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At first glance, saving up for your first home while you’re renting may seem like an impossible task. Your finances are spread too thin as they are, and now you have to make room for an even bigger expense. The key here, however, is being smart about your money and making little sacrifices that will pay off several years down the road. Here are some tips that will help you get started:

Determine your household budget.

The first thing you have to do is to be aware of your current financial situation. So find out how much money is coming in and out of your household, as this will help you make a realistic assessment of how much you can afford in terms of the value of the property and mortgage repayments, and how long it may take you to save up the required deposit to buy the property.

Find out what expenses you can reduce or do away with.

Once you know how much your household budget is, you need to check where your money is going. This will enable you to find expenses that you may be able to reduce or do away with completely. For example, if you’re stuck with an expensive cable plan but watch only a few channels, it may be a good idea to choose a cheaper plan with fewer channels. Or if you still have a landline, but use your mobile phone most of the time, then cut the cord completely. Alternatively, you may like going on regular shopping sprees or fancy meals. Reducing these expenses might sound boring right now but it helps to remember why you’re doing it in the first place. Keep your end goal in mind.

Consider renting a cheaper place.

Another sensible move you can make is to move to a place with cheaper rent. It may mean moving to a smaller apartment, or one farther from your place of work, but if it helps you save up money for your first home faster, you won’t regret doing it.

Open a savings account just for your first home.

If you want to have even more control over your finances, you can open a savings account specifically for your first home. You can, for example, have funds transferred to it automatically from your main account on a monthly, fortnightly, or weekly basis. This will force you to save, and having the account separate from your other accounts means fewer chances of you dipping into that money.

Saving up for your first home may take several years, but it will play in your favour when the time comes to buy a property, because it shows lenders that you have good financial discipline.