How to start saving to buy your first home
For many people in Australia today, especially those on the younger side, having the means to buy a house all by oneself is simply unrealistic. While they’d love to throw down $100,000 in cash for a deposit on a nice place, they don’t have that kind of money and possibly never will. So, what can be done?
Independent savers are now a minority
Survey data collected by New Galaxy found that only 39 per cent of people today are saving for homes solely by setting aside a portion of their own wage. A plurality are now relying on other strategies, like pooling funds with a partner (25 per cent) or getting an inheritance from parents or family (24 per cent).
Joanna Pretty of Lender State Custodians told News.com.au that while there used to be a mentality of “don’t mix friendship and money” that people tried to adhere to, it’s no longer feasible for most people to follow that rule. Instead, friends and relatives have become indispensable resources for many as they save for deposits and home loan interest rates.
How can you buck that trend?
Getting help from others is certainly the norm today, but how can you rebel against that paradigm and afford your own home? The Australian Securities and Investments Commission recommends starting by stripping your personal budget down to the bare essentials. Consider how much you need for basics like rent, bills and food, then try to cut back on the extras beyond that.
From there, it might be tempting to invest your savings and collect a little bit of extra cash for mortgage repayments. This could be a good idea, but it depends on how soon you need the money. Shares and managed funds are better investments if you’re going to stick with them for five years or more; otherwise, you might be better off with a simple high-interest savings account.
The process of buying a home can be long and complicated, and our team of specialist can help you manage it all. Contact the team at Premium Portfolio Finance we’re thrilled to help you reach your first home buyer goals.
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