Saving money to purchase a major asset, like a home, is no small feat. So, where do you start and how do you master the ‘saving’ gig?
We’ve all heard of those basic tips like, make a budget and don’t go out for dinners, but let’s be honest, who finds joy in the most mundane tips like those? We certainly don’t and with years of assisting property buyers under our belt, we know that we’re not alone, which is why we’ve put together some tips that are realistic and a whole lot more exciting!
Saving Tips
- Make purchasing a home your main priority and don’t invest elsewhere so that you can funnel all of your money into that one goal.
- Spend proportionally to your income (i.e. no more than 10% on materialistic items).
- Shop at a cheaper grocery store and try to always use all of your groceries rather than throw any away – make your freezer your side-kick in the kitchen!
Quit purchasing luxury items and delivery-based services like Uber Eats. - Decrease your smoking and alcohol intake.
- If feasible, live with your parents and/or family to try and save on some living expenses.
- Clean out your wardrobe and sell any quality, unused items.
- Analyse your subscriptions (i.e. Netflix and Disney Plus) and see which you could remove. You’ll be surprised at just how much you’re spending each month on subscriptions.
While it’s essential to save for your house deposit, it’s also important to know what else you need to save for and to better understand the whole process.
Here’s our collection of all you’ll need to save for, when it comes to buying a home.
Your Deposit
Starting with the obvious – you’ll need a deposit to bring your home-owning dreams to life, but how substantial a deposit depends on the price of your home and how much you have the capacity to borrow. Usually, saving 20% of purchase prices plus other related costs is a good idea and means you’ll have less to pay off over the years.
Bonus tip? When prepping to secure yourself a loan, use an online calculator and an estimate of what you may borrow to see what your mortgage repayments could potentially look like. This can help you prepare mentally and also ensure that the homes you’re looking at fit within your means and budget.
Purchase Costs
- Legal fees: These are the fees you’ll need to pay for working with a conveyancer or solicitor in the process of buying a home, and they’re estimated to cost around $1800 but this will fluctuate depending on where and what you’re buying and/or selling.
- Building & methamphetamine inspections: These inspections are important, as they ensure there aren’t any problems with the property that you or I wouldn’t be able to notice. If your home is older, this process is even more important.
Moving Costs & Furniture
Something else that often gets overlooked are the costs associated with moving all of our items into our new place, and the cost of the new furniture once we’re in there.
Of course, this can also be the one cost that you can save a lot on by recruiting family or friends with a truck or a trailer to help you move and make the most of second-hand marketplaces. But if removalists are required and you’re a lover of having everything ‘new’ for your new home, then these are additional costs you’ll need to consider beforehand.
Remember, though, that no one expects your house to be 100% Architectural Digest on day one unless you’re having Kris Jenner over for dinner. So, when it comes to furnishing your home, you can take your time to factor all actual spending into your budget once you’ve moved in.
Emergency Buffer
Always have an emergency stash that you can lean on should you run into trouble, in the instance when a bill costs you more than you’d originally estimated.
It can be difficult to know “how much is a safe saving buffer,” but aim for a buffer that will cover at least two to three months of living expenses.
Saving and purchasing a home is super exciting, but it comes with many added responsibilities that you should be aware of before jumping in too early, especially if this is your first time. If you have a question or would like some assistance to better understand the purchasing process, get in touch with us!
