Six essential tips to help you save for your first home

 

We were shocked to learn that first home buyers take, on average, 4.5 years to save for a house deposit according to the 2010 Bankwest “First Time Home Buyer Report”.

 

The report shows that first time buyer couples need to raise an $85,800 deposit to purchase a median house, or a $76,900 to buy a median unit. Research also found thousands of young Australians have been forced to live at home for an extra 10 months as they struggle to pull together a house deposit.

Now it may sound impossible, but there are some helpful tips Gen Y and up-and-coming i-Gen home buyers can follow to help reach the Australian dream of owning your own home sooner.

 

1. Work out a budget

 

Start by making a list of all of your current expenses. Take into consideration things like car re-payments, mobile phone charges, utility bills, food expenses, credit card bills, all the way down to your daily coffee. Add them all up and compare these to your salary to see how much you should have left at the end of each month.

 

Creating a budget will help you to determine what sort of price range you’ll be able to purchase a property in and what sort of deposit you’ll need to have saved.

 

Useful tip: Practice saving as much as you think your home loan repayments will be to ensure you don’t borrowing beyond your means.

 

2. Cut back where you can

 

Take a long hard look at your budget and see whether there are any luxuries you can cut out.

 

For example:

  • Make the most of coffee provided at your workplace and cut out that morning latte.
  • Get out in the fresh air for a run rather than paying for an expensive gym membership.
  • Avoid impulse shopping - make a list and stick to it when doing your grocery shopping.
  • Make a trip to the cinema’s a treat, try hiring movies or borrow them from your local library.
  • Have friends over for dinner instead of going out.

 

Useful tip: If you can handle it, move in with your parents or a relative for a while to save some extra money you would ordinarily be spending on rent.

 

3. Take a close look at your credit card use

 

Credit cards can be your worst enemy so it’s best to pay them off as quickly as possible.

 

If the amount owing on your card (or cards!) is too large, you may need to look into a payment plan or switching your credit card debt to a different company with smaller monthly fees.

 

If you can’t manage to control your credit card spending then cut them up to reduce temptation.

 

Did you know: Credit card debts can reduce the amount a bank will lend you.

 

4. Get the best savings account

 

Finding the right savings account can make a huge difference to your total savings. Find a premium savings account that offers low fees and a high level of interest to be earned.

 

5. Make the most of Government offers

 

The Australian Government offers additional help to first home buyers in the way of the first home owners grant and first home saver accounts.

 

For more information on Government services you can visit firsthome.gov.au or homesaver.treasury.gov.au.

 

 

6. Wait for the right time to buy

 

While you’re saving, watch what the property market is doing. Keep an eye on when property prices go up and when they stay steady. This will help you to find the best time to buy to ensure you don’t over capitalise.

 

 November 2010