If you are a first home buyer or even thinking about buying a home in the future then you will want to know what the best help for first home buyers would be.
Of course, most people would say winning Lotto or just more money to go towards the house. But when you consider the options, most of us need to stop dreaming and start dealing with the reality that faces us.
In our desire to own our own home it is easy to focus on just the immediate issues … often that is the deposit or lack of it.
You can engage a mortgage adviser and discuss your situation and they can give you advice on what you need to do to get the mortgage needed to buy your first home. Advisers know how to manage the mortgage application to give you the best chance of getting the money required, but only you can actually change things.
But if we think about the bigger issue it is that of managing our money.
Manage Your Money Better
Yes, there are plenty of things that can help but learning to manage your money better will not only help with buying your first home but it will help throughout life and especially with paying your mortgage off faster too.
Most people like to spend money and have some nice things and because it is easy to get credit it is also easy to spend more than we should.
Create A Budget & Manage Your Money
Back when I left school my mother told me to get a notebook and manage my spending, and when I did this I was amazed to learn that often I was spending more than I earned. Worse than that, I was wasting money on things that didn’t help me get ahead in life. I was spending money on coffees, junk food and entertainment just because I had money available.
I made the decision then to start saving and set up a superannuation plan (before KiwiSaver) and another investment plan and also a savings account for emergencies and as a back-stop.
More recently I decided that I needed to keep a closer eye on what we were spending, and this time instead of a notebook I signed up for some very smart budgeting software which is a Kiwi design called Pocketsmith.
It’s not like doing your typical budget.
Most people will do a budget and it looks fine, but the reality is not the same … the budget never works!
What I really like about Pocketsmith is it keeps you honest … you can upload your previous 3-months bank statements and code the transactions to see what you are actually spending.
Once you have the actual spending for the past 3-months then it is a lot easier to create some areas to focus on. You can make very defined budgets to make small changes that will actually be achievable.
For most of us it’s about making small changes to our budgets.
Once you know what you are spending your money on you can make some adjustments.
Other Things That You Can Do To Help
There are a few other things that you can do to help improve your chances as a first home buyers.
In this post we have suggested that you monitor your expenses and this is one of the things that everyone can do to improve your changes sand in most cases is the best help for first home buyers; however there are other things that you can look at too.
Here are a three other things to consider;
Increase Your Income – If you want to increase your income then you need to consider what options there are available for you. These could include getting extra income from your current employer, taking on a part-time job or starting a side hustle of business to make some extra money.
Typically we think of earning money from personal exertion; that is from the work that we do. If you can earn money in a passive manner from either business or investment then it is more reliable over time and does not stop if you are unable to work. Setting up a business or a side hustle (part-time or home business) can take quite a lot of effort, but many people would argue that it’s worth doing as it provides a long-term safety net especially in the turbulent times of recent.
If you are serious about buying your first home then it is worth considering making the extra effort to earn more money.
Consolidate Any Existing Debts – often first home buyers will have some short-term debts like hire purchase accounts, credit cards, store cards or other debts. These can be expensive with high interest rates, fees and therefore have quite high repayments. When you want to buy a first home you want to make sure that your debts don’t impact negativity on your mortgage application.
Mortgage advisers can review the impact and arrange alternative debt consolidation loans that can help you.
Invest in Shares / Equities – a lot of people have done some investing into the sharemarket and this has become easier in recent years with a number of online tools that allow you to access various global and mainly offshore sharemarkets. One of the most popular self managed platforms for share investments is Sharesies where you can choose investments from a number of New Zealand, Australian and US shares. You can set up a free account and start investing with just a few dollars.
Investing in sharemarkets does have risks, but you can also achieve some good returns so it is quite a good idea to start investing at least a small amount using a platform like Shareies.