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How to save for your first home during the cost of living crisis

With news headlines across the country currently focused on the cost of living crisis, for many, saving to buy a dream home can seem like an impossible task. Recent research suggests average household savings are expected to fall by 71%, to a weekly average of £26[1] – making it more important than ever to ensure you’re doing everything you can to add to your savings pot.

To help you get saving, national and award-winning housebuilder, St. Modwen Homes, has collated its top tips to bring you one step closer to your forever home. So, don’t write off saving for your home just yet, as there are plenty of simple and effective ways to make the most of your hard-earned cash without having to make dramatic sacrifices. The national housebuilder reveals all:

Tip One – Get organised

The best way to get on top of your savings is to ensure you are keeping track of where your money goes. It can be so easy to spend more of your wages than you’d planned, but a simple trick to avoid this is by setting clear budgeting goals – sounds simple, right?

We’ve all done it – headed to our bank accounts after a busy month and wondered where all our money has disappeared to. Luckily, there is a range of super-useful apps and banks that are designed to help you track exactly what you’re spending at the click of a button. Free apps, such as Monzo allow you to categorize all your spending and keep tabs on your money. Additionally, Monzo has a helpful optional feature to save any ‘spare change’. This means any purchases can be automatically rounded to the nearest pound, and the ‘spare change’ is added to your savings pot. This can prove extremely helpful when trying to save, as you can see which areas you may need to pull back on. What’s more, you can set up individual pots to separate your wages each month – making it even easier to budget every aspect of your life!

Tip Two – There’s no time like the present

It’s best to start saving your deposit as soon as possible! After all, the earlier you start saving the quicker you will be able to buy your home. Even if you don’t have a lot to put aside, just a small amount each month can quickly add up.

There are lots of ways to help save for a deposit and cut down on your everyday costs – including reducing the time you spend in your car. With petrol prices increasing, driving is increasingly expensive, so why not consider switching some of your journeys to a free alternative such as walking or cycling? Plus, it’s kinder to the planet!

Another way to cut down everyday household costs is to switch to cheaper supermarkets where possible. Try to also make the most out of your freezer to avoid food waste, as this will also help reduce the cost of your food shop each week! Finally, a great tip to cut down your expenses is to implement a ‘no-spend day’ into your routine. It may seem odd at first but consider having one day of the week where you don’t spend a penny. This could mean making use of the food you already have at home, watching a movie on the sofa, or visiting a friend.

Tip Three – Slice your household costs in half

Where possible, keeping your gas and electricity costs down will massively help to reduce your outgoings. There are a few small changes you can make around the home to reduce energy bills, such as hanging clothes out to dry on a clothes airer, as opposed to using the tumble dryer. It may take a bit longer to dry, but it’s a quick way to cut down your electricity use. And did you know you can also save money by washing your clothes on a cooler wash? Most washing detergents and fabric softeners are designed to work just as effectively in a cold wash – so there is no need to be blowing your budget on hot washes.

Another way to reduce your electricity use is to keep an eye on your gadgets, it may seem obvious but leaving your devices to charge overnight increases your electricity bill. Instead, charge them up for a couple of hours in the day and you’ll start to notice a difference. If you are looking to make a small investment to help save on your household bills in the long run, then energy-efficient light bulbs are a must-have! Despite having a higher price tag when you initially buy them, energy-efficient bulbs can ultimately help you cut down on your electricity costs over time.

Tip Four – New-build is the way

For those struggling to save for a deposit, buying a new-build property is a great option – offering you access to a range of schemes specifically designed to help you get on the property ladder. When you purchase with St. Modwen Homes, incentives such as the Help to Buy Equity Loan* and First Time Buyer Boost* are both available to support first-time buyers in getting one step closer to the home they’ve been searching for.

The Help to Buy Equity Loan is a government-backed scheme that helps first-time buyers purchase a new home with just a 5% deposit.

The First-Time Buyer Boost is exclusive to St. Modwen Homes, allowing you to reserve your home for just £99, with the national housebuilder also covering your solicitor fees, as well as letting you choose all your carpets and flooring, free of charge! Setting your sights on a new-build property (and the available schemes that come with it) is a cost-effective way to make the most of your savings – especially if you have a smaller deposit saved.

Tip Five – Do your research

Did you know the government also offer schemes to support? To get yourself one step closer to your dream home, make sure you do your research and check if you’re eligible for any government schemes or payments. Currently, households across the nation have been looking into the ‘cost of living payment’ – with Google searches up by 1,550% – to see if they’re eligible for the new government payment (full eligibility for this scheme can be found here). This is just one of many government schemes available to help those on low incomes – and could be the key to helping you save a little more!

Tip Six – Affordable décor is in

Once you have saved enough for your dream home it is time to get decorating! This may seem like a daunting and expensive task, however, there are a few easy ways to make decorating more affordable. Searching for second-hand furniture is a great place to start. Spend some time looking through Facebook MarketplaceGumtree, and charity shops or eBay, and you’ll discover a variety of second-hand furniture, often in great condition. Another option is visiting car boot sales, where you can often find some amazing bargains too. It’s also worth considering upcycling old furniture – perhaps a friend or family member is throwing something out that you could make use of. A little TLC on second-hand furniture can really go a long way. Adding a fresh coat of paint and making small repairs will make decorating your home even more affordable – whilst still giving you the freedom to add a touch of your own personal style.

So, there you have it, six simple steps you can take to get you closer to your dream home. Whether it’s making a few simple everyday switches or researching helpful schemes, there are plenty of ways you can help stretch your savings!