Welcome to the third and final savings guide in our
Saving for your Deposit series. If you’ve already started saving by following the steps in our
first guide ('Starting Saving') and you’ve made lifestyle changes that have created good habits as suggested in our
second guide ('Sacrificing to Save'), you’re clearly in the right place!
Supersizing your Savings is for those who have done all they can to clear debt, build a good credit rating, put their deposit in the right account and are living a life where they regularly put savings away.
Saving for a deposit can take years, depending on your location, necessary costs, travel, and income.
If you’ve made some decent headway, but you’ve sold all your odds and ends, cut down your spending, and are looking for some more ways to cut down your saving time, we’ve got a few tips.
Moving home
Yes, we know, that’s what you’re doing all this for. But usually, your biggest expense is going to be rent and bills. If you work out what you spend over a year on those things, you might find you have the remaining amount for your deposit.
Plenty of people move back in with their parents or another family member to cut down their outgoings for a short period of time. Whilst it’s not always ideal, it’s the number one way to boost your savings quickly.
If you decide to move home, remember not to change your spending habits any more than you need to. It can feel like the extra cash takes the pressure off and you might find yourself reverting to your old ways. Put the money you previously spent on rent and bills straight into savings before you have the chance to dig into it!
Moving in with parents
If you do decide to move back in with your parents (and they’re happy or able to have you) then there are some definite rules to set immediately.
If you move in expecting to pay nothing, but you end up eating all their food or costing more in heating and water bills, then friction will ensue. Work out what an appropriate amount is, whether it’s a set rent, a contribution towards bills or food, helping with house jobs or looking after pets.
When people say ‘you can never go home again’ what they mean is that it’s never the same. You’re moving home as an adult, with your own schedules, priorities, and needs. Your parents will also have their own lives – be mindful of each other’s lifestyles and remember that you’re a guest. Returning home to having your washing done for you and leaving mugs of tea to mould on the side is not okay.
- How long are you staying?
Moving home without a deadline can cause problems – if you know you can save what you need in a year, or two years, then set that as your goal and do everything you can to reach it. An unlimited amount of time can make you complacent and feel like you’re not nearing your goal.
If moving back in with parents or relatives isn’t an option, look at other ways of reducing your bill and rent spend.
This could involve downsizing to a smaller flat, moving further out or moving into a shared house.
House share or lodging
House shares can be good ways to save money on rent.
Moving in with friends is also a good option, to divide the spend between you.
Additionally, if you have a spare room that you can rent out, you can earn up to £7,500 tax free if you have a lodger.
Again, with rent and bills being the biggest spend, you can save a lot by downsizing, but you have to think of the associated costs in order to make sure it’s worth it.
You’ll have to consider:
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Upfront rent and deposit for the new property
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Storage fees if you can’t take all your stuff
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Difference in travel costs
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How long you are planning to stay in your new place
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Estate agent fees - although most fees were banned in 2019 there may still be costs you need to pay, for example if you're leaving your current place before your contract is up
Property Guardianship
Another option might be Property Guardianship, where you rent at a reduced rate to make sure a property is occupied. These can be unusual and grand properties, and you can often make friends with people from all walks of life.
If the amount you would save would be negligible compared to the costs, then it’s better to stay put and focus on adding more money to the pot.
Cashback
Okay, so there’s a little more to it than that, but if you’re going to be spending money anyway, you may as well get something for it. There are a few ways to take advantage of cashback.
When you switch providers
Switching bank accounts can sometimes mean you get an incentive amount, usually in the hundreds. Shop around and make sure you don’t lose out on account fees or fees for quitting your contract early (if switching broadband for example).
When you buy stuff
There are loads of cashback websites designed to pay you for clicking through their link to buy the thing you were going to buy anyway. Always compare to see if it’s cheaper elsewhere, but if the cashback works out, and you were already shopping, why not?
It might take a while but over the course of a few years, especially with Christmas and Birthday presents, your spending may actually pay you back.
Store points
Save up those loyalty points until they’re a big lump sum, instead of wasting them on small purchases.
Whether it’s supermarket shopping or toiletries, collecting points is a way of giving you a little back for spending. Even if these can’t be transferred to cash, they might add up to pay for a month of food shopping, or cover gifts you need to buy.
When you pay bills
A brilliant way to make money on necessary spends – some banks will give you cashback on your bill payments. These add up and can be transferred into your account as cash when they reach a certain amount or can often have higher value as vouchers.
Referrals
If you like your service provider and have a friend who is looking, why not pass on the information? You may get a referral bonus for getting your friend involved. These are often used with different utilities suppliers but may be available for other items too.
Extra work
We already covered second jobs in the Sacrificing to Save guide – either taking on more hours where possible, or adding an extra income where you can both boosts your savings and cuts down on the time you could be spending.
However, sometimes you don’t have that much free time. Maybe you’re exhausted from your regular job, or you have family responsibilities. Getting a second job isn’t always the answer.
But that doesn’t mean there aren’t still options available.
Giving your opinion
Whether taking polls online, giving feedback on website usability from home, or completing market research studies – companies are willing to pay to hear what you think! The polls can take a while to fill out and might not always feel like they pay much, but lots of savvy savers who do them regularly over longer periods of time find them a great way to make a little extra money. Market research can be lucrative, and sometimes you get to keep different products you’re testing.
Alternatively, if you’re desperate for a meal out but don’t want to pay for it, you could do mystery dining, where you assess and write a report on the restaurant and the food. You won’t often make money, but you get a free evening out, allowing you to keep saving!
Passive income
Whilst putting in more hours or doing extra evening work can bring in money more immediately, you could also think long term. Passive income is when you continue to be paid for something you created once.
For example, publishing a book on Amazon, or a downloadable guide on a website. You created it once, but thousands of people can pay for it, long after your work is finished. Often passive income can be related to your personal talents. Passive income is often associated with the creative fields, but it doesn’t have to be.
Examples of passive income creators:
- Book
- Song or jingle
- Image or licensed photograph
- Tshirt/clothing design
- Patterns for knitting or crocheting
- Video guides, webinars, or training videos
- An app
- A game
Anything that you make once but sell more than once gives you the opportunity for passive income, and whilst sometimes it takes more effort upfront, the benefits can be long term.
If you have a website or a blog, there are a few more options:
Referral links on your website
It’s not quite being an influencer, but if you’ve got a popular blog, you could become an Amazon Associate. You post the items on your site using a special tracked link, and you’ll get a kickback from any sale of that item. If you have a lifestyle blog, or even just want to promote items you think are great, you can make a little money.
In the interests of being transparent, you should always let readers know that you receive money for referral links.
Ads
If you’re getting decent hits on your website or Youtube channel, you may have the opportunity to host ads from different companies, who will pay you per view.
Be unashamedly thrifty
The closer you get to reaching your goal, the more you want to make an impact. You can! Try having a ‘no spend’ week – where you don’t buy anything at all. When you do it once, it becomes easier!
It’s perhaps also the time to really push your saving efforts by doing another cut of any expenses you held on to before. If you work out how much you could save by giving it up for 6 months, deleting your streaming service and using a friend’s, biking to work instead of getting the bus…it’s time to go big in order to go home.
Being Money Minded When You Buy
You're not saving in a vacuum - you've worked out what deposit you'll need, what costs you might face and you've been tenacious in your determination to save.
So why stop there?
When it comes to finding the right people for your house move don’t just settle for the first person you find – compare prices and check reviews and make sure you get the best deal.
If your survey reveals that there are issues with the property, take the opportunity to renegotiate the price. After all, if you might have to pay to fix things once you move in, you don’t want to be out of pocket.
Also, if you’re moving out of rented accommodation, ensure you leave the property in excellent condition so you don’t lose out on your deposit. Remember that your deposit should be stored in a Tenancy Deposit Scheme by law, so contact them if you feel your deposit is being unfairly withheld.
Remember that your chosen property is not just a home, it’s an investment. Taking the time to choose a property that is well built, safe and has the potential to increase in value will help you jump up the ladder in future. Invest wisely and think long term.
If you are looking at viewing properties, have a look at our property viewing checklist to ensure you don't miss out on any important questions that need to be asked!
We hope you’ve found our saving guides helpful and the tips have given you lots of ideas to get one step closer to buying your first home. For more help navigating your entry into the property market, visit our First Time Buyer Hub.
Supersizing your saving FAQs
How much can I earn from a lodger before paying tax?
You can earn up to £7,500 per year without paying tax with the Rent a Room Scheme. If the rental income is less than this threshold you do not need to declare the income to HMRC.
If you earn more than this threshold then you must complete a tax return.
What is a normal house deposit UK?
In the UK, the standard amount people usually put down on a deposit is 10% of the property price.
Can I get a mortgage with a 5% deposit?
You may be able to pay a 5% deposit with the 95% mortgage scheme. This scheme helps both First Time Buyers and current homeowners get a mortgage with a 5% deposit.