MAKE 2021 YOUR YEAR TO GET FINANCIALLY FIT
New Year’s Resolutions. We all make them, but sometimes we struggle sticking to them.
One resolution we hear on the reg is creating a budget and sticking to it. Although it may sound like a boring goal, it’s a very important one, especially if you want to achieve your dream of buying or building.
We talk to MyChoice Home Loans Sales Manager, John Berghella to gather handy tips and tricks you can implement to make budgeting and saving for a home deposit easy.
Record your income
Record how much money is coming in and how often. For example, if you get paid fortnightly, set your budget based on the amount you are paid each fortnight.
Add up your expenses to set a realistic budget
Break up your expenses: Fixed expenses VS discretionary expenses. Fixed expenses include rent, electricity, phone bills, groceries, medical costs and insurance, transport, childcare etc. Discretionary expenses (non-essential items) include entertainment, eating out, new clothes, hobbies and holidays. Now you have recorded your expenses, you can set a savings goal.
Scrutinise your subscriptions
Whether it be Netflix, Stan, Foxtel, Disney Plus or Spotify – ask yourself, is it worth paying for? Will I use it enough? Can I do without it? Can I use a family or friends’ login? You don’t need all of them, so choose one and see if it fits in your discretionary expenses.
Set a savings goal
Based on your expenses, set a savings goal. Ask yourself: How much money will I need for a house deposit and how long will I need to save for?
Have a savings plan
Now you have figured out your savings goal you can commit to putting your goal amount aside to build a house deposit.
Set a spending limit
The money you have left after your fixed expenses and savings is your spending money or discretionary expenses. Make a plan of where and how you wish to spend it, keep within your limit and track your spending so you know you haven’ t gone over your spending limit as it all quickly adds up, even coffees and avo on toast!
Manage your money wisely
Ensure payments for rent, bills etc are paid on time and there is no overdrawing of transactional accounts. This is something the lenders will look for.
Say no to ‘Buy now, pay later’
Think twice when using Afterpay, Zip pay, Openpay or any other interest free arrangements as they are a liability in the eyes of lenders. These payment options are factored into the lenders assessment when you are applying for a loan.
Get started by using MOJO’s Budget Planner and start saving toward a deposit today.
If you would like more information, contact our team from MyChoice Home Loans here.