Top tips to help you save for a house deposit
What are they!?
Money management is something few of us are very good at. Somehow the monthly wages go in and, before you know it, there’s nothing left. Which makes the prospect of saving up to buy a house feel virtually impossible.
But before you resign yourself to a lifetime of renting, there are ways to make saving easier. Here the team of property experts at GD Legal, highlight how you can get savvier with your money and start saving.
5 top saving tips
#1 Weigh up your options
The typical first-time buyer will usually put down a deposit of 20% on their first home. 20% might not sound too bad but, in reality, that percentage can translate to an eye-watering deposit of around £20,000. Ouch!
But there is some good news, with a rise in 90% mortgages being offered. And there are a number of other ways to reduce your payments too, including buying with friends or family, looking for a mortgage that covers your valuation and legal fees, and checking out what help is available from the government.
#2 Government schemes
There are several government schemes available offering help to get a foot on the property ladder. These include Shared Ownership schemes and Help to Buy, so it’s always worth checking out the latest offers to see if you’re eligible.
#3 Cut the cost of rent
You’ve probably heard rent being referred to as ‘dead money’. And when shelling out for your monthly payment leaves you with nothing left to put to one side, it can be hugely frustrating. But if you’re to keep a roof over your head, rent is an unavoidable expense. So what do you do?
The first thing is to step back and assess if renting really is your only option. Could you move back in with family for a little while or stay with friends?
Whilst this might not be feasible (or desirable) long-term, a short reprieve from paying your monthly rent bill could be all you need to really kick-start your savings.
Alternative options such as renting with other people, switching to a co-living development (think student halls where you rent a bedroom but share spaces like the kitchen) or downsizing to a smaller rental property, could all help you to save more money each month.
#4 Write it down
Creating a spreadsheet is a great way to organise your finances. It might sound daft, but being able to see on-screen exactly how much money you have coming in – and where and when it goes out – can really help you to get a grip on things. Making it easier to spot where you could cut back and work out how much money you can realistically afford to put away each month.
Top tip? Once you’ve identified how much money you can feasibly put into savings – do it! Transfer that amount into a separate account as soon as your wages go in each month to avoid it being frittered away.
#5 Make smart switches
After lockdown, we’ve all got used to a slightly different way of life. More walking and less jumping in the car. Perfecting your favourite meal at home whilst restaurants were closed – the list goes on. But many of these changes likely had a positive effect on your bank balance. So why not try and keep them as your ‘new normal’?
Using the bus instead of a cab, swapping that takeout coffee for a brew at home, making lunch instead of buying it – although they may sound pretty insignificant, these small changes add up and will make a real difference to your savings pot.