If you’re currently renting, saving the money you need for a property deposit may seem miles away, but this doesn’t need to be the case.
If you plan on putting down 20 percent of a property’s value as a deposit, you’ll need to save tens of thousands of dollars while managing to pay your rent and utility bills at the same time.
However, every bit of savings helps you get closer to your goal.
Keep these small tips in mind to reduce the waiting time and start building your deposit more efficiently today.
Create a designated savings account
If you’re putting money away each month already to pay your tax bill, create an emergency fund, or save for retirement, it’s easy to get confused about what’s available for a deposit.
The act of opening a savings account specifically for a down payment can be a great motivator, allowing you to see the money grow each month.
Shop around to find the best interest rates, ideally with no fees.
Cut your monthly rent
Rent is most likely one of your biggest monthly expenses.
Although it’s hard to do away with it completely unless you move back in with your parents, there are ways to save on your your monthly rent.
Find a roommate, move to a less trendy area, or downsize from a one-bedroom to a studio.
Even if the situation isn’t ideal, it will be temporary and you can put all the money you save into your deposit fund.
Do away with unnecessary expenses
If you live in a sharehouse, there are a number of ways flatmates can save on rent money together.
Most of us pay for things every day that we don’t really need, whether it’s a fancy artisanal coffee every morning or a cable package that doesn’t get used.
Try bundling your cable services or do away with your package altogether, choosing a streaming service like Netflix instead.
Adjust your mobile phone plan to a cheaper one, particularly if you go nowhere near your monthly data limit each month.
Start packing your lunch a couple of days a week instead of eating at a restaurant every day.
Start investing
Take a gamble and supplement your savings account with some sound investments, whether it’s in the stock market or a mutual fund.
You may end up increasing your earnings at a much more rapid rate than a savings account alone.
However, be sure to do your research before you attempt this strategy.
Keep utilities in check
Turn off the lights when you leave the room, turn the tap off when you’re brushing your teeth, and switch to energy-efficient light bulbs to shave money off of your monthly utility bills.
It’s a good idea to make this a lifelong habit to save money once you’re a homeowner as well.
A little bit of foresight and budgeting goes a long way. If you’re willing to make a few sacrifices to cut your regular expenses, you’ll be able to pay that 20 percent deposit in what feels like no time at all.
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