Don’t quit on your house deposit yet
THINK big, start small. That’s how aspiring first-home buyers should tackle saving their first house deposit.
Unless you live under a rock, you’ll be aware house prices are falling – particularly in Sydney and Melbourne – lending conditions are tightening and interest rates are at record lows.
Overall, now is a good time to buy – if you can get loan, that is.
But it pains me to hear younger Aussies – particularly those in their 20s – are throwing in the towel and declaring they’ll never be able to save enough to buy a home.
I speak from experience here: saving a deposit takes years. It’s not something that happens in a few months.
I started tucking away a portion of my salary from the minute I got my first casual job, way back in my late teens.
If it was $20, $50 or $100 a week, I always aimed to save some money.
When I scored my first fulltime job at the ripe old age of 23 it was game on. I watched my savings slowly grow.
And the best strategy I had was siphoning off my money into an online savings account dubbed “house deposit”. This was back when these accounts were attracting interest returns around 6 per cent.
It was a far-fetched dream to buy a home but I knew one day it would happen.
And it wasn’t until nearly a decade later I decided to bite the bullet and get my foot on the property ladder.
After years of saving – while also renting, which can be hard to juggle – I got there. I had more than a 10 per cent deposit saved up to buy my first place, which ended up being a two-bedroom apartment in Brisbane’s inner north.
At the time my other half couldn’t believe it. He couldn’t save a penny, despite earning far more than me.
I’d managed to squirrel away enough money to make his eyes water.
But it took a lot of sacrifices to get there ... cutting back on eating out, buying new clothes and limiting my holidays. I wanted my own four walls and nothing was going to stop me.
So, to all you Millennials out there or those who are hoping one day to buy property, don’t give up. You have to start small – very small.
Be realistic and disciplined. Wherever you stash that cash, do your utmost to keep your hands off it because it will be worth it in the end. Saving is far harder than spending.
If you start sooner rather than later, before you know it you will have a nice little amount stashed away.
Ultimately, owning your own home always pays off ahead of renting. You don’t want to end up in retirement still answering to a landlord.
Good luck!