Saving money for a house is one of the hardest things anyone can do. First-time buyers are struggling to get onto the property ladder more so today than ten or even 20 years ago. I remember when I wanted to buy my first property, and this is now almost 15 years ago when prices were much lower than they are today. During that time, I was trying to save about between £600 to £800 every month (not everyone can do this!).
The problem was the property prices were going up so fast that the money I was saving each month, the prices were going up more quickly. I had to jump onto the ladder sooner than I wanted so I didn’t have as much of a deposit to put down as I wanted. However, it was a good move since two years later that £8K deposit had increased to over £40K in equity in the property value. So my advice to anyone looking to buy a property is to watch the market and try and save up as much as you can when the prices are stable but not to leave it too late to get on the property ladder.
It’s not easy saving money, especially when you still want to enjoy living, going out to eat, having some drinks out with your friends etc. So it would be best if you got your priorities in order. If you want to buy a house, then you need to make some sacrifices. Please don’t go out every week, make it once a month and be careful with your money.
Can you cut back on any existing bills or outgoings? Look at luxuries first and try to cancel anything you don’t necessarily need.
Can you work overtime to help with your savings! Do you have anything in the house you can sell off on auction sites like eBay or craigslist? My wife recently sold loads of our kid’s toys on a local Facebook page. She quickly made a few hundred just for a couple of hours work sorting the stuff out. The great thing about this was that she didn’t have to package anything or go out and deliver the items she sold as the buyers come round to you.
Work out how much deposit you have to save for a house. Then make sure you transfer out money from your account straight after getting paid via a Standing Order into a high-interest savings account. This way you won’t notice the money so much, and you’ll be less likely to spend it. Take out some cash for disposable income, such as lunches and transportation costs. Once you’ve used up your money, you should try not to draw any more cash out or spend any more. You will be more aware of what you are paying by doing this.
Remember it is only going to be difficult during this time and doesn’t have to be like this long term. Once you have your deposit and are comfortable paying the monthly mortgage, then you can continue to live your life while also being a homeowner. Over time your circumstances will change, and your and income will most like go up so don’t make excuses, make sacrifices!
If you are currently renting at the moment, is there any space for you back at your family home? If so maybe stop paying rent for six months and save this while living at home with your folks. You can still contribute to your parents for putting up with you, and I’m sure they would be happy to help!! I know its not an ideal solution, but it can certainly help.
I notice more and more these days parents helping their children with deposit money. This is great, and maybe an alternative solution to jumping onto the property ladder but don’t take them for granted as this could be their life savings. Try and make it on your own if you can as it will make you stronger in the long run.
Hopefully, this has given you the push you need to start seriously thinking about the way you spend so that you can save for a house!