Getting out of the rental trap is not an easy feat. Renting is simple, but it can feel like a kick in the teeth when you realise you’re paying someone else’s mortgage for them. It’s likely that when you’re renting you’re restricted on what you can do to the property that you call home. It’s for this reason that people do everything they can to get out of the rental game and save a deposit for their own home. When you are struggling along on a low income, though, the prospect of one day owning your own first home is one that feels so far out of reach that even trying to save what you need feels like a challenge.
The thing is, it’s not always about how much you earn, it’s how you manage the money you do have. You could have a huge income and be so poor with your money management that you can’t find the cash each month to start a savings account. When you’re on a low income, you’re already used to juggling the money you do have, so you tend to be quite savvy with what you can afford and creative with how you spend it. You mustn’t forget that you’re not just saving for a deposit when you want to buy a home. You must remember to factor in moving companies, legal fees, furniture – there’s a huge list of things to afford and you can read that here. There are some strategies you could implement to save for a new home, and we’ve listed a few of those tips here.
- Start Saving. Okay, so this is obvious, but you need a plan! You can use methods like these or you could speak to your bank and discuss a savings account with a good interest level. Having a plan within your budget is important and you can use tools like this one to help you work out what is disposable for you each month. From there, you can decide how much you can save and stick to it.
- Consolidate. If you’re sitting on any debts at all, even small ones that are spread out, you need to consolidate these are soon as you are able to. Having just the one repayment every month can be far easier to manage and is better on your credit rating. Diverting the money from debt to savings will help!
- Get The Right Advice. When it comes to saving, you can’t just rely on what friends and family tell you to do. The worst thing you could do is nothing, and stay in the same situation you’re in now, which isn’t what you want.
When it comes to actually borrowing the money for a mortgage, you’ll be in a far better position if you can show the banks that you have saved correctly the whole time. This shows a level of mature money management and good balance so that you can be trusted. A low income doesn’t have to scupper your home ownership dream!