Piggy-Bank Properties: Top Tips for Saving First-Home Money.
First time buyers are under more strain than ever with the pound’s value decreasing but house prices increasing. Some are taking a turn towards renting as a long-term solution, which is a shame because buying their first home is something everyone looks forward to and aims for when their career kickstarts. On top of the average 15% deposit for the house, buyers have to cough up for stamp duty, moving costs, buildings insurance and initial furnishing which all tot up to more than people can handle. In fact, buyers shall need an annual income of over £26,000 to be able to afford an average home. A few years ago, first-time homes in the West Midlands cost an average of over £150,447. So, it’s more important than ever to save every pound you earn.
Find a Penny, Pick it Up…
Here are a few tips on how to make your penny pile grow.
After writing down your monthly income and expenses (in detail if necessary), calculate how much money you would like to save per month – this might be easier if you consider the total amount you would like to save and when you would like it by, working backwards from your final target. To work out the exact amount, try dividing your income into three categories:
- Living and Essentials – This category should include everything that is unavoidable and necessary. For example: rent payments and utilities, food, insurance, petrol money or train/bus fare, and even an emergency repair fund (for broken laptops, medical fees or damaged cars).
- Recreational – This category should hold everything you consider as entertainment or social. For example: clothes, holidays, days out with friends, presents for family birthdays or Christmas related activities.
- Savings – This category is simply the money left over which is not necessary for either of those above. You may have to be strict with yourself here and restrict certain activities in order to save yourself some money. If you’re meeting friends for a drink, do you need a pint or are you interesting enough to have just as much fun while ordering water? Do you need to take the bus or a taxi for what might be an easy half-an-hour walk to work?
Here is an extra tip to help your saved money stay that way: create separate accounts for all three categories to help yourself keep those sticky fingers off your precious savings.
Don’t forget that every penny adds up eventually, so think about what could save you money in average day-to-day activities.
- While shopping at the supermarket, avoid the big labels and try the supermarket’s own brand. They are far cheaper, and you most likely will not be able to taste the difference.
- The same goes for clothes – avoid the designer labels. Have you tried a charity shop recently? Not only do they sell at a fraction of the prices you find in mainstream shops, but there is also such a wide range of styles that you are sure to find something that suits you.
- Book tickets early for train journeys, plane journeys and cinema tickets (or just avoid the luxuries altogether wherever possible, and slip on your running shoes instead).
- Quit indulgencies that cost, such as drinking or smoking.
- Visit libraries instead of book shops, even if it is for tuition tools – yes, text books are available at the library too, it’s not just Charles Dickens and Jane Austen in there.
- Ditch those ready meals – home cooked meals are not only cheaper but healthier and keep you feeling full for longer.
When you think you are ready for buying your first home, please get in touch with us and let us help find a home with the right price for you.