Are you struggling to save for a deposit to buy a home? You’re not alone. Our latest ‘Home Truths’ survey found South Australians think saving for a deposit is the biggest hurdle to achieving their home ownership goals.
While it can be hard, saving for a deposit isn’t impossible. We recently asked our Facebook
followers how they save for their goals, and received some great suggestions. Here are a few highlights:
“Work out what you want to achieve (i.e. how much you need for a deposit) and make small saving goals that are time specified. You'll reach your goals if they are realistic and measurable.” Bec
With many financial institutions looking for deposits of at least 5%, you’d need over $20,000 to buy a home at the current median house price – as well as enough to cover other start up costs such as fees.
This may feel overwhelming, so breaking it down into smaller goals, e.g. $1,000 per month, can help you feel like you’re making progress.
Alternatively, you might want to look for a loan with lower deposit requirements, such as HomeStart’s Low Deposit Loan
, which has deposit requirements from 3% for an established property.
“Pay off high interest loans, e.g. credit cards as soon as you can. Pay more than the monthly minimum and remember that interest is calculated daily (in most cases) so the more you pay off each day, the less interest you will be charged.” Bruno
It is always a smart move to pay off credit card and other high interest debt quickly. Not only does it save you on interest charges, it helps ensure you don’t end up with a paid or unpaid default, which could affect how much you can borrow to buy a home.
“Do not buy any fast food or drinks from shops including coffee. You'll feel great and be on your way to home ownership faster!” Josh
Those small treats can add up quickly. If you saved the money you’d usually spend on a coffee and muffin at work, in a year you’d have $2,600 to put toward your own home.
With a little bit of planning and discipline, you’ll be able to save for that deposit sooner than you think.
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