From experience I know saving money can be hard! As someone who loves browsing the shops, retail therapy and holidays somewhere exotic, it takes a bit of dedication saving money each month. But it’s also so important! Although money isn’t the be-all-and-end-all, you can’t deny having a bit of cash helps! Especially if you have long-term goals like buying a new car or a new house. Buying a house has always been one of my dreams, even as a 14 year old I would design my dream house. So I knew it was something I needed to budget for, even at a young age. Here’s how I saved for my first house deposit.
Our Story..
In 2019 my partner, Matt, and I wanted to buy our first house together. We met in 2016 and have been together ever since. Before 2019 there was never the right opportunity to buy a house; I’d been a Uni student and lived away for my first job. Finally we were living and working in the same place so we went for it! Neither of us had any experience with buying a house before which made the process feel even more daunting. I don’t think we ever realised we were about to embark on an almost year long journey! But we finally made it and we couldn’t be happier with our little home.
1. Savings Account
I’ve had a savings account for as long as I can remember. There are so many out there to chose from. Forbes give a great list of pros and cons for the different types to help you chose what’s right for you.
I’ve always used a traditional savings account as it’s so easy to access your money as and when you need it. At the start of each month, as soon as I’ve had my pay-check I move over a set amount. After-all out of sight-out of mind! If you don’t have it sat in your current account its’s less tempting to spend. I’ve always aimed to save 30% of my income, although you can adjust this so it’s affordable for you.
2. Limit Expenditure
My attitude towards money is you can’t take it with you once you’re gone. Quite a morbid thought- but true. It’s important to still live- don’t get so caught up on saving you don’t enjoy yourself.
I’m sure we can all find places to cut back- stop buying new clothes, look for bargains in the sales, limit the number of takeaways you have, start meal planning or look at switching to cheaper bills.
3. Avoid public transport
For some I know this can’t be avoided. Whilst I was a student I actually managed to save quite a bit of money doing this.
In my first year of Uni I lived around 35 minutes away from campus. For me first year was full of late nights and getting up late, which meant scheduling in a 35 minute walk before lectures wasn’t always do-able. So the £1 bus fare saved me, every day! £1 each way, £2 a day, £10 a week, £400 over the 40 weeks at Uni! It quickly adds up. Switching to walking not only is good for your health, but will save you a few pennies too.
4. Meal planning
Takeaways have always been a down-fall for me. I’m not a huge fan of cooking, I think I quickly run out of ideas for dinners and turn to a takeaway menu for inspiration.
I really tried (tried being the key word) to stop ordering takeaways once I’d graduated Uni. Finding a few staple meals that are quick and easy was an important first step. I love things like pasta dishes. If there’s ever a night I can’t be bothered to cook I now go to my old-faithful, spaghetti bolognaise! It beats turning to a takeaway menu. Wow- you can save a lot doing this!
Meal planning includes breakfast, which is so easily over-looked when you’re rushing to get out to Uni/work. Leaving your house feeling full makes it less tempting to pick up a Costa on your way in- another way to easily save £3-5!
5. ISA
An ISA is an Individual Savings Account! There are plenty out there, so make sure to do your research. I opened a ‘Help to Buy ISA’, which sadly no longer exists. Although something similar is a ‘Lifetime ISA‘.
Basically you pay in money and whenever you decide you want to withdraw it, to buy your first house, then the government will pay you a bonus amount on top of whatever you save. The usual bonus is 25%. To use a ‘Lifetime ISA’ in this way towards a house, it has to be towards your first house!
I opened a ‘Help to Buy’ ISA when I was 18, and in the end managed a bonus of a good few thousand. Very easy way to save more towards a deposit.
6. Budget
I’ve written a whole post of budgeting if you’re interested in finding out more.
I have only really started budgeting since I’ve started earning a salary. Although there is no harm in doing this at any stage in life. Budgeting is a great way of seeing exactly where you’re spending your money and then where, if any, you can make cut-backs.
It will also help you make sure you’re saving every month towards those long-term goals. You can budget simply by grabbing a pen and pencil, or jazz it up and make yourself an excel spreadsheet.
7. Investing
Finally investments. Very daunting, very risky but potentially very rewarding.
*I must add this is not financial advise, it’s always important to carry out your own risk assessment when it comes to investments or discuss with a qualified financial advisor.*
I wanted to add it to the list as it is a way I work towards my long-term goals. Although this is something I have done quite a bit of research into. It’s become a bit of a hobby watching the stock markets.
I do invest in stocks/shares and currently have a ‘Stocks and Shares ISA’. Personally, I invest in the history of the stock market; that over time there is growth. Therefore the money I invest in this way I am comfortable keeping in certain companies/ISA’s long-term (i.e. 5-10 years).
I have to admit I’m still learning about investing, someone I LOVE watching is MamaFurFur on Youtube. Very inspiring, I hope to follow in her footsteps!
My deposit
This is only a rough estimate of where I mainly saved my money for my deposit. As you can see savings in my savings account and ISA, account for most of it. This would then be supplemented by the amount I saved with cut-backs through budgeting.
Source | Amount Saved |
Savings Account | 55% |
Budgeting (reducing shopping, less takeaways, less public transport) | 7% |
ISA (including bonus) | 28% |
Investments | 10% |
Finally..
It is never too early/ too late to start saving your money. It doesn’t have to be towards a house, it could be towards a holiday or a new handbag?! I hope it’s useful to see how I managed to save some money, let me know of any other great ways you’ve heard of.