The Best Saving Hack for Renters

June 07, 2021

June 07, 2021

When you’re renting, it can seem almost impossible to save for long-term goals. On an entry-level salary, there’s little left after the bills are paid. When you do manage to get a bit saved up, the next thing you know your car needs new tires or your friends are getting married left and right which means buying gifts and attending weddings. It can feel like it’s just too hard to look beyond your immediate needs.

We feel your pain. It’s challenging starting out in life, living the lifestyle you want while looking after your future. We’re here to help you start saving for your long-term with a few simple changes. It may not seem like much at first, but you have to start somewhere. Before long, you’ll see your savings grow.

First up, let’s get a clear idea of what it is you’re saving for and how much you need.

What are your long-term goals?

Home Ownership

If you have your eyes set on owning your first home, saving up a deposit can seem daunting. The average bank requires a 20% deposit, and with housing prices in their current state that is a whole lot of money. Not only that but you have to be prepared to cover property inspections, rates and insurance, and other expenses that are just part of being a homeowner.

There is some help out there. First, you can withdraw from your KiwiSaver for your first home if you meet qualifications. You just have to leave $1,000 in your account. This should be motivation to make sure you are in the right KiwiSaver fund so you are getting the most out of this investment!

If you’re approved by Kainga Ora for a First Home Loan, your deposit can be lowered to as little as 5%. With the average housing price in New Zealand recently hitting $800,000 that would mean the difference between needing $160,000 or $40,000 for a deposit. Also, there’s the First Home Grant which saw some recent changes making more people eligible to receive it.


If you’re planning to save for retirement, experts recommend that you plan on living on 80% of your income at the time you retire in order to maintain your standard of living. You can achieve this if you’re putting about 15% of your income away every year into a diversified long-term investment like KiwiSaver - if you start saving early in life.

The NZ Superannuation currently provides about $650 per week for a couple which can add to your retirement income. But that’s only if the Super doesn’t change significantly before you get to retirement age. Best to start saving now to be self-sufficient and anything the government can provide you later on will be icing on the cake.

The lazy way to save

The great news is that there is an easy way to save that is open to all New Zealanders. If you get it right, it can make a massive difference to how soon you can buy that first home or what your retirement lifestyle looks like.

You might have guessed we’re talking about KiwiSaver.

Why is it easy? If you are employed, the money is taken out of your wages and put into your KiwiSaver account - it’s done automatically so you don’t even have to think about it. Plus your employer has to match your contribution by at least 3%, so you’re getting a bonus put in right away.

If you aren’t employed, or are self employed, it takes a little more discipline to put voluntary contributions into your KiwiSaver account. Most banks can set up automatic transfers for you so check with your bank.

The money you put into your KiwiSaver is invested on your behalf, so with the power of compounding interest, it multiplies over time. Also the government puts free money into your KiwiSaver every year - seriously there could not be a lazier way to make money!

All you have to do is make sure you’re in the right fund for you and that you contribute regularly. When you sign up for KiwiSaver through your employer, you can choose to contribute 3%, 4%, 6%, 8% or 10% of your wages every week. If you didn’t choose a rate, you would have been set up with 3% as a default.

Let’s take a look at the difference your contribution rate makes. As of April 2021, the median weekly earnings in New Zealand was $1,084.61. We’ll round this down to $1000 to make our calculations nice and easy.

If your weekly gross income is $1,000, here’s what your KiwiSaver contributions look like:

Graph showing savings with contribution rates

Bear in mind your employer matches at least 3%, so in this example they will also be putting at least $30/week into your KiwiSaver fund.

It’s up to you to decide what you can afford to contribute, but setting your rate just a little higher makes a big difference! And remember, your KiwiSaver contributions don’t just sit there - they go out and make more money for you by being invested on your behalf. Depending on the type of KiwiSaver fund you choose, your contributions stand to earn you much more.

Obviously, if you start putting money away in your KiwiSaver in your twenties, you’ll have much more than if you wait until your thirties or forties. So do yourself a favour - put a little effort into sorting your KiwiSaver now and you can lazily let it do its thing, at least until you have a change in circumstances.

BetterSaver makes it even easier

Now you should be convinced that setting up your KiwiSaver fund is a simple way to save. We’re about to make it even easier.

In just five minutes you can be in a better KiwiSaver fund for you. You see, we’ve taken it upon ourselves to help Kiwis make good financial decisions to improve their futures, so we have done all the hard work for you. Our fund finder quiz asks you questions about your personal circumstances and then recommends a fund that will allow you to get the most out of your KiwiSaver fund. Then, if that wasn’t easy enough, we even take care of all the admin of switching for you!

Not only that, but we’re here to continue giving you advice. If your circumstances change, just get in touch and we will help you sort out if your KiwiSaver options are still working the best for you.

Taking this one simple step can mean the difference between owning that home or living independently in retirement. Why not do it right now?

If you liked this tip, follow our socials for new content every day and check out 21 Ways to Save Better in 2021.

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