The Case of the Pushy Parents

Hi Scott,

At 24, I am finally ready to move out of home for the first time. I have approx $60k in savings and I earn $38k. I plan to rent first to ensure I can live successfully with my partner, but my parents think I should buy straightaway. I do not feel I have the financial resources to help me get a loan, let alone repay it. I would want to buy in my preferred areas in Perth, especially if living alone. What options do I have?

Chelsea

Hi Chelsea,

Tell your parents to back off. You’ve done well to save $60k at such a young age. Yet on your income you don’t have enough money to purchase a home, even if you were going to take on a renter. The upfront costs of buying would eat up most of your savings.

Here’s a more realistic challenge that I followed myself when I was your age, and on your income level. Get used to living off $38k a year and put all your efforts into increasing your income over the next six years. And bank the difference! Achieve that, and you’ll have established the financial habits that will mean you’ll never have to worry about money again.

With habits like that, buying a house will be easy.

Scott