I don’t know about you, but owning a home feels like a far-off fantasy, like getting picked out of the crowd at a Beyoncé concert to join her on stage for Halo.
But again, I live extraordinarily and stupidly outside of my means almost all of the time. So turning 30 and not owning a house is kinda karma for my lack of financial responsibility.
But not all of us are terrible savers. There are young people out in the world right now hitting up auctions on Saturday mornings and collecting the keys to their dream home.
We spoke to resident Westpac savings expert and Managing Director of Cash & Transactional Banking, Mandy Rutherford, to get the low-down on how we can be better savers.
What are the main challenges for young people who want to own a place?
According to Mandy, the biggest hurdle is often saving for the deposit. Which I totally understand – it’s why I haven’t done it. A house deposit feels like a HUGE, DAUNTING, OVERWHELMING amount of money.
Mandy reckons time and commitment are the superpowers you need to see that bank balance rise. “Remember that the small things add up, so make smart lifestyle choices and save where you can – it can make a big difference in the long run,” she says.
BRB, just going to catch the train rather than an Uber.
Are there any strategies that will help us get the keys?
Apparently, yes. It involves getting up close and personal with your bank account – your incomings, your outgoings, your overall transactions. Mandy says, “The first step is to really understand your financial situation – what are you spending and what do you have leftover?”
Now you can start properly planning and working towards that “big” savings goal. “Consider setting up a dedicated savings account that pays interest, and the sooner you do it, the better,” she says. “Even if buying a home is a future aspiration, getting into the habit of saving regularly will put you in a good position.”
To get the most out of your savings, ensure you also set up your bank account to maximise the interest you receive on your savings deposits. If you’re worried you’re not saving enough, you can also look to gigs outside of your job to get a bit of extra moula — got any old phones or tech lying around? Sell it online. Have a genius idea for a side hustle? Start working away at it. I’d also recommend selling lemonade, but I’m not too sure how lucrative it would be because adults sitting at a lemonade stand might come across as a bit…odd.
But who knows? You could be sitting on a lemon-flavoured gold mine.
But what about the deposit? How much is enough? We want to know…
I know bigger isn’t always better, but it actually is for a house deposit. But why? According to Mandy, “It’s usually best to save as much as you can. The bigger the deposit, the smaller the loan, and the less interest you will have to pay.”
Interesting, go on Mandy. “We recommend aiming for a 20% deposit, which may take longer to save up initially, but you can help avoid other costs such as Lender’s Mortgage Insurance – which often applies to a 5% or 10% deposit,” she says. “I really recommend speaking to a Home Finance Manager who can give you some clear guidance on your options and the loans that may be best for you.”
Feeling inspired to get control of your bank account and start hitting up your local auctions? SAMES. If you need a financial hand, Westpac can help you.
The post An Expert Gives Some Tips To Help Us Bag A Home & We’re Checking The Couch For Coins appeared first on Pedestrian TV.
