It can be a struggle to save money to put a deposit down on a house. It can take years of saving to come up with enough for a deposit for a home. Shorten the time it takes you to save up by using these tips each day.
Turn these tips into daily habits and see your savings grow more quickly:
Set up a Direct Deposit. Rather than relying on your own good intentions to save money each month, set up a standing order (or automatic payment) at your bank or with your employer to ensure money is put into an account every month without you even having to think about it.
- Try to cut back on buying frivolous things. Do you really need that Netflix subscription? What about the number of meals you eat out each month - could they be cut back?
Once you take control of your finances by sitting down and looking at your bank and credit card statements, you will see how much money you spend on purchases that you don’t even get much enjoyment from.
Open a new bank account. If you’ve had the same savings account for several years, you may find that you’re not getting as much interest on your savings as you would in a different account. It’s worth shopping around to see what accounts are available.
Also, look for promotions to open accounts at local banks. Sometimes they give you $200 to $300 if you follow their opening instructions.- Set goals for your savings. To save a large amount of money, it helps to break it down into more manageable amounts. This will help keep you motivated as the savings are realistic and tangible. These small goals will add up to something much more substantial over time.
Sell your unwanted items. Your garbage may be someone else’s treasure, so it is worth setting aside some time to sort out your current home and to sell any unwanted items. Start off with one room at a time. When you’re done, add the money that you get from selling the items to your investment account (where the deposit is going to come from).
- Save money by buying in bulk. Consider buying certain items in bulk. If you have storage space, you can save a lot of money. Consider using generic items as well, as these are often less expensive than more popular brands.
Rent somewhere cheaper. Saving money for a deposit may require drastic action, such as moving into a less expensive rental property.
- Look for a deal. Perhaps you can begin home ownership with a smaller property, rather than your dream home if you find the right deal. Maybe you can shop in the area close to your ideal location and actually buy another house even if it’s not your dream house but that is a deal that makes sense financially. Once you are on the property ladder, it’s often easier to save for a larger property.
Stick to a budget. When you plan your expenses for the month, you’ll know how much you are able to save. It will show how much money you need to pay those bills, plus how much disposable income you have. You can set your disposable money aside and send directly to the investment account.
- Consider a Roommate. Do you have a spare room in your property? If you do, then you could ask your landlord if they would allow you to rent this room to a new tenant. This will help subsidize the cost of your own rent and allow you to save money.
Using these tips will help you to save money for a house deposit. It may take quite a few months or even years but taking measures to save more quickly will be worth it if your dream is to own your own home.
However, may I suggest another way of doing things? I have realized that even though your dream may be to own a house sooner rather than later, it could make more sense financially to use the money from the investment account to make more money for you by investing it in cash flowing property like multifamily complexes.
Please see our article about buying or renting where we talk about this topic at length. It is better to have more options than less!
Luis Salavarria is a multifamily real estate investor. If you have any comments or if you have a property you would like him to help you with, please contact him through this link https://linktr.ee/luissalavarria247
