Buying your dream home is one of the biggest and most exciting purchases you are ever likely to make.
Saving the necessary deposit as a first home buyer can be difficult without making a few adjustments to your finances. Spring cleaning your budget is an important step in helping make this dream a reality.
The first port of call is to look at how much you want to spend, how much you already have saved and any additional fees and charges that you may incur when making your purchase. Budgeting helps manage your spending and regular outgoings and allows you to direct the surplus into savings.
When preparing your budget as a first home buyer, it is important to consider your current financial situation by working out your priorities, how much you need for basic living expenses and the little things that you can do without.
First Home Buyer Budget basics
- Begin your budget by listing all sources of regular income. There are plenty of online resources and templates that you can use to start.
- Collect your bank statements, bills, accounts and other regular expense records to give you an indication of how much you spend each month.
- List your outgoings (with large items first) by breaking them down into two sections: fixed and variable. Fixed expenses don’t change from month to month and include things like: car loans, rent, personal loans repayments etc. Variable expenses change regularly and include groceries, utility bills, eating out and entertainment.
- If you categorise your expenses, you have the flexibility to start by making reductions to the non-essential items in the variable spending before addressing your fixed and more essential items.
- Compare your expenses against your income to and work out where adjustments can be made. If you find that you are not left with as much as you wish, even the smallest changes can make a difference.
- Give yourself a realistic timeline and encourage yourself to stick to your budget. If you have an exciting goal to achieve, the sacrifices are more than worth it.
Now you are well on your way the becoming a first home buyer, so once you have your budget in place and a target set, get in touch with a mortgage broker who will be able to assess your personal situation and give you the added knowledge you need to be ready to purchase your first home.