BY CANNA CAMPBELL
Aspiring to save up for your first home is an exciting goal to have. The anticipation of freedom that comes with working towards this new chapter is empowering. It’s the idyllic dream of having a place to call your very own, where you are free to style, decorate and renovate to your heart’s content!
But the thought of increased responsibilities and hurdles towards financial goals can be discouraging. When I was saving for my first home, there were definitely times where I lost motivation, as I became frustrated with the low interest rate environment, increasing cost of living and soaring property prices.
I swear my tooth fairy money was included in my deposit, which I saved for over 6 years!
However, I persevered, pushed through the roadblocks and eventually, had the keys to my first home, a small 2-bedroom apartment. It was hard work, took sacrifices, lots of self-discipline and focus, but it was so worth it.
This is what I did to help me achieve my goal and dream:
- A dedicated savings account – the moment I set this goal for myself, I opened up an online savings account, with no fees and the most competitive interest rate I could find. Every dollar that went into this account was for my deposit. Separating this account from my everyday spending account was a godsend because it allowed me to effectively compartmentalise my savings, so I had maximum clarity on how much I needed to spend and save.
- I nicknamed this savings account “My Deposit Money” – so if I was ever tempted to dip into my savings and splurge on something shiny, I would be immediately reminded of the goal I was jeopardising. I would pause and reflect on whether this expense was worth delaying my dreams. Also, by nicknaming this account in alignment with my goal, I found myself more inspired to reach the magic number. I tackled this challenge like a game and it made saving more enjoyable!
- Mini manageable goals – even though I needed a huge deposit, I broke this number down, into small, manageable and achievable goals, similar to ‘The $1000 Project’ I created for my investment goals. This makes the number seem less intimidating and more achievable. I would focus on saving parcels of $1000 at a time, transfer this into my dedicated online “Deposit Money” savings account and repeat this process until I had my deposit.
- Side hustles – I refused to let my income be bound to my corporate salary. There are always additional opportunities to generate extra money. I did babysitting work, market research and sold items I no longer needed. At one stage, I even delivered pamphlets to help earn additional cash. Every extra dollar that I earned, went towards my savings account.
- Rewards – saving can at times be exhausting, even when our motivation is peaking. A great tip to stay invigorated, is imagining you have already achieved your goals. Visualise what your life would be like and implement these actions in real life. Sometimes I would buy an interior decorating magazine to boost my excitement for design or take a stroll in my dream suburb and retain those exhilarating feelings to boost my stamina.
- Budget – I wrote out all my living expenses, and then deducted them from my after-tax pay to see how much I could save on a regular basis. Once I did this, I continuously reviewed my living expenses to see where I could reduce costs. This did involve cutting down or eliminating certain expenses, but it enabled me to save up for a deposit faster, which made the sacrifices worth it.
- My imaginary mortgage – I was fortunate enough to live at home, but it was under strict conditions that I save up for a mortgage. As I gradually got closer to achieving my goal, I worked towards increasing my regular savings (transferred into the “My Deposit Money” account) so it matched my potential mortgage repayments, I even factored in a few interest rate rises. This way, the transition into the mortgage world wasn’t drastic and I had the confidence to know “I could handle this”.
Saving for a mortgage deposit requires discipline. While the initial journey may seem littered with challenges, seeing the eventual fruits of your labour will be a rewarding moment. Trust me on this. My own deposit saving journey highlighted a lesson that still reverberates to this day: short term pleasures fade, but you can reap the rewards of long-term goals for a lifetime and when you achieve your goal, the emotional joy is priceless.
Canna is the founder of the financial media platform, SugarmammaTV, and author of financial advice books The $1000 Project and Mindful Money. She comes from a corporate finance background and is a licensed financial planner. SugarmammaTV provides educational content that helps make money and finance more approachable. She is also the founder and director of financial planning firm, SASS Financial Services.
This article was prepared in partnership with ING. The information provided in this article is of a general nature only and does not consider your personal objectives, financial situation or particular needs. The views expressed in this article are provided independently by Canna Campbell, a Financial Planner and an Authorised Representative of Wealthstream Financial Group Pty Ltd (AR 000309372) featured in the article. ING makes no warranty as to the accuracy, completeness or reliability of the information, nor does ING accept any liability or responsibility arising in any way from omissions or errors contained in the content. ING does not recommend any products, services or financial strategies mentioned in this article. ING strongly recommends that you obtain independent advice before you act on the content. Canna Campbell uses ING’s trademarks under arrangement with ING. ING is a business name of ING Bank (Australia) Limited, ABN 24 000 893 292, AFSL and Australian credit licence 229823.
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