$90,000 In 2.5 Years For A Deposit At 23. My 10 Best Tips To Save Your Deposit Quickly

So you’ve decided to buy a house? Congratulations! Saving a deposit can feel overwhelming but these 10 tips will help you get started and get into your new place in no time.

This post may contain affiliate links, which means I’ll receive a commission if you purchase through my link, at no extra cost to you.

Are you sick of rent inspections? Do you crave your own light filled, plant friendly space where you’re allowed to put hooks in the walls? Does your (future) dog deserve a big backyard?

If you answered yes to any of these statements, then you are probably in the same position I was in late 2016. After a year of traveling Europe, China and South Africa I was desperate for a place to call my own that I actually OWNED.    

I did some googling, some reading and then asked recent homeowners for tips. Over the next 2.5 years I saved $91,000 solo on a teacher’s wage, while living out of home. Plus, I went on a six week trip to Europe!

This is my new place- I love it!

Here are my 10 tips to save your own deposit ASAP!

1. Open a high interest savings account separate from your everyday bank

When you put money into a savings account the bank holding your money pays you interest, generally at the end of the month. The higher the interest rate the more money the bank gives you. This interest means your savings are making you money without you doing any work – it’s called passive income! This passive income helps you to grow your deposit. Currently, bank accounts with an interest rate of roughly 1% or more are considered ‘high interest’ savings accounts.

When saving my house deposit I opened a high interest savings account with a different bank than the one I used for my everyday spending. I named the new account “House Deposit” to ensure I was clear on my goal and this accounts purpose.

Having my savings in a separate bank meant that it took around 3 days for money to get from my everyday account to my savings. This helped stop me transferring my deposit savings back into my spending account. No longer could I stand in a clothes shop or at a bar (especially after one too many vodkas) and think to myself “I’ll just quickly transfer a few dollars over to buy this and repay it when I get paid”. The money was locked away and not immediately accessible.

Furthermore, when I eventually applied for a home loan, this separate bank account provided clear evidence of my consistent savings history. This is beneficial because banks see a good saving history as a sign that you can manage regular mortgage repayments.

Here are two examples of High Interest Saving accounts. Please ensure you read the terms & conditions.

All ages | Up Bank Savers 1.10%

If you sign up to Up banking here we will both receive $5 instantly. If you make 5 purchases within the first month we will both receive an extra $5 each – winning!

18 – 29 | Westpac Life Account 3%

2. Set a savings goal

The goal is “save a deposit”… so now what?

I was always aiming for a 20% deposit because I personally didn’t want to pay Lenders Mortgage Insurance (LMI) and I wanted access to the best mortgage rates. I also didn’t want to over extend myself with a mortgage that I couldn’t afford.

I originally had the goal of saving roughly $50,000 because it seemed like a large but achievable number. As time went on, I realised I needed a more specific figure. To get this I jumped on realestate.com and searched for properties in areas I liked and looked at what they were worth. I then aimed to roughly save 25% of the average amount. The extra 5% was to account for stamp duty, costs associated with buying a house and to give myself a buffer. You don’t need to save 20% but you do need a figure to work towards.

3. Focus on $1000

Let’s be real, savings tens of thousands of dollars is overwhelming AF. Saving $1000 is less scary and much more attainable. The constant progress of aiming for $1000 and reaching it makes you feel so good, and these regular wins keep you motivated!

  • I set a goal to save $1000 from each of my fortnightly pays. I changed my whole lifestyle to make this possible and created a budget. You may not be able save this exact figure when you start saving, and that’s ok, but I believe it’s a nice round figure to work towards.
  •  I focused on saving $1000 at a time. Every time I made or saved extra money, I sent it straight to my high interest ‘House Deposit’ savings account. These little amounts quickly added up to $1000. You can read more on my blog about how I saved $10,000 in 2020 from side hustle income here. Check out book The Thousand Dollar Project Canna Campbell for more information about this approach!

Check it out on Amazon here

4. Increase your income

When I did the math and realised just how long it was going to take to save a house deposit on my base salary I was sad. Then I was mad (not for the first or last time) that teachers don’t earn squillions! I knew that if I wanted to save a deposit quickly I needed to earn more!

I did an ever so slightly extreme thing and moved solo 550km from my hometown to a semi remote area to teach as part of the WA Department of Education’s Country Teaching Program. I did this for the subsidised housing, increased job opportunities, increased salary (+ $8000) and so I would be surrounded by less shops / less temptation to spend. I’m not saying you need to do that. I’m just saying thinking outside of the box and take opportunities that will help you to increase your income.

I tried many other things to increase my income. I found that the key is to transfer every extra dollar earned straight to your ‘House Deposit’ high interest savings account. If you leave it in your everyday account it will quickly be spent on everyday things which will slow your progress. You can Google other ways to earn extra income and see what might work for you. Below are the ways I personally made extra money.

  • Overtime hours and striving for promotions
  • Got cashback on all my online shopping through Cashrewards
  • Casual jobs like baby sitting and waitressing for a catering company
  • Working the state and federal election
  • Online survey sites like Pureprofile and Streetbees
    • (Feel free to use my referral code 4115BQ when signing up for Streetbees $$)
  • Using an app called Receipt Jar to earn cash by scanning my receipts.
    • (Feel free to use my referral code MACKENK1 when signing up $$).
  • Garage Sales
  • Reselling on Ebay
  • Selling clutter from my home on Facebook marketplace, Ebay, Gumtree, My local Buy/Sell/Swap page and at market stalls
  • Worked a second job as a cleaner at a police station
  • I also looked into AirBnBing a room out / Uber but never committed… maybe one day!

5. Decrease your expenses

There are so many ways to decrease your expenses so I couldn’t possibly list them all here. The key is to find ways to decrease your expenses and then SAVE the difference between what you used to pay and what you paid now.

For example, I changed from an Optus phone plan ($50 a month) to Boost Mobile prepaid ($30 a month). This saved me $20 a month or $240 a year! I transferred $240 straight to my ‘House Deposit Savings’ account. The other option is each month when you pay your phone bill send the $20 extra you’re saving to your ‘House Deposit Savings’.

Some other ways I decreased my expenses.

  • I got a roommate. I organised it so that they transferred their rent / half of all bills straight to my house deposit savings account. This reduced the temptation to spend the extra money I was earning.  
  • I got better deals on my car insurance and home internet. I sent the money I saved over the year straight to my house deposit account.
  • Moved to a place with cheaper rent.
  • Cancelled my unnecessary subscriptions and sent this money to savings instead.
  • Ate out less often and meal prepped my work lunches.    
  • In 2019 I had a total ban on buying clothes! I didn’t buy any clothes for the whole year. This left me more money to spend on experiences, eating out etc
  • I stopped buying shit I didn’t need. I committed to using up what I had instead of buying more. This included candles, pot plants, beauty products, stationary etc
  • I started having people over for drinks, meals, coffee catch-ups and games nights. This saved SO much.

Try googling “How to save money on groceries, x beauty treatment, electricity etc” and you will get so many ideas! They key is to always transfer the savings you make to your house deposit!

6. Keep Learning

I highly recommend these three books for anyone saving a house deposit or looking to improve their finances in general.

  • Smashed Avocado
  • Mindful Money
  • Barefoot Investor

Check it out on Amazon here

Check it out on Amazon here

Check it out on Amazon here

7. Track and celebrate your progress – #treatyoself

Saving a deposit is a marathon, not a sprint. So you need to track your progress so you can focus on how far you’ve come instead of how far you have to go. You can find lots of saving trackers online and they’re great! I personally made me own using grid paper. Each square was $100 saved and each line $1000. As you can see, after 2.5 years of saving the tracker was looking a little worn!

Every $10,000 I did something fun to celebrate. This included a picnic in the park, a massage, a new pair of shoes, a comedy show and a really big KFC feast.

8. Find yourself a cheer squad

Everything is easier with a support system. I told my immediate family and close friends that I was working towards saving a house deposit. I also told a financially focussed work friend. It was great to share my progress with these people. It also kept me accountable because they would ask how it was all going .

I found that when I said “I’ll just get a main from the special menu and no entrée” or “should we do a free activity on the weekend” people understood more easily why I was ‘being like this’, they knew and accepted it as part of your financial goal. My friends were happy to support me reach my goal and were really understanding of my increasingly frugal ways!

I also started my money Instagram Smartgirls_finishrich which opened me up to the support and motivation that the Debt Free Community (#DFC) provides. I highly recommended following some accounts that are saving for a house deposit or starting your own account!

9. Do the math.

Use the MoneySmart website calculators to work out what mortgage you can afford. It’s also quite motivating and trust me, their will be times when you need a quick fix of motivation!

Also do the math on if any government incentives (First Home Owners Grant, First Home Super Saver Scheme etc) could benefit you.

10. Use a mortgage broker

A Mortgage Broker is a professional whose job is to help people secure a mortgage. They are free! They are paid a commission from the bank that you end up getting a mortgage with. Google “mortgage brokers in x area” or ask family and friends for recommendations.  

They can;

  • Go through your finances with you and work out how much you can afford to borrow.
  • Recommend steps you can take to seem more of an appealing customer to the banks.
  • Suggest government grants you may be eligible for.
  • Guide you through the process of buying a home.
  • Show you lots of mortgage products and help find one that’s right for you.
  • Answer your questions and guide you through the process.

Saving my deposit is still one of my proudest achievements. Even though it often felt long, slow and never ending all the sacrifice was worth it!

Next time I buy a property, I would do a few things differently. You can read about my mistakes here and avoid making them yourself.

They biggest lesson I learnt along the way was to send every dollar you save or earn straight to your house deposit account. Regardless if it’s a $1 you find on the ground or a $5000 tax return- every single dollar counts!

Next time I buy a property, I would do a few things differently. You can read about my mistakes here and avoid making them yourself.

Short Term Saving Pain = Long Term Financial Gain  

This blog post was all about how to save a house deposit.

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Published by smartgirlsfinishrich

’m a money driven 20 something year old, working hard to improve my finances and create a lifestyle that I love. My hope is that by sharing my story it will help you increase your financial knowledge, motivate you to improve your financial situation and empower you to make more money $$$$ I’m not obsessed with money. I’m obsessed with the freedom and lifestyle choices money provides. (but also, I’m a little obsessed with money) My biggest money wins were all achieved on a a teacher income + side hustle earnings. All while living out of home. Saved a 20% deposit ($90,000) and purchased my dream first apartment in Perth, Australia. Saved $13,000 (so far) for a new car using side hustle income. On track to finish 2021 with NO HECs Debt. $18,000 paid off to date! Travelled Europe for six weeks while saving a house deposit. Check out my blog posts or follow my Instagram for all the details! It’s time for your financial glow up!

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