Smack Down! Milestone #1 met!

Very happy today. It’s now been two weeks since we started saving for our 20 percent home loan deposit, and we have managed to meet our target for the fortnight. We budgeted $1,100 ($550 per week) and we managed to tuck away $1,140.

Highlights for the fortnight:

  1. Budgeting enough to cover emergencies. Our kids who recently started childcare fell ill and we had some unplanned expenditures at the doctors and paying for medication.
  2. I spent a couple of hours cleaning and servicing my car (oil change), saving myself a small fortune on mechanical repairs. I’m planning to do the same with my wife’s car to keep them both running reliably.
  3. The veggie garden we started in January is really proving its worth now. We have been eating a lot of fresh salad with our dinner and that saves us at least $10 at the grocery store on lettuce, cucumbers and tomatoes. We ate three main meals this fortnight made from zucchini we grew ourselves and it was delicious (see pic below).

Overall, I feel great being able to bank away enough money to hit our fortnightly target. Only 51 more fortnightly milestones to go!!!! Bring it on baby!

 

A simple, envelope system works best.

Today was pay day (sound the trumpets!). The first pay day since my declaration of war against the intimidating 20% home loan deposit. I’m determined to shoot down my bills one by one and inch closer to my home loan target.

With the family budget in hand I took an early morning trip to the ATM to withdraw some money for our fortnightly expenses. For this we use the age old envelope system to stay ahead. The envelope system is truly one of the worlds greatest inventions – I swear. I remember watching my mother use it to pay off “Christmas lay-buys” during the year for the kids, and it works just as good today as it did back then.

7260281_f1024

Money set aside carefully each fortnight in labelled envelopes allows the household to plan and manage exactly where its money is going, with the added certainty that the dreaded bills will always be paid for on time or in advance. Just list down every expense you have, and create and envelope for it.

Because of the envelope system, I am never left feeling broke and overwhelmed when something major like car registration is due. These major type of expenses are the ones that really hurt people who don’t have an effect way of budgeting.

When I got home I simply pulled out the envelopes and started filling them. I put money away for everything we spend…groceries, petrol, registration, health insurance, childcare fees….etc. Ten minutes later, I put the envelopes away.

It’s that simple. Good luck!

 

 

Day 1 – Saving for a home loan adventure begins!!!!

I’m creating this blog to document our savings journey as we embark on that long and lonely road of saving enough money for 20% deposit on a decent family home. By decent, I mean a modest three bedroom house the “Australian dream” was made off (1 bathroom, backyard for the kids to play in, and garage for the car). Today is 7 March 2017. We would like to achieve our goal by March 2019 (two years).

The area we live in is designated as a ‘rural region” but in reality, we are only a 20 minute commute from a major metropolitan city. This has many benefits, the most relevant being I can purchase the decent home I mentioned above for approximately $380-$450K. For a 20% deposit we will need $90k. We already have 31.5k in the bank, so need to save around 60k from scratch. This equates to (approximately):

  • 30k per year; or
  • $1150 per fortnight
  • $575 per week

In reality, we may need a save a bit more than this as the total cost of the house includes other costs such as Stamp Duty Fees, Legal Fees, Bank Fees etc. I’ve deliberately left these expenses out of the savings goal as these can be accumulated as we shop for a home (and once we have saved the deposit).

My wife (35) and I (39) have two small children aged 4 and 2. They have just started childcare and my wife has just returned to work (part-time only) after a 4 year break to raise our two kids. I work as a professional so earn a good salary. As many people would understand though, this is a very challenging time for a young family as costs of schooling and childcare begin to consume large chunks of the family budget. Childcare costs families a lot of money. Never the less, we will persevere with our savings goal no matter the cost.

On the plus side,we have worked very hard over the past 4 years to become ‘debt free’. We have no car loans, personal loans, credit cards, or store cards. This was not easy, but there came a time in my life when I realised that living beyond my means was unsustainable.

My car is 22 years old but still runs well. My wife’s car is 13 years old and is very reliable. I expect to keep these over the next two years as we commit ourselves to saving.

The only real debt we carry is a small loan on the tiny two bedroom apartment we live in, and of course our daily living expenses. Selling our place to raise funds for the deposit is not an option for us as we would barely break even. Aside from that, given our savings goal, living here is very convenient for us.

I hope to be able to look back on this post in two years time with great pride. For those in a similar situation, I wish you all the best of luck. Two years feels like a long way away, but time has a way of passing very quickly.