New Year’s parties are behind us so it’s time to get serious about stepping up on that property ladder. If your 2022 goal was to become a first-home buyer, saving for that deposit needs to be your number one priority starting yesterday.

In order to get the right frame of mind and really get moving on your SMART goal, there are some everyday habits you can ingrain in your brain right now.

Treat your budget seriously.

Draw up a table that lists all of your monthly outgoing expenses and your monthly income. 

Remember to add in automatic subscriptions like the gym membership and pay TV that might slip through without you having to think about it. An easy way to do this is to pull out your bank statements and credit card history.

Next, you need to decide how much you need to save to hit that home buying goal. It’s good to make this amount at least (if not more) what you expect your future home loan repayments to be, that way you know you can afford your home, with the extra buffer of not paying rent. 

Cut back on your expenses until you can afford your desired savings comfortably. Make sure you can still afford your essential living items, like rent, electricity, and food.

Don’t throw this sheet away. Taking a working budget with you when applying for a home loan helps to demonstrate you are serious and capable of making loan repayments.

Boost your income.

Saving money isn’t just about cutting back on spending, it's also about increasing your income. Look at your assets and skills to find ways to earn money outside the office, it might be baking, babysitting, driving, or gardening. Your savings should be boosted by additional income streams but not dependent on them as it might raise red flags about what will happen if you can’t continue this extra work.

Treat your savings and purchase like the business decision it is.

A home purchase is a personal choice but the finances involved and the research you undertake is completely professional. Approach your finances like you are running a business to help take out the emotion and look at spending and saving objectively.

You might find it eye-opening to print out statements from your accounts and go through and explain your purchases, just like you would for your boss or account manager. If a business wouldn’t tolerate the spending, neither should you.

This is also good practice for when you apply for your loan. Some lenders will pour over six months of your personal transactions to determine if you are suitable for a loan.

Consolidate your debts.

Having multiple loans and credit cards means multiple interest and fees. Consolidate all of your loans to one place and focus on paying them down as soon as possible. Make paying your loan off a priority so you can turn the regular loan repayments into savings faster.

As soon as the debt is paid, cancel the credit card so you won’t be tempted to load it up again and you’ll save on annual fees.

Let go of instant gratification.

A long-term goal needs long-term gratification and a long-term willingness to sacrifice time, money, and resources. You will need to give up those instant rewards and activities that take money away from your savings and look at the long-term gains to keep you motivated.

Buying a home isn’t the add-to-cart purchase we are so used to with online purchases and express delivery. This will not only take time and research to get right and years to pay off, but it will also bring years of enjoyment, protection, and security. Keep your eye on the bigger prize.

Say goodbye to technology purchases.

Buying online or using app-driven services for meals, transport or shopping can add up quickly and unexpectedly. Cook from home and enjoy making your meals from scratch, be the designated driver for the night to cut back on app transport and cut back on expensive booze. Online purchases can be impulsive and not well thought out. A lender will flag these as potential pitfalls when assessing your loan application.

Save your mortgage repayment amount.

As I mentioned earlier, the most effective way to save for a deposit is to put away the same amount you expect will be your mortgage repayments. This way you are already set up to make the loan repayments after you buy without having to make any changes to your current lifestyle. It not only takes the stress out of future payments and gets you into a great saving habit, but it also proves to your lender that you can successfully meet your loan repayments. To make this effective you need to determine an accurate rate on your future home loan, which might require the assistance of a mortgage broker.

Small savings count.

Finding ways to save on those everyday items might not seem like much, but it will accumulate significant savings over time. Have a look at your day-to-day living and find ways to improve the way you grocery shop, maybe you can carpool to work, do your own dog grooming or change your brand of coffee. Every little bit counts.