So, You’re Living With Your Parents To Save For A House?

Step 1. Find Your Reason To Save.
A report released in August 2016, by the Financial Planning Association and social research group McCrindle, discovered that 47% of us regretted we had not saved more, 34% wished they had spent less, and only 27% thought they could have invested more. Yet when asked, 63% of people studied had no plan, or only a very loose plan, for how they were going to achieve their financial goals.

There is a big difference between wanting something and actually making the decision to achieve something.

One of the reasons most people lack the discipline to save effectively, is that their savings efforts are not tied to a big enough why?

What we mean here is that your destination has not been fully established, and as soon as you save a certain amount, whether that be $1,000, $5,000 or $30,000 something will come along that you will allow to swallow up those savings. That could be a car, a holiday, or anything more interesting to you in that moment than your long term goals. By firmly establishing why you are saving, and creating a structured wealth plan to achieve those goals, you will be far more likely to set, and stick to, a better savings plan.

Step 2. What Gets Measured Gets Improved.
One of the problems for people struggling to get ahead financially, is that they don’t actually know where their money goes. It is a little bit like the mystery of socks in the washing. No matter how careful you are, somehow mysteriously a sock will go missing every few loads.

Most people can tell off the top of their head what their physical weight is to within a few kilogrammes?

Far fewer can tell you what their “financial weight” is to within a few hundred dollars? Why is that?

Good money management habits, have nothing to do with how much income you earn. I have seen clients on huge incomes that are still living week to week and don’t know how much money they have at their disposal at any point in time. I call them “money lazy”. They have high incomes and just assume that there will always be more money available at their next paycheck so there is nothing to worry about. However, many of these high-income earners work in high-risk professions, e.g. Mining, banking, IT and so there job security is only as certain as the economic conditions of the day.

On the other end of the scale, there are the ‘Money Fretters’ who worry constantly about where the next dollar is coming from.

In between, you have the ‘Bean Counters’.

However, what both groups have in common is that they actually don’t have a well-established money management program in place, that can help them both better manage their financial affairs but also stress less.

Check out this amazing tool courtesy of our friends at Crown Money Management. http://www.crownmoneymanagement.com.au/tools/

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Step 3. Find a Savings Partner.
As with most things in life, you will usually get better results if you have someone to share the journey with. Like going to the gym, it is usually better to have a gym buddy, or if you are going to have a drink at the pub, do you really want to be drinking alone?

The same thing goes with saving money. Find someone to share the journey with.

Someone who understands your goals is supportive of them, and who is perhaps on the same path you are. Having someone, with whom you share your financial goals can also be an accountability partner for you, helping you to not only stay on track, but also to keep you motivated.

Have a save off? That is, make a game of it and see who can save more each week? Create your own little mini-Olympic events like the $100 savings (how fast can you save $100), or the savings marathon (how much could you save over 42.2 days).

Step 4. Start Small But Think Big.
As with most things in life, you have to learn to walk before you can run. Establishing a string of small wins early on is a powerful tool in establishing sustainable habits. So maybe start with the goal of just saving $10 per week. After a month, if you have been successful you can increase that amount to $20, or $50 and so on.

However, the most important thing with savings is that you start early, stay regular, and work towards a long term plan.

According to Bill Gates, “Most of us will overestimate what we can do in a year, and underestimate what we can do in ten years.”

Step 5. Invest To Accelerate Your Wealth.
Saving is good, but by investing smartly those savings have the potential to grow exponentially.

Most people will struggle over the course of their lives to have large amounts of money sitting around in freely available cash.

Think about it if you knew, you had $30,000 or $50,000 or even $500,000 laying around in accessible cash you would be far more likely to want to spend a part of it.

The car needs repairs, the kids need braces, you need new golf clubs, and the missus needs a new handbag etc.

Therefore, it is probably better to invest your savings according to a strategic wealth plan to help take away the temptation to want to enjoy the fruits of your labour before they have fully ripened.

By | 2017-11-26T02:49:25+00:00 September 16th, 2016|Property Investment|Comments Off on So, You’re Living With Your Parents To Save For A House?

About the Author:

Matt has had a long and varied career which has led him to become a highly sought after Property Mentor. Matt and his team currently have over $150 million worth of property under development, and have successfully taught hundreds of clients how to build a large property portfolio to suit their lifestyle.