Saving for a deposit

One of the biggest challenges of buying your first home is getting together your deposit, but this may be easier than you think. When you buy a brand new home you can use the Help to Buy – Equity Loan scheme , where you only need a 5% deposit. This means saving for your deposit and buying your dream first home is much more achievable. The Help to Buy scheme isn’t only available to first-time buyers, it can be used for any Bovis Home, so if you’re looking to move up the housing ladder and move to a bigger place, then it could give you the helping hand you need. We’ve put together 10 top tips which could help you save your 5% deposit. By following some or all of this advice, you could be moving into your new home sooner than you thought.

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10 top tips when saving for a deposit

1.  Move in with friends or family: Whilst we all love the freedom of our own place, renting may not be the ideal solution when it come to saving money.  A report from Shelter, the housing and homelessness charity, revealed that on average the cost of renting a property is rising by £300 a year, leaving many trapped in a rental cycle. The findings also revealed that 72% of those renting a property can only save £50 a month or less. Could you move in with friends and family instead? Alternatively, opt for a house share or a rental property where many of the bills are already included.

2.  Research the best savings account: Ask any financial expert and they're bound to tell you that before you can save, you need to clear major debts, such as outstanding credit card bill. Your next priority should be to research the best savings account. Opening a cash ISA could be a serious consideration, since the interest accrued is tax free. Remember that for the 2013/2014 tax year, you can put away up to £5,760 into a cash ISA.

3.  Create a budget spreadsheet: The best way to manage your money and stick to a budget is to create a spreadsheet or utilise free budgeting tools. By comparing your monthly outgoings against your monthly income, you will be able to retain a realistic budget which can be updated regularly. 

4.  Set up monthly savings: Setting up a standing order to your savings account is an effective way to ensure that a proportion of your earnings each month will be saved and not spent elsewhere.

5.  Be stringent with shopping: If a shopping list sounds outdated to you, there are numerous phone apps available so that you can stay focused and only buy those items that you actually need. Plus there are many other money-saving apps.

6.  Sell your clutter: Without realising it, you might have hundreds of pounds worth of goods, or as you might view it, clutter stored away in wardrobes, drawers and even the attic. Why not join forces with a few friends and head off to a local car boot? Or if this sounds too bothersome, you can sell your unwanted goods on auction websites such as eBay.

7.  Cut your spending: At the end of each month look back at your expenses and try to be critical of where you have spent unnecessarily or in some cases over-spent. You need to be realistic about your expenditure and trim down where possible. You'll be surprised at how easy this can be. Buying cheaper alternatives such as own label could be a good place to start.

8.  Go online for the best deals: Whilst putting all these tips into practice it's important to remember to treat yourself occasionally too. There are a host of websites such as VoucherCodes.co.uk or Groupon featuring some fantastic deals and discounts, with some super savings for food, travel, entertainment, shopping (the list is endless). An ideal way to reward yourself minus the guilt.

9.  Create a second income: To help speed up the saving process, you could create a second income, which could be in the form of a part-time job on the side. Alternatively, you could turn one of your pastimes into a money-making venture. Whether you have skills in proof-reading, photography, IT, jewellery-making, baking and so on, chances are there is money to be made. You can also earn cash by signing yourself up to be a mystery shopper, a TV/film extra or, if you have the flexibility, consider pet or house sitting.

10.  Reclaim lost cash: Your old bank or building society accounts, Premium Bonds and investments could all be home to unclaimed cash, but the good news is that you should still be able to reclaim it. Try sites such as www.mylostaccount.org.uk or www.unclaimedassets.co.uk/

As with any savings plan, it's important not to get discouraged, but by making some small adjustments and sticking to your budget, you could be well on your way to accumulating a 5% deposit.

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*Source - House Price Index released by the Office for National Statistics