Down to My Last $700

Hi Scott,

I am a 46-year-old single mum of two teenage kids. I bought my home six months ago for $380k and had $10k left in the bank. Since purchasing the property, I have had to fund several unforeseen repairs (even after a building inspection), equalling around $15k. I now have about $700 left in my bank account! My house is worth about $360k and I earn $53k and have $145k in super. Should I sell, wear the loss, and go back to renting? Or stick it out for the long haul?

Natalie

Hi Natalie,

I totally understand the emotional pull of wanting the stability of a home of your own -- especially as a single mum. But it was a bad decision. You’re now more financially insecure than if you’d continued renting and focused on building up your Mojo.

Buying a home isn’t like buying a dog (if it craps one too many times on the carpet, you simply drop Fido off at the pound) -- a home is a long-term deal. You’ve already spent $16,000 in stamp duty, $1,000 in legals and $15,000 in repairs. If you were to turn around and sell it now, you’d lose $20,000 on the sale price and pay $8,000 to a real estate agent. All up you’d have smoked through $60,000!

On your income, including Centrelink and child support, you’re devoting roughly 40 per cent of your take-home to repayments. That’s tight, but doable. Hold on, tight.

Scott