How to Quickly Save For Your Home Deposit: 10 Best Tips for Millennials and Self Employed
Millennials and self-employed in the UK face a tough uphill battle when it comes to saving up for their first home purchase. Luckily, there are some ways that you can save up quickly so that you can buy your own home without relying on financial help from friends or family. In this blog post, we will go through 10 tips that will show how millennials and self-employed people in the UK can save up deposit quickly with minimal hassle!
1. Get a side hustle online
You can find ways to make money online – freelancing is the best way to earn extra cash and it’s easy! You can try sites like Upwork, Freelancer, PeoplePerHour or Fiverr.
Increasing your income is another way to boost your deposit savings. There are countless ways you could do this, from freelancing in your spare time or setting up an Etsy, Ebay or Amazon shop to renting out games consoles or selling stuff you no longer use. Be aware that you may have to submit a self-assessment tax return and pay income tax on any extra money you have coming in.
2. Get a roommate to share living costs
To save money on a conventional rental, think about moving in with friends who have a spare bedroom or seek out housemates on flatshare websites. Try to find somewhere near your place of work to save on transport, and don’t miss opportunities to negotiate a deal in a shared property. If one bedroom is a lot smaller than the others, for example, offer to take it in return for paying a lower share of the rent.
Bear in mind that many shared tenancies work on the basis of joint and several liability – meaning all tenants are jointly and individually responsible for paying the rent. If one tenant moves out, the remaining tenants still have to ensure the rent is paid in full.
3. Get a Lifetime ISA (LISA) account
In order to see your savings grow, you ideally want to save them in an account offering a rate that beats inflation – otherwise, the cash will end up losing value over time.
While there’s nothing wrong with a traditional savings account, if you’re saving a large sum of money towards a home deposit, you may have to pay tax on the interest your savings generate.
If you deposit your savings into a LISA, they’ll remain tax-free – and you could also get a government bonus of up to 25% on your savings when you buy your first property.
There’s a savings cap of £4,000 annually per person under 40, so over 3 years, you and your Partner could save a combined £24,000 and benefit from a Government bonus of up to £6,000 over the 3 years, turning your £24k into £30k, tax-free!
4. Cut down on unnecessary expenses
It might sound cliche but trimming down your everyday expenses really adds up. Make it a habit every few months to find out what you can save or if you’re signed up to MortgageLadder, you can take the £100-£500 monthly savings challenge to earn points and keep you budget-healthy.
Check your bank statement and have a look at what you’re spending on – apps like MortgageLadder can automatically break spending down into categories, which makes the process easier.
Perhaps you hadn’t realised that the daily cup of coffee you buy costs you £600 a year, or that you’ve been spending £150 on clothes every month.
Identifying any areas you can cut back on – for instance, taking coffee from home in a thermos flask, or using public transportation instead of taxis – can free up substantial amounts of cash to be stashed away in your deposit fund.
Also, consider cancelling your holiday plans (if possible) or going out to party less often ?.
5.. Renegotiate your salary (more hours or benefits)
You can ask your employer if it’s possible for them to increase your salary (more hours or benefits) which would help with the deposit as well.
Of course, it’s never a good idea to simply say: ‘Hey Boss, I want more money for my deposit!’ That’s more likely going to get you the kind of response you don’t want. Instead, ask to take on more responsibility, do longer hours, or show that you’ve already been adding far more value to the company than what you’re asking for in return.
If you think you’re been underpaid, no harm in asking nicely. If you don’t ask, you won’t get.
You could also ask for benefits like flexible working or compressed hours so you can create more time to earn money from a side hustle.
6. Sell Unused items
Consider selling any item that’s taking up space in your home, such as old clothes, books, furniture etc on popular online marketplaces such as Ebay, Etsy, Amazon, Vinted, etc.
Depending on who you ask, did you know that the average home has between £400 and £1,000 of unwanted or unused items within it that could be sold online or at a car boot sale.
7. Reduce your utility bills
Perhaps the most satisfying way of saving money is to reduce your outgoing bills. You can:
Switch your energy bills to cheaper tariffs, if your landlord will let you.
Shop around for cheaper mobile phone and broadband packages.
Check your council tax – if you live alone you could get a 25% discount on your council bill.
Cancel unused subscriptions, e.g TV and music streaming, gyms, clubs, magazines, etc.
8. Live with your parents and save on rent
One way to save up deposit quickly is by living with your parents instead of paying rent. While it may not be considered ‘cool’, living with your parents is often free, meaning you can save up a deposit quicker and become a ‘cool’ homeowner much sooner!
9. Sell your car
Unless you need a car to get to work or live in the countryside, it’s a luxury. And it could be another couple of grand added to your savings.
Even if you drive an old car and do just 10,000 miles a year then you’re likely to spend, according to hire company Autoeurope, on average £168,000 during your life on running your car, which includes £45,000 on petrol.
10. Consider tracking your expenses with MortgageLadder
The smart mortgage coach helps you save for deposit quicker by highlighting unnecessary expenses and giving you the best saving options. You even have access to personalised checklists and your own home purchase plan to keep you on track.
Like most millennials, buying your first home has probably been on the top of your list for some time now. Saving up doesn’t have to be impossibleWith the right tools, it can become much easier. The right help, tips and guidance is all you need.
Sign for MortgageLadder today to make your path to homeownership quicker!