Finding the money: Helping your loved one help themselves

Budgeting and saving

Helping your loved one get a deposit large enough to buy a home can take time and effort. If you don’t have a lump sum readily available you may be able to help and encourage them with their savings. 

Budget wisely

Making sure that every penny your loved one earns is being used to the best of its ability is crucial. 
They should take the time to look at their outgoings against what they earn and find areas where they can cut back and save extra cash. 
It may sound hard to do but make sure they’re being realistic, allowing themselves some budget to cover unexpected costs and the occasional treat or night out. 
But they can also save money without having to cut back. Encourage them to regularly check how much they’re paying for utilities such gas and electric, broadband, home and car insurances and mobile phone contracts. Don’t forget to take a look at any subscription services they might pay for. 
They can use our budget calculator to help work all this out.

Make savings work harder

It’s also a good idea to shop around for the best savings rate. It can be hard to save money so making it work hard is important. 
If your loved one has an ISA, the highest rates tend to be around the tax year-end in March and early April. So, they should make sure they’re keeping an eye out on the market then and transferring their ISA to the best rate possible. To transfer their ISA they should contact their new ISA provider who will arrange the transfer on their behalf. Any money they withdraw from their ISA will lose its tax efficient status and if replaced back into an ISA will count towards their current tax year ISA limit.
If they’re trying to plan ahead, investments might be something your loved one wants to explore. They have the potential for higher returns but there’s also a risk that they get back less than they originally invested. They should speak to an Independent Financial Adviser to see if it’s something they want to explore.
Check out our savings and investment options.

Cut the cost of rent

Reducing rent could be one of the quickest ways to reach that home deposit goal. Your loved one could do this by downsizing to a smaller place with a lower monthly rent.
If your loved one has spare rooms in their property, they could always see if they could rent it out and split the cost of the rent. They’ll need to make sure that their tenancy agreement will let them do this.
There may be tax implications of renting out rooms.

Move back home

Cutting the cost of rent will help your loved one save more each month, but your loved one could consider the possibility of them moving back home. As well as saving the rent they would have paid each month, they’d also save on other monthly bills such as utilities, broadband, insurance etc.
You may want to have a conversation with your loved one to discuss if this is possible and agree how long they anticipate living back home and how they will help around the house. If ‘back home’ is your house, you’ll invariably have higher costs because of them living there, so you may want to have a think about whether they should contribute anything towards those additional costs.

Quick checklist

1. Use our handy budget calculator to help your loved one work out how much they spend each month

2. Find out how much they have saved already and their plan to reach their savings goal

3. Help your loved one boost their credit score

4. Take a look at local properties to get an idea of typical costs

5. You can also use our calculator to understand how much we might be able to lend your loved one

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