How to save for a house deposit in Australia: Your step-by-step guide
Saving for a house deposit in Australia can seem like an impossible dream, especially with property prices rising like they have been over the past few years. However, with the right plan and determination, it’s achievable. Whether you’re a first-time buyer or returning to the market, this guide will show you how to save for a house deposit and secure your dream home.
Understanding the challenge of saving for a house deposit
Property prices in Australia have been climbing since the 1960s, making it increasingly difficult for first-time buyers to save their deposit and enter the market. Many lenders require a 20% deposit saved up to avoid paying Lenders Mortgage Insurance (LMI). For a $750,000 home, that’s $150,000, a significant sum to save, particularly while managing rent and other expenses.
The hypothetical journey of Tom and Olivia
To illustrate how achievable saving for a house deposit actually can be, let’s consider the hypothetical story of Tom and Olivia. This couple, with a combined income of $170,000 per year before tax and $11,163 per month after tax, represents many Australians who find it challenging to save for their first home deposit due to their lifestyle choices. By making specific changes, they can manage to save $150,000 for a house deposit in just 18 months.
Here’s a closer look at their story:
Who are Tom and Olivia?
Tom is a 31-year-old high school teacher earning $90,000 per year before tax, which translates to approximately $5,866 per month after tax. Olivia, 30, works as a dental nurse earning $80,000 annually, or about $5,297 per month after tax. They live in a rental apartment in Melbourne’s suburbs, paying $4,000 per month. Both are outgoing individuals who love socialising, dining out, travelling, and enjoying hobbies like gym workouts and barista-made coffee. Tom is a car enthusiast who owns two vehicles, while Olivia enjoys spa treatments and weekend movie outings. Without knowing it, they’ve inadvertently chosen their lifestyle above saving for a home, which is still possible if they make some changes.
Despite their good incomes, Tom and Olivia found themselves living paycheck to paycheck, with little to no savings. Realising that they needed to make significant lifestyle changes to achieve their goal savings up for a deposit and then enjoying homeownership, they set out on a structured journey to save.
Step 1: Create a Budget
Personal budgeting was their first step. They calculated that to save $150,000 in 18 months, they would need to set aside $8,350 monthly. This daunting figure motivated them to take a hard look at their finances to work out how they can create a savings plan for their deposit. Together, they tracked every expense, including rent, utilities, and discretionary spending, to identify areas where they could make cuts.
Key Tip: use the free MyBudget Personal Budget Template or ask about the MyBudget app to gain clear insights into your spending patterns.

Step 2: Cut Back on Spending
With a clear understanding of their expenses, Tom and Olivia identified specific areas for savings to help put money aside to save for their home:
Downsize your rent: they moved to a smaller, more affordable rental in a different suburb, saving $1,000 per month to go toward their monthly goals. Subletting a spare room added $1,600 per month to their income which they instantly put into their house deposit savings account.
Reduce household costs:
- cancel gym memberships and opt for outdoor workouts like jogging and cycling to save money each month to go toward their home deposit
- Tom began cycling to work, saving on fuel and car maintenance. Olivia switched to public transport giving them instant cash savings
- their grocery bill dropped from $600 per month to $400 by planning meals carefully and shopping smartly giving them an extra $200 a month to save Have you tried the MyBudget Healthy Meal Planning on a Budget Guide?
- after Tom sold his second car for $4,000, their petrol expenses reduced from $200 per month to $100, saving $100 monthly.
Sell unnecessary items: Tom’s decision to sell his second car not only provided an immediate $4,000 cash boost but also reduced ongoing costs like insurance, registration, and maintenance.
Limit social and travel expenses: dining out was reduced by half, saving $15,000 over 18 months. They postponed holiday plans, saving an additional $10,000.
Couples satisfaction from saving
For Tom and Olivia, savings became satisfying. Transferring money every month into a joint high interest rewarding savings account was exciting, and with extra interest they could visualise their journey toward saving for a house deposit and home ownership.
Step 3: The proof is in the savings: breaking down the maths
Here’s how Tom and Olivia saved $8,350 per month to build up their $150,000 house deposit in 18 months:
- Combined after-tax income: $11,163
- rent reduction savings: +$1,000
- subletting income: +$1,600 extra income
- gym memberships cancelled: +$150
- reduced petrol costs: +$100
- grocery savings: +$200
- dining out and socialising reduction: +$830
- total monthly expenses after changes: $2,813.
Savings after expenses: $8,350 per month. Did we mention Tom is a maths teacher?
The sale of Tom’s second car for $4,000 gave them a financial boost early on, further motivating their savings journey.

Step 4: Maximise savings
Every dollar they saved toward their house deposit went into a high-interest savings account. They actually opened a rewards saver account to earn additional interest and used automated transfers to ensure consistency. Having a high interest savings account keeps you enthusiastic about savings, as you see yourself getting ever closer to the house deposit.
Key Tip: automate your savings to eliminate the temptation of spending.
Step 5: Stick to the plan
While the initial lifestyle changes were challenging, Tom and Olivia adapted quickly. They found joy in cooking meals at home, exploring free local activities, and watching their savings grow. By the end of 18 months, they had reached their goal of $150,000 (20% of $750,000) and were ready to purchase their dream home.
But does this savings plan for a new home deposit work in the real world?
MyBudget personal budgeting case study: how Erin and Adam saved for a house deposit in South Australia

Why a DIY budget spreadsheet didn’t work for Erin and Adam
Like many of us, Erin and Adam initially tackled their personal budgets and finances with spreadsheets. “We had a spreadsheet we checked three or four times a day,” Erin shared. “We were so scared of dipping into our savings for our apartment deposit that we tracked every dollar obsessively.”
But after working with MyBudget, Erin realised their spreadsheet had gaps, expenses they hadn’t accounted for, like Christmas or emergency service levies. “It became obvious we were missing so much,” Erin said. “Our spreadsheet didn’t prepare us for things that seemed predictable but always caught us off guard. MyBudget highlighted all those blind spots for us.” They needed a savings plan.
The Turning Point: why Erin and Adam chose MyBudget
Erin was the first to embrace the idea of outsourcing their budget especially as saving for a home deposit was one of their real world goals. “I was sold from the start,” she said. “Adam was hesitant, but once we saw what MyBudget could offer, it was a no-brainer.”
How MyBudget identified hidden expenses and budget gaps
One of the biggest revelations MyBudget’s technology highlighted to the couple? The gaps in their financial budgeting. “We never set aside money for Christmas, how wild is that?” Erin laughed. “Every year, we’d dip into savings or rack up credit card debt for presents, and every January would feel like a financial hangover.”
MyBudget’s tailored budgeting service helped Erin and Adam account for annual expenses like Christmas, car registration, and emergency service levies, ensuring their financial goals stayed on track. “It gave us a full picture of where our money was going and how to plan for the future,” Adam said, “and budget for and help us reach our savings goals.”

Real savings, real results
With a Personal Budgeting Plan from MyBudget, in just two years, Erin and Adam saved over $70,000 for a deposit on their dream home, thanks to their commitment to sticking to the plan and rethinking their spending habits. They made simple swaps, like replacing their daily café coffees with homemade brews, saving $4,000 in a year. They also planned a $5,000 family holiday to Fiji in just six months, all while Erin was on maternity leave. – With twins, no less!
Grocery shopping became another success story. Before MyBudget, their food bills were unplanned and often exceeded expectations. Now, Erin carefully plans weekly food shops for their family of four under $225. “This just wouldn’t be possible without MyBudget,” Erin said who uses the MyBudget Healthy meal planning on a budget guide to save money on food without compromising on nutrition.
Want to see how much you could save by making small changes? Check out MyBudget’s free Savings Calculator. Seeing how you can save for that home deposit quicky, and visualise how can be exciting.

Bonus tips for saving a house deposit in Australia
- set realistic goals: break down your savings target into monthly or weekly milestones
- consider side hustles: freelance work or selling unused items can provide extra income. Check out 21 Best side hustles
- review subscriptions: cancel unnecessary subscriptions and memberships
- track progress: regularly review your savings plan to ensure you’re on track.
Start your journey today
Saving for a house deposit in Australia is achievable with a clear plan, disciplined spending, and a willingness to adapt. Follow these examples, and you’ll be holding the keys to your new home sooner than you think.