Buying your first property can seem daunting as it requires a lot of research and money to get a foothold in the market.

There are many costs involved when it comes to buying a property, the most important of all is the initial deposit you need.

Generally, most buyers aim to save a deposit of between 5-10% of the purchase price, although a deposit of 20% is ideal if you want to avoid lenders mortgage insurance (LMI).

At the start of 2020, the federal government announced a First Home Loan Deposit Scheme that could help 10,000 buyers per year get their property goals off the ground with a deposit as low as just 5%.

While the plan is intended to help first home buyers enter the property market, with on average 110,000 Australians looking to buy their first home in any given year, securing one of the available spots comes down to your luck.

For aspiring home buyers who missed out on the deposit guarantee scheme, with these tips on saving, you could be well on your way to landing your first property sooner rather than later.

1. Get budgeting

Budgeting sounds like the obvious tip – and it is.

However, clear, strategic budgeting is about much more than simply saying you will put ‘X’ amount into your deposit savings every pay period.

Instead, see if you can work out a budget that includes paying yourself a regular amount – enough to cover your essential bills, plus a discretionary spending allowance.

You might find that it leaves you with more to set aside than your ‘X’ savings amount.

To boost this value, look for opportunities to skim costs, such as by cooking more and eating out less.

Go on a spending freeze for a month, when you don’t spend a cent on anything unless it’s absolutely necessary.

Opt for Netflix and homemade comfort food rather than going out for dinner and a movie.

In other words, make a few small sacrifices now to reap the rewards later. Use our budgeting calculator to find out where you may be overspending to help you minimise those cost.

2. Reduce your rent

This can be one of the most effective ways to save for a property deposit, rent can take up a huge chunk of your earnings each month.

While it’s not feasible in every situation, there are various ways to reduce rent, such as by house-sharing, moving back in with your parents, or moving to a cheaper location.

It might be slightly painful in the short term, but keep your eye on the prize: property ownership awaits.

3. Consolidate and close debts and credit cards

Consolidating debts and credit cards can reduce your repayments and interest will allow you to combine these payments into one; and then you can just make a plan to carve through your debts and smash it as swiftly as possible.

Which then frees up cash that can be redeployed into your savings account.

4. Simplify your life

Simplifying sounds… simplistic, but foregoing some of the little things will also help you save money.

For instance, if you spend $100 over the course of the week on buying beverages – a coffee on the way to work or a beer at the pub after you’ve knocked off – then that’s $5,000 you’ve frittered away in a year alone.

For every UberEATS that you would have bought, put that money into your savings.

Work out what other things you can cut back on, and put the money not spent into your savings.

Do you use your gym membership, for instance?

Could you use the exercise equipment in a park instead, or do you have equipment at home?

Remember, cutting back to save a deposit doesn’t mean you have to live a spartan lifestyle forever, but it will be worth it when you reach your end goal.

5. Be a mindful consumer

Really think about your usage of fans, heaters and air conditioning throughout your home – energy bills can chew through thousands of dollars per year, and being smart about your consumption could see you make some significant savings.

Could you hang your clothes out to dry instead of using a dryer, and wait to do your laundry when the load is full instead of in smaller batches?

6. Access the First Home Owner Grant

Even if you miss out on the home loan deposit scheme, you may be eligible for the First Home Owner Grant – however, there are conditions to be met, depending on the state or territory in which you intend to purchase the home.

Requirements vary, but generally you need to be a permanent resident or a citizen of Australia, and intend to buy the property as an individual and not as a corporation or trust.

The applicant must live in the property as their principal place of residence within 6 months of the purchase, and remain there for at least 12 months.

7. Seek support

Some of the ways that family could help you get a leg up on the property ladder include lending or gifting money towards a deposit, or agreeing to go guarantor on the loan (using a proportion of the equity in their own home or investment property towards your property loan).

As guarantor, they also become responsible for making loan repayments in case you are unable to do so; thus, you become a less risky prospect for a lender.

Applying these tips and learning how to save will not only help you secure your first home but could also result in some important lifestyle changes that could benefit you in the long run.

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This article via Your Investment Property does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.