Buying a new home can seem like an unreachable feat, especially if you’re starting from scratch. With the most common first home loan capping at around $400,000, not including the amount you’d need to save for a deposit, you may feel overwhelmed at the prospect of saving up. However, if most homebuyers are between the ages of 25 and 35, it is certainly doable to save up the money and buy your very own house.
Below are a few tips to help you get on your way. Budgeting is key when it comes to saving up the funds for your home, so read on for a few practices to consider.
Get your budget in order
First thing is first. You need to be honest with yourself and consider not only your weekly or monthly budget, but also your spending habits. While it’s important to not spend your money frivolously when you’re trying to save, be realistic with yourself. If you know that you’re the type who will spend an extra $200 on a nice dinner or on exercise classes per week, factor that into your budget. Cut where you can, but don’t give up on everything to save up faster, because you won’t be happy with that lifestyle either.
Give yourself smaller goals to achieve. When you take a look at the lump sum of money that you’d need to buy your first home, even if you’re just looking at the deposit, you may find the task very far out of your reach. However, if you give yourself adjustable monthly goals, you’ll see your savings quickly add up.
Cut out unnecessary costs
As we said earlier, we are all human and need to indulge. Pick one thing per week that you’ll treat yourself to, and for the rest of the time, cut back to save up. Try things like:
- Quitting smoking or multiple coffees per day. Tobacco and caffeine addiction isn’t good for you anyway. You’ll be doing your body and your wallet a favor.
- Meal prep at home instead of eating out every night or lunch.
- Have friends over to entertain rather than going out to the pub and spending three times as much.
- Watch a movie at home instead of going to the cinema.
Save with banks
Try to regularly put salaried income into your savings account. When it’s time to ask a bank for a loan, they will be more likely to want to help you if they can see a steady earned income entering your savings account.
Take out enough cash for each week
Once you’ve decided on your weekly budget, take the money out of your account in cash, excluding bill payments. Having the exact amount of cash that you have allotted yourself is a great way to avoid overspending. Rather than spending the last of your cash on an impulse buy, you’ll likely put the money back in your wallet and save it for things you actually need.
Consider Rawdon Hill if you plan to build your first home. We are reliable and trustworthy modern home builders in Melbourne and are happy to provide helpful insights to this exciting endeavor.