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How to save for a house on one income

how to save imageIf you’re single, you could be excused for feeling a bit hard done by sometimes. You’re subject to the same living costs as your coupled friends and family, but you face these monetary burdens on your own.

But being single is a double-edged sword. While you may not have the financial clout of a couple with two incomes, you’ve hopefully got more developed budgeting and saving skills due to only having yourself to rely on.

Saving for a housing deposit on one income is not impossible. Here’s how it’s done.

Find out how much you need to save

Whether you’re buying your first place or just looking for a new place to call home, the first step is determining how much you’ll need.

The costs you’ll face go beyond the deposit – it’s important to account for things like stamp duty, building and pest inspections and Lender’s Mortgage Insurance (if you’re aiming for a deposit of less than 20% of the purchase price).

On top of this, there may be some additional spend needed to get the place up to scratch – some new furniture or minor renovations can quickly add up.

And finally, once you’ve bought your place, start factoring the ongoing monthly repayments into your budget.

  • For a full, step by step guide on buying your first home, click here
  • To discover all the costs associated with buying a home, click here

Set Savings Goals

Once you have the figure you’ll need in order to make your housing dream a reality, it’s time to map your savings journey. When facing up against a big savings total, the number can be a bit daunting, so it’s a great idea to break your total up into smaller goals.

Be realistic about how much you can save on your income – work out how much you can regularly put aside, and use a Savings Goal Calculator to plot how long it will take you to hit each milestone.

Revisit your budget

Being on a single income, you’re probably already used to watching your spending patterns, but now that you’ve got a home-loan in mind, it might be time to give your budget a quick once-over to eliminate any unnecessary expenses.

For example, a lot of times, rent will be a major expense, so if you’re in a position to move back in with your parents (eeek!) or friends while you save, you’ll have more to save for your deposit.

Save smarter, AND harder

Two things to mention here.

Firstly, if you’re yet to realise that the right way to save is by using a high-interest savings account, you need to open one quick-smart. It’s a no-brainer. The more you save, the more you’re rewarded with bonus interest.

Secondly, if you’re lucky enough to have parents willing to help out with a portion of your deposit, good for you! Young people buying their first home in 2015 are forced to save double the amount to enter the market as their parent’s generation, so getting a Guarantor Home Loan might be right for you.

If you found this blog helpful, and would like to be kept up to date with regular financial hints and tips, why not connect with The Greater on Social Media?

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