We’re on a mission to provide an affordable channel to boost your mental health. So, each week, we’re checking in with our community to see how they’re working on their mental health and their goal towards happiness. We invited to Betsy Westcott, Financial Wellness Coach to share some tips on how to save for your first home deposit.
Q: “I’m struggling to save enough money on one income to buy a home while paying a hefty rent. I’m considering moving in with my family for 6-9 months to save enough for a down payment and closing costs. I’m constantly wondering ‘how do people do it?’. Do they have family money? Do they make over six figures? Or am I terrible with money? What should I do?”
A: “Saving for your first home deposit can feel like a daunting task but there’s lots of ways to fast track your savings including moving home with your parents! It took me just over five years to save my first home deposit. At the outset it felt like such an impossible goal but you’ll often surprise yourself with what you can achieve over a few years so keep the faith!
On average, it takes between 2 and 15 years to save a first home deposit. So, it’s not something you can achieve overnight but with focus, dedication and plan it will happen!
Ok, first things first – what is your goal? If you haven’t already spent some time working out what you need to save as a deposit. Are you aiming for a 15% deposit? Don’t forget to include the legal fees, lenders fees, broker fees, and moving costs in your target sum.
The next step is to work out what you can save whilst living in your current situation. I like to use the Savings Goal Calculator to help me do the maths. Based on your current situation, how long would it take you to save a deposit? Compare this against living at home with your parents. If you lived with your folks, how long would it take you to save your deposit? With this information, you can make an informed decision on what to do next.
Aside from moving back with you parents, here’s some other ways you can boost your savings for the home deposit:
1. Review and re-prioritise your spending
Money comes in, money goes out. Is there an opportunity to save more here? Review your current expenses and identify any areas where your spending money absentmindedly. It could be paying for home food delivery services, subscriptions that you’re not using, or simply looking for a better deal on utilities and insurances to name a few!
2. Automate your savings
If you haven’t already, automate your savings plan! As soon as income hits your bank account carve out the amount you want to save and deposit in your savings account. It’s done and you don’t have to think about it again. Easy!
3. Sell items you no longer need
Go through all your belongings and reflect on whether you really use or need them. If not, sell them via platforms like Facebook marketplace, Shpock, Depop and gumtree. Deposit any money you make in your savings account. Ka-ching!” – Betsy Westcott, Financial Wellness Coach
If you’re struggling with saving money, feel free to reach out Betsy via Instagram.