For many people, saving for their first home is like chasing an elusive dream. As hard as they try, there never seems to be any money left over once they have paid the bills.
Worse, the home-ownership dream can continually move further out of reach as rising house prices make it more difficult for first-home buyers to get that much-needed foothold in the market.
Most people need to save a substantial deposit, not just to ensure they are not borrowing more than they can afford to repay, but to establish reasonable equity in their home to act as a buffer if things go wrong.
As a rule of thumb, to buy an average-priced first home of, say, $300,000, you will need a deposit of at least $30,000 plus another $15,000 to cover costs; ideally you should have closer to 20 per cent as a deposit, or $60,000 plus costs.
For potential homebuyers starting from scratch with little or no savings, this sounds like bad news, but Australians on average incomes frequently achieve this elusive goal.
One way to tackle it is to put together a regular savings plan. You should have as much money as you can possibly afford deducted directly from your salary or wage and deposited into the highest-earning cash management account you can find.
This is a guaranteed method of saving for a deposit, but it can take years to save a minimum 10 per cent deposit, by which time house prices may have doubled, leaving you right where you started.
If you are determined to buy a home sooner rather than later, however, there are some clever ways to speed up the process.
Here are five suggestions. They involve some hefty short-term belt-tightening but implementing any two of them could see you in your own home within 12 months, depending on your overall financial situation.
Cut up your credit cards
Whether you are the sort of person who pays off your credit card in full each month or whether you take your time, you will probably find it impossible to save for a home while you still have a credit card.
Credit cards quite literally create a hole in your pocket. As long as you carry one around with you, the temptation to buy that new pair of jeans or to go out for dinner will prove too great.
Getting rid of the credit card will help you think twice about whether you need to dip into your savings for the cash to make that purchase.
Get by with one car
Getting rid of the second car is a proven strategy for couples trying to save for their first home.
If you do sell your second car, make sure the money you were spending on it, including loan repayments, maintenance and running costs, goes into a savings account.
Move back home
Another method for saving a deposit is to move back in with your parents. Even if you make a regular contribution to the running costs of your parents' home, staying in their spare bedroom will be infinitely cheaper than renting your own place.
Most people spend an average of $1000 on rent each month and much the same again on outgoings such as electricity and water. By moving home for just 12 months you could reasonably expect to save $24,000, which will give your deposit a handy boost.
Pick up a part-time job
There are several advantages in taking up a part-time job. You can significantly increase your savings without having to cut back on your spending.
And you will reduce the amount of time you would usually have to spend money eating out or shopping for clothes.
Having a second job may come in handy for the first year after you buy your home. You will be able to pay off your loan faster and have the money for repairs and other surprise expenses.
It is crucial that you save every additional cent you earn and that you leave the money sitting untouched in a cash management account until you use it to buy your first home.
Stay at home next holidays
This is the easiest way to boost your savings for a home. Instead of going on a holiday next time you take annual leave, put your holiday pay directly into your savings account.
Of course, you will need to spend some to pay for your rent and other outgoings, but if you keep this to a minimum, you will find the money you save a useful addition to your deposit.
While you are at home, you can spend time going through your finances and making sure that you are up-to-date with all your unpaid bills and tax returns. Buying a home is a big financial undertaking and you want to have your financial affairs as ordered as possible before you sign on the bottom line.
Not only will clear, well-organised accounts stand you in good stead when you make an application for a home loan, but you will also find once you do buy a home, it will be essential to have your finances in good order.
This will be much easier to do before you have to face up to the commitment of making regular loan repayments on your home, than it will be after you have signed on the dotted line.
Further reading: 
