The problem with credit cards is they are easy to use and not always easy to keep track of. During the lead-up to Christmas, it’s very easy to get carried away spending. This can not only hurt your savings, but it also makes it appear that your typical spending habits are a lot higher than they might be. A lender will take close look at your expenses over the previous three months when assessing a home loan application, and if they are excessive, it could dent your serviceability and risk getting your loan application rejected. If you don’t particularly use or need your credit card, it can often be a good idea to get rid of it altogether, as lenders assess your credit card as if it is fully maxed out.

We all know that budgeting is important but for most people it is not only hard to do, but hard to implement. One of the best ways to effectively budget is to allocate all your spending money in advance and put it on a debit card. This way, there is no chance you can go over budget. It’s even possible to have multiple debit cards for different areas of your life, such as essentials, spending money and things like bills and expenses. Then, you simply transfer funds to them each week. While this might seem a little over the top, if your goal is to get on the property ladder, then it might be well worth going to these lengths for even a short period of time.

While it might be very tempting to jump on a plane after what has been a few rough years for those that love to travel, don’t take on any debts in the process. Many people like to put their holidays on credit or even take out a personal loan. The problem with adding debt is that this money needs to be paid back. When you have debts, it weighs on your serviceability. Given that credit cards and other unsecured debts attract incredibly high interest rates and need to be paid back in a matter of years at the latest, this can really hurt your bottom line when applying for a loan.

For first home buyers, even a $100 per week payment on a credit card or loan could be enough for you to miss out on getting a loan for your first property. If your goal is to buy a property, wait until you’ve settled on the property and made a new budget before going out and spending money you don’t have on a trip.