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Saving for Your New Home (And Making the Most of COVID-19 Restrictions)
Dreaming of your first home but struggling to think of how you’re going to pay for it?
We look at the things you can do to save your deposit and even make the most of the COVID-19 lockdown.
Draw up a budget (and stick to it)
Start with setting a savings goal for your first home and write it down – accountability is one of the most important parts of stick to a savings goal.
Once you know how much you want to save, set yourself specific targets. For example, if you want to save $25,000 in two years, how much do you need to put away every month to make sure that you can get there?
An important part of the process is knowing how much you spend on food, rent, utilities, entertainment etc. Do an audit of your last four months of spending and sort out your spending. Is there room to reduce certain expenses? Track your expenses each week against your savings goals so you make sure you’re sticking to your budget.
Do I really need this?
Drawing up a budget can be easy, but sticking to it can be extremely difficult because saving money often requires a behavioural change. Whenever you’re tempted to make a purchase that’s outside your budget, wait three days and consider whether you actually need to buy it.
One of the (few) upsides of COVID-19 might be that sticking to a budget is easier than ever. With people going out less and fewer opportunities to spend money on holidays and shopping you might be in a good position to start putting away those precious dollars and cents.
High interest savings account and automating your savings
Compound interest is “the eighth wonder of the world” according to Albert Einstein, so why not maximise your savings in a high interest bank account.
The banks are always changing their offers, so make sure you spend some time researching the best high interest account offers available to make the most out of your savings.
A good savings tip is to set up an automatic deposit so that you transfer your savings into a separate high interest savings account before you get the chance to spend it. By putting the money into a savings account first, you’re reducing the temptation to spend on things you don’t need.
Start a side hustle
If you’ve got some extra time, you might want to think about how to bring in some extra money through a side hustle.
Starting a side business doesn’t need to be complicated, it can be a simple as sorting through things you no longer use or wear and selling them on eBay or Gumtree.