How to Save Money Towards your Home Purchase

Purchasing your first home is often the biggest purchase you will make in your life thus far, no wonder saving towards a house deposit often seems overwhelming for many.

These 4 tips can provide ways saving for your home can be more manageable:

Make use of a Lifetime ISA

The government provided Lifetime ISA (LISA) can be used for your first home purchase, or for retirement. For a more detailed post of Lifetime ISAs check this post and a review of the Nutmeg Lifetime ISA. You can put away £4,000 every tax year into your LISA as part of the £20,000 annual ISA limit.

If you opened a Help to Buy ISA you can add £200 a month every month which can be used towards your house deposit.

Increase Your Income

There are now many ways to increase your income, with some requiring little time and done at the comfort of your home.

Just some ways to increase your income include:

• Ask for a salary raise at your job. Discuss with your manager how you can do this, will you need to take on more responsibility in order to do so?
• Move job. More commonly a salary raise is possible through moving jobs rather than sticking in the same place. The increase is often more than what you could get if you stick to the same company
• Sell unwanted items on websites or apps such as Vinted or Ebay
• Weekend / Zero – hour contract job – finding a flexible job that works around your main job will allow you to earn additional income, whilst still having the flexibility for your main job and having a social life. Examples include Deliveroo, bar staff or working at events such as football or cricket matches. Compass Events provide a range of event jobs
• Complete online surveys on websites / apps such as Prolific or Influence
• Side Hustle – For a range of more ways to make additional income check out this post with ideas ranging from tutoring to market research

Set SMART Goals

SMART goals are – Smart, Measurable, Achievable, Realistic and Time related.

Instead of setting the large goal that a house deposit is, break the amount up into small chunks that you want to achieve at specific deadlines. For example instead of needing to save up £50,000 in 3 years break it down to more achievable amounts such as £10,000 chunks.

Keep track of how you are progressing towards your deposit goal, set monthly or quarterly check ins.

Reduce Your Expenditure

Tracking where your money goes will help you identify where you could potentially cut back. For example if you are tracking your expenditure and realise that you are spending £100 a month on takeaways, can you find other ways to treat yourself, such as a home cooked themed evening. The money that have manage save can go straight towards your house deposit.

Moreover if you set a budget, you can organise where exactly your money goes when it comes into your account on pay day. Budget categories often include groceries, house deposit, commuting and ‘fun money’.