How to Purchase your First Home, Faster!
By Tamara Scutcheon
Visualising where your new sofa will sit and planning paint colours is much more exciting than strategizing ways to save a house deposit. Unfortunately, as most of my first home buyers discover: you usually can’t get to the fun stuff until you’ve done the hard yards and saved your deposit. But how can you get to your goal quicker?
The first step with any financial decision is to draw up a budget. As much as everyone hates the word and sometimes the mere thought of budgeting, there is no escaping how vital it is in the planning process. How will you measure your savings if you’re not sure what you’re spending each week? How will you make sure you’re still able to meet your current financial commitments comfortably without sacrificing savings capacity? There’s no real way to avoid this step. If you’re a couple, sit down together and step it out. Usually one person in the relationship will either enjoy or be more proficient with finances, if you’re the other person then you need to be willing to listen and accept your partner’s guidance. Rome wasn’t built in a day so don’t expect to have your budget planned, agreed to and implemented straight away. There will be a teething period and some people argue that a budget should never be ‘set and forget’ it should always be ready for review.
Budget discussion complete, what did you discover about your current spending habits? What can be cut from your lifestyle to help propel you towards that house deposit? It’s amazing how quickly that daily coffee or lunch at work can add up! Another way to look at the problem is to think about increasing your income. Could you:
- pick up extra shifts at work?
- Ask the boss for a raise
- Sell surplus belongings online
- Get a second job
Most of us however, will need to realistically adjust our spending habits instead. Be honest with yourself about how much you want this house: what could you live without in order to reach your goal? Some of these suggestions will even have a healthy knock on effect:
- Reduce your weekly alcohol intake
- Quit smoking
- Avoid buying take-away food and limit dining out
- Walk or cycle instead of driving short distances
- Catch public transport if available (instead of driving/paying for parking)
- Pack yourself lunch each day for work
- Develop a weekly meal plan and corresponding shopping list so you know exactly what groceries you need
- Eat those leftovers instead of throwing them out!
- Look through your bank statements: what fees and charges can you avoid or reduce?
- Review your current utility suppliers and see what savings can be gained by switching. Most companies offer a large discount for paying on time or via direct debit
- Move in with family to save paying rent
- Cancel your gym membership and/or personal training sessions
- Reduce rental cost by moving to a cheaper property
Most importantly, keep track of your progress. Having a large goal broken up into several smaller and more manageable milestones will make the journey to home ownership a lot more enjoyable.