9 Money saving tips for first time home buyers

With the cost of living crisis, salary rates and more, it can be tempting to feel hopeless about the current housing crisis in the UK. On top of this, a 2024 survey by Finder.com recently shared the average savings for homeowners. It was found that the average savings for 18-24 was £3636, 25-34 was £3748, and 35-44 was £5714. Considering the average price for a home in the UK is £289,723, this can seem daunting for aspiring homeowners. So, we have put together a few money-saving tips for first-time home buyers. 

1. The 7/20/10 strategy

The 70/20/10 saving strategy divides your earnings into three categories. The 70% is for what you need, the 20% is for saving, and the 10% is for what you want. It is a good guide to help ensure that you constantly keep a minimum amount of monthly money towards building a deposit for your first property. 

The 70% dedicated to needs goes towards bills such as rent, utilities, food, etc. The 20% for savings is geared towards your plans. This includes your savings for a deposit. Finally, the 10% of your income should go towards your non-essential expenses like going out with your friends, spa days, and other entertainment activities. Adopting this saving strategy helps simplify savings for you and helps you be mindful of your spending. 

2. Shop for the best deals to save for your deposit

From Onestopsave.com to Trolley.co.uk, there are several apps and resources that send you the best money-saving deals. By utilising these resources, you’ll be able to regularly implement budget-friendly spending, which means you’ll have more room to save the money that you earn.

3. Reassess your needs and wants

When you’re working towards a goal, there are certain disciplines you have to implement to help ensure you will achieve it. Part of this may mean you must assess your needs and wants and if you should be regularly spending on certain expenses. For example, you may want to assess if you want to spend large amounts on Netflix subscriptions or even travel expenses.

It’s important to remember that whilst a £5 coffee may seem small in one transaction, over time in the space of a month, if doing this regularly, it adds up and could be a small change that, over time, could make a valuable contribution to your housing deposit instead.

4. Save for more than your deposit

While saving for a deposit is your first step towards getting your first home, it’s important to know that’s not the only thing you should be saving for as a first-time buyer. Many forget about the other expenses that come with buying a house.

From hiring a mortgage broker to moving costs to furniture, there are a host of other expenses you should consider when saving for your housing deposit.

5. Try co-living while you wait

Rent costs in the UK are at an all-time high—especially if you rent alone. While building your deposit, living in a co-living situation can significantly cut your costs compared to living alone. If you have family to stay with, this can be a big help in saving for your deposit.

6. Automate your savings

To limit the temptation of splashing out on your earnings, automating your savings through a direct debit on your payday, for example, means your savings are already sorted before you get the chance to spend them. If you struggle with discipline, this is a helpful tactic to put aside savings.

7. Make a money savings plan

Seeing things sometimes helps you believe them more. Having a spreadsheet or visual prompter that shows your savings progress or helps you assess when you have certain saving goals can encourage you further on your journey. Sometimes, saving can seem like a hard, boring task, so celebrating your progress along the way is important.

8. Sign up for Cashback apps

From Quidco to Topcashback, various apps allow you to earn money whilst you shop. Simply download them as a plugin to your internet browser or use them as an app on your phone to prompt you to use them when you shop. If you do this consistently, they can significantly contribute to buying your first home.

9. Considered selling unwanted goods

There are so many ways to sell your unwanted items online now. It’s easy to upload images and videos of your item and upload within a few minutes to a marketplace of people who may be interested in them. You can set your price, negotiate, and, over time, build a following from it. As a little side hustle, you can use the earnings from this to go towards your deposit.

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