Where there’s a will there’s a way! If you have a good job and dream of climbing the property ladder, then you can save for a deposit. Where most fall down is a combination of lifestyle choices and negative thinking.
Here’s some of the main barriers people face:
- You’ve never been taught to save
Think back to the spending and saving habits passed down from your parents. The lucky few will have been taught the importance of budgeting, and of devising a savings plan around that budget, but many more will have not.
Saving for a deposit means having the skills and tools to amass tens of thousands of dollars and not touch it over a long period of time.
If you don’t have much practice sticking to a budget, saving for a deposit will seem like too much of a task.
- You want the dream home – Now!
Trying to save a deposit for the dream home will leave you feeling defeated. It is best to focus your efforts on established properties in good areas that may not tick all of your boxes but will give you healthy capital growth.
The deposit will be more achievable at this level, and you will be able to save enough money to enter the property market.
- You eat out like a king
Buying a home is going to involve a measure of sacrifice, whether that be cutting back on expensive trips or meals out. While it is important to enjoy a few luxuries in life, you need to be brutally honest about where you could be cutting back.
- There is no clear target
Saving for a deposit is a bit like committing to a workout plan, but over a much longer period. If you turn up to the gym and go through the motions without any clear idea of what you would like to achieve, the early enthusiasm will eventually wane – the same with a house deposit.
The best way to keep your eye on the prize is to find out what motivates you.
- You’re surrounded by renters
Your friends, and the social circles we move in, have an impact on what we aspire to. If you are in a social circle where everyone else has put a foot on the property ladder, then that could be a strong motivating factor for you to do the same.
There is nothing like seeing other people do what you aspire to do to make a dream seem more reachable and realistic.
Where possible, surround yourself with people who have successfully saved for a deposit and ask them for tips.
- You don’t earn enough yet
Before you start putting money away for a deposit, you need to work out whether you earn enough money.
You can always rein in your spending habits to help you save money, but if your salary is below average to begin with you will struggle to put away enough money to make a genuine dent in the savings account.
Work out how much you would need to save in order to accrue a 20 per cent deposit by using our mortgage calculator.
Are you planning on starting a family soon? Be sure to factor those costs in, too.
If at the end of the day you simply aren’t earning enough, then you need to face this fact.
To find your first home contact Naked Edge Real Estate today.