Smart Saving: How to Stay Sane While You Build A Deposit

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Let’s face it – saving a deposit for your first home is a big task. It’s a commitment that will take likely take several years and a lot of financial self-control.
You may be stringent – putting every spare cent you have into your fund – or more relaxed -assigning a certain amount of your income to your savings fund and leaving funds for the other things that happen in life.
Whatever your strategy, saving for a home like all other worthwhile achievements, takes discipline, maturity and sacrifice.  Keep reading for some advice on how to save while still enjoying life.
Smart Saving

If you are in the fortunate position to be able to move in with parents or relatives while saving, you will be able to save more, or faster. However, discipline and goal-setting are still crucial in order to stay on track.

A tip: work out what you want to save first, then live on the rest.

If you don’t have the willpower to transfer into your savings account each time you get paid, have a specified amount automatically transferred, then spend what is left. Consider taking on a second job – even an extra five hours a week will get you to your savings goal that little bit quicker.

Most of us are guilty of wasting our money on non-essentials to alleviate stress or boredom, or simply out of habit. These include magazine subscriptions, lottery tickets, knick-knacks, home furnishings and decorations, service station impulse buys, video games, unused gym memberships and expensive activewear, energy drinks, and expensive toys and accessories for pets.  Cutting these out or finding cheaper alternatives will help your savings and get you into your first home a lot sooner.

How to Live Well on a Budget

So, you’ve worked out what you have left from your pay every week after socking away your contribution into your house-buying fund.

Trouble is, it’s probably not much.

Can you save for your first home and still have a life? Yes! It’ a matter of re-adjusting priorities and being smarter with your hard-earned money.

Here are some ideas on how to still have fun without breaking the bank.

Eating and Drinking Out

Take your lunch to work and stop buying coffees. There’s no need to live like a monk – you can still treat yourself a couple of days a week – or save up for one weekly splurge on dinner and drinks. Melbourne has a huge range of ‘cheap eats’ options. Organise dinners and barbeques at home and cut down your grocery bill by choosing own-brand items for everyday essentials.


If convenience allows, ditch your car and walk, ride or PT to work. You might even consider not using your car at all for a year, avoiding insurance, maintenance and registration costs.


A return cab trip to the city on a Saturday night from the outer suburbs can cost over $200. If you are serious about saving for a deposit, budget-busting cab rides to and from nights out are going to have to go. Public transport will become your new best friend. Alternatively, cut down on the nights out or take it in turns to be the designated driver.


Saving doesn’t mean you are destined for a life of boredom. You’re going to have to get creative, that’s all.  Your social life will become richer and more varied in the process. Seek out free exhibitions and music events, cheap movie tickets and consider Sunday drives and ‘nights in’ rather than expensive restaurants and cocktails. If you do go out, set a budget for food and drinks, and stick to it. You’ll avoid the hangover AND the spend-guilt the next day.

Clothes, Shopping and Gifts

Women can find this more of an issue as they face bigger social expectations to spend more on clothes, shoes and make-up. There is also a bigger gift-buying culture among women. Consider breaking up with Instagram and Pinterest which can engender lifestyle envy, leading to impulse spending on things that only bring fleeting happiness. You will also need to give online shopping a break.  Let’s face it -the internet is one big shopping basket. Buy only the essentials and choose ‘bricks and mortar shopping’ – the extra effort involved may be the circuit-breaker required to nip your impulse purchase in the bud.

Stop buying new clothes altogether (we all have more than we need) – or buy only for a special occasion such as a wedding or an important job interview.

Smoking and Gambling

These two activities are huge money pits and do not have any positive effects on your mental and physical wellbeing, or your bank account. While it may be impossible to cut them out completely, cutting down will help you achieve your goals faster and will have knock-on effects on all aspects of your health.

Travel and Holidays

International travel for Australians is expensive. Even holidays to places like Bali and Malaysia can put a dent in your savings. Travel must take a back seat while you’re saving for a house deposit.  Everyone needs rest and relaxation from time to time, but there is plenty of fun to be had in taking day trips, staying at home, or if you’re lucky enough to have friends or family with holiday homes, having cheap weekends away by taking your own food, drinks and entertainment, and spending your time enjoying the local sights and scenery. The occasional beer or wine at the local pub is permitted!

List It

Consider downgrading your expensive car, motorbike or bicycle to add some funds to your deposit savings and selling anything you either don’t need or have no sentimental attachment to. Consider a side hustle like a market stall or capitalise on a creative skill you might have to bring in extra cash. It all helps.

Celebrate Your Saving Milestones

Starting on a savings journey, especially one as momentous as a house deposit, can be daunting. Set yourself mini-goals – for example, in increments of $5000. Each time you reach a saving milestone, have a small celebration (but not a bottle of Dom Perignon). Invest in something for your new home which you will need when you move in, or a budget-friendly night in or out. After all, it takes a lot of self-discipline to resist the daily spending temptations that the modern world throws at us. A treat now and then will stave off ‘saving fatigue’ which can lead to budget blow-outs and going to back square one – a depressing place to be.

Take comfort in knowing that these restrictions are not forever. The enjoyment you get from buying things can’t compare to the joy and satisfaction you feel when you get the keys to your new home.

Once your deposit is saved, consider the following when thinking about applying for a mortgage:

How Much Can I Afford to Pay Back?

Lenders call this ‘loan serviceability’ – how much you can afford to pay back. Lower borrowing power means you’re limited in terms of what you can buy, but it also means that repayments will also be smaller. Consider living further out from the city – or buy an entry-level apartment or a property that needs a lot of renovation. Keep in mind that you won’t be living there forever.

You may have been fortunate enough to have been given money towards your deposit – remember that you can’t rest on your laurels completely – you still need to be able to prove that you can make your mortgage repayments. Your lender will look at your saving history and what you earn and spend each month in order to determine how much you can borrow.

Another option is ‘rentvesting’ – this involves buying an investment property in a more affordable suburb while you rent where you want to live. Remember that you will need to live in the property for the first 12 months to be eligible for the First Home Buyer’s Grant.

The equity you build in your investment property will allow you to move up the property ladder.

Another option is to buy a property with friends or family members to pool your savings and split the repayment amounts. This may also allow you to afford a more expensive property resulting in a higher capital gain down the track.

So – your deposit is saved, and you are ready to make an offer on your first home.
The Home Inspection Hub can get you one step closer with a pre-purchase house inspection from an independent and reliable inspector. Our experienced inspectors will check over 250 separate items and provide a comprehensive report with photographic evidence, which is emailed to you within 24 hours of your inspection.
Phone us on 1300 071 283 or visit our website for more information or a free quote.
We look forward to helping you in your search for a new home!