Our desire to have everything we want now and no SAVINGS PLAN, we want the DREAM HOME, a LIFE and STYLE we can’t really afford, we have no clear financial GOAL, a TRIBE that rents and not enough INCOME (yet). I especially like the point on interest rates, something I have not seen much discussion on.
I have to agree with “The six real reasons you can’t save for a home deposit” article below by Michael Yardney on Yahoo7 Finance.
We need to EDUCATE ourselves NOW and get on with it!
My Savings Plan (1) & a Clear Goal (4)
I saved my deposit for my first home, only after buying a property was my clear goal. While this was extremely exciting for me then, I think I nearly hyperventilated while signing the loan documents. I am sure most people would say that it was easier back then, but to the point below, I locked myself into a fixed interest rate of over 9%. I also remember the days when interest rates were over 18% for some (although I did not have a mortgage back then). This home was what I could afford and certainly not my dream home (2).
Life & Style
To save for my deposit, I needed to make different choices on what I needed to spend for my Life and what I had spent for my lifeStyle. Each and every time I have purchased a property, I have had to consider these choices again. That includes not dining like a king (3), in fact eating at home and eating leftovers, is a much better choice!
Are all your friends renters (5)? Over the years it has been important to find people (my tribe), who encourage, support and if I was lucky give some decent advice on how I could continue to work towards my dream home. The reality is that these people are not necessarily easy to find and you need to seek them out, who is doing what you want to do? One magazine I subscribed to was Australian Property Investor Magazine, having this arrive on my doorstep every month, was a great way to stay motivated and focused and the tables of house sales and rentals across Australia is a great reference.
Just like having good health and being fit, there is no shortcut to owning your own home (unless you are extremely fortunate), it is hard work and requires focus and discipline.
While we need to be realistic about our current income (you don’t earn enough yet(6)), there are things you can do here. When I was in my 20s I had two jobs, my full-time day job and a night-time part-time waitress. I then continued part-time study and focused on my personal development, looking for opportunities where I could continue to be challenged. Again you need a tribe that supports this, those that know the value of hard work for your short and long-term future.
My 7th Reason-You have to live in your home
Ok so this is related to (2) but it is another one of my favourites, why do you have to live in your own home. Why not buy an investment property and then live somewhere else (that you want to, but can’t afford) with friends and family? This may help you get into the property market much sooner, because you are more open to buying that house, even though you do not want to live in it, but it gets you started.
Obviously you need to do the right research and not buy just any old house in a cheaper suburb, but there is plenty of time to do this, while you are saving your deposit.
What you really need is to start, then time (and hard work) will take care of the rest!