Struggling in the current economic climate means that many millennials are turning to the ‘Bank of Mum and Dad’ to help them get a foot on the property ladder. One of the biggest barriers to young people is saving enough for a hefty deposit. As a parent, you’ll want to help your children realise their dream of owning their own property when the time comes. So, what is the best way to help your child save for a deposit?
- Give some practical and positive advice
When it comes to helping your child on the journey to buying their first home, one of the most effective ways is to stay positive and encourage a ‘can-do’ environment and mindset.
Encourage them to seek good advice, be financially aware and savvy and how to budget consistently. Encourage them to review their outgoings regularly to identify any areas where savings can be made. Stay positive and urge them to be disciplined about accumulating that nest egg. Budgeting can be a real eye-opener when you realise how many non-essentials you are forking out for.
- Direct them to helpful services
Introduce them to useful online resources and helpful independent financial advice to help them make the best decisions. When the time comes to look for Gloucester houses for sale, visit www.tgres.co.uk/for-sale/houses/gloucester
- A loan
If you decide to loan your child the money for a deposit or provide financial help towards the amount needed, be sure to have thorough conversations about it beforehand with everyone involved. It can be a good idea to have something drawn up in writing so there can be no confusion later on about amounts gifted, amounts to be repaid and timeframes. To avoid unpleasant situations in the future, sit down with your child and agree a regular repayment schedule.
- Let them move back in
This might not be the ideal situation for either of you but by having them move back home for a while can really help them to save money. You’ll sacrifice some space and they’ll sacrifice some independence, but for first-time buyers looking to get on the ladder, this is sometimes the only way.
- House share
Renting a room in a house share generally works out cheaper than renting a property on their own. Make the suggestion that they share with some others who they trust to save towards a deposit.
- Get the best savings rates
Be sure to shop around for the very best savings rates and those short to medium investment chances so their money is working hard for them. Why not turn a rather dull activity into a challenge – who can find the highest savings rates? Be sure you always read the small print though!