Tips for Saving for a Deposit

If you want a home, then you will need a deposit. Whether this is for a rental home or to buy yourself a home, you will need to save up money to put down as a deposit. With a rental it will probably be a few months rent perhaps plus a bit extra but for a mortgage it will probably 10% of the value of the property. Despite the fact that the amounts will be quite different, the method for saving up will be the same.

Consider debts

It can be a good idea to start by having a think about your current debts. If you have a lot of these, then you could be paying a lot of money in interest payments towards them which could be better being saved towards your deposit. Therefore, it could be wise to think about repaying these before you start saving for a deposit. Also it could be good to get rid of some or all of them as you will have to find money for mortgage repayments or rent payments regularly and if you have a lot of debt repayments to make, this might make it much more difficult for you to be able to afford them. So take stock of your current financial situation and think about whether you feel you should be repaying some of your debts before you start to think about saving up money.

Make regular payments

It is wise to make regular payments into your savings account. If you make ad hoc payments, then you could find that you will not save a lot. If you set up a direct debit, to transfer some money into your savings account each month just after you get paid. This will ensure that you do not forget to save any money in the month. Some people wait until the end ad save whatever is left. This is certainly something you could do, but if you do not save any at the beginning you may find there is nothing left to save. If you save the money first, then you will have to budget more carefully through the month to make sure that you do not spend more money than you have in your account. You will want to save as much as possible so that you can get the deposit together as quickly as possible so that you can move quickly and so budgeting carefully will be well worth it.

Spend less

If you can reduce your spending then you will be able to save more money. It is not always that easy to do this but it is a good idea to have a think about whether you can do this. There are some things that are easier than others. To start with it is always a good idea to think about whether you can spend less on the things that you buy. You will find that a lot of the things that you buy can be bought cheaper elsewhere. This means that you might be able to still buy all of the same things that you always do but pay less for them. Of course, you will want to make sure that you are getting good value for money and you do not want to buy lots of cheap things and find that they do not last long and you have to buy them again.

Another way to spend less is of course to buy less things. This can feel really hard though, because we do not like going without. However, it is worth keeping the goal in mind of needing to save up to be able to move. It is also worth bearing in mind that once we have a rent or mortgage to pay we will need to make sure we have enough money for that and we might therefore need to cut back on spending for that as well, as buying less things could be the way that we do that.

Earn more

A way to be able to have more money is to find ways of earning more. This could be in your current job by doing more hours or negotiating a rise but this is not always possible. It might be the case that you will have to get a second job or find a way to earn some extra income in a different way. There are various things that you could try such as freelancing, temping, taking on a second job or online work.