Whether you want to move into your first home or invest in a rental property, buying a house is one of the most exciting and life-changing things you can do. But saving for the deposit can be a challenge.
Here at AssetBase, we’ve seen people from all walks of life overcome this hurdle. Here are our top tips on how to save for a house deposit faster.
1. Set a goal
Work out exactly how much you need to save to buy your dream property, so you are working towards a specific goal.
- A good savings goal for a house is 20 per cent of the purchase price although lenders require as little as 5 per cent. A smaller deposit could mean you’ll be required to pay lenders mortgage insurance (LMI)
- Ensure you factor in extra cash to cover the costs of buying a house, for example, stamp duty
Knowing how much you need to save for how long will help you stay focused, no matter how big or small the goal is.
2. Track your spending
Cutting down on your spending is the easiest and quickest way to save. A few months of sacrifice could get you to your property goals faster.
Download your bank statements from the last 90 days and start by analysing your expenses. Many bank systems categorise for you.
You’ll start to see where you can afford to spend less.
3. Set a budget
After tracking your spending you can check your bank and credit card statements, identify any non-essential expenses like subscriptions or memberships and cancel them.
This is where your budget comes into play. It must be a realistic one too! When you are setting it up, don’t deny yourself every luxury – pick one or two ‘extra’ activities that you will pay for a month and factor them in.
Now it’s your job to stick to it.
4. Automate your savings & pay yourself first
Every time you receive money, make sure you are paying yourself first.
Psychologically, you are more likely to stick to your goal if you send money to your savings at the beginning of the pay cycle, rather than at the end.
Set up a direct debit so that it happens automatically so you don’t even need to think about it.
Want more tips? Get in touch with our team today to discuss the best options for you.