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When 2019 arrived, did you decide that this was going to be the year you started saving to buy your own home? The start of a new year is often the perfect time to sit down and work out your savings goals by taking an in-depth look at your finances to figure out how you can quickly and efficiently save a deposit to build or buy your first home. While it can be overwhelming to think about how long it might take to save a sizeable deposit, we’ve broken it down into manageable goals to set you on the path to home ownership!
The first step is to look at your finances and work out how much you earn versus how much you spend each month. This will highlight areas where you can cut back on spending, such as your morning coffee habit, buying lunch each day, or that gym membership you’re not using, and enable to you reduce costs incrementally. Implementing new habits like bringing a latte and your lunch from home, or joining a group fitness program to share the cost will add up in the long run. You’ll also start consciously monitoring how much you spend each month and your habits will change once your monthly budget is defined.
Instead of big-picture goals, break down your goals into smaller, achievable targets. Rather than having one singular goal of buying a home, create bullet point goals that will set you on the path to your overall goal of home ownership. Things like starting a separate savings account, allocating a set amount of money aside each month, cutting back on one or two personal expenses a month, or aiming to pay off existing debt will feel more attainable if you take it one step at a time.
Many of us have existing debt that can hinder our ability to start saving. Instead of trying to save money and pay off debt simultaneously, focus on paying off existing debt first. Car loans, university tuition fees, personal loans, and credit card debt can be paid off faster if you direct more payments towards them each month. Instead of paying off the minimum each month, allocate a slightly higher amount of money to decrease any interest accumulating and repay the debt faster.
Use this year for research while you save. Speak to a financial advisor and a mortgage broker to find out how much you can afford to spend on your first home. Start exploring suburbs you like and pay attention to the property sale prices each month. Look at a house’s advertised price, versus how much they actually sell for to give you an idea of which areas you can afford. You may also want to start researching house and land packages in more rural areas and consider how much it costs to build a brand new home instead of purchasing an existing home. Visiting display homes and going to open for inspections, as well as chatting to builders and real estate agents will help you understand the process involved in purchasing a home and the costs involved. When you’re ready to make a real estate purchase you’ll have the knowledge and information you need to make an informed decision.
With some careful planning and patience, you can start 2019 off on the right financial foot by creating attainable goals that set you on the path of saving for a house deposit. By putting these goals in place, you’ll be able to put aside money each month to save money to build or buy your own dream home. Visit the Hotondo Homes website for more great home ideas and tips, as well as house and land packages and home designs currently.
Hotondo Homes is not an authorised financial institution and we recommend home buyers always seek the advice of a registered financial professional before purchasing a home.