Five ways to save for your dream home
You dream of owning that pinterest worthy home and then wake to the very real prospect of paying rent into your 60’s. It can be tough to see the finish line but here are some realistic and actionable steps to take towards turning that dream into a reality.
1) Figure out exactly how much you need.
Since January of this year, first-time buyers are now able to borrow up to 90% of the total value of a home, with a 10% minimum deposit. This means if you want to buy a house valued at €250,000, you will need a deposit of €25,000. When you apply for a mortgage you will be assessed by the bank to ensure that you meet its specific criteria, for example, that you earn a certain level of income, are in secure employment and are in a position to repay the mortgage, as well as having a good credit record.
2) Look at where you are spending your money.
Once you work out how much you need to save, the next step is to work out how much you spend every month and what you spend it on. Use the CCPC’s budget planner to keep track of your income and expenses over a month. Remember to include day-to-day expenses like coffees, lunches or travel. This will give you a clear view of your finances and will help you set realistic savings goals.
3) Look at potential savings.
Skip the holiday, bring in your lunch, trade nights for night out, switch the car for the train..move back home. Oh your serious? These things may be easier said than done but you could end up saving thousands of euro by making a number of small consistent lifestyle changes. (It’s not forever).
4. Set up a a savings account
Now that you have started to make savings it is important to have somewhere to put your extra cash so open a savings account if you don’t already have one. Once you have your savings account sorted, set up a standing order that goes from your current account on payday. That way, the money is transferred straight into your savings before you have time to spend it. Also, consider going for one with a notice period. If you have instant access to your savings through an app on your phone it makes it far too easy to sneak a few quid out if you are having a weak moment or see a particularly nice pair of shoes.
5. Mark your rent.
If you are paying rent, it is vital that your rent payments are marked clearly on your bank statements. Likewise, you should try to wean yourself off credit card and overdraft use. If you have a loan, make sure you always make the repayments on time. When it comes to applying for a mortgage you will have to demonstrate that you are responsible with your money.
Look, it can be hard to stay on track when you are saving regularly for something. Make sure you allow yourself occasional treats - maybe a nice meal at home or a takeaway. Another idea is to pin a picture of your dream house to your fridge so you are reminded of your savings goal.