Getting on the property ladder for the first time is harder than ever. Prices are going up all the time and wage increases don’t reflect the rising house prices. The biggest hurdle that first time buyers face is saving up the money for a deposit.
This is especially difficult if you’re already spending a huge chunk of your wages on excessive rent. You might be tempted to just give up and carry on renting forever but there’s no need to be so drastic, you just need to change your spending habits in a few simple ways and you’ll find it so much easier to save the money you need for a deposit.
Stop Spending Your Savings
This might sound like an obvious one but it’s worth mentioning. A lot of people find that they save really well for a couple of months, only to find that they end up spending it all. Sometimes, you end up spending your savings on necessary things like car or home repairs.
The simple solution to that is to start an emergency fund separate from your deposit savings so when those unexpected expenses do hit, you don’t have to clear out your savings. If you’re spending the money on non-essential items, you just need to start being more disciplined and rewrite your budget so it only includes the things you actually need.
Subscription Creep
Subscription creep is something that ruins a lot of people’s budgets without them even realizing it. When you’re paying for subscriptions to TV services etc. it doesn’t seem like that much money. But it soon creeps up on you when you start subscribing to more and more services. Before you know it, you’re spending a huge chunk of your monthly income on various subscriptions.
If you’re finding that you don’t have as much money as you think you should at the end of the month, ask yourself, is Netflix ruining your budget? More often than not, the answer to that question is yes. That doesn’t mean you can’t use any of those subscriptions but most of the time, there’s no need to have more than one. Pick one that you want to keep and get rid of the rest. You’ll free up a lot of money to go into your deposit fund.
Downsize
Paying rent makes it a lot harder to save up for a deposit so if you can cut the amount that you’re spending, things will be a whole lot easier. One option is to move home and live with your parents while you save but most people don’t want to do that.
You can, however, consider downsizing. If you move into a smaller place or even move to a cheaper neighborhood, all of the money you’re saving each month can go straight into your deposit fund. People are often put off by the idea of moving into a smaller place but you’ve got to keep in mind that it’s only going to be temporary. If you’re strict with your saving then you can manage it in a year and move into your very own house.
Saving for a deposit on your first home is never going to be easy but if you make these simple changes, it is possible.
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