How much should I save each month for a house deposit?

A good rule of thumb is to save at least 20% of your income towards your deposit. However, the exact amount depends on your target purchase price and timeline. Use a deposit calculator to work out your specific savings goal and monthly target.

What is the best budgeting app for saving for a house in NZ?

Popular options include Sorted.org.nz (free government tool), PocketSmith (automatic bank transaction categorisation), and your bank's own budgeting tools. The best app is one you'll actually use consistently.

Should I stop paying extra on my KiwiSaver to save for a deposit?

Not necessarily. KiwiSaver contributions can be withdrawn for your first home, so the money isn't lost. Plus, you get employer contributions and potentially government contributions. Consider keeping your KiwiSaver contributions while also building separate savings.

How can I save money on rent while saving for a house?

Consider moving to a less expensive suburb, downsizing to a smaller place, or flat-sharing to split costs. Even temporary sacrifices on rent can significantly boost your deposit savings rate.

Tips For Saving Money When the Cost of Living Is High

Living in a high-cost environment can be challenging, but with the right strategies you can still save money and thrive. In this blog we will explore some effective tips for saving money when the cost of living is high.

1. Use Websites and Apps To Help Save

One effective way to save money in a high-cost environment is to take advantage of cost-saving websites and apps. These tools can help you uncover hidden opportunities for savings by comparing prices, finding discounts, and discovering deals that may not be available elsewhere.

Recommended Apps:

PowerSwitch: Compares electricity and gas prices from different providers in your area. By entering your postcode, you can choose the most cost-effective plan for your needs.
Gaspy: Shows you the cost of fuel at different gas stations in your area, enabling you to find the cheapest local fuel prices.
Grocer: Allows you to compare the price of items from your local supermarkets and create a shopping list to find the lowest prices.

2. Create a Detailed Budget

Categorising your expenses is an essential step in gaining a comprehensive understanding of your financial situation. It identifies areas where you are overspending and finds opportunities to cut back. This process allows you to make informed decisions about your spending habits and prioritise your savings goals effectively. For a complete framework, check out our guide on 7 steps to creating a monthly budget.

Budgeting Tools:

Sorted.org.nz: Set up a budget and track your expenses in different categories. Also offers helpful resources and tools.
PocketSmith: Automatically categorises your bank transactions, saving you time and effort. Provides reports to help you understand your spending patterns.

3. Reduce Unnecessary Spending

Establish a monthly limit for unnecessary spending activities such as dining out, entertainment, and unnecessary shopping.

Try cooking meals at home using budget-friendly ingredients rather than eating out. Explore free or low-cost entertainment options like visiting local parks, attending community events, or enjoying movie nights at home instead of expensive outings. Avoid impulse purchases by creating a shopping list and sticking to it when you go shopping.

By being conscious of your spending habits, you can significantly reduce unnecessary expenses and allocate more funds towards your savings.

4. Increase Income

In a high-cost environment, finding ways to increase your income can greatly contribute to your savings. Consider seeking a pay rise at your current job, or look for part-time opportunities that align with your skills or interests such as tutoring, freelance work, or food delivery. You could also consider selling used items on online marketplaces or organising a garage sale to generate extra funds for your deposit.

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5. Set up Automatic Savings

Setting up automatic transfers from your main bank account to a trusted savings account can help you master the habit of saving money. This approach allows you to prioritise your savings goals and avoid unnecessary discretionary spending by keeping your savings out of reach, ultimately paving the way for a substantial down payment on your dream home.

6. Explore More Affordable Housing Alternatives

Consider a lower-priced rental to help you save money for your first home. This may be easier said than done, as finding affordable rentals in a high-cost environment can be challenging. However, making some short-term sacrifices can greatly benefit your long-term savings goals.

By cutting down on rent expenses, you can free up more funds to put towards your first home deposit and overall savings. Look for rentals in less expensive neighbourhoods or consider downsizing to a smaller space.

Another alternative to consider is temporarily sharing a flat with others as you work towards saving for your first home. This option not only helps to reduce your monthly housing costs, but it also allows you to split other expenses like utilities and groceries.

7. Use Public Transport

Public transportation is a practical and cost-effective alternative to driving, especially during economic challenges. By opting for public transport, you can save money on gas and eliminate the need for expensive parking.

Additionally, public transportation offers a range of benefits beyond cost savings. It provides an opportunity for you to relax, catch up on work, or engage in leisure activities during your commute. With free Wi-Fi available on many buses and trains, passengers can make productive use of their travel time.