SAVE MONEY

SAVE MONEY
SAVE MONEY

Make money

Make money
MAKE MONEY

BUDGETING

BUDGETING
BUDGETING

14 Ways To Save For A Mortgage Deposit While Renting

14 Ways To Save For A Mortgage Deposit While Renting

I have been renting for about 8 years now and I've finally decided enough is enough! It's time for me to settle down and buy my first home after all I am nearly 30! I opened a help to buy ISA a couple of months ago and I'm hoping to save £20k in the next 3-5 years. I know it won't be easy especially on one income, but it's definitely not impossible and I'm already on target to that £20k. Here are my top tips for saving for a mortgage deposit while renting.

Set a goal

You've probably already figured out how much you want to spend on a house, so you can now figure out how much you'll need to save for a deposit and any extra costs. The first thing I would suggest it to set a realistic goal, decide how much you're aiming to save and how long you want to achieve it in that way you have a goal in mind and it makes it easier to save. For example if you plan to spend £200,000 on a house and want to put down a 10% deposit then you'll need a £20,000 or £10,000 if you do a help to buy scheme at 5%.

Open a separate savings account

I'd recommend keeping your finances separate and opening a savings account which you can't touch for a few years or a Help to buy ISA that is solely for your house savings. I'd also suggest having an emergency fund set up for other expenses that way you won't dip into your savings for any other reason than buying a house. 

Live below your means

If you are due a pay rise don't change the way you live. Save the extra money and you won't notice a difference but will have some extra savings. Could you live without Sky, do you really need to go to the gym, instead of going out each weekend save your money and go without. 

Cut your expenses

If you're wanting to save for a deposit quick you're going to need to either increase your monthly income or cut your expenses or both. It may seem like a huge sacrifice, but it'll defintiely be worth it in the long run when you have a house of your own. Check out these 20 ways to reduce your monthly household bills

Transfer your savings automatically

Once you have a budget in mind and you know how much money you can save each month, set up a direct payment from your bank to your savings account automatically each month. If possible set it up on payday or as close as possible that way you won't be tempted to dip into it. If you do happen to save more money across the month then you can always transfer that money separately. 

Cut back on luxuries

The best way to cut down on your expenses is to cut back on luxuries. Anything which you could do without such as smoking, wine, takeaways, magazine subscriptions which aren't actually a necessity. Sit down and go through your bank statements and see if you can cut back on anything which you could live without and you'll be surprised how much it all adds up to! 

Pack a lunch for work

If you buy your own lunch for work each day, instead of going to the near by shop or supermarket and spending £5-10 a day why not make your own at home instead? You could save around £20 a week by doing this which is over £1000 a year! 

Switch bills

Use a comparison site to see if you can save any money by switching utility bills such as the gas and electric or internet package. I like to do this each year as most recently managed to save £135 by switching providers. 

Use cashback sites

Although we're suppose to be saving money there are of course reasons to shop such as birthdays, Christmas and when you need to buy something for the house which is why I like to shop online and get cashback on any purchases I can. I use Quidco, Topcashback and Kidstart when shopping online and search for the best cashback deals before purchasing. Just make sure you're not just shopping for the sake of getting cashback as that defeats the object of saving money. I have received over £1000 cashback over the past year which really helps for birthdays and any additional things I need to buy. 

Sell items around the house

One way to make some extra cash for your savings is to sell anything you no longer need around the house. Have a big clear out and decide which items you want to sell and what needs to be thrown out. You could either sell these on eBay, local Facebook selling groups or car boot sales. I recently had a clear out and sold a few bits from pushchairs, to wellies on eBay and Facebook and made over £1000.

Use cash

When ever possible take cash with you instead of your card. This way you won't be tempted to buy more as you won't have your card on you. I now do this when I pop into the supermarket for nappies or bread. I would always come out with £30 worth of stuff so instead I take what I need for the items I want to buy and I can't overspend. 

Downsize 

To really maximise your savings you could consider downsizing or moving back in with your parents. Moving to a small place can drastically cut your rent and you could be saving at least an extra £100 a month which can be the difference to buying a house this year rather than next. You could save even more by moving in with parents, I know someone who's managed to save £1000 a month by doing this. However this may not be an option if you have kids, so it's defintiely worth thinking if it's the right decision for you. You could put your possessions in storage for the time being until you save up enough for your own place. 

Switch it off

When possible switch off any appliances which aren't in use. Instead of leaving the TV or computer on standby make sure you turn them off at the switch. It may not sound like much but overtime this will save you money on your energy bills. 

Build an emergency fund 

As soon as you start to think of saving for your own home it's a good idea to start an emergency fund so you don't dip into your house savings. Try and put some extra cash in there each month as it will come in useful for any emergency bills you may need to pay such as car repairs or a replacement washing machine. You don't want to have to use your savings and if you don't spend any of it you'll then have it when you move into your new home. 

Are you saving for a home whilst renting? Do you have any tips to share?

Like this article? Sign up to our newsletter here for more money saving tips straight to your inbox!

14 Ways To Save For A Mortgage Deposit While Renting

2 comments