Saving Graces

November 10, 2015

Start the habit of saving money today

Saving money needs to be treated with strict discipline, much in the same way as you probably treat your workouts or social life.    Popular research suggests habits generally form after at least 21 days of repeated activity, so starting today means you should be well equipped to have a strong saving history in the first quarter of the year.  Remember too that in order to qualify for a mortgage, you need to demonstrate a consistent and genuine savings history of at least three consecutive months.  


Creating a plan to manage your money better will help you keep track of what you earn and what you spend, and where any holes can be closed up.  Dig out recent bank statements and sit down with an open and honest mind.  You might get a shock which is good; it will give you an idea of what you can achieve if you knuckle down.    

Ditch the $14 beers

Socialising over the Christmas period can be exhausting – both on you and your wallet. Look for more cost effective ways to catch up with mates – BBQ’s and dinner parties at home are a much cheaper alternative – and your friends will understand what you’re trying to achieve when you tell them.  Why not turn the “catch ups” into “count downs” knowing that you’ll soon be leaving your current home.  Keep it fun.  

Leave the luxuries  

A few simple tweaks to your lifestyle can mean big savings.  Don’t go cold turkey like the lunch leftovers on Boxing Day, start small and you will adjust better!   For example, did you know that by taking your lunch to work every day for a month means $200 in your pocket?  Staying away from the Christmas sales will save you hundreds too.   Stopping other luxuries like Foxtel will also help. Remember, it’s only temporary.  If you like, look at a date in the future and reward yourself by buying something you’ve had your eye on for a while (so long as it’s within budget!).

Take a cue from Santa and his elves and work over Christmas

It may be hard knowing that your mates might be at the beach but if you’re working over summer, it means you’re saving and not spending.

Be realistic  

Shopping for a first home is a bit like shopping for your first car.  Was that a Bentley? Remember that your first step on the property ladder is just the start.  Be realistic about what you can afford. There are some great homes you can build in great areas at affordable prices. Remember to crawl before you run.

Get online

eBay and Gumtree are simple ways to make some money by selling items you no longer need and have the added bonus of cleaning up any clutter.  Remember, you’ll be moving soon so getting rid of things you haven’t used in six months means you don’t have to pay unnecessary money to transfer it to your new home.

Reduce your monthly loan and credit card payments

Free up more money by bundling them into one payment over a longer term. Freeing up more cash allows you to save more, which will, in-turn increase your overall borrowing power for your home loan.

Get professional advice

A good broker doesn’t just find you the best loan with the best interest rate and features. They will take the time to assess your current situation and if you are not ready now, help you build an action plan that is realistic and attainable. You may be surprised to learn you do not need to save as much as you think.  For example, if you think you need to save at least 5%, think again!  If you qualify for a Keystart home loan and you are building, you may only need as little as 1% and your $10,000 Government-assisted First Home Owners Grant takes care of the rest. Conditions apply of course so be sure to challenge your broker so you know you’re getting the best deal.  It really is a great place to start, and even better: their time is free!

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