Is your goal to get on top of your finances and achieve the great Australian dream of home ownership?
We’re over a month into 2019, and there’s never been a better time to make sure you’re armed with expert advice to help you follow through on those good intentions and achieve your financial goals.
Familiarise yourself with the below financial checklist compiled by My Expert to ensure your savings are setting you up for future success.
Open multiple bank accounts
It might seem easier to have your income fall into one or two accounts, particularly if you’re in the habit of banking this way.
It’s time to consider creating multiple accounts and dividing up your finances into categories. Start by sorting out your money into ‘account piles’ such as spending, saving, groceries, bills and long-term saving account. Delegating your money into these areas will allow you to see a clearer picture of your overall finances.
It’s also wise to have multiple savings accounts because chances are that saving for a home is not your only financial goal.
The key is to set up a savings account with emergency money that can be touched if need be without eating into your house deposit savings. For example, your car service might be more expensive than you predicted, or you could face a medical expense or parking ticket.
Make sure you use an expert to set up your accounts and banking structure. A specialist can find the right accounts for your needs so that you’re not being charged monthly fees or unnecessary penalties if you don’t have enough funds sitting in an account or make a minimum monthly deposit.
Secure high-interest accounts
It’s a no-brainer: The best way to get into your home as quickly as possible is to your savings work for you.
If you’re in the rhythm of consistently putting money into a savings account, there’s nothing to lose but plenty to gain by making sure you’re depositing your hard-earned funds into a high-interest savings account.
Not only can high-interest accounts save you on fees and entice you to save – they can also help you reach your desired financial amount sooner by earning interest rewards simply by sticking to your savings plan. They also act as an incentive not to touch your savings and to stick to your goal, as many accounts only add interest to your total if you continue to deposit into the account and not withdraw the funds.
Learn to love direct debits
Automatic savings are the easiest way to ensure consistent saving deposits, simply because it occurs without you having to lift a finger (other than setting up the direct deposit initially).
Direct debits are a great way to make little steps of progress towards your house deposit, which ultimately end up accumulating to your saving target. As a simple example, work out your ideal house deposit total and how soon you want to achieve it. Then calculate how much you would have to put away from your income to achieve that dream and set up a direct debit accordingly. It’s important to be realistic in what you can afford to save and how long you need to make it happen – keep in mind many banks charge penalties and overdrawn fees if there aren’t enough funds in your account to service your scheduled debit.
While you can also set up your accounts so that your bills are paid automatically, you can also use direct debits to delegate your finances. It’s likely that you’ll hardly notice a direct debit as small as $20 per week going into a savings account – but over the course of one year, that tiny sum will accumulate to more than $1000 and may come in handy when your car registration is due or you need to fork out some money on Christmas presents!
Once you’ve explored these tips of the trade, it’s time to speak to a qualified mortgage broker about your financial position. My Expert has a panel of brokers who specialise in helping first home buyers get into the market as soon as possible.
Have you got questions about anything in this article? If so, please call us today on 1300 693 973.
Disclaimer: This content is generic in nature and not to be used as independent financial advice; readers should seek independent legal advice in the instance they feel they require it.