5 things you can do to save for a home deposit

With the Australian government’s First Home Loan Deposit Scheme (FHLDS) in full swing, fresh-faced Australians are frantically getting their finances together to get their foot on the property ladder.

While we may be only two weeks into 2020, 3000 first-home buyers have applied for the Scheme, meaning there are 7000 spots remaining for hopefuls, according to the National Housing Finance and Investment Corporation.

If you’re still a while away from saving a deposit, the good news is there will be another 10,000 places available from July 2020.

Whether you’re considering the Scheme or not, there are several things you can do now to get a step closer to coming up with a deposit.

Move back home or find flatmates

Few would disagree that rent is probably one of the biggest regular expenses for most people, making it a huge roadblock between you and your deposit saving goals.

While this is not necessarily an option for everyone, one way to save on rent is to move back in with the family. You might be known as the “adult who still lives at home”, but you will be saving hundreds in rent every week – money that would otherwise be paying off someone else’s mortgage.

If moving back home is simply not possible, living with flatmates or even roommates could help slash your rental bill. This way, you’ll be able to live closer to your preferred neighbourhood without forking out the full price.

Get a cheaper car or sell it

If rent is first on the list of top expenses, your car is most likely the second. If you have a car but don’t use it for work and don’t need it for the family, think about ditching the car completely if your situation allows it. There might be little difference between taking public transport for five days and for seven days.

Otherwise, you could consider downgrading to a less expensive or smaller car - or both. Depending on how new your existing car is and how cheap your next car will be, you could be pocketing back thousands.

Consider government help

If there’s help out there, why not use it? It could be a good idea to take advantage of the various government assistance schemes designed to help first-home buyers purchase a property.

The most well-known assistance schemes are in the form of cash grants for those buying either a new home or those relocating to regional areas. There are also stamp duty exemptions and concessions which could save you thousands in tax. Check with your state government’s revenue department for eligibility details.

Get on top of any debts

If you’re one of the millions of Australian who have been debt-ridden before, you’ll know how tough it can be to manage it, making the goal of saving for a home deposit even more overwhelming.

But it’s not impossible to get on top of your debt. If you have multiple debts, consider consolidating or merging your existing into fewer or one loan. Doing this reduces the risk of defaulting on any of the repayments, as you’ll only have one to worry about. Keep in mind that some lenders might charge you a “break fee” for getting out of the debt early, so it’s best to consult a finance professional for advice on debt consolidation.

If you’re still paying off a car loan, think about refinancing. Have a chat to your lender or other lenders and see if they can give you a more competitive interest rate. If you have a positive credit record, chances are they will want to keep or attract your business.

Find ways to boost your overall income

This one might sound ambitious for some, but if there’s a will, there’s a way. If your main job is not earning you enough to come up with a deposit soon enough, consider taking on extra work. For example, you could wait tables at a café or stock shelves at your local supermarket on the weekend or find home-based data entry work.

Alternatively, you could turn a creative hobby into a side hustle. If you’re a keen photographer or skilled website designer, think about doing that for a fee as a freelancer.

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