According to the ANZ Affordability Report (2019), based on the average household savings, it would take 11 years to save a 20% deposit for a house in Sydney, 9.6 years in Melbourne and 7.7 years in Brisbane.
However, saving for a house deposit shouldn’t be this lengthy, nor should it be a tiring process for those involved. By having a strategic savings plan, the goal to save for a home deposit can be realised a lot sooner.
No matter what your circumstance, whether you are looking to live in the home or purchase it for investment purposes, being able to save effectively is crucial for a secure financial future.
The longer you are saving for the deposit, the higher the prices are likely to increase for the property, making the dream to purchase even harder.
With this in mind, we have put together some simple, yet very effective tips for you to save for your deposit faster, and in a stress free way.
Tip 1: Stick to a savings plan
Firstly, you would need to figure out exactly how much you need to be saving. Then, set weekly, monthly, quarterly and yearly savings goals and reflect on them regularly.
To help with achieving your savings goals, look to automate the transactions into your savings account as soon as you get paid. Whether this is a savings account set up with your existing bank or a seperate account - look for an account that pays good interest.
By transferring the money as soon as you get paid you won’t be tempted to spend that money on items that hold no significant value.
Tip 2: Be smart with your money
Cut down on things you don’t need to buy and where relevant seek cheaper alternatives on the products you use.
For example, purchasing your groceries from Aldi, instead of Coles or Woolworths to save an extra buck.
Although these little amounts may not seem to add up to a house deposit, they all help in getting you that step closer to the deposit, combined with other savings strategies.
Tip 3: Reduce other debts
Personal debt can be accrued from a range of different things such as: car loans, credit cards or travel … the list goes on.
When saving for your deposit, try to minimise or even completely remove these debts from your life. By developing a comprehensive savings plan this will allow you to stay focused on what is smart spending and what isn’t.
Tip 4: Create a second income
Do you have a hobby that you enjoy? Or maybe you are proficient with something quirky?
More often than not, these hobbies and skills can actually be converted to make you extra income on the side of your 9-5 job. Everyone has the ability to create a second income stream for themselves.
Some ideas:
Freelance writing
High school or university tutor
Affiliate marketing of products/services
Babysitting
Think of this - save your primary income and use your second income stream as your spending money.
Overall, by implementing these tips you are on your way to effective savings habits making you that step closer to your home purchase.
Remember, always seek the advice of a qualified professional such as a financial planner when creating your financial and saving plans.*
Additionally, the Australian Government provides a useful calculator to work out: [2].
How long it will take you to reach your savings goals
Potential steps to take to put your savings plan into action
Naomi Johnston - Digital and Marketing Coordinator at Meridian Australia
P: (02) 9939 3249
References
[1] ANZ Affordability Report 2019 https://news.anz.com/content/dam/bluenotes/images/articles/2019/November/ANZ-Housing-Affordibility-report-Nov2019.pdf
[2] Money Smart Savings Calculator https://moneysmart.gov.au/saving/savings-goals-calculator
*Disclaimer: When considering purchasing property, it is always prudent to seek the advice of an appropriately qualified professional to determine which strategy is most appropriate for your individual circumstance.