Saving for a house deposit, or deposit for an investment property, can seem like a challenging task, especially if you are just starting out.

This blog gives you five tips to help you save your deposit faster, so you can invest in your next property sooner.  

Step 1 - Analyse Your Current Spending

Take a close look at your current financial situation, and gather all the information you can on your current spending habits.

Look at all your income and expenses so you get a realistic picture.

Step 2 - Create a Budget

After you work out how much you are spending, you can create a budget to help you track your incomings and outgoings.

• What is your income?
• Check your payslip and look at the net income after tax. Then include any other sources of income, for example rental income from investment properties.

• How much are you spending?
• Track how much you spend during an average month.  Include everything you can think off, and check your credit card or bank statement to ensure you don't miss anything.  
  
  For example groceries, petrol, subscriptions, dining out, school fees, utility bills and so on.  
  
  Don't underestimate your figures.  As our parents used to tell us (or at least me) you are only cheating yourself...

• What can you change?
• The moment of truth.  Once you know what you are earning and spending, you can work out the difference. Hopefully it will be positive!  If the amount is looking too small to save as fast as you would like, look at areas where can cut back.  
  
  You can separate these into fixed costs, for example rent, and variable costs, like eating out or gym memberships.  
  
  Work out which of these costs you could reduce to help you save more each month.

• Set a goal
• Once you have crunched all your numbers, set a realistic, SMART savings goal, and automate a recurring payment into a savings account, so you are not tempted to delve into it and eat into your precious savings. Your SMART goals should be:

• SpecificDo set real numbers with real deadlines.  If your goals are not specific, then it is harder to know when you have accomplished them.
• MeasurableDo make sure that you can track your goal.
• Attainable
  Do work toward a goal that is challenging but possible.
• Realistic
  Do be honest with yourself, because you know what you are capable of.  Don't forget you may have hurdles to overcome.
• Time-boundDo give yourself a saving deadline. Don't keep pushing towards a goal you might hit "some day.“

Step 3 - Keep on Top of Your Debts

Saving can be difficult, especially if you are struggling with debt.

Remember, there are different types of debt to consider.

• Horrible Debt
  
• The type of debt we enter into to, to buy things that depreciate (go down in value) and receive no tax deduction for having made the investment.
  
  

• Tolerable Debt
  
• This is debt that is not all bad and not all good! This is debt that will not attract any tax relief, but is used to invest in appreciating assets, for example the family home.
  
  

• Productive Debt
  
• Debt that is used to invest in an item that appreciates in value and offers tax relief as a result of making the investment.
  
  

Step 4 - Start Saving

You will want to save as much as possible for your house deposit.

This means you will not need to borrow as much and so you'll pay less in interest on your loan.  Learn more about types of loans here.

Also keep in mind that if you are planning to grow your property portfolio and already own your home, you may be able to use your home equity.

Step 5 - Can you get Help?

You may be able to get help to assist you you save for your home deposit sooner.

The First Home Owner Grant is a government scheme that allows eligible home buyers to receive a one-time grant.

Also could your parents be able to assist and give you a financial gift or interest free loan?.

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