How you can save a house deposit while renting.
Save a House Deposit While Renting? Yes, this is a big obstacle many Australians face. For most it may seem impossible and out of reach, but take it from the team at Impact Property Management Group, you can do it! Check out our advice from our team of property management experts.
Bills bills bills, we all have them whether they are big or small. They come in like clockwork too, and when they do you might be asking yourself, “Can I really save a house deposit while renting?”.
Save a House Deposit While Renting – If you are planning on saving the recommended 20% deposit, you will benefit in the long run and likely save tens of thousands of dollars while still keeping up with all your living expenses. We can’t stress enough that every bit of savings will help you get that much closer to your home loan goals!
There are so many ways you can increase your saving capabilities, here are a few to get you in the property market as soon as possible:
Create a budget strategy
This is crucial. Take a step back and allocate some time to understand your spending habits and finances. It would be highly worthwhile printing out your bank statements and highlighting expenses that are necessary – utility bills, transport, food and pet expenses you may have.
Once you have a list, try to find ways to minimise each expense. For instance, if you are spending $150 a week on a food shop but most of your items in your food basket are branded, consider buying the no name brand for the time you are saving. You would be surprised how much you can save by purchasing no name brands!
Another way to save would be to keep an eye out for specials your local grocery store is having.
Once you have identified all your living expenses, it’s time to list the unnecessary expenses that you can do without. These would include buying coffee from cafes, gym memberships, cigarettes, alcohol and take away. This is where you can potentially save quite a bit of money.
Instead of buying a coffee, make it at home. The same goes for your daily food intake. Pre-plan your meals and know what your having for dinner after a long day. We completely understand that enjoyment must be taken into consideration, so allocate a portion of the money to a night out or some kind of enjoyment, even if it is just once a month.
It is also a good idea to request a copy of your credit card file. You should review and correct any debts you have against your name. Ideally, you want to have any kind of debts cleared before applying for a home loan.
Once you have an understanding of your living expenses, misc expenses and your credit rating/debts you have, it will help you to determine a clear path forward on your budget plan.
Have a chat with a financial planner if you find this initial process daunting. We highly recommend Simon Dundas-Smith from Orbis Wealth Management. Their team of professionals will get you on the right track in no time.
Saving for a House Deposit While Renting – Trim expenses (again)
It has been mentioned above however, there are few other ways to trim those expenses and leverage your saving potential while you save for a house deposit.
1. Minimise rent
If you can, negotiate your rent and try to reduce this expense. If negotiation with your landlord is unattainable, consider finding a roommate, downsizing to a smaller or older place which is cheaper are all options.
2. Minimise Utility expenses
You can also try negotiating with your utility and service providers. Approach your electricity, gas and internet providers and ask for a better deal. You may be surprised to find out just how much providers want to retain loyal customers.
3. Be energy efficient
Be conscientious about your energy expenses. If you are not in a room turn the light off, the same goes with your heater or air conditioner. It’s a simple practice which goes a long way.
Take It Straight Out Of Your Pay
After working out how much you can save each month, ask your employer to take out the amount you have chosen straight away and deposit into an allocated savings account.
Trying to save money after all your expenses and monthly living costs are finished never plays out well. We recommend you save first and manage the month with the money left.
Create a Specific Savings account
This is a great idea to consider. Having a separate savings account allows you to visually see how much you are saving, which may motivate you to keep going. Aside from that, there are a fair few saving account options which allow for you to deposit money into but you are unable to pay for things with it. The account will require you to transfer funds to your main account.
That middle step is fantastic and allows you to think about any purchases you are wanting to make. Check out this list of banks who offer savings accounts. Finding one which provides the most amount of interest and no account fees is of great value to you during your savings period and beyond.
If you are in the market for your first home, feel free to get in touch with one of our highly acclaimed property managers. Our team of Mornington Real Estate agents are based in the Mornington Peninsula and cater to real estate and property management clients in Frankston, Mt Eliza, Mount Martha and other surrounding areas of Mornington Peninsula.