Even though there’s dire tidings about wages and salaries not even remotely keeping up with the cost of living and the cost of properties in the UK, you should keep ploughing on with your deposit savings project.
For all we know, there could be a steep fall in property values, salaries could suddenly start to catch up with the cost of living index, or you might just strike it lucky with an out-of-town doer-upper. One thing’s for sure, if you don’t star saving, you won’t have any savings!
Here’s how you get that deposit together.
Look at your budget
Look at what you earn and what you spend every week, month, year. Your outgoings should include all your recurring expenses as well as estimates for occasional and even semi-unexpected costs, like new tyres or boiler repairs.
When you have all your figures in front of you, you can see where you can make some cuts. The lowest-hanging fruit include utility bills, TV subscriptions, mobile phone tariffs and insurance premiums – look for reductions or discounts.
Get rid of your debts
Debts almost always have interest on them, so the sooner you can pay them off and be free, the sooner you can divert all that money into your savings. You might benefit from heading to this website for advice on managing your debts or even consolidating them. You have to pay all your debts, of course, but if you can pay less interest then it’s all good.
Reduce your rent
Rents tend to cost more than a mortgage these days, which doesn’t help first-timers who are trying to accumulate that vital lump sum. If you can reduce your rent or even stop paying any altogether, you’re switching your savings plan up a gear.
One option is to downsize. Another is to move further out of the city where rents are cheaper, but make sure this doesn’t have too much of the opposite effect on your travelling costs.
Another popular idea is to return to your parents for a year. This needs a bit of management though. You’ll have to agree on how much you’ll pay them and how much housework you’ll do.
Don’t let your savings languish
It’s great that you’re saving, of course, but if your money is just lazing around in an account with a low interest rate, then you need to change this.
Shop around for the best interest rates and have an annual review once you’ve switched your money to a harder-working account. Do watch out for those early withdrawal penalties, though, because they could eat into any extra earnings you make. An instant-access ISA might be your best friend here.
If you’re already working, then is there any overtime available? Could you work a couple of evenings or at weekends in a café, pub or a local shop? There’s always something going if you look hard enough and if part-time work in your area is a bit thin on the ground you could maybe do some work for yourself, like tutoring, cleaning or editing.