In order to reach a deposit of around 20%, many home buyers spend several years saving. So, what other savings ideas can actually help you reach your deposit goal faster?
Saving for a sufficient deposit is one of the biggest hurdles for prospective home buyers.
In order to reach a deposit of around 20%, many home buyers spend several years saving. So, besides bringing your own lunch to work and cutting out the daily cup of coffee, what other savings ideas can actually help you reach your deposit goal faster?
Calculate the numbers
Often the best motivation to accelerate your savings is to calculate how much quicker you can reach your savings goals by contributing more each week. Our savings calculator allows you to set a target savings amount and savings frequency. By changing the savings term you can see how much you need to save each week to achieve your desired savings amount quicker. Check out our calculators here (desktop only).
So how can you squirrel away that little bit extra? Here are a few ideas to either spend less or earn more.
You may prefer to buy well-known brands when it comes to food, medicine, beauty products and clothes, but you can save a lot of money by switching to the generic brands. The products you are buying are often the same quality, except you are just paying more for the brand name. If you are in savings mode, consider whether switching to a generic brand temporarily will be worth it.
Cancel unnecessary memberships
You may like the idea of having a membership for Foxtel, health magazines or a gym, but do you really use them? You need to weigh up whether you really need these subscriptions or memberships and look at cheaper alternatives. For example, there are plenty of exercise workouts and health articles available online for free that you can access anytime.
Even if you don’t want to cancel certain memberships completely, consider reducing the plans. For example, you could reduce your phone plan to save $10 or $20 a month.
Ask for gifts you need, not want
Christmas and birthdays are usually the time of year that you can spoil yourself, but if you are trying to save every dollar, ask your friends and family for practical gifts. For example, you could ask for fuel vouchers, shopping centre gift cards (for your groceries) or furniture for your new home. They may not sound like exciting gifts, but at least they won’t sit in the cupboard un-used for months.
Rent or borrow
Buying things such as books, DVDs or CDs can cost quite a lot of money. Instead of buying a $25 DVD, you could rent it for around $5. You can sign up to your local library and borrow books, CDs, DVDs and magazines for free.
If you have similar tastes in music and books as your friends, then share amongst each other. Swapping these items can help save you money over the long term.
Sell your unwanted items
Selling your unwanted items is not only a great way to make some extra money, but it can help you clean out before you move into your new home and start fresh.
You may have clothes, shoes, electronics and even gifts you never used that you can sell online. Websites such as eBay and Gumtree are easy and quick to use and there are always people looking online.
Rent out space
Do you have a spare room where you live at the moment? Why not rent it out to another tenant to help reduce the costs of rent and bills. It would only have to be a temporary situation, but it can help earn some extra money.
Use your reward points
Do you have a rewards card with your supermarket? These reward cards can get you access to special deals and discounts if you pay attention. But be sure that there are no extra costs to signing up. You may find that you can reduce your weekly shopping spend just by using these loyalty cards.