So you’ve decided to save for a mortgage
Here’s our 6 Tips to consider when saving for a mortgage
1.Change your attitude
Your attitude plays an important part throughout any challenge. A challenge can either be strenuous and mundane or thrilling and enjoyable, depending on your thoughts about it.
Saving money for a mortgage can be difficult; it requires self-control and discipline to resist the urge of instant gratification. However, with the right attitude, it could be enjoyable and a great opportunity to create a sense of achievement for yourself. Turn it into a competition with your friends, watch the numbers rise, get a thrill from it. This way you will be so much more motivated!
2. Cut the clutter
Do you really need that iPhone 4 that is sitting in your drawer? That expensive All Saints jacket that you never wear? Those unwanted Christmas gifts that still have the tags on them? Sell them! Do a car boot sale or post them on GumTree or Ebay. This extra money can create a solid foundation for your mortgage savings; it will also get the ball rolling.
To help maximise your savings you should also reduce unnecessary expenditures. Your daily £3 mocha latte with whipped cream and a shot of caramel syrup could be considered as clutter — you don’t really need it. Make your own packed lunches, carry a flask of coffee, call your phone service provider and see if you can get a better deal, cancel your magazine subscriptions etc.
3. Establish a financial plan
Ok, you have developed a positive attitude, decluttered your possessions and reduced your unnecessary expenditures. Now it is time for the maths. Know what you are working towards and how much you need to save to reach your end goal. Once this is established, work out how much your monthly living costs are, and then decide how much of the rest you want to save. Set a date each month to pay that amount into your savings, get into a routine so it becomes the norm.
4. Do not keep the money under your bed. Houses set on fire.
They also get burgled. Here are some safer options:
Option 1: Open a Help to Buy: ISA savings account and the UK Government will reward you with a £50 bonus for every £200 saved. Help to Buy ISA Accounts are per person, not per property, so if you are buying with somebody else you can both receive a bonus.
Option 2: Open a regular ISA savings account. Help to Buy ISA accounts restrict you to saving only £200 per month, so this would be a more suitable option for you if you would like to save more than that. Do keep in mind that your interest will be taxed with this account.
Option 3: Can you resist everything but temptation? Then why not ask a trusted relative to look after your finances for you. If you are living at home and already paying lodge money to your parents, maybe consider paying more and asking them to put it aside in ISA for you.
5. Increase your income
Monetise your hobbies to further maximise your mortgage savings. Are you artistically skilled? Sell your work on etsy! A Fitness freak? Start a boot camp in your local field! Enjoy spending time at your local pub? Get a job behind the bar!
Put the extra cash straight into that savings account. Sit back and watch the numbers rise.
6. Practise discipline
As soon as you tell yourself you are on a diet, you start to fantasise about large domino’s pizza with a tub of phish food Ben & Jerry’s for dessert. We have all been there. A similar situation could potentially happen with this large sum of money that is only continuing to grow — there will be materialistic temptations. RESIST! Remember, a home is usually an investment. Material possessions devalue.
Now stick to your payment plan, stay disciplined and before you know it you will be in your new home with the freedom to decorate as you please!