how to save money – The Interiors Addict

How to save a deposit for your first home

By Veronica Morgan

Although house prices around Australia have stalled slightly this year, it’s still tough out there for many Gen Ys and Millennials to scrape together a deposit for their first home.

Ideally, you’ll need to save 20% of the asking price plus purchasing costs, but might get away with 10% plus costs if you’re prepared to pay lender’s mortgage insurance.

A question I am often asked by many young people keen to get on the property ladder is how exactly do you come up with such a large amount of money?

Unfortunately there is no way to sugar coat this, you’re going to have to stop spending and start saving!

I recently met with some very motivated young buyers who had all managed to buy their first property by the age of 25. They shared with me four creative ideas on how to save:

Move in with your parents – if you save $400 a week on rent, that’s over $20,000 per annum!
Give up your morning latte – one a day adds up to over $1400 a year.
Pack your lunch and drink tap water – a conservative saving of $10 for every day of work a year equals $2300!
Save your shrapnel – at the end of the day put all your coins and $5 notes in a jar (it’s surprising how much you can save this way).

If you implement the four steps above your should be able to save over $25,000 in one year with only minor changes to your lifestyle. But it’s still going to take you nearly five years to save enough for a $500,000 property, so here are a few other ideas:

Ditch the car or do a car share

You could save a whole lot more money by getting rid of your car. According to various motoring associations, the annual running cost of a small “micro” class vehicle is over $6,000 per annum (plus registration and insurance). If you really can’t do without your wheels, perhaps you could join a neighbourhood car share scheme. According to Car Next Door, you could make between $2,500 and $10,000 profit per year depending on your vehicle and how often you make it available.

Go halves

Partner up with your sibling or trusted friend and look at the option of a more affordable investment property. Just make sure that you enter into a co-ownerhsip agreement before you commit!

Super size it

Talk to your accountant about the option of using your superannuation to accelerate your saving goals.

Cut up the credit cards

Or at the very least, keep only one card and reduce the limit to $500 for emergencies only! Alarming statistics from budgeting company Fox Symes reveal that a huge 86% of Gen-Yers admit to overspending on everything from groceries to entertainment, clothes and holidays – and often through credit card use.

Stay single

Recently I met with a couple who said goodbye to their dream of home ownership when they decided to spend $60,000 on their wedding. Call me a cynic, but given that the divorce rate is almost 50% in Australia, your money would be better used for a deposit on a home!

The good news

I do have a little bit of good news. A number of recent studies have shown that loan repayments are actually easier to manage today than they were for your parents in previous decades. So once you get over that initial deposit hurdle, you’ll find things ease up (well, a little bit anyway).

Veronica Morgan is the principal of Good Deeds Property Buyers, co-host of Location, Location, Location Australia on Foxtel and co-host of The Elephant in the Room property podcast.

Veronica Morgan on whether you should help your adult children get on the property ladder.

4 ways using an interior designer can actually save you money

By Ali Ross

There is no doubt the DIY design market is rapidly expanding. This trend is driven largely by the hot housing market and the design industry is more accessible now than ever.

We have daily design content delivered to our inboxes each morning as we eat our breakfast, while online platforms such as Pinterest provide us with an opportunity to gather new ideas and source products. Naturally, there is also an understanding that DIY renovating will save money. This isn’t always the case though.

Ali Ross says using an interior designer can actually cost you less than doing it yourself

As a design professional with over a decade of experience here in Australia and the US, one of my biggest learnings relates to the value a designer can add. You may not need an architect to run your project but consider using an interior designer for these reasons:

1. We add value through considered space planning, maximising the potential of a space in terms of flow and function and the level of comfort through thoughtful detailing. In other words, we get it right and we get it right the first time.

On a recent project, I was called on to help improve the flow and function of an entry, hall and lounge room. By simply filling in an oversized opening off the entry and recommending a new glazed door in a new location, it opened up a whole new way for the client to arrange and use the space. It was an obvious solution to me, but one that had been overlooked by the client. Now they actually enjoy using the space!

2. As professionals, we have the skills, experience and foresight to identify and solve problems and make the right decisions as they arise (or before) quickly and confidently. We take control of what can otherwise be a stressful process. Whether it’s selecting the appropriate tap spout length to suit a basin, establishing the perfect position for a power point to work in with a furniture plan or simply selecting a suitable size sofa or rug for a space, all of these small decisions impact the end result.

3. We have relationships with reputable trades and suppliers who we trust to deliver good services and products.

On a few occasions, I have been brought in to correct or ‘make good’ mistakes that have been made, with joinery in particular. One client had allowed a joiner to make some design-related decisions but the result was far from well resolved. In fact, they could hardly access one part of the wardrobe, the hardware that had been selected was cheap and the sliding doors were so thin they shook and shuddered along the tracks. When they decided to have new joinery built for another location, they didn’t hesitate to contact me.

4. Designers have access to trade pricing on all local and international furniture and this ranges from 10%-to-25% off retail. I pass on this trade pricing to my clients.

To give you an example, I recently completed a job where I provided a combination of bespoke joinery and furniture selections. The furniture purchases made for part of the home came to approximately $18,000. A trade discount ranging from 10%-to-20% was passed on to them, offering a saving of over $2,500. My fees for this part of the job were around $2,000, an amountmore than covered by the savings on the furniture.

When you consider these figures and facts – can you really afford not to use an interior designer?

Ali Ross has her own business, Ali Ross Design. See some of her work on her website.