5 tips to accelerate your savings for a deposit

Saving for a home loan deposit is a significant task before you even sign for your mortgage.

To avoid having to pay Lenders Mortgage Insurance (LMI), you will want at least 20% of your purchase price, so that you borrow only 80% of the property’s value. Every dollar saved will bring you closer to achieving your deposit – and your home.

1. Reduce your significant costs

Start by taking a close look at your major expenses. Do you have high rent, hefty car loan payments, or other significant financial commitments? Consider ways to reduce these costs. You might explore sharing accommodation, refinancing your car loan for a better rate, or even downsizing to a more affordable vehicle. The extra money you save can go straight into your deposit fund.

2. Cut back on discretionary spending

Discretionary spending on non-essentials like dining out, new clothes, and holidays can eat into your savings. While it's essential to enjoy life, cutting back on these expenses temporarily can significantly boost your deposit fund. Opt to find low-cost or free entertainment options.

3. Increase your income

Boosting your income is a surefire way to accelerate your savings. Consider taking on a part-time job, freelancing, exploring gig economy opportunities, or talk to your manager about opportunities for promotion or raise. The additional income can go directly into your deposit account, helping you reach your goal faster.

4. Meal prep to avoid temptation

One sneaky budget-buster is takeout food. Meal prep can help you resist the temptation of ordering in and reduce food waste which costs Australian households an average of $2,000 to $2,500 each year. Plan your meals for the week, buy groceries in bulk, and cook in batches. This not only saves you money but also time. 

5. Review your bank statements and stop unnecessary subscriptions

Take a moment to review your bank statements. You might be surprised by the automated subscriptions you're paying for, some of which you might not even need or be aware of. Cancel any subscriptions that don't bring value to your life, and redirect those funds towards your deposit savings.