Most people have to rent at some point. Typically, when you first start working – you’ll rent, and in an ideal world you’ll save all your extra income and put it away for a nice home deposit and it will all be rosy. But – things don’t always work like that – because it’s not an ideal world.
As rent and utility bills roll in like clockwork, saving for a home loan deposit may seem unattainable, but there are ways that you can avoid dipping into your savings unnecessarily.
Why do we rent?
We rent because we can’t afford to buy. And as rent goes up – typically faster than your income does – you’ll find rent becoming a larger and larger portion of your income. Some people are unfortunate enough to get trapped in the rental game and never are able to buy a home.
How to save money for your new home while renting
Know the full costs of living on your own. Rent is only part of the cost of living on your own. Don’t forget about utilities, food, supplies, laundry, property insurance, and so on — all those things your parents probably take care of at home.
As a ‘rule of thumb’, keep your rent to a maximum of 30% of your take-home pay. Anything more, and you should consider downsizing, sharing or moving to a different area if you really want to save.
Run a budget
Creating a personal budget is the main idea if you want to save more money by making a budget. This task is simple and an important one. In the words of Warren Buffet, “most people save what is left after spending, but you should spend what is left after saving…” – or something like that.
Make a habit of saving by practising saving. It will help you change your mindset and its make easier to turn into a habit.
And be realistic with your budget and with yourself. Is it realistic to say that you’re only going to eat plain rice with a tin of tuna each meal?? Let yourself live.
We have some very tried and tested rules of thumb for budgets, and worth contacting us to learn more.
Contact us now for a reliable financial advice!
