Thinking about starting to save for a new home? Planning for your first home is always exciting, but from a practical level, the costs involved can be daunting. If it’s your first time trying to save for a property purchase, then those large figures can seem like an impossible goal.
Fortunately, you can take some simple steps to make saving a lot easier and far more achievable. So if you’re about to start saving for a new home, or you’ve been trying for a while with limited success, here’s what you need to do next.
Know How Much You Need to Save
You’ll find it much easier to save for a home if you know how much you have to save. So always take the time to research property prices in the area you want to move to. You can do this by looking at estate agent listings, comparing area prices and even street prices. Once you have some average costs, you can calculate how much of a deposit you need to save.
Of course, you’re also going to have to think about other costs too. From your conveyancing solicitor and surveyor to stamp duty, unexpected expenses are going to impact your budget. The more you know about how much you’re going to need to spend, the more you’ll focus on how much you have to save.
Establish a Timeline and a Budget
Your next step is to sit back and create a budget to make saving easier to manage. Make a note of all of your expenses and how much money you have coming in. By doing this, you can see just how much you can put into your savings every month. That will tell you how long you should expect it to take to reach your saving goals.
Of course, you can speed up that timeline by finding ways to reduce your monthly spending. While cancelling Netflix or cutting down on your avocado on toast won’t make a huge change, there are lots of ways you can curb your spending. Consider walking when you would normally drive, selling old possessions you no longer need, taking up offers of overtime, or moving somewhere that charges cheaper rent.
Get Some Free Cash
Although you might think the government can do little to help you save up for a house, they do offer some help. The introduction of the Lifetime ISA means the under-40s can start saving for their first home, and the government will add a 25% bonus when it comes to buying time. Unfortunately, these kinds of ISAs are limited, and they tend to have regular changes made to them.
There are other options, but they can be risky. There are lifetime ISAs that work with stocks and shares, but like any investment, these can lead to you losing money. So always check with the government about their current saving schemes and what you need to access them.
Get a Better Savings Account
There are hundreds of different savings accounts available, and they all have their pros and cons. Many have a minimum deposit amount you must have before opening your account, while others limit access to your savings until a specific time has passed. That’s why it’s so important to know exactly what kind of savings account you need.
What you’re looking for is an account that offers the best rate of interest. That interest might be quite low, but as your savings start to pile up, so too does the interest. And that’s only good news for your potential to buy your first home.
Start Saving Today
They say the best time to plant a tree is 20 years ago and that the second-best time to plant is right now. The same is true of your savings. Whatever your age or your earnings, the earlier you start saving, the faster you’ll start building up what you need for your big house purchase.
Do your research, know how much you need to save, and always look for ways to boost your savings. Get it right and you could receive the keys to your first home sooner than you imagined possible.