Blog 8 Spending habits that will get you to your first home sooner

8 Spending habits that will get you to your first home sooner

17 February 2020
8 Spending habits that will get you to your first home sooner

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Buying a home is challenging for most first home buyers and property prices are still increasing. CoreLogic predicts dwelling prices will continue to rise in 2020, albeit at a slower pace compared to 2019.

If you’re a first home buyer, fear not: here are some handy tips you can employ to cut down on your spending, improve your savings and get your first home sooner.

1. Create a concrete budget

The first thing you should do is to draw up a comprehensive budget showcasing the ins and outs of your bank accounts.

A simple way to do this is to write down your income in a spreadsheet and subtract any expenses you have such as rent, utility bills, other loan repayments and direct debits, like a Netflix account. A better way to do it is to download your bank statement online and record each and every transaction and expense in a spreadsheet, and use the excel functionality to automatically summarise what you have left over each month.

Whichever way you choose to do it, a good budget can let you know if you’re spending too much to reach your goal or if you’re on track.

2. Cut out unnecessary expenses

Once you’ve done up a budget, take a look at each of your expenses and see if you can cut anything out. For example:

  • Do you need subscriptions to 4 different streaming services? Ditch one of Netflix, Stan or Amazon Prime

  • Look for useless direct debits. How many things are you paying for every month that you never use? Cancel some of those news subscriptions or that gym membership if you never go.

  • Look for things you spend too much on. Buying lunch 5 times a week can easily cost $50 at least, but bringing your own lunch can cost half as much if that. Alternatively, a cheap coffee machine can cost less than $100 but you can spend hundreds more buying coffee each day.

  • Cut out bad habits. Smoking, gambling, or buying too much booze at the end of the week can also cost hundreds if not thousands of dollars every year. Do your best to spend less on these things, or seek professional help if you’re struggling to quit.

3. Create multiple bank accounts

Thanks to the internet you can easily create and link multiple different savings accounts, and you can set up automatic payments to send money to these accounts. Every paycheck send $100 or $200 to each account and let the money pile up, using your main bank account for regular spending.

Ideally, you should be saving enough to pay for a potential mortgage repayment each month - a lender will look at this and see it as proof that you're a responsible saver and have a high chance of meeting your repayments.

4. Set goals and reward yourself for meeting them

Saving shouldn’t be a chore. What’s the fun in scrimping away every penny if you never get to have fun? You should still be able to go out with friends or buy yourself that new TV you need every now and then, as long as you’re still sticking to your goals.

If, say, you set yourself a milestone of saving $5,000 in a few months, then why not treat yourself when you reach it? Go on a short holiday or book a nice hotel room, or buy those new clothes or games you’ve always wanted as a reward for meeting your goals.

Just make sure these rewards aren’t too costly, and that you record them in your budget spreadsheet mentioned above.

5. Make your credit spotless

Lenders don’t like to see things like credit card debts or outstanding loans, so you should endeavour to clean these up before you apply.

Read: Got a credit card? How it impacts your home loan application (

Prioritise paying off your debts first, such as by using a balance transfer or consolidating debts into an existing loan. Once this is done, work to improve your credit score by paying all of your bills on time and by cancelling any unnecessary credit cards you might have.

Another thing lenders don’t like to see is too much buy now, pay later (BNPL) usage in your bank statements. Try to avoid using these services where possible, and never fall behind on your payments with them.

6. Look for a second source of income

Even in a dual-income household, you might struggle to reach a deposit on a regular 9-5 schedule. Instead of whittling away your nights watching television, look to open a second income stream, such as through a side hustle. Uber driving is one alternative, as is setting up a small online business or selling your talents to people via sites like Airtasker.

If you’re still struggling to save, you can always lower your house expectations too and look for a more affordable place, which might make it easier to reach a 20% deposit.

7. Take advantage of grants and schemes

Help is available for first home buyers in Australia. One example is the Australian First Home Owner Grants (FHOG), first introduced in July 2000. These grants can provide around $10,000 - $20,000 in cash for first home buyers if they can meet certain criteria, such as:

  • Being over 18

  • Never owning a property before

  • They intend to live in the house for a continuous period of at least 6 months

  • At least one applicant is a permanent resident or Australian citizen

Although these grants are unlikely to give you all you need for a deposit, they could give you that final push over the line to afford your dream home.

8. Get a good value home loan 

As arguably the biggest expense you’ll ever have, you’ll need a good value home loan to go with your home. A difference of less than 1% p.a. on a home loan can result in tens of thousands extra being spent over the course of your loan, so make sure you get one that’s both cheap and has a good range of features.

Check out some of’s home loans - we have low-rate loans for a broad range of different home buyers.