Buying your first home is an exciting process. Saving for your deposit has become a challenge for many people with the changes to the stamp duty concessions and rising property prices. Here are a few tips on how to get that savings plan moving along so you can move into your new house.
1. Be boring and do a budget – I know it sounds boring and the process can be painful, yet it is essential. Making small changes to your current spending habits can have a large impact on your savings account. Without doing a budget you are less likely to make changes to your spending.
2. Talk to your parents – I know talking went out in the 80’s so you may want to txt or email your parents. Either way it can be a great idea to talk to your parents about either gifting you a sum of money towards the deposit or doing a family pledge. This type of loan allows the lender to use your parents houses equity to cover part or all of the deposit and costs
3. Money for Jam – Setting up a first home buyers savings account is a great long term idea. The government will give you a concessional tax rate as well as contribute to the savings that you add. Check out http://www.ato.gov.au/individuals/pathway.aspx?pc=001/002/066 for more information.
4. Split your pay – The old saying, if you don’t have it you don’t spend it is very true. Getting your employer to split your pay so that a portion is deposited straight into a savings account will ensure that this account grows in size each pay cycle.
5. Consider a second job – This may seem like an extreme option, but if your budget is tight then this may be your only option. Putting the entire amount that you earn from this second job can quickly accumulate and you can be on your way to home ownership.
6. Bonus money – what is bonus money I hear you say. This can be in the form of cash gifts for birthday presents, selling items on ebay or even your tax refund cheque. This is money that is outside of your normal budget and should be saved if you truly want to achieve your goal of home ownership.