Saving to buy a property is no small feat, and will obviously require some mettle and discipline when it comes to managing your finances. As a rule, one should have at least 10% of the property’s original value as a down payment. However, through saving you can manage to pay much more than that, which would then reduce your monthly repayments and the repayment period as well. Below we have some neat tricks on steps that you can take in order to successfully save towards buying a home for you and your family.
Avoid Impulse Buying:
We’ve all been guilty of conspicuous spending, and it’s one of the defining characteristics of modern day culture. However, as you start taking the journey to becoming a home owner you have to acknowledge the fact that your financial situation and lifestyle will have to change, and this includes changing your spending habits. Once you’ve figured out how much you need to save towards the down payment, you might have to bootstrap your budget and avoid impulse buying in order to meet your saving target each month. And learning to control yourself to avoid impulse buying can contribute a lot to helping you achieve your goal, as spending less leaves you more cash to save.
Reduce or Eliminate Your Debt:
Reducing or eliminating credit card and loan debt will not only improve your credit rating, but it will increase your borrowing power and help you get better rates once you do get approved for a home loan. With less debt, you’ll also be able to save more towards your down payment. The website crownmoneymanagement.com.au/ has some awesome tips on how you can go about reducing your debt to achieve financial freedom and pay off your home loan in record time.
Be a Savvy Shopper:
Whatever you’re buying, shopping around for deals and comparing prices from different providers is a great way to access great deals. In fact, there is always a sale going on somewhere on pretty much anything online, from food to clothes and equipment. Changing your supermarket to a more affordable one can be a game changer as well, and so can bundling your insurance with one provider.
Evaluate Your Spending Habits:
You’d be surprised at how much you spend on seemingly small items every day, from coffee to daily lunch costs and many other ‘hidden’ expenses. Analysing your expenditure for a few weeks can give you a good idea of what you’re spending on and you can use that data to cut back on small but meaningless expenses, and make a conscious effort to rather save that money towards purchasing your new home. For example, you could prepare lunch from home instead of getting take-out, or cut down on the amount of coffee you purchase each day. While seemingly small, these daily savings can really increase your saving capacity over time.
Consider Other Major Expenses:
Analyse your financial situation to ascertain whether paying for your down payment and ensuing mortgage will fit in with other major and important expenses like saving for your child’s college fund, and retirement etc. If you figure that you’ll be able to finance a down payment saving and mortgage alongside these other costs, then you should definitely continue saving for it. However if you’re not in a good position to add another major expense to these important essentials, then you should consider waiting until your income increases in a few years or are able to get a more affordable property that meets your preferences. In the meantime, you can work towards getting a promotion at work, or start a small enterprise or offer consulting services in order to supplement your income enough to start saving for your home.
Inform your family and friends about your decision to save toward a home purchase, because it will affect your lifestyle, and in turn, theirs as well. It makes it easier for them to meet you halfway and understand that you won’t be able to go out as often or participate I social shopping sprees anymore. Plus being accountable to someone else other than yourself will motivate you to stick to your goals.
While it’s important to alter your spending habits in order to save for your down payment, it’s equally vital to find balance in your approach. For example, host a shin-ding at your place once-a-month to celebrate life with friends and offset missing out on all those dinner dates with them. In a nutshell, don’t relegate yourself to an ascetic lifestyle for the sake of your goal, rather avoid extreme spending and save wisely.
Final word of advice
Remember that there are a large number of vacant real estate on the market. You should always bargain the price before purchasing your home. And you should also consider purchasing older type property, these are usually sold at below market price because they need to be renovated. You can easily add value to these properties by simply doing garden landscaping and integrate a stunning fiberglass pools from companies like riverinapools.com.au. A fiberglass pool is a cheaper option and will last a lifetime.