Saving a deposit

I often hear how difficult it is to save a deposit for your first home.

I don’t agree at all.

I’ve saved three deposits of $100,000 each now, and I’m going to share with you how I did it.

Keep in mind that many lenders only require a 10% deposit, but I felt more comfortable with 20%.

So how did I do it?

I compromised.

I lived at home with my parents longer than most of my peers.

I bought an apartment instead of a house to keep my cost of living lower.

I could have afforded more but I kept my loan repayments within 30% of my salary at the time.

I didn’t go on massive overseas holidays with the regularity or length of time my peers took.

I didn’t do a gap year or three overseas.

I think you know where I’m heading… I lived below my means.

I graduated from my Bachelor of Business degree in November 2008. This date is important because I recall at the time I had $0 to my name (in fact, a small loan to my Dad for the purchase of my first car). At that stage I was 21 years old.

At this stage of my life, I wasn’t budgeting, but I had one goal - save $1,000 per fortnightly pay.

This was about half my pay back then, leaving me $1,000 to make ends meet.

13 years later and I still aim to keep my living expenses to $1,000 per fortnight, but now include the apartment costs such as body corporate, electricity, water etc.

Basically I have tried to keep lifestyle inflation to a minimum and probably have less disposable income now. I’m not complaining though, saving has always come easy for me.

But back to November 2008. Using my $1,000 per fortnight, I achieved my $100,000 deposit about 4 years later at the age of 25. Done deal.

I was pretty proud of myself but property is so expensive so I kept saving more.

Saving actually got easier by the age of 25 as I was earning more and also collecting some interest (interest rates were higher back then and I was making a couple of thousand of dollars a year in interest).

One obstacle I hit was the more I saved, the more I wanted to buy a more expensive house. This was a nasty cycle that actually lasted years, as the more money I saved, the more I could afford. But in the back of my mind I knew that the more I spent, the longer I would be chained to a job.

I bought my apartment in 2015, as the age of 27. My this age I had around $145,000 saved, $45,000 more than I needed. It’s no surprise that this rolled into the second deposit. Those savings habits are hard to break.

There is a picture of me on the day that I settled the apartment purchase. It was an interesting day.

I love my apartment, but deep down I knew what it meant…a massive loan to be repaid from hours at the office. Future life energy to be traded for this purchase.

It’s exciting to announce, but 6 and a bit years later, the apartment is nearly paid off. I’d love to maintain a debt free lifestyle forever, but reality is, things have changed. I now have a kid and need bigger accommodation. It’s all part of the journey.

If there is one goal I’ve always had, ever since I got my first job, it was to save half my pay. I don’t always do it, but that’s the goal.If you do this for your working life, it’s pretty hard to go wrong.