It’s a sad fact that saving for a home deposit comes easier to some than others. Luckily, we spoke to someone with a knack for saving to throw the rest of us some top tips.
Nicholas from Western Sydney saved over $40,000 in a year while he lived out of home and supported himself on a low-average income. Oh, did we mention he’s 19?
Here’s what Nicholas of Aussie Money Man, shared on saving enough funds for a home deposit within a year.
It may sound obvious, but a lot of people give up on research because of the time and effort involved. But, Nicholas insists it’s all worth it.
“It’s a simple tip but I still say it first because it’s the most important: shop around,” he said. “When it comes to clothes, groceries – shopping at Aldi can be 60% cheaper than Woolworths and Coles – car insurance, literally everything, shopping around can save you a hell of a lot of money.”
It’s also worth double checking you’re getting the best deal on things like bank accounts and credit cards every few years.
To help with your research, sign up to e-newsletters, check coupon sites and read blogs and reviews to make sure you’re not losing out on quality just to save a buck.
Getting your priorities in order will allow you to have fun and maintain a social life without dipping into your savings.
“Basically, it comes down to your values,” Nicholas said. “If you value eating out with your friends once a week, then you should do that. But then you should probably cut out buying lunch every day by yourself if you don’t value that as much.”
“You do have to make sacrifices, but you don’t have to stop everything.”
Take advantage of government incentives
Nicholas found that due to his age and income, he was eligible for a variety of government incentives and rebates. For instance, he took advantage of the government’s superannuation co-contribution deal where they matched his voluntary super contributions.
Even if you don’t think you’re eligible, it’s at least worth checking, Nicholas encouraged. On top of well-known incentives like energy rebates and first-home buyer grants, you might also find rebates for things like using tolls to getting new air conditioning.
Automate your finances
If you struggle with discipline when it comes to saving, you may find one money mantra to really resonate with you: ‘out of sight, out of mind.’
This means that when your pay comes in, schedule it to immediately go to a savings account that you can’t touch. Nicholas guarantees this will help you stick to your goal and avoid temptation.
Make your money work for you
Nicholas suggested putting your money into shares, but this requires a bit of learning.
Dipping your toe into the share market can be daunting, but it’s certainly a skill worth gaining if you want to make the most of your finances. Ask for advice, start small and even if your money doesn’t work for you this year, you may strike gold eventually.
Another way is to check the interest rates on your savings accounts. It won’t save you bucket loads, but it’s worth making sure you’re not getting a raw deal.
Also, if you’ve been scrimping every dollar and have a decent whack of cash, pop it in a long-term savings account. The high interest rate – and inability to touch it – will help you get to that home deposit a lot quicker.
Words by Rebecca Mitchell .
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