Don’t worry, it’s not one of those I stayed with my parents and didn’t pay rent for three years posts. I’m sticking to saving up realness as I share how I saved up enough to buy a flat…
Today I’m going to be talking about how to save for a mortgage in your twenties. Let’s be real, it’s not an easy task. There are a lot of stories out there that make it seem easy, at least on the surface, but in my experience it was a hard grind of saving, and saving, and saving some more. I bought my flat with my boyfriend just after I turned 30, so it took near enough eight years of saving once I had graduated from university and was working full-time. And at times it felt like very much the Impossible Dream.
Even when we moved in, it wasn’t a fairytale. We couldn’t afford a turn-key property so we bought a proper fixer up that needed walls knocked down and a new bathroom. We’ve now been here for a few years and now, finally, I’m enjoying the process of renovating it – maybe because we’re now in the part where it’s all about soft furnishings and wall art. It’s gone from a wood-chip and magnolia wall horror story it was into something that one day might actually look OK, even actually nice. If you’re nosy, you can have a look at my few pictures on my Instagram account here. But let’s get back on track…
“There’s a lot to criticism levelled at young people in regards to their spending habits. The “OK boomer” phrase was never more needed than in this context, right?”
As I’ve said, it’s certainly not easy to save for a flat these days. Rents are high and seem to be going up all the time – and always at a much higher rate than wages are increasing. There’s a shortage of properties in general in the UK and, added to that, there’s also no telling what’s going to happen to the property market once the coronavirus pandemic is finally over. There’s also a lot of criticism levelled at young people in regards to their spending habits, usually by older people, and most of which is completely unfair. The “OK boomer” phrase was never needed more than in this context, right?
However, while I really loathe all the arguments about avocado on toast brunches being the blocker to millennials getting on the property ladder, I do admit that there are so many tempting things to spend money on in your twenties – clothes, nights out, dinners out, holidays abroad, more clothes – and that makes saving for a property pretty tough. Especially when you know you’re going to have to watch lots of people around you, who perhaps have parents who are happy to provide a deposit, do precisely all of these things. I never said it was easy. So how did I save enough to buy a property aged 30?
“While I loathe the arguments about avocado on toast brunches being the blockers to millennials getting on the property ladder, I do admit that there are many tempting things to spend your money on.”
Well, let me tell you a little bit about me. I earn an average salary. I’m not someone who became CEO of a company at 26. I don’t work in an industry where people make a fortune straight off the bat. I don’t have wealthy parents who bought me a car or a flat or summer of travelling in South East Asia when I was 22. It would be great if I did, but unfortunately not. So, I had to be pragmatic with my cash as soon as I started earning a full time wage. And what that meant was waving goodbye to some of my salary each month and waiting and waiting for the numbers to grow big enough for a deposit onto a flat.
Here’s how I saved money every month in my twenties – and how you can too!
1) Live in a flatshare
If you’re saving up for a home deposit then don’t live on your own – make sure you live in a flatshare. I lived in flatshares throughout the entirely of my twenties to save money on rent. Some of my friends rented alone, and trust me, I would had LOVED to have done that, but I could never justify the expense. I definitely got bored of it by the end. I think you reach an age when having to deal with tricky flatmates or not being able to watch what you want on TV loses its charm. Like it was ever charming, really. As an introvert, not having my own space to hide away from the world also bothered me. However, I sucked it up because I knew that saving up for a home deposit was more important to me. Long-term, it meant that I had a much higher disposable income that I could put away each month.
2) Put money away each month
I made sure I put money away each month throughout my twenties. You have to make it a non-negotiable habit, rather than something you just do occasionally. But how do you save money for a house when you’re on a low income? Well, that was me too. I was basically earning the minimum wage until my late 20s. However, I still knew I wanted to save. so I set up a standing order for money to go out of my account on payday each month. FYI, the best savings account to save with is an ISA because you don’t have to pay tax on any interest you accrue. Anyway, being really honest here, sometimes I did have to transfer my savings back into my current account before the month was up, but for the most part I saved around £75-100 per month. It wasn’t huge amount, but it added up over the weeks, months and years. I continue to save every month now, with a standing order coming out each pay day.
3) Make small sacrifices that add up
If you’re looking to buy your own home in your twenties then the bad news is that you’re going to have to make sacrifices along the way. The good news is that you can start off small with a lot of little changes you can implement every day. I’m going to start with takeaway coffees. To be really frank, if you’re serious about saving up for a deposit on a property then I’d try and quit the habit right now. If you’re drinking them regularly the expense is just jaw-dropping. If you really must, allow yourself to have one once a week at the most. The same goes for lunches. Stop buying your lunch each day; you’ll spend a fortune without even realising it. You should also see if you can save money on your commute. Do you have to take the bus both ways or could you walk home instead? Could you cycle? Explore your options and see if there are any savings to be made – you might even get fitter in the process.
4) Go on cheap holidays
Right, I know this post is about saving money rather than spending it, but I also know that it’s unlikely people are going to get through the entirety of their twenties without going on holiday. I had a big gap where I didn’t go anywhere, but I then I started going on holiday again when I was about 25. However, I didn’t do the big holidays that everyone else in the world seemed to be having; the two-week jaunt to Australia or the quick dash across the Atlantic to New York. It sounds boring, but I lived within my means and I took holidays to cheap city breaks in Europe that I could pretty much pay for with one month’s salary – Berlin, Gothenburg, Amsterdam. They were still great holidays! They just didn’t cripple me financially for months afterwards. If you don’t follow Holiday Pirates, you’re missing out.
5) Sell everything you don’t need
One person’s trash is another’s treasure and all that, and so I would make sure you get yourself on Depop and Vinted so that you can sell all the old clothes that you don’t wear anymore. I got really into both of these platforms a few years ago and sold quite a lot of stuff; it was a great way to add an extra income stream to my salary each month. Make sure the photographs of your items are well lit, preferably in daylight, and that your items are ironed and either hung up or modelled by you so people can see how the item fits. It’s also best to include all the relevant information that people will want to know: the brand, the size, whether the item is true to size, and whether the item is new, like new, or worn. Always be honest, there’s no point trying to blag something as it’ll just come back to bite you.
6) Decide what your essentials are
One of my biggest tips for saving money is to decide what are your absolute essentials and what you can let slide. One thing I decided wasn’t essential was a car. I wanted to save up for the biggest thing first, a property, with the thinking that I could get the smaller stuff further down the line if and when it was needed. However, I still don’t have a car several years down the line. I guess I’m lucky in the sense that the city I live in has relatively good transport links, so I’ve never felt the need for one, but I honestly don’t know if I’ll ever feel that I earn enough money to justify the costs. The monthly payments, petrol, paying for parking at work… it all adds up. That’s not even taking into account the refresher driving lessons I’d have to take just to make sure I was safe on the roads. Maybe one day I’ll get a car but for now I’d prefer to have a higher disposable income that I can choose to save or spend.
Quick fire tips
7) Give your savings account a name, like Lucy’s flat fund. You’re much less likely to dip into it if you get a sassy reminder every time you want to deplete your account.
8) Don’t buy books. Just go to your local library instead.
9) Meal plan each week and buy the bulk of your food from budget supermarkets.
10) Quit going to the cinema and just have movie nights at home instead. You can still have the fizzy drinks and the popcorn, just at a much cheaper price!
So those are my top money saving tips. I’m not saying I never went out a blew half my wages on a night out or bought that way-too-expensive coat, because I absolutely did. I wouldn’t be human if I didn’t. However, it was the consistency over time that got me over the finish line and into my own place.