Entries filed under 'Home loans'
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.
“When I was in my late teens I moved out of home and had to learn pretty quickly how to be financially disciplined. I created a budget and have been sticking to it. In the beginning it was really tough but I’ve been able to learn the difference between my wants and needs.
I also meditate and focus on my own personal happiness too. Needs and wants don’t just have to revolve around material possessions. When I hear my friends complain about wanting what they don’t have, I wish they took just a moment to realise how lucky they are to have their health and happiness.
My boyfriend and I are saving for a deposit to buy a house before our next birthday. It’s rewarding to see what financial foundations and positive thinking can do to turn a goal into a reality.”
“I am a proud home owner and UBank customer. I refinanced my home loan to take advantage of the low rate offered here at UBank. It was a no-brainer for me as it means I can pay off my loan faster and get closer to reaching my financial goals, without having to do much at all.
I’m all about making small tweaks to my finances to make my money work for me, including the obvious but less exciting investments like superannuation. I make an effort to spend less and I think I’m just as content as those who have more stuff.
When assessing my wants versus my needs it’s like a little devil and angel appear on each shoulder. But really, it’s amazing just how little you need to make you happy.”
“About six months ago my partner and I decided to buy our first home together. After a few busy weekends filled with open houses, we were able to find the perfect home and now we’re paying off a mortgage.
Our spending habits have definitely changed since becoming homeowners. I’m more cautious before making purchases and budgeting has become very important – but we’re still enjoying our lives! We go out for dinner and drinks with friends, and I even sneak in the occasional shopping trip!”
“I was lucky enough to own my first investment property when I was 19. Today I own several investment properties and I’ve been able to set up myself up financially.
I am happy to work hard while I’m young to secure myself in the future but work-life balance is extremely important to me. I got married this year, and have learnt life is about enjoying the simple things money can’t buy. You really can’t put a price on happiness.”
Australia has the biggest houses in the world, and the biggest mortgages to match, as we chase the Aussie dream. But whose dream is it? And is it making us happy?
We’re working some of the longest hours in the world and giving a huge percentage of our salaries just to meet the repayments. But it doesn’t have to be this way.
All I Need is a thought-provoking social experiment, and one-hour TV show, that follows two different households through a series of challenges designed to explore how we live and what we really need to be happy.
To guide us through the modern minefield, we hear expert opinion from world-renowned Psychologist, Jacqui Manning; Professional Organiser, Jo-Anne Carmichael, who specialises in KonMari the Japanese art of de-cluttering; and Architect, Brad Swartz, whose creative thinking has transformed his tiny studio flat into an award-winning space.
Our first ever documentary 'All I Need’ helps you decide between what you want and what you need. Will a large house filled with unnecessary stuff really make you happy?
Watch the short trailer above. You can view the whole documentary on our Facebook page.
Decluttering can be a liberating experience, but the process can often be challenging.
Jo-Anne Carmichael, a Professional Organiser, shares simple strategies for making the process a more joyful one.
Winner of the 2015 Houses Award, for his extraordinary 27 sq. metre apartment, Architect, Brad Swartz, gives us the grand tour of his tiny but perfectly-formed home.
Brad shares with us the joys of small-space living, redefining what it takes to live comfortably.
Architect, Brad Swartz, invites us into his award-winning small-space apartment.
Ben is a realist. He knows the Australian ideal of what constitutes the perfect home will never completely change.
But this stunning advertisement for small-space living certainly earns him the right to ask some big questions.
Everything we own comes at a cost – and we don’t just mean dollars and cents.
All our possessions come with an emotional as well as a financial price to pay.
Lee Hatton, CEO of UBank, believes we surround ourselves with possessions to make ourselves feel more comfortable and secure; but often they have the opposite effect.
Whilst other banks continue to encourage Australians to borrow more and more, Lee Hatton, CEO of UBank encourages us to borrow less.
There are obvious financial benefits to borrowing less money.
Lee argues that the emotional benefits can be just as important.
We’re challenging Australians to look at their needs versus wants.
We’re challenging Australians to look at their needs versus wants.
Matt, an adviser at UBank, is taking a closer look at what he wants and what he needs. Here, Matt shares his story on saving, renting and Concrete Jungle dreams.
“I learnt the art of living minimally and how to save money when I lived in New York. It’s an intellectual challenge and very rewarding to live with less. I am currently renting and living in Sydney in a share-house and I am torn between saving up a deposit for an inner-city apartment, or follow my other travel dreams”.
Sam, an adviser at UBank, is taking a closer look at what she wants and what she needs. Sam shares her tales of shopping, impulse buys and the challenges of saving.
“Like a lot of people, I have no control when it comes to spending. I buy things I don’t need all the time! Last weekend I went to the shops to buy one dress to wear to an event and walked out with an entire new wardrobe and a $600 hole in my bank account. I really need to examine my spending habits in order to get ahead and save for a home deposit”.
Gabby, a senior adviser at UBank, is taking a closer look at what she wants and what she needs. Here, she shares the challenges of adjusting to owning her first home and having a mortgage.
“I have a big new mortgage on a house I bought with my dad. To help pay the bills, I have a roommate and dad is renovating the house; despite these savings, my mortgage means there’s no more online shopping. Overall, the new house is a downsize for me, having to move from family home, and there’s much less closet space. I also collect jigsaw puzzles and storage is a challenge. In purchasing my first home, I was realistic about what I could afford and what was right for me”.