Saving for a House

LWilliam290 on 24/12/2014 - 11:07

Having just graduated and about to start work next year, I'm hoping to save up for a house in 4 years time.

Still living with mum so there's not a lot of expenses to worry about yet.

Got about 20k in a savings account with about 3.6% interest but not sure if this is the best way to grow my money. I was looking at a First Home Savers Account last year but it looks like the government has stop this.

Should I leave my money in the savings account or look for other investment opportunities such as shares?

Financial

Comments

  • elliolk on 24/12/2014 - 11:28
    +1

    The FHSA would have been perfect for your situation but as you said, Tone Abbott decided encouraging first home buyer's to save wasn't worth the costs involved.

    You have a wide variety of investment options but I think you are best suited to lower risk investing (i.e. high interest savings account).

    The government will gaurantee deposits up to 250k so you're pretty safe. Have a look at UBank, they are currently offering 4.01% for their savings/transaction accounts.

    I'm in the same situation as you and have all my funds in UBank. Sure, you could make more investing in shares or other higher risk investments, but you need to weigh up whether the risk is worth it for your situation.

  • toristo on 24/12/2014 - 11:39

    The biggest challenge is keeping committed - if you can get your employer to split your pay, have it go into a high interest savings account where you can't see it. What the eye don't see, the heart don't miss.

    This forces you to genuinely budget with what's left over as if that's your only pay to work with. If you try to save with what's left over, you're going to find yourself dipping into the savings amount each fortnight for discretionary expenses. People on ozbargain have an incredible talent for justifying the purchase of a new waffle iron for half price. I didn't know I needed one until I saw it on special, but now I know I need it, I'm saving 50% etc… Don't be one of us! Avoid the temptation.

    If you can't split it, try to get it set up that it transfers automatically from your account on the day your pay is deposited (careful that it doesn't transfer early or you may get an overdraw fee).

  • Davo1111 on 24/12/2014 - 11:52
    +2

    High interest account. I'd just move it in there yourself, and keep your employer away from your ideas.

    • Gunther on 24/12/2014 - 12:55

      100% agree with this.

      Just get smart with your money and learn self control.

  • Hikey on 24/12/2014 - 12:51

    Split your money between a high interest savings account (have a look at Lifehacker's monthly Ratehacker feature: http://www.lifehacker.com.au/tags/ratehacker/) and shares. Ask on the Hotcopper forum (http://hotcopper.com.au/) for ideas for shares that are low risk for a four year period. Usually very helpful forum when it comes to shares.

  • Shadow54 on 27/12/2014 - 18:22
    -3

    Save the money in the mortgage account of a close friend or relative and split the savings.
    Works like this: Say you save your money in my mortgage account. I'm paying the bank 5 percent interest.
    Best you can get is say 4.1% at uBank and this interest is taxed, so effectively you'll probably get a 3% return. So I pay you 4.5% tax free and I win an effective 0.5% reduction in my mortgage interest. Win/win. Private invisible financing………..

    • jaybmate on 27/12/2014 - 22:06
      +3

      Very risky, and probably not worth doing. Sounds good in theory but it ain't good to lend to family and especially friend. What if they have some crisis and need all the money they have? you may not get your money back, and can create big issues.

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