Getting on the property ladder isn’t easy, especially when it comes to saving that all important deposit. However, there are ways to cut back in order to save for a deposit. Top online estate agent Hatched have come up with a useful infographic to help potential buyers see exactly where savings can be made.
By cutting out, or at least cutting back, on a few of life’s luxuries, you could find it easier than you thought to save for a deposit. Below, you’ll discover just some of the luxuries Hatched recommends you can potentially cut back on.
Don’t consider coffee a luxury? You will when you see just how much money you could be saving simply by cutting back!
According to research from Hatched, which considered numerous factors, the average person drinks 252 coffees in a year. In terms of money, this adds up to a staggering £680 per year; approximately 2.06% of a property deposit.
You’d only have to cut your morning coffee to see a large cost difference, which admittedly is easier than it sounds.
2. Assess Your Smartphone Plan
Smartphones, we really couldn’t live without them these days. However, if you’re on a monthly plan, you could be paying a lot more than you need to. It’s unsurprising they’ve made it onto the Hatched infographic of luxuries to cut back on. The next time you’re due for an upgrade, consider switching to a slightly older mobile. This alone will save you a lot on the device plan price.
However, it’s the data or airtime plan which is going to save you the most money. Are you currently paying for a top-tier plan? One which includes a high percentage of data and numerous bolt on’s? If so, consider whether you actually need those extras and whether you could downgrade to a cheaper plan.
Hatched estimates the average cost of an iPhone contract is £45 per month. This equals £540 a year based on a 12-month contract – approximately 1.64% of a house deposit.
3. Stay In More
[pullquote]Another surprising find from Hatched, was that the average person goes out with their friends once a fortnight and spends approximately £58.48.[/pullquote] Over the course of a year, this adds up to £1,403.52. That’s 4.25% of the deposit. Some people spend even more than this and go out weekly, rather than fortnightly. So, staying in could save you the largest chunk of your deposit.
Now, these are just the main three luxuries you could cut out while saving for a deposit. However, as you’ll see from the Hatched infographic, if you make just one cutback alone, it will still take you years to save up. In fact, if you were to stop going out fortnightly and that’s the only change you make, it would still take you on average 23.5 years to save up.
So, the key is to cut out all of the luxuries found in the Hatched research. That includes the above, along with gym memberships, cinema trips, meals out and summer holidays. It doesn’t sound fun does it, but if you do these things, on top of saving additional money in an ISA account, it will take you a lot less time than you might think to save.
Overall, saving for a house deposit is hard work, but as Hatched shows, cutting back on those little luxuries could make a huge difference to how quickly you can get the money together.
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