If you are looking to buy a property, especially if it’s your first, you must work out a plan for how you will save the money you need. By far the biggest expense is the deposit, which amounts to about 5% of the total cost. Normally the lender you choose will supply the mortgage to cover everything else.
The mortgage you are entitled to will depend greatly on how your earnings. Therefore, if you have a low income, you will be offered a small mortgage as a first time buyer. This could mean that the deposit you must pay upfront could be more than 5%.
Once you have calculated how much money you need for your mortgage deposit, you need to workout how you will achieve it.
Reduce Your Spending
One of the most effective ways you can increase your savings is by reducing amount of money you spend daily. We’re not even referring to those bigger expenses and purchases, we’re talking about those cups of coffee you buy and what you pay out on clothes every month.
Make an honest and comprehensive account on what you are spending out on each day, week and month and look for areas where you spend less. Whether it’s taking a packed lunch to work rather than buying from a fast food place or buying less clothes every month, by taking steps to really monitor and control your spending habits, you’ll find that the amount of savings you have increases.
Reduce Your Monthly Bills
Another effective and deeply satisfying way to increase the amount of money you must save and put towards your deposit is by reducing your regular bills. Consider doing the following:
- Cancel subscriptions you don’t use, such as those for magazines, newspapers, clubs, gyms and online streaming services.
- Compare broadband and mobile phone package prices with what you’re currently paying.
- Compare energy tariffs offered by alternative providers to the one you currently get your electricity and gas from.
Look for Ways to Earn Money on the Purchases You Make
While you may have worked out some expenses you can cut out, for things you must buy, you could find ways to earn some cashback and loyalty points on. Many of the major supermarkets and other stores offer these kinds of schemes to encourage people to spend their money with them over their competitors. There are also cashback credit cards that you can apply for that award you with a percentage of what you’ve spent that is taken directly off your monthly bill.
Earn More Money
One of the most direct ways to increase your savings is by increasing how much you earn. You could do this by asking your current employer for a raise, but this isn’t always going to guarantee positive results. If they are not able to give you a raise, you may want to look at ways that you could have an additional income, perhaps by freelancing online or by selling stuff that you make yourself or that you no longer want.