A lot of Australians struggle with this problem: saving for a 20% deposit of the property’s value while still managing to pay their rent and utility bills at the same time. Paying rent and saving thousands of dollars for a house deposit simultaneously sounds very difficult, but it’s actually possible if you follow these tips.
Here are seven tips you can use on how to save up for a house while renting.
1. Pay off your debts
Before saving up for a new home, tackling your debts with large interest rates such as credit card debts and other personal loans. You would want to lessen your liabilities as much as possible. Additionally, paying off your debts could improve your credit score, making it more possible to get your home loan approved.
2. Get a roommate
Ask if your friends would want to be roommates with you. Having two or three roommates can significantly help you save money and reduce your expenses easily because you can split the rent and utility bills two or three ways.
3. Create a separate savings account
Another money saving strategy you can do is to create a separate savings account specifically for your house deposit. This can be a great motivator, because you can easily see your money grow each month. Make sure that you choose an account with a good interest rate and little or no fees.
4. Cut off unnecessary expenses
Sacrifices will need to happen if you’re serious about buying your first home. You may need to get rid of some leisure activities such as dining out frequently, purchasing more than one store-bought coffee per day, or even cancelling your gym membership. Try to live cheap as much as possible, and find ways on how you can compromise. You’ll be surprised by how much money you can save money by cutting off unnecessary expenses.
5. Negotiate your rent
Have you been a long-time tenant? You can try to negotiate with your landlord to see if they can reduce your rent. Decreasing your rent bill even for as little can help add to your house deposit savings account.
6. Earn more
If you want to save up for a house deposit, you may want to look at ways to earn more money. You’re 9 to 5 job doesn't need to be the only source of income you have. You can look find ways to earn extra such as applying for freelance jobs, selling your pre-loved items online, or even get a second job if possible.
7. Keep track of your utility bills
Save money by keeping track of your utility bills. For instance, you can invest in energy-efficient appliances and low-flow faucets, turn off the lights when you’re not in the room, or take shorter showers.
Buying your first home will not happen overnight. This may require a lot of sacrifices, but keep in mind that theses sacrifices will pay off in the future.