Want to save for a house deposit without it taking 3 million years?
If you want to learn how to save a house deposit fast, check out my 9 money saving tips to get you there way quicker.
- Work out the number
First step is to work out exactly how much you’ll need. You can search online for ‘property purchase costs calculator’ or similar and that will help you see what kinds of costs you’ll need to pay aside from the actual deposit. You need to factor in costs like conveyancer, pest and building inspections, maybe private inspections if you’re not going to inspect it yourself, stamp duty, lenders mortage insurance (LMI) if you’re not putting down at least 20%, transfer and registration fees etc.
- Do your projections
Next we need to work out, based on your current rate of savings each month, how long will it take you to save that amount? Often this can be disheartening as people realise they’re not saving enough per month to hit their target within a reasonable timeframe. But better to realise that now rather than months or even years down the track. It should be good motivation to make adjustments now so you can hit your target
- Sell all your unnecessary stuff
This is a simple one but a good way to get early momentum. Go through all your unnecessary stuff and list it eBay, Craigslist, Gumtree or whatever similar sites are in your country.
- Fill your calendar with work
When I went into ‘savings mode’ I simply tried to load up my week with as much work as I could. The more I work the less time I had to spend so it worked really well. Sure, it’s not that fun, but you gotta do what you gotta do. It’s definitely worth it. The more you work now, the less you’ll need to later.
- Keep the goal front & centre
This is crucial to keep you motivated and focussed on the goal. Get an A4 piece of paper and write your goal on the paper, stick it to the wall somewhere you’ll see it every day. It’ll help you stay on track, and demotivate you to buy random things that slow you down.
- Keep a low profile for 12+ months
Accept that for at least 12 months you’ll be not going out as much, not doing as many fun things, missing out on social things. Not the best, but if you want to hit the goal you have to make sacrifices. You can’t have your cake and eat it too. Most people who fail at saving much money simply don’t want to sacrifice too much so they save reallllllly slow and then get demotivated.
- Increase your income
If you’ve done a good job cutting your costs, the next key focus area is lifting your income. How can you work more hours, get a second or third job, get a promotion in your current role, maybe even change to a better paying job, get more sales in your business, upskill yourself so you can get paid more.
- How to deal with relationships while you’re in savings mode
Communicate with the people around you what your objective is so they know why you’re not wanting to go out all the time and why you can’t attend certain events or do certain things. Not everyone will be happy with it, but at least we’ve been proactive in letting them know that you have a goal that’s really important to you and it means that you can’t be careless about how you spend money.
- Discipline = Freedom
Ultimately the more disciplined you are early, the sooner you can have the freedom to do whatever you want, whenever you want. Many people say ‘oh you gotta enjoy life, instead of scrimping and saving’. I have never agreed with this, I don’t think barely scraping buy and having a few little luxuries here and there is ‘enjoying life’. I’d rather save and invest heavily and live a very good life than live paycheck to paycheck.
Hope you’ve found that useful and if you have any questions leave a comment and I’ll help you out.
Related topics: How to save for a house deposit Australia, UK, Canada, NZ, Philippines. How to save for a house deposit while renting in your 20s, how to save for a house downpayment with a low income. How to save for a house in 2 years.