Saving for a home

Five steps to boost your first-home savings.

If you’re ready to turn your dream of owning your first home into reality, there are so many little and big money changes you can make that can boost your savings. Moving back in with the folks, dining out less, starting a side hustle – the choices are yours and we’re just here to help you make them. So once you’ve identified and planned for your home deposit, here are the next five steps to kickstart your way to success. After all, the sooner you’re ready to make your move, the sooner your new lifestyle begins.

Step 1: Incoming… new ways to earn money

Incomes are a lot less flexible than expenses – and don’t we know it. So let’s get this one pinned down first. Here are three top ways to boost your income.

• Additional part-time or casual work. The gig workforce is a large and respected part of the economy. Think about whether you’re able to take on jobs during any hours you don’t usually work, such as housekeeping, security or front desk for a hotel chain.
• Extra hours. We know – we’re stating the obvious here, and it mightn’t work for you. But if it’s doable, taking on extra days or paid overtime within your existing workplace could earn you a significant jump in your regular pay.
• Freelance. The skills you use in everyday life or your day job can earn you extra money through a side hustle. People will often pay higher rates for freelance expertise in areas like social media management, or for one-off tasks through a task finder app.

A final word about income: check out the various state and federal government grants for newly built homes and first-time buyers. These grants can add several thousands of dollars to help you buy your first home.

Step 2: Outgoing… keeping track of your spending

This step is all about your expenses and spending habits. And it has the most potential to boost your savings (that’s what we like to hear). Here are three top tips to reduce your spending.

• Knowledge is power. Detail all your spending. You could use an online tool like our budget calculator or a money-tracking app, or you could just add notes to your phone. It’s a good habit to note down spending as it happens.
• Arrange your spending into three categories: essential, necessary and optional. Rent, bills and loan payments are examples of essential Transport, food and clothing are necessary – but still have some wriggle room. And optional spending is everything else because, well, it’s optional.
• It’s all about you and your choices. Only you can decide where you want to make changes. Even small differences, such as making your lunch or buying one less coffee a day, will soon add up. Then things like holidaying at home or dining out less can give you more significant opportunities to save.

Step 3: Balancing the budget, your way

Let’s be clear: budgeting is not a dirty word. It basically means: the choice is yours. The more you’re aware of your income and your spending, the more options you have. Here are three easy budget strategies you can start today.

• The ‘ten per cent’ rule. This is one of the simplest methods. You set things up so that ten per cent of your income is automatically deducted from your wages straight into a savings account (if you’re an ING customer, this could be a dedicated Savings Maximiser account that you’ve nicknamed something like ‘My first home’). You never ever think about this money again. It does not exist. The remaining 90 per cent is what you live on. Even in the months where your bills are biggest, you’ll still have your invisible 10 per cent bubbling along in its own special account.
• The 50/30/20 rule. A budget strategy originally designed for more detail-oriented savers but one that’s easy to remember. Fifty per cent of your income goes to ‘needs’, 30 percent to ‘wants’ and 20 per cent to ‘savings’.
• The $5 rule. Every time you buy something online, pay a bill or open your wallet to pay for brunch, transfer an extra $5 to your savings account. You’ll soon see your savings grow – or your spending reduce! (Psst: If you’re an ING customer, you can turn on Everyday Round Up and we’ll automatically round up your purchases to the nearest $1 or $5 and pop the difference straight into your savings account. Easy-peasy.)

Step 4: Reaching your savings goal

Let’s get real. The best goals are achievable – not something forever dangling out of reach. Being too ambitious can often set you up to fail. We think saving for your first home should be positive and motivating (it’s your dream, after all!). Here are three top tips to keep your goal achievable and your motivation strong.

• Plan for the unexpected. One-off expenses or unforeseen hiccups might temporarily rock your plans. Builders, for example, like to plan at least a 5 to 10 per cent contingency to allow for the unknown.
• Plan for joy. Semi-regular treats are important. If your ‘joy’ is weekends away or concerts or footy trips, include (at least) one of these events in your calculations.
• Plan for success. Saving is a choice you’re making to achieve your goal. Even if you have to extend your timeline or miss a few weeks, always remember you’re still heading towards your goal.

Step 5: Tracking your success

Accountability. Ugh, a scary word. But having an accountability plan can help you achieve your goal. It works by having someone or something to keep you on track. Here are our three top tips to help keep on track.

• An accountability partner can be a friend, family member or professional. Someone you can regularly check in with to talk about your progress and any adjustments you might need to make.
• Break down your long-term savings goal into smaller chunks, and set target dates to achieve each of these progress steps. You might even want to try an online tool like our savings goal calculator to work out how much you could put away each month for a year, for example.
• See it, do it. Keep a visual reminder handy – on the fridge, your desk or inside the front door. This could be a wall calendar with targets and rewards dates, a picture of your dream house, or a pie chart or graph you colour in as you progress. Seeing is believing.

It doesn’t matter how many years away you are from your deposit target for your first home: making savings-boosting changes, when you can, will help get you through your new front door sooner. Dream: achieved.