How are you all saving for your deposits

jimcoxell

Hi all

I am one of those "mugs" who bought at the late end of 2006. The reason I bought is that I was renting a damp ridden, slug invested shoebox in essex for a price that meant that my mortage repayments would be only slightly higher than the rent i was paying. I also found out that my landlady had been bought the flat by her dad who wanted her to get experience at being a landlady. Whilst I love my job and thank my desk everytime I sit down at it the fact that £600.00 of my £1000.00 salary was paying off a young womans mortage did hurt. It was this information that made me go hell to leather to buy a place for me and my family.

Im amazed at how much you are all saving and now that I need to overpay my mortgage I'd be really greatfull if you can all give me an insight how you manage to rent and save your huge deposits.

this is a post from a guy with his head firmly out of the sand who aknowledges that house prices may just fall by a huge amount. As my family may be getting bigger soon i'd like to move to a bigger place so I would be really gratfefull if you could share your tips with me and other people who may need to make adjustments to their budget.

you could all make a real difference to people lifes by sharing your secrets.

thanks as always,

beingjdc

I save largely because, here (London Zone 2) renting is so much cheaper than buying, so there's £££ left over. Especially since I share (separate bathrooms and a dishwasher are what make that possible) Apart from that...

I buy ingredients, not ready-made food. I cook a stack of it on Sundays and freeze five bagfuls. Five days a week in which I don't buy lunch from the sandwich shop = £80 a month saved.

I buy sturdy but good value shoes (£30 from Marks) and wear them into the ground. I just changed my last pair, I had got to the point where I was a bit ashamed of being seen in them.

I don't travel. My friends spend up to £2k a year on holidays. My last holiday was in 2000, and someone else paid for it. I'm going to Italy this Summer, but one week of that will be in a friend's spare room.

I take up offers when I can - YouGov is worth £75 a year to me, and MobilePanel spy on my phone and in exchange I get £60 a year towards my bills.

I've very nearly stopped drinking when I go out (unless, say, it's at Wetherspoons). I spent £28 last Friday night in a bar, and that was the most I've spent on a night out in a year, I reckon. Alcohol is stupidly expensive - say 4 pints at £2.50 each twice a week, that'd be £1k a year.

The big thing for me is that my finances are in a spreadsheet, and there are various graphs I can play with telling me all sorts of stuff. When the lines on the graphs are going the right way, I'm happier than I would be if I had 99% of the things I could get with cash.

Though I do take it a bit far. I really should buy myself a cheap mp3 player - my current strategy of recording mp3 CDs and listening to them on a CD Walkman I bought (last one in the shop, ex-display, naturally!) in 2005 is wearing a bit thin.

jimcoxell

what a fantastic first reply to this thread. plenty more like this would be really appreciated

beingjdc

For the sake of completeness, the graphs are as follows, in the order in which they appear. They are updated on the 1st of each month, though I often do them in draft a week early to discourage any end-of-month splurging.

* My total net worth (with trendline)
* The number of months I could survive if I lost my job (with 12-month moving average)
* The percentage change in my total net worth over the last 12 months (also with a 12-month moving average)
* How much I have spent each month (again, 12 month etc etc)
* The average monthly change in my net worth over the last 12 months
* The salary multiple mortgage I would need to buy a £250k property
* The amount I need to save per month to have my target deposit by my target purchase date

oldMcDonald

I spend a lot of my time lurking over on the 'Debt Free Wannabe' board. I have been out of debt for years and now have quite a nice amount of savings and I find the DFW board is really useful for keeping an eye on your budget. People post their SOAs over there and other posters advise them on where they could save money, what needs are actually wants when you are being really honest - the advice available with regards to budgeting over there is so good.

I would also say spend time over on the Old Style board (but don't call it 'The Housewife Forum' as another poster over on this board did - they wouldn't like it ) The OS board will tell you everything, from hoew to clean your house with vinegar through to how to feed a family of four for less than £100-or-so pounds each month. What those guys don't know about saving the pennies really isn't worth knowing!

I have a set amount that is saved each month, this is not discussable - we put that money aside and it no longer exists as far as the budget is concerned, we live on the amount left. If it is a difficult month then we will go without, eg cut right out on the diesel money, rather than touch the savings. Chances are that when / if (depending on what camp you are in) house prices fall, this will be our only chance to buy. Savings come first. Make sure your savings are in the best place to work for you, ISAs, regular saver accounts that are drip fed from high interest accounts etc.

Like beingjdc, we cook from scratch, don't have any kind of holiday, don't go out other than picnics with the kids or cheap nights in and a home cooked meal with friends, we make our own wine / beer and we also probably take it a bit far for some people - for example, we looked at how much the telly cost to licence and run, how much time it ate up which we could use more constructively - and decided that we would rather those pennies were in the savings account....TV was sold!

There is a thread called 'We're saving for a deposit' which I will look for and link to in a moment, there may be an idea or two in there for you.

Good luck, OP.

*LINKS

How much can you save....
We're saving for a deposit thread

Lotus-eater

I'm not saving for a deposit, but I have saved enough to pay off my mortgage. We do the same as above. Its simple really, you spend less than you earn. Add up everything you spend, absolutely everything. Martin does a good spreadsheet for this on the site somewhere.
Put to one side what you absolutely have to spend and see whats left, cut out what you can from that. It doesn't sound you would have much extra to save so don't beat yourself up if you can't save alot.

PasturesNew

I noticed two things from your posting:
- You only take home £1000/month
- You are speaking in "I" but a vague mention of "we" so not sure if you're single or not

Earning £1000/month isn't a lot (I know because that's what I've been used to for years). It certainly isn't enough to make such a dent into savings that you can ever think it worthwhile.

So here are my different tips:
- Guessing your age, when I was your age I had 3 jobs. I had a full-time office job (PA); an evening telephone canvassing job (double glazing); a weekend job (petrol forecourt attendant/cashier).
- Get one of those magical things called "an other half". Having a partner means ALL of their money is spare and about 70-80% of it can be saved without even blinking. (this was a joke, you can't just GET a partner, I never did)
- Get tight. Ban: rounds and splitting the meal. If you drink at your own rate and buy your own beers and if you pay for what you order at a meal, you can save fortunes (of course this loses you friends because the one who WANTS you to split everything is always the one who has consumed the most)
- Don't buy things you can't use. e.g. I want a WII fit. I will eventually get one in about 5 years' time when somebody throws one out or at a car boot sale for £5.
- Don't confuse WANT with NEED.
- Buy clothes from charity shops. Go regularly and ONLY buy the new/good stuff. You can't just walk into one and expect to walk out fully kitted up, but if you drop in when you can and get one item every 3-4 trips it adds up.
- Be aware of how much everything costs. Buy food based on £/100g; only buy when it's cheap. Trade down on brands. e.g. If you buy Nescafe coffee, look at the price per 100g, it might be £2.50/100g. Now check out the supermarket own brand. Usually 65p-£1.20/100g. Buy that instead - BUT - knowing that figure you can still buy Nescafe in SOME offers.... when its price matches your "cheap price". Don't be fooled by BOGOF or reductions. Compare like for like (weight) and stock up when things you KNOW you will get through are a proper bargain.

oldMcDonald

PasturesNew wrote: »

- Don't confuse WANT with NEED.

Repeating what PN wrote, putting it in bold and changing text to red, as I believe that this is the best piece of advice there is going with regards to trying to build savings.

If only I had understood the importance of this little nugget several years ago......

clobber_2

Don't know if this is relevant to your situation, but internet banking has really helped me. I have a standing order from my current account to my savings account, but every month when I get paid I have a quick look and then transfer any money left over to my savings account. Stops me accumulating cash in my current account which would just get spent.

Jonbvn

beingjdc wrote: »

For the sake of completeness, the graphs are as follows, in the order in which they appear. They are updated on the 1st of each month, though I often do them in draft a week early to discourage any end-of-month splurging.

* My total net worth (with trendline)
* The number of months I could survive if I lost my job (with 12-month moving average)
* The percentage change in my total net worth over the last 12 months (also with a 12-month moving average)
* How much I have spent each month (again, 12 month etc etc)
* The average monthly change in my net worth over the last 12 months
* The salary multiple mortgage I would need to buy a £250k property
* The amount I need to save per month to have my target deposit by my target purchase date

My word you are dedicated. However, be careful that you do not become obsessive! I worked with a guy who ran his life using spreadsheets. He could tell you to the day when he could retire early. Unfortunately his wife became fed-up and left him.

neverdespairgirl

We save by making a priority of savings.

We do spend money on some things where we could save (for example, holidays, and childcare) but make sure that in other areas, we keep spending down. It's easy to spend lots of money over the course of a month with no real benefit, and to fall into the habit of, say, getting a take-away coffee every day, which soon adds up!

A good idea is to make a list of EVERYTHING you spend for a month, including 30p on a choc bar. Then go through it, decide what you value spending, and what you can save next month.