Did you know that each and every year around 80,000 singles and couples become first home builders in Australia?
You probably wouldn’t have thought the number was as high as it is because saving for your first home seems like the biggest obstacle to overcome when you’re starting from scratch. While saving can be difficult for many first home buyers, a small dose of creativity and fore thinking into scaling back on some of your big, dream home plans, will get you closer to building an affordable home on a budget.
Getting started on the budget can be an overwhelming experience for first home buyers, especially if you haven’t been in the savings mindset ever before. One of the first things to do when starting out is to list all of your expenses, including food, transport and other lifestyle and entertainment expenses. This will give you a realistic basis on which to determine how much you can actually start putting towards your first home.
Just because you are building your first home doesn’t mean that you have to forgo all of life’s little pleasures. The next step is to make your budget work for you by identifying what items you can scale back on, such as opting for a DVD rental instead of going to the movies or cutting back on takeaway lunches by preparing food at home.
First home builders can sometimes overlook the smaller but equally important pieces of the budget. Obviously the biggest chunk of your budget will be the construction of your first home but other costs need to be considered as well.
Think about your current living situation, have you included the rent you are currently paying for in your budget? Have you considered moving or furniture storage costs? It is important to identify all of the potential costs of building your first home at the outset to ensure that down the line there is enough money left to complete your home.
There is no point setting your budget in stone without understanding the overall state of the property market in your area. To build an affordable home, researching property trends and keeping an eye out on suburbs you are interested in will ensure you are prepared to move on your investment when the time calls.
This is your first home, it is inevitable that you have a dream picture in your head of what your home will look like and what features it will have. Unfortunately building an affordable home on a budget will mean that compromises will have to be made.
At this stage you will want to invest more of your budget on the bones of your first home because down the track you can always upgrade. Plumbing, electrical wiring and air-conditioning systems are all costly features that become more difficult to update once they are installed, so these things should be considered first in your budget. Items such as cabinetry and fixtures can all be easily upgraded in the future if your high-end versions aren’t an option within your budget now.
No matter how much effort and planning goes into detailing the finer points of your budget, there will always be contingencies and areas of your first home that you will want to splurge on. For example, if you love cooking and spend a lot of time in the kitchen, you will probably want to invest in a quality splashback that will work with your home for years to come.