By Jason Skinner
It’s a common topic of discussion: kids these days will never be able to afford a home. House prices have run away, wages haven’t kept up, and it’s easy to conclude the game is simply over before it starts for our younger generations.
There’s truth in the affordability problem — nobody’s pretending a $400,000 house is what it used to be. But there’s a second truth that gets left out of that conversation: what happens between age 16 and 21 still matters enormously, and most families never run the numbers to see just how much.
Let’s look at the story of two schoolmates – Sam and Jack, both 16, both starting their first casual after school job on the same junior award wage. Same hours. Same pay packet. From here, their paths go different ways.
Sam decides to bank 20% of every pay into a savings account, no matter how much he earns and no exceptions (ie. every $100 Sam earns, he saves $20 and keeps $80 for himself). Jack, on the other hand, spends all his pay and doesn’t save anything— daily coffees, lunches at the canteen, the latest iPhone, weekend takeaways. Nothing reckless, just normal modern-day teenage spending.
Neither of them thinks about it again. They just keep doing what they’ve always done.
Let’s look at the Numbers.
Using junior casual award rates from age 16 through 20 (roughly 10 hours a week, allowing for school terms and holidays), here’s what Sam’s 20% actually adds up to, assuming it sits in a basic savings account earning a modest 4% p.a.:
Age Annual Wage Sam Saves (20%) Year-End Balance
16 $ 7,507 $1,501 $ 1,501
17 $. 9,173 $1,835 $ 3,396
18 $10,838 $2,168 $ 5,700
19 $13,094 $2,619 $ 8,546
20 $15,504 $3,101 $11,989
By the time Sam turns 21, his savings account holds just under $12,000. Jack’s account holds nothing because he lived from week to week spending all his pay.
Sam never felt like the $1,500 a year was a sacrifice because he never saw it. It was automatically put away in his savings account in small increments and it the compounded over time. That’s exactly why it worked.
What $12,000 Actually Buys You in Today’s Market
Let’s take a modest style purchase a $400,000 unit/townhouse and look at what a deposit really requires in 2026, because it’s not what most people assume.
The old rule of thumb was you needed a 20% deposit to avoid Lenders Mortgage Insurance. On a $400,000 home, that’s $80,000 and Sam’s $12,000 covers only 15% of this. That’s the discouraging number most people stop at.
But it’s not the only pathway in. There are many Government schemes and initiatives like the First Home Guarantee (as little as a 5% deposit, with no Lenders Mortgage Insurance) and the NSW stamp duty exemption for eligible first home buyers that can significantly lower what you actually need to save to get into your first home. Under the 5% pathway, Sam’s $12,000 gets him to roughly 60% of the deposit by age 21.
There’s one more mindset shift that closes the gap faster than any of this: your first home doesn’t need to be your forever home. Trying to save a deposit for the four-bedroom house you’ll raise a family in is a longer, harder road than saving for a modest one-bedroom unit as your entry point.
By buying something affordable as a stepping stone, you are able to tidy it up, build some equity, and let the power of capital growth do a large part of the heavy lifting for you — this property can then be used as the springboard to the next place and so on.
Waiting to save enough for the dream home first is often the very thing that keeps people renting.
The Real Lesson: Start the Habit, Not the Savings Goal
Here’s what actually separates Sam and Jack in our story, and it isn’t the dollar figure. It’s that Sam never had to “decide” to save at 19, or 25, or 30. The decision was made once, at 16, and the habit ran on autopilot from there. It became an integral part of his daily life. Jack, by contrast, will have to consciously break a six-year lifestyle pattern before he saves his first dollar — usually at exactly the point in life when saving matters most, for example, buying his first car, etc.
That’s the part of this story worth remembering: the habit is the asset. The house deposit is just what it happens to build.
The Bottom Line
The housing affordability conversation is very real, and I’m not going to pretend a teenager’s savings habit solves it on its own. But the story of Sam and Jack isn’t really about house deposits — it’s about what happens when good savings habits are put on autopilot early in life, versus left until “later.”
If you’ve got teenagers starting their first job, the single highest-leverage conversation you can have with them isn’t about house prices, or grants, or schemes. It’s this: open a savings account and start saving from as early in life as possible — before spending habits set in around whatever’s left.
Everything else becomes easier once that one habit exists.
Importantly
The figures in this article are illustrative estimates only, based on publicly published information, wage rates and conservative savings interest rates; actual outcomes will vary. Government schemes and eligibility to them can change regularly, and you should always seek professional advice with respect to your own personal circumstances.
This article is general in nature and does not constitute financial or taxation advice.Jason is a CPA Accountant and the principal of Milk Bookkeeping and Advisory, located locally in the Bellingen Shire, and can be contacted at jason@milkbookkeeping.com.au.