Do you remember what it was like purchasing your first home?
Clearly, buying a home 20 years ago was a different challenge to today. Our parents had “massive” loans as low as $80,000, but then again they also had to pay 17% interest rates; as “Millennials”, we are facing loans of $650,000 and upwards, albeit with 5% interest rates. Our deposits are as high as their entire loan balances!
We all know inflation plays a part, and land shortages, combined with an influx of foreign buyers, are inflating the market prices. It’s easy to make excuses, but our generation is lucky in other ways. Rather than blaming someone or something that could inflate the market, we must get on the front foot for our future and the future of our children.
Personally, as a first generation Australian, I wasn’t taught money skills; how to save smart, the time value of money, or opportunity cost. I learnt the lessons the hard way, and I wish I understood when I was younger that what I can save today isn’t as important as what I could have saved 3 years ago. That might sound odd, but like all things financial, savings are cumulative and compound over time. You might earn more in the future, but you will spend more as well. Waiting until you have a well-paying job and a supportive partner doesn’t cut it – by that point it is too late!
There’s a growing movement amongst younger people of the next generation to ‘live while you’re young’, or more alarmingly ‘work when you’re 40’. Like all things, the right answer is in between, neither in taking your 20s off nor working yourself to the bone. Living includes working, and working can be as rewarding as travel if you do it the right way. Silently stashing a portion of your income for the future throughout your early 20s is the right way to tread this line; enjoy yourself, but keep it in balance.
Chatting with one of our financial advisers could help you find your footing. Give us a call today!