Is the Australian dream really making us happy?

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.