Saving up for your first home seems impossible. Getting together the funds for a deposit when you are renting, or you’ve recently met the love of your life and you don’t want to wait five years to live together. If you can’t rely on the Bank of Mum and Dad to give you a loan, then there are absolutely steps you can take to create a little savings pot, and probably not from the most obvious sources.
Find out what you’re spending your money on.
The first step is to understand where your money is actually going, so write down everything you are spending for a month. Don’t use bank statements for this, as it’s not always obvious who you have spent money with and besides, it’s far too easy to make contactless payments on the fly.
When you are writing down your purchases, you are becoming more aware.
People used to do their accounts by hand, and so it might be beneficial to keep a notebook to record your current bank balance.
ONE: Swap your contactless card for chip and pin only
As many people are still uncomfortable with contactless cards, you can still get chip and pin only.
We’re not suggesting someone is stealing your money, but in fact, you are more likely to spend more money using a contactless card. Better still, pay with cash to keep better track of your expenditure, but we know that’s not always easy.
TWO: Carry a daily budget in cash
It’s tempting to spend money when you’re walking through town on your way to the bus stop, but if you decide a daily budget you can spend, leave your credit and debit cards at home. Keep an emergency tenner in a hidden pocket in your handbag or work bag and forget about it. This is for if you lose your purse or if you need to take a taxi home.
THREE: Remove your card details from shopping sites
Any sites you regularly buy from will have your card details stored for a quick checkout. Delete these details so each time you checkout, will have to re-enter the details. This way, you know if you are shopping online, it has to be something you really want or you won’t go to the effort of checking out.
FOUR: Use an ad blocker
Advertisers have got very good at exploiting our weaknesses. You don’t need your will testing every time you’re checking Facebook, so consider using an ad blocker so you don’t fall in the way of temptation in the form of retargeted ads.
FIVE: Cut out coffees
If you’re one of those people who is wont to pick up a coffee or a tea on the way into work, or for the train journey, as hard as it may be, consider cutting out Costa in favour of a small independent café that still serve coffees for a pound (you can still find them!). They might not be perfectly crafted cappuccinos, but those extra pounds go to you. And better still, consider taking a flask mug with you so you can prepare your drink at home.
SIX: Sell old possessions online
If you’re moving out, you’ll most likely be doing a sort out, so instead of waiting until then, give yourself a head start and selling any items that have outstayed their welcome online or. Put the proceeds towards the house fund.
Even Facebook makes it easy for you to dispose of your unloved possessions. See Money Saving Expert’s article for the lowdown on selling on Facebook.
SEVEN: Take out, don’t take away
We’re not saying to avoid takeaways altogether. We all need a treat, especially when we’re saving up. But if your diet consists of two takeaway meals a week, you’re spending money that’s better off in your pocket rather than your stomach.
Instead of taking away, buy food you can take out the house for your lunch each day so you avoid costly sandwiches in Pret and have a lunch you actually like a lot better because you made it exactly how you like.
EIGHT: Don’t buy things the day you see them
It’s a familiar feeling we all have when we’re out window-shopping and we see something we must have. A dress or a pair of shoes we can’t live without, or a book that will change our lives. That’s great, and if it really will change your life, it can wait one more day, surely? When you get the urge to splurge, allow yourself a 24-hour cooling off period and see if you still feel as strongly the next day. In most cases, you will have forgotten about it.
NINE: Replace FOMO with JOMO
While friends will try to coax you into an expensive night out, would you prefer to drink away your hard-earned money or invest it? Get creative with your nights in with home-based cinema night, a garden festival (who needs Glastonbury?) or karaoke on the games console. Whatever you like to do out and about, you can find a way to recreate it at home.
And yes, staying in every night can feel dull, so find affordable activities like picnics and swimming to keep you sane.
TEN: Stop all useless subscriptions
Cancel any direct debits you are not getting any value from and redirect the payment to your house fund. That way, any sadness will soon be replaced by the joy of knowing you are making yourself richer to own your dream life.
ELEVEN: Do a Köpstopp for a few months
If you’ve read our article listing our favourite Scandinavian words, you will be aware of the Swedish word köpstopp which describes the process of not buying anything beyond consumable items like food.
Yes, you need to pay your bills and fill your car with fuel, but as for those other purchases? Those impulse buys that happen on and around payday? They’re the ones you are trying to avoid. It’s like dry January, think of it as a challenge and get your mates to support you or even sponsor you if you manage it. Try it for a month, and you may find you’d like to continue it a bit longer. Try it for 66 days and you’ll break some bad shopping habits altogether.
TWELVE: Keep a progress calendar
Use this to cross out each day you manage to put away a little money. Make sure there is a reward lined up at the end of the month so you feel spurred on to be good during the four-week period.
THIRTEEN: Ask for money for Christmas and birthdays
If people don’t give you money, they will buy you things to clutter your house up. All the more to move to the new home. Expedite the process of getting in that new home (albeit by a fraction) by asking for money instead of presents.