Let’s be honest, its daunting for a first home buyer trying to enter the property market. A bare minimum home loan deposit will generally run into the tens of thousands and unless you are one of the lucky ones with a blue-chip salary package, getting a suitable deposit is easier said than done. But you can make some headway just with some simple tweaks in the way you manage your money, and more importantly the way you think about money.

Don’t Fear Commitment

Ask yourself – do you REALLY want to buy a home? If the answer is a resounding “yes” then good for you, you’ve past the first step, now you need to make a commitment.  Understand that it may not be easy, and it may take several years to achieve your dream but with a little planning you can make significant headway.

To get you started, here are some real-life tips to help you save for the deposit you need.

Kick Your Debt to The Curb

To get you in front from the start, pay off any debt hanging over your head. Whether it be credit card or unsecured debt, get on top of it fast to mitigate further interest payable which is money straight down the drain. Not only will this then free up future funds for saving purposes, the less you owe the more you can borrow come loan application time.

First Home Super Saver Scheme – do you even know it exists?

This government initiative allows first home buyers to kick start their saving by making voluntary contributions into their super whether through salary sacrifice or personal contributions. Up to $15,000 of voluntary contributions made in a financial year count towards the amount that may be released.

Budget! Budget! Budget!

This sounds Boring Boring Boring but it will go a long way and will be the easiest and fastest way to kick start the savings. Audit your outgoings and see where some fat may be trimmed. Your phone, internet and insurance providers are great places to start so have your current plans reviewed and source cheaper options. When you do find more cost-effective alternatives make sure you redirect those savings to your home slush fund.

By reviewing your spending and securing savings on your current commitments you should be able to identify a monthly saving amount that is realistic. Once you have committed to a figure, set up a direct debit to your account, so you don’t have to think about making transfers or be tempted to dip into it.

Get paid to shop

After you have made a budget and have set aside a weekly amount for groceries, order your items online instead of making a trek to the supermarket. To mitigate a delivery fee, opt to collect your purchases at the store. This will also alleviate the possibility of overspending due to impulse purchases.

Have you ever heard of Shopback? Its an online platform where you can order items from an extensive variety of popular stores at regular prices, with the bonus of receiving cash back after the purchase has been made. So instead of receiving discounted goods, you physically get the cash back. If you take advantage of this site, make sure the cash back goes straight into your savings account.

Coffee – It’s not that good for you anyway

Your priorities need to realign, that’s for sure. For instance, those minor “necessary” expenditures amount to major funds frittered away. Take coffee for example. If you buy a coffee each day at work, you are probably looking at in excess off one thousand dollars per annum for that caffeine hit. And that’s just factoring in one, if you are buying multiples along with add-ons such as muffins or pastries then you can easily double that and then triple it if you are buying lunch as well.

Reassess your discretionary spending and make purchases on a “need” not “want” basis or scale back on luxury brands and opt for their more generic counterparts – trust us you will survive.

Choose a Savings account on steroids

Don’t just settle for any savings account, make sure you do your research and choose one that works for you. Bankwest have their Hero Saver that we find is popular with many of our clients, but that’s just the tip of the iceberg, there are plenty of high interest bearing options available at most lenders that will see your balance grow.

An “outside the box” option is ING Direct’s Savings Maximser. This product has the option to round up credit card purchases to the nearest $1 or $5 with the extra going straight into your savings. With this product you are saving money without really thinking about it.

Get some love from the Tax Man

The average Australian receives just over $2,500 per year from the ATO in the form of a tax refund. This should go straight into the home loan deposit kitty, not questions asked. The same can be said for any other lump some payments you may receive such as bonuses and inheritances.

Spoiler alert, you can’t live in your car!

Cars are a necessity but at what cost? Couples should seriously look at scaling back to just one, particularly if there is debt involved. By selling a vehicle with a car loan you are freeing up precious income that could go towards a deposit not to mention recouping any equity you may have in the vehicle in the form of cash. Furthermore, funds will no longer be diverted to paying fuel, insurance, maintenance, registration and the like. If commuting is viable this is worthwhile to seriously consider. With the emergence of ride sharing services such as Uber it could be well worth asking yourself, how much your car is holding you back?

Just recently we had a client, let’s call him Darryl (because that’s his name) purchase his first home with his fiancé. By selling his car Darryl was able to save around $17,000 in six months. Freeing up funds to purchase somewhere to live makes sense especially when you think about money you have tied up in a depreciating asset could be diverted into the purchase of a potentially appreciating one. Be like Darryl.

Saving for a home is not an easy task for most but like anything in life you don’t know what you can achieve until you at least try. We think there are some real-life tips here that anyone can adopt. But if you need more information give us a call we are always here to help, and nothing would give us greater pleasure than to see you get into your first home.