Yes you can save for a deposit – even in today’s economic climate

For many people, owning a home is the ultimate dream and also the biggest financial decision they will ever make, but saving up for a deposit can seem like a daunting task, especially in the current economic climate. However, with some smart planning and discipline, it’s an achievable goal for many people.

Below are top tips from the professionals:

• Seek professional advice

The first step in saving up for a deposit is to determine how much you need to save. A general rule of thumb is to save at least 20% of the purchase price of the home as a deposit if possible as this will not only help you secure a mortgage with better terms but also reduce your monthly mortgage payments.

• Set a realistic goal

Determine how much you will need for a deposit and how long it will take you to save up that amount. It’s best to be conservative in your calculations so that you can manage a consistent savings plan and also don’t come up short some months because you had an additional expense.

• Set up a dedicated savings account

Having a separate account will help you keep track of your progress and avoid dipping into those funds for other expenses. You can also set up automatic transfers from your checking account to make saving easier and more consistent. A fixed deposit account will not only keep you from taking out funds for other expenses, it will also offer a higher interest rate.

• Reduce your debt

Reducing your debt can also help you save up for a deposit faster. High-interest debt, such as credit card debt, can eat into your monthly budget and make it harder to save. Consider consolidating your debt or negotiating with creditors to lower your interest rates.

• Shop around for better deals

From groceries to insurance, there are many areas where you may be able to save money by shopping around for better deals. Look for discounts and promotions, compare prices online, and negotiate with service providers to lower your bills.

• Use cashback and reward programs

Many credit cards and other programs offer cashback or rewards for certain purchases. Take advantage of these programs to earn money back on everyday expenses and put those funds towards your deposit.

• Consider a side hustle

If you have extra time outside of your regular job, consider taking on a side hustle to earn extra income. This could include freelance work, tutoring, or selling items online.

• Cut down on housing costs

If you're currently renting, consider downsizing or finding a cheaper apartment to reduce your monthly housing costs. You can also look for ways to save on utilities, such as by turning off lights and appliances when not in use, using heaters more sparingly etc.

• Trim your monthly expenditure

Consider cutting back on non-essential spending, such as eating out, shopping, and entertainment. Yes, it’s a sacrifice but it’s not forever and it will be well worth it.

• Be patient and stay focused

Saving up for a deposit can take time, but it's important to stay patient and focused. Keep your eye on the prize and remind yourself of why you're saving. It may help to track your progress and celebrate small milestones along the way.

There are other costs associated with buying a home, such as transfer costs, legal fees and moving expenses so make sure you have enough saved up to cover these costs as well. You don't want to be house poor, where most of your income goes towards your mortgage and you don't have any money left for other expenses.

Saving up for a deposit for a home can be a challenging task, but with the right plan and dedication, it's certainly achievable – and once you get going it will become easier. Remember to stay disciplined, track your progress, and celebrate your milestones along the way.