AAP 22 November 2015
Saving for your first home can feel like running a marathon.
As any distance runner knows, at some stage you could hit the wall of fatigue.
ME Bank’s head of home loans, Patrick Nolan, has put forward four strategies to help first home savers and, perhaps, long distance runners, reach their goal.
KEEP A CONSISTENT PACE
Throwing as much cash as possible into your savings without allowing for fun stuff is a sure fire way to burn out.
“Life is meant to be enjoyed, and you still need to able to head out on the town occasionally, take a break on vacation or chill out with friends,” Mr Nolan says.
“Aiming to stick to a consistent pace of saving can help you avoid saving fatigue.”
Crunch the numbers to work out how much you need to save on a regular basis to reach your first home deposit target. Once you have the numbers in place, it’s just a matter of maintaining the momentum.
FUEL YOUR HEAD SPACE
Marathon runners often use visualisation techniques to stay motivated.
They imagine themselves crossing the line first or breaking a long held record, and that can be the tonic they need to keep going.
“If your enthusiasm for savings is flagging, stay motivated by picturing how great it’s going to feel to look at your home and think `Yep, I own that’.”
“Sure, you may not win a gold medal but remember, your home is a tax free asset and an excellent investment.”
RUN YOUR OWN RACE
Don’t feel pressured to buy in an expensive suburb just because your friends, work mates or siblings are. There is value to be found in suburbs further out from the city centre.
“Run your own race and buy where you can afford,” Mr Nolan says.
CARB STACK YOUR SAVINGS
In the same way that distance runners take advantage of stopping points to fuel up on carbohydrates, first home buyers can boost their deposit by improving the return their money earns.
Online savings accounts can offer higher interest than everyday transaction accounts but if you’ve had your existing account for a while check to see what your money is earning – a high introductory rate may have lapsed. Explore options to earn bonus rates, like holding your everyday account and savings account with the same bank, Mr Nolan says.
“It all helps you smash through the wall of fatigue and hit the finish line a whole lot sooner,” he says.