Getting a foot on the property ladder is something that many people want to achieve, but it is certainly not easy these days. The cost of buying a home can make it hard for people to afford, especially when the cost of renting can also be so high. This often results in people feeling trapped in the rental market, so what can you do to save for a deposit? You will want to put down around 20% as a deposit, so it is important to start saving early and give yourself enough time to get the money together. Here are a few tips for saving up for a deposit.
Rent a Spare Room
As mentioned in the intro, many people get stuck in the rental market as it can be hard to save money each month when you have to pay high rent costs to a landlord. Moving back with your parents is not always a good option, so a smart way to save on rent costs is to rent a spare room in a house share or private house. Renting a spare room will be a lot cheaper, and you are also able to split the bills. You can browse spare rooms to rent all over the UK, so hopefully, you can find somewhere that will allow you to make significant savings each month.
Create a Monthly Budget
If you have a savings goal in mind, you need to set yourself a budget to ensure that you are tucking enough money away each month. You should draw up a monthly budget that allows you to put enough money into a separate account for your deposit. If buying with a partner (a great way to make it more affordable), you should both try to add as much as you can to this account each month.
Increase Your Income
Increasing your income is smart because it can help in a few ways. Obviously, earning more money each month will help you to reach your target much faster, plus you could also get a better mortgage if you earn more money and afford a nicer home. You can increase your income by asking for a promotion/raise, changing jobs, earning new qualifications to climb the ladder, doing part-time work or starting a side hustle.
Make Your Money Work for You
You also need to make sure that you are getting the most out of your money. If you put your deposit in a regular account, you might find that it is losing value as a result of inflation. Therefore, you want to find a high-interest savings account and look into schemes like a Lifetime ISA (LISA) or Help to Buy ISA to get the most out of your money.
It is also important that you are realistic with your savings goals and give yourself enough time. It is important to scrimp, save and work hard, but you do not want to burn out or give yourself a terrible quality of life while trying to save.
Saving up for a deposit is tough and can take some time, but hopefully, the advice in this post will help you to get there faster.