Zari Gillings said buying a home requires a lot of sacrifices and people have to forego small luxuries. (Source: TikTok)
A young Australian has urged would-be home buyers to “get their priorities right” if they are serious about buying property, as property prices across the country have soared to record highs, forcing some to give up on their home-buying dreams.
But Zari Gillings told Yahoo Finance it was proof that cutting back on “silly” spending on luxury items could be the solution – she and her fiancé bought a three-bedroom house in Adelaide two years ago after a financial “wake-up call”, but at great cost to them.
“To be honest, we really just lived on the bare minimum for a year, and that’s what built up our savings,” the now 25-year-old said.
Baby Boomers are often criticized for advising people to cut back on spending on avocado spread on toast or in their coffee, but Gillings said that’s exactly what people need to do.
“For example, if you have five streaming subscriptions, that comes to $20 a month,” she said.
“Or you might think, ‘It’s only $5’ if you buy a coffee every day, but if you drink coffee every day for a year, plus buy a subscription, it’s going to cost you $60 for nail care.
“I don’t think people realize how much they’re actually spending.”
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The couple had been saving for years, but it wasn’t until they spoke to a mortgage broker that they began to take their monthly expenses seriously.
For the next year they cracked down hard, eliminating everything except what was absolutely necessary.
Going out to dinner? Not anymore. Getting a little self-care at the salon? Out of the question. Retail therapy? Not unless it’s required for work.
Gillings and her fiancé also agreed not to give each other gifts for Christmas or birthdays, and told their families not to expect anything.
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“We said, ‘We’re not participating in giveaways this year and we’re not expecting any giveaways,'” she said.
“And some people will say that’s insane, but we didn’t need that.
“Stop complaining about the cost of living.”
Young workers pointed out that the rising cost of living has left some people unable to survive without small luxuries.
But her message is not directed at those people. It is directed at those who waste money but still complain that they don’t have any money.
“[Yet] “They still go in every week to get their nails done, their hair done, their eyelashes done,” she said.
“Eating out, vaping, smoking cigarettes… They love to complain about the cost of living, but I don’t think you really realize how much money you can save here.”
How did she overcome her spending habit? There was a test she had to pass every time she went shopping.
“For example, if I want to get eyelash extensions, I think, ‘Would I rather get a set of eyelashes or a gift of $120?’ and I always choose the money,” she says.
“That means no more whippings. And more money for the household.”
But are those little luxuries enough to buy a home?
Some argue that giving up your daily caffeine intake or monthly haircuts isn’t enough to buy a house.
Some say not making such purchases misses out on what little joy is left in a sometimes bleak world.
But it’s amazing how much money small transactions can add up to.
If you buy a $6 coffee (which can be pricey) and eat a $17 avocado toast at the cafe every day, that comes to about $8,400 a year.
If you pay $18.99 a month for Netflix, $22 for Binge, and $16 for Stan, that comes to roughly $700 a year.
Paying these amounts individually won’t help you buy a home, but Gillings said it could be helpful to start thinking about these small transactions in the long run and how you can leverage them.
“Most people who say they can’t save money can if they set their priorities right,” she said.
Finder’s research revealed that despite the rising cost of living, 74% of Australians are maintaining certain comforts – there are lots of little things people can’t live without, such as entertainment (20%), eating out (18%) and takeaway coffee (18%).
“On the one hand, a quarter of people are giving up unnecessary possessions to make ends meet. On the other hand, many people aren’t ready to let go of the things that bring them joy,” said Chris Yeager, shopping expert at Finder.
“The data shows the gap between rich and poor in Australia is widening, forcing some people to take drastic action while others are left unaffected.”
How long will it take you to save up a down payment for a home?
New research this week has revealed how long Australians in some of their most popular professions need to save for a down payment on a house.
Parliamentary Library analysis published by the Greens, based on Australian Taxation Office wages, Reserve Bank lending and CoreLogic house price data, found that a nurse earning $112,900 a year would not have enough money to get a mortgage until 2035 at current interest rates.
Even the highest-paid accountant (who earns $144,800 a year) will need to save for a down payment or pay 39% of their income toward a mortgage by 2031.
It will take childcare workers until 2055, a staggering 31 years, to save up for a pension.
“For too many Australians, the dream of home ownership has disappeared,” Greens housing spokesman Max Chandler-Mather said.
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