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Top ways to save for a deposit whilst you're renting

Planning to buy, but still renting? Here’s how to minimise those costs to save for that deposit.

Top ways to save for a deposit whilst you're renting

When telling people how to save for their deposit, the same culprits come up every time: stop with the brunches, the nights out, the holidays, and move back in with Mum and Dad.

Whilst those who do choose this option are likely to save much quicker, there are many reasons why some wouldn’t choose to move in with their parents. It might not be possible in terms of space, it might increase the length and cost of a commute, or it might put too much pressure on a delicate relationship. For those in couples, it can be hard to retain privacy and authority over your life, and both children and parents can find themselves reverting to old habits – scolding for an unmade bed or arguing over petty differences.

So you’re renting, but you still want to save as much as you can. You’ve tightened the belt, you’re forgoing the takeaways and holidays, but rent is always going to be your biggest outgoing. So how can you supercharge those savings?
 

Switch out your providers

We may be biased, but we’re a fan of comparing services to get the best deal. There are loads of websites who will let you compare your energy providers, internet providers and insurance deals. Don’t spend more than you need to – get yourself the cheapest deal and watch how your monthly outgoings drop!

Act like you’re the parent

Did you grow up in one of those households where you were reminded to turn off the lights, not leave the water running, or not to spend hours on the phone? That’s because your parents were footing the bill. So take those lessons and run with them. You can severely cut down on bills by watching your electricity usage (you could get a smart meter) and water (swapping baths for showers, only running washing machines at full load and you can get a water saver to put into your toilet cistern. It will still work normally, but the amount of water used will be limited.) These changes may feel minute, but if you’re aiming to save up a deposit over a large amount of time, making small changes into habits is the easiest option.

Downsize

It could be that moving to a smaller, cheaper flat from your current place would save you a significant amount every month, but be sure to do the maths. If it adds to the cost of your commute, will mean you have to drive more often (and drive up your petrol spend) or has high bills attached, then maybe think again. Similarly, whilst downsizing can be a good option for those who are renting in high cost areas, or have an extra room they don’t need, the cost of moving can be high, especially if you need to come up with a deposit, a month’s rent, and pay for removals costs (though we can get you the best deal on those). So make sure you fully weigh up how much you’ll be saving and if it’s really worth it long term.

Use what you’ve got

It’s unlikely you’ll be able to sublet a room as part of your rental agreement, but there’s no reason you can’t make the most of what your property affords. For example, if you have a parking space you don’t use, space to store a friend’s items whilst they’re away, or an office space you can make use of, all of these elements of your home can make you money. Just be sure to check your rental agreement for what’s allowed.

Make sure home energy efficient

In the winter it is easy to up those energy costs, especially in older properties. If you have the chance to insulate your home, do so. Mention to the landlord or letting agent if there is damp in the property, but if you are left to insulate yourself, invest in heavy curtains, as well as draught excluders (which you can cheaply make yourself) and don’t fall into the trap of never turning your heating on – keep it on a timer on low, so that the property never becomes freezing, but isn’t wasting money.

Make home a holiday

Money blogger Jenni Hill from Can’t Swing a Cat said that in her time saving for her house, she couldn’t bear to go on holiday, because she worked out how much she’d be paying for her rental flat per night in the two weeks abroad, and it seemed like a waste. Whilst it’s easy to become obsessed with saving and denying yourself, you still need time off and a couple of treats, otherwise saving long term is likely to fall flat. It’s a marathon, not a sprint. So whilst holidays might be off the cards, there’s no reason you can’t book time off work and enjoy yourself! Go and explore your local area, see places you haven’t been to yet. Have the odd meal out, knowing that you’ll be spending a fraction of what you would on a holiday. It’s still important to spend time relaxing and not feeling like you’re missing out on life. It’ll keep you motivated long term.

Make your money work

Most people think that by putting their money in the bank, they’ve done their work saving. But if your money isn’t working for you, what’s the point? Make sure you’ve got the best rate of interest in your savings, whether that’s a Help to Buy ISA, Lifetime ISA or great rate on a savings account. You can only work so hard – your money needs to be working too.

Increase the income

Ah, the millennial creation – the side hustle. For most, limiting their expenditure and really focusing on their goals will allow them to save a deposit (although depending on where you live, the deposit needed could very from a few thousand to a hundred thousand). But what if you’ve scrimped and saved, but the numbers just won’t add up? You need to increase your income. Whether that’s angling for a raise or going for bonuses, looking for a higher paid job or creating a second income stream, there are only so many things you can cut out before you need to increase the amount coming in.

Consider your skills, abilities and free time – it might be easy enough to get a delivery or cleaning job on the weekend, but if you are excellent at refurbishing furniture, identifying hidden gems in charity shops or making jewellery, then perhaps using your talents might be a better use of your time. Especially if you get to enjoy it whilst you’re doing it.

Remember that this is a long term goal, so try not to overload yourself – if you value your free time, or aren’t willing to sacrifice your time with family and friends, that’s completely okay. You’re probably better suited to finding a better paid position rather than adding a second job. There are lots of ways of getting further training and qualifications at great prices that will help you up the job ladder – think long term. Working yourself into exhaustion will probably not help you reach that goal any quicker!

Don’t lose focus

It’s easy to start out full of good intentions and energy, and you may find yourself saving a good chunk of money and feeling proud of yourself. But it’s easy to lose sight when the end doesn’t seem to get any nearer. Setting up direct debits into your savings is a good way to ensure you never miss the money. The more you say ‘no’ to events and nights out in order to save, the more natural it becomes. Most importantly, only look back to notice how far you’ve come. You get to determine your stopping point – if your necessary deposit will take another 7 years to save, and you can’t wait any longer, perhaps consider moving further out, adapting your expectations, or using a government scheme if they are open to you. You can also find others who are on their saving journey using our forum, to keep yourself motivated and accountable.
 
 
 

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