Saving for a home can be a challenge, especially for first home buyers in WA. If you feel intimidated by the whole process and are wondering if you’ll ever be able to afford a home downpayment, you’re in luck because in this guide we’ll show you 7 ways you can come up with the funds.
There’re no shortcuts in this journey; instead, you need to refocus your priorities and stick to your savings plan. Let’s dive in and see how you can save for your deposit.
1. Open a Special Savings Account
To start saving for your home deposit, open up a dedicated savings account. This is your home deposit fund. By having a separate account that you can actually monitor, you’ll be able to see your funds grow and be encouraged by it.
Don’t use this account other than to save for your deposit, and don’t withdraw the funds in it. To speed up the process, put the difference between your current rent and your projected future mortgage into this account. You’ll not only accumulate the funds quicker, but when you do start paying your mortgage it won’t be a shock to your finances. If you’re able to save even more in this account, go for it.
2. Save First
This is a no brainer, but many people actually neglect to set aside money for savings every month. Instead of spending your salary first and then saving what’s left over, You should always set aside an amount for savings first and then build a budget around it. Of course, you shouldn’t deprive yourself of essential necessities like food and electricity, so plan wisely and see what works for you.
You can also look for a way to apply for a first homeowner grant. If you know you’re eligible for the grant, you can factor the grant amount into your savings plan so you can theoretically afford a house even sooner. Just consult a reputable finance broker to find out more.
3. Have Budget
Decide on a budget for your house, and make sure you can afford it. You need to calculate the total cost of the home including the loan, taxes, various fees, insurance, and future bills that you’ll need to pay. This way, you’ll have an idea of how much you’ll need to pay in the future after you’ve secured a home loan.
In the meantime, you should also construct a budget factoring in the savings toward the house deposit. Depending on your goals, you can choose to increase or reduce the savings towards your house deposit, and adjust your other expenses.
4. Reduce Expenses
Most of us don’t realise that we live with more than we need and end up paying extra for things such as electricity, water, coffee, and subscriptions. There are a few ways you can reduce your expenses, and the first way is to reduce your budget for expenditures across the board. You could start with a 5% or even 10% reduction to begin with and tweak it from there.
The next thing you can try is to downgrade your subscription packages or cut them off completely. This is a great way to reduce expenditure especially if you have multiple video streaming services or if you’re a frequent patron at coffeeshops.
5. Reduce Your Monthly Rent
More often than not, your rent would be your largest financial commitment. Look for ways to reduce your monthly rental and save that money instead. You could move out into a less expensive accommodation, move back into your parents’ house (temporarily, of course), or even share a space with your partner or friend. If you live alone and have extra rooms to spare, try to rent them out till you collect enough to afford your first home.
6. Increase Your Income
If you’re a first home buyer in WA, chances are you’re young; so this is the time to find ways to increase your income. You can do this by either getting a higher paying job, putting in extra effort towards a promotion, or getting side income through freelancing or opening a business.
7. Pay Down Your Debts
If you have other debts such as credits cards, student loans, and car loans, they could influence your ability to save towards your deposit. By paying down some of your debts you’ll have less financial and mental pressure from them, and you’ll be able to save more for your house. Additionally, having lower debts may help you secure a bigger mortgage with better rates.
With a well thought out plan and plenty of discipline, you’ll be able to save enough for your first home sooner rather than later. Get in touch with us at First Home Buyers Direct if you need assistance with home financing as we have various financial solutions to offer besides a first homeowner grant.
A home is one of the largest investments in your life. Here are ways to consistently save money so you can afford your first home sooner rather than later.
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