Money Talks: I am in my mid-thirties and don't think I will ever be able to buy a house

With outgoings at a premium, the only way for this reader to achieve her dream is by applying radical changes to her spending habits

'You have to make radical savings if you want to afford your own home,' says our financial agony aunt.

I am 35 and single. I work full time in a good job and I am well paid, but I am finding it next to impossible to save anything once my monthly outgoings flow out of my account. I am currently renting, and I am beginning to think that I will never own my own home which is really getting me down. Please help!

I am sorry to hear that you feel like this. Let’s look at what seems to be getting you down the most - buying your own home. The first thing you need to do is create a plan by determining a possible time frame for the purchase of the property. I know it may seem like an impossible dream now, but do you want to achieve it in one, five or ten years? Once you have done this, you will be able to figure out how long you have to save your initial deposit and then you can budget around this.

Make a list and check it twice

To move forward, we must rewind and examine the main reasons why you are finding it so difficult to save any money at all. You need to start by conducting a meticulously ruthless review of your monthly expenses. Do this by printing out a monthly bank statement and then take the time to sit down, review and question every single debit.

I know for a fact that you will find that some of these costs can be greatly reduced or even eliminated completely by cutting out the luxuries, cancelling any automatic subscriptions and memberships, possibly reducing energy and household costs and checking all insurances and any other financial arrangements you have in place for reasonableness and possible savings.

This may seem a bit extreme but if you are serious at all about saving and achieving your goal of owning your own home, then I hate to break it to you, the only way to achieve it is by embarking down the road of radical savings!

Keep your eye on the prize

Develop the financial plan before your home search begins and while it may take years you need to stay mindful of your goal throughout the entire saving process.

Could you look at possibly moving in with family or friends for a year or two to save as much as possible? If not, have you thought of getting in an extra roommate to reduce current rent and household bills?

Or can you possibly make more money? When was the last time you asked for a pay rise or is there a way you could earn extra money by taking on extra paid work and putting this extra pay straight into your house fund?

Look into other options

If you find that your earnings are too low to qualify for the mortgage finance you require, then look into the various schemes which the government has on offer for First Time Buyers like the hugely popular Help to Buy (HTB) Incentive which assists first-time buyers to buy a new house or apartment. The Help to Buy incentive scheme provides a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in Ireland over the previous four tax years.

Break the cycle

By simply creating a financial plan and a budget as soon as possible, sticking with it and then keeping it under regular review, you instantly break that cycle of living from paycheque to paycheque with little or nothing to show for it at the end of the month. Developing this strict savings habit now will continue to provide flexibility and financial security into the future and when your mortgage has been approved, then you can start using this savings cushion to achieve other necessary financial goals in life like creating a “rainy day” savings fund, maybe investing some funds for the medium term and of course your retirement.

• Carol Brick, Managing Director of HerMoney has over 20 years of experience in the provision of professional Financial Advice see hermoney.ie