Struggles in the current economic climate mean that many millennials switch to the ‘Bank of Mum and Dad’ to help them get a foot on the property ladder. One of the biggest obstacles for young people is saving enough for a hefty deposit. As a parent, you will want to help your children realize 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 his or her way 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 smart and how to budget consistently. Encourage them to review their spending on a regular basis to identify areas where savings can be made. Stay positive and urge them to be disciplined about collecting together that nest egg. Budgeting can be a real eye opener when you realize how many non-essentials you are actually forking out for.
- Navigate them to helpful services
Introduce them to useful resources and helpful online independent financial advice to help them make the best decision. Help them find the right agents and Conveyancing Solicitors Manchester when they do find a property they are hoping to make an offer on. Contact Conveyancing Solicitors Manchester like Sam Conveyancing.
If you decide to lend your child money for a deposit or provide financial assistance to the amount needed, be sure to have a thorough conversation about it beforehand with everyone involved. It could be a good idea to have something in writing so there is no confusion later about the amount to be paid back and the time frame. To avoid unpleasant situations in the future, sit down with your child and approve the regular payment schedule.
- Let them move back home
This is probably not an ideal situation for either of you, but to ask them to move back home for a while can really help them to save money. You will sacrifice some space and they will sacrifice some independence, but for first time buyers looking to get on the ladder, it is sometimes the only way.
- Home share
Renting a room in a shared house generally works out cheaper than renting their own property. Make a suggestion that they share with several other people who they get on with to save towards a deposit.
- Get the best savings rate
Be sure to shop around for the best savings rates and the short to medium investment opportunities so that their money works hard for them. Why not change a normally dull activity into a bit of a challenge – to find the highest savings rate? Make sure you always read the small print though!