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Get serious about saving for your first home deposit

By Andrew Bell

Getting onto the property ladder is no easy feat, but with some careful budgeting and saving, your dreams could become a reality sooner than you think. Many lenders require a deposit of at least ten per cent from borrowers, so if you're serious about buying real estate in Surfers Paradise, there are some sacrifices that will need to be made.

Here are just some of the ways you can build up your deposit and hopefully be moving into your first home in the not-too-distant future.

Set a monthly budget

If you regularly find yourself with very little money left over at the end of the month, then you will need to establish a budget. However, this isn't the hard part – sticking to it is.

In the event that you're buying property with someone else, make sure you are both on the same page. There is little point to just one of you squirrelling money away if the other isn't making an effort, it should be a joint commitment.

Write down all your necessary expenses such as groceries and rent, before seeing how much is left over. Aim to set a certain amount aside each month and the funds will soon start to mount.

Make sacrifices

Being savvy with money is going to involve making some everyday sacrifices. If you regularly head out to the cinema at the weekend, then you might want to think about staying in and watching a movie on TV instead. Try cooking instead of reaching for the takeaway menu, too!

All these little cutbacks will make a big difference to the amount of cash you have spare each month. If it helps, keep track of how much you've saved – it might make you feel better!

Aim for a 20 per cent deposit

Although lenders will take lower home loan deposits, 20 per cent of the property's value is going to be crucial to avoid paying lenders' mortgage insurance. This will vary depending on the price of the home you're buying, but is likely to lead to increased expenses in the long run.

Open a separate savings account

Having all your money in one place can be dangerous when you're trying to save, as it's all too tempting to dip in whenever funds are running low.

Instead, think about opening a dedicated savings account where you can put the money for your deposit. A good way to ensure regular payments is to set up a direct debit – if the cash leaves your account straight away then you won't have the opportunity to miss it!

Repay all other debts

A lender will look at your credit history before deciding whether or not you're a safe bet, which is why you should focus on repaying other debts before committing to a home loan. Credit cards, store cards and personal loans are just some of the areas you need to focus on over the coming months.

Once these debts are cleared, you can really start to make a concerted effort in putting money aside for your first piece of real estate in Surfers Paradise.

Change your transport options

If you regularly find yourself reaching for the car keys, even for short journeys, then you'll be amazed how much money you can save. Walking and cycling are great alternatives, not only because they are free, but also due to the fact that they're a means of keeping fit and healthy.

The same goes for taxis. Instead of hailing a cab, think about using a local bus, train or tram service to get you from A to B. Be sure to put the money you've saved back into your home loan deposit fund.

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