Housing affordability in Australia is a hot topic. Well, let’s face it, not just a hot topic but a real issue for many Australians. Whether it’s finding affordable rental accommodation or setting our sights on buying our own home, the costs involved can leave us stressed, overwhelmed and ready to give up even before we’ve started.
But I’m not here to tell you just how bad it is… You know how bad it is, right? We all do! And unfortunately it doesn’t look like easing any time soon.
What I can do though, is give you the steps I recommend you take to make your housing goal more attainable. These are my top three tips:
1. Know your Numbers
I wish I could tell you there is some quick fix or hidden secret to being able to afford housing but the reality is, it simply comes down to the numbers. How much money is coming in and how much is going out. The very first step to housing affordability in Australia is knowing the market and knowing the amount you need to be able to afford a house and working your budget until you reach that figure.
In reality, the amount of money you need versus the amount of money you have could be worlds apart. But just knowing these figures already puts you a step ahead of everyone else that chooses to stick their head in the sand.
Like all goals, we need to know what we are working towards before we can work out the steps we are going to take to get there.
The amount you need to get you into a home may be the price of rentals in the area you want to live or it could be the amount you need to save for a deposit on your own home. Regardless of whether you are working towards renting or buying, once you know the amount you need, you can do your sums (and the work) to make it achievable.
So as boring as it sounds, the first step to housing affordability (and this step will be ongoing) is to set yourself a budget and track your money.
There are plenty of free budget trackers, apps and spreadsheets available online. The Money Smart website has some great budget resources to help you get started or you can download spreadsheet style budget trackers here.
Once you start tracking your money and you know how much money is coming in and how much money is going out, you can identify the money leaks and also identify the opportunities to increase your income to save towards your housing goal.
When the budget does not balance and we find ourselves short of the savings goal, the only options we have are to either increase our money coming in and/or decrease our money going out. It’s as simple as that.
Doing a budget and tracking our money can be an eye opener. It can actually be quite confronting and overwhelming, especially if life has dealt us a rough hand and we are starting from scratch. But confronting and overwhelming is far better than not knowing. The emotions around doing this exercise will pass… Trust me they will, and once you start working towards your financial goal; you’ll even start to feel empowered and financially confident.
2. Housing Affordability Australia = Be Willing to Compromise
One of my all time favourite quotes and words I live by often is the quote ‘Do what you have to do until you can do what you want to do’ by Oprah Winfrey. While we all have our ideal lives pictured clearly in our heads, including our home and lifestyle, we often forget that getting to that idyllic picture can be a process involving many steps. Being willing to do whatever it takes to get us to the next step and ultimately to our ideal home is the key.
Being able to afford a place of our own may mean we need to make compromises to get there. If you can’t afford to rent in your ideal suburb, then look at neighbouring suburbs that may have cheaper rents and rent there until you can afford to move to your ideal suburb.
If you want to buy a 4-bedroom home but it’s beyond your budget, then look for alternatives until you can afford to upgrade to 4 bedrooms, or give yourself more time to save up that little bit more.
Write out a list of what your ideal home looks like. What is its size? Where is it located? What features does it include? What infrastructure, such as schools and shops, would you like nearby? Take your time to list out every detail and then when it’s complete, go back through the list and mark everything that is a must have and everything that you are willing to compromise on.
If your ‘must have’ list is still not achievable on your budget then look at ways to make it work. There are plenty of ways to both make and save money. By using these tips, being resourceful and also be willing to compromise, you can get you into your ideal home a lot faster.
So make compromises. Get yourself to that next step. Do what you have to do until you can do what you want to do. Oprah pulled herself out of poverty and you can too.
3. Build a Strong Mindset
Housing affordability in Australia is as much a mental game as it is a numbers game. Our situation can either be temporary or permanent based on the choices we make. In order to change our situation we first must believe that it’s possible.
Where you are right now does not have to be where we will be forever. This is something many people overlook. If you are currently on Centrelink and struggling to make ends meet, it can be hard to see beyond the struggle and see ourselves in a situation other than the one we are in right now. As I mentioned earlier, working towards financial freedom can be enormously overwhelming. But in order to change our situation we first need to move beyond the overwhelm. At any given moment, you hold the power to either remain where you are or change course.
One of the best things you can do for your mindset is surround yourself with a strong support team and team of advisers who can not only give you good advice but who you can confide in and lean on when you need to.
Seek out the people who can remind you of what you are working towards when you are feeling disillusioned. Build a support network of people who are also working towards a similar goal and be prepared for the long haul.
One of the hardest things about saving for a deposit for a home or working towards a better rental property is the length of time it takes. It can be so easy to become disillusioned throughout the process. You could be on track, doing really well but then you have a setback and the frustration sets in and you think ‘stuff it, who needs a house anyway’. All goals, both short term and long term, require commitment and focus to reach them.
The biggest barrier I have found to moving beyond a restrictive situation such as being on Centrelink is having the wrong mindset. Mindset is something I recommend you work on every single day.
Having a strong mindset along with incorporating the practical steps to increasing your wealth and opportunities is the key to everything you want to achieve in life, including housing affordability in Australia.
I’d love to hear what you are doing to get you closer to your housing goals. Share your thoughts in the comments below.
Until next time