If you had to save £6k this year, how would you do it?

[pinkfishbluefish]

Two incomes no DC yet, combined is circa 3800-4000 overall take home depending on overtime.

Essential outgoings are 2.1k. This includes rent, bills, food, one car loan, car insurance.

Left with between 1700-2000 a month. Within this must factor in fuel, days out, meals out, people’s birthday gifts, clothes.

We need to save £6k quickly this year - this would take us to £10k at which point we have an incredibly generous offer from my parents that they will match that amount and we can then use as house deposit. We’re desperate to own property!

We are trying to work out the best approach. If we lived off one income and saved the other this would mean no room for haircuts, holidays, clothes or meals out. I feel that might be a small sacrifice to make as then we would be at our goal in 3 or 4 months time. Is it unrealistic to try to do that? Other thoughts are getting a second job but not sure if that’s a bit futile after tax.

Except fuel, none of that is essential. If you could do without all the things, you could do it in 3-4 months.

Even allowing a couple of hundred a month for gifts, clothes and days/meals out you could do it in under 6 months.

You never know, a few months of trying to enjoy life on a smaller budget could give you a whole new mindset about what is and isn't worth spending money on and put you in a much better position to be able to save, that would allow you to do things like buy cars without borrowing, overpay your mortgage when you do buy and not be in a position when you don't have much in savings, even though you have a very healthy disposable income.

It's also much easier doing it in the warmer months of the year - taking a picnic to an NT property is fun in June and almost free but much less fun in January! We've also enjoyed exploring the local area on foot rather than going further afield.

We spaced out haircuts more. So mine was every 8 weeks and is now about every 3 months (basically once in the period of intense saving). DD and DH more frequently than this but stretching time between appointments.

My mobile phone is on one of the cheaper tariffs as it's out of contract.

Make the most of free local resources eg the library for warm space, free books and you can often access ebooks that way too.

We rewarded ourselves with a 'treat' at the end of each month - this has varied between a book or magazine to coffee and cake in a cafe.

Set up a savings account and a standing order.

No haircuts, holidays, new clothes or meals out for four months is an absolute doddle. I’ve gone literally years without those things in the past.

It’s perfectly doable if your desire to save exceeds your desire to spend (on non-essentials). Just the same as managing on a very low income really. It’s not hard to get out of the habit of buying stuff you don’t need - haircuts, holidays, new clothes and meals out are absolutely not essentials.

Also look at the Moneysaving Expert budgeting section.

If you've never done things like review all your bills to check that you're paying as little as possible (for example, how much do your phones cost, how much do you spend on groceries, do you use all the subscriptions you pay for?) then you might be able to shave a little off your essential outgoings, freeing up more that you can save.

Having a bit of free money will also mean you can pay your car insurance in one go, which is cheaper than paying monthly.

I did this from necessity when my partner lost hos job. 2 years we had no meals out, no coffee out, took sandwiches to work, spent limited amount on food (£50 a week but this was 10 years ago) I walked a lot rather than using the car or train. Presents we stopped totally as we couldn't afford it. We made our own bread, cakes, biscuits, wine and beer. Sold things on ebay, grew our own vegetables.

We ended up saving £10,000 in 2 years out of just one income as we were so frugal.

If you're going to spend it on a house deposit and you are both under 39yrs old. I would open up a LISA each. You can add £4k per year and the government will top it up with another £1k. £333 per month in each account that's 10k saved in 1 year.

This is easy enough on your wages. I take home a bit less than your household a month and save £550 per month plus overpay the mortgage by £200 a month (Mr Monkey has not been earning for 6 months or so as he has been setting up a business but that has changed now as he has a new job and the busienss is paying a bit) Treat the savings as a monthly essential bill and set up the DD on payday.

I suspect our outgoings are a little less than yours (around £1800 a month) as we do not own a car and probably spend about £60 a month on public transport.

We haven't wanted for much to be honest - we still go out, buy clothes, take a holiday.

I'd be saving more than that. Once you get a house how are you going to furnish it unless you already have all your furniture to take with you.

I take over less than you About £2700 my bills are £1.6k and I still manage to save £800 pcm. Used to be £1000 but I've recently needed to pay to see a chiropractor and decided spend some additional money on other health related acitivites.

This. Pretty simple isn’t it.

I would just only buy fuel and essentials between now and Christmas if you really want a house.

£1500 a month x10 months =£15k

You will want more than £6k as unless you buy a brand new place you will have lots of other expenses buying. Fixing up. Buying home stuff or replacing.

That’s leaves you £300-500 a month still for fuel and extras

Decide what your priorities are

Some people would rather go without anything other than basic bills for a short amount of time, others would like to have certain discretionary spending and save over an extra couple of months.

Once you decide which camp you fall in, agree your discretionary spending and put everything else into savings.

Christ alive, just do without meals out, new clothes, holidays and buying people presents for a year. Yes, that's right, a simple "we're not doing presents this year as we're saving for a house deposit" is perfectly acceptable.
When I was saving our house deposit (with no help coming my way from the bank of mum and dad), once our bills and food shop was done, I drew out £15 cash per week and that was ALL I spent. I walked everywhere and ate pasta pesto EVERY day for a year.
Jesus!

You have to consider the market too. More stock in spring and summer. I'd want to be considering an offer by autumn when sellers are facing the dire months and want rid.

Personally I'd transfer every penny that isn't assigned to a cost at the beginning of the month and try to live off the absolute minimum (keep some easily accessible in case you need it but you hopefully won't unless it's an emergency).

A few months going at it like this will reset your more wasteful habits and set you up well for future.

Me too! it sounds grim, but it is really doable, with a bit of imagination.

Given no DC, I'd take it as a no spend challenge. I've had times as a student when I literally had no money, after student halls and three meals a day paid for in advance.

Id rather just stop spending in anything other than necessities than try an set a limited budget. Expect there may be bumps in the road but generally, it's a test of your ingenuity.

Spend some of the time which used to be for entertainment on trawling the money saving expert site to find good deals in utilities etc. don't bother with the free or cheap tickets for things.

Challenge each other to think of things to do in your free time which do not involve spending anything.

Think of it as an investment for your future selves. As PP has suggested, keep going to build up a fund Tom pay the legal, tax and moving expenses of buying a new house. And perhaps plan something (low budget) with your parents to say thank you.

Enjoy. I look back fondly on those student days. Always useful to have a story to tell about 'something no-one knows about you' that you did no spend for so many months.

@FinallyHere thank you! It will be a good story someday for sure

We saved by living off one salary and putting the rest in a savings account. You don't need new clothes, holidays or takeaways. It's amazing what you can do with out for six months or so. Put off all but essentials.

Echoing what some others have said, I can't see any reason why you couldn't already easily save the deposit in a year based on your own figures. Utilise what your banking apps offer you in terms of savings assistance and set up standing orders to a savings account, round up all your purchases and put the excess into savings and so on.

Be aware that affordability factors heavily in mortgage offers so when the time comes it will only be a positive to demonstrate that you do not spend at capacity every month (regardless of on what). If your parents are matching your deposit also be aware that you will need to go through a solicitor in order to use this amount as deposit. They will need to sign paperwork to confirm that it is a gift and not a loan and that they will never require it back or have any financial interest (as a result of paying towards) any property you purchase. They will also need to be willing to provide lengthy bank/savings statements to prove where that money came from and that they have had it in their account for a certain amount of time.

Lenders have varying rules about eligibility for gifted deposits and will only accept them from certain relatives. I know of someone who had an issue because the funds came from a joint account- a blood relative parent (eligible) and their very long term partner of 40 years but unmarried (not eligible). They also were not keen to provide their bank statements but couldn't proceed without. In the end the parent had to source money from a personal account instead.

An inspirational tale of a couple who, against all odds, went without haircuts for a few months to access intergenerational wealth. Hairs and Graces, staring Lily James, coming to a cinema near you in 2025.

I think you could save double that.

This. Set up bank transfers on your paydays for a total of £500 per month, straight into a savings account.

If your parents have the money, AND if you are okay with buying in 1 years time: put £1 in a LISA right now. This minute. Each. So £2. Clock starts ticking.

Your parents need to then gift you the money in the next week or so. You’ll transfer in £7998. (£4k each minus the original pound). This will get a bonus paid in 3/4 weeks. With MoneyBox, you’ll get 2.75% interest plus a 0.75% bonus in 12 months. You’ll have £10,375. (Maybe a bit less in reality due to govt bonus not accruing for full year).

After April 5th: start moving your savings into these LISAs. 3.75% is decent. Max out £8k if you can by April 2023: get another £2k if you are short, and your parents are still up for £10k gift. If you reach the £8k, then open a Chase account (3%) or a FirstDirect with 7% regular saver (£300 max per month)(ideally switch for £175 one off bonus).

It’s April/May 2024. Your parents have gifted £10k, you’ve saved £6k. The govt has given you £4k. You have £20k (plus some interest).

Now if you have any spare cash AND you find a house: transfer as much as you can into the LISAs ASAP. Make sure any govt bonus comes through before you exchange etc. I’m not sure exact details on timings. (FTB myself).

Good luck.

Actually, if you really intend on buying in Spring 2024 then keep that saving money in Chase/FD reg saved until March 24. The 0.75% bonus from MoneyBox will take a year to mature from when you pay in: so it’s inferior to the aforementioned.