Tips to Save for a House Deposit

Buying your first home has never felt harder and it’s clear that people could use a helping hand.  Australian’s typically approach their finances with a ‘do-it-yourself’ attitude, and have quite a reactive, last minute approach when facing up to life-changing events such as home ownership.  

We understand Australians have a high emotional drive for property ownership and we see the importance to satisfy this driver to create life satisfaction.

Here are some tips to help make it happen:

Tip 1 – Determine / Cut Down your Expenses:  Saving the house deposit is going to involve some sacrifice.  Try cutting down on a little luxury each week.  It all adds up.  As a first step, determine what your living expenses are so you are happy, whilst also ensuring there is money left over to save.

Tip 2 – Start Now:  It doesn’t matter if you don’t know exactly where you will buy.  It’s going to take some time to save for a house deposit, so start a regular savings plan now and sort the finer details later.

Tip 3 – Stash your Cash somewhere Sensible:  Investing short term in the share market is not usually a good option.  Whilst an online savings account doesn’t pay much in interest, it is most likely the right place to save for your house deposit.

Tip 4 – Avoid Paying Rent:  One of the hardest parts about saving for a deposit is saving cash whilst also renting.  Living with your parents is not always an option, however if this is possible it will supercharge your savings.

Tip 5 – Save like you’re paying a mortgage:  Many people say they find it hard to save because they’re renting and still have all the other expenses as well.  If you have to rent, then as a minimum you should be saving the difference between your rent and expected mortgage repayments.

Tip 6 – Don’t forget Lenders Mortgage Insurance (LMI):  If you can save 15% – 20% of the purchase price you will generally avoid paying LMI.  The aim should be to avoid LMI because the insurance isn’t actually for you, it’s to protect the lender.

Tip 7 – Allow for Other Extra Costs:  Costs such as Stamp Duty and conveyancing add up and need to be factored in.  The Stamp Duty amount will depend on the purchase price and the State in which you purchase, whilst conveyancing costs will range somewhere between $800 – $2,500.

How JBS can Assist

We believe the biggest influence on you achieving your financial and lifestyle goals is how you best utilise your cash flow.

This has driven us to develop the JBS Cash Coach program which aims to assist the Generation X & Y demographic, and anyone else requiring advice / coaching / mentoring / tracking / accountability regarding their cash flow and financial goals, such as purchasing a first home / debt reduction / retirement planning etc.

We assist clients to develop great money management skills.  This puts you back into the driving seat, using high impact track and reporting technology teamed with expert advice.  We help clients get their finances back on track, so they can achieve their goal.

We have helped around 10 clients this year purchase their first home, and this was achieved through the JBS Cash Coach program.

If this is something of interest and you are looking for accountability and ongoing advice around achieving your savings goals / house purchase please give JBS a call.

Please refer to this brochure for further details.