Saving for a renovation or downpayment on a house can be a little daunting at first, but you can make it easy and (hopefully!) a little quicker by using our handy top tips for saving for a renovation or property.
Budgeting Tips for Saving for a Renovation or Property
1. Make a budget plan
Start by getting a piece of paper and writing out three lists. One is your income – include everything that comes in regularly, such as salary. Next is your fixed outgoings, ones you cannot do anything about – think gas bill, petrol, food, council tax. Finally, write out an approximate list of variable outgoings – coffees in the morning, nights out, magazines.
Next step, work out how much you can save by looking at the difference between income and outgoings. See if you can cut out any costs that you didn’t realise were so high.
Finally, set up direct debits or savings plans for yourself with dates when you will put certain amounts into a savings account – you can then work out how long it will take to reach your total! Keep this in view in the house to motivate yourself as you keep saving.
2. Try the 50/30/20 Budgeting Rule
There are lots of different ways you can structure finances to give you a good balance between having money to spend, and saving for a renovation or downpayment on a property. A common rule is the 50/30/20 rule, where you split your finances into 3 parts:
- 20% savings
- 30% wants
- 50% needs
Fit your spending into these restrictions for a great saving structure – you could even swap wants and needs to get even more savings!
3. Target Totals
Have a total to achieve so that you can watch your finances get closer and closer – this will be a great motivation to keep going. It is important to include incremental goals as well, so set a target and date and try your best to achieve it.
4. Challenge Yourself
The 30 day rule is a great way to curb spending and keep track of impulse buys. Every time you want to buy something that is not a necessity (clothes, shoes, games), write it on a piece of paper and put it somewhere visible in your house. If, after 30 days, you are still pining for the item, buy it – but try and find it a bit cheaper and never buy it on credit.
5. Reduce / Remove High Debt
Getting rid of high interest repayments is a great way to start. Before you think about getting savings on the go, use the money to clear off your debts as the interest earned on savings will never be as high as interest paid on debts.
6. Automate your Savings
Set direct debits up to transfer money from your current account to savings account the day after payday. If you never see the money in your account, then you won’t be tempted to spend it.
Little Lifestyle Changes to Make Saving Easier
If you want to really crack down and save, the things below might be possible to reduce or cut out of your expenses. Don’t worry if you can’t – remember you still need to enjoy yourself so if it takes an extra month because you love a fancy coffee then go for it! Just keep it in your plan.
1. Cut out little treats like coffee on the way to work, or buying lunch each day. Take treats with you in a flask or carry your own lunch with you to cut out £20 – £30 a week (thats £1,000+ per year!)
2. Try shopping online for food if possible – reports have shown that you spend less online than in store as it doesn’t have the same emotional connection (and you don’t grab stuff off the end shelves at the supermarket!).
3. Give supermarket swaps a go! If you usually shop at a top end supermarket, try using a lower end option to see how much you could save on your weekly shop.
4. Always shop with a list. Sounds simple but it could really help curb unnecessary spending.