12 Tips For Saving For A Property
Saving for your first property is one hell of a task. Not only have you got a big old deposit to put down but there's also survey, valuation, mortgage and legal fees as well as potential removal costs to pay for and don't forget, you'll need to kit out the place as well. So if you've got your future house in mind but don't know how to make it a reality, here are my top tips for saving for a property to get you there!
Start saving early
If buying a house is 100% something you want to do in your life then why not start saving now? Unless you can't afford it, there is nothing bad that can come of saving early even if it's just £50 a month. And if you have a target in mind, saving sooner just means you don't have to put aside as much money each month.
I started saving money years before I even thought about buying a property which meant that when we decided to start saving 'properly' for a house, I already had a head start!
Get a Lifetime ISA
I could waffle on about Lifetime ISAs until I'm blue in the face but I'll keep it simple for the sake of this blog post. You need one.
It's basically a bank account where you can deposit up to £4,000 a year and the government will add a 25% bonus to your savings. The money saved can only be used to buy your first home or for later life when you're over the age of 60. You need to be between the ages of 18 and 40 to open a Lifetime ISA and please remember that you can only get the bonus if you are buying a property under the value of £450,000. Don't do what I did and ignore the small print and then realise only after you've bought the property that you're not entitled to the bonus (not one of my finest moments).
If you are planning on buying a property with a partner then make sure they have a Lifetime ISA as well so you can both use the bonuses. Just think of how much extra money that is for literally just depositing savings into a particular bank account!
Set up a joint account
If you already know you're going to buy a property with someone else, set up a joint account for any extra you can save outside of your Lifetime ISA. I've learnt from experience and trust me, it'll make things much easier further down the line when you come to send off your proof of savings and deposit.
Set up a direct debit for your savings
One of my best tips for saving in general is to set up a direct debit every pay day which automatically transfers your savings into the right accounts. That way, you'll get used to living on a lower income and forget your savings even exist!
Hunt for the best high-interest savings accounts
There aren't as many high-interest savings accounts as there used to be on the market but it's still worth doing your research to find out which ones could make you the most amount of money.
If you struggle with overspending then it's time to start budgeting. I really recommend using Monzo for this (I'm sure there are other online banks that do this) where you can budget different areas like eating out, shopping, etc.
Move back home
I know this isn't the case for everyone but if you're fortunate enough to have family close by, ask them if you can move in to save some money on rent. It's so difficult to save money when you've got such expensive outgoings like rent so try to eliminate the problem by moving back in with your parents. Yes, it might be a pain but it'll be worth it when you can move out way sooner than you'd hoped!
I've heard wonders about Plum which is an app designed to save you money with you even noticing, so they say! It uses AI to take small amounts from your account and deposit it into a savings account which sounds simple but the reviews are amazing!
You can also use it to round up spending (which I do on Monzo) where say you spend £1.20, it puts 80p into your savings pot. I've saved over £200 by doing this and although it was my money anyway, it's nice knowing it's in a separate pot which I haven't spent!
Cut down on everyday spending
When you're hardcore saving, it's important you do it properly. Look for ways you can save money whether that's cancelling subscriptions you don't use, buying a railcard if you regularly catch trains, stopping buying takeaway coffees, etc. You'd be amazed at how much it all adds up to!
Utilise cashback and loyalty schemes
I will never understand why people don't make the most of cashback websites because they are such a great way of making money just by clicking through from a different website. In the last two years, I've made over £180 on TopCashback and if there's anything you should know about saving for a property, it's that every little helps!
I also recommend signing up to your favourite shops' loyalty schemes. The money I've saved through personalised offers and collecting points is crazy!
Invest in stocks
Now investing in stocks isn't just something you can do willy nilly. First of all, you need to have the mindset that you can afford to completely lose the money you buy shares with. Whether that's £10, £100 or £1000, only separate with money you wouldn't be upset about losing.
You'll need to download an app like Freetrade or Trading 212 where you can buy and sell stocks and that's where you make your money. Before signing up, use a referral code to get free shares and then you've made money before even starting properly!
Once you've done your research and have learnt a bit about the stock market, you'll find that investing in the right companies can give you a much better return on investment than if it was just sitting in your bank account!
And even if you don't want to risk your money investing in stocks, you can still sign up and make money just by referring people!
Switch to a new bank account and earn hundreds
I'm sure you've seen the adverts before but did you know that just by switching to a new bank account, you can earn over £100? If you're not fussed about sticking with your current bank, this is well worth a go to add some more money to your savings!
Make some extra money
We'd all like a bit of extra money right? Well use your initiative and work out a way of doing that. Could you sell some old clothes or technology you no longer use? Can you use any of your skills to freelance for businesses? If you've got a spare room, perhaps you could look at getting a lodger?
Well that ended up being a beast of a post didn't it? It may have taken you a while to read but I hope it gives you some handy tips on saving for a property as it can seem like an impossible task at times. I think as long as you're motivated, you'll make the effort to save money and you'll be on a roll in no time!
Do you have any tips for saving for a property?