Saving for a house deposit in a year takes more than just cutting back on Friday night drinks. You will need to reinvent the way you think and live before you get that right to buy mortgage sorted. And whilst it is easier to get the mortgage itself these days, there are other strains that can come with this territory.
Please note this is a guest collaboration post.
I lost friends, got into fights with my wife, and even missed events that I still regret to date. However, the result is worth every bit of it.
This article is not your traditional “canned beans” solution that gives generic advice on cutting back on spending as much as possible. It is an actionable plan that anyone can implement if they want a house bad enough.
Weigh Your Options
Buying a house is the most significant investment I have made so far. The realtor asked for a $20000 deposit, and I only had $2 500 in my name. The property was an absolute steal, and there were more interested people than I would have liked.
So, what’s the next thing to do to save for a house deposit in a year?
Ask my parents for help
Just like any loving parents would do, they agreed to give us an informal loan. That helped us take the home off the market and pay in bite-sized monthly instalments. If that isn’t an option for you, partner up with someone for a shared ownership deal.
Be Smart With Money
However cliché it might sound, cutting back your everyday spending can add up over time. Cancel any subscriptions you don’t need, make coffee in the house instead of buying from your favorite food truck and switch energy bills to cheaper tariffs whenever possible.
But don’t get me wrong…
There’s a thin line between the “canned beans” mentality and living comfortably. For example, my wife and I enjoy a glass of wine at the end of a long day. We used to get a decently priced bottle before the house, but we’ve had to downgrade.
Of course, this wasn’t a welcome move from my wife, but it is for the greater good. We also did the same with our other stuff. And the difference was substantial.
Cancel Your Holiday Plans
I get it. You have been saving for a trip to the Caribbean for the longest time ever. But going for that holiday would jeopardise your dreams of owning a home, or at least make things harder. For example, my parents would not have offered us a loan if we had just arrived from a safari. It just doesn’t make any sense.
Holidays might be a great way to relax and switch off from the daily stresses of life, but they can also be money pits. Any money spent during the trip is lost for good, and we only have a few souvenirs and photos to show.
If you have one booked, see if you can cancel and get a refund, and then use that money to save up for the house deposit. I got a property with a backyard so I can entertain guests without having to go out.
Downgrade Our Car Choice
SUVs are great and all, but it’s also possible to move around in a compact sedan for even less. Big vehicles come with thirsty engines and expensive parts, which drive the cost of ownership through the roof. Consider selling that fuel guzzler and getting a smaller or more economical car. We can choose to go with EVs or hybrid vehicles, which have proven to be more economical than traditional vehicles.
The Bottom Line?
Saving for a house deposit can be easy if we get our priorities right. The idea is to cut back on any unnecessary spending and channeling that money towards saving. Of course, it took us a while to accept lifestyle changes, but the results are worth sacrificing.
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