If you are just entering the housing market you are probably wondering how can someone on a modest salary save a deposit of 10% or even 5% of the purchase price.

Certainly, coming up with a home deposit is one of the biggest challenges that new home buyers face today.

Here are some tips to get you there sooner:

Budget

Put together a budget and stick to it. Your budget should include all your income and all anticipated expenses. A budget is a great tool to estimate how long you will need to save your deposit. Sticking to a budget is not easy, but the results will prove rewarding.

Use Shopping Lists

Make a list before going shopping and do not buy anything that is not on the list.
Again this requires discipline…but so is paying off a home loan.

Throw away your credit cards(..well most of them)

If you are one of those people who holds numerous credit cards for “just-in-case” expenses, you are probably spending more than you earn. It is essential to cut up your credit cards, leaving perhaps one with a small limit. There is nothing wrong with using credit cards providing that you repay all moneys spent before the credit provider starts charging interest.

Let the banks lend you money for nothing - which they do for up to 55 days. To take advantage of these offers you must be organised and ensure that all bills are paid within the ‘interest free period’.

When you can – buy cheaper

Bargain hunters win. If you can buy second hand or look for a better price.
Stay away from the department store “interest free” offers and try to buy cheaper on ebay or through trading post.

Find something to give up

If you smoke cut down or give up. If you go out twice a week, go out once a week. Plan to save small amounts of money on a regular basis.

Buy a Cheaper Car (or sell the car)

How much is you car worth? If you are driving around a fairly expensive car or are in a 2 car family, consider either selling a car or replacing it with a cheaper vehicle.

Ask you parents for help

This is something that few people do but is worth considering. Perhaps your parents are home owners and can provide additional security for your loan, or are simply in a position to lend you some of the deposit. This can be a formal arrangement where all parties are equally protected.