Ask yourself – Do you need it??

Ask yourself – Do you need it??

Why do people purchase properties at their limit and often beyond their means? These properties often come with more bedrooms and bathrooms than they really need. Before you put yourself and your family under extreme financial stress take a step back and evaluate the big picture to determine what’s really important.

If you fall into the materialistic trap or as the old saying goes "trying to keep up with the Jones's" it can be very hard to dig yourself out of the financial hole that’s created. Sure it’s manageable for the first few years but after a while you may start to find yourself struggling to meet the bill payments on a regular basis adding extra and unnecessary pressure to your family and relationships.

Before you get your heart set on buying in a particular area or size of property I believe it’s best to develop a good understanding of what your family’s needs actually are. How many bedrooms, bathrooms and car spaces do you need? Do you want to be within walking distance of local shops and schools? Do you want to have one parent stay home while the kids are young or are you comfortable sending them to childcare?

It’s essential that you do the numbers before you buy as most people I speak with tell me that they send the kids to childcare because they can't afford not to have the second parent working just to cover the mortgage and car repayments. Work out well in advance what mortgage repayments can you comfortably afford for the long term based on one or two incomes depending on your childcare decision.

Once you have an idea of what you can afford then take a look at what that money will buy you rather than deciding where you want to be and working out how to stretch yourself to buy there. If things go well over the following few years you can always trade up to something bigger and better which is a much smarter way to go than the alternative of being forced to downsize or living under financial stress.

Categories: First Home Buyers