How to save better for your first home?

Published on December 3rd, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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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…

Think rich

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.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

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The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.

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