Best way to save for a house?

csgohan4

I used to live in london, Almost half my salary went to rent. I moved and bought a bigger house for the price of a box room in London.

Sometimes you have to make sacrifices to get what you want or at least close to it. Constantly chasing your tail for a pipe dream is self defeating. I would love to live in London in a 4 bed house, that isn't going to happen unless your stinking rich or have a generous donor

[Deleted User]

Eco_Miser said:

Since you are saving, you should keep around £500 extra in your current account, and avoid going into overdraft. The money saved on overdraft (is that around 40% interest?) should be more than you lose on interest elsewhere (2% if you're lucky).

Due to the way I am paid, it would not work. Different months have different pay. I'd have to keep more than £500 and then it becomes confusing so I find it easier just to go negative and know how much I am out by that way.

[Deleted User]

csgohan4 said:

I used to live in london, Almost half my salary went to rent. I moved and bought a bigger house for the price of a box room in London.

Sometimes you have to make sacrifices to get what you want or at least close to it. Constantly chasing your tail for a pipe dream is self defeating. I would love to live in London in a 4 bed house, that isn't going to happen unless your stinking rich or have a generous donor

Indeed, but you can get an OK

Where did you move to?

eskbanker

[Deleted User] said:

Eco_Miser said:

Since you are saving, you should keep around £500 extra in your current account, and avoid going into overdraft. The money saved on overdraft (is that around 40% interest?) should be more than you lose on interest elsewhere (2% if you're lucky).

Due to the way I am paid, it would not work. Different months have different pay. I'd have to keep more than £500 and then it becomes confusing so I find it easier just to go negative and know how much I am out by that way.

Your prerogative to do things the easiest way of course, but serious saving for ambitious goals entails sacrifice and compromise, so you might benefit from a change in mindset rather than taking the path of least resistance.

[Deleted User]

eskbanker said:

Deleted_User said:

Eco_Miser said:

Since you are saving, you should keep around £500 extra in your current account, and avoid going into overdraft. The money saved on overdraft (is that around 40% interest?) should be more than you lose on interest elsewhere (2% if you're lucky).

Due to the way I am paid, it would not work. Different months have different pay. I'd have to keep more than £500 and then it becomes confusing so I find it easier just to go negative and know how much I am out by that way.

Your prerogative to do things the easiest way of course, but serious saving for ambitious goals entails sacrifice and compromise, so you might benefit from a change in mindset rather than taking the path of least resistance.

If such a move would result in significant increases in savings per month I would consider it, 

MaxiRobriguez

[Deleted User] said:

MaxiRobriguez said:

Cutting your £50 investments and £250 pension (presumably that's post tax?) and putting them as savings towards your new house brings you to your target a year faster, although you'd lose £10k+ of tax efficient investments...

How old are you and what is your relationship status? Is there any possibility of moving back in with mum and dad for a couple of years which could turbo charge your savings if you're renting?

The pension I believe is pre tax, it is deducted from salery before tax. I would not wish to cut pension as my employer also pays in 10% which is dependent on me paying in. So I'd lose a lot.

I am 30 and single, already at home but I do pay towards rent (the £500).

Can you speak to your parents about how much you're paying in rent?

Perhaps your parents would consider forgoing all the rent to allow you to build up the deposit quicker? Perhaps they may consider deferral of payments (eg, pay them £0 for the next four years and then £250 for the following 8 years)?

They may need the money, but it's a question you can ask.

[Deleted User]

MaxiRobriguez said:

[Deleted User] said:

MaxiRobriguez said:

Cutting your £50 investments and £250 pension (presumably that's post tax?) and putting them as savings towards your new house brings you to your target a year faster, although you'd lose £10k+ of tax efficient investments...

How old are you and what is your relationship status? Is there any possibility of moving back in with mum and dad for a couple of years which could turbo charge your savings if you're renting?

The pension I believe is pre tax, it is deducted from salery before tax. I would not wish to cut pension as my employer also pays in 10% which is dependent on me paying in. So I'd lose a lot.

I am 30 and single, already at home but I do pay towards rent (the £500).

Can you speak to your parents about how much you're paying in rent?

Perhaps your parents would consider forgoing all the rent to allow you to build up the deposit quicker? Perhaps they may consider deferral of payments (eg, pay them £0 for the next four years and then £250 for the following 8 years)?

They may need the money, but it's a question you can ask.

Unfortunately that is not possible due to their financial positions. 

Eco_Miser

Deleted_User said:

Eco_Miser said:

Since you are saving, you should keep around £500 extra in your current account, and avoid going into overdraft. The money saved on overdraft (is that around 40% interest?) should be more than you lose on interest elsewhere (2% if you're lucky).

Due to the way I am paid, it would not work. Different months have different pay. I'd have to keep more than £500 and then it becomes confusing so I find it easier just to go negative and know how much I am out by that way.

I have a very variable monthly income. Despite that none of my current accounts go overdrawn, nor do they go much above or below the optimum balance. I use an easy access saving account as a buffer account - in in the high months, out in the low months.

MovingForwards

I chased higher interest rate accounts, locked money away in bank fixed rate bonds each year and saved again the next year. On top of this I was clearing debts from my failed marriage; I was 40 and starting over after relocating. 

I prioritised saving and buying a home over everything. Analysed what I was spending money on and where I could make cutbacks by not buying or buying cheaper.

It worked, took 3.5 years, but I got my deposit together. Spent a lot of the years watching as I got priced out of areas and pushed further away from where I lived / worked. Instead of seeing it as a negative I turned my attention to other counties, saw what properties were available and worked out commute options / costs / routes. Found a great place and offered on it a few months after it came on the market, it's been my home for over 10 months. 

[Deleted User]

JamesRobinson48 said:

I was in similar position at the same age.  I asked my employer to send me on 'hardship postings' abroad, with higher pay and free housing provided.  After few years I came back to UK and could buy a nice house without mortgage. I lived and worked in some tough countries, which I could handle OK because I was young. Not an option for everyone, just one example of making temporary personal sacrifice to achieve life goals.

I already do