How to bulk up your first home deposit savings quickly without sacrificing your coffee - Malpass Finance

How to bulk up your first home deposit savings quickly without sacrificing your coffee

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How to bulk up your first home deposit savings quickly - without sacrificing your coffee!

I'm tired of hearing about how buying a coffee is stopping people saving a home deposit. It seems to be the go-to cost cutting measure advised by many a well-meaning person and financial institution offering their mortgage-deficient friends/co-workers/children tips on how to save up a home deposit super duper quick.

How patronising.

Sure, some things take time and discipline to pull off, and some sacrifices may need to be made to reach your goal, but denying yourself the small luxuries in life, like a coffee out somewhere from time to time, is taking things a bit far. It makes you work from a guilt standpoint, which is counterproductive and you'll end up resenting the saving process, like starting a restrictive diet and seeing chocolate everywhere.

If coffee quality is something you're passionate about, then consider setting up a kitchen cafe at home - with a grinder and espresso machine, a travel mug and some coffee beans, so that you make your coffee to take with you from home instead of buying it on the go. For a few hundred bucks upfront you can save hundreds or thousands in a year or two while you save up and beyond.

If you can't afford to do both the saving and the occasional self-care spending now, then think about whether buying a home is a goal you want to strive for. If it is, then go get 'em, tiger.

Here's what I tell people who ask me how to save my home deposit sooner rather than later:

  1. Set up a separate bank account for each savings goal - if you plan to travel, then have one set up for that too, or any other goal you might have for a sizeable chunk of money. Most lenders will let you do this online from a desktop computer and you can add a name to the account so you can see each goal at a glance - try naming these accounts to include the goal amount i.e. Travel fund $5000, or Home Deposit $40,000.
  2. Pay down your debt AND save at the same time: seeing the numbers go down and up in the respective areas of your budget can be very motivating!
  3. Make it hard to access the savings, not impossible, but if you have to work to get to it then you're less likely to spend it
  4. Review every expense in your life and get real with yourself about what is and isn't necessary right now. Be sure to include some treats and fun stuff though so your new savings lifestyle doesn't feel like too much of a change all at once. Obviously the more you can do without, the less you'll be spending on things that keep you from achieving your savings goals.

If you were a business, then you'd have an operating expenses account; use this idea and create an account from which you pay bills. Have a separate account from which you can buy your coffee, or go out socially if there is money in there.

Cancel all unnecessary direct debits from your accounts, then pay consciously for the things you really need, and not renewing those things you don't need anymore or can put off until you have achieved your savings goals. I'm not suggesting that you dishonour contracts, but when it comes time to renew your mobile phone plan, for example, you could move to a pay as you go option or scale back your spending to channel more of your money into paying off your debts and/or adding to your savings account.

Waiting to get something you want works better if you also celebrate the continued positive behaviour towards your goal - what I mean is if you make a saving on one of your big bills - like your car insurance for example, then put most of the saving into your savings account (say 80% of it), but keep a little of it back to celebrate with or add to your fun money account (the other 20%). It'll keep you motivated to find more ways to save because you are getting closer to your goal for the thing you want later AND having some fun spending now too. That's a win-win in my book!

It's true that it takes time to achieve goals worth having, but the journey to home ownership will be much more pleasant if you don't have to live too frugally in the meantime.

Do get in touch for a chat about your situation to see if there are things I can help you with in the lead up to going househunting.

If you'd like help with assessing your personal and financial situation, as well as comparing the loans in the market to see if you're truly getting the right deal for you, then call Bob Malpass now on 0431 862 136, email [email protected] or send us a message via our website for a quick response.

Thanks for reading,


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