How to Save for a House Deposit – 50 Hot Tips

Our Facebook community of Mum CFOs shared in our group their tips on how to save for a house deposit. Do you have any hot tips you wish to share?

• Increase your cash flow. We have 24 hours a day, eight at work, eight sleeping and another eight. Use your last eight wisely.
• Pay your bills with your income, earn your fortune in your spare time.
• Have your savings in a different bank to your transaction account. That way, you can’t see the money along with your everyday banking and the temptation to draw on it isn’t there.
• This won’t be for everyone, but my friend and I have secret savings accounts that we are using to surprise our husbands with a house deposit (her) and a trip to Europe (me). No matter what, money goes into the savings account every pay.
• I’ve just started saving $2 coins in the 600ml coke bottle to reach $1000!
• Planning your meals weekly/monthly and taking a strict shopping list. Cuts out so much wastage.
• Don’t just guess. Print all your bank statements out for the past year & really look at where your money is going. Some are realistic spends, some will be an eye-opener and some will highlight why you’re paying for stuff you don’t need.
• Sell stuff you no longer use on places like TradeMe. Amazing what people will buy. Even if it only sells for $5, it’s $5 more than you had before. The trick is to put that straight into your savings as soon as it hits your account. We paid off a large credit card bill doing this.
• Have the money you want to save – say $500 a month – taken out of the account it goes into and immediately transferred to a separate account you need to go through hoops to access. If you don’t have the money, you won’t spend it. It’s amazing how you still manage to do everything you used to. We “waste” more money than we realise.
• Shop around for things like home insurance. Any savings found by changing suppliers can go straight into your savings account.
• One year I saved $1000 by switching from Commbank to NRMA on my investment property building insurance.
• Work out your mortgage repayments and act as though you’re already paying the extra. This becomes an untouchable amount to be saved. You can also gauge if you can afford the dollars and stress point.
• Take the time to shop around on every bill – especially power bills. I managed a 28% saving last month and it only took a couple of phone calls. The savings you can get on insurance are huge as well.
• At the end of every day, I go online and transfer the odd amount from the total amount in the account. So eg. $157.68 in the account I transfer the 0.68 into a savings account I can’t access easily. Sometimes I might do $168.45, I’ll transfer $3.45 rounds it down to $165.00. You don’t miss the small amounts and I’ve only been doing it a couple of months or so and there’s nearly $200 in there. Only a small amount but still a saving.
• Pay everything on credit cards and pay the closing balance on time. Use the points for grocery gift cards or save them for Xmas shopping. We haven’t paid for Christmas gifts in years!
• Go on a “spend fast”. Check out this website http://andthenwesaved.com/about-the-spending-fast/
• Whenever you go to buy something ask yourself – “is it a need or a want?” It works for me.
• Every time you are about to purchase something, work out its value in “hours worked”. So if you get paid $40 an hour and want to buy a pair of boots for $80, ask yourself if they are worth two hours of work. A simple change but helps me cut down on luxury items.
• The first time we saved, I had been a stay at home mum for four years. I went back to work full time and we’d saved my whole wage each fortnight because we were so accustomed to living on one.
• Treat your savings account as a third entity vendor/bill which needs to be ‘paid’ each time your income hits your account. The only shop with cash – never uses an EFT card.
• With the change, $5 notes go into a jug and $2 coins into a coke bottle. All other changes into a box which is used for lunch order money etc. If we ever feel like eating out or purchasing takeaway, we can only have it if there are enough $5 notes in the jug. It’s a great way to manage incidental spending!
• Gold coins go into a money box in our house that can’t be opened. When it’s full will go straight into a savings account.
• I’ve just started collecting gold coins and 50 c pieces. Every time I get they go straight in the jar – I have $132 in only a few weeks!!!
• We swear by a strict budget, taking all the cash out at the beginning of the month and keeping it in envelopes (don’t use EFT or CC) AND transfer what you intend to save at the beginning of the month – don’t wait to see what you have leftover.
• Download a spending app (I chose Coin Keeper)- one you can access on multiple devices (for example, hubby and I both access from our phones) and enter in absolutely everything you do (except if you both pay yourself an allowance each month- that doesn’t need detailing)- a great way to curb spending.
• Set yourself an amount you will save every month and stick to it no matter what- be really strict about it. If you overspend, cut back on other areas, but not savings. Then put those savings in an account that’s outside of your bank where it’s not easily accessible so you can’t easily withdraw it, such as an online savings account with another bank and one with the best interest rates of course. That’s how we saved our deposit.
• Pay yourselves an allowance every month/fortnight as your fun money. Fun money is for meals out, coffees, movies etc, but once it’s gone, that’s it for the month/fortnight. Doesn’t have to be a lot, and it lets you each have some financial freedom while still setting boundaries on spending. Then save the rest!
• It’s probably an obvious one, but save into your mortgage offset account so not only is it a little separated from your normal account, but you save in home loan interest too.
• I saved my unit deposit on a trainee wage while living at home. I’d take my disposable income from my paycheck each week and hand over the rest to my mother for safekeeping. She put it all in a jar and wouldn’t give it back. Worked like a charm.
• I know some families have moved back to their parents (temporarily) to help with living expenses and kids. Also, I know of one single guy who used to live in Indonesia in-between contract jobs.
• Term deposits and high-interest savings account will get you there faster and you can’t withdraw without penalty so the incentive is there not to touch it.
• My biggest saving tip would be to move back in with my parents. Hubby and I have been lucky enough to be able to do this while we are saving our deposit. It means we can save faster and more and may be able to get a more expensive house because we’ll have a bigger deposit than if we were renting.
• I set up a scheduled payment that transfers $10 daily straight onto our home loan account. It’s the cost of a coffee for hubby and me, and we don’t miss it.
• Do regular cleanouts of cupboards and draws and sell anything unused of value on a local buy and sell pages. When pregnant with my second child, I needed to clear out a spare room that was full of things we never used; clothes, books, linens etc. I sold them off on a local buy and sell page and made $1100.00. I also cleaned out my wardrobe and donated some of my clothes to the salvos, but I had lots of items that still had plenty of life in them. I bundled them up into size piles and sold them for $30-40 a pile. The result? I had decluttered cupboards and spare money!
• ‘ANZ Go Money’ is great to show you where you’re spending your money. You can make a budget, tells you your net worth, analyse spending and links up via your credit cards and bank accounts. And it’s free!
• When I was younger and single, I made very little. It was easy to bust my entire salary on a night out. I operated on a strict cash-only basis. I was paid monthly so when I got paid, I set aside a set amount as savings (pay yourself first), paid bills and I divided the rest into four envelopes and sealed them shut. I opened a new one every week. It seems so silly now, but as my husband had debt and isn’t great with money, we saved and that was how we saved our deposit.
• Best one I’ve done, and have to get back into. If you do Internet banking, each day transfers the odd amount to a savings account. Eg: The balance of your account is:  $ 184.70, transfer $4.70. Balance is $86.60, transfer $1.60. So round it to the closest $5 or $0. I found I  didn’t even miss the money.
• We lived off my then boyfriend’s wage and saved all of my salary. We were planning on doing that in London, but when our travel plans fell through (GFC hit), we decided we might as well try doing it here instead. We got our deposit together in six months (had the double-first homeowners grant to top it up). Luckily we were used to living on one wage, as a month after we moved in my husband seriously damaged his foot and was off work for 6 months with no pay! Was tough with the new mortgage, but we made it.
• Make the most of your interest! Have your salary paid directly into a high-interest account (like ING direct – you can have several accounts with them if you want to keep money in separate “piles” eg. Savings, spending, whatever.) Put everything you can on a fee-free credit card and make sure you pay it off in full each month.
• The biggest tip is to save either a set amount regularly or a % (I recommend at least 10%) of everything you earn (regular wages or salaries, overtime, tips, bonuses, interest or dividends received, tax returns, inheritances, cash gifts, lottery wins, etc.) into a high interest, online bank (no bricks and mortar branch or ATM to tempt you) with penalties (such as lower interest rates) for withdrawals. If you receive a regular wage paid into your main account, set up an automatic transfer from this account on the day or the day after you are paid, to transfer this percentage to your special “savings” account, or you can speak with your payroll department to have your wage paid into two accounts. Most companies can and will do this for you.
• Look for 2nd hand items first or ask around friends and family before buying new ones. Saves a fortune and reduces waste.
• When I have a big savings goal, I work out the absolute necessaries from each pay (rent, food, bills, fuel) and then immediately (on payday) transfer the remainder to the savings account. It forces me to apply all those other rules (i.e doing anything ‘optional’ very very cheaply or for free). It really gives me the sense that my money is not endless, and it also puts the savings goal as the #1 priority.
• If you are savvy and disciplined, you can use credit cards with free balance transfers to your advantage. For example, you pay all your bills in advance on credit, say $10,000. Especially look at things you can get an early bird discount on. Then balance transfer to the credit card with no interest for 12 months and no fees. Then accrue your savings in an interest-bearing account for the next 12 months or offset your existing mortgage, pay back the card and collect the interest. Obviously, you need to be disciplined and good at budgeting for this to work for you. Another thing is to have a separate credit card for work expenses only. That way, it’s easier to identify work-related tax deductions when it comes to tax time to maximise your return.

Do you have any tips?