Buying your first house is one of the biggest and most important investments in your life. For many, this can be considered a dream come true. It sits somewhere between getting married and driving for the first time. The feeling that you have a place of your own is exciting.
However, in recent years, this dream has been getting farther and farther to reach. According to data from the UK Land Registry, the average price of a house in the country is £230,332. And of course, it gets more expensive the closer you are to cities. House prices serve as a wall between the average person and their dream house.
But all is not hopeless. There are still ways to save enough money for a down payment. Here are some of the best ones:
Set a Target
Although In reality, you will be saving as much money as you can, it can still help to set a target. Make sure that this target is not too low but is still realistic enough to achieve. In setting your target, it may help to already have a property in mind. Having a target property can also inspire you to save more.
If you don’t have a particular house you want to buy yet, that’s okay. Just make sure you set a target amount and check properties on the market from time to time to get an idea of whether your goal is the right amount. People usually save up for the down payment, which is likely 5% of the cost.
Before anything else, it’s important to keep detailed track of all your finances. Open up Google Sheets and start listing down the money you have in your bank, in investments, and others. This is going to be your starting point. You should also track the money coming in, but more importantly, all the money going out.
Keeping a strict eye on what you spend is one of the most impactful steps you can take to save money. Once you see just how much goes into random online shopping sprees, for example, you’ll be dissuaded the next time a similar opportunity presents itself.
Most of all, you should be honest with your finances. No one else will be monitoring your savings and your spending.
Save, Save, Save
You don’t have to starve yourself to be able to afford the down payment. But every penny counts. Asking yourself if you really need to buy something every time you want to can already be a good deterrent. However, you can still set budgets for buying things that make you happy, such as movie tickets or a new pair of shoes. Just avoid spontaneous spending.
Setting a portion of your regular income for savings is much better than just saving all the money you don’t end up spending. With the former, you can still make sure anything in excess goes to your house fund.
You can also ask for professional help when saving. Professional financial planning services can give you insights about your target and the rate of your progress.
Buying a house may not be easy, but it is one of the most rewarding experiences, especially if you do all the hard work and save money for it. Be sure to follow these three key tips so that you can have your own house in no time.