The financial data website Moneyfacts, has unveiled tips for people who want to buy their first home and need to save for a deposit. The advice however, is good for anyone looking to set aside cash for any purpose, such as saving for a bigger home or paying off a bit extra on the mortgage. The key it says, is to know how much you need – easily calculated by working out the price you’d have to pay for a house and how much you could borrow as a percentage of that.
Be realistic, it says, about how much you can afford to tuck away each month – one way I’ve found useful is to keep a diary of every penny you spend over a month and then decide what you can do without in the following months. And to ensure that you stick to your plan, set up a direct debit or standing order into a savings account. Finding one that pays a decent rate of interest is another challenge, but as you are unlikely to need the cash for a couple of years you should get a better return.