A London couple have managed to get out of debt and build up a big deposit by getting serious about saving, and are now set to buy a property as soon as next year
A young couple have saved £90,000 by cash stuffing and serious saving – which has helped them clear debt, get married and build up a house deposit.
Michael McCormick, 28, and his wife Claudia, 26, got married in 2016 when they were 23 and 21 respectively.
Their wedding bill came to £30,000, which they funded by Michael taking on a Deliveroo job on top of his day job in finance.
The London-based couple saved £20,000 through this, but still needed a £10,000 bank loan – leaving them in debt.
The £10,000 debt grew to £14,000 due to credit card spending, but the couple knew if they wanted to buy a property they had to sort out their finances fast.
Michael took voluntary redundancy, which cleared their debt, but then there just remained the small matter of a house deposit.
Michael said: “Thankfully due to a merger of the company I worked for, they were offering voluntary redundancy which meant I was able to take that money and pay off the £14,000 debts and begin our house savings.”
The couple began to get serious about saving.
They moved out of a rented one-bed flat to move in with friends who were also married and needed to save cash.
Michael started work at the Financial Conduct Authority, while his wife left university and joined shoe firm Jimmy Choo.
The duo began saving in earnest, but Michael said changing their living situation made the biggest difference.
“The flat share was the major one,” he said “It cuts down hugely on utility bills and other costs.”
Before long their combined income was £80,000 a year, and the pair say they have saved £90,000 in three years towards a house deposit.
They hope to buy next summer.
One of the tricks they have used to maximise their saving is ‘ cash stuffing ‘ – where budgeters shift cash into separate saving pots or envelopes – often using physical cash.
The technique is simple but effective, as it means savers are more likely to be disciplined with their money.
The couple now have 20 savings pots, for everything from car costs to holidays to groceries.
They also have a Lifetime Isa to help save for a house deposit.
Careful budgeting is also part of their saving plan.
Michael said: “We also spreadsheet to visually see how far we are from our targets.”
The pair have tightened their belts, including cancelling Cineworld membership cards, but still enjoy a yearly holiday and dining out.
Michael said: “Our method to saving has become second nature and even when we move our goal is to continue for future projects.
“I have not always been a big saver, but then I met my wife, who is much more frugal.”