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My ultimate goal is to buy a house. To do so I need that house deposit, which is hard to save up when you are paying a small fortune in rent. So apart from downsizing or moving in with my parents, what tips and tricks do you have to save for a home deposit sooner? Sadly its cheaper to pay a mortgage than it is to rent in this town, but the deposit is holding me back and as stated the biggest hurdle that I can see so far is our disgusting rent prices.
Make sure the account has a good interest rate attached if you make no withdrawals, also create a loose change jar surprising how quick change adds up, add in any tax back refunds and try to save a set amount each week or fortnight maybe even set up a direct debit so it's "gone" before it's even "seen".
It can be very challenging to save but if you keep yourself focused you will get there also if your first home buyer look into the grants that are given now to buy an existing home or grants for land and packages. Good luck.
We use a whiteboard where we write down every thing we spend for a month. (We do this 2 or 3 times a year). Its amazing how accountable you get for a $2 snack when you have to write it down! Its small stuff but usually you can see a couple of things that may be able to be trimmed back a bit to save some $$$.
We did that. I carried a notebook with me to write everything down. Then DH and I would go through it all each week or so.:
Check for "money leakage" everywhere else in your budget: are you paying more for phones/Internet/electricity/gas than you could be? Are you subscribing to anything but not using it fully, could it be cancelled? We recently achieved some savings by installing switches & timers on all our electricals with standby settings. Calculate how much you've saved and bank it.
Also: buy yourself some good quality no-leak travel coffee cups. I have saved myself a fortune by making my coffee & taking it with me (we've got a pod machine but it has paid for itself many, many times over). Same goes for stainless steel drink bottles in summer or smoothie cups if that's your thing. Again, work out how much this saves you each week and bank it.
Also, bank any "extra" $$ that come in - refunds, bonuses, tax return, lotto wins, Medicare rebates, etc. Treat this money like you never had it and you won't know its "missing" out of your budget. When family members ask what gift you want, invite them to contribute to your house fund instead.
Thanks guys, all great ideas!
Would it be worth moving in with your folks for a specified amount of time? Say you needed $50k, could you get to 40k then move back in to save the last 10k or something like that
We did the notebook thing, and then we did double entry ledgers, so there was a general ledger with ALL the ins and outs, and then separate tables for different categories - medical, bills, insurance, food, entertainment, etc. And then we did a budget every fortnight, to allocate how much we agreed we could spend on things - some were obviously static (eg: insurance, rates, train fares, etc) but others were tightened.
Actually seeing how much you spend on things might surprise you - food, clothes, beauty products, etc - which might help you save, if you're going to have to account for it all.
You might already be really frugal, but most everyone I've known has been surprised by going through this exercise with a fine toothed comb - we realised we were spending heaps more on entertainment than we thought - we only were going out once every few weeks, but we always spent more than we expected to, but justified it at the time. And books. I couldn't believe how much I accidentally spent on books.
One friend spent loads more on skin and haircare than she thought, and also couldn't believe how often there were the "just one" things - a new handbag, an updated coat, flowers for a sad friend, a teddy for her nephew, taking her parents out for their anniversary, a donation for a colleague's kid's fundraiser - all completely fine things in isolation, but they added up to literally hundreds of dollars every month, and she just had to start saying no to herself and others ...
And I was also shocked at how much food we actually had in the pantry! And how much fresh got wasted. So we've changed that too ...
So we wrote down every cent (every phone call in a pay phone, every fill up of petrol, etc) and so very many times in the first few weeks, I would actually decide NOT to grab something to eat on the way home (or whatever) because I didn't want to have to write it down, and justify it!!
Sounds a bit sad, or matyrish, but you know what? I was saving for something super, and super important. :)
CHeck out some of the savings tips websites. Many have free newsletters or similar that can get you in the right headspace.
Be warned - once you turn frugal you may never turn back! It's 3 years since we bought our house and I am still such a tightfist. It's what lets me stay home with my kids, so it's totally worth it, but hard when friends are going out for coffee mornings, or lunch, and I sit there nursing my latte that I paid for in 20c pieces! That's been the biggest key - to hang out with similarly minded people, and give up worrying what anyone thinks.
It helped me to consider my first world mentality - rather than be concerned that my clothes weren't designer or brand new, to consider how many people in this world don't get to ever buy new clothes. If you slide your scale, you can feel rich with really not that much. Then squirrel the rest away as if it were never there.
We also, while saving, paid our savings first, then bills, then fun money. The savings we put away were equivalent to what we'd be paying on a mortgage - but there were two of us, living in a cheap rental, so that wasn't actually too hard.