How Can I Save My House Deposit In 12 Months?
Believe it or not but it is completely possible to save you house deposit in just 12 months. With some careful planning and hard work you could have your deposit ready this time next year.
In this post we want to talk through steps you can take RIGHT NOW to move you towards saving your deposit in just 12 months. We wanted to make it easy to so have created 7 simple and easy to remember steps that can guide you.
Write these steps on a piece of paper (“what is a piece of paper?”) or in your iPhone, Smartphone or iPad and look back on them from time to time to remind yourself of your goal and how you are going to get there.
How can I save my house deposit in 12 months?
Saving your house deposit in 12 months is not going to be easy. But by creating a plan and sticking to the plan you are going to have the best chance for success.
There is a great quote that says
“If you think you can you can,
If you think you can’t you’re probably right”
Saving your deposit relies heavily on believing you can do it and taking massive action towards achieving your goal.
1. Work Out The Price Of The Property You Want
Start by working out the type of property you want, the area you want to live in and the price that property is going to cost you.
It is not good saving $30,000 if your property is going to cost you $1,000,000. You also don’t want to be slaving away to save $200,000 if your property is only going to cost you $300,000.
Remember: You don’t have to buy your dream home first. By starting with a smaller (and maybe less desirable) property you can use the capital gains to upgrade to your dream home. Sometimes buying smaller and upgrading is actually a quicker way to your dream home than just saving your deposit.
So work out in your mind exactly how much you are going to spend.
2. Decide On The Size Of Your Deposit
Many lenders will give you a 95% loan if you have proven savings and a strong employment record. Or you may prefer to produce a 20% deposit and avoid lenders mortgage insurance on the property.
Some lenders will only give you an 80% loan in smaller towns or even less if the property is very specialized and they see it as a risk.
Work out exactly what the size of your deposit is going to be. If you want to buy a $300,000 house and you want your deposit to be 20% then you will need $60,000. If you are buying a $500,000 and want a 10% deposit then you will need $50,000.
Work out exactly what the dollar figure is going to be of your deposit. Make sure to take into account stamp duty and taxes if you will be paying for these in cash.
3. Make It A Priority…Visualize
This step is going to be EXTREMELY important. In order for you to achieve your goal you will need to want it bad enough.
We get what we want in life. If you want something bad enough you will find a way to achieve it. Now you want to create that want for your goal of saving your deposit.
One of the best ways I have found to do this is through visualization.
Close your eyes and imagine living in your home. Imagine walking in from a day at work and putting your keys down. What is the light doing, what does it smell like and how does it feel? Take in those feelings of joy and experience them now.
This will cause your mind to want to experience these feelings more and it will associate your goal of owning your own home with these feelings. Then it will be a priority for you. Because if it isn’t a priority it isn’t going to happen.
4. Break It Down To Monthly/Weekly/Daily Values
You have your deposit goal.
Divide it by 12 to find out how much you need to save per month
Divide it by 52 to find out how much you need to save per year
Divide it by 365 to find out how much you need to save each day
Now you have an achievable figure that you can work towards.
Breaking the figure down let’s you think of ways of how you can achieve that small figure each day or week or monthly. It stops the overwhelm.
5. Save That Money Every Pay Day – Pay Yourself First
As soon as you get paid put the money you need away for your deposit. Make it the first payment you make before rent, before bills and before anything else. This is the principle of paying yourself first.
If you wait until the end of a pay cycle to save whatever is left then you will find there is nothing left.
The goal here is to save what you need immediately and then try to live of the rest. Start getting your mind working and saying “How can I live off this amount?” or “Where can I find more money to live off?”
You don’t have to live of canned beans and spaghetti and never get to enjoy anything while you are saving. You just need to find ways to spend money better (Read our 300 ways to save your deposit fast) and make more money.
6. Work Out How To Live Off The Remainder
As mentioned in the last point we now need to work put how to live off the remainder. This is where you will need to get creative.
How can you stretch your money further? Where can you save money and how can you get the best bang for your buck?
You will be amazed what you can live off if you only try.
Sit down and brainstorm ways to save money and make your money go further and get online to find more ways. Save money on petrol by buying on the cheapest day or walking. Save money by shopping at Aldi instead of Woolworths etc.
7. Increase Your Income
There are two ways you can increase your income
a) Get a pay rise – Expand yourself in your role at work, look for opportunities and create opportunities if they don’t exist already. Then ask for a pay rise. You may even consider moving companies as another company may be willing to pay you more for your expertise.
b) Start a side business – Use your expertise to start a business on the side and earn some extra cash. Maybe you can do some consulting, or you can sell your own products (or old stuff) on eBay for some extra cash.
This extra cash should be used to living off and enjoying life (as you already should be saving the required amount from your pay cheque each week/month). The more you earn the happier you will be to save (because you won’t be living a poverty existence which causes depression).
Extra cash can be used to save more towards your deposit. But personally I would be saving an emergency fund for those unexpected bills. That way it is easy to get in the habit of paying yourself first. But it is completely up to you.
BONUS TIP: Continually ask the question “How can I afford it?”
Instead of saying “I can afford to save my house deposit in 12 months” you need to be asking yourself “How can I save my house deposit in just 12 months?”.
Always be asking “How can I achieve this?”. By saying “I can’t” you are giving your mind permission to stop thinking. By asking “How can I?” you are forcing your mind to think and come up with solutions. These solutions will help you achieve your goal.
It is possible!
Anything is possible if you want it enough and you put your mind to achieving it. You can save your house deposit it 12 months. So set your goal, get your plan ready and pay yourself first!