Withalittlehelpfrommumanddad
T
he average age of a first-home
buyerisnowinthemid-30s,
according to Dominique Bergel-Grant,
adirectorandfinancialplannerat
Leapfrog Financial. She says many
ofherclientsaregivingtheirchildren
financial assistance either in the
form of cash or a loan or by putting
up their own property as security.
“The first thing parents need
toaskis,‘Ifwegiveourchildren
$50,000 or $100,000 to help
thembuyaproperty,arewe
still going to be able to live com-
fortably in retirement?’ If the
answer is ‘yes’, then certainly,it’s a very generous thing to do.
If the answer is ‘no’, giving cash
shouldn’t be on the table.
“The other option you’ve got
asaparent,ifyouhaveaninvest-
ment property or home you’ve
paid off, is putting that property
up as additional security. You
don’t actually put up any cash.
But you’re effectively putting
your investment property or
homeonthelineifyourchild
doesn’tmaketheirrepayments.
“You’d need to make sure
the child is responsible and
has the capacity to make therepayments. But also make sure
they’ve got income protection
so if they become ill they have
the ability to continue making
repayments and you aren’t going
to be forced to sell your property
to cover their mortgage.”
Inarecentreport,NoPlace
Like Home, the economist Saul
Eslake says declining home
ownershipspellstroublefor
those entering retirement in the
next few decades. The super
systemisbasedondebt-free
home ownership at retirement.
“The failure to address theongoing deterioration in housing
affordability will condemn future
generationsofAustraliansto
poorer standards of living in
retirement, and ultimately result
in increased demands for higher
levels of financial assistance
to retirees, leading in turn to
ahigherburdenoftaxation.”
Eslake says our retirement
income system is relatively
“parsimonious by comparison
with other advanced economies”
because it’s assumed that the
majority of retirees will have
very low-cost housing.yourheadandfoodonthetable,thenmakesureanything
youearninaparticularweekabovethatamountisput
intoyoursavingsaccount.Onceyou’vedeterminedwhat
your weekly spending allowance is withdraw cash from
theATM.Don’tusepayWave.
“Someweekswhereyoudon’thavethatlevelofincome,
youhavearesourcetofallbackonandnothavetouse
a credit card. And be really strict about putting pay
increases into your savings account.”
Bergel-Grantsaysconsiderlivingathome
longer. “The old cliché, ‘rent money is dead
money’, is true. It’s stopping you from moving
forward financially.”
Or if you must rent, then share with friends to
make it more affordable and help you save for that
home deposit.RENTING
Finder.com.au’s Bessie Hassan says that when applying
torentaplaceyouneedtobeorganised.“Youwillbe
assessed on your financial means to pay the upfront
payments–thebondandadvancerent–andpaythe
rent on time.” She says a well-written letter with your
application could give you an advantage.
“Youcoulddetailhowyouareabletoaffordtopaythe
rent and maintain the property. Offer to pay a month’s