It takes more than just cutting back on avocados to save up for your first home deposit. Here’s what the under 35s really need to know.
The new Deloitte 2017 Millennial Survey paints a less than rosy picture of the financial outlook for Millennials in Australia – at least, from a Millennial’s perspective.
It states that only 8% of young Australians (born after 1982 but before 2000) believe they will be financially better off than their parents.
However, there are several ways in which Millennials can proactively tackle these concerns and start working towards owning their first home.
Here are three tips to help you save up for your first mortgage deposit.
Use tech to help you save
Millennials have one up on their boomer parents in the tech stakes, and the smart use of technology can seriously help you manage your money.
There are literally hundreds of free apps available to help you track your spending, save, and invest.
Here are a few of them:
Pocketbook is an Australian app which lets you to track expenses and set spending limits.
Money Smart’s TrackMyGOALS allows you to set, plan, track and manage your savings goals and visualise your progress.
Expensify allows you to scan receipts and track time or mileage for tax deductions.
Set up a budget
The most important step a Millennial can take in terms of getting control of their finances is setting up a budget and tracking income and expenses.
This is because as soon as you start to see where your money is going – on takeaway coffee, on drinks and the pub, or on yes the ubiquitous avocado toastie – you’ll realise how much you can save by making a couple of small, but key, lifestyle changes.
Even as much as $5 a week in savings can start to quickly add up.
Setting up a budget is quick and easy and can now be done online, allowing you to add to your expense list when you’re out and about.
The Australian Securities and Investments Commission (ASIC) is a great place to start, with a free and user-friendly online tool.
Define clear financial goals
When setting your financial goals, the key is to make them achievable and time-bound.
With so much time to accumulate wealth over your lifetime, it’s important to set yourself short, medium and long term goals, so you feel rewarded and satisfied throughout your financial journey.
Before you take out a mortgage you may need to go on a trip to the US for a wedding, or buy a new car.
These will be your short to mid-term goals.
On the other hand saving up for your home loan deposit, and then paying off your mortgage each month, is a long term goal.
Clearly identifying which is which, and then having a plan in place to reach each goal, will make things much less overwhelming.
Still need help?
It’s normal for younger people to put their head in the sand when it comes to mapping out big financial goals, but it’s wise to dig it out as quickly as possible and start planning.
If you need help in saving up for your first deposit, come and talk to us, we’d be happy to help out.
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