Saving for your first home is probably the most rewarding feeling and one of the first truly uplifting financial goals you will ever work on. It’s akin to climbing a mountain, its a lot of work but it is possible and once you’re there the hurt doesn’t feel that bad in hindsight. If you are just starting out saving for your deposit, or thinking about how to tackle this, we assure you, if put the following steps in place you will intrinsically feel more in control and understanding of the saving process. The following is a Financial Advisers perspective, some of these tips could be just the juice to get you underway.

First up… Pick your Battle

Waterfront Mansion? Inner City Penthouse? Or a renovator 10 kilometres from the CBD. Either way, you have to know your target, this is so you can size up what your deposit should look like.

Pick your Battle Brisane Financial Adviser give perspective of saving for first home deposit

Speaking of Deposit – Aim for a Gold Class Deposit

I know its almost impossible to think about saving 20% of your home purchase price – but ideally that should be your target. This will really get you focused and should really annoy the banks. The more your deposit, the less you have to borrow, the less interest you pay and the ultimate triumph is that you don’t pay any Mortgage Lenders Insurance. Yes, you don’t pay the banks to insure against you. The part we like the best is that it means you have less dependence on the bank.

Gold Aim for at least 20% deposit for your first home_Glass Wealth Planning Brisbane

Book an appointment with a mortgage broker, or a bank.

We think it’s best seeing someone who has access to as many options as possible and isn’t afraid to tell you like it is. Banks are quite ‘blinkered’ in their product approach, Ie they won’t send you down the road to the bank that actually does have the better rate or more suitable loan structure, where as a broker will.  The broker or bank will grab your financials (Income & Expenses and Assets & Debts) they’ll do some sums and let you know the maximum amount you can borrow. This is a guide only or they call it a pre-approval. If the bank is willing to lend you a million, its probably not right using the whole amount, remember you will have this ball and chain mortgage around your neck for 30 years if the bank has their way so if you can find a suitable property well below the banks maximum lend then you should highly consider starting smaller. You don’t to be stuck to a loan for 30 years, so the bigger the loan the longer it will take to pay back, the more interest you will end up paying and that means less money you ultimately get to spend on your self. Oh and don’t feel pressured by the bank or broker to buy your property asap, ie before your desired deposit is reached. They just want to get you across the line sooner so they get your business. Be patient and feel no pressure.

Bank or Broker_Know your Options_Brisbane Financial Adviser

Do a Budget.

Really, you should have one already right. Most people don’t, we at Glass Wealth get that. We probably see about one person in a hundred that have an actual budget. But if you are serious then a budget is simple and important. You will be surprised what dirty little financial secrets you are hiding from yourself when you confront the budget demons. You need to know where your hard earnt cash goes, by doing a budget you can afford to work out how much you are able to save. This starts you off. From there you will find you will weed out the junk spending, the little things that don’t really add that much value to your daily life but add an extra $100 to your weekly outgoings. Cut, cut, cut the junk and scrutinise and therefore you will maximise.

A budget aint that hard

Open a Separate Savings account.

You don’t, absolutely don’t want to mix your monies, it’s dangerous. When you have all your deposit money mixed in with your daily money, your bills money and fun money. Give this separate account a Name, call it something like Deposit Target 30 if you are trying to save thirty thousand say. This is great because it reminds you of your goal, target and how you’re tracking all in one.

Start Saving

This is Gold. This is the exciting part and where you truly learn how to become a financial machine. You start to see your goals start to happen the reality of you being able to buy a home becomes more visible. Automate direct deposits into your account so you can see it growing. Automate so you can switch your brain off and it just happens. You see your balance growing and growing over time and it creates a self-fulfilling financial feedback look. Once you dominate the saving any other financial challenge that comes before you thereafter will be easy.

Don’t be afraid to say NO

You definitely don’t want to turn your life into a savings nightmare, penny-pinching till you’re crazy, watching the ground for every 20 cent piece you can luck upon. You still have to live right, still have to have a social life and retain your friends and do all the normal things people do, plus you deserve to give yourself little but inexpensive rewards along the way so you don’t turn into a social Zombie. BUT…the most important thing to you must set yourself up with the right social framework. You must tell your friends, this is what I’m doing, this is why and set a framework for them that you won’t be able to make every Thursday, Friday and Saturday social outing and that you would be more than happy with the social catch-ups but turning it into a completely affordable event at home or a park. Don’t be afraid to say no to social events that are going to cut deep into your progress.

Im Saving. Brisbane Financial Advisor Glass Wealth Planning
Brisbane Financial Adviser gives tips and perspective on saving for home deposit.

Invest in a Money App

It may cost you around 10 bucks a month but this is truly money well utilised. There are some great app’s out there that will allow you to link your accounts, track each and every transaction, categorise purchase, track your budget and make you feel more in control. The more you know and understand about your spending, the more you question it and look for more minimalistic approaches to your daily consumption.

Money App - Save More Faster

Fake it

This one takes a bit of creativity and imagination. Fake being poorer than you actually are. Tell yourself you earn say half of what you actually do, and live a lifestyle with expenses in line with the new fake you. It’s not for everyone, but the ‘fake it till you save’  headspace could just be a winning formula for some to overcome their spending addictions. Worth a try.

Talk to a Financial Adviser

What? I hear you say, that will cost a fortune. You will be surprised. There are a lot of great Financial Advisers out there are actually willing to sit down with a young or old saver who is looking to get some ideas on the best way to save and grow for a first home deposit. A lot of Financial advisers won’t even charge you. If they are a good one they should be more than willing to give up some of their time to help a potential future client.

Pick their Brains_Financial Adviser Brisbane_Glass Wealth Planning

Set yourself a Financial Plan

Mapping it out and writing it down can be the best way to lock in your savings plan and get a full visual of facts, figures and time frames.  This can be as easy as numbers on a piece of paper or a full spreadsheet all nerd like. Whatever suits you is perfect, just get it out of your head and on paper.

Seek out more Income

Yes, its possible to pick up more income other than your 9 to 5. This part is really up to your personal position, how much of your weekday evenings or weekends you are willing to sacrifice? How hungry are you to build wealth? This will become apparent by how to dedicate you are to picking up additional income. It could entail making something to sell, hook yourself up on AirTasker for small gigs cleaning or taking a few paid surveys. Ask friends or family how you can help them for a fee. As I said, this part is really personal and the opportunities are there totally doable.  Just remember don’t burn yourself out, keep a balance.

Extra Income from side gigs_Glass Wealth Planning_Brisbane Financial Advisor

Finally, it really is possible to adjust your lifestyle to reach your desired property deposit. In the end, you are the only beneficiary to sticking out your hard savings plan so you are better off reaching deep and going for it, and yes it will be hard and long.

Plan it, save it, invest it, whatever you do seek out as much information as you can to keep yourself inspired and motivated. Oh, and if you do want to discuss tips and trick with a Financial Adviser, find one in your local area and pick their brains.  If you are in sunny Brisbane, we are happy to help, no cost. We are based in Newstead, just North of the Brisbane CBD. Get in touch, we love conversations with determined savers.

Budget is a dirty word – Basic Financial Literacy