Saving What You Need to Buy Your First Home

Millennial Magazine - buy your first home

For many millennials, especially those born in the 90s, the idea of homeownership still feels like a dream. It is a goal that they are finding extremely difficult to achieve. Yet, despite this, many reject the idea of being lifelong renters and continue to doggedly pursue the goal of owning their own home.

However, the good news is that increasingly the older members of the millennial generation are now entering the housing market. Research conducted by Zillow in 2021 found that over half of homebuyers in the USA are now aged under 36. A similar trend is also being seen in the UK and many EU countries.

In many cases, taking a multi-strand approach is what has enabled older millennials to finally save up enough for a house deposit. Consuming less and securing low-cost deals, while striving to increase earnings is the magic formula that is leading to greater levels of homeownership amongst millennials. A winning approach that those born in the 90s can also use to do the same.

Use comparison websites to reduce your monthly services bills.

For regular outgoings shopping around for the best deals adds up to huge savings. A typical household can save hundreds, per year. Tracking down cheaper broadband deals is essential. As is reducing the amount you pay for electricity, gas, and insurance policies.

All of this is relatively easy to do using price comparison websites. But it is no good rushing around 3 days before your broadband contract or car insurance policy is up to try to find a good deal. You will inevitably rush the task and potentially end up signing up for something that does not meet your needs.

Consume less.

Significant savings can also be made by, for example, turning off all electrical before leaving the home and keeping the thermostat low. Simple changes like walking or cycling to the shops instead of driving all add up over time, enabling you to save even more money.

Put aside some cash every single day.

Saving a little each day soon adds up. It could be as simple as emptying your change into a jar each night. Or putting aside what you didn’t spend on a lunchtime coffee. 

If like most people you are now using a card even when making small purchases, consider using one of these piggy bank apps. When you buy something that costs $2.55, $3 gets deducted from your account. The retailer gets their $2.55 and the 45 cents gets put into your savings account. People who use these apps barely notice that they are saving, which is why it is so effective.

Closely track what you are spending.

Setting and sticking to a budget makes a huge difference. Knowing exactly where your money is going focuses the mind. It helps you to spot where you are wasting money and do so before too much has been spent. Seeing your lunchtime spend begin to trend upwards will soon prompt you to go back to making a packed lunch.

Earn from a side hustle.

Spending less will get you a long way along the road to having enough for a deposit. But you will get there much faster by earning more. Having a side hustle is an excellent way to do that. Here are 25 ways for millennials to potentially earn over $1,000 a month extra while still being able to hold down their main job. For those who are planning to buy a property with their partner, this is an especially effective strategy if they both work a side hustle.

Invest in learning new skills. 

Learning new skills is another way to earn more and do so within a relatively short period. That could mean spending a year or so studying for a qualification which will enable you to get promoted. 

Or instead, you could identify a skill gap and train so that you can switch careers and fill it. For example, right now, in many countries, there are not enough HGV drivers. Driving a lorry means long hours and can be quite stressful and, in some cases, physically demanding. But it is surprisingly well-paid work. Typically, you can qualify after just a few weeks of training. The cost of which you can cover quickly once you have started working as an HGV driver.

Reinvest what you save and the extra that you earn.

Regardless of whether you choose to earn more or save more, or do both, try reinvesting that extra money. Doing so will help to motivate you and greatly reduce the chances of you spending what you have saved up on something other than buying an apartment or house.

It does not take long for these types of money-saving habits to become the norm for you. Something that will help you greatly when you do buy your first home.

What do you think?

Written by Trueman

Trueman is a fin-tech and culture writer for Millennial Magazine. As host of The TrueMan Show, he covers all things related to stocks, tech and culture. He's a market analyst by day and a talent scout by night, combing the Internet for noteworthy startups, influencers and culture warriors.

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