Saving for Your First Home While Renting: Smart Strategies

Summary:

Sharing practical strategies to help you save for your first home while renting, without feeling stuck or overwhelmed:

• Learn how to budget smart, automate savings, and boost your income with side hustles or salary negotiation
• Discover government grants and guarantees that can reduce upfront costs and help you buy sooner
• Use tools like our home loan calculator to stay on track and plan confidently for your homeownership goals

Ever feel like renting is just “throwing money away?” Like you’re stuck in limbo, waiting for the day you can finally buy your first home? It’s a common feeling, and if you’ve recently read our blog ‘buying vs renting with our guide to making the right housing decision’, you might be nodding along. You’ve decided, for now, that renting is your best option, but that doesn’t mean your current living situation has to feel temporary.

We understand that everyone’s housing journey is unique. Whether you are a long-term renter or saving diligently for buying a house, this guide is packed with tips to help you build up your savings while you rent.

1. Build a Smart Budget: Know Where Every Dollar Goes

When you are building a budget, it’s not about restricting yourself, it’s about being smart and strategic with your money. A few great tips for saving for your first home are:

• Tracking Your Spending: Write down or use an app to track every single dollar you spend. You might be surprised where your money is actually being spent. This will help you see areas where you can cut back.
• Identify Your Needs vs. Wants: Separate your essential expenses like (rent, utilities, groceries, or transport) from your discretionary spending which is (entertainment, dining out and designer clothes, etc). Discretionary spending is expenses that are non-essentials.
• Set Realistic Saving Goals: Decide how much you want to save each week, fortnightly, or monthly, specifically for your home deposit. With home deposits they normally require a deposit of 20%.

Using our home loan repayment calculator can help in setting your budget. You’ll be able to add in a potential loan amount, interest rate, and loan term to help get an idea on what your repayments would be.

Interact with our example below:

2. Automate Your Savings:

The easiest way to save money is to make automatic payments, this will help remove the temptation of spending it. You can do this with the following:

• Open a Dedicated Savings Account: Setup a separate bank account just for your home deposit. Look to create an inspiring name, to keep this goal at the top of your mind.
• Schedule Automatic Transfers: On your payday, look to setup an automatic transfer from your main everyday account to your dedicated savings account. Try to do this every time you get paid, so you save before you even have a chance to spend the money. It doesn’t have to be a large amount, but regular small amounts add up significantly over time.
• Consider High Interest Savings Account: Research some savings accounts that offer a good interest rate. Every little bit helps your money grow faster.

3. Boost Your Income:

Sometimes, saving can be more than just cutting your expenses, it can also be about earning more. A couple ways you can look to earn a little more before buying a house are:

• Side Hustles: Look to pick up extra shifts if you can. You can also sell some things you no longer need, or if your schedule allows, and you aren’t overextending yourself, getting a second job can help as well. Even if you can make a few extra hundred dollars a month, this can help accelerate your savings.
• Negotiate Your Salary: If you’re employed, consider if it’s the right time to ask for a pay rise. Your skills and experience might be worth more than you’re currently earning.

4. Explore Government Programs for First-Time Homebuyers:

There are government programs you can look to take advantage of when you buy a house. A few of them are the first home buyers grant QLD, also known as first home owner grant (FHOG), first home guarantee (FHG), and Regional First Home Buyer Guarantee. These programs are all designed to make homeownership more accessible for first time buyers. Below we break down what each program means for you:

• First Home Owner Grant (FHOG): This is a one-off payment to eligible first-time buyers building or purchasing a new home. The amount and eligibility rules vary by state and territory. It’s free money if you qualify!
• First Home Guarantee (FHG): Allows eligible first-time buyers to purchase a home with a smaller deposit without needing to pay Lenders Mortgage Insurance (LMI). LMI can be a significant cost, as it applies when you don’t meet the minimum 20% deposit. Being able to avoid LMI can save you thousands.
• Regional First Home Buyer Guarantee: Similar to the FHG, but specifically for eligible buyers purchasing in regional areas.

Your dedicated Home Loan Lending Specialist will be up to date with all the government programs to buy your first home, so you will be able to ask questions and feel confident in making a decision that is best for you.

If you would like to take a deeper dive into these programs head to the below government links where they will talk about eligibility and the amounts.

• QLD First Home Owner Grant
• Housing Australia: First Home Guarantee
• Housing Australia: Regional First Home Buyer Guarantee  

Your Home Journey, Your Pace:

As you continue your journey saving for your first home, read our helpful blog, ‘7 Pitfalls of Purchasing a Home: Guide for First-Time Buyers,’ where we guide you through the costs to look out for when purchasing your first home.

Fox Home Loans is your preferred mortgage broker on the Sunshine Coast for buying your first home, and rest assured we’re here to help guide you at every stage when you are ready to get your pre approval home loan.

Call us today!