Don’t feel overwhelmed with the prospect of saving for a home with these pointers.
One of the first things you will need when buying a property is a deposit. This is regardless of whether you are a first time buyer or if you are wanting to move to a bigger home. Increasing the size of your deposit will help secure a better mortgage deal. It will also lower your monthly mortgage as well as be able to help you move into your dream home. But how can you increase the size of your deposit?
1. Get number crunching.
Start by calculating where you are spending your money. Set up a spreadsheet and track your outgoings each month. Categorise this into groups such as food, entertainment, rent, bills, transport, etc.
Once you have established how much you spend each month on regular outgoings, set yourself a budget for those that aren’t fixed, such as shopping and entertainment and stick to this budget.
3. Cut back on one.
In order to save money you are likely to need to make a saving somewhere. Whether you ditch the morning freshly brewed coffee from your favourite barista for a cup of instant at work, opt for public transport instead of your own car, eat out only when you have an online meal deal or give up the subscription to your favourite magazine. Cutting back on all of the things you enjoy is hard, and is less likely to be a success. So start with cutting back on one and once you do not notice that this is missing you can cut back on more.
4. Shop around.
Could you reduce the cost of your monthly outgoings by getting yourself a better deal? Are you spending too much on your phone but not using up all the data or minutes? Could you look for a better car insurance deal? Cheaper health insurance? Home internet? Look at all your fixed outgoings and speak with your provider to see if they can reduce the cost for you, and if not, seek an alternative service for a better deal.
5. Agree on a monthly saving amount and set a goal.
Once your finances are in order you will be in a better position to set a monthly deposit amount. You want to set aside any disposable income but remember to make this a realistic figure otherwise you will never stick to it. And remember to have a goal of how much you need to save too.
6. Set up a separate savings account.
Open a bank account solely dedicated to your property purchase. Pick one that makes it hard to withdraw money so that you don’t dip into it with ease. This could be one where you are penalised for making withdrawals or one with a bank book rather than ATM card. They tend to have the higher interest rates too. Set up an automatic transfer into this account the day that you get paid so that the money has instantly gone. Then if you have any money left at the end of the month you can transfer this into the account too.
7. Remain strong.
Saving can take time so be patient and stick to your guns. Set yourself a visual goal if you feel it would help. Such as a picture of your dream home on your fridge. There are ways you can increase your property deposit even quicker by cutting out on bigger luxuries such as holidays or big purchases such as the latest phone. Additionally, if you get a bonus at work then transfer this straight to your savings account. You will be surprised at home quickly your savings can accumulate.