Four Key Steps For Saving For Your First Home
SAVING FOR YOUR FIRST HOME CAN FEEL LIKE A DAUNTING TASK…
BUT IT CAN BE MADE EASIER BY FOLLOWING THE FOUR KEYS BELOW

I.Prepare a budget — the hardest part of this is sticking to it.
It can be tempting when establishing a budget to go for gold, with the intention of saving every last penny.
While this is good in theory, the fact is the impulse to spend will generally get the better of most people and see their hard work and savings used on other lesser expenses.
The trick is to allow for some luxury spending in your budget. This will help you save what you intended to and not give in to impulse buying.
Be realistic with your budget. More often than not you will need to reassess your budget as you go so don’t feel like you have to get it right the first time.
When preparing a budget document, gather together all the information you will need. This information is going to be working out your current spending and any current saving habits.
Where is your money going? Does it really need to be spent in these areas?
How can you make changes to increase saving and reduce spending?

II. Making a spreadsheet — track your current spending habits
When making a budget it can be tempting to jump right in and attempt to start with a clean slate.
It is better to ascertain your current spending habits first. If you only pay for items using your bank cards this can be a simple task.
At the end of the month sit down and go through all your transactions breaking them down into segments, i.e. food, petrol, bills, luxury, etc.
This will help to identify areas that can be cut back.
This can also help you to get into the habit of becoming more conscientious of where your money is being spent and using a spreadsheet on a regular basis.
It make take 2 -3 months to really assess where your money is going. Although this may feel like it’s eating into valuable saving time, in the long run you will see the benefits quicker as you will be less likely to revert to old spending habits by not rushing yourself.

II. Eliminate debts — when setting up your budget this should be a key element to aim for
Now that you have taken the time to really see where your money is being spend it is time to create a budget.
To start with you want to eliminate debts that may reduce your borrowing power.
These include current loans and credit cards. Paying off credit cards can free up money for your savings as long as you can avoid reusing your credit cards for a while.
Paying off a bit extra each pay cycle can help reduce these debits with out feeling burdensome. Sometimes it can be tempting to pay the minimum amount so that you can be saving more. However in the long run you can achieve more if you pay these items off.
Once a debt has been paid off it is very satisfying to be able to delete that debt from your budget and know money previously devoted to paying it off will now be added to your savings.
It can also be useful to consolidate bills to one company to take advantage of bulk discounts.

IV. Open a separate bank account — preferably open an account that penalises outgoing transactions
When setting up a separate account that is dedicated to your savings, you really must ensure it is dedicated to this specific purpose.
All your savings need to be put into this account as soon as you have the money available.
This does not mean every last cent you have goes to this account. You should leave yourself with a buffer in case of unexpected bills or circumstances. Doing this will also help to reduce the chances of you having to dip into your savings.
Most banks offer high interest accounts that penalise you for spending from them, require a monthly minimum and can even be locked for 12 months.
This will encourage you to leave your savings alone. Set up automatic transfers to be deducted on your payday.
It is also good to get into the habit of making additional deposits when you can. For instance when you have paid off those debts. You have already been in the habit of not spending that money so why not automatically save it.
You will now be on your way to discovering the Australian dream and owning you own home. I’ll be speaking to you soon.
Rebecca Calabrese, Real Estate Agent. 0420 420 106
