Saving while renting can feel like you’re walking on a hamster wheel. As soon as money comes in, it’s right out to bills, rent and necessities. But you can get into a first home faster with some smart strategies that won’t mean tightening your belts or giving up your Sunday eggs and avo. (Although making it at home might help!)
Set a budget and spread out your accounts
Budgets might be for politicians and accountants, but they’re helpful if you have a savings goal in mind. If you can allocate a fixed amount to those bills, rent, necessities and luxuries, you can avoid overspending. Instead, the surplus money could go into a high-interest account to help you save for a first home deposit.
One strategy is to split your accounts into weekly, monthly, and discretionary spending accounts. Once you’ve used up all the money in the designated account, that’s it – until the next spending cycle. Whatever is left over can be transferred into your home saving account; or an account for whatever you wish.
Set big goals and smaller goals on the way
“I want to save $20,000” feels daunting, especially if you have next to nothing already. However you can move your goals in reach by breaking them up into smaller sub-goals or milestones. They should be measurable, realistic and achievable. Instead, saying “I want to save $200 per week” will save you $10,400 in one year. Within two years, you’ve achieved your goal! Persistence is a key to success. When you achieve smaller goals, reward yourself! Though, try to make it cheap…
The old adage that rich people became that way because they are frugal has a kernel of truth to it – and you can mimic that lifestyle by trying to wring as much value out of every dollar spent. Does it make sense in buying name brand salt when home brand salt is the exact same Sodium Chloride? Make wiser, frugal choices.
If you can, try to find a second source of income. This could be finding a second job, or using a marketable skill to make money in your downtime. Many people sign up to “odd job” sites, or make crafts and sell them online, for example.
Time your purchase right
Timing is important, and it’s especially important in buying a home. Waiting never hurt anyone in the property market, and you may have to temper your expectations when venturing into buying.
Don’t hunt for unicorns
If you’re waiting for your perfect home, you’ll be waiting forever. The “perfect home” doesn’t exist, and you shouldn’t spend more than you have trying to chase it. Temper your expectations and pressue from friends or family, as a drawn out search can actually cost you more than you bargained for.