BacBack in early 2022, a dear friend of mine—let’s call her Amy—and I were on one of our usual Saturday walks, venting about toddlers, work, and life in general. But that day, she stopped mid-step, looked at me with a mix of worry and “please don’t judge me” honesty, and said:

“We want to buy a house, but we just can’t save. Between rent, childcare, groceries, and car repayments—we’re drowning. I don’t even know where the money’s going.”

It was one of those raw, punch-you-in-the-guts moments that perfectly sums up how bloody hard it can be to save for your first home in Australia when life’s throwing invoices like dodgeballs.

As someone who lives and breathes this stuff, I switched into “money coach” mode. We walked straight back to her place, opened her laptop, and built a plan on the spot. Fast-forward to today, and Amy and her husband are actively house hunting—no windfall, just smart habits and consistency.

If you’re wondering how to save for your first home in Australia, this 2025 guide will walk you through exactly how to do it—step by step.

Get Brutally Honest About Your Spendings

We started by laying it all out. No judgment. No shame. Just facts.

Amy worked part-time in admin, Daniel was full-time in the public service. Together they brought in about $7,350/month after tax. But nearly every cent was disappearing.

Amy & Daniel’s “Before” Budget (Early 2022)

Category	Monthly Amount (AUD)
Income (after tax)	$7,350
Rent ($500 p/w)	$2,000
Utilities (Electricity, Gas, Internet)	$433
Childcare (out-of-pocket)	$585
Fuel (2 cars)	$650
Groceries (inc. takeaway)	$1,517
Phone Plans (x2)	$155
Debt Repayments:
– Credit Card	$300
– ZipMoney	$100
– Consolidated Loan	$400
Non-Essentials:
– Café Weekend Breakfasts, Takeaway Coffees	$305
– Entertainment (Alcohol, Nail infills fortnightly)	$200
– Subscriptions (Netflix, Disney, Stan, Gym x2, Fitness App, App Subscription that had been forgotten about)	$185
Total Monthly Spend	$6,830
💰 Leftover for Savings	$520

They should’ve been saving that $520—but in reality, it disappeared on UberEats, unexpected bills, or yet another Bunnings run that got out of hand. With no savings buffer and no real visibility over their spending, Amy and Daniel relied on credit every time something went wrong.

But here’s the thing: no one’s born knowing how to manage money. It’s something we have to learn—and once you’ve got the right tools and strategies, everything changes.

Budget Glow-Up: Cut the Leaks, Keep the Joy

We didn’t Marie Kondo their entire life. Amy and Daniel still wanted joy—just not one bleeding out $20 notes every day.

Here’s what we changed:

• Cancelled unused gym memberships + fitness app
• Kept 2 streaming services (goodbye Stan)
• Swapped weekend café brekkies for DIY lattes at home (hello, frothy savings)
• Capped groceries and takeaway with an actual meal plan
• Cut work coffees down to one good one per week (because sanity matters)
• Upped debt repayments to kill that interest faster
• Automated savings into a high-interest stash account

And most importantly? They started tracking every dollar. They used PocketSmith to get a clear picture of their money—what was coming in, what was leaking out, and where they could improve. I’ve used it myself for years and recommended it to them because it just works.

Full transparency: I’ve partnered with PocketSmith, and if it’s something you want to try, here’s the link for 50% off your first two months. No pressure—just sharing what genuinely helped.

✅ Amy & Daniel’s “After” Budget (2022 – Onward)

Category	Monthly Amount (AUD)
Income (after tax) – Amy picked up an extra day of work each week, giving their income a bump	$7,350 + $1,100
Rent (increased annually, but for simplicity, we’re keeping it fixed in this chart)	$2,000
Utilities	$433
Childcare – Childcare costs stayed the same—Grandma stepped in to look after their little one, one day a week, so no extra out-of-pocket fees.	$585
Fuel (2 cars)	$650
Groceries (planned + meal prepped)	$1,250
Phone Plans (x2)	$155
Debt Repayments (increased)	$1,000
Non-Essentials
– Café Breakfasts	$0
– Work Coffees (1 each per week)	$44
– Subscriptions (Netflix + Disney)	$40
Monthly Emergency Savings (automated)	$500
Monthly Savings Goal (automated)	$1,200
Total Monthly Spend	$7,783
Leftover Buffer (wiggle room)	$593

📈 36-month savings + 5% interest p.a.: $48,800

💸 Accumulated tax returns over 3 years (Amy + Daniel): $8,200 (approx. $1,366/year combined)

🪙 Total savings stash: $57,000+

💥 Debt demolished: $30,000+ (thanks to boosted repayments + smart budgeting)

🏡 Result? Now ready to buy their first home!

💡 How You Can Adjust Your Spending to Save for a Home Deposit

Before you start stashing cash, you need a clear number to aim for. Use an online home loan calculator (like from MoneySmart, your bank, or a mortgage broker site) to figure out exactly how much you’ll need to save.

Things to include in your estimate:

• Your Deposit: Most lenders want anywhere from 5% to 20% of the property price. A 20% deposit helps you avoid extra costs, but many first-home buyers get in with 5–10%.
• Stamp Duty: This is a government tax based on the property’s price and location. In some states, first-home buyers get exemptions or discounts, so check your eligibility.
• Lenders Mortgage Insurance (LMI): If your deposit is under 20%, you’ll likely need to pay LMI—a one-off fee that can add thousands. Some government schemes help you skip this.
• First Home Buyer Grants & Concessions: These vary by state but could give you a boost of $10,000 or more if you’re building or buying a new home. Look up your local rules (NSW, VIC, QLD etc.) and factor that in.

1. 📋 Do a Spending Audit

Sit down together and go through the last 2 months of your bank and credit card statements. Yes, it’s painful—but it’s worth it. Highlight the “wait, what?” transactions—the random purchases, double subscriptions, and sneaky spend leaks you completely forgot about.

You’ll likely spot patterns: too many takeaways, forgotten app charges, or mini shops that add up over time. This is your chance to see exactly where your money is going—and start taking control.

💡 You can’t change what you don’t see—so treat this as your financial reality check.

2. 🧽 Trim the Non-Essentials

Start with the easy wins—cancel any unused subscriptions (streaming services, fitness apps, or those sneaky monthly charges you forgot you were even paying for).

Next, take a look at your debts. Call your credit card provider and ask to switch to a low-rate card—most banks will let you do this with no impact on your credit score. Every bit of interest you save is money back in your pocket.

Then, go one step further: call your other lenders and utility providers. This includes personal loans, car finance, internet, electricity—anyone who charges you regularly. Let them know you’re shopping around and ask if they can offer a better deal. You’d be surprised how often a simple phone call can lower your repayments or shave off hidden fees.

💡 Small conversations can lead to big savings—and they only cost you 10 minutes and a little courage.

3. 🧰 Track with a Smart Tool

Once you’ve trimmed the excess, it’s time to map out what your new budget actually looks like—and kick off your savings goals.

Start by setting up two separate savings accounts:

• One for your long-term goal (like your house deposit)
• One for your emergency fund (for when life throws curveballs)

To stay on top of it all without getting overwhelmed, use a smart tool like PocketSmith. It connects to your bank, auto-categorises your spending, and shows you exactly where your money’s going each month.

You can set budgets, track progress, and even forecast your savings growth—so you’re not just saving blindly, you’re saving with purpose.

💡 This is where you stop guessing, start planning, and put your money to work.

4. 💸 Automate Your Savings

Now that you’ve set your savings goals, make it automatic. Set up scheduled transfers to your savings accounts on payday—before the money has a chance to disappear into daily life.

Move a fixed amount into a high-interest savings account each pay cycle.

💡 Out of sight, out of spend. Automating your savings takes the willpower out of the equation.

5. 💥 Tackle Debt, One Chunk at a Time

Pick a repayment method and stick with it:

• Avalanche: Pay off the highest-interest debt first to save more in the long run
• Snowball: Start with the smallest debt for quick wins and motivation

Once you’ve picked your strategy, focus your extra repayments on that one debt—not just the minimum. Keep paying the minimum on everything else, but throw whatever extra you can at your target debt until it’s gone. Then move to the next.

If your repayments are too much to handle, consider:

• Refinancing to a lower rate
• Debt consolidation into one manageable payment
• Calling lenders to ask for better terms or hardship support

I’ve written a full blog on how to tackle debt the smart way—read it here.

💡 A plan beats panic—every time.

6. 💼 Boost Your Income (Without Burning Out)

Sometimes, cutting back just isn’t enough—you need to bring in more cash. But that doesn’t mean working yourself into the ground.

Look for low-effort ways to earn extra on the side that fit your lifestyle and skills. Sell unused stuff around the house, pick up some casual freelance work, babysit for friends, walk dogs in your neighbourhood, or deliver pizzas a couple of nights a week.

Even something as small as $100 extra a week adds up to over $5,000 a year—money that can go straight into your savings, debt, or emergency fund.

👉 Need ideas? I’ve pulled together a list of the 10 best side hustles in Australia right now—check it out here.

7. 🏦 Talk to a Broker Early

Once your savings are building and your debt is under control, don’t wait—have a chat with a mortgage broker before you’re ready to purchase your first home.

They can help you:

• Check your borrowing power so you know what you can realistically afford
• Tap into government grants or first home buyer schemes you might be eligible for
• Map out a clear timeline for your purchase, so you’re not just guessing when you’ll be ready

💡 The earlier you get expert advice, the smoother the journey to your first home.

💬 Final Pep Talk

Look, I get it—life’s expensive AF and saving for a home can feel impossible some days. But buying a home isn’t just for the rich, the lucky, or the avocado-toast avoiders. It’s for anyone who’s willing to get clear on their money and play the long game.

Amy and Daniel didn’t win the lotto. They didn’t have family money. They just made a plan, stuck with it, and used the tools available to them. You can too.

Track your spending. Trim the waste. Use smart tools like PocketSmith to stay on top of your money without the mental gymnastics. Automate your savings, be intentional with your spending, and celebrate the small wins along the way.

💡 Small steps. Big future. You’ve got this.