6 Tips for Saving for a Deposit

19/03/2020

Buying your own home is becoming increasingly difficult with house prices rising, resulting in many people staying in their parents’ home until they are in their 30s. Here at Godfrey, Short and Squire, we don’t want you to feel like you can’t move out and go it alone. We’ve shared our tips on how to save for a deposit.

1. Make a Note of Your Goals

A great way to get motivated and ensure you stick to your budget is to make a note of your goals. Having an end goal date can significantly help to encourage you to budget more often and refrain from buying unnecessary items.

Break It Down into Manageable Targets

If you would like to save £4,000 by Christmas, ensure that this is broken into manageable targets. For example, if you could manage to put aside £500 a month, then you can clearly see that you would need to start saving in April in order to achieve your target.

Achievable Targets Are the Key to Success!

If goals are unattainable, then you will become unmotivated and will begin to feel like you cannot achieve it, which will result in not saving and thus, moving your end goal further away.

If you find that you aren’t spending as much in one month, encourage yourself to put more aside as this could provide you with a little more disposable income in the future or some extra money towards your deposit.

2. Avoid Unnecessary Spending

We are all guilty of enjoying dinners out, splurging on a new outfit or treating ourselves to a weekend break. While we do need to take time out for ourselves, you mustn’t overdo it.

Set yourself a cap on how much you can spend on treats like this; that way, you can avoid finding yourself in a position of not having enough to put aside for your savings.

Set Up a New Savings Account

You may already have a savings account, and if you do, then that’s great! But, setting up another that is entirely for saving toward your deposit is recommended. You can use your original savings account for holidays, car payments etc. and use your new one solely for your future home.

Getting Organised is Essential

Being smart with your money and organising it can significantly help with saving. If all of the money that you are saving for you deposit is all in one place, it is far easier to see how far along you are and how much you have left to save.

3. Sell Unwanted Items

You may have come across friends and family selling items on Facebook, eBay or other online marketplaces, and this is a brilliant way to make some extra money. If you have some bits lying around the house that you don’t like or use, then start selling!

Every Little Helps!

You’ll be surprised how quickly money can rack up. If you are selling items for just £5, before you know it, if you’ve sold 20 items, then you’ll have made £100. Big or small, anything that is merely taking up space can be sold and go towards a new home!

4. Consider Moving into a Cheaper Property While You Save Money

By moving to a cheaper property while you are saving for a deposit, you can put the money you are saving from reduced rent straight into your house savings.

For example, if it is just you and your partner living in the property and you are currently staying in a three-bed, then you could consider moving to a place with one bedroom as this is likely to be cheaper. Alternatively, you could look into moving to a more affordable region.

If you are currently renting and trying to save for a deposit, then you might be interested in our guide to saving for a mortgage while renting.

5. Set Up Standing Orders

It isn’t very smart to rely on your memory and will power to put aside your savings each month. When your money comes into your bank account, we all know how tempting it is to go and splurge, so it is advised that you set up standing orders.

If you set up a standing order to go out of your primary bank account a couple of days after your payday, then you can be sure that money is going straight into your savings each month.

6. Utilise the Bank of Mum and Dad

Studies have shown that just 7% of 20 to 24 years olds can buy a home with their own savings, so you shouldn’t feel ashamed for turning to your parents for a helping hand. Many people rely on cash loans from family members in order to make up a deposit.

Whatever path you choose, we hope that these tips help you to save for a deposit and finally purchase your own home! Here at Godfrey, Short and Squire, we have homes for sale in Okehampton and the surrounding areas.

If you are interested in looking at some of the properties we have on offer or would like some advice, feel free to get in contact with us. Give us a call on 01837 54504 or email us at info@gssproperty.com.