Bought a new home? Here’s how you can get back into a saving habit
Buying a home is a significant drain on most people’s savings, especially if they’ve been saving up for a down payment for years. Any money that’s left over may go to solicitors, essential repairs and new furniture, leaving a lot of people with an empty bank account and too many things to spend on. If you’ve found yourself in this situation, you may be wondering how to cultivate a savings habit as a new homeowner. After all, it’s important to have an emergency fund for unexpected events, so how can you start getting that cash together? Here are some of the best ways to begin.
Understand where you stand
The first thing to do is to take stock of your savings – things might not actually be as bad as you think! If you’ve got money in lots of different accounts, have a look to see if they’re all still serving you. There may be new, better accounts out there for your needs. However, you will need to make sure that you’re not closing any accounts that have a fixed term in place, as you may have to pay a penalty when withdrawing your money. Also, if you’re planning to open a new ISA, learn how to transfer ISAs so that you can make the most of your yearly allowance. Otherwise, you may eat up most of your permitted £20,000 just by paying in money that’s already in another ISA.
Identify essential expenses and forget the rest
When moving home or buying a house, it’s tempting to want everything to look perfect straight away. Unfortunately, that’s not possible for most of us. If your home is acting as a significant drain on your savings, identify what absolutely needs doing (e.g. repairing a boiler or installing a stove) and put everything else on your to-do list (e.g. painting your bedroom green and buying rugs). You’ll be able to get these extra things done, but you’ll have to be patient. It’s important to put some money into your savings while spending on your home. After all, balance is the key to a more comfortable life.
Get an extra income stream
If you’re really strapped for cash after moving, whether that’s because your home needs more repairs than you anticipated or your partner lost their job, you may need to look into getting some more money coming in. There are lots of side hustle opportunities out there these days thanks to the internet, but you could also consider renting out a room in your home. Taking on a lodger could help you to replenish your savings much more quickly – and it doesn’t need to be forever either. If you feel apprehensive about allowing a stranger into your home, ask around to see if any friends or extended family are looking for a place to stay.
Saving might seem impossible shortly after you’ve moved home, but once you’ve gotten back into the habit, it will feel like second nature again.
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