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Save for a Deposit (without depriving yourself)

By Rachael Vrana

Surely that little piece of cake won’t effect our fitness goal? Surely those new shoes won’t make much difference to my bank balance? Sound familiar?

I’m going to give it to you in simple terms without the psychobabble: humans like to do things that feel good and, as such, we often choose the short-term, feel-good option over what we know is the “right” thing to get us closer to our long-term goal.

Visualise bite-sized goals
You may have been advised to visualise the end result, picturing yourself living in the lovely home you will one day own. However, research suggests it’s far more effective to swap visualisation of long-term goals into bite-sized habits you can make happen today.

In doing so, we create multiple moments of success, which makes us feel good right now. This immediate reward encourages us to repeat the behaviour again and again, which increases the probability of finally achieving our long-term goal.

Saving for a deposit is hard
There’s no sugar coating this one. As a young person trying to save for a deposit, every step in the savings plan can feel like just another agonising example of missing out when all your mates are having a lovely time frolicking in Byron, eating out or shopping till they drop, while you spend another week living with your parents or eating baked beans for the fifth night in a row.

Don’t focus on the negative!
Focusing on the deprivation your long-term saving plan brings you means it won’t be long before you chuck in the savings towel and head to your favourite holiday spot, the pub, or the shopping mall. Focusing on the negatives will leave you feeling overwhelmed and de-motivated about your seemingly unattainable home owners dream. To balance this it’s important to reward your efforts.

Give yourself small rewards
Instead, aspiring savers need to create small and immediate payoffs that reward them in the here and now.For example, arrange for part of your fortnightly wage to get automatically transferred into your home deposit savings account on the 1st and the 15th of every month. Then on the same dates,  arrange to do something that you want to do – like meeting friends for a walk or hit of tennis, working on a new skill, tuning in to your favourite reality TV show or downloading a new movie.

Pairing the pain of saving with an activity that puts a smile on your face will help you commit to your long-term savings goal, and let you look forward to what could be a difficult time each fortnight. As well as creating frequent feel-good moments, it’s important to garner support and minimise barriers for when temptation strikes.

Don’t give in to the urge to spend
Create an environment that helps prevent unnecessary spending before the urge strikes.Put in place practical savings habits, like ensuring credit cards are paid off in-full every month, or even consider cutting up cards if they lead you to spend beyond your means.

Publicaly declare your long-term home ownership plans to friends and family, so they can help support you as you create daily habits that maintain your saving goals.

Remember: small daily habit changes like taking your own lunch to work and limiting take-away coffees can help save money, but be sure to continue enjoying time with colleagues or friends. Feeling empowered and rewarded along the way is vital to maintaining an effective, long-term behaviour change plan. It also translates to long-term success more effectively that visualisation alone.


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