Top tips for saving a deposit!
09 January 2023
If you’re eager to get your foot on the property ladder, saving for a deposit can seem like the most difficult part!
Here’s some of our top tips to help you along the way to make 2023 the year you start your home buying journey.
1. Research savings account options
If you are going to be saving for a long time (e.g over a year), you should consider how much interest you could earn on the money you are saving. Instead of saving money in your regular bank account, you may want to look into a longer term savings account which pays you more interest, such as an ISA.
If you are a first time buyer under 40, one example to boost your savings is a Lifetime ISA (LISA). You can save up to £4,000 each tax year with a LISA which will attract a government bonus of 25% on each new payment. Funds can be withdrawn without charge 12 months after opening the LISA. This particular scheme is aimed at adults aged 18-39 who are saving for a first home and buying with a mortgage for a property valued under £450,000, however there are other ISAs available.
2. Save regularly and consistently
Setting aside an amount of money at the beginning of the month is a great way to see your savings grow quickly. You could set up a standing order for a couple of days after payday to ensure money is being transferred into your savings account or ISA every month, without having to think about it.
3. Write your goals down in a diary
If you have a goal to save, for example, £5,000 by this time next year, write down a plan of how you aim to achieve it. Writing down a plan is a great way to ensure you can save your deposit. Always make sure you break it down into manageable chunks to make your goal more obtainable. Remember, once you have successfully saved the first £500 you are much more likely to stick to your savings plan.
4. Stop unnecessary spending
We all like to treat ourselves and sometimes we need it! But try and calculate how much money you’d save if you didn’t eat out as much or bought takeaway coffees. Making small changes like stopping unnecessary treats like these will make a massive difference when saving for your deposit.
5. Declutter and sell
Decide on a room to declutter and if you have items in good condition, you can sell these for extra money to put into your savings. Focus on a different room every month and organise your belongings as you go so that when the time comes to move home, you will be one step ahead.
6. Consider your current living situation
Renting can eat up a significant chunk of your monthly income, especially if you live alone. Consider moving in with friends or finding a house share, this can help you save money while you rent while also saving on utility bills. Living with family is another quick saving strategy, allowing you to save for your dream home. Alternatively, if you prefer to live alone, you can consider renting in a cheaper area!