Owning your own home is a major life goal that most of us have. But it’s not easy these days because house prices are outstripping salaries. If you can get a decent-sized deposit together, you can increase your borrowing power and reduce your monthly repayments. The problem is how do you save for a deposit? If you’re still in your twenties or thirties you’re still paying down student loans and you haven’t reached your career and earnings peak yet. You might also be more interested in holidaying and enjoying yourself!
The good news is you do both and make use of these years to save for the future. Remember, your savings earn interest, so whatever you squirrel away starts working for you, enabling you to squeeze in the odd week on a beach and still grow your deposit.
How do you start saving for a house?
So, you’re not rolling in money. You can still save, though. Take a look at your not-entirely-necessary habits. Take homemade lunches instead of buying them every day and avoid lunchtime shopping, go for a walk or visit a gallery or museum instead. That cake and coffee on your lunch break – you may be spending £10 to £15 a week on this, which is £40 to £60 a month, £480 to £720 a year. Cut it down or out completely.
Reduce your rental payments
Your biggest expense is most likely rent, and if you live in a city it’ll be a big biggest! Can you move further out of the city and survive? Move to a smaller place or even houseshare for a year?
Another option is to move back home for a year or so. You’ll have to set strict time limits, pay some rent and do your share of the washing up. Most parents won’t ask too much in terms of rent especially if you prove to them that you are saving each month, so you can really stash some money away during this time.
You can also find some friends who’ve just bought a house and offer to lodge with them for six to 12 months to help with the costs. The first year or so in a new house can be expensive and people are generally recovering from parting with their own deposit! Just make sure you’re willing to help someone else out when you’re snugly ensconced in your own new pad!
Take in a lodger
If your lease allows it, you could take in a lodger to help with your rent and utility costs. You’ll have to run this past HMRC, however, as the extra income you’re earning may well be taxable.
Become a property guardian
A slightly more leftfield option is to become a property guardian. If you prefer your independence and fancy doing something a bit different that could also build up your CV as well as your savings then head to the Camelot Europe or Global Guardian websites for a look. You can usually save 40% or more on your rent if you live in and look after one of these properties and while there are some restrictions, like no parties, your savings will soon rack up.
Pay down high-interest debt
If you have a loan or credit card that soaks up a lot of your spare money each month then bite the bullet and pay extra for a couple of months or more. This means even less spare money, but it also means less interest going forward. You’ll be saving quite a bit in the long run.
Get a personal finance robot
Budgeting is boring and not everyone’s a natural. Even if you are, having a cyber-conscience to prod you every now and then is really useful. There are a few good budgeting tools online so scout out one and get some help managing your money.
Reduce your food expenses
Your grocery bill is one over which you have quite a bit of control, especially if you spend more on eating out than you do on your supermarket shop! You can treat yourself occasionally, but start to buy in for and prepare more home-cooked meals. If you’re always running to the local deli for your workday lunch, then start bringing in leftovers or your own sandwiches instead. You’d be amazed at how much you’ll save and you can also cut out hidden fats and sugars. Don’t buy food and waste it though. Get used to using everything you have in the fridge and make sure you check your use by dates. Homemade soup or risotto with use up any meat or vegetables you have.
Save money on transportation
You need your job, obviously, but if you can shave off a few pounds from your weekly commuting costs then there’s another new funding avenue. Could your liftshare? Walk or bike half of the way (or all of the way in summer) or could you move nearer work if this makes your rent and commute cheaper?
Eliminate your unnecessary expenses
We often think of things like a sports channel and a fancy gym membership as essentials, but when you’re on a serious saving campaign, there are very few things that you can’t do without. Cancel your gym membership, or at least change it to an off-peak one; cut down on any extra classes you do there at the absolute minimum. If you combine this with some extra walking to work, you’ll still stay fit.
Get rid of any magazine and TV subscriptions that you don’t watch so much anymore, as this could save you a couple of hundred pounds a year. You should also have a ring-around of all your utility providers to see if they can knock a few points off your bills each month. There are some great price comparison websites for utilities, insurance and the like. Make sure you check them every couple of months to make sure you are the best possible deal.
Get a second job
Bag a few pre-Christmas shifts in your local pub, or set yourself up as a weekend and holiday dog-walker. If you have a particular professional skill then make use of it outside work with some freelance gigs. Even a few evenings of babysitting a month will bring the cash in. Have a think about what you can offer and then, well, offer it to the world. For money!
