1 00:00:00,080 --> 00:00:03,199 Speaker 1: Welcome to Sugar Mama's Fireplay, the podcast where we spark 2 00:00:03,279 --> 00:00:07,560 Speaker 1: your financial independence, fuel your early retirement dreams, and empower 3 00:00:07,600 --> 00:00:11,200 Speaker 1: you to build long term sustainable wealth. I am your host, 4 00:00:11,400 --> 00:00:16,360 Speaker 1: Canna Campbell, financial planner and a passionate advocate for financial freedom. 5 00:00:16,600 --> 00:00:19,520 Speaker 1: Whether you're starting your journey or finding your strategy, this 6 00:00:19,640 --> 00:00:22,600 Speaker 1: is the podcast that will inspire you, educate you, and 7 00:00:22,840 --> 00:00:26,880 Speaker 1: guide you towards a life of choice, security and abundance. 8 00:00:27,440 --> 00:00:38,640 Speaker 1: Let's get started. So today we're going to be diving 9 00:00:38,680 --> 00:00:44,199 Speaker 1: into an incredibly important topic, mortgages and relationships. Buying a 10 00:00:44,240 --> 00:00:46,879 Speaker 1: home together or even an investment property together, is a 11 00:00:47,000 --> 00:00:50,040 Speaker 1: major financial decision and obviously comes with a lot of 12 00:00:50,080 --> 00:00:52,959 Speaker 1: emotional commitment. So if you are planning on taking out 13 00:00:52,960 --> 00:00:56,240 Speaker 1: a mortgage with your partner, it is essential to have 14 00:00:56,440 --> 00:01:01,840 Speaker 1: clear and open conversations before you sign on the dotted line. Now, 15 00:01:01,880 --> 00:01:05,120 Speaker 1: today I am thrilled to be joined by Adam McCabe, 16 00:01:05,240 --> 00:01:09,280 Speaker 1: my own personal mortgage broker from Blue Lantern, and he's 17 00:01:09,319 --> 00:01:11,240 Speaker 1: going to help us break down the key questions that 18 00:01:11,520 --> 00:01:15,800 Speaker 1: every couple should discuss before buying a home or an 19 00:01:15,800 --> 00:01:20,560 Speaker 1: investment property together. By addressing these crucial topics upfront in advance, 20 00:01:20,600 --> 00:01:24,160 Speaker 1: you can set clear boundaries, reduce financial risk, and create 21 00:01:24,400 --> 00:01:30,039 Speaker 1: a secure, stress free future for yourselves to enjoy together. Adam, 22 00:01:30,080 --> 00:01:33,160 Speaker 1: good morning, and thanks for coming in again. When you 23 00:01:33,200 --> 00:01:33,759 Speaker 1: come in. 24 00:01:33,760 --> 00:01:35,200 Speaker 2: Me too, thanks for having me again. 25 00:01:35,319 --> 00:01:38,520 Speaker 1: And I should also point out you were actually the 26 00:01:38,560 --> 00:01:40,759 Speaker 1: mortgage broker that helped me when I became my single mother. 27 00:01:40,760 --> 00:01:43,960 Speaker 1: Obviously we go really far back, but I remember calling 28 00:01:44,040 --> 00:01:46,520 Speaker 1: you going, Adam, I need your help getting divorced and 29 00:01:46,920 --> 00:01:50,120 Speaker 1: I need to buy this property out and you stepped in, 30 00:01:50,240 --> 00:01:53,400 Speaker 1: like swooped in and helped me. So you know, this 31 00:01:53,520 --> 00:01:56,320 Speaker 1: is really quite appropriate that you're here with me talking 32 00:01:56,320 --> 00:01:59,280 Speaker 1: about the key questions. So, Adam, you have a huge 33 00:01:59,320 --> 00:02:02,280 Speaker 1: amount of experience, you know, twenty something, it's years of 34 00:02:02,360 --> 00:02:05,040 Speaker 1: experience being a mortgage broker, a twenty two, twenty two, 35 00:02:05,560 --> 00:02:08,440 Speaker 1: and you have obviously dealt with lots of couples and 36 00:02:08,480 --> 00:02:10,760 Speaker 1: I'm sure I wouldn't be the only person that you've 37 00:02:10,760 --> 00:02:13,200 Speaker 1: dealt with was going through a divorce or a separation 38 00:02:13,720 --> 00:02:17,720 Speaker 1: where it meant, you know, having to rejig the finances 39 00:02:17,800 --> 00:02:20,400 Speaker 1: or reapply for home loans and mortgages and investment loans. 40 00:02:20,480 --> 00:02:23,800 Speaker 1: You know, you've seen all different situations and scenarios. But 41 00:02:24,080 --> 00:02:26,600 Speaker 1: I'm interested to hear from you what are the key 42 00:02:26,840 --> 00:02:31,400 Speaker 1: conversations that couples need to be having, ideally before they 43 00:02:31,480 --> 00:02:34,040 Speaker 1: go and make a major financial decision and obviously take 44 00:02:34,040 --> 00:02:37,000 Speaker 1: out one of the biggest financial responsibilities together. And I 45 00:02:37,040 --> 00:02:38,720 Speaker 1: also want to make sure we apply this to people 46 00:02:38,760 --> 00:02:41,280 Speaker 1: who maybe have already gone and bought the property or 47 00:02:41,480 --> 00:02:44,119 Speaker 1: bought the investment property, you know, making sure that they're 48 00:02:44,200 --> 00:02:46,240 Speaker 1: worth these conversations so that they haven't had them yet 49 00:02:46,240 --> 00:02:47,880 Speaker 1: they can start to quickly have them. Now, where do 50 00:02:47,919 --> 00:02:49,440 Speaker 1: you start? What are the key things we need to 51 00:02:49,480 --> 00:02:51,000 Speaker 1: be chatting about as a couple. 52 00:02:51,120 --> 00:02:53,120 Speaker 2: Look, you're totally right, and you know, over the years, 53 00:02:53,280 --> 00:02:57,080 Speaker 2: I've had so many experiences through those issues, more than 54 00:02:57,080 --> 00:02:59,519 Speaker 2: I could remember. But what I've tried to do is 55 00:02:59,520 --> 00:03:02,440 Speaker 2: break it down into three categories. So we're looking at 56 00:03:02,480 --> 00:03:05,840 Speaker 2: categories of questions to avoid conflicts, questions to lead a 57 00:03:05,840 --> 00:03:09,960 Speaker 2: comfortable lifestyle, and then questions for financial security in retirement. 58 00:03:10,040 --> 00:03:12,560 Speaker 1: Brilliant. Okay, I like the sound of this, all right, 59 00:03:12,639 --> 00:03:13,880 Speaker 1: so let's get started. 60 00:03:14,040 --> 00:03:17,520 Speaker 2: First question we have is what are our individual financial goals? 61 00:03:17,600 --> 00:03:20,560 Speaker 2: That's really important because each couple they need to discuss 62 00:03:20,680 --> 00:03:24,080 Speaker 2: and understand what each other's financial goals are, whether it 63 00:03:24,120 --> 00:03:27,160 Speaker 2: be short term, medium term, long term, to avoid any 64 00:03:27,200 --> 00:03:30,320 Speaker 2: misunderstandings and to be working together on that common goal. 65 00:03:30,480 --> 00:03:32,600 Speaker 1: So can you give me some examples, Well, it would be. 66 00:03:32,639 --> 00:03:34,560 Speaker 2: For example, if you know you're entering the property market 67 00:03:34,639 --> 00:03:36,560 Speaker 2: for the first time, like a first time buy, first 68 00:03:36,600 --> 00:03:39,000 Speaker 2: time buy or is it an investor? What's important? What 69 00:03:39,040 --> 00:03:41,200 Speaker 2: are their long term goals? Can they afford to buy 70 00:03:41,280 --> 00:03:43,880 Speaker 2: their forever home now? Are they both in line with that? 71 00:03:44,040 --> 00:03:46,920 Speaker 2: Or would they prefer to enter the market with lower 72 00:03:47,000 --> 00:03:49,800 Speaker 2: risk in terms of a lower mortgage that you can 73 00:03:49,840 --> 00:03:51,960 Speaker 2: then upscale over the years and end up in your 74 00:03:51,960 --> 00:03:54,360 Speaker 2: forever home. So what does that look like? Do you 75 00:03:54,400 --> 00:03:56,280 Speaker 2: both want to get there now or are you happy 76 00:03:56,320 --> 00:03:57,080 Speaker 2: to wait? So? 77 00:03:57,280 --> 00:03:59,280 Speaker 1: Is this a stepping stone to help us get up 78 00:03:59,280 --> 00:04:00,600 Speaker 1: foot in the door in the mine? Can we see 79 00:04:00,600 --> 00:04:02,800 Speaker 1: this you know, we're looking at selling this in a 80 00:04:02,880 --> 00:04:04,880 Speaker 1: couple of years time to then upgrade the home and 81 00:04:04,920 --> 00:04:07,160 Speaker 1: buy a bigger one and take on potentially more debt 82 00:04:07,200 --> 00:04:09,680 Speaker 1: with more income. Or is it something that we're going 83 00:04:09,720 --> 00:04:11,160 Speaker 1: to stay put in the meantime? 84 00:04:11,440 --> 00:04:13,880 Speaker 2: Correct? And those are the options. There's also the option 85 00:04:13,920 --> 00:04:16,880 Speaker 2: obviously of rent vesting, which is becoming much more common 86 00:04:16,880 --> 00:04:18,840 Speaker 2: these days as well, and that might be your stepping 87 00:04:18,880 --> 00:04:22,679 Speaker 2: stone into that ideal family home, you know, by paying 88 00:04:22,720 --> 00:04:26,120 Speaker 2: down the investment of a lower price, getting some appreciation 89 00:04:26,279 --> 00:04:29,440 Speaker 2: in value, and then selling for the profit scaling that up, 90 00:04:29,520 --> 00:04:33,080 Speaker 2: that's your stepping stone into your home. I would say 91 00:04:33,000 --> 00:04:35,320 Speaker 2: they're the main factors that we're looking at here. 92 00:04:35,560 --> 00:04:37,600 Speaker 1: So the key thing is to think about what are 93 00:04:37,680 --> 00:04:40,159 Speaker 1: your short term, medium term, and long term goals in 94 00:04:40,200 --> 00:04:43,320 Speaker 1: relation to that particular property. And of course never assume 95 00:04:43,400 --> 00:04:44,400 Speaker 1: anything I think no. 96 00:04:44,560 --> 00:04:47,240 Speaker 2: And you know you can do that obviously for each transaction, 97 00:04:47,839 --> 00:04:51,360 Speaker 2: but when you're starting that first purchase, you need to align, 98 00:04:51,520 --> 00:04:54,560 Speaker 2: and you need to align early otherwise you start the process. 99 00:04:54,640 --> 00:04:57,320 Speaker 2: You can be at auctions, you can be it online shopping, 100 00:04:57,440 --> 00:05:02,680 Speaker 2: and if you're not aligned and working together, be disagreements, misunderstandings, conflict, 101 00:05:02,760 --> 00:05:06,360 Speaker 2: conflict at which which could cause you to pull out 102 00:05:06,400 --> 00:05:09,279 Speaker 2: of the transaction altogether, then it's a missed opportunity in 103 00:05:09,279 --> 00:05:11,480 Speaker 2: two three years time. That's all really important to get 104 00:05:11,480 --> 00:05:13,599 Speaker 2: back and that's why this is our first point. Align 105 00:05:13,680 --> 00:05:14,840 Speaker 2: your goals early on. 106 00:05:14,880 --> 00:05:16,560 Speaker 1: And I should also point out, you know, for couples 107 00:05:16,560 --> 00:05:18,200 Speaker 1: that are listening to this that have already bought that 108 00:05:18,200 --> 00:05:20,920 Speaker 1: property or recently bought a property, have these conversations. Now, 109 00:05:20,920 --> 00:05:21,720 Speaker 1: it's not too late. 110 00:05:22,360 --> 00:05:23,760 Speaker 2: Now, the sooner the better, all. 111 00:05:23,800 --> 00:05:25,760 Speaker 1: Right, What about next, especially when it comes to things 112 00:05:25,800 --> 00:05:28,080 Speaker 1: like expenses and budgets and see. 113 00:05:27,920 --> 00:05:30,480 Speaker 2: Yeah, absolutely so. The second one we're looking out here 114 00:05:30,520 --> 00:05:33,279 Speaker 2: is how we handle joint expenses and savings. Now that's 115 00:05:33,320 --> 00:05:37,040 Speaker 2: really important because if you're sharing financial responsibilities, you need 116 00:05:37,080 --> 00:05:39,520 Speaker 2: to then map out how you're going to manage that. 117 00:05:39,600 --> 00:05:42,280 Speaker 2: And you know, we've got so much technology behind us 118 00:05:42,279 --> 00:05:44,039 Speaker 2: these days to help manage that. You could look at 119 00:05:44,040 --> 00:05:46,599 Speaker 2: options of you know, should you have a joint account 120 00:05:46,600 --> 00:05:49,159 Speaker 2: where you're managing all of your expenses jointly. You could 121 00:05:49,200 --> 00:05:51,680 Speaker 2: look at having a separate type of service account where 122 00:05:51,920 --> 00:05:54,840 Speaker 2: both contribute a proportion of your income to manage the 123 00:05:54,839 --> 00:05:57,680 Speaker 2: direct debits that are due to come out and loan repayments. 124 00:05:57,760 --> 00:06:00,200 Speaker 2: So they're the two types of setups that i'd look 125 00:06:00,240 --> 00:06:02,440 Speaker 2: at that you want to ask yourself which one is 126 00:06:02,480 --> 00:06:03,200 Speaker 2: best suited to you? 127 00:06:03,520 --> 00:06:06,599 Speaker 1: And I guess you know, not everyone earns the same income. 128 00:06:06,680 --> 00:06:08,280 Speaker 1: It's I think it's quite rare to come across a 129 00:06:08,320 --> 00:06:12,680 Speaker 1: couple that earn the same salary definitely, So having the 130 00:06:12,680 --> 00:06:15,160 Speaker 1: conversations about you know, whether it's a percentage, is that 131 00:06:15,320 --> 00:06:17,200 Speaker 1: the best way of running things where it's fair and 132 00:06:17,240 --> 00:06:20,720 Speaker 1: equitable and both parties obviously agree or you know, there's 133 00:06:20,760 --> 00:06:23,039 Speaker 1: so many different dynamics to come into this. 134 00:06:23,200 --> 00:06:24,919 Speaker 2: There are and you know, there are opportunities, and I 135 00:06:24,960 --> 00:06:26,440 Speaker 2: see a lot of this where you know, will be 136 00:06:26,480 --> 00:06:29,200 Speaker 2: for one partner to have the larger main income and 137 00:06:29,240 --> 00:06:32,000 Speaker 2: that goes towards managing all of your expenses, direct debits, 138 00:06:32,000 --> 00:06:35,080 Speaker 2: and the smaller income is the savings because it's important 139 00:06:35,080 --> 00:06:37,480 Speaker 2: to have a savings plan as well as managing all 140 00:06:37,520 --> 00:06:41,080 Speaker 2: your existing commitments. So getting together and aligning of your 141 00:06:41,160 --> 00:06:43,080 Speaker 2: vision on how you would manage that on a month 142 00:06:43,160 --> 00:06:45,280 Speaker 2: to month's basis is really important. 143 00:06:45,400 --> 00:06:47,919 Speaker 1: I have read quite a few blogs where couples have 144 00:06:48,040 --> 00:06:51,400 Speaker 1: explained how they manage money, and the one that I 145 00:06:51,440 --> 00:06:55,080 Speaker 1: think is most popular and the couple seem really happy 146 00:06:55,080 --> 00:06:58,680 Speaker 1: and united, is where they have done exactly that. You know, 147 00:06:58,800 --> 00:07:00,800 Speaker 1: one person income goes to it's the mortgage, and then 148 00:07:00,800 --> 00:07:03,080 Speaker 1: they live off the other person's income together. And I 149 00:07:03,120 --> 00:07:05,279 Speaker 1: have to say, for us in our home, you know, 150 00:07:05,440 --> 00:07:08,200 Speaker 1: Tom's income covers the mortgage and then we use my 151 00:07:08,279 --> 00:07:10,720 Speaker 1: income to live off of the family expenses, and it 152 00:07:10,920 --> 00:07:12,680 Speaker 1: makes you feel more like a team. You know, it's 153 00:07:12,680 --> 00:07:15,320 Speaker 1: none of this. I earn thirty percent of what you're owning, 154 00:07:15,360 --> 00:07:17,920 Speaker 1: so we'll split the expenses thirty seventy like. It can 155 00:07:17,960 --> 00:07:22,480 Speaker 1: get very messy and unproductive and totally yeah, exactly, and 156 00:07:22,720 --> 00:07:23,560 Speaker 1: it is uncomfortable. 157 00:07:23,680 --> 00:07:26,080 Speaker 2: It's also really important to get a grasp on that 158 00:07:26,200 --> 00:07:29,160 Speaker 2: early on because what I see is a common error 159 00:07:29,320 --> 00:07:31,040 Speaker 2: is you've got all these direct debits set up, and 160 00:07:31,080 --> 00:07:33,080 Speaker 2: if you're not aligned and working together on how to 161 00:07:33,120 --> 00:07:35,240 Speaker 2: manage those, and you know, you should have this set 162 00:07:35,280 --> 00:07:38,160 Speaker 2: up to be automated transfers to separate accounts to many 163 00:07:38,200 --> 00:07:41,400 Speaker 2: of those direct debits. That's my advice because if you don't, 164 00:07:41,600 --> 00:07:45,680 Speaker 2: what we do see is your account being overdrawn when 165 00:07:45,720 --> 00:07:48,080 Speaker 2: direct debits come out that you haven't planned for them. 166 00:07:48,080 --> 00:07:50,880 Speaker 1: That's when you get that really awkward situation supermarket and 167 00:07:51,040 --> 00:07:53,600 Speaker 1: your card gets declient or not just. 168 00:07:53,560 --> 00:07:56,200 Speaker 2: Say it can gets overdrawn. These are little things impact 169 00:07:56,240 --> 00:07:58,000 Speaker 2: your credit file, so you really need to be on 170 00:07:58,040 --> 00:08:00,840 Speaker 2: top of that. You can manage it easily by having 171 00:08:00,840 --> 00:08:04,920 Speaker 2: automated transfers to manage those direct debits and then, as 172 00:08:04,920 --> 00:08:08,640 Speaker 2: we say, starting that early as a couple agreeing on that, 173 00:08:09,000 --> 00:08:11,440 Speaker 2: then you'll avoid those types of issues. 174 00:08:11,520 --> 00:08:13,800 Speaker 1: And we should also point out, you know, having equal 175 00:08:13,880 --> 00:08:16,920 Speaker 1: access to those accounts, having that transparency and be able 176 00:08:16,960 --> 00:08:20,520 Speaker 1: to have the login details you know, attached direct debit cards, 177 00:08:21,040 --> 00:08:23,800 Speaker 1: you know, obviously respecting each other and your boundaries with 178 00:08:24,120 --> 00:08:25,080 Speaker 1: managing those accounts. A. 179 00:08:25,120 --> 00:08:28,200 Speaker 2: It's absolutely I've spoken to clients who want, you know, 180 00:08:28,240 --> 00:08:31,640 Speaker 2: one of the customers hasn't had access to online banking 181 00:08:31,720 --> 00:08:33,400 Speaker 2: for those accounts. They just leave it to the other 182 00:08:33,440 --> 00:08:35,720 Speaker 2: person and look, it's really important, which is a. 183 00:08:35,600 --> 00:08:36,800 Speaker 1: Form of financial abuse. 184 00:08:37,200 --> 00:08:41,720 Speaker 2: Well, it's more, you know, it's more I wouldn't say ignorance, 185 00:08:41,720 --> 00:08:42,959 Speaker 2: but it's probably just more. 186 00:08:43,520 --> 00:08:45,280 Speaker 1: That person didn't actually want access. 187 00:08:45,480 --> 00:08:47,559 Speaker 2: Yeah, you know, the money might be managed by one 188 00:08:47,559 --> 00:08:49,280 Speaker 2: of them and that's fine, but you should still have 189 00:08:49,360 --> 00:08:52,520 Speaker 2: access and visibility. It's not that they didn't have permission 190 00:08:52,559 --> 00:08:55,600 Speaker 2: for access. That were just lazy in Registram, setting up 191 00:08:55,600 --> 00:08:57,680 Speaker 2: passwords okay, and getting online. 192 00:08:57,720 --> 00:08:59,679 Speaker 1: Because I have seen the other side where they're actually 193 00:08:59,720 --> 00:09:02,079 Speaker 1: blow they're not. They refuse to give them axes. No, 194 00:09:02,120 --> 00:09:05,360 Speaker 1: that's terrible, horror, horrific. What else, particularly when it comes 195 00:09:05,360 --> 00:09:07,880 Speaker 1: to things like, you know, deposits towards the purchase. I 196 00:09:07,880 --> 00:09:10,840 Speaker 1: mean again, these are conversations that can be really awkward 197 00:09:10,880 --> 00:09:12,440 Speaker 1: and uncomfortable to have initially. 198 00:09:12,760 --> 00:09:14,880 Speaker 2: They are they are, and sometimes you know, if it's 199 00:09:15,000 --> 00:09:17,680 Speaker 2: early on in a relationship where you're taking that step 200 00:09:17,679 --> 00:09:21,200 Speaker 2: of buying a property together, whether everyone's providing full information, 201 00:09:21,360 --> 00:09:22,680 Speaker 2: they want to keep a little bit of money on 202 00:09:22,720 --> 00:09:25,080 Speaker 2: the side as their security buffer. While there's nothing wrong 203 00:09:25,120 --> 00:09:28,640 Speaker 2: with that holding courage, being fully transparent talking about exactly 204 00:09:28,640 --> 00:09:31,320 Speaker 2: what you've got, it's really important to ensure that when 205 00:09:31,320 --> 00:09:33,600 Speaker 2: you're buying a property that you're leaving yourself a really 206 00:09:33,640 --> 00:09:36,240 Speaker 2: good buffer. When I say buffer, we're talking three months 207 00:09:36,280 --> 00:09:39,000 Speaker 2: worth of mortgage repayments I would think as a minimum, 208 00:09:39,000 --> 00:09:41,560 Speaker 2: because if you put all your eggs into one basket 209 00:09:41,760 --> 00:09:44,320 Speaker 2: and after you've purchased that property there's not much left over, 210 00:09:44,520 --> 00:09:45,880 Speaker 2: it's going to be a tough few months. 211 00:09:46,040 --> 00:09:47,920 Speaker 1: And you know when things get hard when you sort 212 00:09:47,920 --> 00:09:51,480 Speaker 1: of realize the strength and possible weakness of a relationship. 213 00:09:51,600 --> 00:09:55,840 Speaker 2: Definitely, the deposit size and contribution is also an important part. 214 00:09:56,080 --> 00:09:59,440 Speaker 2: Is one partner putting in considerably more than the other 215 00:10:00,000 --> 00:10:02,880 Speaker 2: if it's an investment, should they look at ownership percentage, 216 00:10:03,400 --> 00:10:05,880 Speaker 2: get some tax advice on that. As a home should 217 00:10:05,880 --> 00:10:08,319 Speaker 2: they look at the percentage of ownership. I don't necessarily 218 00:10:08,360 --> 00:10:11,000 Speaker 2: think that's a wise way home for your own home 219 00:10:11,040 --> 00:10:14,040 Speaker 2: for investment. I do, but again, these are just conversations 220 00:10:14,040 --> 00:10:16,160 Speaker 2: that you need to have in terms of who's contributing 221 00:10:16,200 --> 00:10:19,920 Speaker 2: what to the purchase so that there's no conflicts moving forward. 222 00:10:20,000 --> 00:10:22,679 Speaker 1: And also there are situations where you know, one person 223 00:10:22,720 --> 00:10:26,040 Speaker 1: may have been saving for a really long period of time, 224 00:10:26,120 --> 00:10:29,920 Speaker 1: you know, five years for example, and the other partner 225 00:10:30,160 --> 00:10:32,720 Speaker 1: has only recently started saving because you know, they weren't 226 00:10:32,720 --> 00:10:34,880 Speaker 1: planning on buying for pretty bit. They decided, okay, now 227 00:10:34,920 --> 00:10:36,840 Speaker 1: we're going to buy something together. So they actually may 228 00:10:36,880 --> 00:10:39,000 Speaker 1: have a capability to have the same size deposit, but 229 00:10:39,040 --> 00:10:40,920 Speaker 1: they're not quite there yet as to what the other 230 00:10:40,960 --> 00:10:43,520 Speaker 1: partner has been saving. So again, like these conversations are 231 00:10:43,520 --> 00:10:45,719 Speaker 1: so so important. You can't assume you're going to go 232 00:10:45,760 --> 00:10:47,520 Speaker 1: in fifty to fifty it's going to be very fair 233 00:10:47,520 --> 00:10:49,559 Speaker 1: and equitable. Nothing in life is fair and eckicable, but 234 00:10:49,600 --> 00:10:51,000 Speaker 1: they are going to be all sorts of things that 235 00:10:51,000 --> 00:10:53,480 Speaker 1: sort of come into play. You cannot assume anything, and 236 00:10:53,520 --> 00:10:55,720 Speaker 1: these conversations are just essential. 237 00:10:55,360 --> 00:10:58,120 Speaker 2: No, and it's even just getting that awkward conversation out 238 00:10:58,160 --> 00:11:00,440 Speaker 2: of the way before the purchase goes through. The last 239 00:11:00,480 --> 00:11:02,760 Speaker 2: thing you want is to be aware of that at 240 00:11:02,760 --> 00:11:04,400 Speaker 2: the back of your mind. And if you both aware 241 00:11:04,440 --> 00:11:07,040 Speaker 2: of it and then nothing is said, property purchase goes 242 00:11:07,080 --> 00:11:09,840 Speaker 2: through and then the discussions start happening, little digs about 243 00:11:09,880 --> 00:11:13,400 Speaker 2: who put in, how much and so on. So do 244 00:11:13,520 --> 00:11:15,960 Speaker 2: that early on upfront before you take the step. 245 00:11:16,040 --> 00:11:19,160 Speaker 1: All right, what about actually the day to day budgeting, 246 00:11:19,240 --> 00:11:22,240 Speaker 1: You know, the mortgage or payment coming out the expenses 247 00:11:22,360 --> 00:11:24,400 Speaker 1: attached to maintaining a property, which a lot of people 248 00:11:24,440 --> 00:11:26,480 Speaker 1: don't realize until they're in the thick of owning a 249 00:11:26,520 --> 00:11:28,319 Speaker 1: property when things start to break or need to be 250 00:11:28,400 --> 00:11:29,400 Speaker 1: replaced and upgraded. 251 00:11:29,679 --> 00:11:32,880 Speaker 2: This point's critical. So this one is what is our 252 00:11:32,880 --> 00:11:36,080 Speaker 2: budget for monthly mortgage repayments. So it's a combination. It's 253 00:11:36,240 --> 00:11:38,880 Speaker 2: what can we afford for the monthly mortgage repayments. But 254 00:11:38,960 --> 00:11:41,280 Speaker 2: to get to that point, you need to dig deep 255 00:11:41,360 --> 00:11:44,520 Speaker 2: into your personal monthly living expenses. And when I say 256 00:11:44,559 --> 00:11:47,680 Speaker 2: dig deep, I mean everything. Go through your credit card statements, 257 00:11:47,760 --> 00:11:50,560 Speaker 2: your bank statements for the last six months and pick 258 00:11:50,640 --> 00:11:54,040 Speaker 2: up every single expense because I guarantee if you just 259 00:11:54,120 --> 00:11:57,360 Speaker 2: go into an Excel spreadsheet or a budget tool and 260 00:11:57,480 --> 00:11:59,960 Speaker 2: into what you think is your budget, you have missed. 261 00:11:59,679 --> 00:12:03,320 Speaker 1: Twenty at least. I completely agree with you, and this 262 00:12:03,360 --> 00:12:05,680 Speaker 1: is why I always recommend to people, you know, especially 263 00:12:05,679 --> 00:12:08,320 Speaker 1: with the Budget and Cashtrow Academy that I run, you 264 00:12:08,440 --> 00:12:11,000 Speaker 1: have to check your transactions because that is the truth 265 00:12:11,040 --> 00:12:13,120 Speaker 1: and reality of how much you really spent. We all 266 00:12:13,160 --> 00:12:14,760 Speaker 1: like to get ourselves that we don't really spend that 267 00:12:14,840 --> 00:12:17,720 Speaker 1: much money, and looking at the call our truth of 268 00:12:17,920 --> 00:12:20,360 Speaker 1: actually you spent this much at Harris arm and this 269 00:12:20,480 --> 00:12:22,720 Speaker 1: much at Dish and this much at you know, the pub. 270 00:12:23,080 --> 00:12:25,480 Speaker 2: It's not just that, it's about the unknown or the 271 00:12:25,520 --> 00:12:28,440 Speaker 2: forgotten expenses. And I find these all the time. You know, 272 00:12:28,520 --> 00:12:30,600 Speaker 2: I can go on Instagram and sign up for something 273 00:12:30,640 --> 00:12:33,280 Speaker 2: that I totally forget about, and then all of a sudden, 274 00:12:33,480 --> 00:12:35,360 Speaker 2: it's tax time. I'm going through all of my accounts 275 00:12:35,360 --> 00:12:38,040 Speaker 2: and I see these direct debits. You've totally forgotten about it. 276 00:12:38,040 --> 00:12:39,880 Speaker 2: So if you're doing a budget, the place to start 277 00:12:40,080 --> 00:12:42,400 Speaker 2: is going through sifting through all of your bank statements, 278 00:12:42,840 --> 00:12:46,520 Speaker 2: highlighting all your direct debits and expenses, and then categorizing 279 00:12:46,520 --> 00:12:48,319 Speaker 2: that into a budget so that you don't miss anything 280 00:12:48,400 --> 00:12:51,240 Speaker 2: Until you've done that, it's really pointless talking about what 281 00:12:51,240 --> 00:12:53,319 Speaker 2: you can afford on the mortgage. 282 00:12:52,920 --> 00:12:55,800 Speaker 1: Repayment out of interest. Would you recommend couples do this 283 00:12:55,880 --> 00:12:58,680 Speaker 1: together or individually and then come together together? 284 00:12:58,720 --> 00:13:01,360 Speaker 2: But yeah, individually, if you're running you account separately, then 285 00:13:01,400 --> 00:13:04,120 Speaker 2: obviously individually and then come together. But either way, you 286 00:13:04,160 --> 00:13:05,800 Speaker 2: just need to make sure you get to the same 287 00:13:05,840 --> 00:13:08,160 Speaker 2: finish line where you've both gone through all of those 288 00:13:08,200 --> 00:13:12,040 Speaker 2: expenses and you holistically understanding one hundred percent of what 289 00:13:12,080 --> 00:13:13,120 Speaker 2: your true budget is. 290 00:13:13,400 --> 00:13:17,200 Speaker 1: All right, What about when it comes to lifestyle, because 291 00:13:17,320 --> 00:13:19,920 Speaker 1: you know, everyone has a different value system. You know, 292 00:13:20,400 --> 00:13:23,960 Speaker 1: I might like beautiful handbags, and Tom likes to spend 293 00:13:24,040 --> 00:13:28,400 Speaker 1: money on golf lessons and golf equipment and buying lots 294 00:13:28,400 --> 00:13:30,840 Speaker 1: of balls that he's lost, you know, which can be expensive. 295 00:13:30,920 --> 00:13:33,719 Speaker 1: Like you like me are in the thick of relationships 296 00:13:33,720 --> 00:13:36,160 Speaker 1: and money and helping people. Obviously I'm more of the 297 00:13:36,280 --> 00:13:39,160 Speaker 1: financial planning side. You're more of the borrowing money side. 298 00:13:39,240 --> 00:13:41,280 Speaker 1: What are your bits of advice and then what are 299 00:13:41,320 --> 00:13:44,839 Speaker 1: the key questions? Handbags and golf are both for expenses, well, 300 00:13:44,840 --> 00:13:47,920 Speaker 1: hang on, depends where you shop Look. 301 00:13:48,200 --> 00:13:50,480 Speaker 2: This is a really important piece because you know, I 302 00:13:50,520 --> 00:13:52,520 Speaker 2: speak to so many people who come and see me 303 00:13:52,559 --> 00:13:54,360 Speaker 2: and they say, look, we want to get to pre approval, 304 00:13:54,440 --> 00:13:56,440 Speaker 2: we want to buy a family home. And then after 305 00:13:56,480 --> 00:13:59,360 Speaker 2: that conversation they'll go away and they start looking online 306 00:13:59,640 --> 00:14:01,480 Speaker 2: and all of a sudden they see the dream home 307 00:14:01,679 --> 00:14:05,120 Speaker 2: without really understanding what the price will be, because obviously 308 00:14:05,120 --> 00:14:08,080 Speaker 2: you get misled by real estate agents and on price. 309 00:14:07,920 --> 00:14:10,200 Speaker 1: Guide I always say add twenty percent. 310 00:14:10,480 --> 00:14:15,199 Speaker 2: Probably you also don't understand what the mortgage repayment will 311 00:14:15,240 --> 00:14:17,559 Speaker 2: be yet, so then you sort of you're putting the 312 00:14:17,600 --> 00:14:20,640 Speaker 2: cart before the horse. You're pushing yourself into your family 313 00:14:20,720 --> 00:14:23,520 Speaker 2: home without understanding what it's going to cost you and 314 00:14:23,560 --> 00:14:25,760 Speaker 2: how that leaves your lifestyle. It's really important not to 315 00:14:25,760 --> 00:14:27,840 Speaker 2: compromise on the lifestyle. You know, you don't have to 316 00:14:27,840 --> 00:14:30,320 Speaker 2: be excessive, but you have a lifestyle that you expect 317 00:14:30,320 --> 00:14:32,960 Speaker 2: and need. It's important to get that right before you're 318 00:14:32,960 --> 00:14:33,600 Speaker 2: going and buying. 319 00:14:33,760 --> 00:14:37,280 Speaker 1: Nothing worse than taking out a huge mortgage and then realizing, actually, 320 00:14:37,280 --> 00:14:39,320 Speaker 1: we can't afford that, we're going to have to take 321 00:14:39,360 --> 00:14:42,560 Speaker 1: and make major cutbacks. Absolutely, you know the way that 322 00:14:42,600 --> 00:14:43,360 Speaker 1: we spend money, and. 323 00:14:43,760 --> 00:14:45,640 Speaker 2: That links up to our last point the budget, So 324 00:14:45,720 --> 00:14:48,520 Speaker 2: getting your budget right, framing what your lifestyle will be 325 00:14:48,640 --> 00:14:51,440 Speaker 2: moving forward, so that the decisions you make in terms 326 00:14:51,480 --> 00:14:53,480 Speaker 2: of taking out a mortgage and buying a property fit 327 00:14:53,560 --> 00:14:55,560 Speaker 2: in with that lifestyle that you've come to expect. 328 00:14:55,640 --> 00:14:58,640 Speaker 1: Okay, what about when you're actually looking for properties? Is 329 00:14:58,640 --> 00:15:01,080 Speaker 1: you said you know the couple that quickly jump online together, 330 00:15:01,080 --> 00:15:03,920 Speaker 1: they're excited, like they're starting to go and maybe make 331 00:15:03,960 --> 00:15:06,560 Speaker 1: some phone calls to real estate agents. They're keeping the 332 00:15:06,640 --> 00:15:10,080 Speaker 1: pavement on a Saturday morning doing open inspections. What are 333 00:15:10,120 --> 00:15:13,640 Speaker 1: the key questions you recommend the couples have around picking 334 00:15:13,680 --> 00:15:16,120 Speaker 1: their home and even the area that they want to 335 00:15:16,120 --> 00:15:16,360 Speaker 1: live in. 336 00:15:16,480 --> 00:15:19,120 Speaker 2: Yeah, so this one's about what kind of home and 337 00:15:19,120 --> 00:15:22,400 Speaker 2: what neighborhood best suits you. And this is important because 338 00:15:22,400 --> 00:15:25,120 Speaker 2: you know, stamp duty is a very expensive add on 339 00:15:25,240 --> 00:15:27,000 Speaker 2: when you're buying property, so you do not want to 340 00:15:27,000 --> 00:15:29,680 Speaker 2: pay it twice. Unfortunately, I've had some clients over the 341 00:15:29,760 --> 00:15:31,920 Speaker 2: years who have made wrong decisions and regretted where they 342 00:15:31,960 --> 00:15:34,520 Speaker 2: bought and could not stay, had to move, so they 343 00:15:34,560 --> 00:15:37,360 Speaker 2: paid stamp duty twice in a very short period of time. Wow, 344 00:15:37,680 --> 00:15:40,600 Speaker 2: So discussing what your preferences are is really important there 345 00:15:40,720 --> 00:15:43,480 Speaker 2: the type of home that you're looking for. Also understanding 346 00:15:43,560 --> 00:15:45,600 Speaker 2: what the type of home will also you need to 347 00:15:45,600 --> 00:15:48,320 Speaker 2: factor in what type of work that requires. 348 00:15:48,440 --> 00:15:52,160 Speaker 1: Is it a home is it a renovator's delight? 349 00:15:52,320 --> 00:15:56,120 Speaker 2: Well even just on a maintenance perspective, you know, building 350 00:15:56,120 --> 00:15:58,560 Speaker 2: a pest inspections play a part in that to see 351 00:15:58,600 --> 00:16:02,280 Speaker 2: if there's any major work required, but also the neighborhood, 352 00:16:02,480 --> 00:16:04,440 Speaker 2: who the neighbors are, what it's like late of a 353 00:16:04,520 --> 00:16:07,240 Speaker 2: night time, do you research go for a drive, to 354 00:16:07,320 --> 00:16:10,120 Speaker 2: go for a drive early mornings, midday, late evenings, see 355 00:16:10,120 --> 00:16:11,800 Speaker 2: if it's really going to suit what you're looking for. 356 00:16:12,080 --> 00:16:13,920 Speaker 1: And also things like you know, checking out the amenities 357 00:16:14,000 --> 00:16:16,080 Speaker 1: like how close are you to public transport, you know, 358 00:16:16,120 --> 00:16:19,720 Speaker 1: what parks are available? Also for families, like what's the catchment, 359 00:16:19,960 --> 00:16:23,000 Speaker 1: like you know, does the school meet your requirements for 360 00:16:23,040 --> 00:16:25,480 Speaker 1: your local area, because you know that can be really 361 00:16:25,480 --> 00:16:27,600 Speaker 1: tricky as well. No, there's a lot and of course 362 00:16:27,600 --> 00:16:30,320 Speaker 1: things like parking is they might not be necessarily a 363 00:16:30,360 --> 00:16:32,480 Speaker 1: garage or a car port. Is there heaps of on 364 00:16:32,600 --> 00:16:35,480 Speaker 1: street parking that's you know, not restricted? And what about 365 00:16:35,520 --> 00:16:37,520 Speaker 1: when guests come to visit can they park as well? 366 00:16:37,680 --> 00:16:40,200 Speaker 1: And even like there's are the cosmetic things like you know, 367 00:16:40,320 --> 00:16:42,640 Speaker 1: like the light, the sunlighty do you get is there 368 00:16:42,720 --> 00:16:43,280 Speaker 1: morning light? 369 00:16:43,680 --> 00:16:46,840 Speaker 2: What's the aspect? Yeah? You know, what's what are the 370 00:16:46,880 --> 00:16:48,640 Speaker 2: neighboring properties like take all the. 371 00:16:48,560 --> 00:16:51,280 Speaker 1: Sun what also das have been submitted with a council 372 00:16:51,480 --> 00:16:54,080 Speaker 1: with potentially me you have the value of your home. 373 00:16:54,200 --> 00:16:57,360 Speaker 2: Yeah, streetscape, safety for kids on the street, neighborhood, all 374 00:16:57,400 --> 00:16:57,920 Speaker 2: those things. 375 00:16:58,160 --> 00:17:00,920 Speaker 1: Gosh, there is so much to discuss consider. 376 00:17:00,720 --> 00:17:03,560 Speaker 2: Units require that as much as houses. I think miconception 377 00:17:03,720 --> 00:17:06,520 Speaker 2: is that that's more relative for a standalone home, but 378 00:17:06,720 --> 00:17:09,280 Speaker 2: units are very important. It's harder to do as much 379 00:17:09,359 --> 00:17:11,720 Speaker 2: research because you don't know who's living below you and 380 00:17:11,760 --> 00:17:13,520 Speaker 2: on top of you if you're in a unit next 381 00:17:13,560 --> 00:17:15,359 Speaker 2: to you, but still do as much research as you 382 00:17:15,400 --> 00:17:17,720 Speaker 2: can on that so that you're comfortable with a purchase 383 00:17:17,760 --> 00:17:19,360 Speaker 2: and have no regrets. 384 00:17:19,560 --> 00:17:23,000 Speaker 1: All right. Next question is what happens if they plant 385 00:17:23,000 --> 00:17:25,000 Speaker 1: this couple that are looking at buying a property together 386 00:17:25,480 --> 00:17:27,159 Speaker 1: or have maybe even just bought the property together, and 387 00:17:27,160 --> 00:17:30,960 Speaker 1: they have a change in income. For example, someone is 388 00:17:31,040 --> 00:17:33,639 Speaker 1: let off at work, or someone decides to take a 389 00:17:33,680 --> 00:17:36,240 Speaker 1: bit of a career path that needs to go to university, 390 00:17:36,280 --> 00:17:38,239 Speaker 1: for a couple of years, or do an MBA, or 391 00:17:38,760 --> 00:17:41,120 Speaker 1: you know, starting a family, you know, all these big 392 00:17:41,160 --> 00:17:44,080 Speaker 1: things that can impact your income and your owning capability 393 00:17:44,080 --> 00:17:45,680 Speaker 1: as well, or even just having to take a step 394 00:17:45,720 --> 00:17:48,560 Speaker 1: back because work isn't growing as well as it previously had. 395 00:17:49,000 --> 00:17:51,120 Speaker 2: Work can be stressful. We've seen a lot of that recently, 396 00:17:51,800 --> 00:17:55,320 Speaker 2: but this one we're talking about being prepared for potential 397 00:17:55,400 --> 00:17:58,720 Speaker 2: changes in income or expenses, and that plays a role 398 00:17:58,720 --> 00:18:00,720 Speaker 2: in what we talked about earlier with you know, your 399 00:18:00,720 --> 00:18:03,480 Speaker 2: budget and your savings and having a buffer of three 400 00:18:03,520 --> 00:18:06,160 Speaker 2: months of mortgage repayments as well, because it's very hard 401 00:18:06,160 --> 00:18:09,280 Speaker 2: to plan for the unexpected. Oh yeah, but it's why 402 00:18:09,320 --> 00:18:12,080 Speaker 2: it's important to try and contribute to savings ongoing or 403 00:18:12,119 --> 00:18:13,880 Speaker 2: to paying off extra in your homeland so that you. 404 00:18:13,880 --> 00:18:16,600 Speaker 1: Do have a buffer, of course, using the offset account 405 00:18:16,640 --> 00:18:17,720 Speaker 1: or a redraw facility. 406 00:18:18,440 --> 00:18:22,880 Speaker 2: Yeah, because you've got job loss, increased expenses, babies, take care, 407 00:18:23,160 --> 00:18:25,840 Speaker 2: take care, you know, all of it. Insurances is a 408 00:18:25,880 --> 00:18:28,159 Speaker 2: really important one as well, particularly once you buy for 409 00:18:28,200 --> 00:18:30,520 Speaker 2: the first time, if you're on two incomes. And you 410 00:18:30,520 --> 00:18:32,320 Speaker 2: can talk about this more than I can cann but 411 00:18:32,400 --> 00:18:35,120 Speaker 2: you know, if there's a main income earner who suffers 412 00:18:35,119 --> 00:18:37,480 Speaker 2: a loss of income or whether that's through injury or 413 00:18:37,640 --> 00:18:40,440 Speaker 2: something something worse than are you covered which to manage 414 00:18:40,440 --> 00:18:41,240 Speaker 2: your mortgage? 415 00:18:41,359 --> 00:18:44,520 Speaker 1: It is so incredibly important. And I only actually got 416 00:18:44,520 --> 00:18:47,520 Speaker 1: a DM the other day on Instagram from someone who 417 00:18:48,320 --> 00:18:51,200 Speaker 1: had someone very very close to them pass away and 418 00:18:51,560 --> 00:18:56,800 Speaker 1: has left a very very young family with a mortgage, 419 00:18:57,400 --> 00:19:00,879 Speaker 1: minimal savings and the power is now going to be 420 00:19:00,920 --> 00:19:03,240 Speaker 1: sort of left on their own fighting for their financial 421 00:19:03,280 --> 00:19:07,600 Speaker 1: freedom and independence. And no, there's no insurance taken out awful, 422 00:19:07,760 --> 00:19:12,360 Speaker 1: and in these conversations, not until things serious is too late. 423 00:19:12,440 --> 00:19:14,800 Speaker 1: Then you know you can't go and retrospectively take out 424 00:19:14,800 --> 00:19:17,480 Speaker 1: an insurance policy, so you know, and it brings me 425 00:19:17,520 --> 00:19:20,040 Speaker 1: a question like working out, okay, well do you cross insure? 426 00:19:20,200 --> 00:19:22,320 Speaker 1: You know, do I take out a life insurance on 427 00:19:22,320 --> 00:19:24,679 Speaker 1: my partner in that event or do we structure it 428 00:19:24,680 --> 00:19:27,000 Speaker 1: through our superannuation. And again, these are conversations you have 429 00:19:27,040 --> 00:19:28,960 Speaker 1: with a financial planner, but you've got to have the 430 00:19:28,960 --> 00:19:31,480 Speaker 1: conversations in the first place, you know, making sure that 431 00:19:31,520 --> 00:19:34,080 Speaker 1: both of you have income protection in place, so that 432 00:19:34,160 --> 00:19:36,439 Speaker 1: if one person gets sick and can't work, they've got 433 00:19:36,480 --> 00:19:38,760 Speaker 1: an income protection policy that pays them up to seventy 434 00:19:38,760 --> 00:19:41,040 Speaker 1: five percent of their income, and that other partner isn't 435 00:19:41,119 --> 00:19:44,159 Speaker 1: left having to try to cover the entire mortgage of 436 00:19:44,200 --> 00:19:46,560 Speaker 1: payment and the living expenses on their own or their 437 00:19:46,560 --> 00:19:48,919 Speaker 1: own sole income. You know, these conversations I think are 438 00:19:48,960 --> 00:19:50,240 Speaker 1: just actually not being had enough. 439 00:19:50,400 --> 00:19:52,480 Speaker 2: No, particularly if that if the one who is left 440 00:19:52,520 --> 00:19:56,000 Speaker 2: working and is the one left to manage everything based 441 00:19:56,040 --> 00:19:58,240 Speaker 2: on their salary, if that was never enough to cover 442 00:19:58,480 --> 00:20:00,840 Speaker 2: half the mortgage anyway, then that's it's a really really 443 00:20:00,880 --> 00:20:04,120 Speaker 2: big hole and something that you just need to act 444 00:20:04,160 --> 00:20:06,080 Speaker 2: on straight away. So that'd probably be stuck with no 445 00:20:06,320 --> 00:20:07,240 Speaker 2: option but to sell. 446 00:20:07,359 --> 00:20:10,480 Speaker 1: Yeah, yeah, I mean it's a financial crisis. Yeah, absolutely, 447 00:20:10,840 --> 00:20:12,560 Speaker 1: Hopefully on that I'll be able to talk about in 448 00:20:12,600 --> 00:20:15,880 Speaker 1: more details soon. But you're right, having the conversations about insurance, 449 00:20:15,880 --> 00:20:17,959 Speaker 1: how are we protecting our home, how are we protecting 450 00:20:17,960 --> 00:20:20,159 Speaker 1: our financial responsibilities? How are you making sure that we 451 00:20:20,200 --> 00:20:22,440 Speaker 1: can stay on track with all of our goals and dreams? 452 00:20:22,440 --> 00:20:25,280 Speaker 2: So family, for the kids, yeah, for the education. 453 00:20:25,160 --> 00:20:27,680 Speaker 1: I mean, it's another episode in itself. It's just it's 454 00:20:27,680 --> 00:20:30,080 Speaker 1: a non negotiable as well. And a lot of people, 455 00:20:30,080 --> 00:20:32,199 Speaker 1: I think don't think about these things until you make 456 00:20:32,240 --> 00:20:34,159 Speaker 1: a big financial decision, but in fact you can take 457 00:20:34,200 --> 00:20:37,280 Speaker 1: out all those insurances much much earlier on life you can. 458 00:20:37,200 --> 00:20:39,359 Speaker 2: And then it's just about adjusting the insurance. If you 459 00:20:39,400 --> 00:20:43,080 Speaker 2: do make a big purchase and your debt increases significantly, 460 00:20:43,160 --> 00:20:46,320 Speaker 2: then obviously you just amend your insurance cover. 461 00:20:46,440 --> 00:20:48,520 Speaker 1: Can we quickly just touch on it? And I almost again, 462 00:20:48,520 --> 00:20:50,359 Speaker 1: I want to almost do another episode with you on this, 463 00:20:50,520 --> 00:20:53,199 Speaker 1: But couples of family, like can I get asked this 464 00:20:53,240 --> 00:20:56,200 Speaker 1: all the time? How do I plan and prepare financially 465 00:20:56,280 --> 00:20:58,560 Speaker 1: for having a baby? And it's often a female asking me, 466 00:20:59,320 --> 00:21:03,320 Speaker 1: but it's it's equal responsibility. You know, what is your 467 00:21:03,640 --> 00:21:06,320 Speaker 1: advice to start having that conversation with your partner about 468 00:21:06,359 --> 00:21:08,520 Speaker 1: how do we see the mortgage being handled if one 469 00:21:08,560 --> 00:21:10,600 Speaker 1: person takes a year off work to have a baby, 470 00:21:10,720 --> 00:21:13,359 Speaker 1: or how are we going to handle the daycare expenses? 471 00:21:13,480 --> 00:21:16,440 Speaker 1: Or how do you recommend having that conversation when you're 472 00:21:16,440 --> 00:21:18,360 Speaker 1: a dad, you've got two young kids yourself. 473 00:21:18,560 --> 00:21:21,760 Speaker 2: Look, it's a really good point, and I probably see 474 00:21:21,840 --> 00:21:24,200 Speaker 2: one scenario more than the other. So what I see 475 00:21:24,359 --> 00:21:28,280 Speaker 2: is the upfront scenario where we're obtaining pre approval for 476 00:21:28,359 --> 00:21:32,040 Speaker 2: a family to buy home together and mum's pregnant, they're 477 00:21:32,040 --> 00:21:35,160 Speaker 2: having a baby that will be coming before the purchase, 478 00:21:35,320 --> 00:21:37,480 Speaker 2: and there are options for that on how to finance that. 479 00:21:37,560 --> 00:21:40,080 Speaker 2: So basically we look at how much you've got in savings, 480 00:21:40,240 --> 00:21:43,720 Speaker 2: what will the gap be between maternity leave and returning 481 00:21:43,720 --> 00:21:47,360 Speaker 2: to work at some capacity, When returning to work at 482 00:21:47,480 --> 00:21:50,159 Speaker 2: whatever that capacity is, what will your income be, And 483 00:21:50,200 --> 00:21:53,280 Speaker 2: then we need to cover the gap between going back 484 00:21:53,280 --> 00:21:56,280 Speaker 2: to work and the MATT leave ending. What will the 485 00:21:56,320 --> 00:21:58,600 Speaker 2: gap of that, what wer net income would have been 486 00:21:58,800 --> 00:22:00,959 Speaker 2: as a salary, and do you have enough savings to 487 00:22:01,000 --> 00:22:02,760 Speaker 2: cover that. If you do, then it's okay for the 488 00:22:02,760 --> 00:22:05,280 Speaker 2: finance approval that can get you approved to buy. So 489 00:22:05,359 --> 00:22:07,359 Speaker 2: that's the first scenary of The second scenario is a 490 00:22:07,359 --> 00:22:09,439 Speaker 2: bit harder and probably not one that I'm involved in 491 00:22:09,480 --> 00:22:11,960 Speaker 2: conversations too much to be quite honest with you. But 492 00:22:12,000 --> 00:22:13,520 Speaker 2: look at the end of the day, it comes down 493 00:22:13,600 --> 00:22:17,600 Speaker 2: to do you have savings before any changes in terms 494 00:22:17,640 --> 00:22:20,040 Speaker 2: of matt leve or going on matt leave. Speak to 495 00:22:20,080 --> 00:22:22,400 Speaker 2: your broker because we can look at changing your loan 496 00:22:22,440 --> 00:22:25,480 Speaker 2: structure to help you get through that type period. It's 497 00:22:25,560 --> 00:22:28,359 Speaker 2: eighteen months two years that might be putting the loan 498 00:22:28,400 --> 00:22:31,280 Speaker 2: on interest only for a short term is cash flow. 499 00:22:31,600 --> 00:22:34,679 Speaker 2: Otherwise you're leveraging savings. So that's why you need to 500 00:22:34,680 --> 00:22:37,840 Speaker 2: be more prepared, be tight with your budget and continually 501 00:22:37,840 --> 00:22:40,480 Speaker 2: put away savings or pay off your home loan in 502 00:22:40,520 --> 00:22:43,159 Speaker 2: anticipation of this big change coming out so that you 503 00:22:43,240 --> 00:22:44,920 Speaker 2: can manage it, and having. 504 00:22:44,720 --> 00:22:47,479 Speaker 1: Those conversations as to how as a couple you're going 505 00:22:47,520 --> 00:22:52,520 Speaker 1: to manage the mortgage payments, the impact of superannuation, the 506 00:22:52,600 --> 00:22:55,880 Speaker 1: living expenses, the new increased living expenses that come from 507 00:22:56,040 --> 00:23:00,320 Speaker 1: having a baby or another child in your in your 508 00:23:00,359 --> 00:23:06,199 Speaker 1: life happy, Oh yeah, doctor's appointments. It is incredible how 509 00:23:06,240 --> 00:23:08,880 Speaker 1: quickly it adds up. But those, you know, conversations are 510 00:23:09,000 --> 00:23:10,560 Speaker 1: how much time do we agree that it's to take 511 00:23:10,560 --> 00:23:13,120 Speaker 1: out of work or is it something will take indefinitely. 512 00:23:13,280 --> 00:23:16,040 Speaker 1: Is it a part time scenario? How does that impact 513 00:23:16,119 --> 00:23:19,760 Speaker 1: the mortgage? You know, if one person's earning us considerably less, 514 00:23:20,000 --> 00:23:21,600 Speaker 1: how are you going to split the mortgage of payments, 515 00:23:21,640 --> 00:23:23,760 Speaker 1: how you're going to split the living expenses. You know, 516 00:23:24,119 --> 00:23:26,840 Speaker 1: there's just so many different issues are not issues, but 517 00:23:26,920 --> 00:23:28,600 Speaker 1: just conversations that need to be had so that they 518 00:23:28,640 --> 00:23:30,560 Speaker 1: don't become issues between the two of you. 519 00:23:31,080 --> 00:23:33,320 Speaker 2: There's a lot of ground you need to cover to 520 00:23:33,440 --> 00:23:36,080 Speaker 2: ensure that you have your left no stone unturned in 521 00:23:36,080 --> 00:23:36,760 Speaker 2: that situation. 522 00:23:36,960 --> 00:23:39,439 Speaker 1: All right, to wrap up this episode, I know you 523 00:23:39,680 --> 00:23:42,520 Speaker 1: mentioned retirement, which is really interesting because that's almost like, well, 524 00:23:42,560 --> 00:23:45,760 Speaker 1: you'd hope that as one approaches retirement, their mortgage is 525 00:23:45,960 --> 00:23:48,160 Speaker 1: paid off or being close to being paid off. 526 00:23:48,240 --> 00:23:51,400 Speaker 2: Look, the last one here is questions around financial security 527 00:23:51,480 --> 00:23:54,399 Speaker 2: in retirement, and that can be you know, there's a 528 00:23:54,400 --> 00:23:56,440 Speaker 2: few different ways that we look at that, but obviously 529 00:23:56,440 --> 00:23:58,280 Speaker 2: that you want to have a clear plan and talk 530 00:23:58,320 --> 00:24:00,919 Speaker 2: about how you will clear your mortgage before retirement. So 531 00:24:00,960 --> 00:24:02,720 Speaker 2: an example of that would be, you know, if you're 532 00:24:02,800 --> 00:24:04,919 Speaker 2: forty years of age and you decide to go and 533 00:24:04,920 --> 00:24:07,560 Speaker 2: buy your forever home for your family, and in order 534 00:24:07,600 --> 00:24:09,080 Speaker 2: to get the loan you needed to take out a 535 00:24:09,119 --> 00:24:11,200 Speaker 2: thirty year loan term or even twenty five year loans. 536 00:24:11,280 --> 00:24:13,200 Speaker 2: What's your retirement age if you want, if you wanted 537 00:24:13,240 --> 00:24:16,159 Speaker 2: to retire sixty, then you wouldn't be forecast to have 538 00:24:16,160 --> 00:24:18,320 Speaker 2: paid your loan off for another five to ten years 539 00:24:18,359 --> 00:24:22,639 Speaker 2: based in that scenario. Look, don't get me wrong. Families, 540 00:24:23,520 --> 00:24:25,159 Speaker 2: you know, once the kids get a bit older and 541 00:24:25,160 --> 00:24:27,680 Speaker 2: out of school, the budget changes so they can pay 542 00:24:27,680 --> 00:24:30,399 Speaker 2: the line off faster. Hopefully you do some investments that 543 00:24:30,440 --> 00:24:32,359 Speaker 2: can help you reduce your debt as well along the way. 544 00:24:32,480 --> 00:24:34,160 Speaker 2: But you need to have a clear plan on that. 545 00:24:34,160 --> 00:24:36,800 Speaker 2: That's what we call an exit strategy come retirement. If 546 00:24:36,800 --> 00:24:38,560 Speaker 2: you haven't paid your loan off, well, you have enough 547 00:24:38,600 --> 00:24:39,960 Speaker 2: super that you'll be able to clear. 548 00:24:39,800 --> 00:24:41,919 Speaker 1: The loan and still live and still live. 549 00:24:41,800 --> 00:24:45,640 Speaker 2: There and still have enough for retirement, retirement and to last. Yeah. 550 00:24:46,040 --> 00:24:49,960 Speaker 2: Obviously the easiest solution to that is a downsizer solution 551 00:24:50,320 --> 00:24:53,080 Speaker 2: or moving, whether it be regionally or downsizing. 552 00:24:53,160 --> 00:24:54,920 Speaker 1: And these are the conversations couples have got to have. 553 00:24:55,000 --> 00:24:57,080 Speaker 1: You know, one person might think, God, I would never 554 00:24:57,080 --> 00:24:58,760 Speaker 1: want to leave my home. You know, I do not 555 00:24:58,800 --> 00:25:00,679 Speaker 1: want to downsize. You do not want to to live regionally. 556 00:25:00,800 --> 00:25:02,120 Speaker 1: In fact, I want to go live overseas. 557 00:25:02,200 --> 00:25:05,600 Speaker 2: Yeah, you see couples living in a family home for 558 00:25:05,600 --> 00:25:07,320 Speaker 2: a long time. They don't want to leave come retirement. 559 00:25:07,359 --> 00:25:09,600 Speaker 2: That's where the kids grew up emotionally attached to it. 560 00:25:09,720 --> 00:25:12,160 Speaker 1: That's what all their friends are, their network, their community. 561 00:25:12,320 --> 00:25:14,320 Speaker 2: If you haven't talked about this and how you would 562 00:25:14,359 --> 00:25:17,720 Speaker 2: plan to tackle that come retirement, it will be a 563 00:25:17,720 --> 00:25:20,600 Speaker 2: really big issue. The ways around it are looking at Obviously, 564 00:25:20,600 --> 00:25:22,119 Speaker 2: if you need to take out a longer term to 565 00:25:22,119 --> 00:25:24,719 Speaker 2: get them more of you initially forward plan. Okay, if 566 00:25:24,760 --> 00:25:26,720 Speaker 2: you've only really got twenty years to pay it off 567 00:25:27,000 --> 00:25:29,359 Speaker 2: so that you've got no debt come retirement, start making 568 00:25:29,359 --> 00:25:31,920 Speaker 2: extra repayments. Talk to your broker or your bank about 569 00:25:32,080 --> 00:25:34,920 Speaker 2: what minimum repayment you would need to make to stick 570 00:25:34,960 --> 00:25:37,320 Speaker 2: to that targeted twenty year term. You know, that's not 571 00:25:37,400 --> 00:25:39,280 Speaker 2: hard to do, It's very easy. It's just about being 572 00:25:39,280 --> 00:25:42,200 Speaker 2: disciplined and making those payments month by month, week by week, 573 00:25:42,240 --> 00:25:44,080 Speaker 2: whatever it is your preferences are. 574 00:25:44,160 --> 00:25:47,200 Speaker 1: And the thing with this is these conversations are just conversations. 575 00:25:47,240 --> 00:25:49,800 Speaker 1: You're not setting anything in stone, but you're you know, 576 00:25:49,840 --> 00:25:53,440 Speaker 1: as you have these conversations and explore where the conversations go, 577 00:25:53,880 --> 00:25:56,280 Speaker 1: you're learning so much about yourself. And you're also learning 578 00:25:56,359 --> 00:25:58,520 Speaker 1: so much about your partner and about your partner's value 579 00:25:58,520 --> 00:26:00,600 Speaker 1: systems and what their dreams are, what their goals are, 580 00:26:00,720 --> 00:26:03,720 Speaker 1: and even like what their money mindset looks like. And 581 00:26:03,720 --> 00:26:06,240 Speaker 1: if you stop and actually really listen to what each 582 00:26:06,280 --> 00:26:09,320 Speaker 1: other is saying, and obviously in a safe, respectable place, 583 00:26:09,400 --> 00:26:12,120 Speaker 1: so so much goodness can really come from having these 584 00:26:12,160 --> 00:26:15,320 Speaker 1: powerful conversations, as awkward as they may be initially as 585 00:26:15,320 --> 00:26:15,960 Speaker 1: you get started. 586 00:26:16,040 --> 00:26:18,399 Speaker 2: Yeah, definitely, no one wants to forego, you know, a 587 00:26:18,440 --> 00:26:21,199 Speaker 2: certain lifestyle that they might have that they're accustomed to. 588 00:26:21,359 --> 00:26:24,000 Speaker 2: And that might be because, you know, within the relationship 589 00:26:24,160 --> 00:26:26,280 Speaker 2: ones a spender, ones a save. But if you talk 590 00:26:26,320 --> 00:26:28,920 Speaker 2: about the potential conflict or the potential issues that you'll 591 00:26:28,960 --> 00:26:31,439 Speaker 2: have come retirement with this big mortgage and plan for 592 00:26:31,440 --> 00:26:33,159 Speaker 2: that early, you're getting way ahead of it. 593 00:26:33,400 --> 00:26:35,600 Speaker 1: And also when you are on the same page by 594 00:26:35,640 --> 00:26:38,240 Speaker 1: having those conversations, you are so much more powerful in 595 00:26:38,880 --> 00:26:41,840 Speaker 1: making a serious dent in your mortgage and in that 596 00:26:41,880 --> 00:26:44,480 Speaker 1: bringing it down so much faster, and being so much 597 00:26:44,520 --> 00:26:47,200 Speaker 1: more proactive in building up the right amount of emergency 598 00:26:47,200 --> 00:26:49,879 Speaker 1: savings in the offset account or redoor facility, and seeing 599 00:26:49,920 --> 00:26:53,840 Speaker 1: potential opportunities to maybe upgrade or you know, to accumulate wealth, 600 00:26:53,880 --> 00:26:55,520 Speaker 1: even debt recycling and things like that. 601 00:26:55,640 --> 00:26:58,440 Speaker 2: You know, well, the conversation creates the hypothetical, Okay, when 602 00:26:58,480 --> 00:27:01,239 Speaker 2: we get to retirement, the option if we change our 603 00:27:01,280 --> 00:27:03,439 Speaker 2: behavior and our spending now and try and pay our 604 00:27:03,480 --> 00:27:06,119 Speaker 2: line off as soon as possible, we'll be here until 605 00:27:06,160 --> 00:27:08,800 Speaker 2: we really want to retire and you know, live in 606 00:27:08,840 --> 00:27:11,919 Speaker 2: a small property that doesn't have much upkeep. But the 607 00:27:11,960 --> 00:27:14,879 Speaker 2: hypothetical if you change that behavior and start paying it 608 00:27:14,920 --> 00:27:17,399 Speaker 2: off extra early so that it's clear come retirement, then 609 00:27:17,440 --> 00:27:19,159 Speaker 2: you know that that's a much better outcome for you 610 00:27:19,240 --> 00:27:20,280 Speaker 2: long term exactly. 611 00:27:20,320 --> 00:27:22,240 Speaker 1: And as I said, nothing's set in stone. There's a 612 00:27:22,280 --> 00:27:24,280 Speaker 1: conversation to get you going and to think about it. 613 00:27:24,320 --> 00:27:26,400 Speaker 1: As you said, you know that do the hypothetical, and 614 00:27:26,480 --> 00:27:30,720 Speaker 1: you know as your life evolves, in your financial situation improves, 615 00:27:30,960 --> 00:27:34,400 Speaker 1: you can make the necessary changes, get professional advice along 616 00:27:34,400 --> 00:27:37,280 Speaker 1: the way that is only going to benefit you even further. Look, Adam, 617 00:27:37,440 --> 00:27:39,639 Speaker 1: thank you so much for creating a safe space so 618 00:27:39,760 --> 00:27:41,359 Speaker 1: we could have these conversations, because I know it is 619 00:27:41,359 --> 00:27:42,880 Speaker 1: a very awkward one and a lot of people don't 620 00:27:42,880 --> 00:27:44,399 Speaker 1: know how to do this and how to get started. 621 00:27:44,440 --> 00:27:46,800 Speaker 1: So thank you for coming on the show and allowing 622 00:27:46,800 --> 00:27:49,639 Speaker 1: me to ask you questions on this particular topic. A 623 00:27:49,680 --> 00:27:52,600 Speaker 1: quick shout out for you for anyone that needs help 624 00:27:52,760 --> 00:27:56,439 Speaker 1: with buying their home, couples or even obviously single people. 625 00:27:56,600 --> 00:27:58,199 Speaker 1: How's the best place to get in contact with you? 626 00:27:58,440 --> 00:28:00,000 Speaker 2: Yeah? The best way to just be sending an email 627 00:28:00,240 --> 00:28:03,040 Speaker 2: Adam at Blue Lantern, do you or give me a 628 00:28:03,080 --> 00:28:03,960 Speaker 2: call let me. 629 00:28:04,200 --> 00:28:06,840 Speaker 1: Help you out by buddying Haba your direct contact details 630 00:28:07,160 --> 00:28:09,800 Speaker 1: including your Instagram account of course, your email address and 631 00:28:09,840 --> 00:28:13,800 Speaker 1: your phone number in the podcast notes for everyone to 632 00:28:13,840 --> 00:28:15,800 Speaker 1: be able to reach out directly to Adam. And as 633 00:28:15,800 --> 00:28:17,960 Speaker 1: you guys know, Adam is my own personal mortgage broker. 634 00:28:18,080 --> 00:28:22,240 Speaker 1: He does Tom's and my loans, and he does family friends. 635 00:28:23,560 --> 00:28:26,520 Speaker 1: He's the only person I feel comfortable recommending, and then 636 00:28:26,560 --> 00:28:28,240 Speaker 1: I get zero benefit in doing that, So I just 637 00:28:28,280 --> 00:28:30,080 Speaker 1: all I get is the comfort knowing that you're in 638 00:28:30,400 --> 00:28:33,919 Speaker 1: brilliant hands, whether it be Adam, Joe or John. So 639 00:28:34,359 --> 00:28:37,200 Speaker 1: for everyone who's listening to today's episode, thank you so much. 640 00:28:37,440 --> 00:28:39,360 Speaker 1: As you know, mortgages are one of the biggest financial 641 00:28:39,360 --> 00:28:42,320 Speaker 1: commitments that we will ever make in our lives. And 642 00:28:42,440 --> 00:28:46,520 Speaker 1: having these open, honest conversations together before taking the plunge 643 00:28:46,600 --> 00:28:48,360 Speaker 1: or as ideal if you're already taken the plunge, how 644 00:28:48,400 --> 00:28:50,840 Speaker 1: the miston as possible can truly make or break a 645 00:28:50,880 --> 00:28:54,800 Speaker 1: couple's financial future. I say that from professional experience as 646 00:28:54,880 --> 00:28:57,640 Speaker 1: well as personal experience as well. So that is it 647 00:28:57,680 --> 00:29:00,800 Speaker 1: for today's episode on Sugarmum's fireplay. I really hope that, 648 00:29:00,960 --> 00:29:03,960 Speaker 1: as always, you're feeling inspired, you're feeling empowered, and you're 649 00:29:04,000 --> 00:29:07,520 Speaker 1: ready to take control of your financial future and build 650 00:29:07,520 --> 00:29:10,479 Speaker 1: that financial independence. If you have enjoyed today's episode, can 651 00:29:10,520 --> 00:29:13,200 Speaker 1: you please do me a huge favor and share it. 652 00:29:13,360 --> 00:29:15,440 Speaker 1: Send it to your partner, send it to your friend, 653 00:29:15,640 --> 00:29:18,240 Speaker 1: send it to your family members, anyone who's going to 654 00:29:18,280 --> 00:29:22,240 Speaker 1: benefit from listening to this wise sensible advice from two 655 00:29:22,520 --> 00:29:26,280 Speaker 1: experienced professionals. And of course, in the meantime, don't forget 656 00:29:26,280 --> 00:29:28,760 Speaker 1: to make sure you are subscribed and following this show 657 00:29:28,840 --> 00:29:31,440 Speaker 1: so that you never miss a beat. In the meantime, 658 00:29:31,560 --> 00:29:34,800 Speaker 1: keep learning, keep growing, and most importantly, keep your financial 659 00:29:34,840 --> 00:29:48,800 Speaker 1: fire burning bright. I'll see you next Monday.