The real struggle to save a deposit

The hardest part for so many would-be property investors is getting that deposit together, and it’s not easy is it! Being told “you just need to save for it” really doesn’t help. The number one reason most of us grownups don’t have a budget is because we don’t know how. We know why we need to have one, but it gets pushed away because it’s all too hard.

So here is the simplest little budget plan you can use. You don’t need to buy any flashy apps, you don’t need a mass of Excel spreadsheets running kidding yourself that you are doing something.


The 50/30/20 budget is absolutely fabulous for budgeting beginners, as it gives you a nice easy to understand framework to work from. It also gives you the chance to reassess your own spending over time. This simple to manage budget, splits your monthly income into three categories needs, wants and savings and put them into three separate bank accounts.

Needs:      Your needs are your everyday expenses and the essentials you need to live, such as food, rent, utilities, healthcare, and transport costs. This also includes debt repayments, such as credit cards or loans.

Wants:      Your wants are things that generally make your life more enjoyable but are not necessities. These include things like dining out, that morning coffee and other entertainment such as gigs, after-work cocktails, and brunches.  

Savings:   Your savings include any and all savings you are setting aside, such as your emergency fund, extra repayments and goal savings.

Just as in life, there are some rules:

Without rules in society there would be total anarchy, no doubt the same thing has been happening in your bank account. Every great sports team has a game plan before they run out on the field. So having a guiding rule is going to stop you slipping back into those ‘old-ways’ of frittering away your pay-packet.

“Attention please, no one’s coming to save you,
this life is 100% your responsibility” Dr Tony Hayek

The rule is that 50% of your net income (that’s the part remaining after tax and super) must be spent on needs and obligations that you have to meet. These items are rent, gas bills, electric bills, car registration, school fees.

Done that?  Great now the remaining half will be split up this way. 20% savings and debt repayment with the remaining 30% going to your wants and entertainment.

What’s the benefits of the 50/30/20 budget? 

The main benefit of the 50/30/20 rule is that it gives you the chance to reassess your spending, but still gives you the flexibility to do what you want to do. There are several reasons to implement the 50/30/20 budgeting rule in your day-to-day life, including;

Time to reconsider:

If your rent or mortgage is more than 50% of your take-home pay, it might be time to have a think about moving and renting somewhere more affordable. If it’s your home loan repayments that’s the issue, grab a mortgage broker and look at some refinancing options. How about this for a silly but practical idea, have you ever thought about renting out a room and getting a flat mate?

KISS, Keep It Simple:

These budgeting rules are simple and easy to understand, so you won’t get lost in the numbers when you’re planning.

All work and no play:

From time to time, you might spend a bit more on ‘wants’ than the ‘savings’ but that’s ok.  Allow yourself some enjoyment while still putting some money aside.

Heathy Habits:

The small decision of putting your money in its box’s each month will get you into a good long-term habit and break the cycle you were once in.

Will this fix everything for everyone?

The short answer – no. I can tell you that after 20+ years in finance, there is no magic money pill you can pop that will solve your problems. You must want to make a change and stick to it.

Although, this is a great place to start, but the rules can be a bit too vague for some and although nobody is checking your numbers it’s easy to lie to yourself and fudge the figures.

If you are carrying over a lot of other debts, you might find the percentage split doesn’t work for you because you won’t be paying these debts off. So, you might need to reduce the amount going to the ‘want & needs’ part.

You are not alone:

I speak from years of experience here, get a mortgage broker involved early on. I recommend you have a sit down with your new best friend (mortgage broker) and ask them to run some numbers for two scenarios.

You need to know your borrowing capacity as it is right now, with no tweaks or changes to saving/spending patterns. Then look at where you’d ideally like it to be and work your budget planning/saving plan backwards from there.

You’ll notice that Blue Wealth Property does not have a finance department. We are purposely not a one-stop shop because we want every Blue Wealth client to get independent finance advice to suit their own requirements and plans.

Ask friends and family who they recommend or ask us, and we can happily refer you to a trusted expert local to you.

In summary:

The important thing is to get yourself into a routine of managing your money and then you can look at broadening your goals and building wealth.

Do it, you’ll thank yourself in years to come.

Knowledge is Power


Owun is the Blue Wealth Property Academy Senior Education Specialist. He has been working in the finance and property world for well over 20 years and has a fantastic way of explaining the complex, simply.
He holds qualifications in education, engineering, finance and real estate. For well over a decade he ran his own multiple award-winning mortgage and financial planning brokerage.

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