How to save for your first home

Thinking of starting to save up to buy your first home? Put off by rising house prices and daunted by how much you need to save? You’re not alone.

Saving up for your first home means saving more money than most people have ever saved before. Just looking at how much you’re going to need to save can be extremely off-putting! However, the fact is that the sooner you start, the sooner your savings will grow.

If you’ve been putting off saving for your first house, here’s what you need to know.

Know the amount

Your first step is to ensure that you know exactly how much you need to save. Goal setting is a proven way to motivate, and savings are no different. Have a clearer idea of how much money you need in your savings account so that you have a target to hit.

That’s going to mean understanding the size of your deposit, your mortgage terms, and all of the additional expenses that come with a property sale. Don’t just save for the deposit and assume you’ve covered all of your costs.

From the fees of your conveyancing solicitor to your estate agent, there will always be additional payments that need to consider when you start saving. Don’t forget to stay up to date on property prices in the area you want to live in. Those prices can fluctuate, so the more you know, the easier it will be to set an achievable and practical goal.

Putting more away

The more money that you can put into your savings every month, the quicker you’ll be able to raise the money you need. You don’t have the luxury of selling a property when you’re buying for the first time, so you need to think outside the box.

That could mean living more frugally, finding a side hustle, or simply cutting your living expenses (do you really need five streaming services at the same time?). If you’re serious about saving, you need to think about changes to your lifestyle. Ask your employer for a raise, sell the clutter in your home, and put as much into your savings as possible.

Think about moving

It might be the last thing you want to do, but moving could be a game-changer when saving. If your rent and utility bills are high every month, you might struggle to save at the speed you want to.

One option that’s growing in popularity is to leave the rental behind and move back in with family for a while. This isn’t an option that everyone can do, but it can save you a massive chunk of your salary that can go straight into your savings.

If that’s not an option, consider downsizing. A smaller living space might not be any fun, especially if there are a few of you, but it can be a huge money saver. Your rent will be lower, and the costs of running a smaller property can also be considerably less.

Although this is a big step, it’s also one of the best ways to streamline your outgoings and speed up your saving potential.

Start selling

This is one of the most common pieces of advice for first-time home buyers. Selling what you don’t need can become a lot of fun, and it’s great for your savings balance. Take a walk around your current living space, and take photos of all of the things that you simply no longer want or need.

You could even go all out and sell your vehicle if that’s an option (although that will depend on how far you have to travel to work and your local public transport). A bicycle is much cheaper than running a car, and those monthly insurance payments can instead be allocated to your savings account.

Of course, stay practical. Don’t make life too challenging. If selling your car would reduce your quality of life, avoid doing it. However, you can be sure that your years of accumulating gifts and trending must-have tech means that you may have more to sell than you think.

Start saving today

Saving for your first home is always going to mean a commitment. Without that commitment, you’re going to be more inclined to treat yourself with those savings. You have to remember that splashing out on a holiday is going to severely drain the savings that you’ve worked so hard to build up.

Take the time to optimise your income, reduce your spending, and make changes that have a positive financial impact. Get it all right and you could be getting handed the keys to your first home a lot sooner than you thought possible.