They say saving for a house deposit is the beginning of your adult life. But is it actually just the end of your youth? With the right attitude, it doesn't have to be.
Saving for a house deposit can seem like a never-ending, lonely existence. Forget drinks with friends, nice dinners, even going to the movies — if it's out of the budget, it's out of the question.
But what if we told you it didn't have to be this way? Although saving for a house when you're young is important (read: because it'll take a lifetime if you live in the city), so is living your life. And as it turns out, it's possible to do both.
Be organised and keep your budget visible. Picture: Getty
Budget, love
How quickly you can save a deposit comes down to your income and expenses. In short, maximising the former and minimising the latter. Mortgage Choice broker Tim recommends tackling your spending first.
"Analyse three months of your daily savings accounts and separate the 'must-spends' with the 'discretionary-spends'," he says.
Once you've done this, you need to eliminate any unnecessary spending and create a budget.
Budgets can be detailed (read: you have $25 per week to spend on your caffeine addiction) or more flexible, for example, you separate a percentage of your income into one of three accounts: savings, emergency (in case your car explodes or you need root canal), and daily expenses.
According to Tim, even more important than creating a budget is sticking to it.
"Once you work out your budget, be ruthless with it," Tim says. "Each week or pay cycle, remove your savings from your account and park it in a separate account. Make a pledge with yourself or your partner to never ever withdraw from that account."
Tip: Tim suggests revisiting your budget constantly to ensure it's still in line with your situation and your goals.
Sounds like the same #lifeover advice you've heard before?
Picnics are an easy, affordable way to socialise, especially if guests bring a plate. Picture: Getty
Factor 'fun' into the budget
Spending is emotional. If you cut out all the things that give you pleasure, chances are you'll crack and make an impulse purchase to make yourself feel better. Tim suggests factoring 'fun' into your budget to prevent a spending binge.
"Be creative and start looking at the things in life that give you the most enjoyment," says Tim. "Be proactive when arranging dates or social events with friends. Instead of going to a fancy restaurant, consider going to see a local band and limiting your allowance for the night. Don't stop the good life but, while saving for a house, learn to say no sometimes. On weekends, suggest a BBQ with friends on the foreshore and bring your own food and drinks — this is so much cheaper than a night out."
Source an extra revenue stream
"Doing an extra shift or two each week or adding in a part-time job can do wonders for your deposit," Tim explains.
If this goes against your idea of 'having a life', get creative. Are you a writer? Mechanic? Maybe you could utilise your skills by selling a service on the sharing economy. Unskilled? Why not try KonMari-ing your possessions and flogging some stuff on Gumtree or eBay. If you tap into a passion and start a side-hustle, it won't feel like extra work.
Visualise your dream home and it'll make the saving worthwhile. Picture: realestate.com.au/buy
Tough love
It is possible to save for a deposit and still enjoy the good things in life, you just need to reframe your thinking and your priorities.
"Ask yourself what is more important: spending up big on a night out or getting into your own home? This is the time for a bit of sacrifice. 'What's hard is easy and what's easy is hard' is my motto in life. Do the hard yards now and later in life, you'll take a lot of pressure off yourself and life will be easier. Flip this and your fun now will mean some serious financial pain later in life. You can still have a heap of fun without spending too much," says Tim.
Full Article: https://www.realestate.com.au/advice/how-can-i-save-for-a-deposit-and-still-have-a-life/