Saving for a deposit - Top tips for property buyers

Buying your first home is a really exciting time. A new home, a new start, new memories to be made... There's just one killjoy: that dreaded first deposit.

Seeff advises how to save for your first down payment without breaking the bank:

- When you are serious about saving money the best thing to do is to speak to a financial advisor as soon as possible. There are different ways of saving and every method comes with its own associated risks. It is important that you are well informed before making a decision!

If you want to save money on the short term (generally for two years or less) it is usually best to opt for an account where the interest rate is fixed and you have no risk of losing any money, but if you have a longer approach in mind (2-5 years) then it is often better to invest your money in an ETF, a unit trust or a similar high risk product that could generate more interest, although it also carries a higher risk. Your financial advisor will be able to discuss the pros and cons associated with every option.

In general the following points are also crucial to stick to when trying to save money:

- Do not attempt to save money in an account that you use often. Open an account specifically for the purpose of saving. The lines between what is yours to use and what needs to be saved are at a higher risk of blurring when all your money goes into the same account.

- Save automatically by creating a debit order that goes off from your account well before you have to make any payments. If you don’t create a debit order it could be all too easy not to save the agreed amount because of a “bad month” or choosing to spend it on something else!

- Pay your debt – not only will it give you more disposable income and allow you to save more money on the long term, but a good credit score will also enable you to qualify for a better home loan.

- This is easier said than done but create a budget and stick to it – come hell or high water!

- Faithfully vow to immediately deposit every cash injection you receive (whether it is in the form of a bonus, a 13th cheque, a salary raise or anything else) into your savings account straight away. Don’t let the extra cash become a part of your lifestyle because once you make lifestyle changes (even if they are slight) it is very difficult to let them go!

- Preferably save into an account where you have to give a couple days’ notice to withdraw your money. This will make you think twice before you do it and it is also more admin than merely withdrawing it from an ATM.

- Have a separate emergency account so that you won’t be tempted to use your savings in a crises.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 19 Feb 2018
      Possibly one of the biggest sources of contention between landlords and tenants surrounds the rental deposit. “Most tenants rely on getting their rental deposits back when moving, so that they can use it to pay a deposit on their new home. Having it withheld or even having large amounts deducted can lead to a lot of distress,” explains Bruce Swain, CEO of Leapfrog Property Group.
    • 19 Feb 2018
      Situated approximately halfway between Johannesburg and Pretoria, Midrand was established in 1981 and forms part of the City of Johannesburg Metropolitan Municipality. It has become one of the major business hubs in the country with major pharmaceutical, textile, telecommunication and motoring giants situated within its boundaries.
    • 19 Feb 2018
      The PayProp Rental Index Annual Review of 2017 shows that the rental market suffered from much volatility during the year. It kicked off with rental growth spiking in January with weighted year-on-year growth (YoY) growth peaking at 8.3% before dropping to 6.34% in July, dipping down to less than 5% in November and then experiencing a slight uptick at 5.75% in December.
    • 19 Feb 2018
      While most homes in cluster complexes, estates and other gated communities come with at least one garage or carport, residents would often like additional permanent parking or storage areas for things like trailers, bikes, boats and caravans.
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
    • 15 Feb 2018
      One positive consequence of the financial crash in 2008 was the rise in consumerism, especially in the property market, where buyers have steadily become more knowledgeable and more value conscious.
    • 15 Feb 2018
      While most homeowners will take the agent’s commission into consideration when they are trying to determine what the will get out from the sale of their property, many often forget to factor in the other costs involved in a home sale, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      The forecast for the national rental market in 2018 remains a mixed bag of good news and bad news. Although rentals are expected to rise slowly as the challenges of home affordability and tighter lending criteria tighten their grip, it’s a double-edged sword as the market also will come under increasing pressure from factors like declining disposable income levels.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us