Today’s twentysomethings have been dealt a more challenging hand than previous generations when it comes to financial matters. For millennials, taking that first step onto the property ladder can seem so far out of reach it’s almost a dream.
However, there are measures you can put in place to give yourself the best possible chance of home ownership sometime in the future. Here, we’ve put together five valuable pieces of advice that, put into practice, should help you to save up a deposit for your first home.
Open a savings account
Saving even a small portion of your income each month is worthwhile. Find a savings account with a high rate of interest and set up a direct debit to automatically pay cash into it every month. Later this year, the government will launch Help-to-Buy ISAs, which are savings products designed specifically to help people get onto the housing ladder with the government topping-up any savings you manage to put away.
Experiment with own-brand goods
The price difference between household names and own-brand goods can be vast but the quality they deliver is barely distinguishable. Items from tea and coffee to washing powder and bread can offer a saving. Experiment with the cheaper equivalent of the goods you regularly buy and you may even discover you prefer the more affordable products.
Consolidate your debt
Minimise the interest you’re paying on debt through consolidation, and look for the lowest interest rates available and move any debt you can. For example, if you’re paying 5% on a £2,000 overdraft, it’d be sensible to pay off the overdraft, take out a 2% personal loan and commit yourself to paying it off before the interest rises. Another tip to remember is that debt invariably costs more than savings will earn. Get rid of it as quickly as possible.
Learn to budget
Take control of where your income goes each month. Set yourself defined limits of expenditure in key areas like food, transport, socialising and clothing. Simultaneously, try to reduce your regular outgoings. Use switching websites to find the most affordable car insurance, gas and electric providers, phone companies etc. Make it a habit to regularly check you’re getting the best deal for your needs.
This is about boosting income rather than controlling outgoings. What could you do to bring additional cash into your pocket? Could you let a spare room, car-share or sell items online? If you’re an open-minded, enthusiastic person, you’ll be able to identify the perfect money-spinner for your lifestyle.
By being determined and dedicated, you will eventually save enough to begin your property search. And, once you’ve got that deposit in place, you’ll be in the habit of careful money management so that when you do secure the ideal mortgage you’ll be more than prepared to become a financially responsible homeowner.