We have been labeled the ‘avocado generation’, splurging our money on overseas getaways, indulgent brunches and raging summer festivals. But when if comes to the prospect of buying a house, well the overwhelming prices that we face in Australia is enough to make any of us feel uncertain. The recent Household, Income and Labour Dynamics Survey revealed that the rate of home ownership among 18 to 39 years olds has declined between 2002 to 2015 from 36% to 25%.
It’s scary stuff, we know. Entering the housing market ain’t easy, and we’re pretty sure you don’t want to forfeit your travel dreams and indulgences along the way. Well thanks to our mates over at UBank, landing that first home doesn’t have to be impossible. They say to forget the typical ‘start a budget’, instead get creative and watch you savings grow.
#1 Save When You Splurge
It’s easy to splurge, especially when you’re constantly tempted by good food, good wine and weekend getaways. But the trick is to deposit the same amount into a savings account and match each splurge expensive. Often the pain of doubling down on a cost can be enough to curb spending, or at least keep your savings growing.
#2 Save When You Save
It’s so easy to think, ‘I’ve saved 15 bucks by bringing my lunch to work,’ but the truth is you’re not physically saving anything – you just haven’t spent anything. Depositing money into a savings account when you save can make a big difference. Take for example the weekly groceries. You see on the receipt that you’ve saved $11 thanks to your thrifty eye for specials, transfer that straight into your home deposit account. Every little transfer makes the difference, so get ready to watch that figure grow.
#3 Pay Down Credit Card Debt
If you’re carrying a credit card (which most of us do these days), it’s important to pay it off as soon as you use it. And if it’s maxed out, well get on top of that hefty debt as soon as possible. Carrying credit card debt can also impact your credit score – a key measure used by banks to assess your ability to pay off a loan. Prove your financial responsibility and keep those high interests debts as low as you can.
#4 Visualise Your Dream Home
By simply visualising your saving goals and viewing them regularly, you can train your brain to achieve your end goal. It could be as simple as printing a picture and sticking it on the fridge or even setting it as your phone backscreen. The more you picture those big numbers in the bank account, the more engrained the goal will become in your brain. And the more you see that dream house, the more motivated you will be to save for your deposit.
#5 It Can All Start With Two Dollars
Many of us find no joy from moving money into a savings account, and we end up falling into the trap of over spending. The trick: turn it into a regular habit. Research has shown that it takes the average person 66 days to turn a new behaviour into a habit. So rather than jumping head first into an extensive savings plan for a home loan, just start small. This might just start with two dollars and then doubling it each week until you reach your weekly savings goal. This will train your brain to put money away on a regular schedule.
Whatever you do, don’t let ridiculous house prices deter you from owning a home, set your own pace. With easy saving hacks like these, you’ll watch your bank account soar. You’ll be enjoying smashed avo toast in the comfort of your own house in no time.