Buying a home with girl math
How do you combine buying a home with girl math?
I’ve recently discovered what “girl math” is – a previously unknown code known to many young people. Google this term and you will find:
“Girl math is a trending phenomenon that emerged on TikTok and is used to describe the way girls justify their spending habits. ‘Girl math’ is used as a humorous way to rationalize seemingly intricate and often ridiculous ways women justify an extravagant or unnecessary expense.”
An example is: “If I pay for something using actual cash, I basically didn’t spend anything or it was free because there’s no proof of spending.”
OK - humorous, but also concerning! And, by the way, not only applicable to females!
A slightly different but similar view from a young person in our daughter’s circle of friends is “I’m never going to be able to buy my own place, so I might as well have fun now and deal with the future in the future."
So is this reasonable, in a time when housing affordability is at its lowest level in three decades[1]? There is so much data showing that residential property prices are at an all-time high and rising, with higher interest rates and a decreasing number of new houses being approved; this situation doesn’t seem to be changing any time soon. This is not a pretty picture at all – especially if you haven’t yet entered the property market.
However, my research and financial analysis show that there are other ways to approach this dilemma to create wealth in the long-term, and it’s not about tapping out and jumping to the conclusion that there’s no way it’s possible.
There is no black box trick or crazy investment methodology – it’s about having a plan for your life and your finances. Having a budget or at least a broad financial plan that’s written down - it’s about knowing where your money goes so you can save for a deposit. It’s about doing your homework to understand what sort of property you can afford and how you might reach the goal of a ‘forever home’.
There is a way, it does take some focus, thinking and action – but what worthwhile endeavour doesn’t. It may be confronting to work through this process but isn’t it better to be realistic and consider the long-term as well as the here and now?
How about this for a more realistic girl math approach: “Saving for your own home is a double benefit because once you pay it off you live cost/rent free and it increases in value over time.” And this is true.
Yes, that may mean that you need to make some changes in your short-term spending habits to be able to save for a deposit and service a mortgage.
While you will generally see greater growth in a detached house and land, than a unit or apartment; for many an apartment may be a good stepping stone and home – as long as you buy well.
So what are the steps you need to take to do this:
Assess your current income, expenses and savings
Based on this financial capacity - identify the type of home you want to buy and can afford to buy, as well the suburb/area
Assess the requirements of mortgages eg. deposit requirements, insurance, (e.g., Lenders Mortgage Insurance), repayment levels
See what government or other assistance is available to help fund the deposit and/or mortgage
Start looking for a property - know the market!
In researching the course material, it’s surprising what’s out there in terms of government assistance – you’ll need to spend the time finding out what you qualify for. For example, First Home Owner Grants, First Home Guarantee or First Home Loan Deposit Scheme, Stamp Duty Concessions, First Home Super Saver Schemes and a range of others.
“Wealth, like a tree, grows from a seed. The sooner you plant that seed the sooner shall the tree grow.” George S. Clason
There are a number of more detailed steps, reference material to calculate how much you can afford to spend and how long it will take to save the deposit - in my course: “Buying a Home”. See the website: www.lifelaunchpad.com.au
[1] https://www.proptrack.com.au/insights-hub/proptrack-housing-affordability-report-2023/
