Be your best self.
Productivity

How To Save $50,000 Without Even Noticing

Brought to you by the Commonwealth Government and ASIC 
I

’m prefacing this post with a disclaimer. I haven’t actually saved $50,000 (a house deposit)… but I’ve made a bloody good start. I’m not thrilled at the state of housing prices at the moment (Sydney has reached science fiction levels of ridiculous) but I’m still tucking away my pennies hoping that the housing bubble will burst and when it does I’ll be ready to snap up my dream top floor warehouse conversion in Fitzroy.

how to save $50,000

That could take years to happen but if I’m serious about saving, I’ll be in a much better position than if I was like ‘Yay! Shoes!’ instead. Here’s how I’m trying to save $50,000 without even noticing…

Get rid of debt first

If you have a credit card that needs paying off, do that first. You’ll have to pay it off eventually so you might as well eat the proverbial frog and get on with it. I know it’s hard paying off stuff you can’t even remember buying but credit card debt is bad debt and you’ve got to take care of that.

Downgrade your current living situation

If you’re paying more rent than you need to, you could consider downgrading. My partner and I live in an extremely small one bedroom flat and we pay the least amount of rent possible. We can absolutely afford something bigger but we are choosing to live in less comfortable circumstances so we can pocket that extra money and put it towards a home of our own. We know the situation is temporary and by making concessions now it will definitely pay off in the future.

Start early

It’s never too early to start saving for a house deposit. I’ve had a little chunk of money I’ve been adding to for about ten years and it’s starting to look pretty good. Every little bit counts so open up a high interest, long term savings account asap and start putting a little bit away each month. If you save $50 per week for 5 years, that’s $14,007 which is nothing to be sneezed at. It’s all about the slow burn with savings so start early.

Rent out a spare room or holiday sub-let your apartment

Although we’re very frugal with our money, we still like to travel and we’ve booked flights for a month long trip overseas next year. Instead of our very cool urban apartment sitting empty while we’re away, we’re planning on renting it out on AirBnB. Our landlord is cool with it and that way our holiday doesn’t cost us anything except airfares. We don’t miss out on travel, we don’t hinder our savings plan and we don’t throw money away paying rent on an empty house for a month.

Have a tangible goal

‘A deposit on a house’ isn’t actually a goal. $20,000 is a goal. $50,000 is a goal. Depending on your financial situation and what kind of house you can afford, make sure you set yourself an amount to aim for. Saving for an aimless theoretical chunk of money won’t help you take your goal seriously.

Put aside a certain amount every pay

Some experts recommend putting aside 10% of every pay check but just do whatever works for you.  It can be difficult to work like this if you’re a freelancer or casual employee but choose either a percentage or a specific dollar amount to put aside each pay and be very strict about doing it. You really need to commit, even when times are tough.

Sell things you no longer need

If you have two last model smartphones, a couple of bikes, a leather jacket and spare fridge you never use, take some photos and put them up for sale on Gumtree or eBay. You could have an extra few thousand dollars sitting around your house in items that you never use. A few thousand dollars that would be much more use in your high interest house deposit bank account.

Automate your savings

If you get a regular pay check you can automate it so that the designated amount comes out immediately. That way you don’t even have a choice. Most high interest savings accounts will penalise you if you withdraw funds so once they’re in there, they’re as good as gone. This is a great tip if you tend to self sabotage.

Be consistent 

Savings only work if you do it consistently. If you only put money in your savings account twice a year, it’s going to take a very long time for it grow. You need to nurture your savings like a plant. Pay them attention, give them a lil’ loving and they’ll grow in to a very healthy money-tree for you.

women's money toolkit

Bonus tip: Have a look at the Women’s Money Toolkit from ASIC . It’s an amazing free resource that helps you with your personal finances  You simply answer a few simple questions like whether you are planning to buy a house, have a baby, care for someone with an illness or disability and so on. There are tools such as a budget planner,  Trackmy Spend app and a parental leave calculator. I’m a massive supporter of women getting their finances under control so make sure you check it out. It doesn’t matter if you’re single, married, have kids or own a business. You need to be in charge of your own finances.

Have you saved for a deposit on a house? How did you do it?

P.S Want more Smaggle? Every day? Every week? It’s up to you cupcake!

 

 

42 Comments

  1. Vehs 9 years ago

    I’ve saved for two house deposits – my first one in two years and the second one (or rather half the second one – going in half with my now husband) in one year. Automating for the first one was key and for the second one we basically gave ourselves one year from getting engaged (on a long OS holiday) to pulling together deposit money and that year was a scrimp and save year.
    Good luck!

  2. Sammie @ The Annoyed Thyroid 9 years ago

    I married a saver and I’ve acquired some of his good habits. We used to deduct money from our pay and put it in a high rate savings account which we couldn’t touch. Now that we have a mortgage, we try and pay the minimum plus a little extra so that we can pay it off quicker. I think being out of debt is so important, it’s almost impossible to save when you’re in the red, oh and start early. It’s never too early to start saving!

  3. hugzillablog 9 years ago

    We were DINKS and basically lived off one (average) wage for an entire year (this was pre-kids, so much easier). We banked any lump sums (eg tax returns) immediately without spending a cent. I got made redundant when I was 32 weeks pregnant so that boosted the deposit but made it much harder to get the loan. And this will be anathema to many but we have never travelled and have no plans to at this stage because our priority has been to get the mortgage paid down (we own 2/3 of our house and can service the mortgage on one income). I figure that we knuckle down now so we can have a bit more freedom later on with things like travel etc when the kids are older and more able to appreciate it.

    • KellyNH 9 years ago

      This is pretty much what we did too. But we just travelled with the kids and it was awesome! We loved it, they loved it. Sure, there were times we wanted to throttle them, but it was an adventure we, as a family, will never forget! At 7 & 9 they will remember it as much as we do.

  4. Ali 9 years ago

    I had a house deposit saved at 25, but blew it all on a brand new Mini Cooper S instead (zero regrets! I bloody love my mini). Now I’m 31 and have an investment property and am also waiting for the Sydney market to crash so I can buy a house to live in. I use all your tips (except now I use an offset account instead of a savings account) and have banned myself from online shopping, dye my own hair and have cut down drinking. A lot. But I am fortunate I got a good paying job straight out of uni. It’s important to figure out what your priorities are and make them happen for yourself. Great article Smags

    • Author
      Carly Jacobs-Smaggle 9 years ago

      Love that you have no regrets on that. Minis are adorable and if I had the cash I might have done the same! Mr Smags and I are just the doing the best we can with our weird sporadic incomes! 🙂

  5. Christine 9 years ago

    I’ve always been a saver. It’s so satisfying to see it grow. I love to calculate how much I can save in a year and aim for it. Keeping away from the shops used to be an easy way to refrain from spending. But online shopping now makes it harder. I have developed a little trick to try and overcome that. I visit the online shops, browse, make a lovely selection and put heaps in my cart, but don’t check out. Funnily enough, it’s still quite satisfying! If I am severely tempted to check out, I repeat to myself the yearly aim figure (which I know I won’t achieve if I spend). x

    • Author
      Carly Jacobs-Smaggle 9 years ago

      Oh me too! I love doing that. We have automated deductions from ours so I duck in every now and then to check on it and I’m always very pleasantly surprised.

  6. Vicki Wallis 9 years ago

    Love all your tips Carly. I do not need a deposit for a house but I would like to start saving for a overseas trip within the next 2 years after my youngest finishes Year 12. Thank you Mwah. x

    • Author
      Carly Jacobs-Smaggle 9 years ago

      That’s a perfect thing to save for! You can do it in no time!

  7. KellyNH 9 years ago

    Love the tips in this post Carly. Saving is made really difficult when you see folks around you living it up and having all the shiny sparkly new things all the time, so if its done automatically, before you miss the $$ its fantastic! We have always paid more than required off our mortgages to get them out of the way, and we went without heaps and saved for ages for our first ever overseas family holiday just recently, and its given me even more incentive to keep scrimping and putting dollars away for another big adventure.
    Shiny new things aren’t anywhere near as valuable as money in the bank, or dreaming up the next big adventure for our family while knowing we have a bit of security if things get tough.

    • Author
      Carly Jacobs-Smaggle 9 years ago

      Absolutely! I’m tougher and tougher to please with stuff now anyway so I hardly ever buy stuff because I pretty much hate everything. It’s very handy for saving $$$.

  8. I come from a family who had no idea how to manage their money, so I’m still slowly learning the ways and means of saving and paying off debt. I’ve set up an automatic direct debit each pay to send a slice of cash to my credit card (which has been cut up) and another automatic direct debit to go into a savings account for our upcoming trip to Spain. I like the fact that once that money’s gone (on pay day), I can’t touch it and have to budget and work with the amount I have left to buy groceries, pay bills and have a bit of play money.

    • Author
      Carly Jacobs-Smaggle 9 years ago

      It’s also totally do-able. If you just put limits on yourself and put the money in a spot where you’ll get seriously penalised if you take any out, it just stops you buying shit. Although there are essentials. Like wine and sparkly and jumpers!

  9. vanessajrowse 9 years ago

    Great tips! The first thing we did when we saved for a deposit on a house was pay off our HECS debts. It was a huge chunk and hard to do but it meant our pay checks were suddenly bigger as the automatic debit wasn’t coming out. Paying off our credit card in full every month has been another thing we’ve always done which has meant we’ve avoided paying massive interest. I wish that Women’s Money Tool was around twenty years ago! x

    • Author
      Carly Jacobs-Smaggle 9 years ago

      I never had a HECS debt because my parents paid my fees upfront which was a huge help but also a giant saving (it wasn’t much more than high school fees). But definitely paying off hecs debts should be a huge priority. How handy is the Women’s Money Tool Kit? I love it. I think it’s so important for women to stay on top of their finances. Even though I’m with my forever guy I’m making sure I’m contributing and that everything is equal. I don’t even want money to be the reason for me staying in a relationship I don’t want to be in.

  10. Bec 9 years ago

    This might sound crazy, but I was in a hurry to save and living in London makes it really difficult. So my husband and I decided to move to the Middle East to teach. We worked for a year and tutored on the side and saved over 20k each (GBP) and that includes going on four international holidays and buying return tickets to Oz.

    • Author
      Carly Jacobs-Smaggle 9 years ago

      That’s not crazy at all! When I was at uni they were offering teaching packages to go to rural Australia to teach outback kids (it’s notoriously tough work as lots of them are Indigenous kids who aren’t used to going to school or they’re farm kids who literally work full time as well as go to school so they’re usually half asleep) and they’d pay like $60,000 a year for first year teachers and all your rent and expenses were paid. A friend of mine did it for two years (was totally miserably but she did it!) and came with $100,000. Brilliant!

  11. Amanda Jade 9 years ago

    I bought my first property for $68,000 and have since bought 6 properties without spending over $70,000. The cheapest was $47,000 and that was in Port Douglas! I rented it out at $495pw holiday let, saved the money and bought a small motel. I know having a home is important but look at investing first, then let your investment money buy your home! I work less than 2hours a day and am about to embark on a 7 Month long travel holiday. I still live in a small one bedroom unit but it suites me fine as we travel a lot and I would rather invest my money in making money. ?

    • Author
      Carly Jacobs-Smaggle 9 years ago

      That sounds like a perfect existence! We’re thinking about buying as an investment first and Airbnbing it for a while. I think that’s the way to go these days.

  12. I’m going to start flicking more things I don’t use on eBay, I have a tin with a few $100 in there and after a few years I hope it’ll grow and be enough to have surprise holiday for our family someone… maybe not Paris but Thailand will do!

    • Author
      Carly Jacobs-Smaggle 9 years ago

      Thailand is great! Definitely nothing to be sneezed at – we did it a few years ago and LOVED it!

  13. I was lucky and bought a house when they were super cheap and I was very young. We only needed a few grand each to get a mortgage. When that relationship broke up 2 years later house prices had more than doubled so we sold up and that cash plus its interest set me up for everything after that. I was so super lucky! I have no idea what people do today to start off and I’m up in Brisbane so nothing like Sydney prices.

    • Author
      Carly Jacobs-Smaggle 9 years ago

      I think you were sensible rather than lucky! It also depends on where you live. I do know of people who have done the same thing and not been as successful though I think is a bit about making good choices at the right time.

  14. KezUnprepared 9 years ago

    Fantastic advice! I find that having a set budget each month (or pay period) is great. It sounds really hard and boring but you get really good at it as you settle into a routine. I can’t believe how much money we wasted away on disposable type things before we started budgeting properly! Now we put away a set amount every time before we can even miss it and because it’s an item on the budget, it doesn’t feel like ‘that extra thing’ that we can procrastinate about. We go big with it too. It makes us more careful if we need to redraw any of the money out of the savings account later (if things get too tight or something unexpected comes up).

    • Author
      Carly Jacobs-Smaggle 9 years ago

      It is really hard if you don’t have a steady income like Mr Smags and I but we manage! We’re careful with our money across the board (we hardly buy clothes or anything) so we’re aren’t doing too badly considering we only get paid like twice a year!

  15. Sarah 9 years ago

    We saved like crazy for our first place and got a low interest low down payment loan. Then, we saved again and made appropriate renovations to increase the value. Then, we bought a rundown duplex and fixed it up with mostly cash, and are renting it out. Then, we saved cash from that venture as well as our regular jobs to buy another duplex we now live in. In the next 3-4 years we should be able to buy our “dream” house and still have income from 4 different renters!

    • Author
      Carly Jacobs-Smaggle 9 years ago

      Amazing! That’s hopefully going to be us in ten years! Just have to get started first! 🙂

  16. Love these ideas. Many moons ago I did save a chunky home deposit by working 7 days a week and putting every CENT away … for five years. It was hard yakka but I got my place at the end of it. As soon as I have some regular $$$ coming back in I’m going to do your $50 or $100/week thing.

    • Author
      Carly Jacobs-Smaggle 9 years ago

      I’m so pleased hearing about these people getting in with their houses! I meant to buy one early but it kind just didn’t happen. It’s definitely on my list now though!

  17. emmabovary 9 years ago

    We bought our place quite young but have great support when it comes to our budget as husband’s father is a bank manager – aka totally sensible with money! We have set amounts that pay off debt, our mortgage each week and then a chunk goes into a bill account – we’re left with enough cash for groceries/meals out and have a small amount each to do with as we please – to be honest, mine just goes on takeaway coffee and it’s a choice I’m totally happy with ;P
    It’s hard when spending money is fun but it feels good to be on top of things too – I’m going to check out that app it looks really good and I think it’s important for both partners to be money-savvy, even though I’m better at saving and budgeting than my husband I help him work stuff out and together we’re doing better than we expected at it!

  18. Wonky Heidi 9 years ago

    I’m saving up for a trip to Australia!!! Not quite a house deposit but still a big lump. And only this week I booked a place on Airbnb for a short trip to Lisbon! Great blog! Greetings from Germany!

  19. Valentina 9 years ago

    My husband and I had a weekly budget of $100 each and it had to cover everything for going out, petrol, lunch, everything. At the end of the week we’d put whatever was left in our wallets in a money box. We’d then pay our bills using the money box and saw our savings account rise quickly. Selling old stuff was great, just getting rid of baby clothes have us about $3,000. We bought our house in Sydney 9 years ago and today it’s going to auction, expecting it to triple in value today. Start early and keep your eye on the prize, it’s totally possible! And then we’re moving to Bowral 🙂

    • sunny 9 years ago

      great idea! I’m doing to do the very same thing!

  20. Nat Tucker 9 years ago

    This was great Carly! Always nice to receive a kick up the butt on knuckling down a bit xo

  21. little miss scout 9 years ago

    It was so great reading your article and everyone else’s comments. I put money aside weekly for the kids savings (ie saving maybe for a car or university) but need to do it for ourselves. It’s so easy to spend willy-nilly haha….I was just thinking that everytime I think about buying something I should quickly whip that same amount into my savings account and then i get an idea how much I spend as well!

  22. Nicole (@dorkabrain) 9 years ago

    I’m late to this post and I know most of your audience is in Australia, but as far as the credit card debt goes, here in the US, paying it off completely and not using it/not having one is not always the best answer; Especially if you’re saving for something like a down payment on a house. Basically, almost everything revolves around your credit score here, and if you’re not consistently showing that you can be financially responsible (this example being, by constantly using the card and then paying a little more than the minimum each month), your credit score can drop and affects most financial things. I couldn’t even be on a payment plan for a lounge once because my credit score was basically non-existent. I’ve only made progress in that regard by having and using a credit card.

    Do you think it’s possible that it will ever be a buyer’s market in the big cities of Australia? I just feel like there are SO many people living in those places (and more moving there all the time), that it’s kind of a supply and demand sort of thing.

    The savings accounts here are kind of a joke compared to Australia. We had westpac there and would probably get about $20 a month on $5000 in a regular savings accounts. Here, with a Westpac sister-bank no less, we’d probably get about 10c on that same amount. And the “high interest” accounts aren’t much better, it seems.

  23. I bought a place when I was 19 and rented it out. My parents gave me $5k deposit and said “happy early 21st bday, you’re buying this” Best present ever that keeps on giving. 20 years later it’s the best thing I ever did with Perth prices!!

  24. Cynthia 7 years ago

    Great article! I was in massive debt in 2015, 78K in student loans to be exact. My then new husband was very upset to learn the damage, as we didn’t discuss our individual debts prior to marrying. A big lesson learned, is discuss with your significant other on whatever individual debt is still present. Fast track, 3 months later, we both became obsessed with podcasts such as Dave Ramsey, Suze Oreman, Mr Money Mustache, LIstenMoneyMatters, and The Financial Samurai. While listening to this great information, we incorporated varying strategies which included, also wiping out the 6K of credit card debt, also used for school. So we paid off the debt with highest interest weekly to knock the debt hard. In order to do this, we lowered our expense by over 2,000 dollars a month, so this additional amount went to the debt, totaling 6K to 7K per month. This meant no shopping for new clothes for one year, no cable just WiFi, no trips, no entertainment with a price tag, brown bagging to work, no morning coffee outside of home, no restaurants except 2 meals out per months, and limiting cost of meal in the home to $2.75 per meal. Thirteen months later, we paid the full 78K. Now, we been out of complete debt for 9 months and have saved $50K for an invest property. We go out a little more, yet we still stay frugal, while also have gotten creative to increase our income.

    So the lessons were:

    1. Cut all but the basic needs and very limited entertainment at a cost for a year and you will realize how much more relieved you feel.

    Go to parks, museums, picnics, brown bag to work, and stick to budget. Our weekly budget for anything like a snack, in case we were hungry after all our brown bagged food was gone was $20 each per week.

    2. Increase your income.
    We all have some skills we can monetize. You can consult, tutor, Uber/Lyft, etc… 5 hours a week of income can catapult you to reduce debt or save for a goal by years with discipline.

    3. Keep yourself accountable with someone you trust, if you need that initial push. If you get off-track you can have a consequence, this way you are on track.

    4. You may have a lapse, but make sure to not relapse. Stay strong in your journey!

  25. Maria Mercado 6 years ago

    Everything so helpful.thanks..I’m 48 but I will start..I been over spending for more then 25 years..

  26. chasity Singletary 5 years ago

    I wish I had been more frugal with my money and made wiser decisions before 2 kids.. But I am currently saving 50k for a down payment on a house.. I am making small slow progress but making progress is more important than how much you make. I would love an update on your situation.

Pingbacks

Leave a Reply