If you feel that buying a house is similar to climbing a very large mountain – on a snowy day – in gale force winds – without gloves and a beanie – then you’re not alone.
But there is hope and there are some things you can do that will help you buy your first home without having to completely give up your lifestyle!
1. Rein in your spending
This is a bit obvious but it’s also often the hardest to do – but it’s good training! You will need to get together a deposit and you will need to demonstrate to the lender that you have the ability to pay off your mortgage. So the saving period a bit like training for the real thing.
The first step to managing your spending is to actually know what you’re spending and then to manage it.
Track your spending, using your bank’s app, a spreadsheet or pen and paper – it doesn’t matter how you do it, but you must know where your money is going.
Once you know what you’re spending and, importantly, where you’re excessively spending, see what you can do to tip the scales in favour of saving.
My tip is to automatically transfer your savings from your regular bank account into your savings account – or get your pay split into two accounts. If you never have access to it, it’s much easier to save.
2. Increase your income
This is a bit obvious too but you’ve got some options:
- Ask for a payrise or promotion
- Get a new job
- Get a second job
- Get creative – find a side hustle like selling stuff on Facebook Marketplace, signing up to Upwork or AirTasker, walking the neighbour’s dog, washing cars – or something?
Whatever extra money comes in, put it straight into savings – no detours!
3. Change your home buying plans
If you can’t afford to buy the house you want, think of alternatives to get you into the market. You could:
- Ask family for help – you may need to put together a compelling proposition of how you will pay back the loan to convince them that you’re a good risk, but if that’s what you’ve got to do, then do it. That could be your best option!
- Go halves with a family member, close friend or partner – but get a contract first and agree on your exit strategy, especially what happens if one of you wants to sell and the other doesn’t.
- Buy a cheaper investment property and stay renting where you want to live. The investment property could be the stepping stone to your dream home. I recommend that you talk to a financial planner about the best way to do this before you rush out to do it.
The bottom line is, the longer you wait, the harder it becomes to buy your first home.
Take control, think outside the square, make some changes and make it happen.