Creating a Savings Plan for Your Home Deposit

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Before anybody can embark on the great dream of purchasing a home, they need to start saving for a deposit. While having a budget is definitely an important part of the process, having a solid savings and financial plan in place ensures that first homebuyers are able to not only reach their goals, but afford them for many years to come. Read on to find out how having a savings plan could help get you in your first home sooner.

Have Measurable Goals

It is important to have an understanding of what you’re trying to achieve. ‘Saving for a house’ is a very vague statement. To turn your budget into an actionable financial plan, you need to set yourself actual goals and milestones. ‘Save $20,000 in 12 months’ removes the ambiguity and gives you something to work towards. You can then set your smaller targets such as ‘Deposit $1,700 per month into the savings account’ to really drill down exactly how you’re going to achieve the overall goal.

Having a figure to work towards is only one part of the equation – you also need to make sure your income and spending habits match up to your goals. Spend at least a month tracking exactly where your money is going. Every bill you pay, every trip to the grocery store, every coffee – if you pay for it, write it down. At the end of the month you’ll have a clear snapshot of exactly how much you’re currently spending, any opportunities to save money and how much you can realistically put towards your savings goals. Don’t be disheartened if your original goal isn’t possible with your income and outgoing expenses – use this information to reset the targets so that they are realistically sustainable and achievable.

Research The Market

Spend some time looking into how much properties in your desired area sell for, and how much a mortgage on them will actually cost over the term of the loan. You typically need 10 – 20% of the purchase price as a deposit, so getting an understanding of how much you’ll need to spend is crucial. You also need to ensure that the end goal is affordable and within your means while you’re paying off the mortgage. A site such as the BOQ website is a great source of information for first home buyers, with the latest home loan rates and other information that can help you towards home ownership.

A house deposit is one of the biggest figures you’ll ever need to save. Setting a budget is always a good place to start when it comes to achieving financial goals, but to really make your money work for you, it is important to be working to a bigger picture plan. This ensures that you not only can save that house deposit, but also continue to live a comfortable life once you’re moved into your dream home.

What is your best tip for people wanting to develop a savings plan for their house deposit? Leave a comment to share your answer.


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