It used to be an Aussie right of passage – work hard, save for a house deposit and buy a home of your own.
But with house prices through the roof, continual interest rate rises and a cost-of-living crisis, home ownership now feels like a pipe dream for many.
In the latest episode of the 52Q Podcast with Steff and Micah, they ask the question, ‘Where do I begin to save for a house deposit when it feels like I’ll never get there?’
Joining them to help answer this question is Christian Financial Planner, Alex Cook. Alex Cook is the CEO & Founder of Wealth with Purpose, an organisation that equips Christians to honour God with their finances, by teaching them sound financial planning skills based on the wisdom of the Bible. Alex has been helping individuals and families manage their finances for over 20 years and he’s passionate about helping people take control of their finances and future to live generously so they can fulfil the purposes for which God has called them.
“I want to begin by acknowledging how people do feel” Alex said.
“Australia is a country where house prices have gone up massively over the last 30 years. To give people an idea, you used to buy a house on three times income, now it costs six times income.
“That’s why I think there’s this sort of feeling of concern and in some cases is despair at will I ever own. So, I think it’s a very important topic because owning your own home is a good thing in the long run.
Before diving headfirst into saving, Alex recommends doing some research on the ins and outs of buying a home including the costs associated with having a mortgage and exploring government schemes that might be available for first-time homebuyers. This might include talking to a mortgage broker and doing some research on how much you’ll need for your initial deposit.
Once you have a grip on the financial requirements, Alex recommends setting your savings goal and then automating your savings.
“Set a goal as to how much you need for the deposit, including additional costs like stamp duty and conveyancing. Then work out how much you can realistically save each year to achieve that goal.”
“Automate your savings. Make it so that the day after you get paid, an automated direct debit takes money straight out of your account and into your online savings account. Automating the process forces you to save without having to think about it.” Alex Cook, Financial Planner and CEO of Wealth with Purpose
Alex recommends saving at least 10% of your income, or more if possible, depending on your circumstances.
While owning a home is an important goal, Alex also talked about aligning your savings and financial goals with your values and purpose.
“It’s not just about buying a house; it’s an opportunity to invest in your long-term goals and make an impact. Find that balance between providing for your needs and living generously.”
For more resources and advice on how to take control of your finances, visit the Wealth with Purpose website.
Listen to the full episode by checking out the 52Q podcast below.