Saving for a deposit is really hard, isn’t it? This is especially true when you’re having to pay rent, as it takes up a huge amount of your income. So, how do you do it?

Well, it took us a lot of hard work, scrimping and planning, and a total of 3 and a half years, but we managed to get together enough of a deposit to buy a so-called “starter home” outright… No shared ownership. No “help to buy”… And you can too. Here’s how.

Change Your Habits

What this is, depends entirely on you. For example, with me, I had to stop buying so many games. Instead of buying two games a month, I cut down to just buying one every three months or so. On top of that, I didn’t keep buying games new. Instead, I would buy preowned games…

I would also trade in games that I had played, so that I could use those to fund the purchase of new games. This way, I was either not paying anything, or paying very little for my hobbies.

On top of this, we stopped buying clothes from places like H&M, instead going to Primark and buying the cheapest items in bulk. In fact, the most expensive things we bought for ourselves were t-shirts for about £7… We did spend quite a bit more on clothes for the princess, but only when we saved more money on our stuff.

Basically, you need to look at your budgets and work out what hobbies and spending habits are costing you the most. Then, you should try and work out how to carry that habit on in a cheaper way. After all, you still need to have a life when you are saving.

Save On Food

Before we started trying to save for our mortgage, we bought our weekly shop from Tesco or Sainsburys. It would cost upwards of £150 every week, and that was before we were parents. I dread to think how much more it would have been after the princess’ birth if we hadn’t changed our habits on this as well.

For the last few years, the only things that we have bought from Tesco are nappies and Fanta… The nappies we buy are Tesco own-brand ones, because they are cheaper but actually seem to hold more than the likes of Pampers… Oh, and the princess doesn’t get nappy rash from them, but she gets it every time she wears Pampers… And we buy Fanta from Tesco simply because they don’t have it at the other supermarket we now frequent; Lidl.

Now that we’re doing 99% of our weekly shop at Lidl, even with the stuff for the little princess, we’re typically spending around £70… So, you know, just under half of what we were spending at Tesco before our daughter was born.

Whilst that might not seem like much, the fact is, it allowed us to save an extra £320 per month! That’s a pretty good amount of extra savings… And for those who are worried about the quality of food from Lidl; we’ve found the fruit and vegetables to be fresher, the dairy products taste nicer, and the chilled meat doesn’t shrink to half the size when you cook it.

Look At Your Luxuries

We used to have so many random luxury items and subscriptions…. For example, we had subscriptions to monthly gift boxes and PlayStation Plus, which we cancelled. But there are loads of other things that you could have that are costing more money than you need to spend.

For example, if you’re paying for Sky TV, it can be really expensive and actually cost quite a lot of money over the course of a year. So, instead of paying the subscription fee, you could get NowTV instead! For example, we got (and still have) NowTV entertainment, movies and kids.

These three “passes” give us access to a bunch of live channels, including Sky Movies, Sky Disney, Sky Atlantic and Discovery… On top of this, we also get access to the full on-demand listing from Sky… All the movies. All the box sets… Everything. And how much does it cost us? About £22 per month… Compared to having access to the same things through Sky normally, it’s more than a 50% reduction in cost!

I would definitely recommend taking a look at all the different subscriptions that you have, and seeing if there are alternatives that are cheaper.

Review Your Income And Budget

After going through all of our subscriptions, changing our spending habits and cut down on luxuries, we then took a look at our finances. We wanted to see how much money we actually needed to spend on bills and necessities so that we could create a realistic budget.

The thing with budgeting is that people try and budget really cheap, and end up not being able to keep to it and splashing out at some point.

It’s really important to sit down and think about it carefully. You need to budget in a way that allows you to get everything you need, but whilst saving at the same time. Don’t try and push it too much in order to save faster. It’ll end in tears when you either have to skip buying things you really need, or throw to budget out of the window.

Saving will take time, so budget realistically and be patient.

And That’s All Folks

The important thing is to understand that it won’t be a quick thing… It took us a few years of saving to get to the point where we now have enough deposit for a 95% mortgage… So yeah, that means we managed to save 5%… But you know what? When you’re giving £600+ away to someone else in rent, you can’t sit there and expect to get a 10% deposit easily.

You’ll be paying more on your mortgage to begin with, but that 5% deposit at least gives you the chance to get on the ladder! Then, in a few years, you can sell that house and move on, with a better mortgage rate. At least you were able to get that first house!

And those of my tips on how to save for a mortgage when renting, based upon how we’ve done it. We’ve got our Decision in Principle now and we’re trying to find our first home… So it works, and it can be done… But it will take a lot of effort, and time. So be careful, and be patient!

Do you have any tips on saving for a mortgage? Are you currently trying to save for one? Let me know in the comments below!

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