The path to home ownership starts with saving for your first home deposit. For many, it requires a new attitude to financial responsibility and learning some new financial techniques to make your savings grow. Here's some tips for making that lump sum grow quicker. Work out a budget Managing your money is a lot easier if you create a comprehensive budget. To create one, work out your living expenses every month. Include everything – rent, food, morning coffee, utilities, petrol or public transport costs – everything you are spending your money on. The trick is to think carefully and include all of your actual expenses. Once these have all been deducted from your monthly income, what's left over is your potential monthly savings amount. It's that simple! The next step is to look at areas where you can spend less. Decide how much money you want to save every month and find ways to cut your spending to achieve that goal. For most people, just being aware of your casual spending habits can be a big help. Do you really need to buy a coffee on your way to and from work every day? Could you save an extra $50 a week by bringing your lunch instead of buying it? The next step is to look at your bank account at the end of every month and put away what's left over. If you've ever said something like "Oh look – I've got $200 left over this month, I'm going shopping!" then saving for your deposit is also going to require a bit of a mental shift. Remember that ‘extra' money is destined for your savings account – don't be tempted to spend it on anything you don't really need. Plus, when you finally do choose your mortgage, you really should get into the habit of making extra repayments. This can save you thousands of dollars in interest over the life of the loan. There are some additional benefits to planning a regular budget and training yourself to stick to it! If you have an established savings routine and a strong history of growing your savings balance, it may place you in a better position when it comes time to apply for your home loan. It could even mean you have more choices and can obtain a better interest rate. Make your money work for you Once you've worked out a budget and have established a monthly savings routine, you'll want to consider other areas where you can save money. You can start by cutting back the costs on your everyday transaction account. To do this, you can consider paying your bills with automatic debiting as this is usually a fee free service. You can also save money by being careful where and when you make withdrawals – use EFTPOS when shopping if you must withdraw cash as there is no extra charge and avoid using other bank's ATMs as these attract higher fees. Every day transaction accounts usually do not pay interest, so you'll want to consider opening a savings account so your money works harder for you. Keeping your savings in your transaction account also makes it very accessible – putting your money away in a savings account will help to remove the temptation to splurge. Shop around for your savings account and try and choose one that pays interest daily if possible. The more frequently interest is paid on your savings account, the more quickly the interest will add up. Some savings accounts just pay interest on the monthly balance, which really means you get interest calculated on your minimum monthly balance and these are the ones to avoid. In addition to the interest rate and how it is calculated, there are other factors to consider like account keeping fees and transaction costs. These can really add up. Look for an account that's free of charges and allows a few fee free withdrawals every month. Some accounts even offer an interest bonus if you make no withdrawals at all, so it does pay to shop around! Stash your money away from temptation A savings account is a great way to get started on saving your deposit. But once you have a few thousand dollars saved, you may find it beneficial to put it away in a term deposit account. With a term deposit account, you put your money away for a fixed period of time. It's a great way to remove the temptation of spending it on luxuries or things you don't really need. Additionally, term deposit accounts offer a better rate of interest than regular savings accounts. The interest rate on term deposits is usually determined by the length of time you agree to leave your money in there without touching it. Generally, the longer the term the higher the interest rate – and your interest rate will be fixed for the agreed term. There are also often penalties for withdrawing funds from a term deposit early – which is a good incentive to leave it sitting in there earning extra interest! If you need help formulating a pathway plan to your first home, then talk to us today. We can help you set some clear goals towards saving your first deposit and assist with suggestions to get you there faster. And when you're ready to start looking for your first home, we can help make sure your financing is already in place.

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