Renting a home is often the biggest expense in one's budget, making the goal of saving for a home seem almost impossible. However, we have compiled some simple strategies to make that dream within reach quicker than you imagined.
So the question is, how do you save for a home while renting?
Seeking guidance from a professional is often the first step to getting in the right frame of mind to begin your savings journey. They will take a comprehensive look at your financial position and create a plan for your budget moving forward. They will also be able to help you navigate your credit score, which is important to understand when applying for a loan.
Set a timeline
How much do you need to save and when do you want to achieve this? Considering when you want to reach the goal of buying your home will determine how strict you need to be with your budget.
Once you have taken a closer look at your expenses, you will have identified areas where you could tighten your purse strings a little more. It won't be easy, but it is essential to cut back unnecessary spending if you want to reach your goal. Little things like buying a barista made coffee daily could set you back around $1800 a year. One small sacrifice can bring big rewards when you're trying to save! As rent is most likely one of your biggest expenses, consider whether it would be practical to move to a cheaper rental. Although it may not be ideal, remember, it isn't forever and the goal of owning your home will be worth it! We also recommend taking a closer look at items on your expenditure list such as mobile phone plans and gym memberships to ensure you're getting a competitive rate. Every dollar counts!
Create a Dedicated Savings Account
Setting up a separate savings account is a fantastic step to help you save your imminent house deposit and it will also help to compartmentalise your savings. Make sure you shop around for a high interest account that will act as an incentive for you to make deposits and not withdrawals. If you can, setting up automatic deposits into this account will further help to grow your savings. Finder.com.au is an incredible resource that allows you to access comparable information from not only the big four banks, but many more too. There is also a category specific to high interest savings accounts!
Take Advantage of Grants
There are incentives specific to each state that are designed to help you reach your goals faster. The First Home Owner's Grant is an example of a scheme available in all states across the country. Under the scheme, a one-off grant is payable to home-owners that meet the criteria. To find out if your eligble, you can click here.
Ultimately, the hardest part is taking the first step! Once you are on your way to achieving the goal of owning your own home, you won't look back!
DISCLAIMER - The information provided is for guidance and informational purposes only and does not replace independent business, legal and financial advice which we strongly recommend. Whilst the information is considered true and correct at the date of publication, changes in circumstances after the time of publication may impact the accuracy of the information provided. Property Boutique will not accept responsibility or liability for any reliance on the blog information, including but not limited to, the accuracy, currency or completeness of any information or links.