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8 Ways to save for a deposit in a cost-of-living crisis

8 Ways to save for a deposit in a cost-of-living crisis

Saving for a house deposit has only got more difficult in the cost-of-living crisis, but these savvy cost cutting tricks could help get you on your way

In 2022, the average deposit for a first-time buyer was just over 20% of the overall property price.

Saving so much money can be tough at the best of times, but with the cost-of-living crisis we’re currently experiencing in the UK, it may seem even more daunting.

However there are things you can do to get together the money you need to make your dream of owning a home a reality.

Keep a record of everything you spend, then cut down

Whether you download a budgeting app or simply use pen and paper, list out everything you spend money on in an average month. This includes essentials such as bills and food, to things like nights out, holidays, and presents.

"You may be surprised what you’re spending when you see it all laid out"

You may be surprised what you’re spending when you see it all laid out, and can pinpoint areas to cut down on your expenditure.

Evaluate your subscriptions and monthly plans

Netflix subscription on phoneAre you using your subscriptions enough to warrant keeping them? Cancelling some memberships could help you make savings

Many of us are so used to paying for subscriptions nowadays that we don’t even notice the money come out our accounts. Few of us go without a mobile phone contract or memberships to services like Amazon Prime and Netflix, or the local gym.

The question is, do you use all of them to their full potential? Could you downgrade your phone plan? Could you cut one thing out completely? 

These things quickly add up and if you can be ruthless with cutting things out, that’s extra money to add to your deposit pot.

Open a Lifetime ISA

Individual saving accounts (known as an ISA) are often not taken advantage of but are great if you’re looking to buy a first home.

You can pay in up to £4,000 a year and the Government will pay in 25% of whatever you put in—essentially a free top up from them towards your deposit.

"You can pay in up to £4,000 a year and the Government will pay in 25% of whatever you put in"

This is more beneficial if you’re thinking of buying in a few years as you’ll get more from the Government the longer the ISA’s open. If you’re looking to buy with someone else, they can open an ISA too.

Change up your social plans

According to Statista, the average night out where you pay to get into a venue and have drinks is nearly £30. If you include pre-drinks and food too, this goes up to £56!

Staying in and socialising differently can have a big impact when you’re trying to save money.

You could do a Come Dine With Me style competition with friends, where you have them round and cook for them. They each then return the favour, saving you money on a few meals. Other ideas could include movie nights or game nights.

Look out for discounts

Discount voucher to save money on grocery billsTake advantage of special offers and vouchers to cut down your spending

Keep an eye out for discounts and special offers and take advantage of them when suitable.

Vouchers can be found in newspapers, magazines, even in small print on receipts. You can use web extensions online that will automatically apply discount codes, such as Honey.

Many employers nowadays offer access to discount platforms as part of their employee benefits, so double check this too.

Cut down on your energy bills

Smart meters are a great way to monitor how much energy you’re using and what you’re spending, so you can cut back where necessary.

If you’re currently renting, you could ask your landlord if it’s OK to get one fitted. They’re fitted for free by your energy supplier and will benefit the property even after you move out.

"Smart meters are a great way to monitor how much energy you’re using"

There are many energy saving hacks you can try to help reduce bills too, like using a slow cooker instead of the oven, or showering instead of bathing.

Assess your living arrangements

Three men in shared accommodation to save for house depositRenting in shared accommodation rather than solo could help you put aside more money each month

If you’re renting, is it possible to move in with your parents or guardians so you can save a bit quicker? Another option if you’re renting a whole property is to rent a room in a house share instead.

It might not be very desirable, but could help you get a deposit together more quickly, so you can get your own home and have it how you want it.

Start a side hustle or additional job

If you already have a full-time job it may not seem ideal having to work more, but this won’t be forever. Additional income can really supplement what you’re already putting towards a deposit.

If you can link this into something you already enjoy, such as creating art and selling it on Etsy or taking on a couple of shifts at your favourite bar, it won’t feel as tedious.

Bonus tip—Speak to a mortgage broker

Speaking to a mortgage broker will help you understand how much you need to save. They can also tell you about schemes such as Shared Ownership which require less of a deposit. When you’re ready to buy a home, a broker can help get the most cost-effective mortgage deal for you too.

Saving for a deposit is likely to mean you’ll need to make some sacrifices or adapt your lifestyle. However with the end goal of getting on the property ladder and having a place you can call yours, it will be worth it.

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This post contains affiliate links, so we may earn a small commission when you make a purchase through links on our site at no additional cost to you. Read our disclaimer

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