How to Save up for a Deposit

Whether you are saving for a deposit on a home to rent, a home to buy or something else, it can be quite a difficult task. Trying to come up with a large sum of money is not easy for most people. This means that you will need to change the way that you earn and/or spend in order to make sure that you can save. It can be wise to follow a step by step approach

  • Open a savings account – to start with it is wise to open a savings account which is dedicated to saving up this deposit. This will allow you to have somewhere to collect your money, help you to be able to more easily see it growing and stop you being tempted to spend it. You will also be paid interest on it, which will help you to accumulate money more quickly, even if it just makes a very small difference.
  • Pay off loans – if you have any loans then it could be wise to pay these off before you start, especially if they are quite small but have high interest. Then you will be able to start saving the money that you were paying on interest on the loan. Companies such as Cobra Payday Loans can help if you’re looking for a short term cash influx to tide you over.
  • Put money in there when you get paid – when you first get paid it is wise to put some money into the savings account. It can be worth setting up a direct debit to do this. This will mean that you will not be tempted to spend all of your money before you have saved some. It is a good idea to make sure that the amount that you are putting in is a sensible amount. You need to think about how much you can afford, but also put away the biggest amount that you can. It can be a good idea to look back over bank statements to see how much you think you would normally be able to afford and use that figure.
  • Put money in at end of month – at the end of the month you can put any money you have left before being paid into the savings account. This will vary form month to month depending on how much you spend but it could help to add to the amount of savings that you have.
  • Compare prices and spend less – if you want to free up more money to save then you will have to spend less. This might seem very obvious but finding a way to do it may not be so obvious. One way to start is to compare the prices of everything that you are buying and see whether you can buy cheaper items to save money. You may not be prepared to reduce the quality so you may want to make sure that you are getting good value for money. You may still find that you can save money. Perhaps on things such as energy, insurance or even food, you may find that switching to cheaper items could make very little difference with regards to quality but a lot of difference to the cost. Making small savings across many items will make a difference to the amount that you can save and will mean that you will not have to go without anything. You may even find that there are some cheaper things which offer significantly better value for money.
  • Buy less unnecessary items – we all buy some items that are not really necessary. It can be worth thinking hard about everything that you are buying and asking yourself whether you really need it. This could prevent you form buying so many things and therefore help to save money. Obviously, we all like some luxuries and pleasures but the more that you can do without, the quicker you will be able to save up the deposit that you need.
  • Look for ways to earn more – Earning more can really help to give your savings a boost, particularly if you keep your spending at the same level or lower it. This may not be that easy though, but it is still worth thinking about. There are many things that we can do to earn more, but we need to think about whether there is anything that we can do which will enable us to earn more and fit in with our lifestyle. It might be that working more hours is not practical, but we may be able to ask for a pay rise or look for a better paid job. It may be that we need to be at home to look after family but we can some online work. It might be that you do not feel you have enough skills, but that you can earn money doing some online questionnaires. There are earning solution but you will need to look for them.

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