How to Save for a House While Renting

Published: 18/07/2018 By Penny

Buying a home is a dream for many but with the challenging economic situation, potential homebuyers fear that the dream could take a lot more time than they imagined. Until then, they typically would rent a home until they can afford to buy and save for a deposit or receive a large cash injection somehow for this purpose. The problem is, renting means that you are not putting any equity into a home of your own and it can be very challenging to save enough money for a down payment to buy. For some, they end up renting for years and years without ever buying a home of their own. That is, unless they balance their savings to rent ratio and start saving as much as they can for their new home whilst garnering a deposit will be unlikely without external assistance.
Let’s take a look at some ways you can save money for a home, even while renting:
Ways To Save For A House
1. Use a Budget App
A relatively new and popular option now is to download a budget app onto your mobile device. This can help you keep track of the money you are spending and show you ways that you can save money by creating a budget that works for you.
2. Cut Your Expenses
We spend a lot of money on “luxury” items that we often think of as necessities. From your morning coffee, to your gym membership, these can all add up to significant savings over the course of a year. Make your coffee at home instead of buying it the local café, cancel your gym membership and look for some free ways that you can work out and stay in shape. It might not seem like much, but you can find little ways to save everywhere each month that all add up.
3. Use Autopay
Autopay enables you to pay your bills on time without late fees which can add up very quickly. Even if you just save late fees on one or two bills every month, over the course of a year, that could add up to hundreds of pounds. As well, your actual rates are often reduced with many companies if you sign up to a direct debit rather than opt to pay monthly on your own accord.
4. Make Your Down Payment a Bill
Treat your down payment(deposit) as a bill and have it deducted from your bank account and placed into a savings account every payday. By having the money automatically deducted, you won’t miss it and by the end of the year, you will have a good amount set aside.
5. Spend Less Wherever You Can
Clip coupons, shop generic, buy your clothing online where you can get significant savings, carpool to work and get rid of your credit cards if possible. People have been known to save thousands of pounds every year by clipping coupons alone or looking out for deals. This can add up very quickly when combined with buying store brand foods or clothing at online discount retailers.
Saving money for a down payment on a home can be challenging for renters, but it is not impossible. Every little bit helps and soon you could be house shopping with Chamberland Residential and buying your first home. Even if you aren’t quite ready with a deposit and have questions, please do call us at any time as we will always be happy to help and advise in any way we can.
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