Saving up for a House Deposit
Moving out and buying your own house is, without doubt, a feat worth applauding, however, the surrounding pre-requisites turn it into an especially daunting task to overcome. One of the toughest hindrances to jump across is the initial deposit required before buying the house. To deposit this sum, saving up money is required, which is not a person’s strong suit if they’re working 9-5 at a minimum wage job. However, there is a relief considering the initial deposit depends upon the location and size of the house. This is why it is important to separate your needs from your wants before you start looking for your house. Once you have set a budget, it will become significantly easier for you to find a much more lenient house for your wallet.
Set a Realistic Budget
The amount of money you can save up each month is directly proportional to the amount you earn each month. This is why saving up tends to be easier for some, while harder for others. Granted, your salary covers your basic needs as well as the occasional tubs of ice cream, but it is still important to work out the amount you can potentially separate from your monthly salary.
Utilizing this approach can help you save up money for the deposit in a civilized manner, instead of frantically taking out huge sums of money from your bank account. Normally the deposit is 10% of the purchase price of the house, however, certain lenders will give you the mortgage with a 5% deposit.
Take a Deeper Dive at Your Spending
Once your budget has been finalized, it is time to start treading towards achieving that goal. Take a deeper dive into your current spending habits and analyze if you’re overpaying for anything. If the answer is yes, then it is time to cut back on any potential spending habits which can greatly dwindle your savings.
Added to that, banks such as HSBC UK offer their customers tools such as the Balance After Bills features on their mobile banking apps. This can help you effectively keep track of the amount of money you’ll be left with once Direct Debits and standing orders have been paid.
Cut Down on Other Spendings
This part might be the hardest since cutting down on your spending means letting go of activities you truly enjoy doing. This includes letting go of your hobbies as well as downgrading your lifestyle for some time.
Going out to a fancy restaurant to eat out with your friends? Opt for a picnic in the local park instead. Not only will this food cost significantly less, but it will also be a much healthier option!
Buying clothes, you like can wait as well, since without doubt currently your closet is filled to its brim with similar-looking clothes. Resist the new trends, since the clothes you currently own look just as good, or even better!
If you still feel as if you’re not cutting down and saving up enough, then it is preferable to buy a house with one of your friends. This will instantly be half the deposit required, requiring you to worry about half the total amount.
Downsize Your Current Living Space
Consider moving into a smaller apartment, if you can since this will not only reduce the amount of rent you currently pay but your energy bills will be greatly reduced as well.
The other option would be to move back in with your parents if you’re living in a rented apartment. This can immensely ease the burden since the rent you pay can directly be added to your savings account.
Open a Savings Account
If the money is not in front of your account or bank account, you will be less tempted to spend that money. This will not only prevent your unnecessary cash spending habits but will also help you keep track of the amount you need to save up. Added to that, calculating how much you need to add to the savings account will not be a nuisance either if it is kept within a separate bank account.