Times are tough. Especially with the state of the global economy at the moment and no signs of things changing any time soon. So you might think it’s impossible to save for a home loan deposit at the moment and get on the housing ladder. The reality is, it may not be as difficult as you think- here’s how to do it.
Make a Budget
To save for a home loan deposit, you need to be in control of your finances. You need to be disciplined about it. Any slackness is a form of inefficiency that will simply prolong the time until you meet your target.
Take three months of accounts and analyse them carefully. Check your cd rates. Look at the essential outgoing and what you’re bringing in. Is there anything you can cancel, such as subscription services? Set attainable goals, and you will have an idea of how long your savings will take.
Open a Savings Account
In order to save, you need somewhere to put the money, and it’s best not to mix it up with the money you use for spending and daily expenses. Various savings accounts exist, so do some research and get the best interest rate.
Consider a tax free savings account. These are very popular for long term saving and are available from most lending providers. With one of these accounts, you don’t pay any tax on your savings and will get the best value for your money. Set up a monthly direct debit, even if it’s only for a small sum.
Control Your Spending
One of the biggest barriers to saving is spending. That’s because we tend to live in the moment and enjoy spending our money. However, it’s all too easy to empty an online shopping basket or buy our favorite coffee when we get a craving.
Controlling your spending doesn’t mean giving up treats or special events; it means understanding the difference between needs and wants and making responsible decisions. Think of your savings as a game; it will make it more interesting and successful.
If you find it difficult to budget and control your spending when saving for a deposit, then apps can help; several savings apps on the market will automatically save a portion of your income and put it in a savings account. You can even use these apps to invest in the short or long term.
If you’re thinking that you spend all your time working and there’s no extra time to earn income, you might be mistaken. There is always a bit of extra time in the day. It might be during your lunch hour or an hour on your day off. It’s an opportunity to be productive.
Earning a little extra, along with your budget routine and savings app, should make your home loan deposit within reach. You could use the spare time to start a monetized blog, join an affiliate program, or make crafts to sell on online marketplaces.
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