Since my last update post, I have selected the mortgage broker and conveyancer who will support me on my home buying journey. I have also been researching a few more suburbs in north-east and south-east Melbourne and done a few more suburb tours, particularly inner north-east Melbourne which is potentially a nice area to live in.
Over the past few weeks, I have been looking at my borrowing capacity, or how much I can afford to borrow from a bank to buy my first home. I am doing that right now so that I can start researching the property market by looking at past sales over different suburbs. To determine my borrowing capacity, I have been seeing a few different mortgage brokers and ran a few calculations on the mortgage calculator at moneysmart.gov.au.
I had enough money saved to cover a 20% deposit of the median price of 2-bedroom units in different suburbs. I have also made a concerted effort to minimise my expenses by adopting the Fast and Slow System and diverting much of my excess savings towards my first home. Furthermore, even though I am currently working four days a week, I am looking to extend my working week to five days a week so that I can earn more money to save towards my first home.
A big hit on borrowing capacity
Unfortunately, from both a mortgage broker’s and mortgage calculator’s perspective, the increase in interest rates over the past few years have eroded my borrowing capacity, to the point where I cannot borrow enough money to buy a 2-bedroom unit in the suburb I want to live in. Assuming a 6.5% interest rate on the home loan, making fortnightly repayments over 30 years with no bank fees, my borrowing capacity according to the mortgage calculator ranges from $222,576 to $435,549. This is a reduction from $247,776 to $484,863 for a 5.5% interest rate. Assuming a $130,000 deposit, this means I would only be able to afford a $560,000 home at most which is below the median price for 2-bedroom units in suburbs I want to live in.
Work days per week
% net income on repayments
Repayments per fortnight
Borrowing capacity at 6.5% interest
Borrowing capacity at 5.5% interest
4
30
$649
$222,576
$247,776
5
30
$762
$261,329
$290,918
4
50
$1,082
$371,074
$413,088
5
50
$1,270
$435,549
$484,863
Borrowing capacities over different work days per week, proportion dedicated to home loan repayments and interest rates
What’s worse is that assuming I earn $2,540 per fortnight by working five days a week, half of my weekly income would only cover the minimum repayments on my home loan. This does not give me any room to get ahead of my home loan or to build a buffer on my savings that I can rely on should I suddenly stop earning due to injury or unemployment.
The non-existent margin of error in my home loan repayments is what is putting me off from buying my first home more than not accumulating a large enough deposit. I can see why people are in despair of buying their first home, whether it is not having enough money to cover a 20% deposit or to keep up with the minimum repayments of their home loan.
My next steps
Despite this, I will keep saving more money in an effort to accumulate a bigger deposit so that I can reduce my home loan, allowing me to buy a better property that I can live in for a long time. I am also thinking about whether to go for one of the government initiatives to buy my first home sooner, versus the potential bigger repayments that I may need to make now and in the future.
I am also thinking about whether my first home is something that I would live in forever, or is a stepping stone to a better property in the future. That is something that I will consider as I start to do my research on the property market over different suburbs of Melbourne.
Given the above considerations, combined with other series that I am writing, I am putting regular updates on my First Home Buyer Journey on hold for now. However, I may continue to publish information and update posts on my First Home Buyer Journey if and when they arise.
Buying your first home in Australia can be difficult due to the high property prices and the difficulties of saving money. Although there are first home buyer schemes that let you buy your first home sooner, you run the risk of buying a home too soon when you are not financially ready, putting yourself in financial stress.
Hence, the only guarantee to buy your first home without getting into financial stress is by saving money. Thankfully, there is an effective way of saving money via super: the First Home Super Saver (FHSS) scheme. In this blog post, I will talk about how you can save money towards your first home via the FHSS scheme and the benefits of using that scheme.
What is the First Home Super Saver scheme?
The FHSS scheme is a federal government scheme where you can save money in super to buy your first home. You can make voluntary contributions to your super in additionto compulsory superannuation payments made by your employer. In total, you can voluntarily contribute up to $15,000 per financial year and a total of $50,000 across all years. These voluntary contributions can be made as a:
Concessional contribution, where money voluntarily placed in super is claimed as a tax deduction. This can be done via a salary sacrifice, where you contribute some before-tax dollars into super, or as a voluntary contribution from your after-tax dollars where you subsequently claim a tax deduction.
Non-concessional contribution, where you contribute after-tax dollars to super without claiming a tax deduction.
Then, when you are ready to search for your first home, you can release money that you voluntarily contributed into super, plus any associated earnings that come with storing money in super. There are two parts to withdrawing money from super under the FHSS scheme: the FHSS determination and the FHSS release request.
FHSS determinations
Before you can release money from super under the FHSS scheme, you have to first apply for and receive an FHSS determination. An FHSS determination sets out the maximum amount of money that can be released from super under the FHSS scheme. This is known as the FHSS maximum release amount. You can request an FHSS determination via ATO online services in myGov. Follow the steps below to request an FHSS determination.
Time needed: 5 minutes
Answer the eligibility questions before entering the FHSS determination form.
In the FHSS determination form, record:
-Eligible voluntary contributions, along with the amounts and the date the super fund received the voluntary contribution; and -Any super tax deductions claimed across different financial years (found at the bottom of the form).
Once you submit the FHSS determination form, print off a copy that lists the voluntary contributions made into super.
A few days later, receive a FHSS determination letter from the ATO stating the FHSS maximum release amount. The FHSS maximum release amount consists of:
-100% of non-concessional contributions -85% of concessional contributions, either via a salary sacrifice or as a personal voluntary super contribution where a tax deduction was subsequently claimed. -Associated earnings from the above voluntary contributions under the shortfall interest charge (SIC) rate. This is defined as 3% more than the base interest rate of the financial quarter, not the actual earnings from the super fund.
Note that you cannot withdraw compulsory superannuation contributions from your employer under the FHSS scheme.
You can request as many FHSS determinations as you like every 60 days to capture any new voluntary super contributions and associated earnings. However, once you sign a contract to buy property or request a release of money from super under the FHSS scheme, you cannot request any more FHSS determinations.
Releasing funds under the FHSS scheme
Once you receive an FHSS determination, you can send an FHSS release request to the ATO via myGov. The ATO will ask the super fund to release the required amount to them before depositing it to your bank account. This request can be made any time before signing a contract to purchase a property, or up to 14 days after signing a contract. The amount of money released under the FHSS scheme needs to be included in your tax return for the financial year, though you will receive a 30% tax offset that reduces the amount of tax payable.
Once you request a release under the FHSS scheme, you have 12 months to sign a contract to purchase or construct your home. If this does not happen within that period of time, the ATO may grant you an automatic 12 month extension. If you still do not sign a contract to purchase or construct a home during the extension period, you can either:
Recontribute the released amounts into your super; or
Keep the released amount and pay a 20% FHSS tax.
Once you have signed a contract to purchase or construct your home, you have to notify the ATO within 28 days.
Eligibility criteria for the FHSS scheme
To be eligible for the FHSS, you need to:
Be 18 years or over when requesting an FHSS determination or FHSS release (though you can start making voluntary super contributions from under 18 years of age).
Not previously made an FHSS release request under the FHSS scheme.
Never owned or have acquired an interest in residential, commercial or investment property or vacant land in Australia.
The only exception to this rule is where a person has suffered financial hardship that resulted in a loss of all property, and the person did not acquire subsequent property or vacant land since then. Financial hardship includes bankruptcy, divorce or separation, loss of employment, natural disaster or illness.
Financial hardship provisions need to be requested and then provided to the ATO before the person can start saving money in super under the FHSS scheme.
Furthermore, once you have purchased a property or vacant land in Australia under the FHSS scheme, you need to occupy it for at least 6 out of the first 12 months of ownership.
The benefits of the FHSS scheme
There are numerous benefits to saving money under the FHSS scheme to buy your first home.
1) Another way to save money
The FHSS scheme is another way to save money towards your first home, in a place that is harder to access. You could save money in a bank account to buy your first home. However, if you structure your bank accounts incorrectly, you could find yourself raiding your bank account regularly to spend frivolously on useless things.
By saving money in super towards your first home, you cannot access money to spend frivolously as super is normally inaccessible until you reach old age. You can only get your money from super once you receive an FHSS determination and send an FHSS release request. This allows you to build up your savings in super that is dedicated to your first home.
2) Earn more money
You could potentially earn more money via super to buy your first home compared to a bank account, even if the super fund loses money during an economic downturn. When you withdraw money from super under an FHSS release request, you don’t take the associated earnings or losses from your super contributions. Instead, you receive interest based on the SIC rate on your contributions, set at 3% more than the base interest rate when the contribution was made. That means low returns or losses from your super fund during an economic downturn do not transfer over to your voluntary contributions. Hence, you do not lose any money under the FHSS scheme.
Furthermore, under conditions of high interest rates (graph below), you can earn more money due to the increased SIC rates (orange line) compared to a savings account. This rate can sometimes outpace inflation (grey line), meaning that your money grows faster than price increases, preserving your wealth. In comparison, storing money in a savings account could result in you losing money as the money you earn in interest (blue line) is eroded by price increases (grey line).
Comparing interest and SIC (short interest charge) rates against inflation from November 2019 to November 2023
Hence, the FHSS scheme is a safe place to grow your money to buy your first home.
3) Tax effective
The FHSS scheme is tax effective, where you pay less tax. Have a look at a sample calculation where you save $10,000 under a savings account or super towards your first home.
Scenario 1: In a savings account
Scenario 2: In super
You save $10,000 in a savings account which grows at 5% p.a.
After one year, you earn $500 in interest, resulting in a total of $10,500.
You are charged tax at 34.5% (32.5% marginal plus a 2% Medicare levy) to both your $10,000 deposit and $500 interest.
Hence, you pay $3622.50 in tax, leaving you with $6,877.50.
You save $10,000 in super and claim a tax deduction, making it a concessional contribution.
This attracts a concessional tax rate of 15%, so you keep $8,500.
After one year, you apply for an FHSS determination which allows you to withdraw $8,500 plus associated earnings of 7% p.a ($595). This results in a FHSS maximum release amount of $9,095.
You request a release of the FHSS maximum release amount. This attracts a tax rate of 4.5% of the release amount (32.5% marginal plus 2% Medicare levy, less a 30% tax offset).
You pay $409.28 in tax ($1909.28 total in tax), leaving you with $8,685.72.
A table showing two scenarios of storing $10,000 in a savings account or super to buy your first home
As you can see, you can earn around $1,800 more if you save $10,000 in super and release it under the FHSS scheme, compared to putting it under a savings account. This is because tax rates are lower in super, not only while inside super but also when releasing it. In comparison, marginal tax rates are high and are charged to both money saved in a savings account and any interest earned. Also, you can earn more money under super under the FHSS scheme compared to a savings account due to the higher SIC rates charged under the FHSS scheme.
Overall, you can save more money from earning money under the FHSS scheme while paying less tax.
4) Fewer conditions
There are fewer conditions to using the FHSS scheme compared to other first home buyer schemes. The FHSS scheme just requires you to have never owned or bought any property and to live in your first home for at least 6 out of the first 12 months of ownership. Furthermore, you can buy any new or existing property anywhere in Australia, whether it is a house, townhouse or apartment. In contrast, many first home buyer schemes have restrictions on the places or properties you can live in, and stricter conditions as to how long you need to live in the property or how to maintain it. Hence, as long as you do not have any property, the FHSS scheme is an easy scheme to apply for.
My personal experiences of using the First Home Super Saver scheme
I am using the FHSS scheme alongside my bank account to save money towards my first home. That is because I can only save up to $50,000 via the FHSS scheme, but an unlimited amount of money under a bank account.
Having saved money in my bank account towards my first home, I first saved money using the FHSS scheme in the second half of FY2021-22. I initially contributed $15,000 from my bank account as a personal super contribution which I then claimed as a tax deduction. This allowed me to reduce the amount of tax I needed to pay, resulting in a huge tax refund.
From the beginning of FY2022-23, I salary sacrificed a set amount of money into super to save towards my first home. At the same time, I was still setting aside a portion of my salary plus excess savings towards my first home in my bank account.
By the time I start looking for my first home, I will have saved around $40k under the FHSS scheme and $90k in my bank account. That will give me enough money to put down a deposit to buy my first home, cover any associated costs from buying and moving into my first home and provide a buffer to start paying off my mortgage.
Conclusion
You might not have much money saved towards your first home. However, if you start saving money in your super via the FHSS scheme, you can grow your savings in a relatively safe place that is harder to access. If you combine the FHSS scheme with money placed in a bank account, you can slowly but steadily grow your money, to the point where you have enough money to be financially secure and start searching for your first home.
The FHSS scheme is something that not many people know about. However, it is a hidden gem that harnesses the low-tax environment of super to save money. Hence, you should definitely consider it if you are looking to buy your first home in a few years’ time.
Anything that is posted on The Active Evaluator blog is for general informational purposes only. You should not interpret this information as formal financial advice. If you would like advice tailored to your personal situation, please seek an accredited professional. I am not responsible for any subsequent actions you take by reading my blog as well as any expenses, costs, losses, damages and injuries you or another person may incur in the process.
From time to time, I may publish blog posts giving a brief update of where I am up to on my home buyer journey. These posts aim to shed a personal light on what it is like to buy a first home in Australia which will supplement the information posts that describe how to save and buy a first home. In this blog post, I will talk about the numerous things I did during the Christmas/New Year holiday to prepare for buying my first home.
The First Home Buyer Guide
Over the second half of December 2023, I watched all the videos of the First Home Buyer Guide by Home Buyer Academy to get an overview of the process of buying my first home in Australia. I first heard about the course while listening to a Digital Finance Analytics video on buying a first home under rising interest rates. Since then, I had wanted to do the First Home Buyer Guide to learn more about the process of buying my first home. To prepare myself, I listened to a few First Home Buyer Guide podcasts and did two free coursesfrom Home Buyer Academy to get a feel of what the platform is like. Liking what I heard from the podcasts and the two free courses, I purchased the First Home Buyer Guide for AU$990.
Doing the course was worth it as it taught me an orderly process of buying the right property at the right price. The central idea of the First Home Buyer Guide is that there is a sequential process of purchasing the right property that suits my long-term needs without overpaying for it. This process is encapsulated by the PACE system which consists of ten steps over four phases:
Preparation: It consists of assembling a support crew that would support me on my home buyer journey, knowing my borrowing capacity with the money that I saved and thinking about what I would like in my first home.
Action: This consists of the property search and inspection, and using the information to revise my expectations of my first home.
Commitment: Once I have found the property that I would like to buy, I would need to do some due diligence to see whether the property is right for me and if there are any faults or dealbreakers.
Execution: Once the property is okay for me to buy, I would need to read and/or sign a contract, either negotiate a fair price or go to auction and undergo the settlement process once the property is purchased.
The PACE system as taught in the First Home Buyer Guide
The steps in the first two stages were very clear, highlighting the importance of research and self-reflection to understand the property market and what I need to consider when inspecting property. The course provided a lot of templates to keep track of who I have recruited in my support crew and to record whether I would buy recently sold properties so that I can calibrate my expectations of what I can buy.
What I learned from the course is that I don’t have to enter the property market right away by buying a cheap property that does not meet my long-term needs and does not have much market demand. Instead, if I have sufficient borrowing capacity and patience, I can stretch myself and buy a first home that might be expensive but would suit my needs in the long run and would be easier to sell as it would attract plenty of potential buyers.
On the other hand, the steps in the last two phases were a bit messy as I was confused of what I can do before and after I sign a contract depending on whether it is a private sale or an auction. This is something where I would need to do further research and ask more questions and guidance from my support crew. Nevertheless, the steps in the last two phases gave me an overview of how to use my research to negotiate effectively and what happens after I purchase the property so that I know when I can move into my first home.
I also received a lot of freebies in purchasing the course, namely a book on buying property at auction, a question board to ask questions to the course facilitators and a 30-day free trial of live Q&A sessions where I can receive guidance live. The 30-day free trial is something that I will activate later on once I have identified a few properties that I am thinking of buying, but I will make use of the book and the question board now while I start searching for property.
Overall, the course has been worthwhile in understanding what is involved when buying property. The steps taught in the course are not only useful for buying my first home, but also set the foundations for researching and buying investment property later on in my life.
What else did I do?
Going off the First Home Buyer Guide, I am starting to bring together my support crew that will support me in my home buying journey. I did some research on mortgage brokers, property solicitors, conveyancers and property inspectors that I could recruit as part of my support crew. At the moment, I am making appointments with two mortgage brokers to learn more about my borrowing capacity and ways to expand it. These mortgage brokers would not only search for the right home loan for me, but would also structure it in a way that gives me flexibility of buying investment property in the future. Knowing my borrowing capacity would allow me to decide whether to start looking at property or not.
In preparation for my meeting with mortgage brokers, I calculated how much money I earned and spent in 2023. I found that I had enough money to cover the weekly essentials and fun stuff, allowing me to save a huge proportion of money towards my first home. At the same time, I found that I could save even more money to increase my deposit and to cover the costs of buying my first home such as inspections and conveyancing fees.
As a result of inspecting my spending and saving habits, I have slightly modified my cash flows between my bank accounts so that I can save some money towards my first home while giving myself some money to spend on fun things and go on a domestic and Japan holiday over the next two years without feeling guilty. I will have plenty of excess savings, of which I will allocate a high proportion towards my first home, accelerating my savings.
Finally, even though I have not started looking at property, I am starting to walk around different suburbs in Melbourne. I am doing these tours to see what they are like, particularly how easy it is to walk to shops and the train station, and whether I would live in them. Over the past two weekends, I have done a tour of two adjacent suburbs within eastern Melbourne, looking at what homes, shops and public transport are like in these suburbs. I will do more suburb tours around Melbourne over the next few months to expose myself to different areas where I might live. This suburb research would put me in good stead in knowing what property I could buy when I start looking at property.
What’s next?
As for what’s next, I am still planning blog posts on ways to save money towards a first home deposit. Currently, I am planning to write a blog post on the First Home Super Saver (FHSS) Scheme, an initiative where one can save money towards a first home deposit via super. I have been using that scheme for the past 1.5 years, so I have some knowledge of how the scheme works and my experiences of using that scheme. I haven’t started writing it up yet, but I intend to recollect information on the FHSS and start planning that blog post so that I can write it up soon.
Saving enough money to buy your first home can be a daunting task. This is made more difficult by the many temptations that entice people to spend money such as holidays, clothes and home appliances. This spending could be covered by credit cards or personal loans. However, these only depress savings towards a first home and reinforce unsustainable spending, putting people in a lot of debt that can be hard to get out. As someone who saves as much money as possible while cutting down on unnecessary spending, I find it easy to save money towards a first home deposit. However, I used to feel uncomfortable spending on guilty pleasures that would make me happy for fear that I have wasted my money. It was not until two years ago that I learnt and implemented a system that balances saving and spending. Now, while I am still saving towards a first home, I feel less anxious spending on things and experiences that make me happy.
In this blog post, I would like to describe the system that I use to balance saving and spending, allowing me to save towards a first home while spending on present things and experiences that make me happy without feeling guilty.
The basics of the Fast and Slow System
The modern world compels us to spend money as quickly as possible
I first heard about the Fast and Slow System during a seminar that Max Phelps delivered. In the seminar, he described how to set up your bank accounts and optimise your cash flows between accounts so that you can save money towards your first home while spending money on holidays, unforgettable experiences and guilty pleasures that make you happy without feeling uncomfortable or anxious. You can learn more about the system and how he developed it in his book Spending Fast and Slow, a book that I highly recommend. In this blog post, I’ll just give an outline of the Fast and Slow System and how I have adapted the system to my needs.
A basic schematic of the Fast and Slow System. You can find more details about the system and how cash flows between bank accounts (represented by circles) in the blog below.
The Fast and Slow System is attuned to the fact that our cognitive biases and elements of the modern world such as electronic banking encourage us to spend money as quickly as possible. This system is designed to slow down our spending by introducing friction in how money flows between bank accounts. Friction is introduced by setting up bank accounts over two banks: bank A which is for achieving savings goals and paying the bills and bank B which is for everyday spending and guilty pleasures. By separating our bank accounts over two banks, we can identify that money in bank B is okay to spend, but money in bank A needs to be saved up to cover our bills and savings goals. Having bank accounts over two banks also allows us to reduce the amount of money that is readily available to us. This is done by:
Making it as difficult as possible to readily access money from bank A. This can be done by leaving the bank A card at home, unlinking the card from our phones and watches and deleting the bank A app.
Making it relatively easier to access money from bank B by carrying around a physical card, linking the card to our phones and watches and having the bank B app in our phone.
Setting up an automatic transfer from bank A to B so that a set amount of money is paid weekly from bank A to B to cover everyday expenses.
Having less money available in bank B induces us to spend less. This allows us to save more money towards a first home deposit while having enough money to cover everyday expenses, guilty pleasures and holidays without feeling guilty about it.
How cash flows in the Fast and Slow System
The Fast and Slow System consists of at least five bank accounts over two banks. Bank A has three bank accounts:
Bills: the account where bills get paid. This is also the bank account where our income initially lands and gets distributed to other bank accounts.
Future: the account where we are saving money towards our long-term goals such as a first home deposit.
Holidays: the account where we are saving money to go on holidays, without resorting to a credit card or a personal loan.
Bank B has two bank accounts:
Everyday: the account being used to cover everyday expenses such as groceries, meals out and drinks.
Fun: the account being used to cover gifts, special occasions and guilty pleasures.
In terms of how cash flows under the system, within bank A, income initially lands on the bills account. Any bills get paid in that account while money gets allocated to other accounts. We set aside a portion of our income towards our savings goals. To save towards a home deposit, we typically save at least 20% of our income. However, if we are living with our parents where there are no additional living expenses, we can save 50% of our income. We also transfer some of our income to the holidays account to save towards local and overseas holidays.
In contrast, we only transfer enough money from bank A to B to cover our everyday and discretionary spending. A set amount of money should be transferred to the everyday account weekly to cover our weekly expenses such as groceries, meals out and drinks. Conversely, money should be transferred to the fun account monthly so that we can either have fun or save towards big events such as birthdays, anniversaries and Christmas.
This system allows us to save money to achieve our future savings goals, while setting aside an amount of money to comfortably cover our everyday and discretionary spending. Under the system, we can take a proactive approach to how we save and spend money, balancing fun with financial stability. This is in contrast to reacting mindlessly to insufficient savings or unsustainable spending which force us to quickly cut back, depriving us of some happiness.
How have I adapted the Fast and Slow System to my needs?
Before hearing about the Fast and Slow System, I previously had one everyday and two savings accounts in one bank. All my pay would go into the everyday account, where I would set aside some money to spend over the fortnight, transfer a set amount of money to the holiday account and whatever was left to the first home deposit. Although I was saving a lot of money towards my first home, I did not have an account to cover my discretionary spending on guilty pleasures. This made me feel anxious about spending money that was designated for everyday spending. Hence, I did not spend much money on experiences and things that I would have enjoyed for fear of feeling guilty about it.
However, after learning about the Fast and Slow System, I set up two bank accounts in another bank and used that bank to do my everyday and fun spending. I kept the existing bank accounts to pay my bills and save money towards my long-term goals. After moving to different banks and some tweaking, I have found an optimal structure based on the Fast and Slow system that works for me. You can see the banking structure that I use below.
My version of the Fast and Slow System
All my income still lands in the bills account, where I pay my bills and transfer money to other accounts. I keep at least $1,000 in the bills account to pay my bills and to cover any unexpected expenses. Within bank A, I set aside:
33% of my income to the home account to save towards my first home.
10% of my income to the holiday account to go on holidays every year.
10% of my income to the investment account, where I invest in index funds to build my wealth.
I transfer a set amount of money weekly into the everyday account in bank B to cover my weekly expenses such as public transport, groceries and medicines. For the fun account, I pay a set amount of money fortnightly to see my money grow in that account. I use money from the fun account to purchase things and guilty pleasures that I desire such as video games, clothes and anime merchandise.
However, I am still a saver at heart; I don’t spend all the money that is available in bank B. Instead, any money that exceeds the maximum amounts in the everyday and fun accounts gets funnelled into a third bank account labelled overflow. I can use money in the overflow account to make big or expensive purchases such as furniture, home appliances and gaming machines. For example, I recently bought a gaming PC using money that I saved in the overflow account. This not only gave me the satisfaction of using my own money to buy something that I desired, but it also gave me a chance to wait for other gaming PCs to release so that I could compare them before purchasing the best gaming PC for me during the Black Friday sales.
With the system in place, I am still saving towards a first home deposit while having enough money to cover my daily and discretionary spending. This has reduced my anxiety and has allowed me to buy things and experiences that would make me happy without feeling guilty about it.
Conclusion
Using the Fast and Slow system, I am able to cover my living expenses and spend on things and experiences without feeling guilty. At the same time, I am able to save a lot of money towards a first home while going on holidays and starting some investments. Depending on your goals, you can adapt the Fast and Slow System to suit your needs. It just depends on what you want to achieve in your life, saving enough money in your savings accounts and setting a specific amount of money to sustain reasonable weekly and discretionary spending.
I am also saving money for a first home deposit through superannuation. Learn more about it in the next blog post in the series.
Anything that is posted on The Active Evaluator blog is for general informational purposes only. You should not interpret this information as formal financial advice. If you would like advice tailored to your personal situation, please seek an accredited professional. I am not responsible for any subsequent actions you take by reading my blog as well as any expenses, costs, losses, damages and injuries you or another person may incur in the process.
As of writing this blog post, I am living with my parents in South-East Melbourne. However, for many years I have aspired to move out of my parents’ home and live by myself by buying a first home. This is an important step in my life, where I can live independently without being burdened by family expectations. I will be able to live in a place where I can go wherever I want, whenever I want, and form long-term connections with the community. Having my own place to live also means I can arrange my things however I want, and possibly have a pet. I appreciate there will be some challenges in finding my first home given the housing and rental crisis in Australia. However, I not only have the determination to move to my own home, but I am also willing to learn more on what to consider when buying a first home. That way, I will be an informed first home buyer, able to purchase a first home that I can live in for at least 10 years.
I am starting “My First Home Buyer Journey” blog series to record in real-time my personal experience of buying my first home. I will provide an account of what it is like to buy a first home, from saving enough money for a deposit to moving into my first home. I will share some tips when finding a first home, as well as mistakes I have made along the way and what I would have done differently. I will also upload some research posts describing the housing and rental crisis in Australia, as a way to provide some background behind my personal journey.
Of course, I am not a property expert by any means, and what may have or will work for me may not work out for you. I would also strongly advise you to seek professional advice if you want to buy your first home. However, I hope that this blog series will give you a personal insight of what it is like to buy a first home in Australia despite the challenging circumstances. Reading my blog posts will hopefully help you identify some things to consider when buying your first home, as well as what to avoid.
