Getting A Deposit

In recent times, getting a large enough deposit has been a significant hurdle for many buyers, alongside proving to a lender that they can service their new loan (although there are always avenues to pursue for buyers with a smaller deposit – get in touch if you need to discuss options.)

Every little bit counts, so here are some ideas to consider if you need to kickstart your savings.

1. Kiwisaver – KiwiSaver is one of the most popular ways to save a deposit for a first home. Eligible KiwiSaver members who are buying a first house to live in can withdraw almost all the money in their account, except $1,000. In some circumstances, a grant may also be available to top up a KiwiSaver deposit.
2. Direct debit – many people find they need to automate their savings. Even with the best will in the world, it’s hard to pledge to “just spend less” and save whatever is left over at the end of a month.
3. Save the change – If you’re keen to superpower your savings, you could choose to “round up” every purchase you make. Some banks offer the option to do this automatically on a transaction account, otherwise you can manually log in at the end of each day and transfer an amount that “rounds up” your daily spending to the next $10 or $100, and put it into your savings account.
4. Join a challenge – Some people have found success with things such as the $1 challenge, where you save $1 one week, $2 the next and so on up to $52. If the novelty factor helps you put a bit extra aside, why not embrace it?
5. Match your spending – If you’d like to take the ‘guilt’ out of impulse shopping, you could resolve to save an amount equal to each discretionary purchase you make. If you buy a new pair of shoes for $100, you then put another $100 into savings. This gives you an extra flow of money coming into your savings account and it’s a way to discipline yourself to not buy anything unless you can afford to pay for it twice.

However you plan to get to your deposit goal, the key thing is to start as soon as possible. There’s a saying that the best time to start was yesterday and the second-best time is now.

The more you can put aside, and the more regularly you can do it, the sooner you are likely to reach your target. What is achievable will also depend on the timeframe you have, and there might be other options to consider.