Fast-track Your Dream Home Financial advice to make your home goals a reality with advice from Cherie Barber.
The property market is booming and if you want a piece of the action, you’ll need to maximise your savings, says renovation queen
Aussies have a love affair with property. But as prices trend upwards, many first-home buyers struggle to save that all-important 20 per cent deposit.
Thankfully, banks recognise this issue, with many now offering down-payments as low as five per cent. With the national average dwelling price currently sitting at $574,872, according to property data group CoreLogic, it still represents a decent stash of cash – and stamp duty and legal costs need to be also factored in.
It’s easy to feel disheartened, but where there’s a will, there’s a way. Whether you’re saving for your first home, an investment property or a renovation, the goal is the same: to accelerate your savings.
Start with the end in mind
Change your mindset… pronto!
Goals don’t happen by accident; they’re meticulously planned. Be focused and prepared to do whatever it takes (within reason). That requires a special type of thinking and for you to be disciplined.
Cut out the luxuries
Forgo the $4 latte every morning. Eliminate gym costs by exercising outdoors. There are cheaper ways to do everything. All these savings cumulatively add up to a lot each year.
Formulate a strict savings plan
Yes, boring but necessary. Work out where your money is going and how you can cut back. How much can you save each week? Get your employer to deposit part of your pay straight into a term deposit. To reduce the temptation to dip into that account, make sure it has no card access.
Take on extra work
Ask your current employer if additional hours are a possibility. If it’s not, take a second job on nights and weekends, and put the extra income into savings.
Pay off high-interest debts first
First-home buyers often have several debts – HECS fees, credit cards or a car loan, for example. Pay off debts attracting the highest interest rate first. Better still, try to consolidate all your debts into one lower-interest rate loan.
Sell stuff you don’t need
This is an instant cash grab that can go straight into your savings account.
Reduce your rent
Rent is a major expense for first-home buyers, so try to eliminate or minimise it. Move back in with your parents or share accommodation. Short-term pain for long-term gain. Also, a lower deposit is easier to achieve if you adjust your strategy. That may mean a lower-priced home in a more-affordable area, or an unrenovated property which is naturally cheaper. Or go halves with someone you trust and get into the property game sooner. Where there’s a will, there’s a way – and only the financially fit will get there!