Saving for Your Dream Home: Affordable Financial Solutions for Millennials and Gen Z

Achieving the dream of owning a home is a significant milestone in the lives of many people. However, the high cost of property often presents a financial challenge, especially for millennials and Gen Z. Many feel frustrated and give up before even trying. In reality, with the right savings strategy, owning a dream home can be easier to achieve without falling into debt or experiencing excessive financial pressure.

Saving for a Home: Easier with Proper Planning

According to an article published by Kompas.com about saving for a home, the key to success is planning and discipline. One important step is to start saving for the down payment (DP) early on, with a realistic allocation of funds.

Effective and Stress-Free Saving Strategies

Here are several steps that can help you save for a home in a measured way without adding stress:

1. Set a Target and Timeline
   Determine the price of the desired home and the target date for achieving it. For example, if you plan to buy a house worth Rp500 million within five years, you need to save around Rp75-100 million for the down payment.
    

2. Use the 50/30/20 Method
   With this method, allocate 50% of your income for necessities, 30% for wants, and 20% for savings or investments. For example, with a monthly income of Rp7 million, you could save Rp1.4 million each month for the home down payment.
    

3. Choose High-Yield Investment Instruments
   Instead of keeping money in a low-interest savings account, consider placing funds in instruments like time deposits, money market mutual funds, or gold, which offer higher interest rates and are still secure.
    

4. Open a Separate Home Savings Account
   Open a separate account exclusively for saving for your home so that the funds don't get mixed with your daily expenses. This helps maintain consistent savings and avoids the temptation to spend the funds.
    

5. Use Financial Planning Apps
   Apps like Finansialku, Jenius, and Spendee can help you monitor the progress of your savings, simulate home purchases, and calculate installment payments in real-time.

Savings Calculation Simulation: Saving for a Rp500 Million House in 5 Years

Assumptions:

• House price: Rp500,000,000

• Required down payment: 20% = Rp100,000,000

• Timeframe: 5 years (60 months)

• Investment return: 5% per year (e.g., money market mutual funds)

Using the monthly investment formula:

FV=P×(1+r)n−1rFV = P \times \frac{(1 + r)^n - 1}{r}FV=P×r(1+r)n−1​

Where:

• FV = Rp100,000,000

• r = 5% per year / 12 = 0.00417

• n = 60 months

Simulation result: You need to save around Rp1,480,000 per month for 5 years to reach Rp100 million with an average interest rate of 5%. Without interest, you would need to save Rp1,666,667 per month.
 

Benefits of Using Interest-Bearing Instruments
With an investment return of 5%, the difference in the profit you would earn is about Rp186,667 per month or Rp11 million over five years compared to saving without any interest.