Save for that de­posit

YOUR OWN HOME: PLAN A BUD­GET, TRACK SPEND­ING AND BE IN CON­TROL

The Citizen (KZN) - - Business - Shirley Smith Set your­self a goal Track your spend­ing Cut costs Cut down on your cur­rent rent Put off that over­seas va­ca­tion Put sav­ings in a sep­a­rate ac­count

Ide­ally, you would want to have 10% to 12% of your dream prop­erty value.

Buy­ing and own­ing a house is a huge de­sire for many South Africans but the prospect of be­ing able to do so in your 20s or 30s may seem like a pipe dream.

In­flated prop­erty prices, a dif­fi­cult eco­nomic land­scape and pos­si­bly even the re­straints of lin­ger­ing debts, such as stu­dent loans, may leave you feel­ing that own­ing prop­erty is unattain­able.

One way to en­sure you take achiev­able steps to­wards your fu­ture home is to start sav­ing for a de­posit.

Here are some tips on how to do it:

Ide­ally, you would want to have 10% to 12% of your dream prop­erty value set aside as the de­posit, which is paid up­front.

So, sit down and think about how much you want to save and then take a hard look at your fi­nances. Where can you af­ford to cut down? How can you save more and in which ar­eas of your life might you be over­spend­ing?

Once you have de­cided where you can save and cut back, pre­pare a new bud­get and stick to it by mak­ing sure you put your sav­ings away the minute your pay­cheque clears.

One of the best ways to make sure that you’re stick­ing to your bud­get and not spend­ing frivolousl­y is to track your spend­ing.

Opt for a bud­get­ing pro­gramme or app, much like the ex­cel­lent (and free) app 22seven.

With this savvy ap­pli­ca­tion, you can track your money as well as set up a per­son­alised bud­get, in­vest your money sim­ply and have all your fi­nan­cial records in one place.

You have full con­trol over your fi­nances, bud­get and spend­ing habits.

One of the best ways to en­sure you can save for your de­posit is to cut down on need­less spend­ing. Here are some of the ways to do that:

What por­tion of your in­come does your rent de­mand?

If it’s any­thing from 30% on­wards, it’s time to look for more af­ford­able ac­com­mo­da­tion.

Find some­thing you share with oth­ers, opt for a smaller room or move to a less ex­pen­sive area – don’t pay an in­or­di­nate amount of money to­wards some­one else’s home loan when you can save for your own.

To save enough for a de­cent de­posit for a house you’ll need to fo­cus all of your sav­ings on that.

That’s not to say you can never go surf­ing in Hawaii or hot air bal­loon­ing in Turkey, you might just need to ex­er­cise a lit­tle pa­tience and put it off for a lit­tle while. Right now, rather in­vest in some­thing you can one day own (and live in) op­posed to “in­vest­ing” in fleet­ing ex­pe­ri­ences.

Cre­ate a sep­a­rate sav­ings ac­count for your de­posit. Open a fixed de­posit or a sav­ings ac­count that yields high in­ter­est.

Shirley Smith is chief op­er­at­ing officer at Old Mu­tual Fi­nance. This was first pub­lished on Old Mu­tual Fi­nance’s blog.

Pic­ture: Shuttersto­ck

NO FRIV­O­LOUS SPEND­ING. To save enough for a de­cent de­posit for a house you’ll need to fo­cus all of your sav­ings on that.

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