Best Budgeting Tips for a Home Loan Deposit
Here are our Best Budgeting Tips for a Home Loan Deposit!
In this blog we share some very simple, practical tips on how to budget for a home loan.
If you are struggling to find ways to save, just start working on a few of these to see some results. Work on many and you'll see bigger results. If you change your whole approach and work on all of these, you will be well and truly on your way to saving for a home loan deposit.
Make your meals - Yes this takes time! You also need to plan ahead with your shopping, get a little creative on the meal options and potentially also discover what a pot and pan are used for in the kitchen! We have clients who get Deliveroo daily simply because it's easy and convenient however when they look at their savings account to see it almost non-existent, this change can save an individual big bucks. Let's well and truly under quote a lunch meal for $10, then compare that to a nice pre-made salad, spaghetti left overs, rice and tuna bowl, box of vege and hommus dip, or any other quick and easy meal which might cost you $5. You have just halved your weekly expense, better yet treat yourself on a Friday and half your spend for 4 days of the week. $20 per week saved in food x 48 working weeks a year is $960 per year saved!
Forego brewed coffee - If you're a coffee lover, then perhaps this is an insult to you! However, if your workplace provides coffee (instant even) or you can cut down your daily intake of brewed coffee, you could see some more change in your pocket. Let's pretend a regular coffee is $4 and you like to have two per day, let's also pretend you are HIGHLY MOTIVATED to save for a home and you are willing to forego this for a cup of tea, some refreshing water, a herbal tea or even workplace instant coffee! $8 per day = $40 per week x 48 working weeks a year is $1,920 per year saved!
Turn off your power switches - We cannot begin to calculate the potential savings here as there is no common household example. You may have lots of devices, old refrigerator, live in a location where air con is needed most of the year, etc. but turning off your power switches after using a device (kettle, toaster), turning off lights when you leave a room, turning off all power when you go away for the weekend or on holidays are simply a good thing to do for your budgeting, for the environment, for your energy consumption and carbon footprint. So regardless of budgeting needs, adopt this habit anyway!
Find cheaper fuel - With a very quick Google search it looks like average fuel consumption is 1,800 litres per year and 15,000km travel distance. Based on this information if you planned where you get your fuel from (not just what's convenient) and saved $0.05 per litre, you could save $90 per year. Now I don't know about you but I can find a price difference of $0.15 between a major fuel supplier and a budget supplier just by turning off the main road. So I've just tripled the potential savings to $270 per year.
Public transport (avoid tolls) - If car travel is chewing up the cash on a weekly basis, perhaps it's time to consider public transport. If it is an option and you can save some money from changing your travel method, you'll not only see the benefit in your bank account but you may also enjoy some time to read a book, study the property market, catch up personal emails / admin and tick a few tasks off each day while someone else does the driving.
Eat out less - Similar to the lunch preparation, if you are the type of person to each out 5 days a week because you haven't made the time to learn how to cook, then perhaps it's time you invite someone over who does know how to cook and they show you how easy it is to use YouTube or read a cook book! Again, it takes some planning, you need to have something in the cupboards to be able to make a meal, hopefully you are making a healthy meal which means some fresh produce is included. but take that $15-$20 per take out, halve it and you're potentially on your way to saving another $50 per week x 48 working weeks a year is $2,400 per year potential savings!
Cheaper products (cosmetics, clothes) - Perhaps it's time to let go of ego and start buying something which isn't top of the line, designer brand name if you're getting serious about saving for a home loan deposit.
Stop unnecessary spending (consumerism) - If you struggle to walk past a shop without having to buy something, then don't go to the shops! Magazines, trinkets, smoothies, sweets, gifts, etc. could all be the little differences in the extra $10 per week in your bank account.
Close unused subscriptions (gym, Audible, Stan, Netflix, etc.) - If you are a TV series tragic, perhaps it's time to do more than close the unused subscriptions too. One of the most common expenses that accumulate over time (if unused) are subscriptions. The Gym Membership is a classic example of how people can get very motivated, commit to a program for 3mths then something changes and the gym is no longer the priority. The membership isn't closed as it is used as a reminder to get back into it but it doesn't happens.
Put 10-20% savings away every pay - Let's pretend your household income (couple) after tax is $100,000. If you are budgeting well, putting 10%-20% of your income aside before allocating it to lifestyle costs, that's a potential $10,000-$20,000 savings per year.
Below are another handful of ideas and from the above, I think you are getting the picture of how a shift in mindset, a different approach to how you do things can produce results and the important thing to realise is, lots of small changes add up quickly.
Without putting a number next to all of the above and the below ways to save, you could add the above figures to be approx. $16,000-$26,000 savings per year. And let's be realistic, this is not an easy thing to do, otherwise everyone would be doing it. Budgeting for a home loan deposit takes time and consistency, so if that's the goal, then start making those changes.
More of our best budgeting tips for a home loan deposit:
- Shop around for cheaper services (phone, gas, electricity, insurance)
- Try using free applications as opposed to paid apps
- Refinance existing debt for cheaper rates
- Look for deals (holidays, travel, accommodation)
- If you break a big note at the shops, keep smaller notes and coins in a savings jar
- Walk or ride to the local shops (it's healthy for you too!)
- Find a savings account with a better interest rate (does that exist?)
- Use an offset account or redraw for your savings
- Be disciplined when shopping for groceries
- Use up what's in your pantry
- Repair items rather than dispose of them (clothes, household items, etc)
- Limit personal care expenses (nails, massage, hair)