Mortgage deposit explained: 6 Steps to your first home
- By: Ashley Saunders
- May 2018
Ask a few friends, for the best tips on how to save a mortgage deposit. They’ll probably tell you to put some money aside each month. While this isn’t a terrible idea, it’s far from the best.
The news is full of stories of people who’ve cut out their morning coffee or eaten fewer avocados. Again not the worse idea but what if you could bypass such drastic action?!
What you do need is a plan. The adage of “If you fail to plan, you are planning to fail! ” still ring true.
So if you don’t know where to start or have lost your way, we’ll cover how to save a mortgage deposit from scratch. You’ll also learn how to stay motived while you save.
Set realistic goals
Achieving anything in life involves setting realistic goals. For each goal, write up a plan of what steps you’ll take to complete it and set a time frame to reach it. You could give yourself 3 months, 6 months, 10 years. Having a time frame focuses the mind while keeping you motivated,
Sadly, as kids, we don’t learn how to set and achieve goals. So we lack the focus to set and work toward a goal as an adult. This often leads to frustration both personally and professionally.
You’ve likely heard about setting SMART goals, and while that’s a fantastic way to set goals, here’s an even simpler process which will enable you to set and achieve goals, quickly.
The power of 1
One is a powerful number. One is the start. If you focus on one thing long enough you’re more likely to succeed.
So think about having a single goal. Need to save a £20,000 for your mortgage deposit? You have your goal.
It’s easy to have a long list of goals that never get completed. If you only have a single goal, you can remind yourself of it constantly throughout the day and focus all your attention on achieving it.
Have a plan how you’ll save a mortgage deposit
So now that you have your goal, it’s time to work backwards. If you’re trying to save what seems like a large amount for your mortgage deposit, then by breaking it down will make it seem more achievable.
Our goal of £20k can be broken down into 10 smaller milestones.
Having to earn or save £2,000 instantly feels more achievable than our first goal. You just need to repeat it 10 times.
Yes, that’s a little bit of a shock but still, focus on the smaller amount. So how can we come up with £2,000?
To reach our first milestone, we must reclaim some time each day. You’re probably short on time as it is, but don’t fear. If you can find an hour or two a night, and a few hours over the weekend, that’s fine.
An hour a day devoted to the task is way better than a scattered approach. Don’t leave it until the weekends, as you’ll find a reason to put it off.
Consider it the hair and tortoise approach! So first calculate what time you can easily give each day.
Now that you have an idea of the time you have, let’s think about how to achieve each milestone as this will allow us to save a mortgage deposit quickly.
Firstly, eBay. It’s the lowest hanging fruit. eBay believes we all have about £2,000 of unwanted stuff in our home. We could easily convert these items into cash.
A few top tips if you haven’t used eBay. Remember to calculate all of the costs before listing anything. Typically these costs are eBay fees, Paypal fees and Postage.
Also, look at what others are charging. If you have an item that’s desirable, it may shock you to find it’s selling for a lot more than it’s really worth!
Finally, if it doesn’t sell the first time, relist until it does. As long as you’ve priced the item fairly, someone will buy it – eventually.
If you love clothes and have lots of them, then arrange a swap night with friends. Ask everyone who attends to bring some old clothes and something to eat or drink.
Try to attractively arrange all of the items and let everyone choose a few items. While this idea doesn’t bring in any money, it does save some cash, which could be put toward your mortgage deposit.
Dine out for half price
If you like to eat out then look online for vouchers or start shopping at Tesco as you can redeem point as meal vouchers at major restaurant chains.
You could also lookout for new restaurants in your area, who might be doing a free or pay what you think opening night.
Of course, there are hundreds of ways to make or save money including our best mortgage deposit saving tips. The real secret, however, is to start with what you have as this will all add up. You’ll have a mortgage deposit saved quickly.
Messy house? Lose the clutter with eBay!
Good at crafts? Get selling on Etsy.
Enjoy DIY? Then make some flyers and go door to door.
Measure your progress
Another reason most fail to set and achieve goals is they forget to measure progress! It’s a stupid mistake we’ve all made, but it’s a simple one to correct.
If you’re trying to earn £2,000 over the next 6 months, then you need to bank £333 in profit each month. This works out to around £84 per week.
So it’s worth measuring each week how you’ve done in comparison to where you should be. Again if you take a small step each day, you’ll soon find that you’ve nearly completed the goal.
Keep on keeping on
It’s easy to see saving for a mortgage deposit as a never-ending journey. However, remember the hair and tortoise.
It’s better to take little steps often and track your progress than aim for massive jumps. As you keep on, you’ll see that your money compound, which in turn help you to achieve your goal faster.
Budget a monthly treat
You’d probably hate us if we didn’t include the occasional nice treat into the journey. Yes, you can save a mortgage deposit and still be nice to yourself once or twice a month!
In terms of suitable treats, you could go for a meal or the cinema with your other half. If you enjoy spa days, then treat yourself! Just make it memorable, affordable and highly enjoyable.
Top tip on how to save a mortgage deposit
If you’re wondering how to save a mortgage deposit quickly, it’s actually quite simple. Pick one major goal and start now!
You’ll need to break this major goal into smaller, manageable chunks. For each chunk, you’ll need to plan out the steps you’ll take to reach the goal as well as a reward for hitting each milestone.
Don’t t beat yourself up if you lose focus or stay. Instead, acknowledge you’ve slipped up, get back on course and keep going.
It’s tough to save a mortgage deposit as it can seem like a never-ending process. However, stay focus and keep going!