Saving money for your first home deposit

06 April 2021

In today’s climate, the Kiwi dream of buying a home seems increasingly out of reach. However, by taking a few steps now and getting a plan in place, owning your own home may be more realistic than you think.


With a savings plan and a few life style changes, that initial first home deposit might not seem like such a daunting sum to pull together.

So, if you’re considering joining the New Zealand property ladder for the first time and signing up to a mortgage, check out our tips and tricks for saving money for your first home deposit:

1. Save every dollar you can

It sounds simpler than it is, so we’ve broken this tip down into bite size pieces of information so you have somewhere to start:

Conduct an audit on all your unnecessary spending

We’re ripping the band-aid off first with this tip, and it might not suit those who love ordering a daily coffee or a little indulging. It starts with you doing a complete audit of your expenses and seeing what things you can simply stop spending on. Think of it as short-term pain for long-term gain.

Where are you spending that you just don’t need to be? Sure takeaways twice a week are delicious, but what is that costing you each year? Here are some prompts to get you started on your audit. What do you spend each month on…

  • Eating out - that means coffees, takeaways, sweet treats, and that weekly drink with your mates
  • Your grocery bill – was that $10 tub of ice cream really necessary? What indulgent extras can you leave on the shelf or buy a cheaper version of?
  • Vacations – everyone deserves a holiday, but if buying a house is top of your goals list, swap a holiday at the beach for a staycation this year
  • All the other extras – think concerts, new clothes, subscriptions etc…

We don’t want to to sound like the fun police, but we are here to give you a little dose of reality. If you’d like to get to your savings goal faster, then once you’ve reviewed all of these expenses, ask yourself what can you realistically cut out or cut back on? If that drink with your friends is the highlight of your week – leave it in, but cut back your spending in other areas.

Start a meal plan

You’re cutting costs so you’re probably eating out less, which ultimately means you’re going to be cooking at home a lot more. But, before you head to the supermarket we'd recommend putting together a meal plan. Planning out each meal saves you time during the week but it also saves you money too. By planning ahead you'll likely have less leftovers and food waste, and make less impulse supermarket purchases. Plus when you've got food in the fridge you're less likely to order takeaways. 

Over time you should get a feel for your average supermarket spend when sticking to a meal plan, and you might just find it's cheaper than your usual shop. 

Review your household bills

You might be shocked at how much you can save by checking some of your household bills from the last year. Changing your broadband provider can save you up to $300 per year, and you could save a similar amount by reviewing your power provider too. Making the change isn't as annoying as it sounds, it can be done from your couch in just a few minutes. 

  • To help get you started, we suggest you review your broadband using Broadband Compare. Go to Broadband Compare
  • You can find the cheapest power provider using the Government website Powerswitch. Go to Powerswitch.
Sell your car

This one won't be for everyone, but hear us out. Unless you need a car to get to work or you live in the countryside, a car can be considered a luxury. The average Kiwi spent 4% of their usual weekly spending on petrol last year (even lockdown didn’t change this number very much.). That's 4% that could be saved for your dream home each week. Selling your car would be a healthy injection of cash added to your savings. Or take it a step further and imagine how much you could save on the gym if you switched to a bike!

Trade Me everything 

Okay, maybe not everything, but how many things do you have lying around that house that you don't use or have been meaning to get rid of? Depending on who you ask, the average home can easily have between $800 and $2,000 of unwanted or unused items that could be sold online or at a car boot sale. If you haven't used it within the last year it's probably safe to go in the 'to sell' pile.

2. Budget. Budget. Budget.

Okay so you’ve followed tip #1 and you’ve reviewed your expenses, but how is the rest of your budget? What are you spending this year versus what you are making? You might be surprised to find that your spending exceeds what you earn. Budgeting makes sure you'll have enough for the things you need and the things that are important for you, and shows you where you can trim the fat on the other unnecessary stuff. 

Starting a budget and being confronted by your spending can seem daunting, but once you dive in and take control, you might just start to feel better about your financial decisions.

Not sure how to begin? Here is a great starting point on learning how to create a budget.

3. Start a side hustle

Sometimes cutting your costs might not be enough to get you to your savings goals in the timeframe you'd like. If you've got an in-demand skill set or a special craft then having another revenue stream can be a great way to save extra money. We're not saying you should work two jobs forever, but ask yourself if a side hustle is sustainable for the short-term to get your closer to your first home loan. As an added bonus, when you focus your free time on earning extra income instead of being out spending it, you're side hustle could save you even more money.

If you're not sure how to find work freelance work, start by checking out websites like the Unicorn Factory, The Freelance Village, and Upwork

4. Make your money work for you

For some people, their first home deposit will be sitting in a bank account, which may be the right option for them. For others, there are other potentially better places to be saving for a first home deposit, like being a KiwiSaver member. Understanding what your options are and what one is most suitable for you is up for you to decide. It's important to remember that saving and investing are very different. If you'd like to read further into the different options you have, in this article we talk you through some of your investing choices. 

At kōura we believe KiwiSaver is one of the best options to help you save enough to get on the property ladder. But why is KiwiSaver perfect for saving for your first home? 

  • It's a separate account you won't have access to until you're ready to buy a house. You might have great self-control, but let’s sometimes it's tempting to spend some of your savings, especially when the money isn’t in a separate account or an account you have easy access to.

  • It's an automated process. The money is deducted from your paycheck, so you don’t have to decide between your savings account and your Friday night drinks. You won’t even see the money go. 

  • You get free money from your employer! When you're contributing, your workplace will match your contribution up to 3 or 4% (depending on the employer). 

  • Even more free money from the government. You get $521.43 from the government if you save more than $1042.86 between 1 July and 30 June each year. And if you're saving for a house, we bet that you've contributed enough to receive the $521.43. The harder your savings work for you - the less saving you need to do.

The kōura difference

At kōura, we recognise how hard it is to save for the things you want (especially your first home). We want to make it easy for you to make the right decisions. Using the kōura personal advice tool will allow you to build a personalised portfolio that you can use for your KiwiSaver fund, or you can use the asset allocation to invest in non-KiwiSaver managed funds. 

We want to make sure that you make the right decisions for you!

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