First home buyers – 5 tips to get your deposit faster!
Saving a deposit for your first home isn’t easy. It takes more than just cutting back on smashed avo and take away coffees.
You need discipline, a savings plan, and a team of supportive people around you.
Here are my best savings tips for First Home Buyers!
1) Use Tech to make budgeting fun
I wish these were around when I was 25! The following apps are fun and easy to use, and will help you track expenses and set spending limits. It won’t even feel like a budget!
MoneyBrilliant:
One of my favourites, MoneyBrilliant aims to provide an overview of your entire financial setup, including super. There is a free version and you can upgrade to a $9.95pm plan.
Pocketbook
If you are you’re looking for a basic tracking and budgeting tool, then Pocket book is also a great option. It has less features than MoneyBrilliant, so you may prefer it if you like to keep things simple. Also free!
2) Physically remove yourself from your savings
Once you’ve committed to saving a specific amount each pay, you need to physically distance yourself from your money.
Open a high interest savings account with a different bank. Do not get a card attached to this account or link it to your mobile wallet (that defeats the purpose!).
The aim is to make the money difficult to access, so your default is to not spend it! Savings for your first home deposit are not to be touched.
3) Use your Super to boost your deposit
Did you know you can use your super to help you save for your home deposit?
New rules mean you can now direct some of your pre-tax income into your super fund. There’ll be less money going to the tax man, meaning more in your pocket!
You can save up to $15,000 per year in your super (up to a max of $30,000). You’ll just need to wait until 1st July 2018 to withdraw the money.
Check out this calculator to help you see how much you could save through your super: https://budget.gov.au/2019-20/content/estimator/incometax.htm
Best of all, while your money is held in super it will be growing. The current interest rate is 4.72% pa*. Not bad at all!
There are a few T&C’s to this strategy, so seek advice from a Certified Financial Planner®.
4) Get the same experience with less cost
Being on a budget doesn’t mean you have to be stuck inside eating baked beans.
You can keep doing what you love, just chose the lower cost option. You’ll still have the same great experience and your savings will get a boost.
- Meet friends for a coffee instead of lunch or breakfast (same experience – less cost)
- Avoid shopping centres – they are designed to make you poor! Instead, meet friends in free public spaces like art galleries, parks or museums and go for a stroll
- Check out your local library for free magazines, DVD’s and books & e-books. They’re better than you think
- Take your lunch to work. It’s the healthier option and can save you up to $200 per month!
- Never leave home on an empty stomach and pack a muesli bar or snack
5) Know how much deposit you need
Over-saving is a thing! I’ve seen people pay more for a house this year when they could have qualified for the house last year… at last year’s prices!
How much deposit you need depends on a few factors, including:
- how much you want to spend buying your home
- whether you want to buy new or existing
- what First Home Owner grants are available to you (i.e. Builder’s grants or Gov grants).
Don’t assume you can’t buy now…
Can your parents help? If your parents own their own home and have a small mortgage, then this ‘equity’ could be used as your deposit.
Do you have rental lease? If the lease is under you name (or as a couple), then some banks take this as a good sign that you can pay for your living costs. It may help you to qualify for a home loan with less deposit.
Get a team on your side
Make sure to speak with a financial specialist about your ideal property and personal situation: home loan advice is free!
I’m happy to help and you can schedule a free call with me here:
or drop me a line at: tamara@truejourneyfinancial.com.au
Tamara Gillman is a Certified Financial Planner® and the director of True Journey Financial Planning. She loves working with first home buyers and helping them get ahead.