The Deposit! This is the biggest and often the first obstacle any first-time buyer will meet is the deposit – that percentage of the house price that you are required to source yourself. The deposit is a significant expense and one that is often feared and deemed unobtainable – but it is a realistic goal if you have a plan. How quickly you get there is dependent on your ability to curb your spending and start saving.
1. Devise a robust savings strategy
To save successfully, you need to track your spending over a couple of months. Keep all your receipts and, at the end of each month, tally your income and your expenditure and this will give you a clear idea of your spending and where you may be able to cut some costs. It may be worthwhile considering any extra work you can take on that may boast your income.
It may seem obvious but once you break it down into bite-size pieces, saving becomes a habit and, much like going to the gym or healthy eating, once you start practicing it you can find yourself becoming competitive about it.
2. Cut out vices and luxuries
It goes without saying that cutting out cigarettes, alcohol and coffee can be easier said than done, but giving up these vices can give your savings a boost.
Review your household bills and see if money can be made by switching providers for energy and internet, and even consider living somewhere cheaper. Whilst the thought of staying locked indoors is a bleak extreme that few would manage, at least cutting down on trips to restaurants and bars will help you reach your goal sooner rather than later.
3. Make Money on selling websites or at a car boot sale
‘Does it spark joy?’ wise words from Marie Kondo. Declutter and sell your unwanted items on Ebay, Gumtree or at a car boot sale. It can be a nice little earner!
4. Cut the cost of your rent
Paying less rent could be a good way to free up more cash for your deposit. You could reduce your rent by downsizing. Or you could relocate to a cheaper area closer to work so you can save on commuting costs. A house share is often cheaper or you might want to look for a lodger, who knows you might enjoy the company.
5. Find your great savings account
Keeping your money under your mattress is risky and you can guarantee no interest! It is worth while doing your homework here. Some accounts will offer you a higher rate of interest if you commit to locking the money away for a year or more, and then there is always the option to utilize your annual ISA. Make sure you are aware of any charges or restrictions attached to the account.
Good luck - your efforts will be more than worth it once you’ve been handed the keys to your first home!