The best ways to cut your expenses and increase your savings for home deposit

Is the key to saving a home deposit as simple as giving up smashed avocado toast for breakfast? Well, not quite, but spending less does make a difference.

On top of budgeting, an automatic saving plan can also help in saving up the deposit, but the most effective way to save is to reduce or eliminate expenses.

Start by understanding how you spend your money

It can be easy to lose track of how you’re spending money, especially due to cashless payments and credit cards.

Most online banking systems have included tools in their online system to categorize debits and make a budget. Or there is an APP from ASIC called ASIC’s TrackMySPEND, and it allows you to track your expenses.

Find savings in the essentials

Some costs can’t be avoided – but many everyday expenses can be reduced. For example, you could:

Move-in with your parents/relatives, or move into a cheaper rental or share house (short-term discomfort can pay off in the long term).
Implement tactics like meal planning, making grocery lists and buying in bulk to save money on food. Set aside a budget for eating out/takeaway and stick to it.
Shop around to reduce your regular bills – you may get better value if you switch, or tell current providers you intend to switch. Seek discounts for taking out multiple policies with one insurer.
Use the car less: take public transport; carpool with colleagues; or try walking or riding. You’ll be amazed at how quickly it all adds up to savings.

Most of the credit card providers would charge 18%-20% p.a if you didn’t clear the balance each month. So, please make sure you are paying off the credit cards balance each month to avoid the added expenses of high interest.

Reduce common overspending

If you always overspent on things like buying clothes, dining out, games and high-end technology, it will be impossible to cut the expense entirely, but you can set a weekly or monthly limit in those items.

A survey of more than 1000 Australians showed that 73 per cent have a problem with overspending, especially when they tend to go overboard when Christmas rolls around. To reduce gift expenses, be like Santa: make a list and buy only planned items within your allocated budget.

Another most common way for Aussie overspend is on holidays trip. Commonwealth Bank research has shown that a third of people spent more than their planned trip. The best way to save during the holiday trip is to do your research and set a daily budget.

Costs that could be eliminated

Look for any unused services. Either reduce or cancel the services. Such as you joined the gym membership but you seldom go to the gym, or you have pay for 30GB of mobile data plan, but you only use 5GB per month. Every single dollar you save you could put toward into your home deposit.

Disclaimer: We recommend that you seek independent financial and taxation advice before acting on any information in this newsletter. It contains general information only and has been prepared without considering your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply.

A survey of more than 1000 Australians can be find on this link (https://www.theadviser.com.au/breaking-news/35575-majority-of-aussies-struggle-with-overspending?_escaped_fragment_=/ccomment)