There are a few things in life that come at a cost. Getting married, having children and a house deposit are typically the biggest things we spend money on in life.
The decision to switch from renting to owning isn’t usually one that people take lightly and can take a few years to see it happen.
Most people don’t have access to bottomless funds and the luxury of living with their parents while they save. So in order to save for a house, you have to make some tough decisions when it comes to how you spend your money.
In the end, no matter what you are saving for you will likely have the same path as the steps that are outlined here.
Making plans without a clear goal can leave you more than a little frustrated. In fact, it can mean that you aren’t going to meet your saving potential at all.
The best way to save is to write down, to the last cent, what it is that you need to save. Broader strokes are fine, but the more specific you are about the savings goal the more likely you are to reach it.
You need to consider the type of house that you need. Often when we look at houses we go for the biggest, but that is usually way more than we need – and the price matches.
For the down payment on any type of real estate that you are planning on buying, you should ideally have at least 20%.
Even if there are schemes that can help you when you have between 5-10%, try to go for the most significant deposit you can.
Trimming the fat
Most of us spend more than we need to on everything from groceries to insurance. If you spend a few days looking at where you spend the most money, you will likely find even more savings.
While you should tighten your spending and trim off any subscriptions you don’t need, you should also have some fun money.
If you are saving for vacations, retirement, and rainy days, take a look at the savings you could use to increase the rate at which you can save for your house deposit.
You should redirect all of your retirement savings, though, just a portion if you plan to put a deposit down in the near future.
Even if you have a job and your partner has a job, you could likely benefit from making some earnings elsewhere.
It is essential to keep in mind the extra taxes you might need to pay, but it might be time to put them to good use if you have additional skills.
As a rough motivator, if you work an extra 16 hours a week for $12 an hour, you will roughly have an extra $153 per week after taxes. In the space of 24 months, if you don’t need to dip into the savings, you will have close to $16k.
If you are looking for how to make some extra cash to help towards the downpayment on a home, check out: 3 Side Hustles Guaranteed to Make You Money.