If you struggle to save enough money just to have a holiday, the idea of saving for a house deposit probably feels completely out of reach. The good news is – it’s not! Keep reading for the best ways to save for a house deposit, including five practical tips for getting started with saving, and five tips for accelerating your savings.
How to save for a house deposit fast: Five practical savings tips
Tip #1: Create a budget
Saving for a house deposit? If you don’t have a budget, you need one – stat! A detailed, 12-month budget can provide deep insights into your finances and reveal where extra money can be saved and bill payments smoothed to make cash flow management easier. With a budget in place, you have structure and visibility over your finances, which makes it easier to save regularly. How to make a budget: A complete guide
Tip #2: Pay off any existing debts
Given that interest earnings on savings accounts are generally lower than interest charges on loans, it makes sound financial sense to use any spare cash to pay off debts before you start saving. Especially in the case of credit cards, personal lines of credit and other debts with high interest rates.
Tip #3: Open a dedicated saving account
One of the best ways to save for a house deposit is to never let your savings touch your pocket. Open a dedicated bank account for your savings so they’re kept separate from the money you use for your living expenses and bills. After you’ve created your budget (we can help you with a customised budget plan if you need, or try our budget template), set up an automatic transfer so that a portion of every pay is deposited directly into your dedicated savings account.
Tip #4: Avoid unnecessary debts
When you have your sights set on saving for a house deposit, it’s important to keep your credit score healthy. That means avoiding unnecessary debts. Be careful with payment options like Afterpay and any other ‘buy now pay later’ offers when purchasing holidays or new whitegoods. If items like these aren’t in your budget without a payment plan, consider whether they’re more important than saving for a house deposit, or if you can get a second-hand alternative to save money.
Tip #5: The less you spend, the more you can save
For the majority of people, the ability to save is affected by how much they spend. If you’re wondering how to save for a house deposit fast, remember this: The less you spend, the more you’ll find yourself saving for a house deposit. If you’re finding it hard to save regularly, this statement is a simple, but powerful reminder that saving challenges usually stem from spending habits. By taking control of your spending, you can create spare cash for saving.
- Bring lunch from home. Yep, the old paper bag lunch. It’s easy to ignore how much money you spend if you buy lunch from the food court every day, but it really adds up
- Go natural. Hair colouring appointments can be over $200 a pop, so if you forgo your quarterly salon appointment and DIY at home, you could save a lot of money
- Cigarettes and alcohol. It can be helpful to look at how much you really spend on these items, and see if you can cut back or cut them out completely
- Gym membership. There’s many ways you can exercise for free! Youtube has heaps of fitness instruction videos if you need some inspiration and advice
- Cut back on meat. Try choosing one or two days a week where you forgo meat and eat vegetarian. We have lots of meal planning on a budget tips here
- Shop around. From utilities to grocery stores, it can pay to shop around to make sure you’re getting the best deal on your household expenses
How to save for a house deposit fast: Five tips for boosting your savings
Tip #1: Make do with one car
Some households with two cars may be able to make do with only one car, especially if you can take public transport to work. Not only can you make money from the sale of your second car, you will save on registration, insurance, petrol and maintenance, which over the course of a year can really add up!
Tip #2: Reconsider your rental
Wondering how to save for a house deposit fast? You could consider renting a smaller house until you’re ready to buy; renting in a more affordable area; or even seeing if you can move in with a family member for a predetermined period of time just to boost your savings (only if they’re okay with this of course!)
This doesn’t have to mean you’re living rent free and freeloading off your parents, but you may be able to come up with an arrangement where everybody benefits, e.g. you could offer to look after cleaning and garden maintenance in exchange for cheap rent.
Tip #3: Monetise your mess
Is your shed and spare room cluttered with expensive hobbies that you started but never stuck with? Many people have fancy cameras, bikes, surfboards, electric guitars and even gaming consoles that they’ve either bought themselves or were given as gifts that they don’t use.
Sell these online via Facebook Marketplace or Gumtree, or have a garage sale and get rid of big ticket items as well as all the other clutter around the house like old toys, knick knacks and extra wine glasses. You could also do a big closet clear out and rent a rack at a secondhand/consignment clothing store, or sell them online.
This is a great option for all those nice dresses and shoes you wore once to a wedding and are gathering dust in the back of your wardrobe. As a bonus, if you get rid of your clutter, you will reduce the cost of moving house once you’ve purchased your new home!
Tip #4: ‘Tis the season to save
Let’s face it, Christmas can be a pretty expensive time of year, between all the extra Christmas drinks with friends and colleagues, putting on a Christmas feast, and of course presents. Depending on your family situation, consider whether you can cut back on your Christmas costs, a little, or even a lot.
Do you and your partner normally give each other something big? Instead, agree to put the present money into your savings account and write each other a nice card instead, reminding your significant other of the fact you’re saving for a house deposit, and the fun future you’re picturing in your future home of your own!
Tip #5: Find additional ways to make money
Whether you pick up a couple of shifts at a second job, or start a side hustle, there’s lots of ways you can make additional income that you can put straight towards your savings for a house deposit. Giving up your Saturdays could really help you save for a house deposit fast, especially if you get casual rates. Even if you have family commitments, think about whether you’ve got skills or hobbies you can monetise from home.
Ready to start saving for a house deposit?
Want to get into your own place sooner but want some extra advice about how to save for a house deposit faster? Call MyBudget on 1300 300 922 and have a chat with one of our caring money experts today. They can put together a customised budget plan for you.
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