Property ownership, whether for home or investment, is an aspiration for many Australians yet the prospect of saving what can be an entire annual wage for a deposit puts the dream further into the future.
Goal setting, clever planning and a commitment to following through are often the keys to solving this savings problem.
According to Mortgage Choice, Australia’s largest independently-owned mortgage broker, creating a savings plan need not result in the stripping away all the good bits life has to offer, but it will prioritise them.
Mortgage Choice senior corporate affairs manager, Kristy Sheppard said, “It’s best to know what you’re in for from the very start. Begin your deposit savings process by speaking to an accountant plus a professional and accessible mortgage broker who has access to a wide range of lenders. This will give you a good idea of how much you can and need to save for your deposit in order to buy within a particular price range.”
“Then, create a comprehensive budget, constantly reassess it, and follow it to the best of your ability. It can be as elaborate or as simple as you like however, even a basic Excel spreadsheet with your cost detailed in consecutive columns will often suffice. The easier it is to maintain, the more likely you are to keep it up.
“Don’t stop there; seriously consider setting up automatic payments into high interest savings accounts from your salary account, for ongoing costs such as your car, rent, utilities, groceries, entertainment and, of course, home deposit.
“While this may limit your disposable income, don’t deny yourself treats every now and then – but remember, every treat you give yourself takes you a little further away from the end result of property ownership. Nothing comes for free and earning your badge as a property owner takes effort.
“Most importantly, be realistic about what you can achieve. Remember most people can’t afford to buy their ideal property the first, second or sometimes even third time around. Regardless, saving for your own property is a journey you will look back on with pride.”
Also consider these tried and tested savings tips when planning your budget:
Give yourself a holiday every now and then, but reduce all costs where possible. Fly with a discount airline and/or wait for airfare sales. Also, consider giving a cheap cabin, van or tent a go and enjoy the adventure.
Take your lunch to work rather than buying it. Same goes for coffee and tea – bite the bullet and make it at work. Every cent counts.
Don’t turf the old faithful. If you have an old car that isn’t in the best aesthetic condition but runs well then resist the temptation to buy a new one. Which would you prefer: a vehicle upgrade or being months/years closer to owning your own home?
Don’t be a clothes fanatic or hoarder. Shop at funky seconds and samples shops, warehouse sales, factory outlets or even online. You could also look into selling your old clothes (or other household items) online or at markets, to save extra money.
Keep up your social life. Keep the smile on your face but tone down your social agenda where possible, such as encouraging friends around to dinner or out for a picnic or bbq instead of heading out on the town.
Call the customer service centre on 13 MORTGAGE, visit www.mortgagechoice.com.au or www.facebook.com/MortgageChoice or http://twitter.com/MortgageChoice.