You don’t have to be cheap to save a bit extra every month.
So, how exactly do you save and spend wisely without cutting costs at every corner?
I have 5 specific tips for saving a bit more for your home loan deposit. And none of them include cutting your own hair or making your own beer.
Instead of using your credit cards, why not…
earn $1000 on the side?
I know that nobody sets out to live off credit card debt. And if a financial planner actually asked you how much you spend on your credit card per month, you’d probably tell them that you always try to pay off the balance.
But do you actually? It’s not an easy question to answer, and don’t beat yourself up if the answer is ‘no’. It’s quite common, so you’re not alone!
How many times have you whipped out the plastic when you get an extreme case of FOMO? Probably a lot more than you’d care to admit. And I’ll admit that I’ve been there too.
But the thing is that if you’re using your credit card to pay for things and can’t pay off the balance every month, then you’re living outside of your financial means. And if you’re living outside of your means, the answer is simple.
You need more money, or you need to create a realistic budget. I know, so boring! Right?
Let’s say you’d prefer to earn more money. The easy solution? Work more. Pick up a side hustle and offer freelance services using your own ABN. Or hop on Air Tasker, perform odd jobs, and treat that extra income as a nice little bit of pocket money to put towards your home loan deposit. People need odd jobs performed all the time. Walking a dog 8 times a month for $25 an hour? That’s an easy extra $200 a month. How about re-installing someone’s hard drive? Fixing their bike tyres? Watering their plants. Don’t turn down your nose at easy money, which could very well be on your doorstop (or your neighbour’s).
Instead of moving out of home just because you can, why not…
Postpone moving out?
I feel that Generation Y cops a lot of flack for choosing to stay at home. Mention you’re still shacked up in the suburbs with the parents, and you’re met with the similar disdain that petty criminals are. Why can’t you do your own laundry? Does your mum still make your lunch? These are all insulting questions hurled at those who choose to stay at home. But it’s not always a matter of sticking by the olds just because moving out means – GULP – doing your own chores.
Choosing to live at home is a smart financial decision, particularly if you live in Sydney. Because as the entire world knows, living in Sydney, and particularly renting and buying a house in Sydney, is one of the most expensive living decisions a person of sound mind could make.
Which is why if you stay at home a little longer to save for that house deposit, you’ll be well placed financially in the long run.
Just think of what you could do with all that money saved on rent.
Average weekly rent for a Sydney-sider in a prime location is $300. That’s over $15,000 a year! If you’re willing to stick it out at home for even just two years longer, that’s $30,000 at the end of your stint to put towards a mortgage.
Instead of going to the sales to grab a bargain, why not…
Shop with intention via Shop It To Me?
Ever given in to the End of Financial Year Sales? Me too. You’re wondering throughout MYER trying to find some socks, and then you walk out with a whole new outfit. You think you’re saving $30 on a pair of jeans that were marked down, but did you actually need or set out to buy those? No, you were after socks, remember? Going to the sales is a waste of money, and a waste of time. Do yourself a huge favour, and avoid stepping inside MYER and David Jones at the end of every season. Shopping centres are designed to make you spend more money, not save. And you’re WAY smarter than that.
I’m not recommending you give up shopping, but one way I recommend to save money AND still dress to impress is to use a service like Shop It To Me. It’s like your personal shopper on a scrooge budget. You simply sign up, select the brands you like, select your size, and Shop It To Me will tell you when there’s a sale on. You even get to select how often you’ll receive emails from them.
Instead of getting a masters without a step-by-step plan, why not…
Invest in education outside the classroom?
It’s been a traditional educational trajectory to get a bachelors degree, and then aim for a masters in the attempt to increase your income down the track. Which can be a viable seal of approval for many an employer, not to mention necessary for many a profession, like doctors and lawyers. But don’t look at your secondary education as the silver lining that it once was. With many university degrees now way out of budget for many, more and more work places understand that the next generation of job seekers might not have a plethora of framed certificates. In fact, a few big name businesses are dropping degrees as a requirement for job applications, like Penguin Random House, Ernst and Young and Price Waterhouse Coopers.
There are many, many other ways to further your education outside of the lecture hall, not to mention ways to cultivate soft skills, which are just as important, too.
As long as you research credible course providers wisely and double-check their accreditation and curriculum, furthering your education need not cost you $20,000 a year. Of course, it’s entirely up to the requirements of your role and your industry.
Instead of getting sucked in by a low interest rate, why not…
Speak to an expert on finding the right mortgage for your financial circumstances?
With record low interest rates, it’s incredibly tempting to pick up a credit card or mortgage based on this factor alone. However, low interest rates won’t last forever. If you’re a first homebuyer looking to enter the property market with a variable rate home loan, don’t fall into the trap of overextending yourself and borrowing too much while interest rates are low.
If rates were to rise by 2 percentage points, would you be able to service your home loan? Always calculate your ability to meet your repayments dependent on potential interest rate rises, and create a borrowing limit based on those rises and its impact on your monthly home loan repayments.
Instead of holding multiple superannuation accounts, why not…
Consolidate them into one and avoid extra fees?
According to the ATO, over 24% of people have more than one superannuation account. If your employer is making contributions into only one account, that leaves your other superannuation account to whither and die. Quarterly fees hemorrhage your super balance, leaving you with far less when it’s time to retire. It’s best to speak to a financial planner about consolidating these, and even locating lost super.
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