5 Simple Saving Tips for First-Time Home Buyers
A house is a big purchase and will probably tap out a good chunk of your savings, if not the full amount.
Many people are discouraged because they cannot afford to save a lot each month. This should not be something that scares you off.
If you can only save in small amounts, you can still meet your financial goals if you are determined enough. Nothing is impossible; it might just take you longer to get there than the next person.
But who's comparing anyway?
Here are five ways in which you can increase your savings account:
No.1 - Direct deposit into your savings
It is very easy to spend money when you have it. It can also be challenging to save liquid money once it has been in your account for a while. As soon as you see it, you want to use it. Probably on things that you don't really need right now.
Rather pretend like you don't have it and that it does not exist. Deposit a portion of your salary into your savings account every month and only work with what you have left over.
A good idea would be to open a 32-day notice deposit account so that you think twice before using it for emergencies.
No.2 - Check your daily expenses
Every single day we spend money on items we need (and sometimes don't need) but have you ever tried cutting back on certain daily costs?
Even though they might seem like small amounts, they eventually add up to a bigger amount that you could have saved.
Instead of buying food at work, why not bring a sandwich from home? And do you really have to buy groceries at the most expensive supermarket in your area?
Small changes like these make all the difference in the end.
No.3 - Save the change
Along with saving bigger amounts of money, you can also save the small change that you receive from breaking notes.
This is called the 'snowflake effect' and has proven to be quite successful. Every time you use a R100 for an item that is, for example, R75, you deposit the remaining R25 into your savings account.
This amount will slowly but surely add up at the end of the month and before you know it, you would have saved a couple of hundred. Many banks in South Africa already have this as an automatic option.
No.4 - Institute a No-Spend Day
The above tip might not really work out if you are already cutting back on daily expenses or if you already have a tight budget.
A No-Spend Day is a day where you decide not to spend at all. It could be a weekend or a weekday where you decide not to hand out any money at all.
Instead of spending Saturday in the mall or at the bar, spend a quiet night in with homemade meals and movies. The money that you would have handed out you can add to your savings account.
No.5 - Hide your new home savings
Sometimes you just need to fool yourself and trick your mind into believing that the money you have saved does not exist.
Many banks offer the option to hide bank accounts so that clients are not tempted to use it for other things, like expensive TVs or stereo systems.
Once you are confident that you have saved enough, you can unhide the account and check it out. A super awesome surprise should be waiting for you!
Saving is easy if you have the right tools. You don't necessarily have to have a huge load of cash!