Start with a clear budget.

The first step towards saving for a house deposit is to establish a budget. This will provide an insight into your income, expenses, and how much you can realistically set aside each month for your deposit. It’s particularly important to set this budget as soon as you start thinking about buying a house. You need to be clear about how much you can afford to put aside each week or month and what is realistic for you. It’s a good rule of thumb to aim for a deposit that is at least 12% of the property’s purchase price. This amount should cover your deposit, stamp duty and legal fees.

Set up automatic transfers.

Every month is different but the amount that you save should be non-negotiable. Making the savings automatic will help you stick to your plan, whatever happens. Setting up automatic transfers is a highly effective and hassle-free way to get started. Simply set up a direct debit to transfer your saving to another account as soon as you get your salary. I call this the pay yourself first method. This takes advantage of the ‘out of sight, out of mind’ principle, which can help curb temptations to spend.

Reduce unnecessary outgoings.

Now that you’ve committed to saving a certain amount each month, chances are you’re going to need to cut back elsewhere. This may sound like an easy decision, but reducing your monthly expenses is a surefire way to save more money. Take a closer look at your current lifestyle and see where you can make some cuts. Are you spending too much on dining out? Can you switch to a cheaper phone plan? By making small sacrifices now, you’ll be able to save up for your house deposit much quicker.

Start tracking your expenses.

Not sure where your hard-earned money is going? It’s time to find out. Having a clear idea of how and when you spend your money will help you to save it properly. Track your expenses and identify any areas where you may be overspending and to get a clear picture of where your money is going and help identify areas for potential cutbacks. It doesn’t have to be a complex system. Figure out what works for you. Contact us and we can provide you with a simple spreadsheet.

Lower your rent payments.

It’s no secret that the average cost of rent is rising. While some people have no choice but to rent a home, it’s worth thinking about your options. If you can move back in with your parents for a brief period or rent a room, rather than a house or apartment, that could make all the difference.

Look for additional income streams.

Are you still falling short of the mark? If you’re struggling to put aside a decent amount of money each month, there are ways that you can boost your income. While it’s not always easy to make extra cash, it’s worth considering your options here. If you want to save up a significant amount of money in a shorter period, you can consider taking up a part-time job to supplement your income. Maybe you have a valuable skill or talent that you can monetise, such as freelance work or selling goods online. This income will go straight towards your savings so you can reach your home deposit goal faster.

Differentiate between needs and wants.

It’s always going to be challenging to save a significant amount of money. However, by changing your perspective on spending, you may make it easier. One effective strategy for reducing spending is differentiating between ‘needs’ and ‘wants.’ ‘Needs’ are essential expenditures for survival and basic comfort, such as rent, food, and utilities. Wants,’ on the other hand, are non-essential expenses that enhance our lifestyle, such as a new pair of shoes, dining out, or the latest electronics.

with Philip Cullen of Southeast Mortgages & Financial Services

This article aims to give information, not advice. Always do your own research and/or seek out advice from a Financial Broker before acting on anything contained in this article.