Learning how to save your money is the very first step to home ownership. It is not enough to put away some money every now and then, you must have an effective savings plan in place in order to accumulate enough to at least save the deposit required to buy a house.
How to Create an Effective Savings Plan
The key to devising an effective savings plan for your first home is to have a smart goal to strive for. You must first determine how much money you need to make the purchase. In the case of the home, it will be the deposit for the mortgage.
Loan calculators, such as those provided by Holiday Coast, can help you estimate this figure. Our loan calculators can also help you determine your borrowing power and your ability to repay a loan.
Once you have a financial goal set in stone, determine how much you will need to put away each week, fortnight or month to achieve this goal. To help you with this step, use the Savings Plan Calculator on the Holiday Coast website to calculate how long it will take to reach your savings goal.
Finding the Right Savings Account
The next step is to find an account with the best interest rates. Holiday Coast has a choice in savings accounts that will meet your savings needs and you can also apply online.
A savings account will keep the money being saved for a deposit out of your day to day transaction accounts, so that you cannot accidently spend it. A savings account will also accumulate interest and that will help you achieve your goal faster.
A great feature is that you can automate your weekly, fortnightly or monthly deposits direct from your salary to the specific savings account.
Be Realistic With What You Can Afford
Many people never achieve home ownership because they will only be satisfied living in a home that is out of their financial reach. It’s much wiser to be flexible with what you can afford. Be willing to look at smaller houses, older properties and neighbourhoods you may not have considered.
Remember, you can always sell the home when you are better off financially and able to afford your dream home.
First Home Owner Grant
The New South Wales Government is trying to encourage ownership with the First Home Owner Grant, also known as the New Homes Scheme.
Check out the information on the first home owners grant on the NSW Government Office of State Revenue website
For more tips on how to create a savings plan for your first home, call Holiday Coast at 1300 365 724, or drop into a Holiday Coast branch near you.
This article provides general information only and should not be relied upon as financial product advice.