Tips For Renters To Save For A House
With the cost of living increasing month by month, it is becoming increasingly difficult for renters to save for a house. By the time the rent, bills and groceries come out of the paycheck, there isn’t a lot left to play with, yet alone stash away in the savings account.
So how do you save enough money for that elusive deposit?
Set a goal
If you set your eyes on the prize, you will have a better chance of achieving it. Therefore, think about what suburb you would like to buy in, if you want an apartment or house and if you want to buy new or renovate. Once you have decided what you eventually want to buy, research the average price and establish how much 5-10% is which will equal your deposit. Ultimately, the bigger the deposit, the better but this will at least give you a goal to work towards.
Establish a budget
Sit down and write out all your weekly or monthly expenses and review where you are spending your money. It’s the oldest trick in the book but it could help you identify where you could save. For example, if you buy a large coffee every morning on the way to work, over a month you will spend at least $110, which over a year is more than $1320. Seeing those types of figures could be enough to trigger behavior changes if you’re motivated enough to buy your first home. Then again, if you don’t want to sacrifice your lifestyle in order to save, look at other areas where you can cut back.
Once you work out home much you want to save each week, set up a direct debit from your everyday account to your savings account so that it comes out as soon as you get paid. This way, you will avoid the temptation of having extra money sitting in your everyday account to spend on a night out or new outfit.
Pay off your debts
Paying off your debts will not only increase the amount of money you can borrow but it will free up your pay checks when you eventually do get a mortgage. You’ll also save money long term on the interest repayments.
Sell unwanted items on eBay or Gumtree
If you have clothes, shoes, accessories, kitchen wares, furniture etc that you no longer want or use, Gumtree or eBay are great options to offload them and make a few dollars along the way. It will be a great way to clear out the clutter in preparation for your move as well.
Challenge big bills and negotiate interest rates with the banks
If a big utilities bill comes in that seems out of the ordinary, call up your provider and question it, don't just pay it. In most instances they will be willing to work with you in order to keep your business. And review your credit card, if you aren't using the awards or benefits attached to your credit card, switch to the low interest rate card or at least ask your bank what other options they have. Like the utility providers, the banks are keen to keep your business so they should be willing to work out the best solution for you.
Cut back on the luxuries
If you are desperate to get that deposit together as quickly as possible, think about cutting back the luxury items for a period of time such as:
- Alcohol and nights out on the town
- Eating lunch out everyday & packing it instead
- New clothes or shoes
- Magazine subscriptions
If you would like to speak to financial planner or a mortgage broker to get a better idea of your costs, call Coronis Financial Services today, we're here to help you achieve your dream home (07) 3105 2060.