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Posted on October 26, 2020

How do I save to buy a house after being hit by COVID?

Have you been struggling with the COVID-19 pandemic? Has the global pandemic affected your income adding financial stress not only to your household, but to your overall mental health?

The markets took a major hit going up and down but whilst it is now starting to stabilise as we slowly loosen the restrictions, it’s never been better timing to look at your financial position.

 

You might say… “But I’m late bloomer when it comes to finances?”

To everyone who is asking the same question, know that you’re not alone.  We’ve had clients in their 30’s who’s been focusing on saving for home and to be honest, it’s been rough. We’ve heard stories of  journey’s full of pitfalls, late-night tears and anxiety.  Lamenting and wishing they’d saved more in earlier years.

 

Despite the tumultuous changes in the market, it’s important to find balance. There’s been remarkable shifts not only how people view their personal finances but also how they view money and their money, also known as ‘money mindset’.

 

Now this article isn’t written to make you feel bad about being a late bloomer.  It happens at different ages, but this age is proving to be the trickiest to navigate when it comes to financial independence and security. Many have utilised this period of time to review their goals.  Here’s a few lessons they’ve learned when finding their feet and getting those house keys.

 

DO NOT put your investments on a credit card. In fact, if you can avoid a credit card all together do it.

The idea of a credit card to spend on the things we can’t afford can be quite tempting. Making sure you understand the risks before you get a card is vital but what happens when you’re trapped into paying one off? It makes sense that if what you earn goes onto paying off these high-interest rates you will sink deeper into debt regardless. The best thing to do here is reassess what you have and then see if you can afford paying this debt off even if you did have a home loan.

 

Pay off your debt slowly – even if it’s over time.  JUST MAKE SURE IT GETS PAID!

Student loans, credit card debts, car loans seem pretty good at the time when we borrow the money but remember that after some time, they actually gain interest. Paying off debt before you buy a house is a little tricky but not entirely impossible. Implementing automatic direct debit payments will help you pay it on time, every time.  Paying this off over time is fine but making sure you do this as quickly as possible is the priority!

 

Everyone wants everything now but goals take time… be patient!

Our generation struggles with patience. They seem to want everything right now, from iPhones to houses, we decide to risk all of it for what we want. Do you stop and think,” have I the income to support everything that is coming out of our bank account?” Asking yourself the question of not only “can I afford it” but “can I save 10% on top of” will allow you to stop and think before you buy and invest in something new. Ensuring you have clear goals for your financial plan will put your mind at ease. Taking these measures can assure ways to increase your finances and what avenues to invest in. Take the time to contribute and invest in your superannuation fund and don’t spend so easily when you have the money available.

 

If you are going to buy a house make sure you know all of the pros and cons.

Home loans and investment properties can be frustrating when you first look at everything. You need to know how much you have saved for the portion of your investment as well as the 10-20% saved before you even make the purchase. Savings, purchase costs and home loans can be a balancing act and this is why it pays to speak to someone who understands not only the market but how much financially you may need to reach your goal.

 

Seek the advice of a qualified Financial Advisor

Finding a financial planner is important as they not only help you with your financial mindset but also look at your roadmap of how, what, when, where and why on all areas of investment – right up to retirement.  Understanding the broader picture will help to move forward and succeed with your specific goals.

 

Everyone has different journey’s and pathways to go on, but if you can invest in the bigger things earlier on whilst increasing your savings you will be better off further down the track.

 

So, if you are a ‘late bloomer’ it’s ok, I can help you plan for your future with a view to getting you where you need to be.

 

To schedule an online appointment, click here.

 

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