How I, as a financial advisor, am budgeting to buy my first home.

I might be laughing now, but that’s because I haven’t seen how much a mortgage will cost me yet…

This year has been a wild one.
The world has been thrust into turmoil, everything is uncertain and my partner and I decided it was time to buy our first home.

Why not add another challenge to 2020 you know?

Of course long-time listeners of the podcast will know shares are primarily where I choose to invest for a suite of reasons I won’t go into here – but for my partner, buying a home has forever been one of his life goals and that meant it became important to me too, so we decided it was time to start planning 

Unfortunately, buying a home isn’t something you can just do overnight.

It’s been a long process of planning and budgeting to make this quintessential Aussie dream a reality, but it has been crucial for us.

I know lots of our SOTM-ers are in similar spots to me right now and are getting their finances in order to take this big step, so I thought it would be a clever idea to share with my queens what I’ve been doing to hustle our finances into a space where we can afford this new venture.

But enough preamble, here is how we’ve done it:

Set your goals, write them down and make them happen

What makes goals easier to achieve is writing them down so they’re not just a fleeting thought, but something you can refer to time and time again to help you stay on track. ‘Home deposit’ has been on our list of goals this year and daggy as it sounds, it’s stuck to our fridge on a sheet of A4 where I see it every day and it genuinely holds me to account. You can also break it down by figuring out how much you need to put away each week or month towards your house deposit, and tick it off as you go (we have lots of SOTM templates for this kind of thing, so have a search in our Facebook group if you need).

Keep the conversation open with your partner – you’re in this together

This has been so important for my relationship as home ownership is something we are going into as a team and the sacrifices we’ve each made have needed to be evenly weighted. We constantly check in with one another, hold each other accountable and remind one another of our end goal - we know a little bit of discipline now will be worth it in the end! Of course not everyone has a partner and many of us will be embarking on this endeavour alone, so if that’s you, keep on checking in with yourself, keep a diary of this rollercoaster and continue to believe in yourself - you’ve got this. 

Budget smarter and make use of budgeting tools like Pocketbook

Pocketbook has been a lifesaver for me in the past (especially in budgeting for holidays when we were able to travel) and this app has been pivotal in keeping us on top of how our budgeting is tracking. I know many of you are already Pocketbook users, but for those who aren’t, it’s a free budgeting app where you connect all your bank accounts, instantly see your spending insights, get reminders for upcoming bills, set yourself a budget goal. Pocketbook makes it really easy to stick to a budget as it automates these processes for you. The main appeal of Pocketbook for me is the way it helps you track your income and expenses and its ability to identify where you are falling down in your spending. In terms of budgeting, it helped us make a ‘house deposit budget’ where we could keep track of how we were progressing daily, and it helped us stay across how we were going in reaching our goal. It made the whole budgeting process much easier for us and when you’re as busy a lady as I am, it really helps take the stress (and thought) out of making your budget work for you (a great tool for those of you who can’t be bothered with a manual spreadsheet!).

Be realistic

As I always say, setting realistic goals is paramount to being able to successfully nail them. Earning $60k a year with $4k of savings but still pining for that million-dollar home by the end of the year? It’s not going to happen! And that’s okay. We just need to be having honest conversations with ourselves about what is realistic for us and then strive towards that. 

Don’t give up everything – you still need to live in the now

As I’ve mentioned before in relation to the FIRE movement (Financial Independence Retire Early) I don’t believe in pausing your life now for a better one down the line - while some compromises may be necessary along the way, you don’t need to strip all of the things you love from your life in pursuit of achieving home ownership - you’ll be miserable and it’s just not worth the toll it may take on your mental health. For me, I love my oat lattes (surprise surprise), so they’ve remained a daily fixture in my schedule, however instead of cutting that $30 a week I’ve chosen instead to cut back on our UberEats (and wine consumption) and have put that extra money towards the house deposit savings - it’s about compromise, not sacrifice. 

So....

I think all of these steps are achievable for the majority – they’re simple, they’re effective and not that much has to change – it’s just about taking control of your cash flow and owning your budget, as well as making use of available resources like Pocketbook and other tools to keep you on track and accountable.

If I can do it, I know you can too.

Victoria. x