Is it in the budget?
Saving for a home loan is never easy and ‘budgeting’ has to be one of the least appealing words in our vocabulary, but if you’re looking to take control of your finances and apply for a mortgage to buy your dream home, then you need to budget, it’s that simple.
While most people squirm at the concept, it doesn’t have to be that painful. In fact, if done correctly, saving for a mortgage and sticking to a realistic budget will not only make life easier, it can help you create even more money!
Developing a budget to save for a home loan is not hard: simply calculate all of your weekly, fortnightly and monthly outgoings, set them against your income, and prioritise all expenses from most important to least important.
Essential and unavoidable spending, such as utility bills, rent and food should be placed at the top of your list; new clothes, a night out with friends and take-away lunches should be at the bottom.
This should give you a rough idea of how much you are ‘overspending’ each month, depending on how you structure your budget.
As a rule of thumb, you should be able to save approximately 10 per cent of your income.
Often the hardest part of budgeting, particularly with long-term goals such as saving for a home loan, is maintaining your motivation. To keep yourself on track, set regular targets and monitor your progress. Start off with weekly goals, move on to monthly then finally to quarterly targets.
Be sure to track your progress and don’t miss out on seeing your hard work transform itself into real results, enough deposit to apply for a mortgage.
A Home Loan is your Goal but Treat yourself
If you’ve never saved before, you may find it difficult to stick to your goals.
For some people, seeing their bank account grow each month is enough to keep them on track, but for others the temptation can be too strong.
If you find yourself battling with the urge to spend your hard-earned cash then here is a little trick to help you keep your spending in check.
Treat yourself, spend your money and don’t look back!
Rewarding yourself with a purchase every three months is a great way to keep the budget fresh, if you are looking to buy a new suit, a dress or fancy a lavish night out with friends, save for it by putting a few extra dollars away each week for your own personal fun fund, you’ll still reach your home loan goal and it won’t seem so onerous.