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How much are you willing to sacrifice?

Sitting here with the light off to save electricity costs,  I’ve been thinking:

How much are we willing to sacrifice to own a house?

I think I am fairly lean in terms of sacrifice, I live my life fairly close to most people. I would say the only difference being is I try to keep electricity cost down and I don’t buy goods that I can live without.

But alot of people can go more extreme, selling their car in the pursuit of saving £1000 per year as I highlighted in this post HERE.

I read just now about a guy who lives in his van. And I dont think it would be too difficult.

  • Showers could be done at the gym (something I do anyway)
  • You can cook using a camping stove
  • If you park it near to work / gym / supermarket you will have a toilet close by

Sure, I wouldn’t tell anyone that I live in a van to save face, but it just goes to show that humans can easily adapt to new surroundings easily.

Like I said earlier, I haven’t sacrificed much but I have adapted to a cheaper lifestyle.

  • I drink Aldi branded coffee, some people has scoffed at the thought of drinking this coffee, but I learned to love it and it wasn’t difficult.
  • I sold my old convertible and bought a more efficient car
  • I often cycle to work (I start at 6:00AM so this isn’t practical during the winter
  • I get triggered when lights are left on, this has become a personal hatred of mine

In all, my friends don’t see me as a scrooge because I haven’t changed the way I interact with them. I just make several small adjustments to my lifestyle to save a lot more money

5 Ways to save money without (massively) changing your lifestyle

There are two distinct methods to increase the rate of your house deposit savings:

  1.  Earn more money – This can be fairly difficult / time consuming
  2. Save more money – This method is alot easier

Today we will focus on the easier method, saving cash!

  1. Eliminate the unnecessary bills

Unlimited Cineworld, huge mobile phone bills, financed cars. All these bills are not essential, I agree it is great to be able to see the latest films as soon as they come out. Its also great to have the latest Iphone and a brand new car, all these items are nice to have… But not necessary.

“But Cineworld is only £16.90 per month!” I hear you cry. True, but that equates to £202.80 for a year, if you were to hold onto that membership for 10 years you would have thrown away £2028.00. And that is a big amount.

2. Shop around for Energy / Insurance / mobile Providers

The majority of Companies that sell these sort of things are not very loyal, what I mean by this is they will offer the best deals to new customers while milking the current customers for higher amounts.

Its a known tactic that providers use because they know that the majority of customers will not switch, MoneySavingExpert reckons that it is easy to save £300/year for the average household (here)

3. Switch to Lidl & Aldi

I have been a lifelong Tesco / Asda fan, I really though Lidl & Aldi food was…crap. Until I actually went there.

Guess what! The meat & veg in discount stores is the SAME as that in the other supermarkets. The quality is on par with other stores and costs a lot less.

Both stores run a weekly vegetable off whereby they massively discount 5 / 6 type of Veg, most weeks are different, what I have found is I save money from buying these and my diet is more varied, helping my health.

4. Lay of the accelerator

Cars cost money. Fuel, Insurance, Tax, maintenance. All these costs add up, I own a SEAT Ibiza and regularly get 80mpg from it, so people think that the car costs me very little. But adding up all the associated costs show that it does add up:

8000 miles / year =  £640 fuel costs

Maintenence = £400

Insurance = £520

Tax = £0 (I do love bragging about this)

Total yearly cost = £1560

As you can see, even with the £0 tax and the high MPG, the car is still a massive drain on my wallet. the simple way to reduce this cost… sell your car, I know this is only practical for many people, but if you live in a city, then it can be quite easy to walk / cycle around.

5. Make your own lunch

A £3 meal deal doesnt sound like much does it?

But £3 a day can add up:

£15 a week

£60 a month

£720 a year

By making your own lunch, you could halve this cost and it really is simple. It doesn’t even take more time, what you have to do is simple.

Make a bigger dinner.

When I make dinner at night, I cook double the amount of food I am planning to eat. I then put half in a plastic container and stick it in the fridge. Simple.

 

3 types of home deposit savers

In my view, there are 3 main types of deposit savers, each with their own benefits and flaws. It is easy (sometimes) to move between each type, I have for instance, been all 3 types at one stage or another.

Type 1: Living with Parents

Benefits:

  • Cheap (sometimes zero cost)
  • Reduced food cost
  • Rent (if any) usually includes bills such as electricity, gas and internet
  • Easy to rely on parents for meals and other things

Negatives:

  • Conflicts can happen (nearly every family argues at one stage or another)
  • Lack of independence and privacy – no one wants to bring a partner back to their parents 😉
  • Dont learn how to rely on yourself – life experience

I haven’t lived with my parents for about 6 years now, I don’t think I really appreciated it when I did and I wish I could work closer to home  so that I could temporarily stay with them.

Type 2: Living in a shared Flat / House

Benefits:

  • Cheaper than renting an entire flat
  • Can share with friends for an awesome time
  • Meet new like minded people
  • Easy to car share to shops etc

Negatives:

  • Personality conflicts
  • Lack of privacy again
  • Can break apart friendships

Throughout university I lived with 4 different groups of people, some I got on really well with and they became buddies, others I dreaded seeing and would go out of my way to avoid (I’m sure they did as well). Also, washing up dishes is ALWAYS an issue.

Type 3: Living alone (or with Partner)

Benefits:

  • You can keep the place as clean / dirty as you want
  • Privacy
  • No personality clash issues

Negatives:

  • Cost of full rent
  • Cost of Utilities
  • Can be lonely (if by yourself)

This is my current situation, me and my girlfriend rent a flat together. Although it costs more to rent the flat outright, we value our privacy and so are willing to pay the extra.

Conclusion:

You will know yourself what situation you’re willing to live in order to save up for a deposit as quickly as possible. There are people who cannot stand living with their parents and so are willing to pay the extra just to have more ‘freedom’

For myself, I don’t mind where I would live. There are benefits to all scenarios and also drawbacks, but if you are looking to save for a deposit as soon as possible, I have ranked the locations in order of cost:

  1. Living with parents
  2. Renting a property with others
  3. Renting alone

 

 

Novemeber 2015 – Savings and Income

From this month on, I’m going to provide monthly updates to my savings. This will show the (hopefully) monthly increase in savings to reach a goal of a house deposit.

I will try and complete each post by the 1st of each month, so this month is a little late…oops!

Account Name Account type Amount
TSB 1 Current £   2,000.00
TSB 2 Current £   1,370.59
TSB 3 Current £                 –
TSB 4 Current £   1,226.85
Halifax Current £       794.10
Halifax Credit -£   2,959.47
Virgin Credit -£   2,724.24
Halifax H2B ISA £   1,200.00
Ratesetter P2P £       220.00
Fidelity Stock & Shares ISA £   2,471.39
Total in credit £   9,282.93
Total debts £   5,683.71
Total Net worth £   3,599.22

As you can probably see I have my money spread out quite a lot, this is for a number of reasons but each account has its benefits.

TSB Current Accounts:

The TSB current accoutns each provide 5% interest upto a maximum of £2000. So if I was able to (hopefully soon) max out these accounts then I could earn £400 interest (minus tax).

Halifax Current Account:

If this Current Account is in credit and has at least £750 paid in every month then it will pay out £5 per month.

Halifax Credit card:

This credit card is used for “Stoozing”. The long 0% interest on purchases that the card offers means that I can spend on the credit card and still gain interest from the money in the TSB accounts

Virgin Credit card:

This is another type of “Stoozing” card, the card provides 0% interest on money transfers (there is a 1.89% fee). I transferred this balance to the TSB accounts to gain interest

Halifax Help to Buy ISA:

The help to buy ISA is a great way of saving for a house deposit, I ran into more details about the benefits HERE.

Ratesetter:

Ratesetter is a provider of peer 2 peer lending, the website provides people loans funded by other people. The benefit is two-fold, firstly the lender (you & me) gets a great interest rate on our capital. Secondly, the borrower can get a low interest loan. If you are interested, please click HERE (Referral link)

Fidelity S&S ISA:

I opened up the S&S ISA last year and pump £200 per month into it, the past year hasn’t been great for my index fund (Vanguard Lifestrategy 100%) but I’m hoping it will pick up over next year, just in time to buy a house. I will go into more details regarding Index Funds in a later post

Income VS Expeditures

Nov 15 income

Income at the moment is fairly consistent, the “property” portion is rent contribution from my girlfriend

Main Salary £             1,875.65
Interest £                   9.39
Property £               300.00

Nov 15 Expenditures

Ill be honest, November was a BAD month.

Household: includes rent, food and bills, I pay bills on a quarterly basis and they both come out during one month. I will change this to a monthly to make comparisons easier.

Insurance: Being a 24 year old male, insurance is still sky high for me even though I have a boring car. At least its only a yearly expense

Gifts: I bought one significant gift this month, very costly and out of character for me. But she deserves it 🙂

Other: This consists on mainly Fuel and cash, I can only think the cash withdrawals are from nights out… its bad I cant remember ha

Going Out: We went for a long weekend in Rome on the cheap, this expense is usually a lot cheaper

Household £1,249
Insurance £513.73
Gifts £299
Other 173.08
Going out 141.71

Total savings for November: -£192

BAD MONTH