First Property Saving Tips
Deciding to buy a property is one of the most important and biggest investments people will make in their personal lives. Depending on the size of the investment, the size of the deposit, interest rates and bond repayment scheme, paying off a house can take anywhere from 10 to 30 years ‒ which is a sizeable chunk of one’s lifetime.
To minimise the size of the loan and therefore the repayment, it is advised that you put down as large a deposit as possible. This will not only play in your favour in terms of securing a bigger loan, but will also reduce your interest rate and decrease the amount that you owe on the property.
Typically, about 10% to 20% deposit is considered ideal to secure the best possible terms. However, this is a large amount of money and is the kind of sum that most people don’t simply have lying around.
Saving up for a deposit on a property takes planning, foresight and, most of all, time. This means that the sooner you can start saving up, the better.
Here are two major things to consider to help you figure out how to save up for your first property.
Budget
Before you can save a single rand, it is important to work out a budget. This will help you determine how much money you can save towards your deposit every month, which will in turn allow you to plan ahead and figure out how many months or years it will take for you to save up enough to apply for a loan.
You will need to work out the difference between your monthly expenses and your monthly income so that you can determine how much disposable income you’re left with and apportion as much of that as possible towards saving for your property.
Reduce
The best way to save for a better future is to make a few sacrifices in the present. This means reducing unnecessary expenditure wherever possible.
Obvious wasted expenditure might be easy to spot and minimised. These expenses include things such as frequent expensive outings, fast food, bad habits such as smoking or gambling, costly holidays, among others. Cutting these down or out completely for a few years could make a significant positive impact on your budget and your ability to save.
Less obvious ways to reduce your costs is to downsize your lifestyle. Perhaps you want to consider renting a smaller home for a few years so that you don’t throw as much of your budget at paying rent. Perhaps you could trade down for a smaller, more fuel efficient car or reduce your travel expenses by moving closer to work.
Downsizing your lifestyle will contribute significantly to your ability to save.
At Live Easy, we have gorgeous, affordable, safe and conveniently located apartment units to rent of various sizes, catering to different lifestyles. Contact us now to find out prices, availability and special offers!