Saving for First Mortgage Deposit

Despite slight falls in house prices, most first time buyers still face a mammoth task in saving for a deposit. Nevertheless, the break in rising house prices, at least, gives young aspiring homeowners the opportunity to try and save sufficient funds for their first mortgage deposit. These are some suggestions to save money for a deposit, some more painful than others.

Live with parents / relatives.

This may not sound very appealing, but, it can potentially save significant sums on your monthly rent. As this can be the biggest % of your monthly outgoings, it makes sense to look closely whether you can reduce your monthly rent. If moving in with your parents is not an options, look carefully to see if you could find somewhere cheaper to rent. Even a 10% reduction in rent, can save £100 a month. Don’t move to a place where you would be unhappy, but, cheaper doesn’t necessarily mean worse.

Make Saving A Priority

Rather than spending money and saving what is left over. Make it a priority to put aside a certain amount each month. This could be the first priority after receiving your paycheck. By making saving a priority it is possible to make real savings each month.

Eat and Drink In

By eating out and getting takeaways we can easily spend much more money than we intend. After adding drinks, eating out is usually more expensive than we realise. If we make a habit of eating out a few times a week, it can take a very high % of our disposable income. Another expense to watch out for is getting breakfast from a cafe. Even just a coffee and pastry can cost £4, $8. If we do this 5 times a week it becomes another significant expense.

Unnecessary bills.

Examine carefully, the various bills that you have, do you really need a landline and mobile phone. How often do you watch the 300 channels on cable TV? Do you actually have time to read to all the magazines you subscribe to? It is good to question how much you value various bills, rather than just continue to pay them out of habit.

Buying Second Hand.

For items like cars, it definitely makes sense to buy second hand, rather than brand new. But, also for electrical goods, it might be worth buying second hand on ebay, rather than full price. Alternatively, you could like me, buy all your electrical goods in US when you are on holiday and take advantage of the weak dollar. (Mac = $800, £700. Exchange rate 2$ = £1. Almost pays for the airfare itself.

Related:

• 7 Ways to avoid Overspending
• This blog entry featured at festival of frugality