How to Save Money for A House Deposit Fast and Other Financial Hacks: Part One

Wondering how to save money for a house deposit fast? It can be easier than you think. Financial guru Melissa Browne explains how.

It feels like a long journey to save for your first house deposit but there are ways to get there faster.

In one of the episodes of The NSW Property Show, I spoke with financial educator Melissa Brown about making money, spending it and saving it wisely.

Melissa’s advice was so insightful that I have broken it into two blog posts.

Here’s part one (you can find part two here):

How to save money for your house deposit fast

Melissa says saving is first and foremost about two things; your attitude and your knowledge. 

What is your goal?

The first thing Melissa advises is to make sure that you are pursuing the right goal. “Is it your goal to have property,” she says, “or are you sabotaging it because it’s someone else’s idea for you? It might be that when you sit down, you work out ‘I don’t actually want to own my own home, I really want to own an investment property’.”

There is no way you will put the effort into saving for a home if it’s not something you really care about. If you are struggling to save or come up with the money, take a look at your goals and readjust if you need to.

What are you prepared to suffer for and how long?

Saving money can be a hard task. If you are willing to go without, you can save a lot more quickly. If, however, you know that you aren’t going to be happy scrimping for a year, it is going to take longer. Once you put into perspective what you are willing to put yourself through, you will have a better idea of the time frame you are going to be dealing with.

An example Melissa shares is a couple who bunkered down for a set time period and spent as little money as possible. They stopped going out for meals and let their friends know that if they wanted to catch up, it would have to involve something low-cost. The result was that they had enough money for a deposit relatively quickly. 

Talk to your broker

Melissa also says to talk to your mortgage broker as early as you can. Brokers will be aware of government schemes that you might be eligible for. They can also advise on different ways to save and build funds and strategies for buying homes. 

Melissa says, for instance, “You might be happy and comfortable to have a really small deposit of 10% and pay mortgage insurance because you’re the sort of person where you’re amazing at paying down debt but terrible at saving.” Brokers will be able to talk through different strategies like this with you to find what suits you best. 

“But I’m no good at saving!”

Melissa says many people believe they’re no good with money because of false ideas that they have bought into. For many people, Melissa says, “It’s a money story that they’ve picked up, where someone has told them they’re bad with money or they were bad with maths at school, so, therefore, they presume they’re going to be bad with money.” In fact, there is no reason this has to be the case. Put aside those feelings and you might find you are more than capable of saving.

On the other hand, personal goals may once again raise their heads. You won’t be good at saving for something you don’t care about. You need to change tack.

How to change tack

It’s all about understanding who you are and what drives you. Maybe you’re trying to save for a home because you have been led to believe that it is the thing to do. In reality, you don’t know where you want to live and what you want to do with your life. “If you’re not excited about your home,” Melissa says,  “Are you excited about some other type of property like an investment property instead? Is there any other way that you could be excited about this?”

In part two, Melissa offers some more practical tips on how to save money for a house deposit fast and shares her best and worst decisions.