Since December I have been on a mission. I have never been set on anything more in my life.
Tell a lie… I regularly set myself big life goals and I achieve them.
The reason I am successful with big life goals is due to sure determination.
So if you are wanting to save money for a house, I highly recommend that you get focused and find your motivation. It is the first step to successfully saving the money you will need.
At this present point in time, the housing market scares me a little. Prices have sky rocketed by tens of thousands in the space of 6 months and that worries me. However, there is little that I can do about this right now, and fortunately for me I am not in the position to be able to buy just yet. I am a single parent, so for me the amount of deposit needed to buy a house is going to be much larger. I don’t intend to wait to meet someone as it may not happen. So I am taking the steps I need to secure my own future. My dream is to buy a house, so I have accepted that it will be a bigger challenge for me.
- The first thing I did when I started in December was to look at all of my in-goings and outgoings. I had to assess what debts I had and whether there was anything I can do to reduce my outgoings. I made a comprehensive budget. I noticed that there were things that could be cut from my budget.
- Pay off debt. The second choice I made was to clear my debts. This may sound like an odd way to save for a house deposit, but the interest on the debts (which for me was a hire purchase car) meant that I could overpay on my car debt and save hundreds of money in interest. This is useful for many reasons. It means that the debt gets paid off quicker so that you can pay more towards your savings earlier. And more importantly, it is cleared before applying for a mortgage so you have less outgoings, as well as meaning you will be in a better financial position when owning your own home.
- I opened a LISA (Lifetime ISA). This has really allowed me to benefit from a bigger deposit by giving me a 25% bonus. You are able to pay in up to £4000 each financial year and receive a £1000 bonus (25%) from the government. This is such a quick way to help increase your money. Once this is filled you can open a separate ISA to put your remaining despot money. You can have a total of £20,000 put into ISAs each year. So if you use £4000 in a Lifetime ISA you can put up to £16,000 into a separate ISA. A note, you need to have your LISA open for at least a year before you can use it for a deposit.
- Cut unnecessary spend. This seems like an obvious one, but if you really want to save money fast, then you will need to cut a lot of your spending. This means reducing meals out, drinks, treats, takeaways. A good starting point would be to assess how you have been spending your spare money for the last month so you have a clear picture of where you spend your money. Next, you need to decide where you are going to cut your spend. You could do this buy doing a no spend or low spend month. Here is a link to my no spend year video. https://youtu.be/rLP_omuefBQ
- Sell items you no longer need. This can be a really quick way of earning additional money, as well as helping you to clear out things you no longer need. When you do this, it will help you to realise how much money you spend on things that you don’t use. Put any money made into your ISAs.
In the space of 6 months I have clear a few thousand off my car and saved £4000 in my LISA, earning me a £1000 bonus.
There’s a long way t go for me yet, but I am positive I will get there in another year and be in a position to be able to buy a house!
Rachel, That 30 Something Life X
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