There are significant benefits of purchasing real estate that outweigh the rental process; but you’ve already come to that conclusion, as you’re reading this article.
So you’ve set a goal to save and buy your dream apartment - but how do you actually do it, and what does one actually have to do?
Many people who live pay check to pay check just accept the fact they ‘weren’t built to save’ - yet with the appropriate budgeting and guidance, it isn’t as hard as it looks.
Eliminate those tempting luxuries
Whilst this is not the most important step, it is, by far the hardest one.
Avoiding any luxuries is by no means fun, but it is a proven way to save money, and save money quickly. Until you actually stop these luxuries, you do not realise how easy it is accumulate a savings account with little effort.
You don’t have to skip every second breakfast, and every forth dinner, but instead try the following:
- Take your lunch to work instead of buying it (potential yearly saving ($5000)
- Don’t buy any new clothes for 8 weeks, twice a year (potential saving $1000)
- Every second month, do not go out on the weekends ($5000)
Save 10-20% of your pay check
Whilst you may be thinking, ‘that’s easier said than done’, it really can be easy.
‘If you don’t see it, you don’t miss it’.
Instead of manually allocating what is saved each week, get your employer to pay you into two accounts, rather than one. We suggest that the secondary account be unlinked to a card, making it easier to resist the urge to spend it.
Allocate a certain amount that goes into that secondary account - if you never see it enter your spendings account, then you’ll seemingly never miss it.
Pay off your debt
The obvious one - paying off your personal loans and credit cards will give you a stronger platform to save on. Instead of paying those interest repayments each month, you’ll instead have that money in your savings account.
Specifically for credit card debt, your aim should be to drop your credit limits once you’ve paid them off - or even better, get rid of the card.
Get a secondary income, or go on a selling frenzy
Secondary income can help significantly with your savings. If you have the energy and resources to source a weekend job, then consider it, but don’t consider it permanent. Use that weekend job to pay for your living expenses, with your main salary dedicated to your savings. It’ll take a lot of mind power and will, but the end-result will surprise you.
Alternatively, using eBay or Gumtree to sell some of those things you never use that hold value. That designer dress or suit, or that Playstation 4 you never actually use. Depending on what you have to sell, you could easily make anywhere from $5,000 upwards, just from clearing out your room.
These may seem extreme, but if your goal really is to purchase an apartment, then consider it your mission.