Saving for a Flat in London

I want to buy a flat in London in my 20s I said it I think the average age of firsttime buyers in London in the past year was 35 so I'm definitely taking upon myself a little bit of a challenge here so in this video I'm going to show you exactly what my plan is how I'm saving up to buy and how you can too we're going to cover how to get into saving what accounts I use and how to stay consistent My Hope Is that wherever you are on your savings Journey this video will be helpful for you I have tips if you're completely new to saving you don't even know where to start where to find the money in your budget to start saving but I also have tips that I literally just learned myself a couple of weeks ago from people that I know who have bought and my financial advisor so without further Ado let's get into this video okay let's start from the beginning how do you even get into saving in the first place now I have three things I want to go through here and the first thing is finding room in your budget to start saving and this applies to absolutely everyone by the way not just people who are starting out on low salaries I read this really great book called psychology of money if you have the time definitely read it it's really really good and it talks about how a lots of people like millionaires included struggle to save money because as their income goes up so does their spending so there's no room left there for any savings because they have what's called lifestyle inflation and this is why it is so important that if you're currently on a low salary you get into the habit of saving because even though it might feel like you're saving up a absolutely minuscule number it's not going to make any difference learning to make room in your budget when you already have little to play with in the first place it's going to teach you how to be consistent with your savings because imagine if you can find room in your budget right now when you're straight out of uni and you're just starting your first job imagine how much easier it will be for you to find room in your budget when you're earning more money in the future or you get a promotion to save that money as well it'll help you develop the habit of spending less than you earn and always saving whatever your salary is now the next thing I want you to do if you haven't done already is I want you to create a budget and I want you to base that budget off of your spending in the past 3 months so sit down and take a look at your bank statements and write down what an average month in your life looks like this going to help you see in what areas of your life you are overspending and perhaps where you can cut and take that money and put it into saving said finally and I want to quote Vivian from your hbff here because I think she makes a really good point and that is the best way to save more money is by making more money and how she explains this is it's much much easier to get a £5,000 promotion a year or get a second job that pays £5,000 a year than to cut that same number £5,000 out of your existing spending now very important that is not to say that you should wait to save until you earn more money or until you get that promotion please start saving as soon as you possibly can because what might happen as we talked about earlier is the lifestyle inflation that happens when you start earning more you just start spending more and there's like the versus cycle but if you want to significantly increase savings and you don't want to completely alter and change your lifestyle the only way to really do that is to earn more money so let's talk about a couple of ways you can actually increase your income in the UK which is where I live and where I work women are consistently getting paid less than their male counterparts and one of the reasons for this is because we are less likely to ask for pay Rises and promotions and when we do we ask for less than our male counterparts I actually have a friend that I spoke to and this might be a very dramatic example but I think it's worth sharing anyway she was talking to some other female analysts in her team and she realized that for over a year she had been paid £15,000 more than the other analysts who had the same exact job as her simply because she had asked for a pay rise and had asked for a higher number and they didn't so if you've been thinking about this take this as your sign to ask for that pay rise and ask for that promotion now another way to increase your income is to start a side hustle which leads us to the very fitting sponsor of this video skillshare skillshare has thousands of classes led by industry experts across freelance design marketing entrepreneurship productivity and so much more so if you are looking to learn a new skill or transform a skill that you already have into a side hustle skillshare is the perfect place to start there are so many people on the internet who are willing to pay for all kinds of skills copywriting transcription basic logo design graphic design video editing I know there's even people who sell like notion and Excel templates and make a bank doing it and skillshare has both classes and learn learning pth that are specifically Cur to help you master these and so many other skills from start to finish personally I really love the master typography and logo design learning path it teaches you the entire process from shape to color to customization so when you've completed it you know exactly how to create a logo for your business or even sell logos to other small businesses first 500 people to click the link in my description box below we'll get a free one month trial of skillshare so give it a go try it out and let me know how you get on next let's talk about all the different ways you can save your money to buy when I decided I wanted to save up to buy this was something I was so incredibly confused by first of all I'm not from the UK so I didn't have like parents or siblings or anyone to like ask about like how they saved up for a house like what accounts they use what saving methods they use like all of that but I also don't think I would even have known how to do it in normary to be honest I didn't know what a savings bond was I didn't know what a high yield interest account was but after doing some research I found out that there are four methods or ways in particular that people save up to buy at least here in the UK and that includes high yield savings accounts saving bonds Isa accounts and investing every single one of these accounts and methods are slightly different and they also have very different time frames which is important to consider and I'm going to talk you through more of that later but essentially depending on how far into the future you think buying is for you one method might suit you better over the other okay so let's go through all the different savings accounts first and then we'll End by talking about investing High savings accounts what is it a high savings account is essentially a savings account that you can have with your bank that gives you better interest and better return of your money than your regular schmugler 1% interest rate savings account and this is really important to know about because if you're currently putting your mortgage savings or your house savings into a regular savings account with 1% AER and inflation is four 5% at least what it has been lately you are losing money every single year by having your Savings in that savings account however high yield savings accounts often have much better returns a lot of them right now I think have between 4.5% to 5% because of the very high uh interest rate set by the bank of England okay let's do an example because I know this is probably all sounding very confusing imagine savings account a with 1% a and savings account 2 with 5% a this is a regular account this say high savings account if you put in £1,000 in each savings account you would have 1,010 in in the regular savings account and £1,050 in the high old savings account because of the acur interest you can open a high savings account with your bank you can set up a direct debit from your debit account to your saving account and this is also very low risk so I think this type of account is a really great place to start saving for a mortgage that's at least what I've been doing and what I started with at least after I moved my money from my 5% regular Sav account I can't believe I did that for so many years and if you get an easy access account you also get immediate access to your money which is great if you're planning on buying in the near future or if you're just not comfortable with your money being locked off I think I have like three different highill savings accounts now I've been opening them a little bit all over the place some in Norway and some in the UK um before and after I moved but they all pay me between 4.75 and 6.60% returns each year next is a high yield savings bond a high yield savings bond is very similar to what we just talked about a high savs account but you lock your money away for a set period of time often to get a higher return and typically the longer you're willing to lock your money away the higher the rate of interest you will get will be I only started doing this very recently because I was not a place where I was comfortable locking my money away and not touching it for like 12 18 24 months at a time but I'm now in a situation where I have a multiple year lease signed on this flat so I'm not moving anytime soon and I also have a full emergency fund and a couple of other access savings account so I'm comfortable now putting my money away to get that higher return and so if you have a slightly longer time frame and you know for absolute certain that you're not going to buy within the next 6 months 12 months 18 months 24 months a savings bond might be a good idea for you I think the return on my savings bond now is 5% or proba 50% I'm not sure next we're going to talk about Isis this is specific to the UK and Isa is essentially a tax-free savings account or investment account we'll talk about the investment part later you can save or invest up to 20,000 each year and whatever returns you make will be taxfree and there's two savings accounts in particular that people in the UK use to save up to buy a flat the first one is a lifetime Isa or otherwise called a Lysa this account allows you to save up to £4,000 each year for your first home or for retirement and the government will then add 25% to whatever you save up to £1,000 each year so this is potentially a really great way to save up to buy you can get up to £1,000 for free each year that's a great return the only reason that I'm not using aysa and a lot of people who buy in London don't end up using L to save is because there's a cap of £450,000 to buy a house so if you want to buy something that costs more than £450,000 you cannot use aysa to buy but if what you're looking to buy costs less than £450,000 then aysa might be a really good option for you what I'm using instead of the Lysa is a cash Isa that's funny this all kind of Rhymes doesn't it but a cash Isa is essentially very similar to the high yield SS accounts we talked about earlier but it is in that taxfree wrapper so whatever interest or returns you make on your money it will be taxfree the only thing I've noticed at least with my bank with cash Isis is they have a couple of restrictions or at least most of them do with the money you can take out and how often you can take out money of your accounts so do keep that in mind again if you're not super comfortable with not having easy access to your money but I think a cash Isa can be a really great way to save for a mortgage and save to buy last year I really doubled down on saving into my cash Isa and I saved £7,000 in my cash Isa which has 4.75% interest rates and that earned me £332 in taxfree money which is just money I can add on to my savings which is not great but it's something and it definitely helps and finally we have investing as another possible way to save up to buy if you live in the UK K you can open a stocks insures Isa account and whatever returns you make on your investment will be completely taxfree I have a little video that goes more in depth on investing so if you're interested I'll link it there or there but essentially with your stocks insures Isa you can buy shares in funds like an ETF that tracks the S&P 500 Index on average over the past 20 years this Index Fund has had an average return of 10.6% every year so if you were to have put your money 20 years ago into an ETF that track this index fan you would have earned 10.6% on average returns or no money which would have been a great return but is really important to remember however is a fund that you put your money in can go up and it can go down it can increase in value and it can decrease in value it is not like a savings accounts this is why time frames are really really important to consider if you're thinking about choosing um investing as a seing strategy and I think the general rule of thumb is having at least a 5year Time Horizon when putting your money into funds the stock market is volatile it goes like this so having this longer time Horizon will help you prevent putting your money in when it's at a high and then having to take it out when it's at a low and then potentially losing money okay I know this has probably been a lot of technical information so let's move over to something a little bit more fun which is how to actually stay consistent with savings because that is the number one most important thing if you're not consistent and you're just doing your savings with a lump suum here and a lumpsum there is going to be that much harder to reach your goals and buy a flat or buy a house so let's talk about the things I do first we have the practice of paying yourself first this essentially means that every month you know exactly how much you're able to save that month and then the minute you get your paycheck you transfer the money out to your bank account and into your savings account so you can only spend what is left after saving and a great way to stay consistent with doing this is just setting up a direct debit from your bank account to your sales account on the day that you get your salary every single month next is seeing your goals visually I'm talking visually boards I'm talking notion boards I'm talking putting a photo of your dream house on your bedroom wall you need to visually remind yourself of your goals and how far long you are now I personally use notion to track exactly how far I am on my savings journey and seeing that number increase every time I put a little bit of money into my savings account it's a big motivation for me to see like okay I know I'm far but at least I'm getting closer I know I'll will get there one day if I just keep doing this I have a whole video about my notion money page and also a template which I will leave in the description box below if you're interested next is gamification and there are so many ways to do this just think outside the box and be creative but I'll share a couple of ways that I do it and then I've seen other people do it on my notion I have trackers and I have progress bars that every time I put in money into my savings account the tracker moves a little bit to the right and a little bit closer to my goal so it kind of makes it a little bit more exciting to put my money into my savings account and see that kind of little Dash move to the right I also heard of this one girl that for every 5,000 she and her partner saves they will go out and spend £50 on a meal to kind of celebrate they reached another Milestone I think that was a really cute idea and finally number four is having an accountability bud and this is something that I really never thought of before but me and my boyfriend have been really dedicated to saving over the past year because we got kicked out of our flat and we decided that we never want to go through that again and we want to buy the next apartment we live in hopefully at least fingers crossed and so every time Theo gets his salary he saves his money and he tells me about it and then every time I get my salary I save and I tell the about it and then we're like oh I saved this much this month and I saved this much this month and it kind of just keeps you accountable because you know the other person is there and saving and so you want to be there and you also want to be saving and that is it that was a lot of information I know we're in a time where buying has become increasingly difficult as I said in the beginning of this video the average age of a first-time buyer in London is 35 which is absolutely crazy and it's crazy that it's even gone to this point but it is still possible even though it's a lot further away from us than it was for our parents or our grandparents and it requires a lot more saving and a lot more time it is still possible and I hope this video helped you get a few ideas on how you can save and how you can potentially reach your goal so thank you so much for watching and I will see you in my next video bye guys

I want to buy a flat in London in my 20s I said it I think the average age of firsttime buyers in London in the past year was 35 so I&#39;m definitely taking upon myself a little bit of a challenge here so in this video I&#39;m going to show you exactly what my plan is how I&#39;m saving up to buy and how you can too we&#39;re going to cover how to get into saving what accounts I use and how to stay consistent My Hope Is that wherever you are on your savings Journey this video will be helpful for you I have tips if you&#39;re completely new to saving you don&#39;t even know where to start where to find the money in your budget to start saving but I also have tips that I literally just learned myself a couple of weeks ago from people that I know who have bought and my financial advisor so without further Ado let&#39;s get into this video okay let&#39;s start from the beginning how do you even get into saving in the first place now I have three things I want to go through here and the first thing is finding room in your budget to start saving and this applies to absolutely everyone by the way not just people who are starting out on low salaries I read this really great book called psychology of money if you have the time definitely read it it&#39;s really really good and it talks about how a lots of people like millionaires included struggle to save money because as their income goes up so does their spending so there&#39;s no room left there for any savings because they have what&#39;s called lifestyle inflation and this is why it is so important that if you&#39;re currently on a low salary you get into the habit of saving because even though it might feel like you&#39;re saving up a absolutely minuscule number it&#39;s not going to make any difference learning to make room in your budget when you already have little to play with in the first place it&#39;s going to teach you how to be consistent with your savings because imagine if you can find room in your budget right now when you&#39;re straight out of uni and you&#39;re just starting your first job imagine how much easier it will be for you to find room in your budget when you&#39;re earning more money in the future or you get a promotion to save that money as well it&#39;ll help you develop the habit of spending less than you earn and always saving whatever your salary is now the next thing I want you to do if you haven&#39;t done already is I want you to create a budget and I want you to base that budget off of your spending in the past 3 months so sit down and take a look at your bank statements and write down what an average month in your life looks like this going to help you see in what areas of your life you are overspending and perhaps where you can cut and take that money and put it into saving said finally and I want to quote Vivian from your hbff here because I think she makes a really good point and that is the best way to save more money is by making more money and how she explains this is it&#39;s much much easier to get a £5,000 promotion a year or get a second job that pays £5,000 a year than to cut that same number £5,000 out of your existing spending now very important that is not to say that you should wait to save until you earn more money or until you get that promotion please start saving as soon as you possibly can because what might happen as we talked about earlier is the lifestyle inflation that happens when you start earning more you just start spending more and there&#39;s like the versus cycle but if you want to significantly increase savings and you don&#39;t want to completely alter and change your lifestyle the only way to really do that is to earn more money so let&#39;s talk about a couple of ways you can actually increase your income in the UK which is where I live and where I work women are consistently getting paid less than their male counterparts and one of the reasons for this is because we are less likely to ask for pay Rises and promotions and when we do we ask for less than our male counterparts I actually have a friend that I spoke to and this might be a very dramatic example but I think it&#39;s worth sharing anyway she was talking to some other female analysts in her team and she realized that for over a year she had been paid £15,000 more than the other analysts who had the same exact job as her simply because she had asked for a pay rise and had asked for a higher number and they didn&#39;t so if you&#39;ve been thinking about this take this as your sign to ask for that pay rise and ask for that promotion now another way to increase your income is to start a side hustle which leads us to the very fitting sponsor of this video skillshare skillshare has thousands of classes led by industry experts across freelance design marketing entrepreneurship productivity and so much more so if you are looking to learn a new skill or transform a skill that you already have into a side hustle skillshare is the perfect place to start there are so many people on the internet who are willing to pay for all kinds of skills copywriting transcription basic logo design graphic design video editing I know there&#39;s even people who sell like notion and Excel templates and make a bank doing it and skillshare has both classes and learn learning pth that are specifically Cur to help you master these and so many other skills from start to finish personally I really love the master typography and logo design learning path it teaches you the entire process from shape to color to customization so when you&#39;ve completed it you know exactly how to create a logo for your business or even sell logos to other small businesses first 500 people to click the link in my description box below we&#39;ll get a free one month trial of skillshare so give it a go try it out and let me know how you get on next let&#39;s talk about all the different ways you can save your money to buy when I decided I wanted to save up to buy this was something I was so incredibly confused by first of all I&#39;m not from the UK so I didn&#39;t have like parents or siblings or anyone to like ask about like how they saved up for a house like what accounts they use what saving methods they use like all of that but I also don&#39;t think I would even have known how to do it in normary to be honest I didn&#39;t know what a savings bond was I didn&#39;t know what a high yield interest account was but after doing some research I found out that there are four methods or ways in particular that people save up to buy at least here in the UK and that includes high yield savings accounts saving bonds Isa accounts and investing every single one of these accounts and methods are slightly different and they also have very different time frames which is important to consider and I&#39;m going to talk you through more of that later but essentially depending on how far into the future you think buying is for you one method might suit you better over the other okay so let&#39;s go through all the different savings accounts first and then we&#39;ll End by talking about investing High savings accounts what is it a high savings account is essentially a savings account that you can have with your bank that gives you better interest and better return of your money than your regular schmugler 1% interest rate savings account and this is really important to know about because if you&#39;re currently putting your mortgage savings or your house savings into a regular savings account with 1% AER and inflation is four 5% at least what it has been lately you are losing money every single year by having your Savings in that savings account however high yield savings accounts often have much better returns a lot of them right now I think have between 4.5% to 5% because of the very high uh interest rate set by the bank of England okay let&#39;s do an example because I know this is probably all sounding very confusing imagine savings account a with 1% a and savings account 2 with 5% a this is a regular account this say high savings account if you put in £1,000 in each savings account you would have 1,010 in in the regular savings account and £1,050 in the high old savings account because of the acur interest you can open a high savings account with your bank you can set up a direct debit from your debit account to your saving account and this is also very low risk so I think this type of account is a really great place to start saving for a mortgage that&#39;s at least what I&#39;ve been doing and what I started with at least after I moved my money from my 5% regular Sav account I can&#39;t believe I did that for so many years and if you get an easy access account you also get immediate access to your money which is great if you&#39;re planning on buying in the near future or if you&#39;re just not comfortable with your money being locked off I think I have like three different highill savings accounts now I&#39;ve been opening them a little bit all over the place some in Norway and some in the UK um before and after I moved but they all pay me between 4.75 and 6.60% returns each year next is a high yield savings bond a high yield savings bond is very similar to what we just talked about a high savs account but you lock your money away for a set period of time often to get a higher return and typically the longer you&#39;re willing to lock your money away the higher the rate of interest you will get will be I only started doing this very recently because I was not a place where I was comfortable locking my money away and not touching it for like 12 18 24 months at a time but I&#39;m now in a situation where I have a multiple year lease signed on this flat so I&#39;m not moving anytime soon and I also have a full emergency fund and a couple of other access savings account so I&#39;m comfortable now putting my money away to get that higher return and so if you have a slightly longer time frame and you know for absolute certain that you&#39;re not going to buy within the next 6 months 12 months 18 months 24 months a savings bond might be a good idea for you I think the return on my savings bond now is 5% or proba 50% I&#39;m not sure next we&#39;re going to talk about Isis this is specific to the UK and Isa is essentially a tax-free savings account or investment account we&#39;ll talk about the investment part later you can save or invest up to 20,000 each year and whatever returns you make will be taxfree and there&#39;s two savings accounts in particular that people in the UK use to save up to buy a flat the first one is a lifetime Isa or otherwise called a Lysa this account allows you to save up to £4,000 each year for your first home or for retirement and the government will then add 25% to whatever you save up to £1,000 each year so this is potentially a really great way to save up to buy you can get up to £1,000 for free each year that&#39;s a great return the only reason that I&#39;m not using aysa and a lot of people who buy in London don&#39;t end up using L to save is because there&#39;s a cap of £450,000 to buy a house so if you want to buy something that costs more than £450,000 you cannot use aysa to buy but if what you&#39;re looking to buy costs less than £450,000 then aysa might be a really good option for you what I&#39;m using instead of the Lysa is a cash Isa that&#39;s funny this all kind of Rhymes doesn&#39;t it but a cash Isa is essentially very similar to the high yield SS accounts we talked about earlier but it is in that taxfree wrapper so whatever interest or returns you make on your money it will be taxfree the only thing I&#39;ve noticed at least with my bank with cash Isis is they have a couple of restrictions or at least most of them do with the money you can take out and how often you can take out money of your accounts so do keep that in mind again if you&#39;re not super comfortable with not having easy access to your money but I think a cash Isa can be a really great way to save for a mortgage and save to buy last year I really doubled down on saving into my cash Isa and I saved £7,000 in my cash Isa which has 4.75% interest rates and that earned me £332 in taxfree money which is just money I can add on to my savings which is not great but it&#39;s something and it definitely helps and finally we have investing as another possible way to save up to buy if you live in the UK K you can open a stocks insures Isa account and whatever returns you make on your investment will be completely taxfree I have a little video that goes more in depth on investing so if you&#39;re interested I&#39;ll link it there or there but essentially with your stocks insures Isa you can buy shares in funds like an ETF that tracks the S&amp;P 500 Index on average over the past 20 years this Index Fund has had an average return of 10.6% every year so if you were to have put your money 20 years ago into an ETF that track this index fan you would have earned 10.6% on average returns or no money which would have been a great return but is really important to remember however is a fund that you put your money in can go up and it can go down it can increase in value and it can decrease in value it is not like a savings accounts this is why time frames are really really important to consider if you&#39;re thinking about choosing um investing as a seing strategy and I think the general rule of thumb is having at least a 5year Time Horizon when putting your money into funds the stock market is volatile it goes like this so having this longer time Horizon will help you prevent putting your money in when it&#39;s at a high and then having to take it out when it&#39;s at a low and then potentially losing money okay I know this has probably been a lot of technical information so let&#39;s move over to something a little bit more fun which is how to actually stay consistent with savings because that is the number one most important thing if you&#39;re not consistent and you&#39;re just doing your savings with a lump suum here and a lumpsum there is going to be that much harder to reach your goals and buy a flat or buy a house so let&#39;s talk about the things I do first we have the practice of paying yourself first this essentially means that every month you know exactly how much you&#39;re able to save that month and then the minute you get your paycheck you transfer the money out to your bank account and into your savings account so you can only spend what is left after saving and a great way to stay consistent with doing this is just setting up a direct debit from your bank account to your sales account on the day that you get your salary every single month next is seeing your goals visually I&#39;m talking visually boards I&#39;m talking notion boards I&#39;m talking putting a photo of your dream house on your bedroom wall you need to visually remind yourself of your goals and how far long you are now I personally use notion to track exactly how far I am on my savings journey and seeing that number increase every time I put a little bit of money into my savings account it&#39;s a big motivation for me to see like okay I know I&#39;m far but at least I&#39;m getting closer I know I&#39;ll will get there one day if I just keep doing this I have a whole video about my notion money page and also a template which I will leave in the description box below if you&#39;re interested next is gamification and there are so many ways to do this just think outside the box and be creative but I&#39;ll share a couple of ways that I do it and then I&#39;ve seen other people do it on my notion I have trackers and I have progress bars that every time I put in money into my savings account the tracker moves a little bit to the right and a little bit closer to my goal so it kind of makes it a little bit more exciting to put my money into my savings account and see that kind of little Dash move to the right I also heard of this one girl that for every 5,000 she and her partner saves they will go out and spend £50 on a meal to kind of celebrate they reached another Milestone I think that was a really cute idea and finally number four is having an accountability bud and this is something that I really never thought of before but me and my boyfriend have been really dedicated to saving over the past year because we got kicked out of our flat and we decided that we never want to go through that again and we want to buy the next apartment we live in hopefully at least fingers crossed and so every time Theo gets his salary he saves his money and he tells me about it and then every time I get my salary I save and I tell the about it and then we&#39;re like oh I saved this much this month and I saved this much this month and it kind of just keeps you accountable because you know the other person is there and saving and so you want to be there and you also want to be saving and that is it that was a lot of information I know we&#39;re in a time where buying has become increasingly difficult as I said in the beginning of this video the average age of a first-time buyer in London is 35 which is absolutely crazy and it&#39;s crazy that it&#39;s even gone to this point but it is still possible even though it&#39;s a lot further away from us than it was for our parents or our grandparents and it requires a lot more saving and a lot more time it is still possible and I hope this video helped you get a few ideas on how you can save and how you can potentially reach your goal so thank you so much for watching and I will see you in my next video bye guys

Transcript for:Saving for a Flat in London

Transcript for:
Saving for a Flat in London