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Saving graces: how to afford your first home... and still enjoy life!

30th August 2019

It’s likely to be the biggest purchase you’ll ever make in your lifetime (unless, of course, you win the lottery and move into the ‘super yacht’ bracket!)…

Most of us dream of the day when we can buy a home of our own – but one of the most daunting aspects is actually taking that tentative first step onto the property ladder.

So, how do we go about making that dream a reality?

We’ve put together a short guide to help get your saving started – so you can begin thinking seriously about getting a foot on that first rung…

It’s all about the money…

Unless you’re lucky enough to have that lottery win, you’re going to need a mortgage of some sort.

Most lenders have packages designed specifically with the first-time buyer in mind – but you’ll still need to decide what sort of budget you’re working to and how much you need to save up.

There are mortgages available with deposits as little as 5% - but think of that another way: it would then leave you having to pay back 95% of the price of your home.

So, if instead you could save more to put down as an initial deposit, your monthly mortgage repayments may be less – leaving you more money for all the other things that go hand-in-hand with daily living and running your own home!

And it’s usually the case that the more money you put towards a deposit, the better mortgage deals will be available to you.

It’s important right from the start to remember all the additional expenses that go along with buying a house, too: stamp duty, survey costs, legal costs… and that’s before you even start budgeting for DIY and furnishing your new place once you’re in!

Taking aim…

First things first, you need to decide on the practicalities. What sort of price bracket are you aiming for in your search for a place of your own? And when do you ideally want to get your hands on the keys? This time next year? In five years’ time?

Once you’ve settled on that, it will give you something definite to focus on: an idea of the sort of deposit you’ll need and a target date to achieve it by. Then, it’s just a simple case of…

Breaking the habits…

All of a sudden, it’s time to stop and re-think all your old spending habits – the impulse buying, the ‘retail therapy’, the weekend treats, nights out on the town…

They don’t have to stop completely – (what’s that saying about ‘all work and no play’…?) – but if you’re going to hit your savings/deposit target, you need to have a plan even if that means cutting down on some of life’s little ‘non-essentials’.

Let’s look, then, at a few ways you can start working towards your goal – and many of them are a lot simpler than you’d think…

Pennies make pounds…

You’ve heard the old saying ‘Look after the pennies and the pounds will take care of themselves’ – and it’s true!

So, why not start your saving regime by spending out on a decent money box – preferably the lockable/sealed sort that you can’t dip into day-to-day.

Then use it as a regular depositary for your loose change – all the silver, for example, from your pockets/purse at the end of the day. At the end of a year, you’ll be surprised at just how much has built up.

And when it’s full, smash it open – transfer the proceeds to your savings account and start again…

Taking things into account…

Speaking of accounts, you’ve heard people complain that ‘there’s always too much month left at the end of the money’ – but you might find you’ve actually got some spare cash in your current account now and again.

Start checking your account the day before pay-day each month and if you can afford to do it, move the surplus over to your savings account.

Food for thought…

How many times do you pay out for your lunch on work days? And what do you pay, on average? Chances are, it won’t be far off a fiver a time, for a sandwich and a drink. That’s £25 a week, £100 a month and £1,200 a year!

Instead, why not make yourself lunch before leaving for work each morning (or even the night before?) and you’ll soon be piling on the pounds in the best possible way…

Off your trolley…

Do you plan your week’s meals in advance and do your food shopping accordingly – or do you tear up and down the supermarket aisles, randomly filling your trolley with loads of items you may not need?

Check your food cupboards and shelves first; make yourself a list (and stick to it!); and only buy the things you need. You’ll be cutting down on food waste AND unnecessary expense.

You could also save money by shopping at an alternative supermarket – cheaper doesn’t necessarily mean a drop in quality! – or by trying your local store’s own brand of everyday supplies…

Take away the takeaways

We’ve all been there, a long day at work, you don’t feel like cooking – and it’s all too easy to just pick up the ‘phone and ‘order in’…

But it’s very rarely a cheap fix – especially if you’re in the habit of tipping the delivery person, too…

So why not keep a little stock of microwaveable ‘ready meals’ – curries, pizzas etc – in the freezer, for when those ‘can’t be bothered’ moments strike? (plus they’re far cheaper!)

A caffeine hit…

If you’re in the habit of a regular (or large!) latte from your favourite coffee shop on your way to or from work…think again: your caffeine hit could also be hitting your pocket, big-style…

At an average of around £2.50-£3.00 a time, it’s worth investing instead in some ‘designer’ coffee from the supermarket and your own thermal cup. Then you can enjoy your favourite beans at a fraction of the price you were shelling out…and prove you’re no mug!

You can STILL live for the weekend...

That ‘Friday feeling’ is usually the signal for at least two nights on the town and all the wallet and purse-emptying expense that goes with it!

But why not turn one of those evenings into a night in – get your friends over, have a DVD/video games session, even a ‘cut-price’ bite to eat from the freezer? It might just work…

The bottom line...

These might only be a few money-saving tips to get you going, but you’ll be surprised at just how quickly your savings can grow by following some of the advice or come up with a few ideas of your own.

At Leek United we have a Flexible Saver Account to help you save for your first house, there is no commitment to save the same amount every month. Just enjoy saving for the future at a pace that suits you, even if your circumstances change!

And when you’re getting close to your deposit target, come and talk to one of Leek United’s Qualified Mortgage Advisers free of charge – they’ll be only too happy to find the right mortgage product for you and help you up onto that first rung of the property ladder.

After that, there’ll be no looking back!

 

Image By: DisobeyArt/Shutterstock.com

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