Want to buy a property but not sure where to start saving — or how? Follow these expert tips to learn how to make managing your finances easy.
Many Australians find managing money stressful and overwhelming. Do you get a piggy bank? Download an app? Possibly just stick all your spare change under the mattress? Buying a property is probably the biggest financial commitment you’ll ever make so it’s important to do it right. Here are our top tips if you’re looking to start saving for a new home or investment.
1. Set realistic goals
So, you want to start saving, but how much and by when? It’s easy to say ‘as much as possible’ but if you push yourself too hard too fast you may end up disappointed. By setting realistic goals you’ll be able to feel good about your savings and track how you’re going month to month. We recommend speaking to a financial adviser or accountant about your yearly income and expenses. They’ll understand your financial situation and help you decide how much you can expect to save up within your desired timeframe.
2. Make a plan
You’ve set a goal so now you need to figure out how you’re going to reach it. There are some fantastic money saving apps that can help you track spending, set budgets and stick to them. It’s a good idea to put away at least 10 per cent of your earnings as soon as you get paid, but you can also moderate your spending and maximise your income. Here are some tips you can use to stick to your new budget and boost savings for your new home:
– Cut down on luxury items. These include new clothes and accessories, sports gear and more. Before purchasing, ask yourself: do I really need this?
– Shop the sales. Discount department and grocery stores offer great savings, while using food planners and meal budgets will help you shop smart.
– Eat out less often. Try taking your lunch to work and save nights where you eat out or get takeaway for special occasions only.
– Manage your debts. Speak to your financial adviser or institution about the right way to handle any debts you may have and how to optimise your savings strategy.
– Open a high-interest, low-fee savings account. Different accounts have different benefits, so look into the pros and cons of each and pick the option that’s right for you.
– Sell your stuff. Downgrading your car, selling unused clothing and accessories online or renting out a room or garage in your home can be good ways to generate extra cash.
– Add a second income. If you’ve set a high target and are really gung-ho about hitting it, getting a second job on weekends or after hours is a good way to go the extra mile. Just be careful not to over-extend or exhaust yourself, and ensure you speak to a tax adviser to ensure this is a suitable option for your circumstances.
– Take cheaper holidays. You’re saving, but it’s really important to give yourself treat days and getaways. Try camping instead of staying in hotels, and driving to beautiful destinations nearby for weekenders or daytrips instead of flying overseas or interstate.
3. Get good advice
Finally, and perhaps most importantly, when you’re looking to save for a new home, is getting good advice. You’ll need to know what you can afford so take advantage of the great home loan tools and calculators available for free online. It’s also a good idea to explore your options up front. Aussie’s expert brokers can take you through many of the opportunities which may be available to you, help you find a competitive interest rates and present a cost breakdown of the expected government fees for your loan amount.
So what’s the key to making your money work for you? Setting realistic goals, putting a good savings strategy in place and getting good advice about your own financial position and the options available for your future home loan. Speaking to an Aussie Broker can help you understand how home loans work and find the option that’s right for you.
What’s your tip for saving up to buy a property? Tell us your experiences in the comments below.
