Author: Mr and Mrs DDU.
A few months ago we made a post considering what we wanted out of life. We received a lot of thoughtful and helpful replies, so thanks if you were one of those of responders.
In that post we outlined that we weren’t exactly sure what we wanted to do with our money. We said we want to achieve FIRE, so we’re investing at least $1,000 a month into shares. We want a bigger emergency fund, so we’re saving $200 a month. We want a second child, but will very likely (who are we kidding – we will) need IVF again so we’re saving $200 a month towards our next family member.
We also said we wanted to buy a house, but we weren’t exactly sure when or how hard we were going to save for it. But, we would start by saving $200 a month.
Well, we did start saving $200 a month. So, by the time Baby DDU was born we had saved just over $1,000. Hey that’s enough to buy a house, right?
We’ve done a lot of thinking about where owning a house would fit in with the life we want, with FIRE, etc. This really came to the forefront when we recently asked the landlord to install one air conditioning unit in our rental place. We don’t have it yet, but it’s been a hassle and will cost us a fair few more dollars per week. It will be worth it for those hot summer days with Baby DDU though.
Anyway, it really highlighted to us the positives of owning your own place versus renting. There are other positives (as well as negatives), but freedom and not getting rental increases are pretty good reasons to own. Of course interest rates can go up, council rates can go up etc, but that seems as though we would be more in control of those somehow.
The high price of Australian property is as high as it ever has been, even with talk of a slowdown. The main difficulty for avo toast eating youngsters like us is the time it will take to save for a deposit.
So, to be realistic and ambitious, we’ve said we’re going to buy a house before Baby DDU goes to school, which is at five years old. We are going to aim to buy a house by Christmas 2021, which is four years and a couple of months away.
Who knows what the Australian economy will do between now and then? Who knows what Australian property prices will do? Maybe they will stop growing, perhaps fall a little. Whatever happens, we can’t control that part. What we can control is the amount we save for a deposit.
We’re going to save at least $1,000 a month, perhaps up to $1,500 on good months, towards our house deposit. It will take a long slog and dedicated effort to do it, but it will just be a matter of time before we achieve it. We’re also going to channel all of our cash dividends towards our house fund too.
Hopefully our deposit will be at least 10% of the price in 4 years.
From now on we will report how much we have put towards our house fund in our monthly savings rate posts. Today it currently sits at $4,408, so there’s a loooong way to go, but we have made a good start.
We are still going to be investing monthly in shares, saving for baby #2 and building our emergency fund. So, our savings rate will look good, but all of that cash will be put towards each of our financial goals.
We have no intention of selling any shares when we get close to buying a house. FIRE is still our ultimate goal and the dividends will help fund the future life we want. Hopefully the shares and dividend income make it a bit easier to get the best mortgage we can get.
There are lots of things out of our control that could hinder or help our journey to buying a house, so all we can do is save and hope for the best when we get there in a few years.
It feels a little bit like we’re Frodo on the start of a huge journey. If we just keep walking and saving we’ll get there, step by step. Hopefully we have some happy news to share in 4 years from now.
Thanks for reading this article about our financial journey Down Under.
Onwards and upwards!