How to Save for a House Deposit

7 Tips to Help You Save for a House Deposit

Owning your own has long been the dream for many, especially if they are planning kids.

Recent years have made it seem more impossible than ever but if you have a plan and take advantage of schemes and services available, you might be able to do it sooner than you think.

I owned my first home in Sydney but sold it when I got divorced and opted not to purchase straight away as I didn’t know where I’d live and didn’t want an investment property at the time.

Since then, I have travelled around a lot, lived in different locations and now own property overseas which is managed by family there.

Saving the deposit can be tricky. Fortunately, there are various government schemes to help and things you can do to make owning a home a reality.

How can you Save for a House Deposit?

Image of woman in chair holding a dog and surrounded by plants inside a room. Text reads how to save for a house deposit. 7 tips to help you save faster.

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1. Research ALL Upfront Costs

A house deposit is only part of what you need to buy a house but you need to have money for other costs.

There are conveyancer fees, stamp duty*, building and pest inspections, insurance, and connections such as electricity and internet.

Plus you will need some money to set aside for maintenance or emergencies which can happen immediately after you move in.

You don’t want to buy a house, use all your money then have the hot water system blow up with no way to get it fixed.

Get a complete picture of how much you need then set that as your goal.

*Stamp duty might not be payable depending on your circumstances which is why you need to research all upfront costs.

2. Set A Realistic Budget

Tell your money where to go instead of waiting for payday to come and paying things as you go.

Review your bank statements to see where you are spending and where you can cut back.

Use my annual financial review article as a guide for how to do this and for ideas on where you can reduce your expenses.

Often when we do this we are surprised where we are wasting money.

The cash envelope system is great for many people as it shows you exactly where your money is going because the cash is being used.

Read this post for how to set and stick to a budget then create your own and stick to it.

3. Treat Savings As A Bill

When working out your budget be sure to include a specific amount for savings and treat it the same as any other bill.

Looking at your savings like a bill makes it something you have to pay and do first instead of something done if there is anything left.

This can be as small as saving 1% from every time you get paid and increasing it as you adjust to not having that money.

Or you could set an audacious goal of the total you need saved in a specific time and set aside that each week.

E.g. $10,000 in 1 year = $27.40 per day/$192.30 per week/$833.33 per month.

Read 20 ways to make an extra $1,000 for ideas on how to make this happen.

Open a separate account for your savings and start now, even if it’s only transferring $2 today.

Something is better than nothing and set a plan to ensure it continues.

As you reduce expenses or make more, add that to the savings account to boost it and ensure that money is actually saved.

When you open a separate account, be sure to get the bonuses for it e.g. $100 from ING to help kickstart your savings.

Research savings accounts and their interest rates as well as terms and conditions to find the right one for you.

4. Do a Full Financial Review

Go over every expense and look at ways to cut back. Compare your insurance providers, electricity, phone, anything you spend money on and reduce it.

I am currently with Red Energy for electricity. They offer a $25 bonus when you join too.

I once saved almost $5,000 when doing my annual financial review.

When doing this, read 17 ways to reduce your electricity and 23 ways to save in 2023 for more ideas and think about debt.

For debt, check out 6 tips to easily reduce debt, how this reader cleared $3,000 worth of debt in a month and how this couple cleared $90,000 worth of debt in 12 months, starting off unemployed!

Image of house with a pool. Text reads how to save for a house deposit.

5. Look For Ways To Make Extra Money

There are only so many ways to cut back but you can always make more.

Once your budget is sorted and you know you’re getting the best deal on everything, start making more money.

This could be asking for a raise or comparing your current role with other companies to see if you might be paid more elsewhere.

Is there a course you could do (or potentially get your job to pay for you to do) that would increase your earning potential and job prospects?

Would training in a new field mean you get paid more?

Only change jobs if you don’t plan on getting your mortgage for a little while. Otherwise, it might be best to speak to a broker first before switching roles.

Increasing your actual wage will help with your borrowing power as well.

Check out these 9 ways to increase your income from Aspiring Millionaire.

Next, look at ways to make money on the side that you can add directly to your savings to boost it.

Check out how I made $33,277 on the side in 12 months, 43 ways for single mums to make money, 19 ways I made money from home and remotely for ideas.

6. Get Visual

Create a vision board with the house and things you want.

Print off a house savings chart you can colour as you progress with your savings and stay focused.

Write your goals in permanent marker on your mirrors, create a background image for your phone and devices and put visuals anywhere you can to keep you focused.

Visual reminders such as these can help keep you motivated.

Take it further and change your passwords to be a coded version of your goal so every time you type it in you are reminded of what you are working for.