Saving for a Deposit

our tips to get you on the ladder to owning your own home


If you’re desperate to take that first step on to the property ladder but struggling to save enough money for a deposit, then you’re likely to be asking yourself questions like ‘how much should I save’, ‘am I eating out too much’ or ‘how much should I be spending on bills’? All very common questions, and of course exact amounts depend on your own personal circumstances. However, there are a few tips and tricks you can employ regardless of your annual income to help you work out if you’re happy with your spending patterns, where you could make some changes and how to go about making them, which should all result in an increase to your savings and a big step towards home ownership.


The 50-30-20 rule is a very useful guide to help you analyse and apportion your spending. The idea behind it is that you aim to break your monthly outgoings down as follows:


  • 50% of your income on needs: essential living expenses, such as rent/mortgage, bills, food and transport to work
  • 30% on wants: discretionary spending, such as eating out, shopping, trips and subscriptions
  • 20% on saving or debt – paying off debt beyond minimum payments, or putting money into a savings account, investment or pension fund


So, if your monthly income was £1,500 after tax, you might spend:

  • £750 on essentials
  • £450 on wants
  • £300 on savings or debts


This method is a simple way to track your spending without requiring you to have any prior experience with budgeting, and it will quickly become clear where your money is going each month and how you can make positive changes to increase the size of your savings pot.

To put the system into practice, once you’ve noted down how much money you have coming in each month, make a note of all your direct debits (e.g. rent, utility bills), check your bank statements and identify how much you spend on essentials like groceries and petrol, and work out what you’re spending, on average, for leisure activities. If you ever save money, make a note of how much you save on average and finally, note down what you spend on debt repayments.

It’s a good idea to prioritise paying off any debts you may have before starting to save. Debts will be costing you money in interest payments, and could also hinder your ability to get a mortgage, so any you can clear before starting on your property journey will put you in a stronger position to move forward with your dream of owning your own home.


Now you can really start saving!