Taking on a home loan is a big financial commitment, so it’s important to put in place good money habits before you take the plunge. Here are some tips on how to prepare for the demands of a mortgage.

1. SET a target. Do your research to find out the regular amount you are likely to need for ongoing home loan repayments. Each pay period, put this money into a savings account to contribute towards your deposit and learn to live off the remainder. This will lessen any shock of meeting mortgage repayments when the time comes.

2. TRACK your spending. This will help you understand where your money is going and instil the discipline required to meet regular home loan repayments. There are a number of free online applications that can help you track your spending, such as Pocketbook, but a simple spreadsheet is a great place to start. You can also try out the HomeStart Budget Test calculator.

3. PAY off your credit cards. Credit cards allow you to live outside of your means and can have a serious impact on how much money you have available. Ensure all of your credit cards and debts have been paid off, and try to live within your budget to eliminate the need for credit.

4. CUT money-eating habits. Whether it's alcohol, tobacco or coffee, bad habits can be expensive. Cut-back or quit these habits and you will be surprised at how much extra you will have in your pocket. Making a coffee at home or work, rather than buying one, could save you over $1000 in one year.

5. BUY in bulk. The weekly grocery bill is a major expense for most households and will remain a necessity even when you have a mortgage. Good shopping habits are essential to managing your budget. Look for specials and stock up on storable items such as toilet paper, body wash, shampoo, canned goods and fresh meat for the freezer.

6. TAKE your lunch. Take away foods may often seem like the cheaper and easier option, but with the average sandwich costing between $10-15 at the local deli, you could be saving at least $50 a week just by bringing your lunch to work every day.

7. RIDE a bike to work. Australians spend $78.4 billion a year on their cars, and only $2.2 billion on public transport. By taking the bus, walking or riding your bike to work you’ll not only be getting fitter and helping the environment, you could also save yourself a lot of money.

8. ALLOW for flexibility. Sometimes life is unpredictable and expenses may suddenly appear. You may need to pay for new car tires, visit the vet or buy a wedding present. When you set your budget, allow some extra money for variable and unexpected expenses. And try to be kind to yourself, if you go over budget one month, save a little extra the next.