The time has come: you and your partner are ready to become joint homeowners. However, between your existing rent or separate mortgages, essential bills and leisure spending, collecting enough money for a deposit seems hopelessly out of reach.
While putting together the pennies to purchase a property is a long road, several simple steps will significantly speed up the process. Here’s how to start saving for your first family home with your other half.
Set specific targets
Begin by creating a budget that outlines the key costs involved with buying a house. This should include the deposit amount, legal fees, surveys, stamp duty and land tax, and removal costs.
Set specific targets in line with these costs so that you know exactly what the money is going towards. Being able to tick off these milestones along the way will make you feel like you’re making progress, helping to keep you both motivated and providing insight into the timeline.
Assess your finances
Next, assess your finances. Sit down together and look at your monthly outgoings, separating essential and non-essential payments and identifying areas where money is being wasted.
Consider options such as collating bills and shopping around for cheaper providers to minimise your essential spending. In the short term, cutting back on leisure spending and choosing to shop more mindfully could have a dramatic effect on increasing how much you’re able to save each month.
Boost your credit score
Think ahead and look into ways to boost your credit score to ensure you’re a more attractive option to mortgage lenders. Having a good credit score will also secure you better deals on ‘buy now, pay later’ schemes that are useful for big homeware purchases like sofas.
You can boost your credit score immediately by registering to vote. Ways to improve it over time include minimising your debt, keeping up with monthly payments, and paying more than your credit card’s minimum amount.
Use a savings account
One of the best ways to get the best bang for your buck is to use a savings account to store your money. This might sound obvious, but a surprising amount of us keep the majority of our funds in a current account.
Savings accounts often have higher interest rates than current accounts so your savings will grow more quickly. Be aware that these higher interest rates are often linked to a no-withdrawal clause – in other words, you’ll only get the benefit if the money remains untouched.
Finally, stay accountable. Saving money is hard, especially over a long period of time. Remember that feelings of frustration are completely normal, and be kind to one another if you give into temptation, but understand the consequences of your actions if you overspend too often.
Including small rewards when you hit each savings target will help to keep you both positive and focused while ensuring that the end goal remains front of mind.