Saving For A Deposit
In recent times the banks have kept interest rates the lowest in NZ history around the 5% mark, but it’s still not that easy to get onto the housing ladder so today I thought I would offer some thoughts on saving the deposit.
Many people would like to buy their first home but seem to be all at sea when it comes to setting the budget they need to save money for a deposit. It’s not hard to spend a whole pay packet each week even though if one earned less, one would be forced to spend less. Some people have trouble working out what they spent the money on when they look back over the week. If this sounds like you, the first thing to do is to make a list of all your expenses (it may take a week to do this if you are going to account for every dollar).
Do all the items on your expenses list correspond to ‘needs’ or should they be regarded as ‘wants’?
If you isolate the items that are needs, you end up with core expenses. Needs are food, shelter, transport, clothing. But even within the ‘needs’ group of expenses, there is a big window of possibility for unnecessary spending , an expensive car, designer clothes or rental accommodation that are more about keeping up with your peer group than about providing mobility or a roof over your head. Have you ever heard (or said) “I absolutely need…?” when the actual meaning was “I really want?” This is not to suggest that you shouldn’t be able to have the things you want, but you need to know that you are making a choice that might not only preclude the possibility of buying your own home but might lead in the end to a financial blowout even in terms of credit card costs.
Even if you have isolated your needs and the best value way to meet these needs, another way to save money is to delay big purchases by borrowing or hiring the item to find out if it’s something you will really use. Are the latest GHD hair straighteners really better than a similar product on special at your local electrical store or the ones you are currently using that do the job but don’t carry the flash label? Once you have your list of necessary expenses, start with the biggest items first to see where you could cut costs and scale down to a less expensive option. A moderate saving on one of the big items (accommodation and cars) combined with savings on the smaller items (food, clothes, etc.) might just be enough to get you started.
If you are thinking of selling your home, would like an appraisal, or want more information on the Upper Hutt property market please call me on the numbers below or contact me via email email@example.com alternately fill in your details here on my website.
(04) 212 6787
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