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Owning a home has traditionally been the Australian dream and through chasing this dream, Aussies have some of the biggest houses in the world with the biggest mortgages to match. But at what cost?
Does owning a huge house, and subsequently a huge debt, really make us happy? The truth is not all of us are going to get the same big block and picket fence as our parents had when we were growing up — and that’s okay.
Whether you own your home with a mortgage, or are just aspiring to get on the property ladder, you’re probably making some easy-to-fix mistakes that can help you in the long run.
Most (93%) Australians admit to wasting money on non-essential belongings and almost half (47%) feel stressed because of the amount of unnecessary items they have.
The question you need to ask yourself is, could you own less but have a happier life? It’s quite telling that just over a fifth (22%) want to move to a bigger home to have more space for all of the stuff they own, with a high likelihood of that pushing them into more and more debt as they upsize.
We hear all the time in the media, or from friends, that home ownership is impossible these days. But, they’re wrong. Buying a house in today’s climate is possible if you’re willing to make the commitment.
For many people, buying a house is the biggest financial decision they will ever make and often it is saving the deposit that is the hardest part. However, with careful planning, it is achievable.
When you think about it, there are a lot of implications we face when chasing the ‘Australian dream’. Namely, the huge amount of debt that we take on by mistaking our wants with what we really need.
By taking time to contemplate the distinction between our ‘wants’ and our ‘needs’, we could live happier and financially healthier lives. Do you really need the pool, extra bedroom, 60” TV, pool table and sports car out front — or is it just a want?
A quarter of Australians (23%) have gotten themselves into debt by buying something they knew they didn’t need, which could be working against them if they are saving for a home or paying off a mortgage. In UBank’s ‘All I Need’ documentary, a conversation around spending choices and lifestyle needs and wants has begun and is continuously evolving.
We can all visualise what we want, but can we stop and think about what we really truly need? And, when we visualise that need, what does it look like? How does that home look? This is a good starting point for people to live a great life within their means with the things they truly need.
Top 3 tips for avoiding unnecessary debt:
1. Ask yourself, what do I really need in my life? Rather than what you want in your life. There is nothing wrong with having nice things, a fast car, going on holidays or having a nice home. Problems arise when we overstretch for the things we want but don’t really need.
2. Start a budget and stick to it. Keep track of where your money is going and forecast for future payments that tend to hit hard, such as car registration or insurance and put a little money aside so when the time comes you can reduce your financial stress.
3. Continue to look at and work on your mortgage just as you would your health – by carrying out regular check-ups. Our research showed that 84% of Australians don’t know their home loan rate. Given that most home loans have a term of at least 25 years, if you don’t keep a close eye on your finances, particularly the rate, it can mean paying thousands of dollars more for a home loan.
“I live in a shared apartment in Paddington with one other flatmate. Until recently, I haven’t really put much thought into saving my money, but I am now looking at my needs versus wants and it has been a learning curve for me.
My long-term goal is to buy a house and go overseas. Now that I’m conscious of my spending, I realise ‘wants’, like a personal trainer and getting my hair done, are slowing down the time it will take to reach my savings target. I am going to have to make some lifestyle changes, but that’s okay. I believe I can live with less and be just as happy.”
We live in a world of desire. It starts when we’re young. We want the new toy. The new video game. The new movie. Then we get older and we still want all those things and a boatload of new things: a job we love, a wardrobe, a house, a family. We have grown and our desires have grown with us.
But has the endless pursuit of wish fulfilment left us feeling … well … kind of unfulfilled? Doesn’t it seem like we spend an awful lot of time focused on our immediate wants as opposed to our long-term needs? Speaking for myself, I know that by chasing my desires I often end up ignoring the things right in front of my face that might very well actually fulfil me. Things like love, companionship, memory-building, conversation and security.
I recently watched the documentary “All I Need”, which is about the pursuit of happiness in the modern world. The documentary featured two groups of people living at different ends of the “desire” spectrum. At one end was a family of five. The parents worked tirelessly to afford and sustain their dream house, but then owning such a big home created literal and emotional distance between the family members. At the other end were two young single women so infatuated with going out and buying things that their lives were overflowing with clutter and surprisingly hard to manage; their goal of owning any home at all seemed forever out of reach.
In light of these modern dilemmas, the documentary posits the question: what the heck happened to the dream? Or better yet, why wasn’t the dream enough? Why did the two-bedroom house become the five-bedroom house? Why did having a nice wardrobe become piles and piles of clothes with no sentimental value? When did the pursuit of happiness because more about the “pursuit” than it did the “happiness”?
Perhaps the answer boils down to mere human nature, where the compulsion to spend or simply “do better” can end up overshadowing the joy we’re supposed to receive from the actual things we buy. It reminds me of my short-lived obsession with tiny video recorders. When mini-recorders came out, I was the first in line to buy one. Finally! I thought. Finally I can record myself snowboarding, or bungee-jumping. I can strap the camera around my dog’s collar to see what things are like from his perspective. It’s everything I’ve always wanted!
So I bought my little camera and I took it snowboarding. And I took it bungee-jumping. And I strapped it to my dog’s collar for a day. And then about a week later I put the thing on a shelf and forgot about it. One day I looked at the gadget and asked myself: why had I been so desperate to own this thing? And why didn’t it make me feel the way I thought it would? It was as if my desire to obtain this new toy was so strong that the joy I received purchasing it overpowered the joy of actually owning it!
All over the world people are experiencing the same thing. In order to keep pace, or satisfy an urge, the desire to consume becomes more valuable than the actual thing being consumed. Falling by the wayside are events that provide a more satisfying level of happiness through human bonding or genuine personal achievement. We’ve exchanged healthy, enduring happiness for empty, fleeting happiness.
It’s not the things we buy, it’s how we buy them. For instance, there’s nothing wrong with paying a mortgage and wanting to own a house – that’s a completely normal human endeavour. But what quickly happens is that the “do better” clause overpowers the “necessity” clause, and suddenly a roof over our head and a bed to sleep in at night isn’t enough. After all, what about that pool we always wanted? What about the game room? Oh, and this one comes with a sauna, you say? Well, we just realized we want one of those too! So we buy the McMansion and suddenly we never see our kids anymore. The desire to “do better” has left us with a purchase that contradicts our emotional needs as a human being.
It’s not our fault. Consumerism and capitalism are two entities that thrive on manipulating people into spending money. The underlying message of almost any advertisement is that we can do better. These are subliminal impressions that start creeping into our brains before we’ve even learned to speak, constantly telling us: “More. More. More. More.”
So no, material things are not in and of themselves evil, but the methods employed by businesses to get us to buy those things can be evil. And while the choices we make to accommodate our desires might not be downright evil, they’re almost certainly selfish being they so frequently come at the expense of genuine companionship.
Think about the memories that truly stand out in life. A first kiss. A road trip with your buddies. Weddings. Island holidays. These are the moments that we cling to, the moments that make us happy whenever we think about them. They represent the fulfilment of desire on the level of human need, not mere want.
Memories last longer than iPhones. Simple things like catching up with an old friend over coffee, or watching a football game while drinking cheap beer, or going for a hike with your girlfriend can enrich life in ways you never imagined. Treat yourself to a lasting memory and not a fleeting rush. Watch how much value you can end up placing on something that cost far less than you expected.
You know the great Australian dream; big house, a yard for the kids to play in, and everything you could ever want to fill it.
In 2013 we moved from Sydney to the Northern Rivers, and we bought our first home. We applied for a loan, and it felt like the most stressful thing ever, and we made the decision to only take up around half of the funds we were approved for. We didn’t want a mansion, but most of all we didn’t want to buy a house that we’d resent and make us stressed for the rest of our lives.
The great Australian Dream of the house with the yard started off simple, but now the goal post seems to be constantly moving. The dream keeps getting bigger, and the house keeps getting larger, and so does the stress that comes with that. A documentary recently aired on Channel 7 about the Aussie Dream, and our wants and needs. I rarely tell people what to do (except my kids and husband) but I’m going to tell you what to do here. This is some of the best 40 minutes I’ve spent in my life. I scribbled down a million notes and tips, but also I left the end of it feeling really satisfied with what I have. WATCH THIS VIDEO (there’s a good chance it will change your life).
One of the biggest learning curves for me around wants and needs happened in my early twenties. I was working as a nanny and I worked for people who lived the grandest lives. They had huge houses, filled with more bedrooms than they could sleep in, and more bathrooms than they could count. They could buy whatever they wanted, whenever they wanted. They had the fanciest of cars and the best holidays. To me, a girl from a country-ish town, from a middle-income family, this always seemed like the dream to me.
Except those people I worked for, they didn’t seem very happy. They worked long hours, they saw very little of their children, their houses were so big they really didn’t see much of each other and from where I was standing they seemed miserable. It wasn’t quite living the dream.
A whopping 90% of Australians are stressed so there’s a good chance you’re feeling a little under the pump too. So, UBank are asking… “Is it perhaps time to reset the Aussie Dream?” Should we be aiming for smaller, and wanting for less? Is it time that we worked out what we need versus what we want?
In the documentary, the topic of wants and needs is a constant one, but a moment I loved most was when one of the kids shares a project he did. On one page he had the word WANTS and the other had NEEDS. He’d drawn and collected pictures and pasted them on whatever page that they belonged. When his parents asked what his needs were, it was simple, “love!”. That seems like a pretty cool exercise to do with our own kids so they can start learning about it early on.
I learned so many gems from the documentary and I’m sure I’ll find more when I watch it again.
But most of all, the thing that made me get teary, was this: We’ve got so caught up in this dream. In the working, getting stuff done, trying to pay bills, and just trying to tread water … we’ve forgotten about making memories. What if we turned off the TV and played a board game, or what if we spent a whole day together making memories? Those moments shouldn’t be put off for next school holidays, or one day when we’re less stressed, that stuff needs to be happening now.
So, don’t wait to make your memories. Make them today.
Sonia and Lucy take a look at what they’re spending their money on each month, and the results are a little shocking.
The Winn family seem to have it all, but have they got their priorities straight?
Check out Brad’s award-winning, 27 square meter apartment that contains everything he needs.
Expert declutterer Jo Carmichael teaches the world famous Konmarie technique to the very messy Sonia.