How I saved £25k for a house deposit…

How I saved £25k for a house deposit

First up, saving is hard. You have to think of money in a completely different way, and that’s frustrating at times.

However, it’s also pretty addictive seeing the money slowly but surely start to add up.

This post is not at all meant to boast or lecture, it was just an idea after a really interesting conversation with a friend about advice on how we managed to recently save a deposit, and the ways we somehow managed to make our money work for us over the last few years. It doesn’t guarantee you’re going to be offered the same opportunities I was from banks, but if you can find something similar, it’s well worth a little extra effort for some considerable gain!

 

Sign up to an ISA

I have been putting the maximum allowance I can each month into a help-to-buy ISA since it was launched. Lots of banks offer it, but as I already had a Halifax account, I just opened one up with them. The general jist is that you can open it with a deposit up to £1,200 and then save anything up to £200 a month for your first house. As long as you don’t touch that money, when you come to buy, the government will give you an extra 25% on top of all of your savings! Just watch out, as we ended up not being applicable because we bought a house over £250,000, so there are some limits. Still, it’s literally the best scheme going at the moment even if you’re not sure when you might be able to buy, if you’ve got any spare cash each month, getting 25% extra is SO worth it! (For houses over £250k, they’ve also just brought in the Lifetime ISA, which would be applicable, just for us unfortunately it was only brought about a little too late!)

 

Scrimp

This is the one no one particularly enjoys, as it can be pretty boring, but realistically, it’s the only way you’re actually going to save the big bucks. Yes, it might mean biting the bullet and moving back in with your parents for a bit to save on rent and bills, it means saying no to big holidays, new cars, or even buying clothes every month. Between us, we’ve tried for the last few years to save each and every penny we can whenever it might have otherwise been spent on something unnecessary. I’ve still managed to go abroad, we’ve just chosen cheaper places for a shorter time and out of peak season. I still have a full wardrobe, I’ve just tried not to buy too many new items, and when I have, made sure they were occasional treats. Work out your priorities and take it from there…

 

Juggle your money

When you’ve managed to save up the first few thousand, rather than letting it just sit in your current account collecting dust (because, let’s face it, interest rates are abysmal currently!) we spent a day or so working out and researching in which banks we could get the most interest. Therefore, I currently have about 7 bank accounts to my name, all with money that went in and came out of them. Online banking is your friend, yes siree, and if you work it out well enough, there are lots of banks who offer 5 or 6% interest up to £2k, as long as you pay in at least £500 or £1000 a month. All we did was set up the account with the maximum allowance for interest, then automatically move that £500 into the account on one day, and back out the next. It’s a faff to get your head around at the beginning, but once it’s all set up you don’t even have to think about it.

FYI, I had accounts that gave either 5 or 6% interest with the following banks: First Direct, TSB, Halifax, Santander & Nationwide (though check on moneysupermarket which are currently offering the best rates).

 

Watch the pennies

The age old saying your granny probably told you, watch the pennies and the pounds take care of themselves…well, granny was right. If you constantly think about actually what you’re spending your money on, and give yourself spending limits each day/week/month, it doesn’t end up getting out of hand. We tend to buy a lot of things through topcashback, so we basically get discounts on most purchases online. We’ve got into the habit of making people gifts, homemade things they actually really love, which genuinely seem to go down quite well. There’s also the option to look for offers and bulk buys and good as new second hand alternatives. Ebay, Gumtree and Facebook selling sites are great for this!

 

Work your butt off, and find other ways of making money

We both have full time jobs. As an environmental consultant in the south west, my salary really isn’t that high. However, both of us have other ways of bringing in extra money on the side to save. I have this blog for instance, which, though only a small trickle now and then, still can make a bit of extra, and Adam has his woodcraft business, Oaken Husbandry, where he has had quite a roaring trade for handmade oak duckboards, and actually does bring in quite a steady stream of cash. As long as you keep all of your receipts and fill in the appropriate tax forms each year, making that little bit extra really can help! Alternatively, work your way up the property ladder and make some money that way, start by buying somewhere smaller and ugly, make it beautiful and sell it on for more than you bought it for. We did this with the flat, and whereas I could save by living with my parents, Adam gathered a lot of his deposit for the house from the capital we gained. From a lot of hours put into DIY projects, doing most of the work ourselves, and increasing the value of the property!

 

It takes time

Unless you are lucky enough to have a stonking salary, barely any outgoings and a lot of money to spare, to save £25k each takes a long time. If you need a deposit of this size (or potentially even more), you unfortunately might just have to wait for it. I have been saving back up since I left uni with £3k to my name (I worked pretty much throughout my degree so luckily never got into debt) and since then have lived with my parents during the week. It’s been nearly three years of really hard saving, keeping weekly tabs on how much was in my accounts and slowly slowly watching the number grow.

 

Even though I now have the least money I have ever had to my name, though cash poor, I’m asset rich, and the very proud owner of a beautiful house. Yes, there are lots of things we are looking forward to doing to it to make it even more beautiful, but once again these projects will have to wait until we’ve saved up enough to do them. Hopefully some of these tips helped, I hadn’t even considered that we had much of a game plan when it came to spending, but once you sit down an think about it, I’m glad we tried to be tactical with money wherever we could, and I honestly don’t feel like we had to miss out on anything.

  • I quite enjoy saving, it’s so fun to see your pot mount up. I’m far stricter with it than Simon though, he struggles to focus on it like me – think I drive him mad!

    • I think I quite enjoy it too actually! Like you both, we are the same. Adam would happily spend up to his limit every month, but i prefer the satisfaction of seeing the money add up, and it panics me whenever I get too low! It’s good to have a balance in a relationship though, it would be rubbish if both squirrelled money away or both spent it lavishly! xxx

  • It’s so hard as I know I’ll need such a giant deposit in London that it just then puts me off really trying to save! I do still save quite a lot but never with any purpose of like in x years I’ll buy a house. I think I need to decide on what city / country I want to live in to give me a bit of motivation!!

    • Gosh, in London you’d need masses of cash to put down as a deposit, it’s crazy! Having something to aim for is probably a good starting point but the fact you’ve still managed to save is so great, well done!! xxx

  • Congrats on such savings! It’s impressive! Gem bought our house some 15 years ago (not with me, but you know, now we’re married it’s ours…) she spend £2k deposit on it back then!! I can’t even imagine being able to get this kind of deposit together now! So huge, well done!
    Your juggling money aspect is interesting – I’ve never thought of using savings in this way to increase ability to get interest?
    Holly xx BLOG: http://www.mrshollycrocker.com
    LATEST: https://www.mrshollycrocker.com/blog/2017/4/25/my-weekend-style-midi-pleats-and-easy-spots

    • Nice, you married a good one if she came with a house! 😉 Madness to think her deposit was just £2k and now that really wouldn’t get you anything I don’t think! We did quite a lot of research how to make the most with savings and I reckon I managed to get at least an extra £500 in interest just from moving my money around in different accounts for a few years! Definitely worth splitting it up and checking out the maximums each bank will offer! xxx

  • These are really good ideas. I might reopen an ISA for our second house because I know that the next house I want needs to be like yours and I know it won’t come cheap. Well done on doing this xxx

    • Haha thanks Bee! It took a LOT of saving (and a teeny tiny bit of borrowing from various family members right at the 11th hour) but I’m chuffed to bits we went for the wildcard that we never ever thought we’d be able to afford, managed to knock enough off the asking price to just about scrape together the pennies! Do you think you’ll move again any time soon? xxx

  • This is our next thing I think. Next year will be the year to save. I have been umming and ahhing (I am on my third glass of wine – you wouldn’t believe how long it took me to stop autocorrect messing up those words plus I almost dropped an f bomb). About whether to stay home with the baby this next year but I just think we need some stability first and that will also be important for the baby in the long run too.

    • I think you’ll manage to find a balance that works for you all, what works for one person doesn’t necessarily for another! You’ll be so organised with it I bet!! xxx

  • Great tips! I’m trying to save for a house at the moment and I feel like I’ve done okay. I’m quite good at saving and I’ve really tried to be more mindful of where I put my money, finding a balance while still enjoying life. My boyfriend isn’t as good though but he’s still putting money into a help to buy ISA every month. Saving money is definitely a waiting game!

    • Definitely a waiting game,and I was so lucky to have the option to save whilst I was living with my parents, else a huge chunk of my income would have gone into rent! Even with that though it’s still taken me three years to gather enough pennies! Do you think you’ll manage to buy a house any time soon? xxx

  • I used to be so good at saving, but at the moment I am rubbish at it…saved for around a year and a half and lived with my parents to get quite a good pot of money saved up but then I quit my job, went travelling for six months and spent it all. Wouldn’t change it for the world because it was worth every penny but I’ve been back 10 months now and haven’t saved anything since?! I so need to take these tips on board because I would love for Rob and I to be able to buy a house at some point in the next couple of years. The point about juggling your money was so interesting, I’ve never thought to do that and you must have to be so organised but like you say – a bit of effort can be seriously worth it!
    Sophie xxx | Sophar So Good

    • Organised initially when you set it up, but then it just does it automatically which is so helpful! when I had a big sum all saved up I was so tempted to do exactly what you did and just blow it all travelling! I’m glad now that I didn’t, because in the long run I’ve got a pretty great appreciable assets, but the thing I’ve definitely missed most about saving rather than spending has been the lack of travel! Where did you go and visit over 6 months away? xxx

      • That sounds super helpful, I’m definitely going to look into it (if I can just get a little saved to get me going first haha). I made it round a fair few countries in the end – Cambodia, Vietnam, Laos, Thailand, Malaysia, Borneo, Philippines, Singapore and Indonesia. Had the absolute time of my life but now I’m in the opposite situation to you with no assets (apart from my car I guess) or money, so it’s swings and roundabouts really isn’t it. I guess you just do what is right for you at the time and you have such a beautiful house that you actually own now which must feel amazing! You’re on the property ladder and there’s always time to travel later after all :) (hopefully there is also time for me to take a step onto that first rung at some point haha) xxx

        • There definitely will be, and I’m very jealous that I haven’t seen all the amazing places you have, but you’re right, and i’d really really like to take the time off to travel properly at some point, we’ve both had dreams of taking 6 month sabbaticals and saving up for them to do a trip a bit like yours! xxx

  • It’s a long way down the road for us, still but one day! Because rent in London was so high and our salaries were so low, we were pretty much breaking even every month and being quite tight about it too (lots of scrimping, zero savings). It’s why our wedding budget was under £5k! Since the move, we’ve finally been able to slowly start saving up, but I’m in an extremely low paying field (and have my American student loans) so hopefully Sam can off-set me a bit. x

    • I am certain I responded to this, but it doesn’t seem to appear. I can’t see how anyone can afford a house in London, so hopefully you now living in York will really help!! Your wedding was just as beautiful as some that I’ve seen where they’ve spent 10x as much, it’s what you make of it! I’ve definitely suddenly realised how sad it is to not have any money spare and it’s tough!! xxx

  • Ami

    That’s an amazing deposit and such a clever idea about opening all the different bank accounts! I would absolutely love to buy an unloved property and renovate it. Congratulations on your new home, you worked hard for it! xx

    • Thanks so much Ami! :) You totally could then, it’s the desire for buying something in a rough state and then having the energy to do it up! Still feels quite daunting as we have so much to do, but i’m excited to do it all! xxx