Experts warn that habitual spending on convenience and lifestyle items may erode savings and borrowing power, highlighting the importance of establishing a ‘Freedom Fund’ to secure a future home.
Small, repeated purchases may seem harmless, but property advisers say they can quietly weaken both a buyer’s deposit and their borrowing power by feeding what one expert calls the “dopamine trap”. Lloyd Edge, a buyer’s agent and founder of Aus Property Professionals, says the real risk is not an occasional coffee or takeaway meal, but a pattern of frequent spending on conveniences, clothes, travel and status purchases that leaves little room for a future home deposit.
That warning comes as NAB data shows spending at cafes, restaurants and pubs rose 7.6% year-on-year, with hospitality now accounting for one in every $10 spent. Edge said the pressure is amplified by social media, where constant comparison can normalise expensive habits, from nights out to designer buys and car upgrades, even when they are not financially sustainable.
The problem is not just on the savings side. Lenders also examine recurring expenses, so subscription services, food delivery and other lifestyle costs can reduce the amount a bank is willing to lend. Edge said higher income does not necessarily help if extra earnings are quickly absorbed by bigger fixed costs and more expensive habits, leaving would-be buyers with less flexibility when an opportunity arises.
To counter that, Edge recommends building what he calls a “Freedom Fund” by automatically diverting 10% to 15% of each pay cheque into a separate account for future investment. He acknowledged that many households are under pressure from the cost of living and may need to start smaller, even with $5 a week. Ray White senior data analyst Atom Go Tian said first-time buyers often feel the gap between modest weekly savings and a deposit running into six figures, and he urged them to look closely at government incentives and schemes that can speed up the path to ownership.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
