For most people, saving for a deposit is the hardest part of obtaining a home loan. Dealing with expenses such as rent and electricity whilst trying to save is difficult, but with focus and dedication it can be done. In this article, we look at 10 practical savings tips that you can use every day to help your deposit grow.
Don’t forget to find yourself a high interest savings account to deposit these extra funds and help them grow faster. Remember, every dollar counts!
1. Create a budget
Every article you read on saving will tell you to create a budget. Writing down your expenses and limits gives you solid numbers to aim for. You can always adjust the budget if you find it does not suit your lifestyle or needs, but try to limit adjustments to only once per month.
2. Make your own meals
Cooking at home is almost always cheaper than eating out, that’s a fact. You don’t need to completely give up restaurant meals, but try bringing homemade lunch to work or limiting restaurant dinners to twice per month.
3. Sell the things you no longer need
There is a huge market for second hand goods that can help you bring in extra cash to put toward your savings.
4. Review your memberships
Do you have a gym membership “for motivation” that you never use? Or a Netflix subscription that you have for a rainy day? Go through your memberships and cancel any that you are not actively using – you can always resubscribe should you decide to use it in future.
5. Shop smart
Plan your meals for the week around seasonal ingredients to avoid wasting food, then at the grocery store make use of the “ugly” produce bins where available. If you have access to local farmers markets you may find the produce up to 50% cheaper than the supermarket, and better quality too!
6. Use the 30 Day Rule
Whenever you feel the urge to purchase non-essentials like clothes or homewares, write it down in a list to revisit in 30 days. If you still want the item after the 30 day period has passed then feel free to purchase, however most likely the urge will have passed and you can put that money directly into your savings account.
7. Find free fun
Once you start looking, you will find that there is plenty to do in your city or neighbourhood for free. Being in Australia, most of us are close to a beach, and in the capital cities there are often free art exhibitions and street shows.
8. Minimise your monthly repayments
Monthly loan repayments can take a big chunk out of you budget, but fortunately there are ways to minimise them. Consider refinancing any credit cards or high-interest loans into a single personal loan with a lower interest rate.
9. Look online for big ticket items
If you have passed the 30 day rule (see number 6, above), look online to see whether you can find the same product cheaper. Lower overheads mean that online retailers can often afford to offer a significant discount on certain products.
10. Shop around for your utilities
If you have been with your utilities provider for a period of time, you are probably missing out on discounts. Shop around to see if you can get a better rate, or call your current provider and let them know that you are considering changing due to better offers on the market. In many cases they will offer a better deal as it’s cheaper to retain an existing customer than win a new one.