Save for your first home faster – how to create a budget
Buying your first home is one of most exciting times of your life, but saving for that magic deposit number can quickly feel overwhelming. A clear savings strategy will help you to efficiently reach your new home goals, without putting yourself under financial stress.
Below, Homebuyers Centre’s expert finance team, Resolve Finance, offer their tangible tips for sticking to your budget and manifesting your dream home:
1. Find your realistic savings number
Don’t try to save too much, too quickly.
‘It’s important to find a happy medium. I see a lot of people who restrict their spending to the point they resent the idea of budgeting and fail pretty quickly,’ says Resolve Finance mortgage broker Jasmine Brennan.
Begin by writing down your total monthly income, after tax. Next, list all of your expenses – from rent, utility bills and car payments, to Uber Eats, coffees and streaming subscriptions. This will help you understand exactly how much of your pay is realistically saveable.
Don’t forget to bake in a buffer of funds for unexpected expenses, such as your car breaking down or replacing your phone.
2. Automate your savings
Take the guess work and stress out of your budgeting by treating your savings like a non-negotiable bill. An easy way to automate your savings is to organise your expenses into separate accounts or ‘buckets’.
For example, ‘fixed bills’ (for consistent payments such as rent, car payments and subscriptions), ‘spending’ (for variable expenses such as visiting the hairdresser and eating out), ‘emergency fund’ (for unexpected expenses) and ‘home savings’.
Set up automatic transfers to each of your ‘buckets’, including your savings account, on pay day. Just make sure to double check your working out to avoid any overdraws and pesky fees.
3. Find a budgeting tool that works for you
Knowledge is power! Use budgeting tools such as apps, spreadsheets or notebooks to monitor your income and expenses. This will reveal your spending habits and identify areas where you may be overspending.
‘It’s important you find a tool that works for you. I find many people enjoy the ease of apps, which integrate with their various bank accounts and automatically track their spending in categories, such as groceries, home goods and eating out,’ says Jasmine.
‘At Resolve Finance, we provide clients with a bespoke savings tracker that helps them build confidence by reaching achievable milestones, such as $1,000, $5,000 and $10,000.’
Resolve Finance offers a complimentary My Home Plan tool to help you track your spending and savings. Other popular budgeting apps include WeMoney and Frollo.
4. Create fun in your savings plans
‘No spend challenges’ are popular on social media, with TikTok a great place to find fellow savers who adopt a similar mindset. Do you have a wardrobe full of clothes? Commit to not buying new garments for an entire year unless a key piece breaks or wears. Spending too much money eating out? Commit to only eating at a restaurant or buying your lunch once per week, instead of two to three.
Another way to curb impulse purchases is by using the ‘30-day’ rule. Commit to waiting 30 days before purchasing an item that caught your eye. This helps differentiate between your needs and wants.
5. Partner with an expert in savings
Even if you are years away from buying a home, it’s never too early to speak to a mortgage broker. Brokers are experts in their field and can provide a clear savings goal and the tools required to get you there.
‘Brokers can review your financial situation, calculate your current borrowing capacity and help you set realistic savings goals. We will then keep in touch until you are financially ready to purchase your own home,’ says Jasmine.
‘Many of my clients were actually closer to buying a home than they realised.’
Are you ready to start saving for your first home but aren’t sure where to begin?
Homebuyers Centre’s in-house finances team, Resolve Finance, are home loan and construction loan experts. They can help you determine the savings you need to acquire your dream home, and find a budget and savings plan that work for you.