The Best Ways to Save up for a Mortgage Deposit

If you want to buy a home, then you will normally need a mortgage and to get a mortgage you normally need a deposit. The amount that you need will depend on how much you are borrowing and the terms of the mortgage. However, it is very likely that you will need to save up for it. This can be a daunting prospect, especially as the amount that you will need to save will be likely to be more money than you have managed to save before. However, there are some things that you can try that will help you if you are wondering where to start or how to continue with savings.

Set up a Savings Account

It is a good idea to start by making sure that you have a savings account set up specifically for saving up money for your deposit. Make sure that it is an account that pays a reasonable interest rate, so that you can gain a bit of extra money without having to do anything. You may want to put the money in a notice account as this will pay more interest and it is likely that you will have some time that you give before drawing out. You may even want to choose an account where the money has to be tied up a for a period of time, such as a bond, if you have a long time to go until you need the money. However, you may also want some in an instant access account in case you need to did into your savings for an emergency. Also consider the fact that you can get paid a limited amount of interest per year before it is taxed, depending on your income tax level. Look into this and make sure that you get a tax free savings account if it benefits you with regards to tax, although most people will not need to consider this as they will not pay tax on savings interest anyway. So have a think about what will suit you the best.

Set up a Regular Transfer

It can be wise to set up a regular transfer into your savings account so that you do not forget to pay money into it. Having this go in just after you are paid is best, as you will have the money available to do it. Of course, you will need to work out how much you can afford to put into the account each month. It can be a good idea to do this by looking at previous bank statements in order to see what you normally have available to you and then setting up a transfer for that amount. You can always change it if the amount is not right, but it is good to set it up and get going with it as soon as possible. You might also need to try different things so that you can make more money available for saving,

Consider Ways to Earn More

It could be good to start with thinking about how you might be able to earn more money. There are the traditional ways such as trying to get a pay rise or promotion or seeing if you can earn more money in the job that you are doing but these may not be possible or you may already be doing these and not getting enough money. It is therefore worth seeing if there are any other things that you can try. Some people make money by selling items that they have and do not need anymore. This can raise a lump sum which can be popped in with the savings. Some people will find some little online jobs to do, which will earn small amounts of money that all add up and help, such as doing online surveys or freelance jobs. It could even be worth considering getting a second job, perhaps a weekend or evening job or making doing some temp work at times to get a bit of extra money. Every little bit can help out so even small extra earnings can be helpful.

Consider Ways to Spend Less

Spending less money can also be a big help. This can be easier for some people than others – it all depends how much they actually spend on things. For example, if you are only paying for things that are necessary, then you may not be able to cut down much, but if you buy a lot of luxuries then you could cut back on these. However, it can be even easier to spend less by comparing prices and paying less for the things that you do buy.

Should I Swap Credit Cards?

If you have a credit card, you may wonder whether you might be better off swapping to a different lender. There are different things to consider and it is worth having a think before you decide whether this will be a good idea for you.

Interest Rate

The interest rate can be a big influencer when it comes to credit cards. They can often high interest rates compared to other types of lending and therefore it is a good idea to check them out and see how your card rate compares to others. If you always repay the card in full each month, it is likely that you will never pay interest on it. However, you never know when you might not be able to afford to repay it, so it is always worth keeping in mind how much the interest rate is, so that you will be able to keep that in mind. If it is extremely high, then you might decide that it will be better to swap to another card just in case you do not repay it in full. If you do tend to owe money on your card, then the interest rate will be extremely important. It will be something that you will need to think about and if you can get a lower interest card, then the borrowing that you are doing will be cheaper. So swapping to a lower interest card, could be particularly beneficial for you.

Rewards

Some cards offer rewards to their customers. This might be some sort of points to spend on things, discounts, air miles or even cash. They can be very enticing and great for some people. If you always repay your card in full, then they can be great for you. This is because it is often the case that these cards will be higher interest so, if you have an outstanding balance, the value of the reward will not make up the extra cost you are paying in interest compared with standard cards. However, it is well worth checking as this might not always be the case. It is wise to be careful with these though. You may use the reward as a way to justify spending more money than you normally would or more than you can afford because you are getting some money back. You do not want to do this as the money that you are getting back will only be a small amount – probably a very small percentage of what you spend. Therefore, you need to think to yourself, being very honest, whether this might happen with you or whether you will be self disciplined enough to just use the card as normal.

Lender

It is worth having a look into the lender as well. Look at some information about the card issuer and what they are like. You might be especially interested to find out what their reputation is like, how well they treat their customers and things like this. You might be able to read some reviews online but remember to use trusted sites and think about the review carefully. Note what people are saying and whether things that they like and dislike are important to you or whether they are not. It is also good to speak to friends and family about it if you can. Talking about finance can be difficult with some people but it can be really handy if they can give you some useful advice and feedback. People are often very willing to help you as well, particularly if they have had a particularly good or bad experience that they would like to share.

Should I Repay the Minimum or the Credit Card in Full?

If you have a credit card, when you get your statement you will be given two main options – to repay the card in full or to pay the minimum. You may wonder which to do. It is worth understanding the consequences of each so that you can make the right decision.

Repaying in Full

If you repay what you owe in full by the date it needs to be repaid, then you will not have to pay any interest on the credit card. This means that you will be using the card for free (unless there are annual charges). This can be fantastic because you get the benefits of the credit card without any extra charges. You can even set up an automatic payment so that the card issuer takes the money from your account automatically which means that you will never forget to pay your bill and you will be able to ensure that you will never have to pay any interest. However, if you do this, you will need to keep a close eye on what you are spending on your card. This is because when the payment comes out automatically, it could mean that you will be left short of money because you have spent a lot and it could even mean you do not have enough to cover the other basics that you need to buy. So, make sure that you are careful if you do this.

Paying the Minimum

If you only repay the minimum amount each month, you will find that you will be charged interest. Interest on credit cards can be relatively high compared to other types of borrowing, so it is wise to take a look at the amount that they charge. When you get your monthly statement, it will let you know how much you will be charged in interest on the card. You will be able to see that amount and use it to decide whether you are going to repay the minimum or the full amount or something in between. If you just repay the minimum amount you will normally just be repaying the interest and a very small amount extra to repay some of the balance. If you continue to do this and spend no more on the card, you could find that it will take a very long time for you to repay your card. It could take years. If you keep spending on it, then it is likely that you will never clear the debt. You may be happy with this and be okay with paying this interest in return for having that extra money. However, it is wise to make sure you calculate how much interest you are paying in a year and think about whether you really think that it is offering you good value.

Paying Some Other Amount

Many people do not realise that it is possible to repay any amount off your credit card. This means that you are not forced to either repay it all or just the minimum. If you would rather pay more than the minimum but cannot afford to repay all of the balance then you can send a payment for what you wish to. This means that you will not be charged as much interest as if you only repaid the minimum and you will be able to reduce the debt that you owe. It can be a good alternative to repaying the full balance as you will repay the debt more quickly than if you just repay the minimum but it will be more affordable in some cases. Of course, it is best to repay everything that you owe, but this is a handy alternative if you know that you would struggle to manage this.

How to Pick the Best Credit Card Issuer

There are lots of companies that issue credit cards and it can be quite confusing knowing which one to choose. There are ways that you might choose between cards, such as comparing the interest rate, any rewards they offer and how much credit they offer you, but you will also need to think about the credit card provider when you are picking. There are different things that might be important to you and it is a good idea to check out some of them so that you can decide what is important to you and which lenders fulfil your requirements.

If They are Well-Known

Some people only like using a credit card company if they have heard of them. They feel like the more well-known companies can be trusted more. This is natural but it is worth thinking about whether this is a worthwhile attitude to have. Think about why you have heard of the lender and you probably will not know, in most cases why you know them. It could be that you have read a new article about them when something negative happened or that you have seen an advert. Is that a reason for using them? It might be better therefore to consider whether this is actually something that you should be considering or whether you should be thinking about other things.

What Their Website is Like

It can be a good idea to visit their website, just like you would with guaranteed payday lenders. This will mean that you will be able to learn a bit more about them and their products. It can give you a feel for the company and it will enable you to decide what you think about them. It is also a good place to look for more information about them. You will be able to find out about how long they have been going, some background about them as well as what products they offer, if it is a good website.

Reputation

It can be reassuring to know that a credit card issuer has a good reputation. You might want to find out what others think of them so that you can decide whether you think that they will be a good company for you to use. It is a good idea to think about what you feel would make a good reputation so that you can see if they match up. It can perhaps be handy to ask people that you know what they think of the lender if they have used them. They might be able to tell you a bit more about them. You could also look at online reviews to find out what others think about them too. Try to go to a review page that you trust and that is unlikely to be biased.

Customer Service

Having good customer service is something that is important to a lot of people. If you want to get in touch with the lender, perhaps with a question or query or you have a problem, then you want to know that it will be dealt with well. You want to know that it will be seen quickly and dealt with efficiently by someone that is helpful and polite. You may also want to be able to get in touch in a specific way, perhaps in a branch, by phone or online chat. So, think about what you want and then try to contact the company that you are thinking of getting a card form. You will be able to see how they respond and you can judge whether you feel that you are happy with the way your query was dealt with.

Should I Worry About Being in Debt?

Many people do worry about being in debt, but there are also people that do not worry at all. You may wonder whether you are feeling the right way with regards to your debt.

Worry Can Lead to Panic

In some people worry can lead to panic. If you are panicking about your debt then you will not be in a good way. Panic leads to us making poor decision or not being able to make decisions at all. This means that it can be the case that if we are so worried that we have this extreme emotion then we will not be able to do anything practically to help us out of our problem. In this situation you should really try to reduce your worry as much as you can as then you will be in a better state to tackle the debt. The first thing to do is to ask for help. You will need someone else to help you to find the right solution, both to reducing your panic and to sorting out the debt as you will not be in the right mindset to deal with it. So whether you go to your partner, another family member, friend, counsellor or bank manager it does not matter but seek help as soon as you can.

Worry Can Lead to Stress

If you are stressed this is also not a healthy way to be. Stress can lead to us becoming ill and this is not good. It is wise to try to deal with the stress as best you can. It might be that dealing with the source of the stress will help you, but you may need to deal with the stress before you can cope with dealing with the source of it. Therefore, you will need to have a good think about what will work for you. Consider what normally helps when you are stressed about something and whether removing the stressor or just doing some form of relaxation will help you. If you need to do relaxation then do this and then you can start to think about how to deal with the debt.

Worry Can Lead to Action

Having a bit of concern can be a good thing. If you are not worried at all about your debts then you could end up getting into lots of debt and not caring. It could get out of control. So, having a bit of concern is good because it means that you will be much more likely to be motivated to make sure that your debts do not get out of control. Try to keep your worries in check enough to make sure that you do not find them overwhelming, but allow then to motivate you to improve your situation by making changes. This could be by not spending so much money so not increasing the debt and perhaps trying to cut down enough to have spare money to repay some of it. You might also be able to think about ways to earn more money that will allow you to have more available to pay off the debt. It is important to start by making sure that you do not need to keep borrowing, then work on ensuring you make all of the minimum payments before you then think about whether you want to overpay some of the debt and start to repay more than you have to. This last part can be quite complex as there are a lot of factors that you need to consider when you are deciding which debts to repay and how much you can afford and so you want to be clear thinking when you do this.