Epic Ways To Save For A House

If you’re a first-time buyer looking for ways to save for a house, then I have been the guinea pig for you and found a host of ideas to make your deposit grow. I had to work out how to save for a house on a low income, and in spite of people telling me that I would never reach my goal.

I wasn’t trying to get a deposit together within a year unlike some buyers, but we still need to have a sense of urgency if we’re ever going to reach lift off. This can be hard to maintain as the months tick by, so I learned all kinds of strategies and tricks to keep my eye on my finances and not slide into apathy.

If you’ve tried saving before and have nothing or little to show for it, then I think you just haven’t found the right savings path for your spending personality. We are not one size fits all. It doesn’t mean that we’re lazy, or flaky, or a waste of space if we struggle to save.

Life comes with surprises. I’m editing this post during the coronavirus lockdown after reading about how the majority of homeowners will be shielded financially better than renters from the economic consequences. Surprise!

There were surprises for our wallet before coronavirus. Plus we’re constantly bombarded with marketing messages and other optional demands on our bank account. I’ve learned to shut out some of the noise, and I hope I can help you do the same.

Or perhaps you’ve got some cash put away already but need to know how to get a deposit for a house quickly because of a change in circumstances, or you simply want to accelerate your existing efforts since things are ticking along in the right direction. If you’re always looking for ways to get more value from your spending and your savings, then you’re in the right place.

Here’s what I’ve covered below:

The Overnight Solution: Pay Yourself First
What If We Need Money For An Emergency
Why Budgets Fail
How To Budget When We Hate Budgeting
Why We Go Overbudget
Automation
Extreme Challenges

At the very end I have some inspiration for us from others who have saved for big goals with every ounce of their being, so I’m not the only unicorn. I’m not a financial advisor or planner, but we shouldn’t need a PHD to save for a house in the UK.

If we don’t fancy renting or living with family forever, then something has to change. If the universe isn’t going to bring a solution to our rented doorstep, then we have to do some financial acrobatics of our own to carve out the future we want.

Black belt buckle — *Buckle up because this is a long post and apparently that’s my default setting.*

Disclaimer: If you sign up for a free trial or purchase via an affiliate link below, I earn a commission from the seller at no extra cost to you that might one day go some way towards covering the cost of producing lots of free content and hosting the blog etc.

The Overnight Solution

Number one in my epic ways to save for a house is to pay yourself first.

I think I was still a student when I discovered David Bach and The Automatic Millionaire, and he’s been a welcome financial expert in my head space for a long time. He writes for Americans, but the principles are the same in the UK.

I’m a big believer in playing the long game, especially as most of us are living longer too. David doesn’t teach people how to get rich overnight because he’s not a snake oil salesman. He teaches that wealth is built over decades. No one likes to hear this, so he has a rocket-fast and easy way to stash cash along the way:

You pay yourself first
Pay yourself automatically
And pay yourself equivalent to one hour of your income per day

This simply means the first deduction from our payslip is a regular payment we set up. Whip that money into a high interest savings account. This tends to be the opposite of how most of us save for a house. We pay our bills. Then we see what’s leftover.

Next we spend that on going out and other things we’ve had our eye on for a while. Then we see what’s leftover again for our savings and realise there’s nothing leftover. A standing order automates the process, saving us mental energy and removing any opportunity for excuses.

You can also listen to The Automatic Millionaire with a free trial of Audible.

What’s your worth?

For those of us that struggle to decide how much we can reliably save for a house monthly, this might be because we’re waiting for the breadcrumbs. Instead we can think about what our time and money is truly worth.

Lots of things inform our idea of value. We know when something is very obviously out of our salary range. I’m not going to buy a Jaguar on minimum wage.

How much of what we buy that we consider to be within our means actually equates to several hours or days’ work though?

Once upon a time, if shown a price tag for most things under £50, I’d shrug and say “It’s not bad, I guess”. Under £100, my brain still wouldn’t have gone into overtime about whether it was too much money. When you realise how many hours overtime you’d have to do to cover that pair of shoes (and your company stops offering overtime), the value of items takes on a new meaning. If you don’t deserve to keep an hour of your income a day for your future, then why do you go to work?

Hoarder's staircase with fashion shoes on every step — *Emma hadn’t reached peak shoe yet. She could still technically go up and down the stairs…*

What If We Need The Money For An Emergency?

Correction: we might need money for an emergency, but we don’t need that money necessarily. Firstly, if we have a financial problem that is not going to impact our health, shelter, debt levels, or ability to work then it is not an emergency.

We can try to earn our way out with short term fixes:

Ask for extra hours at work
Pick up some gig work online
Ask anyone we know who earns more than us if they have any paid chores you can do this week for them
If we have a skill we can freelance, offer our service to neighbours and friends of friends, or friends of relatives

Another short term fix is to become a shut in and live off our food cupboards to at least avoid worsening the situation financially. (I didn’t know how pertinent this idea would become, as I outlined this post before the world went to Hell in a handbasket via coughing and fever).

Then we should set ourselves up a long term fix by negotiating a pay rise and coming up with a second stream of income. (I also didn’t know that side hustles were going to become main hustles for much of the nation this year…) I’ll write more about all of this in future.

Only after this do we want to dip into our savings, otherwise it all becomes counterproductive. We can still save for a house, even during a crisis.

Why are they called emergency savings if I can’t use them in an emergency?

If we save for a house from scratch, then we are really saving into two funds: our deposit and emergency savings.

When we apply for a mortgage, it’s in our favour to demonstrate that not every single penny is going in our deposit. This is because “they” want us to be able to pay our mortgage if we lose our job. While they can fall back on repossession if we default on our loan, it’s a lot more lucrative for the bank if we can afford to pay our mortgage and it’s interest instead(!). It’s unfair when online calculators say we can’t afford repayments that cost less than our rent. However, home ownership can be more expensive than we anticipate for three reasons:

We will have dodged certain costs through renting
Our attitude to spending on improvements is likely to change since it is our own space (finally!)
Being able to afford to stay in the black despite heavy outgoings when we get paid our monthly salary is fine, but those outgoings can snowball if our income drops for any reason

How much money do I need in emergency savings?

Six months living costs is what you’ll see personal finance types throwing about on the interwebs as the kind of buffer you want between you and doom. Your definition of six months living costs might change between this moment and you taking action on the ideas in this blog post.

Emergency savings are what we use to buy essentials and to pay any debts to avoid bankruptcy. Once I bought my house, I then worked on my **** You Fund, which is the kind of money you build up so that you can walk away from bad situations e.g. you quit your toxic job before finding another. (More on that later in this post, although I call it Raspberry Money).

If we don’t miss the money after we start paying ourselves first, or we simply need to put away more to hit our goal, then we need more than one savings strategy.

Unimpressed grumpy cat — *Unimpressed Cat’s thinking “You’re going to tell me to start a ******* budget next, aren’t you?”*

Why Budgets Fail

Number two in my epic ways to save for a house is to use a budget THAT ACTUALLY WORKS.

One of the reasons so much is written about budgets is because they’re not failproof. Companies and governments seem to use them as a guideline of what NOT to spend. If we go into budgeting thinking that it will be hard to stick to and is destined to be broken, then guess what? We will screw the pooch.

I also don’t agree that we can’t maintain a budget if we have a varied routine. In fact, I think a budget is ideal for anyone who has an active social life and an ever changing diary. If this isn’t you, then you should skip ahead to automation, which is a form of budgeting where you don’t think about what you’re spending so long as you don’t vary your routine.

If you have tried and failed to stick to a budget then we need to tackle why first to see if you should have another stab at this type of saving.

We might be able to unpick your dislike of budgets if we look at three areas:

Our goals
Our significant others
Essential expenses vs disposable income

Otter in water clapping paws together — *Significant otter. Like a significant other, only they influence your finances less. Both will clap you on a good day. The otter might be cuter.*

Our goals

Goals are not just for athletes to miss; the difference between us and professional sports players is that they try again, and again, and again…
If you read my philosophy, you’ll see I’ve developed a thought system over the years that makes it easy for me not to spend money.

This creates a chicken or egg question: was it these concepts knocking about my noggin that helped me save for a house, or did having a goal make me form those values?

I have always had a savings goal since I was a teen. Every time I hit a financial goal, I replaced it with another. Lots of influences over the years have made me less interested in owning things. If your spending is out of control, then I recommend two things.

1) Get super clear on your goal. If owning a house is still an amorphous idea, something “you’d like to do” then you need to start thinking seriously about location, types of ownership. and how you’ll afford this minor desire.

2) Spend time around resources that don’t promote constant consumerism for fun. This blog is a good start obviously. I’ll recommend more as time goes on.

Ignoring the genius myth

A note on age-related goals (from someone who said they’d buy a house by X age): I dislike age goals generally because of the genius myth.

Basically, there is always someone out there who hit the jackpot younger than you. Anna Paquin won an Oscar at age 11. There are kids starting businesses that involve slightly more than selling lemonade on a street corner.

Are they geniuses?

Who cares?

If you’re twenty five and you haven’t won an Oscar yet, then you’ve already lost. So do things at your own pace. Or you know, at least make some lemonade.

Also look at everything that makes your goal feel impossible with a critical eye. The BBC had a round up one time of people who bought by the age of 25 which was meant to be inspirational. I say one time, but the BBC and co like to crack out that kind of content on the regular, so there’s probably many more stories like it across their news, podcasts, radio etc. I actually found it off-putting because everyone featured bought as a couple and none of them were in London or the South East except for one.

It’s not impossible to buy by the age of 25.

It’s not impossible to buy in the South and on your own.

BUT I think you will have more success if your goals revolve around how you are going to change your finances rather than hanging them on an age target. e.g. “I’m going to buy a house by getting a qualification that will double my salary”. Rather than “I’m going to buy a house before I’m 28…”

Reading Cal Newport’s work helped me disregard the genius myth. In books like Deep Work: Rules for Focused Success in a Distracted World, he’s suggesting an alternative for climbing the career ladder. However, swapping the genius myth for enhanced focus and skills will benefit you with every goal you tackle in life.

You can listen to the Deep Work audiobook with a free trial of Audible.

Our significant others

If we have friends or family who love things more than people, then we need to think about who we spend time with and how it’s affecting us. If the biggest barrier between us and our goal is another person then what can we do to rectify that?

Are they your enabler?
Do they use you to make themselves feel better about their own lack of control?
Is your relationship built on spending money together to fill a void created by being unhappy at work, or with something else in your life?
If you took away the consumerism, would you still have a relationship?
Why not?

How can we save for a house if we’re uncomfortable talking about money with those closest to us? Get comfortable or get out.

Essential expenses versus disposable income

These questions are harder than a prison mattress, but they’re necessary. The other area we need to get tough if we are going to attempt following a budget is what we define as essentials and discretionary spending.

I’ve seen resources try to define a new car or clothing as essentials. When I tried to put zero on my mortgage application for clothing expenditure, my mortgage advisor wouldn’t have it (there isn’t a “slow fashion” tickbox on those forms). The majority of us buy more clothing than is really “essential” though. After all, if it’s illegal to walk around naked, then we technically only need one outfit to stay within the law…Right? Right?

We have wardrobes beyond this for different occasions, weathers and desires, but then some of us double and triple those wardrobes. I know, because I have been this person, drowning in a sea of fast fashion.

Many of us spend money we know we don’t need to and the rest of us justify expenses as essential when we would crumble if we had to say more than a sentence about why it’s justified. Everyone has their own reasons for why they spend what they do.

Pop art drawing of woman crying — *Bear had a perfectly reasonable meltdown when she realised the tonic water was all gone.*

I didn’t create the blog to judge other’s spending, just as I know when I’m sat drinking a gin with a Fever Tree tonic water mixer, someone somewhere will be thinking “You could do that cheaper. How dare you write about value for money?” (And I won’t give a flying squirrel because that’s gin for you).

But it tastes so good…

You might think I’m crazy if I cut my own hair because it’s essential to you that you get it done in a salon every six weeks (why hello, lockdown… Foiled again, just not with hair foils). Perhaps you thought I was crazy when I used to only get my hair cut at a college once or twice a year. Basically, if it doesn’t impact your health on a daily basis, such as brushing your teeth or eating nutritiously, then can you make it less essential?

Really, we should just stop calling it disposable income.

I don’t like disposable anything. I like disposing of my “extra” income in high interest investments. Doing this means I can be financially free in future and not tied to one place, one employer or one lifestyle if my needs change.

Turn disposable income into Raspberry Money

To get to this point I saved first for my shelter (my first house). Everything else is the kind of money that lets you tell banks or bosses to go swivel. If you’re a sensitive soul and don’t want to call this a **** You Fund, call it Raspberry Money, since blowing a raspberry at them is the PG equivalent of what you’re doing when you walk away.

Besides our individual opinions on what is and isn’t mandatory, we can also get tough on those mandatory expenses. If we have accepted that we will always have bills, then the drive becomes to make those bills cheaper. If they’re energy bills, then we can consume less energy and switch to a more forgiving supplier.

With every expense that is “fixed” in the sense that it’s always going to be an expense of some amount, we want to focus on reducing the amount of that fixed expense. (Unless we start growing potatoes to generate electricity or something.) In every situation if we do less of something and switch to a cheaper provider/brand, then it shall by happy days.

Puppy with short golden fur lying on the ground in the sun — *No shit, Sherlock. I’ll shift my butt when you tell me something I don’t know.*

So why don’t we do it already? (If this applies to you, go and do it now. Pay it forward and tell someone else to do the same. This blog post will still be here when you get back if you bookmark it; I’m not going anywhere. I mean, I literally can’t go anywhere because of lockdown, so …)

Or maybe you don’t want to answer any of these tough questions. You can skip ahead. Also, good luck.

So we’ve thought about our goals.

We’ve considered who’s holding us back in life (eek!)

We’ve concluded personally what really counts as essential spending…

Now we can attempt to create some budget categories for ourselves to save for a house.

How To Budget When We Hate Budgeting

These are the budget categories I have used for years:

Rent (replaced with mortgage eventually)
Bills – electricity, gas, water, council tax, broadband
Food
Travel
Misc – household, toiletries, insurances, one-off annual costs
Entertainment
Gifts*
Eyecare because I need a lil help in that department

*For gifts I would spend on whatever I wanted that person to have and then keep a note of it so that I was a bit more prepared in future, rather than having a budget to stick to per se. If you are worth something to me, I can’t always squeeze that meaning into a £10 or £40 purchase etc. By the same token, if I spend less on another occasion it doesn’t mean that person has pissed me off. I define the value of my gift by how useful it will be to the other person rather than a price tag decided by a seller looking for a certain profit margin.

How to invent a budget that works

Most of the advice about how to save for a house gets the first step wrong. Let’s fix that.

Step 1: Save something

DON’T work out what you’re spending.
Unless you want to?
Didn’t think so.
You can do that bit in a while.

First, I want you to save something. If you have any money in your bank account today, then move an hour of your wages into a savings account right now. If you’re cleaned out and this is a regular occurrence for you, try any of the following:

Go into your online bank account and cancel any subscriptions you forgot you were paying for (mobile phone insurance, anyone?)
Call up any of your bill providers if you’re out of contract/near the end of a contract and ask them to reduce your bill or you’ll switch away
Contact your landlord to say you’re thinking of moving unless they can reduce the rent (This was offered to me unasked for! So you don’t know until you try!)
Go into the kitchen and empty the cupboards onto the counter. Draw up a list of meals you can make this week from ingredients you already own. I’d normally say while you’re there, make a meal to take out tomorrow if you normally buy lunch at work, but corona and all that…
Have a rummage and find one thing to list online for sale
Write down everything you’ve improved for the business at work this year for when you can next discuss a pay rise

Join the mailing list at the bottom of this page and I’ll send you some more savings ideas (every week for the foreseeable future).

Step 2: Automate

Arrange a transfer of the money you saved on the above to go into a savings account when you next get paid.

Step 3: Find your poison

Now you look at your current monthly spending. In the next step I have a choice for you if you and maths are going through irreconcilable differences, so step 3 is worth it, I promise.

I have a long concentration span, so I usually average my spending habits out over a year to get a true picture. If this is too arduous (depending on how spendy you really are), then examine the year so far instead. This won’t give you a true average, but it’s better than nothing. You might spend twice as much one month due to a holiday for instance.

If you’re going to just average your year so far, I would still add in what you spent last Christmas if you are in the habit of destroying your income for the sake of this holiday.*

*other religions are available.

Cash or card?

If you use cash as well as cards, then think hard about what you spend cash on as there won’t be a record of this other than your withdrawals. If you really can’t fathom what that £120 you withdrew last month went on, then you should consider embracing plastic full time.

Worried about ever being stranded because your card got declined? Or you had a brain fart and blocked your pin by accident? Then you can keep an emergency £10 or £20 note on you.

Make it really hard to access though, so that you only go through the hassle of unwrapping it in a true emergency. For example, fold it up as small as possible, put it inside a coin bag, inside another coin bag, inside another coin bag etc. Tell the people closest to you when out and about that you’re only meant to spend this in true emergencies. You’ll soon find out who are the devils and angels on your shoulder.

When tracking your spending, you still need to pour the information into some basic categories like food, travel, and entertainment, so that you can see where it all goes.

Join the newsletter at the bottom if you want to keep these ideas at your fingertips with a bonus free ebook

Step 4: Average your spending

If you hate maths, pick the occasions where you spent the most on a category in any given month. Maybe you have a wildcard figure where you spent £200 on miscellaneous items one month because you had to move somewhere unfurnished, for example. If it would bankrupt you to tell yourself you can blitz this amount on a regular basis, then go for the next highest amount where you were free and easy with your pounds, but it didn’t stop you paying other bills.

If you don’t mind maths, average your monthly spending instead. Tweak this figure if you know for a fact that the average will get screwed. We are trying to reduce our spending with this budget after all.

E.g. if you normally spend £15 a month on other people, but spend £300 alone in December on Christmas presents, you can do two things. Either budget the £300 in advance now, or add it all up and average it out.

Your monthly budget for presents will look too high for most of the year as a result. However, if you naturally don’t spend most of this outside of the holiday season, you know you can carry it forward to Christmas.

If carrying it forward is where you struggle (i.e. if it’s there, you spend it) then put it in a savings account rickety tick named Presents. (There’s an argument here for a gift amnesty or giving without spending at all, so consider those too).

Step 5: Be realistic

Check the budget genuinely fits in with your monthly payslip. If you usually watch your bank balance go down and use that as a barometer of what you can afford, and then rely on an overdraft or other people if you go over, then you need to reduce your budget. Something has to stop.

I see the 50:20:30 rule referenced a lot when it comes to budgets. This suggests we allocate 50% of our income to rent and bills, 20% towards goals, and 30% on Raspberry Money. I didn’t use this rule partly because two jobs meant my income varied and I would have to work out new amounts every month to match the percentages.

I also had a HUGE amount that I needed to save on a low salary, so to put only 20% away was simply not going to make the dent I wanted. I ended up saving 50% of my wages monthly instead. My Raspberry Money in some months was in the single digits of percentages. I didn’t feel deprived because I enjoy NOT spending, but not everyone would be able to live like this.

Ask this very important question: does this budget reflect my priorities? What categories could you get rid of or reduce?

Step 6: Systemise

Learn these budget amounts off by heart or keep a note of them on you at all times. That way, if you are out and about in our glorious future where we’re not under lockdown, you’ll always know where you stand financially. Imagine your budget for entertainment for the month is £60 and you’re sat in a restaurant (remember those??) knowing you’ve spent £50 by week three. If someone is asking you to extend the night with more drinks, you know your budget won’t survive another week if you say yes. Take the conversation home instead.

What if you go overbudget regularly by accident through sheer tomfoolery? And who doesn’t like a bit of tomfoolery? If it’s because you forget the budgets you set yourself, or because you keep upping the limit on certain categories without reducing what you’ll spend elsewhere, then you could try the cash envelope system.

You only take the amount of cash outside that you’re allowed to spend on that category. When the envelope is empty, your spending in that category is done. (And keeping your budget small in all categories will make you feel safer about carrying around any amount of cash).

Step 7: Review

At the end of each month, assess any changes that will impact your future budget. If you’re not sure you’ll turn up for this date with yourself, arrange with a friend now to stay in and talk money together. If you are sticking to your plans, try shaving off 10% next month to increase your savings rate. Or if you are routinely going over, then read on.

This is still not a foolproof plan for how to save for a house. You’re going to go overbudget if you don’t tackle the items below.

Why We Go Overbudget

Lack of planning
More lack of planning
Have some lack of planning…

Only joking. You can also include:

Self-sabotage and upper limits
You don’t really want what you think you want
Life is for living

Seriously, let’s talk about lack of planning

We don’t like this subject because a lack of planning either means we feel incompetent, immature, or a free agent who loves spontaneity and doesn’t want to be chained by habits.

Budgets fall apart when we underestimate what we’re going to spend. You might be thinking “Give me a break: I blew £100 and the only way to save anything was if I budgeted to spend £99 instead of £100.” You still ended up spending £100. There was nowhere else to go.

It wasn’t like you normally treat yourself to the tune of £500 a month on clothes and said you wouldn’t buy any clothes. You needed to renew your contents insurance and the cheapest quote still ate all the money. Now what the fudge do you do?

If we are struggling to buy essentials like food, then overestimating our budget will not help save for a house. We should be looking to increase our income rather than focusing on budgets.

We can budget properly if we plan ahead. There is no point saying we will only spend £30 per month on celebrations in future if we know we normally spend £20 a pop and we have three friends with birthdays in the same month (unless we can organise some kind of joint gathering).

There are lots of people out there who will tell you not to bother with budgets. That no one sticks to them because they’re another casualty of the things we know we should do, but don’t really want to do, like eating less sugar or cleaning.

Yet I have been using budgets successfully ever since I left school, so they can work. The steps above mainly tell us how much of a creature of habit we are and how to turn that into numbers on paper/our phone. They don’t account for the decisions we make on a daily basis.

How to be predictably unpredictable

Here’s what you can do:
Look at your calendar past and future to see where your spending gets irregular. If you don’t use a calendar or diary, but regularly take photos, then looking back over your gallery will remind you of places you did and didn’t plan to go.

Irregular spending can be made predictable:
Learn to say no to any costs that aren’t improving your life. Ask someone to be your accountability partner on this
If your income is irregular, assume you will earn the lowest amount and budget from there
Come up with creative solutions to still benefit from opportunities e.g. a friend is moving abroad next year and expects you to visit. You want to see the place from their local perspective. Could you start racking up points for airmiles now?
If you can’t do something in moderation, ban it altogether

How do we learn to say no?

Just ask, will this help me buy a house?

The reason money and food diets fail are because we can’t link our behaviour in the present with our future self. We are not making a choice between another takeaway or dinner out. We are making a choice between overspending for dinner and buying a house. Or whatever major financial goal is on our brain afterwards when we’re kicking ourselves.

But saying no makes me sad…

Elimination doesn’t mean we become a hermit. Just because we say no to going out doesn’t mean that we stop seeing our friends by other means. We’ve learned that the hard way during the current clusterbomb.

Substitute your activities with things you can do for free or at home. People who exercise with others tend to keep the habit longer than people who start an exercise regime alone, so if you and your friends are all social butterflies, why not turn your savings journey into a (virtual) group activity?

What if you don’t need to say no anyway?

Here are some things you can do with others to save for a house. This makes it about saying yes rather than telling yourself you’re going without.

Get cooking together so you all have dinners for the week
Exercise! Go for a walk or a run, or take it in turns to lead your own bootcamp. Thus killing two birds with one very large rock.
Make something you can each sell on Etsy if you’re crafty types*
Generally compare savings tips
Roleplay asking for a pay rise
Hold a clothes/accessories swap
Hold a jumble/tabletop/garage sale of belongings you don’t want anymore
Go to a property viewing or open house when doing so is less deadly than it is right now (writing during corona is weird)

*The fees on Etsy for content creators are painful if you’re selling digital products. I think ConvertKit Commerce will be a mighty challenger to this, but then I’m biased because I use ConvertKit as my email service provider to send exclusive emails to you lovely bears! (affiliate link)

Self-sabotage and Upper Limits

I’ve also covered this in the free ebook available only to email subscribers. Subscribe at the bottom of the page to get that straight to your inbox.

We can’t see the upper limit. It’s in our mind. We hit our metaphorical head on it when we tell ourselves that it’s not our fault we do what we do.

Self-sabotage comes in two forms: conscious and unconscious. It’s conscious when we openly decide not to turn up to an exam. It’s unconscious when we decide we’ll get our bag ready in the morning, then realise on the morning of that we can’t find our keys, or anything else conducive to leaving the house on time and turn up to the exam/work/courtroom/wedding/other very important occasion late.

When we are worried about failing, sometimes it’s easier to go directly towards failure. If we weren’t where we were meant to be, then we can blame the failure on ourselves and our inability to cope with simple logistics.

If we turn up where we’re supposed to, and someone else fails us anyway, then this feels worse somehow. No one wants to do everything they were told and still be judged wanting. So we don’t do what we’re told, so that the reason we failed is obvious and in our hands.

This is why we make excuses like “I can’t save for a house because I live in an expensive city.” Or “I live in the middle of nowhere therefore goods and services are expensive because they are harder to procure and there’s less competition”.

I’ll concede that you pay more for rent and bills in certain places (in fact, energy companies charge different regions totally different prices). However, you can spend as much or as little as you like in all the other budget areas regardless of location.

Gay Hendricks coined the term the upper limit in his book The Big Leap.

You can listen to The Big Leap with a free trial of Audible.

Only you can remove the upper limit

Here’s a reminder of the remaining categories to save for a house:

Food
Travel
Misc – household, toiletries, insurances, one-off annual costs
Entertainment
Gifts
Eyecare

Food, certain miscellaneous items (toothpaste…), and eyecare are the only non-negotiable essentials of which you will definitely spend something. Travel, entertainment, and gifts arguably come out of Raspberry Money and can be slayed entirely or greatly reduced via a budget or automation.

Wait, that’s not what you said earlier.
I said many thousands of words earlier that I don’t find age-related goals helpful and that the BBC were unfair to profile people who bought before age 25 because they nearly all lived in the North.

The distinction is that you can spend as little or as much Raspberry Money as you like regardless of where you live. Property prices might be higher in your location, therefore you will want to save more Raspberry Money in London and the South East to get on the property bridge compared to say, Liverpool or Sheffield. There is also a higher onus on increasing your earnings in these locations.

Black and white outline drawing of mapgie — *My spidey sense tells me there’s a magpie nearby…*

Now back to why we go overbudget…

You don’t really want what you think you want

This is another cousin of self-sabotage and upper limit problems. It’s very simple. Every time we buy something we know we don’t really need, or justify to ourselves that we did need it, we’re making a choice between being a magpie today and having any freedom in future.

Is it because you don’t really see yourself staying with your current partner forever and buying houses seems very permanent?
Or is it because you’re single, but your vision of owning a house includes a partner that doesn’t exist yet? Why don’t you deserve to have an asset of your own therefore?
Is it because deep down there are interests you haven’t explored yet?
Or maybe it’s because you’re not sure having a mortgage is the way forward for you at all? (I’ll have posts coming up for you, so stick around).

Follow @savelikeabear on Instagram for more motivation.

Life is for living

But I do want to save for a house, I hear you cry! I just keep forgetting/don’t like to be reminded that what I do in this moment has repercussions for the rest of my life.

It’s the same reasons that fad diets don’t work. We find a reason to overeat at 4pm on a Monday afternoon because we can’t see all of our future Mondays in front of us. We can only see that we’re sleepy, depressed with work already, and some ****er had the audacity to celebrate their birthday by bringing in cake.

You still believe you will end up with your dream house (with dream partner and dream kids if applicable). You’re reading this because you’ve done the maths and the clock is ticking. A high-paying job will come later. A dual income will come later. Later you will have savings earning interest. You’re not sure how these things will happen, but since life happens to you, they will surely materialise.

Big goals are achieved through taking the tiniest of steps.

These might be literal steps by walking more from now on to save money on travel. Only taking small actions today will get you to later.

There is a trick we can use on the spending front. Wrap a note around your debit/credit card with an elastic band. Make sure it’s covering the pin and the security code on the back, so that you have to move the note out the way to use the card whether you’re in the shops or online. The note says ‘Or do you want a house?’ Every time we go to spend, we are confronted with the choice of a lifetime.

(Delete all your stored payment details from your favourite shopping sites while you’re at it, so it’s not so easy to checkout on impulse).

We can afford anything, but not everything.

White short haired dog wearing a tshirt sitting in yellow armchair — *Rufus overheard Bear saying they were going to have to sell his favourite chair. At least he still had the shirt on his back.*

Automation

The third way to save for a house is to stop thinking about money much at all.

This is an alternative to budgets where we plug and play our spending, so that we don’t have to devote energy to whether we’re going over a limit. A person with a very consistent routine that has been frugalised will spend roughly the same every month.

If you don’t currently use a budget or automate your spending, then there are a few steps you need to take first.

Step 1: Track your current spending as in the budgets example above
Step 2: Times the good stuff by 10

Once you know where you spend, you can look for ways to a) do it cheaper and b) do it cheaper regularly. Maintain the same routine and you won’t need to look at a monthly budget.

If you find you spend about the same on food every month for instance without even trying, think about why that is and how you can replicate that in other categories. Is it because you always eat breakfast at home? Do you make packed lunches no matter the occasion? More importantly, are these meals fairly similar in cost even if you change them up e.g. you don’t eat smoked salmon for breakfast one week and value porridge the next?

How to default to cheaper eating

Perhaps your food and entertainment bills vary wildly instead. This usually hinges on whether you eat out regularly or not. One way to automate this is to bring the entertainment home every time and get people round to eat in future instead of going out, or suggest that you take homemade munchies round to theirs. Consuming the majority of your food and drink at home is also the number one way to save for a house.

It might be that our spending wobbles all over the place currently because we simply buy everything we see in the supermarket one week then cut back out of guilt the next. Then lose all sense of control the next time again because we were hungry/tired/shopping without a plan.

A really simple way to spend less on food if you don’t do this already is to only use a basket instead of a trolley. If it’s more than we can carry, we don’t buy it: simple! If you normally reach for a trolley because you have access to a car for shopping and can fill up the boot, go another step further and abandon the car. You buy only what you can walk/cycle/scooter/segway home with and voila, your receipt will invariably be less than £15 every time.

This is fail-proof providing we:

Don’t take a wheeled suitcase and walk that home, because you’ll fit far more weight in than if you take a reusable bag
Aren’t 6’5″ with the appetite of a horse
Don’t start popping to the shops on a daily basis to fill our basket
Don’t use our weight limit to buy all the ingredients needed for a three-course harissa lamb feast

If you’ve eaten like this during the past week while thinking that you can’t afford a house, then I will do some recipe posts because there’s no point sleeping like a peasant while you eat like a king.

How to default to cheaper transport

If it’s our travel spending that peaks and dips all over the place because we switch between using a car, the train, and our feet depending on how your mood takes you, then we can establish a rule that if it’s within walking distance we will always walk.

What’s walking distance?
This is a funny one. Ask three people right now their definition of walking distance, and I expect you’ll get three very different answers.

For me, it’s anything under an hour if I’m not carrying weight. If I’m carrying the kind of weight that means I can’t walk at my normal speedy pace, then it’s 20 minutes max. I’ve had people tell me anything over 10 minutes is ridic. If we count the number of steps we take around our home or workplace each day, it probably adds up to far more than a 10 minute walk.

Who has time to walk for an hour for an errand or to an appointment?
Yet we think little of spending that hour commuting or in the gym at great expense to ourselves. Why not cancel an unused gym membership and walk/run/cycle to places instead? I understand walking/running is less of an option if there are no footpaths door to door. In that case, would it be cheaper to take public transport only part way?

Running/cycling puts off even the most avid runners/cyclers if there are no showers at work. Second best is to lock yourself in a cubicle to freshen up and change your clothes.

I used to have a full bag every day of prepared meals,snacks, coffee etc. See if you can’t take most of this in on the first day of the week via transport, leaving you mostly hands free bar a small backpack for your work outfit the rest of the week.

The best part? No car traffic, no cancelled/delayed trains…And you’ll probably sleep like a baby.

Nothing on Earth will make me run and I don’t want to walk in heels or carry trainers during the day
Get a pair of fold up shoes.

I’m a dude and I don’t want to walk in my usual heels
If Harry Styles can dance on stage in heels, then you can walk anywhere. I’d include some evidence right here, but his European tour has been postponed for a year, so my concert footage is on the backburner…

The easiest way to enforce the walking distance rule
Sell the car if you have one. Voila! Since we no longer buy more than we can carry, we no longer need a vehicle anyway. Amirite?

But, but, but…!
But Bear, you make everything sound so simple, when it’s not!

What if it could be simple?

What if the only thing stopping our life from simplicity is ourselves?

If we don’t want things to be complex, then we have to stop looking for reasons for them to be messy and complex. Remember we’re trying to automate here.

But don’t you think these are major changes?

Yup. By all means make a trim here and there if you are earning well and think saving a deposit is a small climb. If we are worried that we might never be able to afford a house, then we are going to have to make big changes. Or if we want a deposit big enough to cushion us against negative equity, then we are going to have to make big changes in the service of our budget/automation/paying ourselves first. We don’t know yet what the new world order is going to look like, but I suspect deposits will get bigger, not smaller.

This might mean:

Changing careers or jobs so we can earn more/stop paying to work
Moving to somewhere where rents are cheaper
Selling a car although we have been driving daily ever since we got our licence and think we are one with our wheels
Doing all of these things

We might feel like our foot is molded to the shape of the accelerator, but there is another life out there. We just have to consider it for more than one second.

Reasons you won’t want to automate

You’re a carefree spirit who doesn’t want to lug groceries on the same day at the same time every week or every other week to ensure you’re not in and out of ASDA like someone with far more money than you. Your life has been full of last minute invites and spontaneous house parties.

The extremely simplistic solution: if you miss your shopping visit, don’t go shopping. [Never skip meals though, unless your doctor wants you intermittent fasting for health reasons].

You can still eat by doing four things:

Finally opening that packet of rice cakes your mum gave you
Asking your roommate if they have given up on their eggs which are past the best before date. If the answer is yes, put them in a container filled with water. If they don’t float, you’ve inherited some eggs
Apply the same principle at work if you know for a fact something has been left in the fridge that is perfectly edible and the owner says have at it
Try Olio, a free food-sharing app

I did say earlier that I think it is possible, if not better, for anyone who is outgoing and flexible with how they spend their time to have a budget as a savings strategy. Some of us require stability to keep us sane and are therefore suited to automating our finances. Some of us get bored quickly with routine and therefore having a budget allows us more room to improvise than if we didn’t. Imposing restrictions often makes us more creative.

If we still have some excuse as to why we don’t want to budget AND we loathe routine, then we can still try automation. Harness your dislike of routine as a way not to spend rather than overspend. Every time your last minute plans change, make it a game to serve those plans for free or cheaper.

Also answer one question: how much energy do you think you use every day because none of your decisions are automated?

Otherwise, automating a low level of spending revolves around taking one or more of these four actions:

Stop doing the thing
If we won’t stop, then do less of the thing
Do less of the thing with a cheaper brand (includes buying secondhand)
Do it ourselves

The spontaneous among you will rely more on points three and four. For everyone else, in some areas you’ll be able to combine these actions for maximum impact. For example, we can stop buying lunch daily, stop eating out of boredom, and make food ourselves from the best value ingredients.

Daily opportunities to automate

Breakfast/morning coffee. Make it at home.
Gym. See the next step for why you won’t need to go anymore.
Morning commute. Go via less wheels or on foot.
Elevenses a.k.a those mid-morning drinks/snacks worthy of a hobbit’s third breakfast. Make them yourself if not provided by work.
Lunch. We know what to do.
Afternoon snacks/drinks. That there are so many daily opportunities to spend on eating and drinking is why we need to DIY our food ASAP.

I’ve covered insourcing coffee habits in detail in the Supershoppers recap.

Or if you must buy coffee on the go, at least pick up loyalty points at the same time. Nab yourself extra via my Free Money blog post.

After work opportunities

After work drinks: yeah, don’t go to those if all anyone does is complain about work. Or have a G&T without the G (said by a gin lover). Especially if you already have a month’s supply of Fever Tree tonic at home (scroll up if you missed that bit).
Evening commute. Take fewer wheels or your feet.
Evening entertainment. All together now: do it yourself! (I mean catch up with friends indoors, what were you thinking?) Or if we insist on going to the gym, combine it with socialising. Or if we won’t scrap after-work drinks in future, get friends to meet us there so we can kill two birds with a very large rock and still be home in time for dinner.

If we insist on going to the gym, we can also look for cashback via TopCashback on brands like PureGym.

Dinner. We spent the entire day eating apparently, why do any of us need a huge dinner with seconds and thirds and dessert so that we can then do as little activity as possible afterwards.
Bathing: Budget shower gel and budget shampoo in a short shower shall make you clean which is the point of bathing. You don’t need to write your version of War and Peace in your head while turning yourself into a prune.

Of course, you could listen to the War and Peace audiobook afterwards instead with a free trial of Audible.

Evening wind-down: Write your version of War and Peace with pen and paper or borrow one of the books below. (I make notebooks for fun, so I obviously think those are a worthy investment).
Don’t worry about paying for Netflix etc because staring at a screen is only going to give you insomnia.
Besides, you can get a free trial of Amazon Prime Video if you’re desperate for viewing pleasure.
Sleep: Get lots of it so that we can make sound financial decisions such as maintaining our routine instead of buying a bacon butty five minutes before work starts because we’re shattered. P.S. That bacon butty is like watching Dawson’s Creek: the magic wears off too soon and leaves you empty all over again.

Lastly, if we expect our circumstances are about to change i.e. we will move somewhere else or start a new job, then plan to keep the automation unless rent is increasing/pay is decreasing. This means if your rent goes down or your pay goes up, you don’t inflate your spending just because you can.

Extreme Challenges To Save For A House

Number four in how to save for a house is the kind of thing that gets you in the papers.

The other option is to set yourself the kind of challenge that requires advertising to everyone you know. Tell your colleagues, your friends, your family, and your cat that you are on a spending ban and their mission is to help you complete your mission.*

*you should definitely still feed your cat and pay for the vet/insurance. Now you know why the cat at the top of this blog post looked so pissed off.

The difference between this and all the above is that we can start on a budget or automated lifestyle by making small tweaks or one big change. Going extreme means we ban all of our Raspberry Money at once. We can spend on rent, bills, eating in, and washing. That’s it.

Here are a few predecessors for inspiration:

Michelle McGagh

Michelle is the personal finance journalist behind the book The No Spend Year: how you can spend less and live more. As a perfect example of do as I say, not what I do, Michelle found herself spending with abandon despite what she wrote about for a living. A hefty London mortgage made her want to get a grip on her finances.

Because she didn’t have any other debts, she had been comfortable with heavy discretionary expenses. Her no spend year was all about saving as much Raspberry Money as possible by getting on her bike no matter the distance/weather, drinking water in pubs and washing up at friend’s houses to say thank you for dinner instead of taking a gift. (Among other things, otherwise it would be a very short book).

Guess what? You can listen to The No Spend Year with a free Audible trial.

Zoe Morrison

Via her blog Eco Thrifty Living, Zoe made the news when she undertook a series of environmental challenges that also saved bags of money. The one the papers loved the most was her month without toilet paper and she also swapped shampoo for water only or olive oil, and toothpaste for bicarbonate of soda. Consult the dentist on that one I reckon… Zoe continues to write about sustainability that doesn’t cost the Earth in every sense including in her book of the same name.

Cait Flanders

Similarly to Michelle McGagh, Cait had a no spend year, but with different motivation. She got herself out of $30000 of debt racked up through buying stuff for the sake of it, and then started to slide that way again. Cait detailed her personal revolution in The Year of Less.

If it seems counterintuitive to add to a book collection while looking for wisdom inside on how to shop less, then this is why I love services like Audible that let you listen to your first book for free.

As I said above, if we can’t do something in moderation, we should probably ban it, so Cait stopped shopping for a year (and longer, as the experiment turned her into a true minimalist). Cait allowed herself to spend on consumables like groceries, toiletries and petrol, the latter presumably because of the distances in Canada.

If you are going on an extreme challenge, you’ll have to come up with some ground rules. Be ruthless and if you can’t be ruthless, get someone ruthless to come up with the rules for you. I grew up somewhere rural where there aren’t footpaths connecting the villages and towns, but you could still cycle, and there was a dude notorious for hiking to the nearest town market every week by road, lack of pavement be damned.

One rule could be that you’re allowed to buy a hi viz jacket before you start…

Kath Kelly

Kath came first when she published How I Lived a Year on Just a Pound a Day in 2008. Her most hardcore anecdote was hitchhiking and camping her way to visit her brother in France. This just goes to show that nearly anything is still achievable under normal circumstances, even if you’re on a savings kick (and if you are a singleton without much sense of self-preservation).

One caveat is that the £1 was for expenses outside of rent and bills and she already owned a bike. Working as a lecturer meant she ate and drank her way through university events with free refreshments. You might notice this was published during the last recession. We seem to have be having another of those. If you decide to knock out a book about your extreme challenge then there will always be recessions to make it more relevant than ever…

Mark Boyle

a.k.a The Moneyless Man who brushes his teeth with ground cuttlefish and fills his pillows with reedmace. Mark initially gave up cash for a year and like Zoe, he had the environment in mind as a priority. Since he moved to an off-grid caravan parked for free in exchange for volunteering on a farm, I don’t think Mark will be using his Freakonomics to buy a house any time soon. Forget Raspberry Money, if you want to know how to quit “essentials” like soap, Mark is the man for you.

There are a few recurring themes in these challenges:

Relying on a bike instead of a car or public transport
Quitting certain cosmetics and toiletries. Probably no one needs to buy wrinkle cream before the age of 30.
Taking routines back to basics. Probably no one needs to buy wrinkle cream after the age of 30.
Foraging for food
Using networks like Freecycle
Not buying anything in pubs*

*not exclusively responsible for the death of a lot of pubs in England. Perhaps you could offer to do the washing up in exchange for a pint???

Even if we picked just one of these swaps, we could save a lot in a year. Definitely read The Truth About Looking Good recap if your anti-ageing expenditure is giving you stress wrinkles.

So what do we think? Are you already doing one of the above, or are you going to start today? Is there anything from the above that you want some extra detail on? Let me know in the comments.