How to save while renting

This article is part of a fictional case study series following "Sarah", a typical first home buyer in Victoria. Read each article to follow "Sarah" through a variety of articles exploring issues related to buying a home.

It often seems that the hardest part of buying a home is actually saving up the money for a deposit.

It’s no joke: it often is the hardest part. But that doesn’t mean it’s impossible. It just means you have to buckle down on some strategies to squeeze every penny you can into your savings account.

Yes, that might mean making some sacrifices in the short-term. But in 20 years, you'll be living in your own house and won't mind the things you gave up for a little while. (Though we don’t recommend going off avocado cold-turkey.)

Take Sarah, a teacher earning $55,000 a year. She takes home $3,700 a month. At first that doesn’t seem like much, but look at how small savings add up:

  • Sarah has roommates. Dividing up rent between two other people means she pays just $100 a week in rent. That’s just 10% of her income, which leaves a lot left to save.
  • She meticulously plans out meals. At the start of every week, Sarah figures out what she’s going to eat, and on which days. That way she’s not tempted to hit the supermarket every couple of days.
  • Sarah uses a budget to plan her spending. A budget doesn’t mean necessarily restricting your money – it just means being intentional about it. Sarah budgets $50 a week for going out with mates, and doesn’t go above that. If that means ordering a soft drink instead of a gin and tonic, so be it! (She can make it cheaper at home anyway.)
  • Sarah doesn’t take out loans. No car loans – she buys second hand – and definitely no personal loans. They all add up.

And most importantly…

  • Sarah pays herself first. Every paycheck she takes 30% and puts it straight into the bank – that’s $14,800 every year. After just three years, she’ll have $44,000 in there. Is that enough to buy a penthouse in the Melbourne CBD? Hardly. But it’s definitely a start.

Your own situation is unique, but the principles are the same – look for areas where you can save.


It might take some sacrifices, but the more Sarah saves while renting the bigger deposit she'll have - which will mean she won't have to borrow as much.

Home First
Home First