Saving a house deposit calls for a “sure and steady” approach. An important starting point is to develop a savings plan you can comfortably live with.
Ideally, your savings plan should adopt a two-pronged approach – combining regular saving backed up by lump sum deposits. Here’s what’s involved.
Saving a house deposit might not happen overnight, but it can be done by consistently tucking away cash on a regular basis.
Drawing up a budget will help you understand how much you can realistically save each pay day. After that, make it happen by organising an automatic transfer of money out of your everyday account and into a dedicated savings account.
Look for a savings account that pays a consistently strong rate of interest. Some pay the top rate only for a limited period, after which the interest rate can drop significantly.
Lump sum deposits
It’s likely that throughout each year you’ll receive lump sums of cash. These might include a tax refund, an annual work bonus and even cash gifts for birthdays and other special occasions.
Adding these amounts to your home deposit doesn’t just give your savings a valuable boost, it can keep you motivated to reach your goal.
Cutting costs to save more
Your budget can also highlight areas where spending can be trimmed to boost regular savings.
Every dollar counts when you’re saving a home deposit. Cutting back on luxuries, such as gym subscriptions, dining out and takeaways, can provide extra cash to fast-track your savings.
It might mean giving up a few non-essentials for a while, but the reward will be buying your first home sooner.