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.

 

 

 

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