Tips on saving for your home

It has been five years since Stu and I bought our first home but it feel as if it was only yesterday we were at the auction. I remember so clearly the moment Stu made the winning bid and the loud thud of the hammer as it went down to seal the deal. The exhilaration I felt, the shock, the realisation that, "Oh my goodness! We just bought a house (and are now seriously in debt)!"

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Five years on, I've never been more glad - we've made the house our own and with the addition of Frankie the dog and Alexander the naughty boy, it has really become a real family home. And I feel incredibly fortunate we were able to afford it at that time. With Sydney's house prices soaring in the last few years, saving for a home has never been more daunting.

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So today, I'd like to share a few tips to help home buyers get started saving towards their future home.

High interest savings account - High interest accounts will allow you to speed the saving process up considerably and all you have to do is keep putting money in there. Make it easy to put money into the account and incredibly difficult to withdraw it. This is to keep any impulse withdrawals from ruining your awesome interest rate for the month.

Know how much you want to spend - this will allow you to build a time frame for saving. If the price range you’re looking at is particularly expensive, you can start putting together the funds for a proper down payment. If the property you’re looking at is on the cheaper end of the spectrum, you should probably be looking to pay for as much of it as you can straight off the bat.

Budget accordingly - build yourself a workable budget that takes all of your current earnings into consideration. You should be able to break the budget down into money that needs to be set aside for essentials like bills, car registration, food, and any existing debt repayments, while also leaving a little bit for emergencies or a bit of leisure like a night out. Working out exactly what you need to spend on these things allows you to take whatever is left and put it to work in your savings account.

Stay on target - the hardest part about trying to save for a house is having that growing amount of money just sitting there calling to you. You really have to focus on your goal. The best thing you can do is forget that the account even exists. Set up a direct payment into the account from your pay every week and ignore it. This will hopefully prevent you from being tempted to dip into it!

And if you're lucky enough to be thinking about buying your second or even third home, why not turn your first home into rental properties in short term? To do so, you should be researching everything. The suburb the property is in, housing market fluctuations and pricing and real estate agents. Agents are the people you’ll be dealing with most when leasing, so knowing what they’re about is crucial. Use sites like http://www.localagentfinder.com.au to gather information on things like commissions and real estate agent letting fees to make sure you’re getting a good deal.

These are just a few of the things you can do to effectively save money for buying your family home. What are your favourite saving methods? Do share in the comments section below!