5 Tips to Save for your dream home
Know what your goal is
It’s pretty hard to save for something when you don’t know what that magic figure is. A general rule of thumb is that you are going to need to have saved a minimum of at least 10% of the proposed purchase price of your dream property. This allows 5% towards the deposit and another 5% towards the associated costs with the property such as stamp duty and other government fees that could apply. Make an obligation free appointment with your local Zobel Broker to discuss what you need.
Do up a budget
It sounds boring and hard work, but with the use of a budget app (you can get these for free from your app store) it really simplifies the process for you. This will help you to track your dollars and see where exactly your money is going each month. You need to make sure you are including all your expenses, and once you have been up and running for a few months should be able to identify spending patterns to potentially save even more.
Set up a separate savings account
Once your budget is up and running and you know what savings you have each month – set up a separate savings account. Preferably the account should not be able to be accessed via your ATM card or internet banking as this takes away the temptation to dip in to your savings when you see that must have item on sale. A lot of the Financial institutions offer high interest savings account that reward you when you make at least one deposit a month (and no withdrawals) which can help you build those savings quicker.
Get rid of any unsecured debt
Having a couple of credit cards and small personal loan is a bit of a double edged sword. Yes they can be handy for those impulse purchases, but they not only impact on your ability to save, they also have an impact on your borrowing capacity when it comes time to borrow to buy or build your home. That small personal loan repayment of $400 per month can reduce your borrowing capacity by over $50,000!! Where ever possible try and get rid of these debts (or at lease consolidate them) to get your ongoing repayments down as low as possible.
Move back home with Mum & Dad
Yes it may mean losing your independence for a few months, but what a big difference this could make to your savings. No rent, no electricity bills, a lot less take away!! If this doesn’t speed up your savings then nothing will. The big trick here is to make sure what you were previously spending on all these other outgoings is now put into your savings. But just remember, be nice to your mother and maybe a few $$ on a nice little gift for her wouldn’t go astray.
Combining all of these tips will help you to achieve your goals.
Its never too early to talk to your Zobel Loan Consultant, we will set you up with the right tools and information to get you started.
Yes there is some discipline and some work involved, but if you can spend the time to get this right you will be on the path to home ownership much sooner, and isn’t that the idea?