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6 Steps To Break The Rent Cycle and Land Your Dream Home

Breaking the rent cycle and saving enough to purchase a home of their very own is a financial goal on the agenda of many everyday Australians. But with housing prices steadily increasing across Australia’s major cities, achieving that dream can begin to feel impossible.

But, it doesn’t have to.

In fact, this 6-step guide is designed to help you break free of the rent cycle and land your dream home – according to the advice of your resident team of financial experts.

Step 1: Set Your Financial Priorities & Goals

The first, and one of the most important, steps to working towards buying your dream home is to take the time to work out your financial priorities and goals. 

This part of the process is all about gaining a realistic picture of what you would like to achieve and the timeframe in which you’d like to achieve it. In order to do this, you could start by doing research, both online and by attending open houses, on potential homes that meet your criteria so you have an indication of the prices you’ll be looking at.

Then, once you have the price, you’ll be able to calculate how much you’ll need for a deposit. Across the industry, 20% is often the ideal standard, however there are lenders that will let you take out a mortgage with less of a deposit – provided you meet certain other criteria.

Step 2: Understand Your Cashflow & Budget

We know, nobody wants to take another look at the dreaded budget. But getting your cash flow under control and setting (and sticking to!) a realistic budget is the cornerstone of any successful home ownership journey.

Understanding your cashflow means knowing exactly what you spend on a day-to-day, weekly, monthly and yearly basis. Having this set out clearly somewhere, whether it be online or offline, alongside your budget can serve as a reality check to help you see where your money is actually going. And once you know where your money is going, it’s much easier to see where your expenses could be cut down and the income redirected towards saving for a deposit.

Step 3: Cut Unnecessary Costs

Now cutting down on unnecessary costs doesn’t necessarily have to mean saying goodbye to your social life and resorting to your university diet of instant noodles and boxed wine. It simply means taking the time to ask yourself if you really need something before making an impulse purchase.

Do you really need all those streaming services or could you just keep the one you watch the most? Do you really need that takeaway delivered for another night or could you get creative in the kitchen and see what you can whip up with the ingredients you already have?

In fact, cutting down on unnecessary costs could actually provide opportunities for you to engage your creative brain and find new ways to still do what you love, without the additional price tags.

Step 4: Eliminate Debt

Another essential step in the journey to homeownership is doubling down on eliminating any outstanding debt you may have. While there is a difference between good debt and bad debt and sometimes you can’t avoid repayments on things like cars or car insurance, there are certain debts that should be paid off as soon as you can.

These debts include things like personal credit cards and buy now, pay later schemes such as AfterPay or ZipPay – both of which are not looked upon favourably by mortgage lenders as they are considered a negative spending habit.

Paying off any outstanding personal debts you may have will help you to free up income to put towards achieving your financial goals. Think of it this way: if someone offered you a pay rise of $100, $200 or $300 per week, would you take it? Of course you would! So why not liberate yourself from debt and give yourself a pay-rise by freeing up more income in the future.

Step 5: Start Saving

Now that you’ve defined your priorities and financial goals, and gained a better understanding of what your dream home is likely to cost you, it’s time to start saving.

It can be tempting to draw on your savings if your savings account is freely accessible, so you may want to consider setting up a dedicated savings account with incentives to discourage you from withdrawing funds. If you’re saving with a partner, you could also open a joint savings account with both of you as signatories to withdraw in order to hold each other accountable for any dipping into the savings fund.

But, at the end of the day, making sure that you’re regularly contributing to your savings and then leaving it to do its job is a personal habit that you’ll have to hold yourself responsible for doing.

Step 6: Understand Your Options

Okay, so you’ve saved your 20% deposit and you’re ready to break free of the rent cycle and make the jump to home ownership. Now it’s time to tackle the finer details of this transition and the questions that come with it.


Do you buy an already-established home or do you build a new one? Are you eligible for the First Home Buyer Grants or are there other concessions you may qualify for? 

And that’s just the beginning.

Finding the answers to all these questions can feel overwhelming on your own, so it’s at this point we’d recommend reaching out to a financial advisor or mortgage broker for assistance. Your financial advisor can help you by clearly laying out what your options are while making sure these options are in line with your financial goals and circumstances. 

They can also provide an alternate point-of-view and sounding board for many of the big decisions you may face in your journey to home ownership, something that can be invaluable when you’re overwhelmed with information.

Ready to get started working towards purchasing your dream home?

Get in touch with a financial advisor now!

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