Saving money can be a real battle of wills. In order to reach your long-term goals, often you have to forego your short-term cravings, like a new phone, a sports car and eating out every night of the week.
What's more, it doesn't seem to be getting any easier. The Moody's Australian Housing Affordability Measure found that Sydney households spent on average 35.1 per cent of their income on mortgage repayments, as of March 31 2015.
Despite this, a report from CoreLogic RP Data notes that the growth is slowing, indicating it could be a good time to see your mortgage broker.
To get an idea of how much you need to save to purchase the home of your dreams, you can use a borrowing power calculator – the Australian Securities and Investments Commissions (ASIC) recommends at least 20 per cent of the home's value to avoid lenders mortgage insurance.
Here are three quick tips to help your piggy bank prosper:
1. Pay yourself
While it may sound strange, this is actually a very effective way of amassing funds when done properly. All you have to do is set up an automatic payment into a savings account (preferably at a different bank from your usual to make it harder to access) that coincides directly with your paycheck.
Once time has passed and you've adjusted to your reduced income, you won't even realise you're putting money aside – until your healthy statement comes through!
2. Set goals and reward yourself
By poring through your expense history and seeing where your money is going, you can determine what costs are necessary. By subtracting this sum from your income, you'll be left with potential savings.
However, you shouldn't remove all the fun from your life. The ASIC suggests setting monthly goals and, provided you achieve them, rewarding yourself with dinner at your favourite restaurant, maybe a new phone but probably not the sports car.
3. Get advice from a mortgage broker
You may be wondering "how much can I borrow?"
A mortgage broker will be able answer this question by assessing your financial standing and offering you the most suitable financial package, helping your savings go further!