Work out your deposit amount
The key to a successful savings goal is to make it achievable, but you also need to be realistic about what you can afford to buy. Some of us need to manage our expectations about our first home. For most of us, it's a step on the property ladder rather than our forever home. Our article Buying an affordable home gives some helpful advice on the subject.
But how much do you need to save? According to the Australian Bureau of Statistics, the mean house price is now over $600,000, and more in the capital cities.
But there are steps you can take to save faster. In our case studies, we're going to look at two sets of aspiring first homebuyers. In our first case study, we'll introduce Alicia who's looking to buy on her own. In our second case study, we'll follow Todd and Renima a couple who are saving for their first home deposit together.
But first, we'll look at some general home deposit-boosting tips.
Analyse what you're spending, then cut costs
It’s easy to spend money without thinking about it. Daily coffees, taxis, clothes and subscriptions all add up and affect your ability to save.
The first thing you’ll need to do when you decide to start saving is to analyse exactly where your money is going. To begin with, go through your bank account and make a note of every dollar that you’ve spent in the past month. You can use our budget planner to help you get started.
Here are some changes you can make now to help you save faster.
Move back home or into a share house
If it’s a realistic option for you, sharing a home with family or friends could be a good idea. Living in a sharehouse could help to potential save some money by cutting down on the cost of rent and bills.
If you’re already renting or considering renting, check out our Renting vs Buying calculator. This calculator shows you what size home loan repayments you may be able to service based on your current rental payments.
Get rid of your car
It's easy to underestimate how much your car costs to run. It's more than just petrol. Add in insurance, repairs, maintenance and depreciation. That can add up to thousands of dollars a year. If you're in a city with decent public transport (and good bike lanes), you could possibly save some cash by going car free.
If you have no other choice than to drive, read our cost saving tips for running a car. Or, check out your state or territory’s car club website. For example, the RACV has put together some handy cost guides to help guide you on the real cost of owning a car.
Review your lifestyle
Minor lifestyle changes, like limiting takeaway meals and coffees, can incrementally add up. That might mean drinking the instant coffee at work each morning for a while.
Reduce your nights out and entertainment costs. Start finding some cheaper ways to have fun. If you have friends in the same situation, consider taking it in turns to host dinner parties at home, or movie and games nights.
Cut out things you don't use
A simple way to save is to stop paying for things you don't use or need. Start looking for discounts and cheaper options on things like memberships, subscriptions, utilities and insurance. It's worth taking the time for the longer-term gain.
Set up a savings account and plan
Saving takes dedication, but it's important if you're thinking about buying a home. Get help with your savings plan by using NAB Money Tracker when you login to internet banking. This tool can help you budget, track spending as well as set up a realistic savings goal.
One great way to ensure you meet your savings goals is to set up a designated "house" account.
You can easily organise a direct debit each payday and put as much money as you can afford into it. That way, you don't have an opportunity to spend before you save.
Get all the first home buying assistance you can
First Home Owner Grant
If you’re starting out, you might qualify for a First Home Owner Grant (FHOG). How much you get, and the rules and conditions vary from state to territory and can change from time to time.
We’ve got more information about the FHOG in our First Home Owner Grant story. We’ve also got a summary of the various schemes (with links to each state/territory’s website).
Most offer grants for newly built homes now rather than established homes. The grant amounts differ depending on your state or territory but range from $10,000 to $15,000 on average.
As of 2016, only the Northern Territory offers grants over $15,000. You can check your state or territory's grant eligibility and amounts on their websites.
Stamp duty concessions
If you’re buying your first house, you may also qualify for stamp duty concessions (depending on the state/territory). Since stamp duty can add another 3-5% to the purchase price, this is a real help.