If you are planning to buy your first home, then you know it is a big task to save up enough for the deposit. We have put together some of the most important first steps you need to take if you are serious about saving for your first home!
Know your number
When you are trying to save money, it really helps if you have a concrete number in mind, i.e. how much you will need to save for your deposit. It’s best if you do this before you even start looking at houses as you might be looking at homes out of your budget which can be very disheartening! Speaking to a mortgage broker is a great way to find out how much you can potentially borrow. You can even get pre-approval so you know exactly what your budget is when you start looking at your dream home!
Prepare a budget
This is another necessary step that you need to take if you are dedicated to your savings goal. The first thing you need to do is work out how much money you bring in and compare that to your expenditures, like rent, insurances, gym memberships, groceries etc. An easy way to do this is retrieve a couple months’ worth of bank statements and look for regular, outgoing costs. This is a really helpful way to immediately spot anything that you might be overspending on or something that you don’t need to be spending money on (I see you Uber Eats!)
With this information, you will be able to draw up a budget of things you need to spend money on each week, so you can see how much extra you can put towards savings! Make sure you leave yourself a little “fun” money as well though, because if you deprive yourself too much, then there is more chance that you will fall off the wagon and go on a spending spree. See if you can set aside around 20% of your monthly budget for things like dinners with friends, new clothes, holidays or anything else that sparks joy!
Set up a higher-interest savings account
Now that you have started saving, you need somewhere for all of your savings to live! Most banks offer some sort of higher interest account. Look out for accounts that guarantee a higher interest if you don’t withdraw any money; this will help give you an incentive not to touch the money in the account and will start to make your money work for you! Have a look at your bank’s website, to find out what they have available, or you can use a comparison website to easily compare different account options so you can open an account at a new bank.
Once you have completed these three steps, you will be well on your way to hitting your savings goals! If you would like to learn more about home loans for first home buyers, or savings strategies then contact the first home experts at Bluebay Home Loans on 1300 258 229 and one of our friendly staff will be more than happy to help!