Top Ways To Cut Your Expenses and Speed Up Your Saving For A Home Loan
Is the key to saving for a home loan deposit as simple as giving up smashed avo toast for breakfast? Well not quite, but spending less does make a difference. On top of a budget, a savings plan and strategies such as a high-interest savings account, an effective way to save is to reduce or eliminate expenses.
Start by understanding your spend
It can be easy to lose track of how you’re spending money, especially due to cashless payments and credit cards. Many online banking systems include tools to categorize debits and make a budget – take advantage of them. Or download an app that helps you track your personal expenses on the go, like ASIC’s TrackMySPEND.
Find Savings In The Essentials
Some costs can’t be avoided – but many everyday expenses can be reduced. For example you could:
- Move in with your parents/relatives, or move into a cheaper rental or share house (short-term discomfort can pay off in the long term).
- Implement tactics like meal planning, making grocery lists and buying in bulk to save money on food. Set aside a budget for eating out/take-away and stick to it.
- Shop around to reduce your regular bills – you may get better value if you switch, or tell current providers you intend to switch. Seek discounts for taking out multiple policies with one insurer. Make sure you review your insurance each time it is due. Don’t just let it roll over.
- Use the car less: take public transport; carpool with colleagues; or try walking or riding. You’ll be amazed at how quickly it all adds up to savings.
Make sure you’re paying off debts or credit cards completely each month or as much as possible, to avoid the added expense of paying interest.
Reduce Common Overspending
If you spend excessively on things like clothes, going out or expensive hobbies, it may be unrealistic to cut the expense entirely. Set a weekly or monthly limit and reduce that limit over time.
A survey of more than 1000 Australians showed that 73 per cent have a problem with overspending. In particular, people tend to go overboard Christmas rolls around.
To reduce gift expenses, make a list, and a budget. Stick to it! Buy only planned items within your allocated budget. Ask your family for support; it’s easier to put a cap on gift values if everyone else does too.
Another common way Aussies overspend is on holidays. CommBank research has shown that a third of holidaymakers spent more on their trip than planned. Do your research and set a daily budget.
Costs that could be eliminated
Look for opportunities to eliminate costs. Cancel unused services. Update your internet or mobile plans if you’re always paying for excess data. Ask yourself, are you really using that gym membership? Are you getting value from your subscriptions? Remember, every wasted dollar is money you could be spending on your own home. When saving for a home loan, every cent counts.
Speak To Your Mortgage Broker
If your not sure if you’re ready to buy, speak to Dennis Smallwood, your local mortgage broker. He can advise how much you will be able to borrow. He can also advise on ways to help when saving for a home loan. Also knowing what the lenders are looking for when they assess your application is a great advantage. When you are ready, Dennis can apply for a Pre-Approval. This will then give you confidence when looking at properties.
The Home Loan Comparison Co. compares home loans from a much wider variety of banks than most people have time to consider, and we find the loan that suits your goals.
We are experienced, knowledgeable and dedicated to building ongoing relationships to keep on providing personal and valuable service that is rarely experienced when dealing with the banks.