To ask for deposit saving advice. For the first time ever we might be financially ok. Any advice on how to budget the income and finally save for a house deposit ?

[Seasidecoast]

After over a decade of financial struggles , making sure we got enough to pay bills, moving countries, changing jobs , having 2 children, living in badly rented flats DH (34) and I (32) might finally have some financial stability soon. We always lived from one bill to another and never had any disposable income, no financial or childcare support from our parents. After two long maternity leaves I have finally secured a wee job at the local school and DH is due a promotion this summer. Its a big thing for us as we used to live on a student scholarship with our eldest barely affording food. We never even dreamt of saving up for a mortgage as barely had anything left each month.
We might be able to start actually saving up soon and perhaps manage to save a decent deposit within the next 4 years. So I would appreciate any advice on how to not blow the money away and save wisely to save up for a deposit? I might be earning about 20 k before tax and DH about 60k from this summer

P.S its not a boasting post, we have never had any disposable income ever. There were times we simply survived and we used every little bit of our savings during Covid to move back to the UK for a new job and to rent somewhere. So to think that it all might finally pay off is a very strange feeling.

This is absolutely crazy advice. Someone who earns £60k a year doesn't need to put £10k a year into a pension when they're saving up for a house deposit.

Plus you don't lose any child benefit until £60k now, and even then you only lose a small amount.

I'm saying this from a position of financial comfort so I appreciate it may not be the most appropriate. But what me amd DH have always done is have a budget spreadsheet with all our outgoings on, and a target max for groceries spend every month. Then we've set an amount thay we each save - some jointly amd some personal. And that amount is also fixed. The day after our salaries hit our personal accounts our bills and savings/pension contributions leave by standing order. Then whe we get pay rises/bonuses we decide how much is going to savings before it lands in our account, and adjust standing orders accordingly. This means you never feel the loss because as soon as it is in your account you squirrel it away. As our salaries have risen over the years our quality of life has got better of course, but we prioritise savings and pension above any kind of lavish lifestyle stuff. We are very fortunate to have good salaries, but we have also been really careful with money and have been able to pay off our mortgage 10 years early as a result.

The problem is also inflation. If you want to have a ‘gentle’ approach to getting a deposit together, this will take you longer to achieve, by which point, prices will
have gone up so the deposit needed will also increase. So you will need more time to save for the increase in deposit, by which point house prices may have gone up further and so on. So, getting on the property ladder may always feel
out of reach.

it is possible to live and save at the same time. If you have £1500 ‘spare’ each month, allow yourselves a portion of this to enjoy and save the rest for deposit.

I think just save as much as you can, but don’t sacrifice quality of life. And don’t buy a house you don’t love.

When Dh and I had our first dc, mid 20s to early 30s, I was on a PhD studentship and Dh was earning £18k a year. We managed through starting a business, me getting my PhD and finally a FT job, with no family help with childcare. No subscriptions to things, we cooked from scratch, old secondhand cars, our holidays were all camping or going to stay in a family member’s second home for free. We didn’t buy our first home until I was 40, so 10+ years of saving (obviously we were earning quite a bit more than £18k by then). We managed to save close to £200k. That was purely just earning loads and not spending loads. But we also had an inheritance in that time, so we were able to bump up the final deposit.

For us, I think the key thing was waiting. I know everyone says get on the ladder, but we waited until we were truly in a solid position to buy and buy a house we really loved. It was very worth the wait and has been a great investment for us.

It seems after food and bills you have 2155 left my suggestion is that first you save 3 months living expenses as emergency that's 9000 so that will take about 6 months putting 1500 a month into it. Put the other 400 aside for family treats and holidays it will be 4800 a year which is plenty for a holiday some days out Christmas and Birthdays . The remaining 255 should be for unbudgeted items clothes, transport hair cuts. Didn't see any figures for phones, tv licence Netflix etc or insurance but with no car and renting contents only should be fairly cheap .often people forget to budget for expected but occasional expenses.
Emergency fund should be for genuine emergencies not Christmas etc.
I would put the holiday savings in an instant access savings account several paying around 4% the emergency fund should be in something similar. The 1500 should be in a cash ISA several pay around 4.5% do not buy premium bonds while there's a small chance you might win if you don't it's not keeping up with inflation. 1500 a month is 18000per year so 2years is 36000. Three years is about 50k .At 40 I would definitely not max the mortgage just a decent 3bed house go online see what you can get for 3 times joint salary (240) and 50k deposit and 25 years max. So would 300k but something ok in your area. Using 300k purchase price with 50k deposit is approx 1389 per month for 25 years almost identical to your rent. However a 400k house would be 1945 a month which is a big jump

I appreciate you sharing your experience ! Very close to how our situation is and yes we only want to buy a place we would truly love and call home. Really find your views very close to ours we will try to save as much as we can and look around for good properties.

This is absolutely crazy advice. Someone who earns £60k a year doesn't need to put £10k a year into a pension when they're saving up for a house deposit.
Plus you don't lose any child benefit until £60k now, and even then you only lose a small amount

I stand corrected! I see it changed in April 2024. DD's 20 and you lost all CB when your earnings reached £60k. Glad it's changed.

Anyway, it appears OP isn't that motivated to save for a deposit. She wants to give her DC "experiences."

This is a really unkind thing to say. It’s ok for the OP to save for a deposit- in a timeframe that suits her- and have her experiences. She doesn’t need to sacrifice anything just because you think she should

My children had to endure living in a moldy house and coughing at nights for years because we didnt even have money for a deposit or a stable income to move to a different place. Whilst they were sleeping my husband and I were applying for all the jobs around the globe (not just the same country) and would have gone to any country simply for some stability and a better hope for our future. Apologies, for wanting to treat my family to a tiny bit of something and still have a dream of having our own home one day .

I'm not saying you shouldn't treat your kids but you were dismissing the advice to invest in LISAs because you wanted to give them "experiences." The "lovely flat" is only yours for as long as it suits the landlord.

How bizarre- how were you going to afford the massive expense of relocation for low paid jobs?!?

Congratulations OP! Sounds like you’ve both worked really hard and deserve your good fortune.

Best idea is don’t see the extra money as yours to spend. If you can live on your current amount of income without being in dire straits can you simply save the rest of the “new” money?

A standing order set up for the first day of the month for all the “new money” in to a cash ISA or premium bonds or high interest savings account is a good bet and a safe place to keep it. Interest on the ISA or savings account may go down after a year or two. If it does, look for a better rate elsewhere and switch accounts, moving your standing order. Don’t touch the money unless it’s an emergency.

Premium bonds aren’t great as you don’t get interest, but you get entered in to a prize draw. This generally works out less good than interest on an ISA/savings account, but it’s a very safe place for your money, and you could win big!

Also, don’t neglect your pensions - both put max amount in that you can contribute that your employers will match. If you have defined benefit (career average or - unlikely nowadays - final salary schemes) put in as much as you’re required to by the employer.

If you don’t want to save the full amount then try and save £1500 a month at least. On a new salary for you and £60k for DH that should be more than doable. Good luck!

Also echo PPs who have recommended LISAs. It’s free government money in top ups - go for it.

Yes to the Lisa!! We both got 5k each top up for our flat!

so we only had to save up 30k and we ended up with 40k!

you do heed to chip away at it! We used to take a break for a month here and there and use what we would have on treats/trips etc

but mostly we just went all in on it to get it done :)

good luck

Save up £2k as emergency fund and lock in an ISA. Open a LISA each and put £4k in each. Government will add £1k to each of your accounts donyoull be saving £10k pa.

We were never after low paid jobs. We had the qualifications plus a little bit of money for relocations needed. Covid was a bad timing for us.

Are you sure? You’re doing a low paid job now, your husband doing an average-ish paid job.
Relocation is hugely expensive, moving, visas, savings requirements.
I can’t imagine considering immigrating when I was living hand to mouth in the uk and can’t see that it’s worth it at all for less than 6 figures although I would want substantially more than that to be honest.

Are you not from the uk? I’m miffed by this very causal approach to moving abroad, and opening up your job search to many counties. How were you going to get visas!?

this isn’t really relevant but I’m sort of fascinated now!

I understand wanting to give some experiences and also to save up for a house deposit, but you need to decide how serious you are about this. Let’s say you have £2k after your outgoings left over each month. How much do you want to lock away for a house deposit. Could you lock away £1k and then have £1k left to play with? That should give you enough for a cheap holiday each year, some disposable money for days trips every month and money for Christmas and birthdays. You won’t be going all out but could have some experiences whilst also saving £12k a year for a deposit.

For what it's worth, I think your plan is sensible OP. Life is for living too!

I like the suggestion of the poster above to lock away some and keep some ready money too, that's what we do too.

There is not need to be mean. I am doing this job because it lets me be with my children during school holidays and pick them up from school and I dont pay for after school care. You cant imagine immigrating perhaps because you never had a situation when your documents are expiring and you cant extend them, you are in a relationship with someone with a different passport, there are no jobs in your country at all or there is war in your country and you have have to leave everythint behind and try to grab any opportunity you can. There are lots of relocation packages offered by companies all over the world its 2025 and people move for different reasons .

I wasn’t intending to be mean at all, just interested. I did ask if you weren’t from the uk and seems like you’re not so you have more opportunity to get visas and move etc.

I think the best way is to pretend if it was today which houses could you afford based on your salaries and what deposit would you need...THEN it's up to you to decide how fast you want to achieve that goal (or what is realistically possible)

Then the LISA for savings and to consider shared ownership as a way of getting on the property ladder.