Smart money hacks

Developing good saving habits are an important part of life that can support you towards the home ownership journey but it can be tough to know where to start. Here’s some small changes you can implement as part of your everyday routine that quickly add up in the long-term.

1 Track where you are spending your money

It’s easy to lose track of how much money you’re spending, what it’s being spent on and the proportion of your income that makes it into your savings account.

Setting up a method to track your spending should be the first step in improving your saving habits. You can use apps, spreadsheets or keep a list of your expenditure and review this regularly. Most banks provide tracking tools and apps that categorise and provide insights into your spending habits. Your spending will consist of both fixed and variable expenses.

Fixed expenses are less likely to change from month to month and include your rent, utilities, insurances and any other debt payments. Variable expenses include items such as food, clothing, entertainment, fitness and travel.

Monitor your spending and categorise it by type of expense to develop a greater understanding of where your money is going and identify areas where you can cut back.

This research provides a strong foundation that can inform your weekly or monthly budgets and help you create one that is challenging but still realistic.

2 Automate your savings 

Avoid the temptation to spend by automating your savings. You can do this by setting up a regular direct debit to your savings account. You can also set up a bank account or app to round-up each of your transactions to the nearest dollar with the change being deposited into your savings account. This is a painfree method of building your savings, which will build up quicker than you think!

3 Plan ahead

Make sure to allocate time each week to plan out your meals before going grocery shopping. Being well-organised will make a surprisingly big difference to your grocery bill as you spend less on groceries you don’t need. Having a meal plan also makes it far less likely that you will buy your lunch at work or get take-away for dinner regularly which can become very expensive when you add it up.

4 Buy only what you need 

If you find yourself spending money on unnecessary items, start a habit of taking some time to think before you buy and only buy what you need.

It’s not a bargain if you don’t need it

Saving for a house deposit 

To save for a house deposit, you first need to understand the total amount you will need to save in order to have the ability to get an approval from a lender to purchase your ideal property, typically you will need a 20 per cent deposit. When setting saving goals, be realistic about your household situation and the timeframe you set yourself to save up this amount. There are other options to assist you achieve home ownership sooner, such as purchasing a home with First Home Guarantee (FHG) or Lenders Mortgage Insurance (LMI).

Case study

How lenders mortgage insurance can help you purchse a home sooner

Jenny and Tom have found a home they 1 1 want to buy for $700,000. Typically, they would need a 20 per cent deposit ($140,000) to secure a loan from their lender. By the lender taking out Lenders Mortgage Insurance (LMI), their lender is prepared to provide a loan up to 95 per cent of the value of the home ($665,000 if the home is valued at $700,000). This means that Jenny and Tom can secure a home loan sooner with a 5 per cent deposit ($35,000) and stop paying rent. Their lender passes on its LMI premium cost to Jenny and Tom by way of a fee.

LMI only protects the lender if Jenny and Tom default on their loan repayments. 

Saving for a $35,000 deposit instead of a $140,000 deposit is more achievable in a shorter timeframe.

Lenders Mortgage Insurance (LMI) enables you to buy a home without having a 20% deposit which is typically required by lenders.

Lenders Mortgage Insurance (LMI) may help you to: 

  • Buy a home sooner and stop paying rent

  • Build financial wellbeing and security

  • Avoid possible property price increases in Australia by buying sooner.

Talk to us today if you have any questions regarding lender’s mortgage insurance. Call us on .

 https://helia.com.au/tools-resources/it-s-my-home

This publication has been produced by Helia Group Limited (’Helia’). This publication may include content which is owned by third parties (’third party content owners’) and that has been provided to Helia for publication. Opinions expressed in this publication are of the writer or contributor and do not necessarily reflect the view of Helia or its affiliates. This publication covers a variety of topics including property, insurance and other financial products and services. Although some of the information involves tax, stamp duty, legal, accounting, financial or similar issues, Helia, its affiliates and the third-party content owners (as to their materials only) (‘we’) are not in the business of offering such advice and nothing in this publication constitutes a personal recommendation or advice. You must consult with your own professional advisers to examine the legal, tax, accounting or investment aspects of any information presented in this publication and how they may affect your particular situation.

The information also does not contain all of the applicable terms, conditions, limitations or exclusions of the products or services described. We expressly disclaim all responsibility and liability for any action or inaction by you in reliance or partial reliance on any material, information, opinion or advice in this publication or referred to in this publication. The information is current as at the date of publication but may change without notice. We are under no obligation to update the information or correct any inaccuracy which may become apparent at a later date. We do not take any responsibility for any reliance on the information contained in this publication or for its reliability, accuracy or completeness. Nothing in this publication is an offer by or on behalf of Helia or its affiliates to sell, or solicit an offer to buy, any security or financial product.

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