We are passionate about educating and helping our clients own their own home sooner and continue their financial journey to wealth creation through property and financial freedom.
We hope you find these strategies and tips helpful and implement them straight away into your own life.
Step 1 – Create your money management system
The first step in any plan to fund a house purchase is to have the skills in managing your money well to save for a deposit. We have written a previous post explaining how to set up your money management system which can be viewed by clicking here.
The money management system offers an easy to use savings method where you calculate your available income after expenses, and automatically transfers these savings into specifically labelled bank accounts and therefore cannot be spent on other things.
Step 2 – Reduce Expenses
Reducing living expenses does not necessarily mean foregoing your lifestyle. It does mean looking at what you’re already spending your money on and where you can make adjustments.
For example, your monthly mobile phone bill could be reduced by looking for alternative options from different providers that may be cheaper, but still offer the same features.
Do you need all the streaming services or could you get by with only using one and alternating between them?
Check out https://moneysmart.gov.au/budgeting/budget-planner which is a free tool offered by the Australian Government to easily budget and manage your spending.
This calculator is extremely useful in creating a visual of where you spend your money and how much free cash is left over after all expenses whether yearly, monthly or weekly.
Another great short term strategy to reduce living expenses is to move back in with parents if currently renting, or continue living with parents as long as possible to save for a house deposit.
Step 3 – Increase your income
The more income you can generate, the faster you can increase your savings for your house deposit. This can be achieved by becoming more valuable within your workplace. You could take on extra tasks, putting in extra hours to get more work done (working overtime), learning faster, or negotiating a raise with your employer/s.
Enrol in education or short courses that could boost your knowledge to take on more responsibilities, or assist you in getting a promotion if possible. Ask your employer/s about extra training if your company provides it, or what external study you could complete to increase your value at that workplace.
Step 4 – Get your partner involved
You are most likely going to buy your home with a partner or spouse, and it’s important to be on the same page in terms of managing your money. Discuss the money management system and work together to set up your bank accounts for expenses and savings. This can be done together with the same bank by joining all accounts, or only setting up a joint home deposit savings account.
Remember there is no right or wrong way, some couples prefer to keep their finances separate, and have a joint account for savings, whilst others wish to combine all their bank accounts. Again, it’s important to be on the same page and keep communication open. Share living expenses and help each other with budgeting. Agree on big expense items together such as designer items, technology items and cars.
Step 5 – Speak with a professional
Speaking with a mortgage broker who can help you own your own home sooner. A mortgage broker can help with calculating how much of a deposit you need to save, how much you can borrow from different banks, how to prepare loan applications, finding the right loan options, structuring of loans and more.
Having the right mortgage broker supporting you to capitalise on their knowledge and experience can make the world of difference in getting it right the first time, and can get you into your home sooner, whilst saving you money.
At Wealth Psychology, we specialise in tax accounting, financial planning, and home loans. We can show you the pathway to buying your first home sooner.
We help our clients take the next step in buying their first investment property, as well as formulate a plan to continue building their property portfolios. As credit specialists, we have access to multiple lending options to fit your personal needs.
Contact us today via our website contact page or Facebook page to find out how we can help you.