It’s a question we get asked a lot – How do we save money for a deposit when renting?
Looking to buy your own place and move out of rented accommodation?
What a great thing to be doing, to get on the property ladder is a wonderful sense of achievement and a milestone to be proud of.
So you’ve sat down and worked out that you want to move. You may even have found your ideal location, perhaps even seen your dream pad.
Four beds? Nice garden? Garage? Room to grow your plants or even grow your family? Brilliant.
Unfortunately, at this point, some people stop right there though when they realise they’ll have to put a deposit down. It is said so many times “I will never be able to afford it!”
There are a number of schemes available to help. The general rule of thumb is that you’ll need around a 15 per cent deposit.
That can mean a large sum of money saved in the bank before you even start to make an offer for your new home.
It can seem to be an uphill struggle! But if you’re prepared to work hard to save up for a deposit, that dream can become a reality.
So, what can you do?
6 Ways to Save Money for a Deposit
Seek help from a trusted mortgage advisor
First off, speak to a professional mortgage advisor and work out how much you need to save and over what period. If you don’t know what you need, how will you know what to put to one side?
Mortgage Squared are more than happy to have a chat with you in regards to this.
Can you move into a place where the rent is cheaper and put aside what you have saved into your deposit fund? Yes, it might mean not living exactly where you want, but it’s your dream to own a property.
Short term planning
Along similar lines, have you thought about moving back home with relatives? Sure, it may seem like you’re going backwards and could lead to tantrums and tears, but think of the money you will be saving!
If you’re paying for a car, do you really need it? Can you buy a smaller one or get rid of a car altogether? Yes, you’d have to think of other means or transport to get about for a while, but think of the bigger picture.
Look into bills
Switch your energy bills – this sounds small fry but its good advice. It shows how much you can be saving. Also check your council tax bill – are you paying too much or should you have a discount? That money is better in your savings pot.
Are you spending too much on clothes? Cosmetics? An expensive gym? Eating out? Again, these may be lovely things, but you’re on a mission. Cut out or slim down your day-to-day living expenses can make a huge difference. We bet you’ll soon see how frivolous a lot of your spending is!
Think about it. Say you’re paying £50 a month for a gym membership, can you workout at home instead using YouTube for example? That’s a £600 saving already. Put that in a savings account with the rest and it all adds up.
How much is a nice coffee, and how many times do you have one during the week? Sounds daft, but if you’re having a ‘double frothy chocolate top latte’ two or three times a week, you’re drinking your savings away. Treat yourself for sure, but keep an eye on the spending.
If you are using a bank with an app you can manage and monitor what you’re saving or spending. So, now you’ve started to save money – and put it away in your pot – you should think about earning a few extra pounds too.
3 Ways to Make Money for a Deposit
- Have you thought about freelancing or tutoring in your spare time? If you have a skill or can offer help to someone, this can become a lucrative second income.
- What about selling some of the things you’ve collected over the years and are sitting gathering dust on a shelf? There are so many apps you could be using to help you manage online sales of items such as books and clothes.
- It’s cheeky, but don’t forget to ask your boss for a pay rise! If you don’t ask, you won’t know the answer. Think about how to broach the subject and make sure you explain why you think you deserve a raise. You should show your boss how your work and commitment will benefit the business rather than making it all about yourself!
The Bank of Mum and Dad!
If you’re saving and being careful but still not getting near your total, there is the potential to use the Bank of Mum and Dad. We know that this isn’t available to everyone, but it’s worth the chat to see if a relative can assist you. With this option though, check out the legal rights and responsibilities as it may not all be straightforward.
Mortgage Squared are always available to offer advice so please don’t hesitate to call us on 08081551807.
Email us at email@example.com
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