Top 6 Budgeting Tips to Buy a Home in 2017

Writing on paper using pencil with calculator on side on top of a wooden table

 

Saving for a first home deposit can be hard work. The number one rule to getting there is to spend less than you earn and to keep track of your savings in general. It’s easier said than done though, so here are some tips to help you save money and craft the perfect budget to meet your goals in 2017.

  1. Set Realistic Goals

Work out exactly how much you need to save. Create a detailed budget which outlines all your income, debts and expenses. Set realistic savings goals based around these and how you can achieve them within a specific time frame.

Try to break down your overall financial goal into smaller goals. For a home deposit, focus on weekly or monthly savings rather than the overall amount. Having an organised approach with easy to understand goals makes budgeting simpler.

  1. Organise Your Spending

Account for every dollar you make and break it down into categories of regular expenditure, then include your savings goals.

For example:

  • Fixed costs (rent, utilities, etc.) – 50% of income
  • Investments – 10% of income
  • Home deposit savings – 10% of income
  • Spending money – 30% of income

Knowing you have 30% of your income for guilt-free spending makes it easier to prioritise what you spend your disposable income on without accidentally dipping into other areas. You may need to make adjustments as you go because it’s difficult to predict spending habits, especially if you’ve never budgeted before.

Remember to be realistic when you craft your budget. There’s no point leaving yourself with 10% of your income for spending money if you know it’ll be impossible to stick to.

  1. Include Contingencies

Don’t forget to budget for unexpected costs, emergencies and fun. While you should give special attention to overcoming your areas of weakness (impulse purchases, eating out, etc.), don’t be too meticulous. Give yourself reasonable expectations.

Emotions play a big role in successfully saving money. If you budget too meticulously, you may end up stressed out or miserable, meaning you’re more likely to be tempted to splurge or abandon the budget altogether.

  1. Use Separate Accounts

It’s harder to track money when it’s all lumped together in one account. It’s much better to have one account for your savings (which is difficult to access), one account for fixed expenses and for emergencies, and another for spending money (everything from groceries to fine dining).

This makes it easier to keep track of your budget and only lets you “see” your spending money when you’re out spending.

  1. Use a Budget Tool

Track your budget with a tool that works for you. The options are endless, from simple spreadsheets to smartphone apps. Use a strategy that works well with how you learn and where your weaknesses are.

Many budgeting apps are free to download and come in a wide range. Try different ones until you find what’s right for you.

  1. Stick To Your Budget

Many people find it challenging to stick to a budget. Remember to keep track of it on a monthly basis, try to control unnecessary spending and accept that you’ll blow it every now and then. One budget blowout a month doesn’t mean you should give up. Keep your goal in mind, have a healthy relationship with money and don’t let your budget stress you out too much.

For further advice about how to finance a home loan, speak to a professional mortgage broker. Multi Choice Home Loans in Queensland can help you get your home by taking you through the process and helping you reduce costs.

For quality advice and services for all things home loans, call one of our friendly local brokers on 1300 36 36 99 or get in touch online.