Tips & Tricks on how you saved up for a house

While waiting for my FLR(M), I need to distract myself so I'm focusing on my future, and we've decided we want to start seriously saving for a house or flat one day. We had a Help to Buy ISA, which has since been turned into just another ISA, and it has a bit of money in it. But we're still a long way out from a deposit on anything so I'd love to hear anybody's advice on good ways to budget/save up money for a deposit.

Also, I realise we need good/decent credit to get a mortgage. Neither myself nor my husband have a credit card. We've actively avoided them since people close to us have gotten into a lot of debt because of credit cards. But I realise the best way to get good credit would be to have a credit card and pay it off on time. Is it really necessary? Could we do decently without a credit card, or is it time to just suck it up and get one?

Is there anything else we should consider? I've heard that sometimes getting the mortgage is the easy part, and all the admin and lawyers afterwards are the real pain.

I recommend getting a credit card, but also keep track of exactly how much money you have, and only use the card if you already have the cash available to make the purchase.  Don't borrow from your future.

But do use the card.  Use it in place of your debit card and then pay it off with the money that was already in your current account that you would have spent.  This will give the credit card issuer some good news to report to the credit reporting agencies every month.  The more months of "Paid as agreed" you can rack up, the better.  Do not ever pay late!  And don't carry a balance.  Also, make sure you get a card with no annual fee.  It doesn't matter what the interest rate is, since you're never going to pay interest (because you're paying it off every month), and make it a goal to never have to pay a fee.  I got a card once with a $300 incentive (!!), in the form of 30,000 loyalty points that could be taken as cash back... no annual fee, and I never carried a balance... that bank (Chase) just gave me $300, and I never gave them anything back.

Why did your Help to Buy ISA get converted to a regular ISA?  The total bonus that you could've got was "only" £3000, if you had £12000 saved up in it, but every little bit helps.  If you're under 40, did you sign up for the Lifetime ISA?

I keep a budget spreadsheet.  I have a fixed income every month, and straight off the top, I put the maximum into my ISA (which gets a rather hefty for these days 3.2%), and then some more into a Lloyd's Monthly Saver.... The budget spreadsheet automatically deducts these expenses, along with a couple of other things I pay, straight off the top, and tells me how much I have left for the month.  I also track every cent I spend on the side, and the spreadsheet keeps the running total and deducts it, too, so I always know exactly what I have to play with.  I am able to make saving a priority, and as a rule, I never dip into my savings (the Monthly Saver account is an annual thing that gets cashed out each spring and historically was used for visa applications, council tax, and water rates... now it's just council tax and water rates, and then I get about half of it back as a reward for being such a good person... yay, me!).

Also, I have a little bit invested in Premium Bonds... It doesn't draw interest, but every month there's a drawing and I could win up to £1M.  Once you're invested (minimum of £25 to get started), you are in the draw every month until you pull your money out, it's government-backed and secure, and you can withdraw your money at any time.  Nothing wrong with stashing away £25 in the hope that you might one day win.  It's incredibly unlikely (about 1 in a billion if you have the minimum invested), but it's possible. 

This may sound obvious but watch your spending.

Cut out your daily coffee, take lunch to work, try Aldi or Lidl if you don't use them already. Plan your meals so there is less food waste. Fix things rather than buying new.

And before buying anything at all, ask yourself if you really need it.

I recommend getting a credit card, but also keep track of exactly how much money you have, and only use the card if you already have the cash available to make the purchase.  Don't borrow from your future.

But do use the card.  Use it in place of your debit card and then pay it off with the money that was already in your current account that you would have spent.  This will give the credit card issuer some good news to report to the credit reporting agencies every month.  The more months of "Paid as agreed" you can rack up, the better.  Do not ever pay late!  And don't carry a balance.  Also, make sure you get a card with no annual fee.  It doesn't matter what the interest rate is, since you're never going to pay interest (because you're paying it off every month), and make it a goal to never have to pay a fee.  I got a card once with a $300 incentive (!!), in the form of 30,000 loyalty points that could be taken as cash back... no annual fee, and I never carried a balance... that bank (Chase) just gave me $300, and I never gave them anything back.

Why did your Help to Buy ISA get converted to a regular ISA?  The total bonus that you could've got was "only" £3000, if you had £12000 saved up in it, but every little bit helps.  If you're under 40, did you sign up for the Lifetime ISA?

I keep a budget spreadsheet.  I have a fixed income every month, and straight off the top, I put the maximum into my ISA (which gets a rather hefty for these days 3.2%), and then some more into a Lloyd's Monthly Saver.... The budget spreadsheet automatically deducts these expenses, along with a couple of other things I pay, straight off the top, and tells me how much I have left for the month.  I also track every cent I spend on the side, and the spreadsheet keeps the running total and deducts it, too, so I always know exactly what I have to play with.  I am able to make saving a priority, and as a rule, I never dip into my savings (the Monthly Saver account is an annual thing that gets cashed out each spring and historically was used for visa applications, council tax, and water rates... now it's just council tax and water rates, and then I get about half of it back as a reward for being such a good person... yay, me!).

Also, I have a little bit invested in Premium Bonds... It doesn't draw interest, but every month there's a drawing and I could win up to £1M.  Once you're invested (minimum of £25 to get started), you are in the draw every month until you pull your money out, it's government-backed and secure, and you can withdraw your money at any time.  Nothing wrong with stashing away £25 in the hope that you might one day win.  It's incredibly unlikely (about 1 in a billion if you have the minimum invested), but it's possible. 

This is good info – thank you so much! I've been thinking about getting a credit card to maybe pay off some of my regular monthly things, which I already budget in, but I could just do it through the credit card.

And I need to check but I think it got changed to a regular ISA because we kept getting mail about the scheme ending. We have an appointment to go in to the bank and talk about it because (from our understanding) the account should still be fine because we signed up before the scheme closed.

Oooo this sounds like my dad buying lotto tickets but maybe a safer investment  I honestly didn't know about this, but it sounds like a good idea because I do a squirrelling system of saving now.

This may sound obvious but watch your spending.

Cut out your daily coffee, take lunch to work, try Aldi or Lidl if you don't use them already. Plan your meals so there is less food waste. Fix things rather than buying new.

And before buying anything at all, ask yourself if you really need it.

You're not kidding! I really had to budget in the last couple months because my employer accidentally messed up their payroll so I've been having to pay off an expired travelcard through them (I'm not bitter about that). But it's really opened my eyes to the fact I bought a lot of food for lunch, like a fiver every three days, but that really added up. Since I've been working from home, I easily saved over £100 in food in the last two months  My personal goal is to go "no bought meals" for the whole month of Feb

When we got our current rental flat, I hadn't yet gotten a job so it all had to be affordable on my husband's salary. This was hard at the time but being able to live on just one person's wage (and we're not high earners) turned out to be good. When I started working, at least half or more of my wage went into savings every single month, not to be touched. Sometimes my whole wage would go in there especially when we were saving for a visa and deposit at the same time. This also looked good when we went to apply for our mortgage because they look at our outgoings and we were living way below our means.

We're lucky to not live in London though. Where we live isn't cheap, but it's not crazy London commuter prices either. So this advice is best for people in the same situation, I suppose. For us it was always just a matter of putting savings away in a place that was difficult to access, every single paycheck.

When we got our current rental flat, I hadn't yet gotten a job so it all had to be affordable on my husband's salary. This was hard at the time but being able to live on just one person's wage (and we're not high earners) turned out to be good. When I started working, at least half or more of my wage went into savings every single month, not to be touched. Sometimes my whole wage would go in there especially when we were saving for a visa and deposit at the same time. This also looked good when we went to apply for our mortgage because they look at our outgoings and we were living way below our means.

We're lucky to not live in London though. Where we live isn't cheap, but it's not crazy London commuter prices either. So this advice is best for people in the same situation, I suppose. For us it was always just a matter of putting savings away in a place that was difficult to access, every single paycheck.

I used to do this when we lived in a different flat. We were no-fault evicted from the last place due to extreme renovations that needed to be done and had to move to this new place. Luckily, we just started a system where we're each putting a decent chunk into our ISA at the beginning of every month. Out of sight, out of mind lol

Unrelated but also kinda related:

Also, we just got our first credit cards (big adult milestone  ) yesterday. At what point do we have a decent credit history (ie six months, three months, etc)? I tried to apply for an O2 contract for my phone and also it would be a monthly piece of mail to come through for my future ILR evidence. But both my husband and I were rejected for not having any credit history. Any ideas? Or should we just go with a different provider?

Unrelated but also kinda related:

Also, we just got our first credit cards (big adult milestone  ) yesterday. At what point do we have a decent credit history (ie six months, three months, etc)? I tried to apply for an O2 contract for my phone and also it would be a monthly piece of mail to come through for my future ILR evidence. But both my husband and I were rejected for not having any credit history. Any ideas? Or should we just go with a different provider?

I was able to get a Three SIM only contract shortly after I moved here, with no credit.  I applied online.

Sent from my SM-G950F using Tapatalk

I was able to get a Three SIM only contract shortly after I moved here, with no credit.  I applied online.

Sent from my SM-G950F using Tapatalk

Oooo that sounds good! I joined O2 after coming over, but I'm realising it might not be the best out there lol

I used to do this when we lived in a different flat. We were no-fault evicted from the last place due to extreme renovations that needed to be done and had to move to this new place. Luckily, we just started a system where we're each putting a decent chunk into our ISA at the beginning of every month. Out of sight, out of mind lol

Oh ugh, the reason we got this current rental is because our old (lovely) landlord needed to sell up--he offered to sell to us but we didn't want to buy a place we could only live in for a couple more years. Renting feels so precarious here. Luckily we have now completed on our house and when we've finished a bit of the work we're doing on it we'll be moving in, a big reason we bought was for the security of not being kicked out.

A bonus with 3 is that you can use your data in the USA, as well as Europe. I have also subscribed to Martin Lewis's newsletter, not all of it is relevant, but there are lots of good money saving tips. https://www.moneysavingexpert.com/