Saving for a deposit can be a long, hard process and unfortunately a lot of us fall short because we don’t have an active budget or savings plan in place. While it might seem impossible, there are actually a number of highly effective ways you can be better with your money in order to achieve your deposit goals. That’s why I’ve put together my top 10 tips to help you save your deposit faster!
- Shop smarter
While grocery shopping, there are a large number of products you can substitute with the home-brand version without noticing any significant change in quality or taste. To make this work for you, start substituting various products in your weekly shop so you can figure out which ones you’re happy to use on a regular basis. Remember that it’s okay to buy the more expensive brand when it’s genuinely better – don’t make yourself miserable by depriving yourself of your favourite things. Just be wiser with how and when you purchase them.
- Take it straight out of your pay
One of the easiest ways to overspend on things you don’t necessarily need is by keeping your salary in your account each month and only saving what’s left over at the end. Instead of living for the month and being disappointed that you didn’t save as much as you would have liked, try taking the amount you want to save straight out of your pay and put it away, then live off the rest. You’ll find you make money stretch a lot further when there is less of it to start with. Always make sure though that the amount you?re putting away to save vs the amount left to spend is realistic in terms of your living expenses.
- Create a second income
One of the hottest commodities for businesses right now are skilled freelancers. Do you have skills or passions that aren’t currently being utilised in your workplace? Why not offer them on the side and create additional income? Whether it’s graphic design, jewellery making, candle making or even writing, you can nab yourself some extra dough by offering your skills on a freelance basis.
- Use your super
Did you know that you can use a self-managed super fund to buy property? Instead of letting the money sit there until you’re ready to retire, use it to invest in your future! This option doesn’t work for everyone though, so it’s important you consult with the right experts who can give you sound advice on your personal situation before you make any decisions.
- Encourage your spouse
Couples often have one person who handles all of the money, and thus will be handling the budget and savings. Unfortunately, when only one person sees the budget and understands the ins and outs of spending habits each month, it can result in the other person overspending without realising. If you’re the budgeter, make sure you include your partner in the process so they understand the numbers better and can help you save more effectively.
- Earn commissions and save them
If you work in a sales role, or a role that allows for commissions, actively work hard toward earning these. If you are in one of these roles, you’re often given a target number to reach. Instead of settling simply for reaching the required goal, why not set yourself one that’s slightly higher (but still realistic)? Anything you earn as a commission is on top of your base salary, so you should try as much as possible to put your entire commission earnings directly into your savings.
- Downgrade your car
Most families own two cars, or at least one really nice car. If you can live realistically with only one car, or even a slightly less fancy car, than make the switch! While having multiple cars or a really nice car is an awesome luxury, sometimes you have to make sacrifices, especially if you want to save your deposit faster. Remember, you can always upgrade again once you’ve bought your home!
- Rent out a room, or a garage
Do you have a spare room? Is it just sitting there collecting cobwebs or being used as your dumping grounds for junk you don’t know what to do with? A room can be rented out anywhere from $50-$200/week. Sure, you might have to sacrifice a little bit of storage, but think about how much quicker you’ll be able to save your deposit if you have that extra bit of money coming in each week! If you live in a busy area you could also consider renting out a parking space in your garage. You could get anywhere from $30-$70/week for one of these, depending on demand.
- Sell your stuff
How much stuff do you have that just sits around not being used? A second TV that’s not even plugged in? An old laptop you upgraded years ago? Why not sell your unused items and put the money straight to your deposit? Ebay, Gumtree and even Facebook Marketplace are all fantastic platforms for selling second hand goods. Trust me, if you weren’t using it to begin with, you won’t even notice it’s gone!
- Lower your rent
If you’re living somewhere where rent is medium-high, chances are you could move to a place that is quite a lot cheaper, allowing you to put the difference in price straight toward your deposit. One thing to remember is that you’ll likely be renting for a few more years before you have enough saved to fully finance the deposit of your first home, so it’s important that you make sure you’re happy with the downgrade and will be able to live there for an extended period of time before you go ahead and do it. There’s no point making yourself miserable!
There you have it! 10 awesome, actionable tips that you can start implementing straight away. Do you have any trips or tricks for saving that you’ve been using? Make sure you leave a comment and let me know what they are!
Written by Sasha Holland
Property Investment Strategist, Investor and Valuer