Whew – world’s longest title there, hey!? Recently, my friend asked me a question or two about where to start if you’re planning on saving up. So, just in case it helps you in any way at all, (not that I’ve got finances ‘sorted’ – I’m certainly no expert!), I want to share 10 things I’m doing to make saving up a bit easier. I should warn you in advance that I haven’t finished saving yet (and it’s not just my savings that are making this whole process possible, is it?) But, I am getting pretty close to being able to start checking credit scores and viewing houses and that kind of thing, so the subject of ‘saving up’ is something I wanted to write about…
Set a goal
As soon as Lee and I decided we were going to buy a house (truth be told, I don’t think we just had a single momentous “let’s buy a house together” chat…. rather, it was a series of conversations over a period of months), we worked out how large of a deposit we’d need.
We knew we’d like to put down at least 10% of the property’s value to get the better mortgage deals, and we also did some research and heard we needed to budget £3,000 to £6,000 to cover our fees. So, those two numbers added together and split down the middle (we’re going into buying our first home 50/50) gave us a savings figure to aim for. Hopefully the fees will come in cheaper than this, but it’s better to have a bit extra, right?
Open a Help to Buy ISA
My responsible, knowledgeable parents are to thank for this, but they nagged me relentlessly (thank you mum & dad!) to open a Help to Buy ISA. As it transpires, it isn’t quite as useful as we first imagined… but, it meant I opened a savings account to actually put money into, and it pays a higher rate of interest than normal savings accounts (though admittedly, still not much!).
The best thing about having it is that the government gives you a bonus of 25% of whatever you save into it (check the terms and conditions though – it’s paid on completion of buying a house, rather than counting towards a deposit), which I find is a good incentive to save the maximum amount possible each month.
Open ANOTHER savings account
As well as opening the Help to Buy ISA, I opened another savings account. That’s because the Help to Buy ISA only allows you to pay in £200 a month – not enough to save as quickly as I wanted to!
Having two savings accounts to move money into is really helping, as it means I save the maximum I can afford to, rather than leaving it in my current account and spending it by accident…
Download a banking app
A few months into saving, I decided to download a banking app. Before then, I was someone who buried their hand in the sand about money – I never knew how much money was in my current account, and I think that’s because I feared I’d find I had less than I needed.
But, downloading the app was a great idea; not only does it mean I can transfer money into my savings accounts really easily, but it keeps me up to date on how much is in my current account too. Checking it every other day or so helps me to stay on track with my spending, and I also find it handy to have the app on my phone as it lets me check my savings from time to time… a nice little boost to keep me on track!
Move money immediately
Another thing that’s making the process of saving up much easier is simply moving money into my savings accounts immediately. And it’s a tip I strongly recommend you do, too, if you can. When I get paid, I transfer an amount into my savings account before I even consider it ‘mine’ to spend on anything else.
And, on the 1st of every month, I move money into my Help to Buy ISA too. Once the savings are moved, my rent comes out and the rest of my current account shows me how much money I have left for other direct debits, overheads and fun stuff.
This stops me overspending on unnecessary things, and means I never waver on my commitment to saving.
Open a ‘fun fund’ current account
Now that I’ve written this, I can see that I opened lots of accounts! When Lee and I first got together, we opened a joint account that we each pay money into every month, using it for date nights, coffees, meals out and anything else we do together that is ‘non essential’.
The good thing about having an account for this purpose is that it means you won’t empty your current account just by hanging out with your significant other. And, you’re pushed to find some cheaper things to do together when you see funds running low at the end of the month.
Reduce your overheads
Another tip for saving up is to simply cut back on the things you don’t absolutely need to spend money on. For Lee and I, this meant moving in with my parents rather than renting a place of our own. I understand this isn’t an option for everyone, but if it’s possible, you’ll save a lot of money. We pay rent to my parents, but we have significantly cut our overheads at the same time.
Also, we decided to just share one car and pay for it between us: Lee drops me off and picks me up each day, which requires me arriving early to work every day, and Lee waiting in the car park at the end of every day, and we negotiate about who’s having it outside of work hours and weekends. It’s not ideal, but it’s doable – and saves us shelling out for a second car to a tax, insure, service and pay for fuel on.
I also paid off my phone contract and decided not to upgrade my phone, as just paying the phone bill rather than the finance on a new iPhone is so much cheaper.
We also have just one ‘fun’ subscription each: I pay for Netflix each month, and Lee pays for Spotify. Other than that, we don’t have any memberships or subscriptions. I’d love to go a Yoga class, and Lee wants to join the gym, but for now it’s yoga in the living room and weights in the hall.
Be accountable to someone
Something else that’s really helped me when saving up for a house is having Lee to save up with. Knowing he’s saving up every month means I don’t want to let him down by blowing my paycheque on clothes or beautiful homewares, especially as we agreed to invest equally into our first home. I’d recommend saving up with a partner, a friend or family member. My theory is that their disappointment in me, should I go on a spending spree, will stop me falling off the bandwagon. 😉
Expect things to be different
When I started saving up, I knew that I’d have to shift my expectations a bit. My mum (really kindly) talks about the fact we’ve ‘sacrificed things’ in order to save, but in all honesty, it doesn’t really feel like that. In the two years Lee and I have been together for, we’ve been saving for 18 months of them. This means we’ve never been abroad together on holiday or just blown a load of money on cocktails, shopping or going to festivals.
But, rather than being despondent about it, we’ve actually had so many good times together. We’ve gone on short holidays around the UK, doing budget getaways like staying in the Lake District, checking out Norfolk, visiting Warwick and and spending a birthday in York. We enjoy each other’s company, so watching a movie, going for walks and having the odd takeaway or brunch together has felt like more than enough, but I’m sure that’s partly because we’ve not expected to have more than that.
But honestly, it’s so not a sacrifice at all. I think we’re very lucky and have had more quality time together than most.
Visualise, visualise, visualise…
Finally, visualising what I was saving up for has been really useful at times, too. In those moments where you’re torn between buying a whole new wardrobe on ASOS and keeping the money in reserve towards your savings, picturing what you’ll be doing in your home, what it represents and why you want it to come sooner is a really effective trick. I admit, it doesn’t always work – I’ve bought new makeup, splashed on a jumpsuit for the Christmas party and had the odd haircut or two. But it’s about balance right? I think so long as you’ve got your sights set on the goal, and it’s a really clear one, you can afford to go off-piste once in a while.
What do you think of these tips for saving up? I’d genuinely be really interested to hear your thoughts in the comments below, and I’d like to hear your ideas for saving up too.