The hardest part of buying a home for most people is saving the deposit. It can seem to take forever, and the whole time you’re saving, you’re watching house prices go up. So it’s time to take action and get serious about your savings plan!
Here’s some of our top tips that our clients have used to boost their savings and buy their first home faster.
1. Pay yourself first
This is the number one most important thing to do! We recommend that you either ask your paymaster to put a percentage of your pay into a savings account or set up a direct debit with your bank to transfer money on the day your wages hit your account. If you wait to see what’s left over after you’ve paid your bills and had a few nights out, chances are there won’t be much left to save. Be vigilant and set a certain amount – 10, 15 or even 20% of your pay. You’ll hardly notice it’s gone if you never get it, but you will notice a big leap in your savings.
2. Pay off old debt
Debt – especially credit card debt is just like a hole in a bucket. Paying interest and even card fees is just wasted money. Get rid of cards you don’t need and pay off debt as fast as you can. You could even transfer to a low or no interest card if you have one. But get rid of it as fast as you can!
3. Set a budget
Take the time to sit down and work out where your money is going. Get out your bank statements and look at the last three months expenditure. Write down everything! Then take a look at what you expenses you can cut back. Don’t deprive yourself, but don’t be wasteful. If you subscribe to Netflix and Presto, choose which one you like best. If you eat take away three nights a week, cut back to one or two. Is there a way to make work lunches less expensive? Would buying a coffee machine reduce the amount of money spent buying coffee each day? Make the decisions, set your budget and stick to it!
4. Sell stuff!
Have you got a heap of old clothes, CDs, books or furniture sitting around collecting dust and taking up space? If you do, get rid of them. Have a garage sale, sell them on a Buy and Sell Facebook page or eBay. And make sure the money goes straight to your savings account. If you don’t need it, get rid of it.
5. Earn more
Do you have time on your hands or a skill that you can freelance? If so, get a part time job, advertise your skills or start putting the word out to friends, family and colleagues that you’re available to hire. Make sure 100% of your additional earnings goes straight to your savings account. Get creative with this! You could walk dogs, teach English, tutor students, babysit, wait tables – anything. Just try to make sure it’s fun and something you enjoy doing so that it doesn’t feel like a punishment. Sometimes working a night in a bar is almost as much fun serving as it is being served, so think outside the square.
6. Ask your parents
If you’re serious about buying a home and making good inroads to your savings, but still a little way away from your target, you could consider asking family members for a loan. But make sure it’s documented and that you’re serious about paying them back. It could be just the boost you need!
With interest rates at an all time low, the sooner you can buy, the better. So do everything you can to make it happen.
If you want to talk about your plans, I’m always happy to talk and we can run your numbers to check your borrowing capacity. That way you’ll be able to set your target and start looking around your ideal location to see what’s available in your targeted price range.
