New Zealanders have some of the highest rates of home ownership in the world. In 2001, 67.8% of Kiwis lived in homes they owned. However, this rate has been decreasing, mainly due to financial hardship for younger interested buyers.
Saving for your own home is an achievable goal, with several programs to help you get there. Here are a few suggestions for first home buyers on how to boost your savings accounts.
Use KiwiSaver for Your Home Loan
You can use your contributions and your employer’s contributions from your KiwiSaver account for your first home mortgage. You also may be eligible for a HomeStart one off grant. Find out more about using your KiwiSaver account.
Set up Automatic Payments to a Savings Account
It’s easy to get a pay check, pay your bills, pay your discretionary expenses, and hope you have enough left over to put some away for savings. That also makes it easy to forget to deposit into your savings. Pay yourself first by automatically depositing at least 10% of every pay check (or however much you can afford) into a dedicated savings account. Then, pay your bills and whatever you have left over use for discretionary expenses.
Keep Track of Where Your Money is Going
Regularly check your bank statements and credit card bills to see what you’re spending your money on. You may find you catch yourself with impulse buys or subscriptions you don’t need. First home buyers should be looking at what they spend their money on, so when you ask for a mortgage you can create a realistic plan.
Budget for Yourself
If you scrimp and save and only live off of $2 noodles for a year, you may find it more tempting to throw the towel in and just dig out of your savings. It’s a better idea to plan some leisure into your budget in the first place. Live within your means, but allow yourself to have fun once in a while — that way you’re less tempted to dig into your savings.
Avoid Payday Loans and Afterpay type finance
By using these, you are demonstrating that you cannot manage small borrowing requirements. Banks will decline applications for this reason.
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