Have your end goal in mind and work backward

Calculate what is the price of the property you are looking to purchase and then work backward. For example, if you are looking to purchase a $500,000 property, at 10% deposit would require a $50,000 deposit.

Once you have decided on your budget, consider what rebates and concessions are available for First Home Buyers (read about what is concessions are available for Victoria First Home Buyers CLICK HERE).

A $500,000 property purchase in Victoria will be exempt from Stamp Duty and depending on the age of the property, you may be entitled to a $10,000 Cash Grant. These concessions will significantly impact the amount of deposit required.

Now that you have worked out your savings goal, you need to work out how to get there. CLICK HERE to download our free hfinance budget, input your income and expenses to see long it would take to reach that goal. Take your time with this process and be honest, you will learn a lot about where you currently spend your money and where you can make cutbacks.

Pay yourself first

As Tony Robbins says you should apply a 20% tax on yourself. That is 20% of everything you earn, needs to be saved away BEFORE you have access to it.

Saying you will transfer 20% of your pay once it hits your transaction account, sounds great – but practically it is harder to stick to.

Here are some tips to help you achieve this. Speak with your payroll department at work as ask they divert 20% of your pay to a savings account, separate from your everyday transaction account.

This savings account HAS to be different to your everyday banking account. If you set up a savings account that is with the same bank as your transaction account, you have the temptation of accessing the funds every time you log into your internet banking – out of sight out of mind.

Additionally having the funds in a different bank will mean any transfers will take 1 business day to clear, this will avoid any spontaneous spending.

Another option is to work with your payroll department to request additional tax is withheld from your payslip. This is mean you will receive a refund at year end when you lodge your tax return, due to additional tax withholding throughout the year.

Now you have the savings, accumulating in the background – make it hard to access the funds. Term Deposits are a great product as it invests your funds and prevents you from accessing the savings (this is general advice and speak to your bank for a product disclosure)

Eliminate all debt

If you have any outstanding debt, this has to be your first goal. Once you have completed your budget above, you need to pay down any outstanding debt – before you even start saving.

Typical non-deductible includes

• Credit Cards
• Personal Loans
• Pay Day Loans
• Layby Type Loans (this is a new type of finance)
• Car Loans

The statements may only require a minimum balance repayment – but you need to pay down as much as possible. These types of facilities incur 10 – 30% in interest expense.

Stop Being Lazy

Make a coffee in the office, bring in last nights leftovers, clean your own house, ride a bike to work, cancel your gym membership and go running. You get it, work out which types of discretionary spending is important to you (but you can only pick 1 or 2) and then eliminate the rest.

Once you have done your budget, you will realise this type of spending is where a lot of your money goes. Cutting back on this spending will get your closer to your first home.

Get a second job

The best thing about working a 40 hour week, means there is 128-hour spare. Plenty of time for a second and third job. With technology now it is very accessible to taxi people, deliver food, run errands, clean houses or even work at your favourite Pub or Café.

Once you have found that dream second job, you guessed it – make sure the wage is going straight into your savings account that you cannot touch. This will super charge your savings growth.