Help Me Buy a House

Hi Barefoot,

I’m wanting to buy my first home but don't have a deposit. I earn $37,000 a year. I have a car loan which costs me $327p/f and will be paid off in March 2018 (approx $10,000 remaining), plus a credit card with $3,500 owing ($4,000 limit). Would I be better off selling my car, paying off my debts, use the remaining money to buy a second-hand car, and then save for a deposit? I don't know which direction to take.

Rachel

Hi Rachel,

It sounds like you’ve reached a point in your life where you want some stability.

I’d suggest you do three things:

First, sell the car, pay off all your debts, buy a second-hand Toyota, and put $2,000 into an online savings account. That’s what we Barefooters call ‘Mojo’. Don’t use it for a house deposit -- this is the start of the security you’re chasing.

Second, repeat after me: “I, Rachel, promise that from this day forward I will never own a credit card or borrow for a car again.”

Third, spend the next 12 months working out how to make yourself more valuable to potential employers. Honestly, $37,000 isn’t going to cut it. Aim for $60,000 a year. That will probably require you to retrain so you can gain skills and experience in a different area (sales and leadership are where the money is).

I’d wish you good luck, but I don’t think you’ll need it. From the sounds of your question, you’re prepared to make difficult, disciplined decisions. Keep that up and there will be no stopping you. Email me back on your progress in 12 months. I’ll be here.

Scott