#SmartSaver

Everyone knows that buying a house will be one of the biggest decisions you will make in your life, and one of the most expensive! A fact that you will be all too aware of if you are trying to get on the property ladder.

We’ve talked about where you could potentially save your money, giving two very good options (depending on when you want to buy) with the Help to Buy ISA and the Lifetime ISA, but what about how to get those sought after savings in the first place?

You might be thinking to yourself – it’s simple – just put money into a savings account each month. Easy right? The problem is that life still goes on when you are saving for a property and you will still have expenses that need to be paid. So what can you do?

We have put together a list of tips to give you some ideas.

  • Your first step is to work out how much you are actually going to need to save! Some lenders will go up to 95% loan to value* (meaning you have a 5% deposit) but realistically the lower the loan to value the more options you will have and the better deals you will be offered.

  • Once you have your goal take a good look at your finances. How much have you got coming in every month? How much is going out? This will allow you to work out an achievable amount that you can afford to save every month.

  • This leads us nicely on to the next tip. What can you forfeit spending money on in order to get to your end goal? This could mean having less takeaways or making a packed lunch instead of buying your lunch every day. Once you look at your accounts in detail you may be surprised at how much money you spend every month on things like this that could go towards your house deposit instead!
    • That being said I won’t go as far as to say skipping buying your lunches will mean you can afford a house like this Australian columnist!

  • Be realistic – remember it is going to take time to save and you don’t want to be miserable! So if you really enjoy your Friday night takeaway don’t cut it out completely. You could just adjust how often you have it e.g. one Friday a month instead. 

 

  • Don’t be disheartened by how long it takes – remember all the best things are worth waiting for!

My circumstances changed several times during my saving period (around 5 years) as I went from being a student, to a uni student with a part time job to a teacher on an NQT salary. Each time my circumstances changed I re-evaluated how much I could realistically afford to save each month. I also made lots of small changes that allowed me to save just that little bit more. Here are some of the things I did (in case you need ideas):

  • Made a packed lunch
  • Made my own hot drink to go for the train
  • Had romantic meals in (instead of going out for date night)
  • Went for walks at the weekends as opposed to shopping sprees
  • Made homemade presents where possible (our family members had a lot of cakes, cookies, drawings etc over the years)!
  • Planned meals for the week so that no unnecessary items were bought whilst food shopping. This also meant I could plan meals that would work out cheapest.
  • Walked instead of taking the bus where possible in my University town

 

None of this means that I didn’t still live my life in that time though. Remember it’s all about moderation and little steps you can take to get you closer to that dream of owning your own home.

*Loan to value = this is the amount you are borrowing set against the amount you have for a deposit. This all depends on the value of the property. So if for arguments sake a property is £100,000 and you have a £25,000 deposit then the loan to value would be 75% because 75% of the property purchase price is coming from a mortgage.