When telling people how to save for their deposit, the same culprits come up every time: stop with the brunches, the nights out, the holidays, and
move back in with Mum and Dad.
Whilst moving back 'home' will help you save more quickly, there are many reasons why it might not be right for you. It might not be possible in terms of space, it might increase the length and cost of a commute, or it might put too much pressure on a delicate relationship.
For those in couples, it can be hard to retain privacy and authority over your life, and both children and parents can find themselves reverting to old habits – scolding for an unmade bed or arguing over petty differences.
So you’re renting, but you still want to save as much as you can. You’ve tightened the belt, you’re forgoing the takeaways and holidays, but rent is always going to be your biggest outgoing. So how can you supercharge those savings?
1. Switch out your providers
We may be biased, but we’re a fan of comparing services to get the best deal. There are loads of websites who will let you compare your energy providers, internet providers and insurance deals. Don’t spend more than you need to – get yourself the cheapest deal and watch how your monthly outgoings drop!
Keep an eye out for good deals, be aware of when your contracts end, and don't just sit idly by because it seems like a hassle - providers know you often won't bother!
Take the time to compare, do the maths and get the best deal.
2. Act like you’re the parent
Did you grow up in one of those households where you were reminded to turn off the lights, not leave the water running, or not to spend hours on the phone? That’s because your parents were footing the bill. So take those lessons and run with them.
You can severely cut down on bills by watching your electricity usage (you could get a smart meter) and water (swapping baths for showers, only running washing machines at full load and you can get a
water saver to put into your toilet cistern. It will still work normally, but the amount of water used will be limited.)
These changes may feel minute, but if you’re aiming to save up a deposit over a large amount of time, making
small changes into habits is the easiest option.
3. Downsize
It could be that moving to a smaller, cheaper flat from your current place would save you a significant amount every month, but be sure to do the maths. If it adds to the cost of your commute or has high bills attached, then maybe think again.
Similarly, whilst downsizing can be a good option if you're renting in an expensive area, or have an extra rooms, the cost of moving can be high, especially if you need to come up with a deposit, fees, a month’s rent, and pay for removals costs (though
we can get you the best deal on those).
So make sure you fully weigh up how much you’ll be saving and if it’s really worth it long term.
4. Use what you’ve got
It’s unlikely you’ll be able to sublet a room as part of your rental agreement, but there’s no reason you can’t make the most of what your property affords.
For example, if you have a parking space you don’t use, space to store a friend’s items whilst they’re away, or an office space you can make use of, all of these elements of your home can make you money. Just be sure to check your rental agreement for what’s allowed.
5. Make your home energy efficient
In the winter it is easy to up those energy costs, especially in older properties. If you have the chance to insulate your home, do so. Mention to the landlord or letting agent if there is damp in the property, but if you are left to insulate yourself, invest in heavy curtains, as well as draught excluders (which you can cheaply make yourself).
Don’t fall into the trap of never turning your heating on – keep it on a timer on low, so that the property never becomes freezing, but isn’t wasting money.
6. Make home a holiday
Money blogger
Jenni Hill from Can’t Swing a Cat said that in her time saving for her house, she couldn’t bear to go on holiday, because she worked out how much she’d be paying for her rental flat per night in the two weeks abroad, and it seemed like a waste.
Whilst it’s easy to become obsessed with saving and denying yourself, you still need time off and a couple of treats, otherwise saving long term is likely to fall flat.
So whilst holidays might be off the cards, there’s no reason you can’t book time off work and enjoy yourself! Go and explore your local area, see places you haven’t been to yet. Have the odd meal out, knowing that you’ll be spending a fraction of what you would on a holiday.
It’s still important to spend time relaxing and not feeling like you’re missing out on life. It’ll keep you motivated long term.
7. Make your money work
Most people think that by putting their money in the bank, they’ve done their work saving. But if your money isn’t working for you, what’s the point?
Make sure you’ve got the best rate of interest in your savings, whether that’s a
Help to Buy ISA, Lifetime ISA or great rate on a savings account.
You can only work so hard – your money needs to be working too.
8. Increase the income
Ah, the millennial creation – the side hustle. For most, limiting their expenditure and focusing on their goals will allow them to save a deposit, but the money needed varies depending on where you're hoping to buy.
What if you’ve scrimped and saved, but the numbers just won’t add up? You need to increase your income. That could mean angling for a raise or going for bonuses, looking for a higher paid job or creating a second income stream.
Sometimes there are only so many things you can cut out before you need to increase the amount coming in.
Consider your skills, abilities and free time – it might be easy enough to get a delivery or cleaning job on the weekend, but if you are excellent at refurbishing furniture, identifying hidden gems in charity shops or making jewellery, then perhaps using your talents might be a better use of your time. Especially if you get to enjoy it.
Remember that this is a long term goal, so try not to overload yourself – if you value your free time, or aren’t willing to sacrifice your time with family and friends, that’s completely okay. You’re probably better suited to finding a better paid position rather than adding a second responsibility.
There are lots of ways of getting further training and qualifications at great prices that will help you up the job ladder – think long term. Join any free courses you can, consider what will make you stand out, and take the time to talk to people who are doing the job you want.
Working yourself into exhaustion will probably not help you reach that goal any quicker!
9. Don’t lose focus
It’s easy to start out full of good intentions and energy, and you may find yourself saving a good chunk of money and feeling proud of yourself. But it’s easy to lose sight when the end doesn’t seem to get any nearer.
Setting up direct debits into your savings is a good way to ensure you never miss the money. The more you say ‘no’ to events and nights out in order to save, the more natural it becomes.
Most importantly, only look back to notice how far you’ve come. You get to determine your stopping point – if your necessary deposit will take another 7 years to save, and you can’t wait any longer, perhaps consider moving further out, adapting your expectations, or using a government scheme if they are open to you.
You can also find others who are on their saving journey using our
forum, to keep yourself motivated and accountable. Be sure to have a look at our
First Time Buyer's Hub for more infromation on how to get saving, what you'll need to know when buying a property, and tips to make it easier.