Do you dream of owning your own home one day but fear it may be a pipe dream, what with rocketing house prices having the inevitable knock-on effect of deposits that seem out of reach?
If you’re one of many who bemoans how much month there is left over at the end of the money, don’t worry, you can still save up for a deposit.
This article shares money-saving tips everyone can put into action with a bit of financial discipline.
Location, location, location
If you’re buying a house up north where properties still cost about the same as a bag of chips with gravy, your deposit will be a lot smaller than someone who’s got their heart set on a leafy suburb in the south.
But it makes no difference whether you’re hoping for a house in Hull or your weekends are spent gazing longingly at beautiful homes in the windows of estate agents in Chiswick.
There are ways to cut back on your out-goings and get those pennies saved up for a mortgage deposit.
Cut down on going out and associated expenses
If you’re a bit of a social butterfly, with no pubs or restaurants open, you probably saved enough for an entire house, never mind the deposit, during the COVID-19 pandemic.
Now pubs and restaurants are open again, you’ve probably seen your bank balance deplete a bit more rapidly than it has done over the last year or so.
We’re not saying don’t go out at all – goodness knows we all deserve a good time after the last year – but if you’re saving for a mortgage deposit, those expensive restaurant meals or nights down the pub will have to be cut down on.
Inviting your friends around for a meal or a drink will cost a lot less than going out and your friends will feel obliged to invite you round to theirs for food and drink in return. A free night out and no washing up, result!
If you really must go out, there are ways to make this cheaper by using coupons for cheap meals and drinks (Groupon have some great deals) and by getting the bus or walking instead of getting a taxi there and back (taking your safety into consideration of course).
Cut down on your entertainment packages
Cutting down on your entertainment packages probably seems a little unfair, seeing as we just said to stop going out so much.
But take a look through your bank statements, credit card bills and direct debits. Go on, we’ll wait.
Is there anything there you can do without? No, not your council tax or utility bills. We could all do without paying those but they’re an unfortunate by-product of being an adult.
Take a closer look. How much are you paying for your television package? Do you really need eleventy-billion channels? Do you watch Netflix often enough to warrant its monthly cost? Are you paying for Spotify every month when you’re already an Amazon Prime member and could listen to Amazon Music instead for no extra money?
A gym membership might not come under ‘entertainment packages’ in your eyes but gyms make their money by the members who took out a membership in the new year, only to never return after a couple of enthusiastic trips in January. Are you one of them?
Taking a good look at your regular monthly outgoings and deciding what you can live without can save you a stack of cash each month.
Take a packed lunch with you to work
Those Pret a Manger sandwiches are delicious, we know. They’re also expensive. You can save hundreds of pounds a year by taking your own lunch to work. Sandwiches can be kept in the fridge overnight and soup or salad can be batch-made on a Sunday so there’s enough ready for you to take to work each morning.
And as for those Starbuck coffees? Make your own coffee and take a flask into work with you. You can even pour it into a plastic cup and write your name on it incorrectly for the whole coffee shop experience if it makes you feel better.
While we’re on the subject of work, if you can persuade your boss to let you work from home, this will save you even more money.
These are just three ways you can save money for a mortgage deposit. Just a few small changes a month can save you thousands of pounds over a year. Isn’t a house worth sacrificing a few things for?