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Saving for a deposit. Tips?(28 Posts)
Desperately trying to save for a house deposit - I'm in the good position of having a high(ish) income compared to my outgoings but I never seem to be see much progress in my savings account. Christmas has made a bit of a dent.
I know the obvious stuff like cutting out holidays and major spends, I don't buy clothes very often etc. anyway. Maybe it's just a case of being uber strict?
Anyone have any advice for how to see the pennies adding up to pounds?
Set yourself a spend budget (outside of all committed bills etc.) and then withdraw that in cash. Anything you have left in your account at the end of the month, move to an ISA/savings account.
I always find spending cash makes me more sensible with my money!?
Save 20% first then work out what you have left?
Look at your daily lunch budget. I was spending £3-5 a day at Pret. But actually 2 slices of toast and half a tin of beans is a perfectly good lunch. I have that twice a week, leftovers on the other 2 days and treat myself on Friday.
Other than that, put everything you spend in a month into an excel sheet and go through it line by line. Chances are you will spot lots of non-essentials and you can start cutting those out.
give yourself a budget for the month and stick to it. when my salary came in, I transferred all the money I intended to save that month to another account so I couldnt touch it.
so if I wanted to go over budget, I would have to do a transfer. I also find it makes balance alerts easier, you know at a glance how much you have available.
In all honesty I don't know how people do save for deposits these days. House prices are rising so fast here that even when you do save it's impossible to keep up and have enough.
Cut your spends back to the bare minimum if you want to seriously save! My disposable spends each week are £20 that's for travel & lunch at work. I eBay where I can, use topcashback, scan my receipts and get cash back there too. I've switched bank accounts for the bonus' & make sure I'm on top of all the bills to ensure they're the lowest they can be. It's all very boring, but I know it will be worth it in the end
Work out how much money you have left after bills and give yourself a weekly allowance - like pocket money for grown ups. I give myself £60 - for all entertainment/non essential food / 'stuff'. Amazing how quick it gets spent when you are not watching it.
Christmas should not be relevant - if it is, you are overspending. Declare adult present ceasefire and spend a tenner max on kids.
Stop all adult clothing buying except for essential replacements of worn out items. No magazines, takeways, books ( use library) , new gadgets. Hammer down utilities and insurances. Limit going out. Ease off the booze. I assume you don't smoke?
In fact, stop buying anything except food and other essential consumables.
Sounds like I need to nail down the little spends. Things like unnecessary spends on the dog (better kitted out than I am tbh) need to go. Good idea re lunches. I think I'll start a new year excel spread sheet and see how that goes too.
Pocket money withdrawn in cash for the month sounds good too. I have saved in the past when I've needed to!
I have a little loan that if I paid off now would eat all my savings (3k) but give me an extra £170 a month - any views on the most sensible thing to do with that?
Special, I don't drink and I don't smoke! Not a huge going out person either. I think most of my wasted money is going on lunches, spoiling the hound and probably my one splurge is using dermalogica. I really don't want to give that up but if needs must...
What is the interest on that loan? And what is the interest on savings?
The savings are just in a bog standard savings account making nothing really, a couple of pounds a year. The loan would be discounted if I paid it off early.. I've no idea what the rate is but there is another 2 years left to pay on it. Am I answering my own question here!
ok, in that case it is seriously time for a budget. Writte down all spends and it should shout out what is a waste. Lunches for a start. Batch cook!
dog can downgrade its brands too.
all cosmetics/creams are pretty much the same unless you are allergic to ingredients.
and yes, you are answering your own question - but everyone does need a savings cushion. So save a bit more and then get rid of the loan. And then save harder.
Have a look at whether you can save money/get cash reward by switching your banking/utilities/internet etc. It's an easy win for money saving and plan ahead for any upcoming insurance contracts making sure you use Money Supermarket etc to shop about
Decide how much you can save and move it into a savings account as soon as you are paid.
Get into a mindset that saving money is fun. Challenge yourself how you can save more and make your hard earned money work for you not someone else by stopping buying stuff you don't need.
Budget for the month then take whatever is left out of your account as soon as you're paid and place it in a savings account separate from your main current account so you can't make "little transfers" back to spend every now and again.
Definitely spend a fortnight - or month if you can - writing down everything you spend, be it cash or card, including the "little things".
Then you will have a clearer message about where your money is going.
If you haven't already, then spend one evening or weekend afternoon checking you have the best deals on all your phone, internet, insurances, utilities, etc - that can add up to £hundreds if you don't change each year.
Check your bank account - are you still paying for anything you don't really use ? - gym membership or a magazine subscription?
Set up a standing order to take £X out of your account when you get paid each month.... don't wait until the end to scrape things into savings, but save it from day one, and then, if you haven't got cash for it at the end of the month, you will go without it.
Have a serious look at your supermarket spend - I'm staggered what some people on here spend every week, when they could (if they wanted / needed to) only spend 1/2 of what they do.
the other thing is to think about how you can increase your income - maybe sell stuff, or are you able to do another job - bar work one evening a week (means you earn, as well as not spending that night - can be quite sociable in some bars or social clubs or sports clubs), or maybe register as a babysitter - when you can often get on with something else or just relax for 4 hours when dc are asleep, or some kind of home working (don't know what your skills are in)
Fab advice, thank you all for your help. I'll definitely get started with writing down every penny I'm spending and having a look at where I can cut back. Hopefully this time next year I'll be looking for advice on finding the best mortgage deal
Agree with starting a spreadsheet to track your outgoings, even if you just do it for a couple of weeks it should flag up where you can cut back.
I'd definitely recommend moving the money you want to save out into a separate account as soon as it gets paid in so that the option isn't even there to dip into it when you fancy treating yourself to a new jumper.
You should also be making money on your savings. Unfortunately interest rates are a bit crap at the moment, but there are still some good deals to be found for small amounts of savings. Money Saving Expert is really good for a summary of what's available. Also look at Help To Buy ISAs. I can't quite remember the details, but if you're eligible for one then when you put it towards a house the government will add 25% to the balance (there is a limit to what you can pay in though). Can only be used on houses up to a certain value, so have a look whether you think you're likely to be able to use it. But even if you can't, you still get your money and any interest back, you just don't get the extra 25%.
I've used an app called budgeted in the past which I really recommend. You enter your regular incomings/outgoings, so wages bills etc. along with your savings target and it will tell you how much money you can spend daily/weekly to remain on target. It also allows you to factor in one off larger purchases that you may need (i.e. If you pay for car insurance annually rather than as a monthly bill). You do have to be good at updating it with every purchase but it is by far the best budgeting tool I've used.
I saved up for a house deposit a few years ago with my husband. Our rent was low which really helped (£220 each per month) we did a spreadsheet and noted all outgoings. This helps you a) cut back unnecessary spendings but b) helps you come up with a figure to save. We saved £500 each per month and as soon as we got paid we transferred that money to an ISA so we treated that £500 like it was a bill to pay. I then took out what I could spend that month food and essentials in cash.
Other tips: sell anything you don't use/need on eBay. I made £200 there and paid for Xmas gifts from that. Get a help to buy mortgage the govt pay £50 for every £200 you save (if I remember rightly). Don't buy lunches out/ coffees etc. If you like going out consider doing cineworld if there's one near you. That gave me something to do every weekend without spending much (that's about £18 per month for unlimited films and we always took our own snacks/ drinks).
The best advice I could give is h
ave a look at apps that earn money. Enlightly (the best by far) one pulse, qmee and Voxpopme are brilliant I've made £100s over the year and kept all earnings in my PayPal. You can either add that to you're ISA or use that for gifts at Xmas or for treats. They're basically market research apps and take a few minutes to earn small amounts by answering qs certain companies/brands want to know but it all adds up.
Good luck x
Also something I learnt with our budget spreadsheet is to make a lot of all your annual bills; TV license, car insurance (much cheaper if you it annually rather than monthly), house insurance, even a Christmas budget.
Work out the total and divide it per month, put this much away in a separate account each month. This way, when the big bills come in they don't completely screw up your budget for that month (and the next few if you're really unlucky). It's so nice when those big bills come in, to simply pay them because the money is already there, rather than stress or have to put them on a credit card.
We've paid off a huge debt this year by being really strict with ourselves. Payday comes, money is transferred from individual accounts to:
1. An account to pay off the debt (it's due quarterly so we move the monthly amounts to a separate account so we're not tempted to spend it)
2. An account to pay monthly bills
3. An account to pay the annual bills
4. An agreed (small) amount for personal spends, lunches etc.
Only carry around cash or the card for the personal account so you can't easily access the others.
Our debt account has now turned into the saving for the house deposit account and as we're already disciplined it's easier to put the money in and not spend it.
My friend did this seriously a couple years ago and I. Remember her withdrawing £100 pound and splitting it into 4 envelopes with £25 for her to spend on herself- seemed to work!
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