Saving for your dream home
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Owning your dream home is a significant milestone that often requires payment of a substantial deposit in order to be approved for a home loan, or to keep your monthly bond repayments low.
"Saving up for this financial goal may seem daunting, but with the right strategies and dedication, you can make it a reality," says Berry Everitt, CEO of the Chas Everitt International property group.
"And while it might be tempting to purchase a home with a minimal deposit, the second advantage of putting down a larger amount upfront is that it will save you a significant amount of money over the life of your home loan."
Here are a few tips to help you save more every month:
1. Cut back on credit:
One of the first steps towards saving for your dream home is to reduce your reliance on credit. High-interest credit card debt can eat away at your savings potential. Create a plan to pay down credit card balances and avoid accruing more debt. By doing so, you'll free up money that can be put towards your deposit.
2. Re-evaluate your insurance premiums:
Review your insurance policies, such as car, health and home insurance, to ensure that you're not overpaying for cover. Shop around for better deals or consider adjusting your excess amounts to lower your premiums. The money saved can be redirected into your savings account.
3. Cancel memberships you don't use:
Many of us have subscriptions and memberships for services we rarely utilise. Take a critical look at your monthly expenses and identify any memberships you can live without. By cutting unnecessary expenses, you'll have more money to save.
4. Cook more at home and eat out less:
Eating out can quickly drain your finances. By cooking meals at home and bringing your lunch to work, you can save a significant amount of money over time. Consider setting a monthly food budget to help you track your spending in this area.
5. Set a savings goal:
Determine how much you need for your deposit and set a specific savings goal. Having a target in mind can provide motivation and direction. Break your goal down into manageable monthly contributions to make it more achievable.
6. Track your spending:
It's crucial to keep an eye on your expenses. Use budgeting apps or spreadsheets to track where your money is going. This will help you identify areas where you can cut back on spending and increase your savings.
7. Reduce monthly costs:
Look for ways to trim your monthly payments. This could involve negotiating with service providers for better rates, downgrading your cellphone contract, refinancing loans, or making energy-efficient changes in your home to reduce utility costs. Every bit you save counts toward your deposit.
8. Create a separate savings account:
Open a separate savings account specifically for your deposit. Having a designated accountmakes it easier to track your progress and ensures that you don't accidentally dip into these funds for other purposes.
"Saving for the deposit on your dream home may require discipline and sacrifice, but the reward is well worth it," says Everitt. "By implementing these strategies, you can accelerateyour savings and move closer to your homeownership or rental goals. Remember, the key is to start saving today - your dream home is within reach."
Author: Chas Everitt