Saving the deposit for your very first home can seem like a long, hard slog.
However Chic Living has some great tips to not only motivate you, but also to help you build your savings quickly!
Make your Savings Visible
It’s hard to get excited about a bunch of numbers on a screen.
Making your progress towards becoming a first home buyer visible, can really boost your motivation. Create a chart of your savings target to hang on your fridge, or above your desk – and shade it in every time you add another hundred or thousand dollars to your savings account. Just Google “savings thermometer” and you will find loads of templates and printables that you can adapt to your own purpose.
And, while you’re at it – why not create a mood board with pictures of ideas for your dream home, and hang it in a prominent place – so it inspires you to stick to your savings plan on a daily basis?
5 Saving Tips
Small changes (and small change!) can really add up when you are trying to save a home loan deposit. For example:
- Cut back on extras. Bringing your lunch to work for example, could mean an extra $50 a week for your savings!
- Make sure you have a designated savings account that offers a high rate of interest and limits withdrawals.
- Don’t let coins weigh you down. Empty your pockets and wallet each night, placing all coins into a money box.
- Sell stuff on ebay or the like. We all tend to have things that we no longer want or need, that could be sold online.
- Any unexpected windfalls – a tax return, a win on a scratchie ticket, or backpay for example, could all be used to boost your savings.
How Much Deposit Should You Save?
You’ve probably heard all sorts of figures bandied around – but as a general rule, aim for a 20% deposit. Here’s why:
- If your deposit is less than 20%, you will most likely be required to take out Lenders Mortgage Insurance. This is an extra cost added on to your home loan – but there is no benefit to you. Instead, it covers your lender, should you be unable to meet your repayments.
- With a healthy deposit, you should be able to obtain a lower interest rate on your home loan, as you are less of a risk to the lender.
- And of course, the less you have to borrow in the first place, the less interest you’ll pay over the lifetime of your home loan.
And when it comes time to buy your very first home, you can always check back here at Chic Living for some great house and decorating ideas to make it truly your own!