Hack 1: Supercharge Your Savings with Increased KiwiSaver Contributions
One effective way to boost your savings is by maximizing your KiwiSaver contributions. Consider raising your current 3% contribution to 8% or even 10%. By diverting a higher percentage of your income towards KiwiSaver, you won't even notice the money in your bank account, reducing the temptation to spend unnecessarily. Trust in the power of compounding and watch your savings grow faster.
Hack 2: Master Your Finances Through Budgeting and Expense Tracking
Creating a budget may sound mundane, but it's an essential tool for understanding where your money is going. Take advantage of the convenience provided by banks, as they now allow you to export your bank statements into spreadsheets, making it easier to track and categorize your expenses. Start small by monitoring your spending on essentials like food, transport, and utilities. Over time, you'll find enjoyment in the process and expand your budgeting categories to gain a better understanding of your habits.
Hack 3: Amplify Your Savings by Saving Pay Increases and Bonuses
When you receive a pay rise or a bonus, consider maintaining your current lifestyle and saving the additional income. By living within your means and avoiding unnecessary expenses, you can maximize your savings potential. If you receive a pay increase of 2%, increase your savings rate by the same percentage, either by contributing more to your KiwiSaver or depositing it into a separate savings account. This way, you'll save more as you earn more, rather than succumbing to lifestyle inflation.
Hack 4: Break Free from Credit and Strengthen Your Financial Position
Living within your means is vital to achieving your financial goals. Avoid the temptation of credit cards and the consumerist mindset that often accompanies them. By pretending that you're earning a basic graduate salary, you can develop a mindset focused on saving for your 20% deposit. Additionally, keep in mind that each $10,000 credit card limit you have can reduce your borrowing capacity by $45,000 to $50,000. Be cautious and mindful of your credit usage.
Hack 5: Unlock Additional Funds with the First Home Buyers Grant by Kainga Ora
Take advantage of the First Home Buyers Grant initiated by the government to assist Kiwis in purchasing their first homes. If you meet the criteria, you could accelerate your deposit by an additional $20,000, especially if you're buying a brand new home. It's a fantastic opportunity to enhance your savings and expedite your path to homeownership.
Hack 6: Plan Strategically to Realise Your Homeownership Goals
Having a well-thought-out plan in place is crucial for achieving your goals. It not only helps you save for your deposit but also reduces anxiety when the time comes to make your first home purchase. Create short, medium, and long-term plans, breaking down your goals into manageable milestones. For example, increasing your KiwiSaver contribution to 10% as mentioned in Hack 1 could be a short-term goal. Stay focused and committed to your plan.
Hack 7: Leverage Parental Support to Fast-track Your Deposit
If you're fortunate enough to have parents who can assist with boosting your deposit, consider accepting their help. Many first home buyers receive financial assistance from their families. It's important to seek professional financial advice for both you and your parents to ensure a smooth process and understand any potential implications.
This article is for informational purposes only and should not be considered as financial advice. It is always recommended to consult with a qualified financial professional before making any financial decisions based on your individual circumstances.