Can I Save for a Home Loan Deposit and Still Enjoy Life?
A decent size deposit for your home loan is an important factor considered by most banks. We know it’s important but does that mean it’s the end of fun and a social life while we’re saving? With the right attitude, it doesn’t have to be.
Saving for a home loan deposit seems like a boring and lonely way to live your life. You’ll stop afterwork drinks with friends, some family bonding, nice restaurants, and even going to the movies. If it is outside the budget, then it is out of the question. But does it have to be this way? Although saving for a home loan deposit is important, so is living your life. It is actually possible to do both.
Learn to love a budget
How quickly you can save for a home loan deposit comes down to your salary and living expenses. And while there are things we can do to increase our income, tackling spending to reduce expenses is the first and easiest place to start. Look at the last three months of your bank accounts statements and separate the essential spending with the non-essential spending. You will likely be surprised at the amount of money you are ‘wasting’ on things you don’t really need. So eliminate the non-essential spending and then create a budget for the essential costs.
Budgets can be as strict as you like or setup to be more flexible. More important than creating a budget is sticking to it every day. For example, every payroll period, move some of your salary from your account and put it in a savings account; then be sure to never withdraw from that account.
But be sure to review your budget on a semi-regular basis to ensure it’s still in line with your financial situation and your goal of saving your home loan deposit.
Include some ‘fun’ in the budget
If you cut out all spending on the things that give you pleasure then chances are you will crack and make an impulse buy to feel better. So include some ‘fun’ in your budget to prevent a spending spree.
Be creative with your budget and look for things in life that give you the most pleasure. Be proactive when arranging bonding events with friends and family. Instead of going to an expensive restaurant, consider some local event that’s free (or nearly free) and reducing your budget allowance for the night. Don’t stop the good times, just learn to say no sometimes.
Extra source of income
Doing an extra shift or two at work each week or adding in a part-time job can go a long way to adding more savings to your home loan deposit. This is the other end of the equation we just discussed – first reduce expenses to their minimum level, now add income on top of that.
If earning extra income is not your idea of ‘having a life’, then get creative with it. Are you good at writing? Maybe you could utilise your writing skills by selling your services on a sharing economy platform like UpWork. You could also try selling unnecessary household items online.
It is definitely possible to save for a home loan deposit and still enjoy life, you just need to get the right attitude and adjust your thinking and priorities.
What is more important to you: spending lots on a big night out or buying your own home? It’s time for a bit of personal sacrifice. Do the hard work now so that later in life you’ll take a lot of pressure off yourself. The reverse of this is that your fun now will mean some serious financial pain later in life. You can still have fun without spending too much.