Saving

[Windy At Moorabbin]

I also have two accounts. When my pay comes in fortnightly I put a certain amount into my savings account and leave the rest for 'general living'.

To increase my savings I also have a money tin. Any coin I receive in change goes straight into this tin. So generally speaking when I look back on a weeks 'general expenses' I'm seeing this coin as a expense but I still actually have it. I normally put approx $5 a day into the tin but sometimes it can be $20-$30 after a saturday night out because I purposely use notes at every opportunity to increase the savings within my tin.
My current tin I've had since the start of Oct12 and I would estimate I have around $300 in it. I find it to be a good way of saving money you would otherwise spend on useless stuff.

 

[bunsen burner]

Best advice I recieved lately regarding spending (Which is saving) is that it's far better to spend on experiences than items, experiences remain with you a lifetime and often become better as you get older. Items give you a instant thrill that quickly becomes the norm and requires further expenditure to get back to that original thrill.

I'm going to sort of call bullshit on this.

I'm no 70 year old but in my early 40s I don't recall specific experiences. I can't imagine i will at 70 either. It's not about remembering experiences but more so about if you have lived a good life (partied up a storm, shagged heaps of women, travelled the world) you're more likely to have an inner feeling of content. It's like babies. No one remembers f-all about when they were a baby, but as babies grow into toddlers and kids they have this sense of being that can be either positive, negative or somewhere in between that is based on what happened during that time we can't remember. It's not a memory, but rather the past creates a sense of your being.

You're sort of half right here but the "experiences v items" comparison is way too simplistic. Cars, nice clothes, playstations etc. All consumable items. I would really call houses, shares, managed funds etc "items". They are vehicles to help create a a life of comfort and choices. Anyone who thinks the driving force is fast cars and bitchin' garms is missing the point.

Best example I suppose is spending money on Holidays / Dates / Sporting events opposed to the latest Iphone/Computer/Clothes.

Much of a muchness. One person's 2 week holiday experience is another person's 24 month enjoyment of the latest gadget.

The other issue is we're all constantly told how much of a difference saving in your 20's makes later in life, which is definitely true. However I always remind myself you can't take your money with you and going on the most expensive cruise at 70 is hardly the same as backpacking through south america at 25.

You're sort of in denial I'm afraid. From experience:

1. Saving in 20s helps but it isn't be all, end all.
2. A cruise at 70 would be just as enjoyable as backpacking through South America in your 20s. I used to think the same s**t when i was at my mental peak (I knew everything at 19) but it's not true. It's simply a case of horses for courses. As you get older your tastes and needs change. Having money when you're old is just as good as if you had it when you're young
3. Having money isn't about "taking it with you". You're in denial if you think this. Having money is about choices. The choice to live in a nice area and have your kids grow up in a nice environment (there's no guarantees but environment plays a huge part in your childrens well-being and chances of success). It's a simple percentage play. Money also allows people to retire on a good income. Living on the pension would be a pretty s**t life.

Continuing from point 3, my recollection is you are or were western suburbs ring in. I can tell you these people pass their money on when they die and keep their money within their family. It ensures (until some f-wit offspring blows it) that their bloodlines remain in the "haves" rather than the "have nots".

You don't have to save in your 20s but hit your 40s without some assets and then things will look pretty bleak.

 

[bunsen burner]

I don't save, I invest. Rather than save I just negative gear and hold the largest asset pool I can (without stretching myself). It allows me to cruise without penny pinching and or having sleepless nights over money, whilst at the same time my asset base grows.

Any of you saving got your first house, i don't really have any advice but:

Go on a financial diet for 2-3 years. Save the f*** out of it. Buy your house as soon as you possibly can - as in, don't buy the cheapest thing, but just don't wait until you have 20%. If you want to spend $500k the start hitting up lenders as soon as you have $50k. It will be a buyers market for a while yet but it won't be forever. And when it does change it will sneak up and surprise you.

 

[Effes]

I don't save, I invest. Rather than save I just negative gear and hold the largest asset pool I can (without stretching myself). It allows me to cruise without penny pinching and or having sleepless nights over money, whilst at the same time my asset base grows.

Any of you saving got your first house, i don't really have any advice but:

Go on a financial diet for 2-3 years. Save the f*** out of it. Buy your house as soon as you possibly can - as in, don't buy the cheapest thing, but just don't wait until you have 20%. If you want to spend $500k the start hitting up lenders as soon as you have $50k. It will be a buyers market for a while yet but it won't be forever. And when it does change it will sneak up and surprise you.

Mortgage insurance?

 

[sabre_ac]

I'm going to sort of call bullshit on this.

I'm no 70 year old but in my early 40s I don't recall specific experiences. I can't imagine i will at 70 either. It's not about remembering experiences but more so about if you have lived a good life (partied up a storm, shagged heaps of women, travelled the world) you're more likely to have an inner feeling of content

Correct, inner content comes from experiences and growing as a person. Your 20's as far as decades go is about as important as it gets developmental wise.

It's like babies. No one remembers f-all about when they were a baby, but as babies grow into toddlers and kids they have this sense of being that can be either positive, negative or somewhere in between that is based on what happened during that time we can't remember. It's not a memory, but rather the past creates a sense of your being.

Not at all, comparing your 20's to being an infant is flat out wrong.

You're sort of half right here but the "experiences v items" comparison is way too simplistic. Cars, nice clothes, playstations etc. All consumable items. I would really call houses, shares, managed funds etc "items". They are vehicles to help create a a life of comfort and choices. Anyone who thinks the driving force is fast cars and bitchin' garms is missing the point.

You can't compare cars to invesments, one is an instant thrill which will become part of the norm and the other if managed correctly can be a steady source of enjoyment.

I agree though, people who accumulate without spending often get most of their satisfaction from looking at bottom lines and potentially reminding others of their bottom line.

Much of a muchness. One person's 2 week holiday experience is another person's 24 month enjoyment of the latest gadget.

Can't agree here.

40k car vs a 5k holiday.

8 holidays at the price of a reasonable toy doesnt equate to me, though in this case we might have to leave it at each to their own.

1. Saving in 20s helps but it isn't be all, end all.

Agreed, you need to find a balance. Though if you must go to one extreme do the poor traveller thing over 2 minute noodles on a Saturday night.

2. A cruise at 70 would be just as enjoyable as backpacking through South America in your 20s. I used to think the same s**t when i was at my mental peak (I knew everything at 19) but it's not true. It's simply a case of horses for courses. As you get older your tastes and needs change. Having money when you're old is just as good as if you had it when you're young

Can't agree and most 70 yo's I know while enjoy their retirement often consider their youth as the highlight of their life.

You are correct though, horses for courses. If your the type that enjoys balance watching, then accummlate away. I make my point for the guy or girl who feels guilty for not wanting that. If your the type of person who seeks adventure and wants to travel while your young, do it. Don't let someone tell you that your better off investing that money in your first home.

3. Having money isn't about "taking it with you". You're in denial if you think this. Having money is about choices. The choice to live in a nice area and have your kids grow up in a nice environment (there's no guarantees but environment plays a huge part in your childrens well-being and chances of success). It's a simple percentage play. Money also allows people to retire on a good income. Living on the pension would be a pretty s**t life.

If your talking kids then the most important decision is who you have those kids with and how much time you spend with them.

Chasing adventure in your 20's will not result in living on a pension in older age. Living off a pension is the result of a life time of poorer/unlucky decisions and or not working hard enough.

In a 40 year career throwing 20k a year abroad or going on multiple holidays will not send you to the poor house.

Continuing from point 3, my recollection is you are or were western suburbs ring in. I can tell you these people pass their money on when they die and keep their money within their family. It ensures (until some f-wit offspring blows it) that their bloodlines remain in the "haves" rather than the "have nots".

You don't have to save in your 20s but hit your 40s without some assets and then things will look pretty bleak.

Correct and I work in finance, I know as good as anyone how to accumulate wealth and the importance of time . However you need to be true to yourself and a comfortable life is very possible if you defer home ownership by 5 years and travel (If your that way inclinded). Wealth comes from hard work, connections and a little bit of luck. I'd argue learning to deal with a wide range of people and living outside your comfort zone does wonders for your ability to network.

If your a balance watcher, so be it and who am I to say your wasting your life. I will however jump to the defense of the young adult who decides to go to south america for 6 months and is given the guilt trip and told their putting their future happiness at risk, rubbish.

 

[sabre_ac]

I don't save, I invest. Rather than save I just negative gear and hold the largest asset pool I can (without stretching myself). It allows me to cruise without penny pinching and or having sleepless nights over money, whilst at the same time my asset base grows.

Any of you saving got your first house, i don't really have any advice but:

Go on a financial diet for 2-3 years. Save the f*** out of it. Buy your house as soon as you possibly can - as in, don't buy the cheapest thing, but just don't wait until you have 20%. If you want to spend $500k the start hitting up lenders as soon as you have $50k. It will be a buyers market for a while yet but it won't be forever. And when it does change it will sneak up and surprise you.

What proportion of your income do you recommend spending on a mortgage?

 

[bunsen burner]

Mortgage insurance?

you only have to pay until you have the 20%

 

[bunsen burner]

Correct, inner content comes from experiences and growing as a person. Your 20's as far as decades go is about as important as it gets developmental wise.

---------------------

Not at all, comparing your 20's to being an infant is flat out wrong.

First you agree, and then you disagree? Which one is it?

You can't compare cars to invesments, one is an instant thrill which will become part of the norm and the other if managed correctly can be a steady source of enjoyment.

You used the word "items". You were comparing "experiences" with "items". In context I assume you were using "items" to describe "assets". In my view "items" are consumables likes cars. You sort of twisted reality to enhance your stance.




I agree though, people who accumulate without spending often get most of their satisfaction from looking at bottom lines and potentially reminding others of their bottom line.

Can't agree here.

40k car vs a 5k holiday.

8 holidays at the price of a reasonable toy doesnt equate to me, though in this case we might have to leave it at each to their own.

Not sure if you understood my point. I don't really have an opinion on this other "buy appreciating assets first and once they aer up and running then buy holidays and cars"

My point was:

You like "experiences", others like "items" (cars and gadgets and s**t). We both agree that past experiences
are not really about "remembering/reliving" but about an inbuilt contentment gained from these things.

I'm actually with you on this but I respect other people get the same contentment from wearing cool clothes, having the latest gadgets etc.

Agreed, you need to find a balance. Though if you must go to one extreme do the poor traveller thing over 2 minute noodles on a Saturday night.

Each to their own but in my experience I have noticed most people enjoy 20s and in early 30s the penny drops and they nail down 3 years of hard saving to get that deposit. No issue with this whatsoever. But if people want to start early I have no problem with that.

Can't agree and most 70 yo's I know while enjoy their retirement often consider their youth as the highlight of their life.

Not really what we're talking about though.

Money is just as enjoyable through different age groups. Being poor in your 20s doesn't matter a lot. You don't need to travel the world in good hotel rooms. You also don't need to provide shelter and a positive environment for your kids. In your 20s all you need is a bit of swagger and condom in your wallet.

But at 70, if you don't have money and live on the pension, you up s**t creek. Can't back pack around South America at that age.

I don't consort with many 70 year olds and don't know their actual opinions. But I do know my own experiences and have noticed that this is how it works -and I know it's not just me, but pretty much universal. I am sure of this.

You are correct though, horses for courses. If your the type that enjoys balance watching, then accummlate away. I make my point for the guy or girl who feels guilty for not wanting that. If your the type of person who seeks adventure and wants to travel while your young, do it. Don't let someone tell you that your better off investing that money in your first home.

Let me just clarify this so we're on the same page:

I spent my youth (20s) pretty well. There was no saving going on. Worked hard and played hard.

I don't have an issue with either savers or adventurers. As discussed, it's not until 30s that people typically snap out of the "need to be seen" or "have to have it now" or "money isn't everything" mindset. People start caring less of what others think, and start seeing the perception bullshit facade many put on. They partner up, get married, and the need to go to the next phase in life comes about.

People generally tell people in the 20s to do this and that because they are old a wise and can see the pattern. My issue with this is, you can tell people to you're black and blue but it just doesn't resonate. People in the 20s are in a different space. It's like when people with kids tell people without kids how good it is. They sort of believe it but at the same time can't really comprehend it.

I don't think people in the 20s should feel guilty about not saving - it's no different to when when tell teenagers stuff for their own good and they don't listen. My grandfather told me the other day that blue rinse was a sign of wisdom and contentment. I don't believe him.

But my issue is people in the 20s with the "money isn't everything" and "experiences last a life time" and "you can't take the money with you" view. These views are shortsighted and you will either mature and change your view or you will keep them. The only people who keep them are the ones who are renting, living week to week, and heading for the pension and life of public transport.

If your talking kids then the most important decision is who you have those kids with and how much time you spend with them.

Money is as important unfortunaely. And don't take that as we should work 90 hours a week and send our kids to boarding school. It's all about balance and the external environment your kids grow up in is important.

You tell me which is better:

1. Work intermittently and live in housing commission in Kelmscott but have heaps of time to spend with your kids
2. Work 50 hours a week, with a stay home wife, and own your own home in Karinyup

To simplify it down to "time is important" is just a way people justify their failure in providing a positive environment for their children.

Chasing adventure in your 20's will not result in living on a pension in older age. Living off a pension is the result of a life time of poorer/unlucky decisions and or not working hard enough.

In a 40 year career throwing 20k a year abroad or going on multiple holidays will not send you to the poor house.

I've been pretty clear I have no issue with living life in your 20s. But do it through your 30s and 40s would be a really dumb decision.

 

[bunsen burner]

What proportion of your income do you recommend spending on a mortgage?

I don't have a figure. It's not how I think about investment. It's really a risk thing that each individual has to work out for themselves.

My whole think is about serviceability. I sit at a level that allows me live normally. I don't "save" and I'm lucky in that I've never had to budget or go on a financial diet. I'm happy for others to stretch themselves and make a mortgage commitment to knuckle down for a few years. Buy your first home wasn't easy 40 years ago and it's not easy today. Sacrifices need to be made. It's not a bad thing.

 

[sabre_ac]

First you agree, and then you disagree? Which one is it?

I'm not sure how you can compare your 20's to your infant stage.

Each to their own but in my experience I have noticed most people enjoy 20s and in early 30s the penny drops and they nail down 3 years of hard saving to get that deposit. No issue with this whatsoever. But if people want to start early I have no problem with that.

Not really what we're talking about though.

Most people in their 20's due to graduate salaries and home prices will have to choose between having disposable income and travelling or getting a mortgage. So it is what we are talking about, I suggested leaving your 20's for experiences (work and world).

Money is just as enjoyable through different age groups. Being poor in your 20s doesn't matter a lot. You don't need to travel the world in good hotel rooms. You also don't need to provide shelter and a positive environment for your kids. In your 20s all you need is a bit of swagger and condom in your wallet.

But at 70, if you don't have money and live on the pension, you up s**t creek. Can't back pack around South America at that age.

Poverty in your 70's can be just as easily avoided if you go into debt in your 20's or your 30's. So why not defer to your 30's?

Let me just clarify this so we're on the same page:

I spent my youth (20s) pretty well. There was no saving going on. Worked hard and played hard.

I don't have an issue with either savers or adventurers. As discussed, it's not until 30s that people typically snap out of the "need to be seen" or "have to have it now" or "money isn't everything" mindset. People start caring less of what others think, and start seeing the perception bullshit facade many put on. They partner up, get married, and the need to go to the next phase in life comes about.

Ok you don't have an issue with the adventures in their 20's

I don't think people in the 20s should feel guilty about not saving - it's no different to when when tell teenagers stuff for their own good and they don't listen. My grandfather told me the other day that blue rinse was a sign of wisdom and contentment. I don't believe him.

But the adventures are not doing the right thing because by not saving their not doing "stuff for their own good"

But my issue is people in the 20s with the "money isn't everything" and "experiences last a life time" and "you can't take the money with you" view. These views are shortsighted and you will either mature and change your view or you will keep them. The only people who keep them are the ones who are renting, living week to week, and heading for the pension and life of public transport.

That's a pretty inaccurate stereotype.

I'd argue that most 20 somethings who are burning through their money on experiences have a proper end game in mind and a plan to get there, they just dont see the point in starting early. The hamster wheels isn't going anywhere and its a long run.

The people who end up living week to week are the ones who spend for instant gratification on "things", make poor decisions and or over stretch themselves with debt.

Money is as important unfortunaely. And don't take that as we should work 90 hours a week and send our kids to boarding school. It's all about balance and the external environment your kids grow up in is important.

You tell me which is better:

1. Work intermittently and live in housing commission in Kelmscott but have heaps of time to spend with your kids
2. Work 50 hours a week, with a stay home wife, and own your own home in Karinyup

To simplify it down to "time is important" is just a way people justify their failure in providing a positive environment for their children.

I've been pretty clear I have no issue with living life in your 20s. But do it through your 30s and 40s would be a really dumb decision.

Scenario 1 is more likely to happen to those who go into debt too early, make bad decisions or simply don't work hard enough when it matters. None of which is impacted by taking a year off to back pack through South America when you are 24.

Scenario 2 is as gettable if you start at 19 as it is if you start at 29 or 31. A comfortable life is a combination of luck, making connections and working hard.

Is Karrinyup considered Western Suburbs these days? Very nice place, but do you think that if you can afford to live there your considered wealthy.

 

[sabre_ac]

I don't have a figure. It's not how I think about investment. It's really a risk thing that each individual has to work out for themselves.

My whole think is about serviceability. I sit at a level that allows me live normally. I don't "save" and I'm lucky in that I've never had to budget or go on a financial diet. I'm happy for others to stretch themselves and make a mortgage commitment to knuckle down for a few years. Buy your first home wasn't easy 40 years ago and it's not easy today. Sacrifices need to be made. It's not a bad thing.

My argument is the sacrifices to be made in your 20's for a house are too great for the average 20 something.Your far better of getting out there and seeing the world / meeting people. I'm not talking 10 years of wandering the world, its quite easy to build a career and travel

Specially when you take into account the average graduate salary is 50k (40k after tax) and your paying 24k per year on a 300k loan (First home). It's harder now, now matter how you look at it. On the flip side its cheaper now to travel than it ever was.

 

[bunsen burner]

I'm not sure how you can compare your 20's to your infant stage.

You're thinking about it the wrong way. You mentioned "experiences" matter because you "remember them". I mentioned that this wasn't quite true. It's not that you remember and reminisc that makes you happy but more that by having these "experiences" it enhanced your being. Then I went on to prove this by using another period of our lives - that being a baby and a young child. As children we have dispositions that may have different levels of positive/negative. They come from somewhere - from the experiences we have as babies. Experiences we don't actually remember.

I agree that positive experiences enhance our lives but felt I needed to explain it's not really about specific memories.

Therein lies my point.

Most people in their 20's due to graduate salaries and home prices will have to choose between having disposable income and travelling or getting a mortgage. So it is what we are talking about, I suggested leaving your 20's for experiences (work and world).

From memory the OP wants some advice on savings. Whilst I have no issue with your ideals (for 20-somethings only), I'm not sure why you are pushing them? Is it to validate your own insecurities around your decisions which are driven by people pressuring you to do the responsible "thing".

The guy just wants some saving advice.

Poverty in your 70's can be just as easily avoided if you go into debt in your 20's or your 30's. So why not defer to your 30's?

Are you reading what I'm saying?

Last time I checked you weren't advocating this at all. You were on the "I'm 20 something and know all about all and experiences are better than items, money doesn't matter, quality time does, you can't take that money with you when you retire etc"

On the other hand I've been consistent throughout that doing nothing in your 20s is okay and delaying it until your 30 is fine.

Ok you don't have an issue with the adventures in their 20's

Nope. Never have had. Just find the rest of your wisdom arse about and naive.

But the adventures are not doing the right thing because by not saving their not doing "stuff for their own good"

I have no idea what you're talking about.

That's a pretty inaccurate stereotype.

It's spot on. It's like clockwork. A very large percentage of people I know have done exactly that.

I'd argue that most 20 somethings who are burning through their money on experiences have a proper end game in mind and a plan to get there, they just dont see the point in starting early. The hamster wheels isn't going anywhere and its a long run.

Who are you trying to fool here? Us? Yourself? Both?

You've been jibber jabbering about money not being everything, can't take it with you etc. You don't think this and a large percentage of sub 30 people don't either.

Scenario 1 is more likely to happen to those who go into debt too early, make bad decisions or simply don't work hard enough when it matters. None of which is impacted by taking a year off to back pack through South America when you are 24.

Scenario 2 is as gettable if you start at 19 as it is if you start at 29 or 31. A comfortable life is a combination of luck, making connections and working hard.

You've moved the goal posts on this one. You haven't really addressed my point. From memory you said something along the lines of "spending time is important, money isn't". I pointed out that this was a simplistic view and showed two theoretical scenarios.

Is Karrinyup considered Western Suburbs these days? Very nice place, but do you think that if you can afford to live there your considered wealthy.

Not sure why you think I implied this the case. I chose not to use a Western Suburbs as an example but use a a well to do middle class area that is a positive environment. I just picked Karinyup because it just came into my head.

I'm interested in why you hit 18/20 odd and moved to Claremont? What was that all about?

 

[bunsen burner]

It's harder now, now matter how you look at it.

You mean compared to baby boomers etc?

 

[sabre_ac]

We're going around in circles here. Clearly we have moved from the opening post

I've made one main point

1. Your better off in your 20's travelling, meeting people and working out what you want to do career wise than saving hard and or getting a home loan. You miss out on too much burdening yourself with debt too early and often end up trapped. The difference between getting a home loan at 25 and 30 in the scheme of a lifetime is negligible.

Do you agree?

I've pushed this idea purely because I believe that it's the best route to take, again as mentioned if your more of a nester than save away!

I'm not sure if I should be flattered or disturbed you've taken such an interest in the few things I've mentioned on this forum about my life 10 years ago, I'll go with flattered.

You mean compared to baby boomers etc?

Anyone that has graduated and started working post 2000 has it allot harder than previous generations.

http://en.wikipedia.org/wiki/File:Real_Melbourne_House_Prices_1965_-_2010b.JPG

 

[bunsen burner]

We're going around in circles here. Clearly we have moved from the opening post

I've made one main point

1. Your better off in your 20's travelling, meeting people and working out what you want to do career wise than saving hard and or getting a home loan. You miss out on too much burdening yourself with debt too early and often end up trapped. The difference between getting a home loan at 25 and 30 in the scheme of a lifetime is negligible.

Do you agree?

No. I think you're shortsighted and assume what's best for you is best for others. I did it your way but don't think there's anything wrong with starting early.

I've pushed this idea purely because I believe that it's the best route to take, again as mentioned if your more of a nester than save away!

All due respect but you are very naive

Anyone that has graduated and started working post 2000 has it allot harder than previous generations.

http://en.wikipedia.org/wiki/File:Real_Melbourne_House_Prices_1965_-_2010b.JPG

Absolute rubbish. I pity anyone who buys into this "poor me" syndrome.

I will explain later.

 

[sabre_ac]

No. I think you're shortsighted and assume what's best for you is best for others. I did it your way but don't think there's anything wrong with starting early.

There is noting wrong with starting early if travel and getting out there isnt your thing. You may as well start saving, I don't think however you should get a house in the first few years of graduation.

All due respect but you are very naive

Childish.

Absolute rubbish. I pity anyone who buys into this "poor me" syndrome.

There is no self pity at all. We are in new territory here and a number of inputs are lagging in the "homes = wealth" mentality.

I will explain later.

Please do.

 

[bunsen burner]

Please do.

So one set of statistics is at it's highest and you think that is be all end all? I don't mean to tar you with the naive brush again but have you considered this justifies your actions so you have conveniently latched onto it and not bothered considering other factors? You should try religion out as you seem to be well suited.

So, let's have a look at the WHOLE picture:

What was different

2012

1. Compared to wages, house prices have been as high as they ever have been
2. Double income, no kids until 30s. A massive massive difference.
3. Competitive lending market with all sort of investment products and strategies including offset accounts, negative gearing
4. Massive consumerism. We spend more than ever. Be it cable TV, internet accounts, mobile phone plans, gadgets, coffee, cafes. We spend more than we ever have. Affordability compared to wages isn't the only reason we find mortgages hard to afford
5. People think they should be able to afford a house in their mid 20s. wtf? In the 70 and 80s when it was allegedly "cheap" people weren't doing it until their 30s. These people who bemoan they can't afford a house at 24 are kidding themselves. When has this ever really been the norm? Gen Y. Rofl-f***.
6. Young people think they are hard done by as if previous generations didn't have to go and buy out in the suburbs.

1970s and 1980s

1. Compared to wages, house prices were comparitively cheap
2. People got married in their early 20s and had kids. Mums stayed at home.
3. No real competition or options or savvy leanding practices
4. Pretty bare bones back then. There just weren't the mod cons to spend money on. Air travel was mega expensive and many just didn't travel.
5. The expectation was 30s
6. From the start of time first home buyers have had to move to the sticks to buy their first homes.

But more important:

What is the same

1. It is not easy to buy a house. Never has been (despite what the majority of Gen Y think), never will be.
2. To save a deposit you have to make massive sacrifices. This has always been the case
3. To pay your mortgage you have to make sacrifices. Home brand food, less holidays, take lunch to work, instant coffee, etc.
4. Often you have to move out to the sticks or live on a main road. This has also always been like this.


So the more things change, the more they stay the same. I pity these gen Y types who see the affordability graph and incorrectly assume that back in the day it was easy to buy a house. In hindsight it was, but then what makes these people think that in 30 years time hindsight will also say buying a house in 2012 was easy.

It's a shame people like you take the excuse road. Maybe all you should be aspiring to is living in that bogan suburb you grew up in?

Childish.

All heard so far is you going to extraordinary lengths to justify your choices. A guy started a post wanting so savings advice and you felt the need to bound in and defend your choice to put off saving. Some gems from you in this very thread:

1. You shouldn't save for an appreciating asset, going on holiday has more upside
2. Experiences are better than "items". You conveniently misrepresented appreciating assets as "items" as if they are disposable consumables.
3. Money is not important because you can't take it with you
4. Spending time with your kids is important whilst money isn't.

Your whole premise of your argument is a self absorbed validation of your own failings. And you're naive

a) not to realise what you're doing,
b) that some people are quite happy to save and don't need to back pack around south america
c) to think that one's 20s are be all end all. Did you learn nothing from your teenage years.

 

[Patrick Bullet]

You must work as a catalogue deliver with Salmat.

Haha - been away from this thread for too long and missed the replies! I earn a fair bit more than $5 per hour, but I cap my 'fun money' allowance at $200 per week - everything else goes into savings (see my previous post above the one that was quoted - re-quoted below). If I get a raise, I still only set aside $200 per week, the rest goes into the mortgage.

Going with $10 for a pint of beerYou earn $5 an hour? Get a new job!

Well I live in P-town, so being realistic, beer is more like $15 per pint nowadays.

The way I have always done it (successfully) is to work out a budget. Try to work out all of your unavoidable costs that you face over the course of a year (e.g. rent, food [groceries, not eating out!], car rego, insurance, public transport, electricity, gas, petrol, car servicing). Grab your old bills or look at your old statements and try your best to guess what you will need over the course of a year. Add it all together, then divide it by 26 if you get paid fortnightly, or 12 if you get paid monthly. I use Excel to do this. This is the amount you will ABSOLUTELY NEED to set aside from your pay (i.e. not spend on fun stuff) in order to survive. If you are able to resist spending this money on fun stuff, you can rest assured that you will never find yourself with a bill that kicks your butt unexpectedly. In my system, I call this money the Household Budget and it lives in its own everyday transaction account. When I pay bills, I pay them from this account. This works for me because if I think there's a chance I might go out and get drunk and want to spend money in this account on stupid stuff, I just leave the card for that account at home.

After that, work out about how much in a pay period (i.e. fortnight/month) that you feel you will need in order to have fun. I personally set aside $200 per week, but I'm half of a DInK household so this might be more than you want to set aside (in my student days, this amount would be closer to $50). I call this money my Fun Money and it lives in its own secondary everyday transaction account (i.e. on fortnightly payday, I send $400 of my pay to this separate 'Fun Money' account). When I go out to pubs, buy clothes, computer games etc. I use the Fun Money account. This Fun Money card goes with me when I go out.

The rest of my pay then goes into a high-interest saver (e.g. uBank, ING)edit - this is now a mortgage offset account, which I don't touch.

This is probably me getting carried away here, but I also use Excel to keep track of everything that I spend in the Household account to see if my initial budget estimates were right. If they're not, then I change them and adjust accordingly.

It sounds like a lot of work, but almost all of the work lies in working out the estimated budget at the start - you only really need to do this once. If you're serious about saving, it's time well spent.

 

[sabre_ac]

True to form you completely fail at putting together an argument without getting personal, it is quite laughable then when you suggest I am the insecure one. I'm putting forward a case for waiting, not having a go at those that don't wait, the sooner you realise this the better.

Anyway back to it!

What was different

2012

1. Compared to wages, house prices have been as high as they ever have been
2. Double income, no kids until 30s. A massive massive difference.
3. Competitive lending market with all sort of investment products and strategies including offset accounts, negative gearing
4. Massive consumerism. We spend more than ever. Be it cable TV, internet accounts, mobile phone plans, gadgets, coffee, cafes. We spend more than we ever have. Affordability compared to wages isn't the only reason we find mortgages hard to afford
5. People think they should be able to afford a house in their mid 20s. wtf? In the 70 and 80s when it was allegedly "cheap" people weren't doing it until their 30s. These people who bemoan they can't afford a house at 24 are kidding themselves. When has this ever really been the norm? Gen Y. Rofl-f***.
6. Young people think they are hard done by as if previous generations didn't have to go and buy out in the suburbs.

1. Yes I made this point.
2. Correct, a function of more options available to women and a lesser extent the higher cost of housing as above.
3. More complex ways for financial institutions to charge fees to the financially uneducated. Ultimately the rich get richer.
4. Irrelevant when your talking total wages to price of homes.
5. Refer to point 1 again.
6. I've never said anyone considers themselves hard done by, I've said what is considered normal has changed.

1970s and 1980s

1. Compared to wages, house prices were comparitively cheap
2. People got married in their early 20s and had kids. Mums stayed at home.
3. No real competition or options or savvy leanding practices
4. Pretty bare bones back then. There just weren't the mod cons to spend money on. Air travel was mega expensive and many just didn't travel.
5. The expectation was 30s
6. From the start of time first home buyers have had to move to the sticks to buy their first homes.

What was the point of this part? You have already stated this in 2012.
1-6. See my points above

What is the same

1. It is not easy to buy a house. Never has been (despite what the majority of Gen Y think), never will be.
2. To save a deposit you have to make massive sacrifices. This has always been the case
3. To pay your mortgage you have to make sacrifices. Home brand food, less holidays, take lunch to work, instant coffee, etc.
4. Often you have to move out to the sticks or live on a main road. This has also always been like this.

1. It's harder, see wages to home prices
2. Correct, the difference is now you have to save a higher proportion of your income and miss out on more. It's not only consumer good's that have come down in price relatively, so have airfares.
3. Same point as above, except I'll restate there is no need to get a home loan just out of university.
4. If you want the larger house, a mentality that hopefully dies with your generation.

It's a shame people like you take the excuse road. Maybe all you should be aspiring to is living in that bogan suburb you grew up in?

I'm not taking the excuse road, I never have. All I said is there is no need to go into debt too early at the expense of other opportunities.
How do you know I grew up in a Bogan suburb?
Normally I'd find it funny that Mr "Bunsen Burner" from Bigfooty has taken such a keen interest in my personal life, however in this case his/her notes are wrong.

a) not to realise what you're doing,
b) that some people are quite happy to save and don't need to back pack around south america
c) to think that one's 20s are be all end all. Did you learn nothing from your teenage years.

a) You have no idea what I'm doing, I haven't felt the need to tell you
b) I've acknowledge this over and over
c) The fastest way to waste a decade is taking on too much debt regardless of your age. Your 20's ar arguably the most vunerable to this.

Once again I repeat my point.

Getting a home loan straight out of college for those wanting adventure and experiences is a dangerous move as it traps you in your job and current situation, at the cost of missing out on allot of fun/growing opportunities. Furthermore deferring five years when you have a better idea of what you want career wise and are on a higher salary makes little difference to retirement.

 

[bunsen burner]

True to form you completely fail at putting together an argument without getting personal, it is quite laughable then when you suggest I am the insecure one. I'm putting forward a case for waiting, not having a go at those that don't wait, the sooner you realise this the better.

Anyway back to it!




1. Yes I made this point.
2. Correct, a function of more options available to women and a lesser extent the higher cost of housing as above.
3. More complex ways for financial institutions to charge fees to the financially uneducated. Ultimately the rich get richer.
4. Irrelevant when your talking total wages to price of homes.
5. Refer to point 1 again.
6. I've never said anyone considers themselves hard done by, I've said what is considered normal has changed.


What was the point of this part? You have already stated this in 2012.
1-6. See my points above

1. It's harder, see wages to home prices
2. Correct, the difference is now you have to save a higher proportion of your income and miss out on more. It's not only consumer good's that have come down in price relatively, so have airfares.
3. Same point as above, except I'll restate there is no need to get a home loan just out of university.
4. If you want the larger house, a mentality that hopefully dies with your generation.

I'm not taking the excuse road, I never have. All I said is there is no need to go into debt too early at the expense of other opportunities.
How do you know I grew up in a Bogan suburb?
Normally I'd find it funny that Mr "Bunsen Burner" from Bigfooty has taken such a keen interest in my personal life, however in this case his/her notes are wrong.


a) You have no idea what I'm doing, I haven't felt the need to tell you
b) I've acknowledge this over and over
c) The fastest way to waste a decade is taking on too much debt regardless of your age. Your 20's ar arguably the most vunerable to this.

Once again I repeat my point.

Getting a home loan straight out of college for those wanting adventure and experiences is a dangerous move as it traps you in your job and current situation, at the cost of missing out on allot of fun/growing opportunities. Furthermore deferring five years when you have a better idea of what you want career wise and are on a higher salary makes little difference to retirement.

You haven't go a brass razoo to your name but you know everything.

 

[bunsen burner]

True to form you completely fail at putting together an argument without getting personal, it is quite laughable then when you suggest I am the insecure one. I'm putting forward a case for waiting, not having a go at those that don't wait, the sooner you realise this the better.

Anyway back to it!




1. Yes I made this point.
2. Correct, a function of more options available to women and a lesser extent the higher cost of housing as above.
3. More complex ways for financial institutions to charge fees to the financially uneducated. Ultimately the rich get richer.
4. Irrelevant when your talking total wages to price of homes.
5. Refer to point 1 again.
6. I've never said anyone considers themselves hard done by, I've said what is considered normal has changed.


What was the point of this part? You have already stated this in 2012.
1-6. See my points above

1. It's harder, see wages to home prices
2. Correct, the difference is now you have to save a higher proportion of your income and miss out on more. It's not only consumer good's that have come down in price relatively, so have airfares.
3. Same point as above, except I'll restate there is no need to get a home loan just out of university.
4. If you want the larger house, a mentality that hopefully dies with your generation.

I'm not taking the excuse road, I never have. All I said is there is no need to go into debt too early at the expense of other opportunities.
How do you know I grew up in a Bogan suburb?
Normally I'd find it funny that Mr "Bunsen Burner" from Bigfooty has taken such a keen interest in my personal life, however in this case his/her notes are wrong.


a) You have no idea what I'm doing, I haven't felt the need to tell you
b) I've acknowledge this over and over
c) The fastest way to waste a decade is taking on too much debt regardless of your age. Your 20's ar arguably the most vunerable to this.

Once again I repeat my point.

Getting a home loan straight out of college for those wanting adventure and experiences is a dangerous move as it traps you in your job and current situation, at the cost of missing out on allot of fun/growing opportunities. Furthermore deferring five years when you have a better idea of what you want career wise and are on a higher salary makes little difference to retirement.

You haven't go a brass razoo to your name but you know everything.

 

[sabre_ac]

You haven't go a brass razoo to your name but you know everything.

Excellent response

Most people wouldn't see the point in telling "Bunsen Burner" from bigfooty anything about their personal finances, however..

Would knowing either way have any effect on how much credibility you give my argument?

 

[Scotland]

I'm not going to buy into the bunsen vs sabre quote pyramid, but I will point out that travelling in your 20s is not even comparable to travelling in your 70s.

Yeah, you'll stay in cheap hostels, hike summits, hook up with Danish backpackers etc. versus going on cruises, staying in B&Bs, going for country walks etc. as is to be expected, but your health and well-being in your 20s is far from guaranteed in your 70s. If you spend your whole life working towards retirement you're taking on the risk that you might never get to experience the fruit of your labours.

FWIW, I'm 28 years old and have a foot in both camps. Have travelled a fair amount and also have a career and a mortgage. I could borrow more and buy a bigger house, save like a Jew and put all of my money into my mortgage, sell all my assets and travel like a gypsy for years etc. but I'm happy with the balance I've created.

 

[bunsen burner]

Would knowing either way have any effect on how much credibility you give my argument?

It's hard to have wisdom without experience and i haven't seen you post much advice other than things that defend your choices.

I'm quite happy for others to make their own judgement as to who has presented a more balanced and realistic argument regarding affordability etc

 

[bunsen burner]

I'm not going to buy into the bunsen vs sabre quote pyramid, but I will point out that travelling in your 20s is not even comparable to travelling in your 70s.

your age is seventy-.......????

I'm not 70 but I can already see the pattern. Also not sure why we are cornered into travelling? The debate is really saving and comittment v living life and spending.

sabre is stuck on talking about travelling because he is vigorously defending his decisions (to himself)

If you spend your whole life working towards retirement you're taking on the risk that you might never get to experiencr labours.

Here is the problem with this debate. No one is suggesting that. It's just that Sabre has taken a tunnel visioned view

And has assumed anyone who opposes his narrow view have the opposite argument. Not the case.

FWIW, I'm 28 years old and have a foot in both camps. Have travelled a fair amount and also have a career and a mortgage. I could borrow more and buy a bigger house, save like a Jew and put all of my money into my mortgage, sell all my assets and travel like a gypsy for years etc. but I'm happy with the balance I've created.[/quote]