WEBVTT - Helping your kids get into home ownership 0:00:07.860 --> 0:00:10.800 Hello and welcome to It All Adds Up the podcast 0:00:10.800 --> 0:00:13.170 where we chat about money, how to get it, how 0:00:13.170 --> 0:00:15.720 to spend it, and how to invest it. I'm senior 0:00:15.720 --> 0:00:18.000 economics writer at the Sydney Morning Herald and The Age 0:00:18.000 --> 0:00:19.650 newspaper's Jess Irvine. 0:00:19.860 --> 0:00:21.900 And I'm money editor Dom Powell. And this week we're 0:00:21.900 --> 0:00:25.230 continuing our special series, focusing on real life budgets, money 0:00:25.230 --> 0:00:27.720 questions and how you're tackling the rising cost of living. 0:00:28.020 --> 0:00:30.780 Yes, And this week's question comes from one of our 0:00:30.780 --> 0:00:33.900 lovely listeners, Sam, who has sent us her budget and 0:00:33.900 --> 0:00:36.270 wants to know how she might be able to help 0:00:36.270 --> 0:00:40.350 her daughter achieve the great Aussie dream of home ownership. 0:00:40.680 --> 0:00:42.479 So let's have a listen to her question. 0:00:45.170 --> 0:00:47.690 Hi. Yes. And Tom. My name is Sam and I'm 0:00:47.690 --> 0:00:50.809 a 48 year old solo parent of one. I have 0:00:50.810 --> 0:00:54.170 a small mortgage and emergency fund and my super is 0:00:54.170 --> 0:00:59.210 tracking along nicely with property purchasing becoming increasingly difficult for 0:00:59.210 --> 0:01:02.150 young people to achieve. I've been giving some thought to 0:01:02.150 --> 0:01:04.730 what I can do to be in a financial position 0:01:04.730 --> 0:01:07.610 that if needed, I may be able to help my daughter, 0:01:07.819 --> 0:01:10.730 who is now 16 years old, into her own property 0:01:10.730 --> 0:01:13.850 in the next 10 to 15 years. I know this 0:01:13.850 --> 0:01:16.280 will look very different for every family, but it would 0:01:16.280 --> 0:01:18.740 be great to hear your thoughts on budgeting for things 0:01:18.740 --> 0:01:21.380 with a 10 to 15 year time frame. Thank you. 0:01:22.760 --> 0:01:25.880 Thanks for calling in, Sam. It's always good to hear 0:01:25.940 --> 0:01:28.550 parents thinking about, you know, trying to help their kids, 0:01:28.910 --> 0:01:31.209 you know, plan for the kids financial future, 10 to 0:01:31.209 --> 0:01:33.380 15 years. Just that's a good long time frame. You'd 0:01:33.380 --> 0:01:34.970 think you'd be able to achieve quite a lot in 0:01:34.970 --> 0:01:35.450 that time. 0:01:35.660 --> 0:01:38.780 Yeah. You know, it's that old adage that little steps 0:01:38.780 --> 0:01:40.580 really do add up. And if you have a big 0:01:40.580 --> 0:01:43.459 enough time frame, you can, you know, put aside little 0:01:43.459 --> 0:01:46.910 amounts that really do add up. And I love Sam 0:01:47.330 --> 0:01:49.580 just as a person, but I love her budget that 0:01:49.580 --> 0:01:52.460 she has sent through. And if anyone can do this, 0:01:52.460 --> 0:01:54.380 if anyone can come up with a ten year plan, 0:01:54.590 --> 0:01:58.010 I know it's because she sent us her her budget 0:01:58.010 --> 0:02:02.330 spreadsheet where she uses the same color coordinated budget categories 0:02:02.330 --> 0:02:06.140 that I also use. It's a beautiful rainbow. And she's 0:02:06.140 --> 0:02:09.890 been you know, she's tracking her spending every month and 0:02:09.889 --> 0:02:12.500 adding that all up. And there is wiggle room in 0:02:12.500 --> 0:02:15.170 her budget. And, you know, she is she's on a 0:02:15.169 --> 0:02:19.160 good income and she's got a relatively small mortgage that 0:02:19.160 --> 0:02:24.829 she's incurring at the moment, which is about $650 a fortnight, 0:02:24.830 --> 0:02:29.990 which is hashtag goals for a mortgage. So and she's 0:02:29.990 --> 0:02:33.830 also doing great things like maxing out her super contributions 0:02:33.830 --> 0:02:36.800 to make the most out of the tax breaks. She's 0:02:36.800 --> 0:02:41.690 also started investing a little bit into buying ETFs, exchange 0:02:41.690 --> 0:02:45.950 traded funds, putting about $200 a week into that. So 0:02:46.280 --> 0:02:48.919 for Sam, it's a question of, you know, she's got 0:02:48.919 --> 0:02:52.940 good habits in place, she's regularly saving. And then that 0:02:53.060 --> 0:02:56.899 it's almost a moral question about how much do I, 0:02:56.900 --> 0:02:59.750 you know, save for myself versus what do I owe 0:03:00.020 --> 0:03:02.600 sort of in terms of help for my child in 0:03:02.600 --> 0:03:05.690 helping them get into homeownership. Because I know everyone's like 0:03:05.690 --> 0:03:07.880 not saying that's not the path to wealth, but I 0:03:07.880 --> 0:03:10.160 wonder if that's a little bit of defeatism creeping in 0:03:10.160 --> 0:03:13.610 because when something seems so unachievable, you think it's maybe not, 0:03:13.610 --> 0:03:16.460 but actually our tax system is structured so that, you know, 0:03:16.460 --> 0:03:18.830 the least tax you'll ever pay is on being able 0:03:18.830 --> 0:03:23.329 to purchase a primary residence and enjoy tax free gains 0:03:23.330 --> 0:03:25.520 on that. That is actually the system that is so 0:03:25.520 --> 0:03:28.730 preferential if you can get into home ownership. So it 0:03:28.730 --> 0:03:31.910 really is something worth looking at and a conversation that 0:03:31.910 --> 0:03:34.670 is worth having between parents and kids. And I'm trying 0:03:34.669 --> 0:03:37.310 to figure out myself, you know, my son, you know, 0:03:37.460 --> 0:03:39.890 what is the best way for me to also save 0:03:39.890 --> 0:03:44.180 to help him into home ownership in in the future? So, Sam, 0:03:44.180 --> 0:03:47.840 you know, it's a fantastic, fantastic question. And there are 0:03:47.840 --> 0:03:49.960 various strategies that we're going to we're going to pass 0:03:49.970 --> 0:03:51.200 a workshop now, aren't we doing. 0:03:51.710 --> 0:03:53.650 Yeah. And I think if you thinking over a 10 0:03:53.650 --> 0:03:55.880 to 15 year time frame, as we said, you know, 0:03:55.880 --> 0:03:59.060 that's a good long period. But also anything could happen 0:03:59.510 --> 0:04:01.610 in 10 to 15 years. Like right now we've got 0:04:01.610 --> 0:04:03.740 a big fall in house prices, but they are still 0:04:03.740 --> 0:04:07.070 sort of at, you know, quite a high level. You 0:04:07.070 --> 0:04:10.280 would hope you would think maybe that intent of 15 0:04:10.280 --> 0:04:13.100 years we might have some more sort of housing affordability 0:04:13.100 --> 0:04:14.180 policies in place. This is. 0:04:14.220 --> 0:04:17.150 Lowell. I've been writing about this for 10 to 15 0:04:17.150 --> 0:04:19.610 years and more, and we have still not ever fixed 0:04:19.640 --> 0:04:21.400 that problem. So I remain. 0:04:21.620 --> 0:04:24.080 I live I live in joyful hope. This is May 0:04:24.080 --> 0:04:26.989 being this is maybe optimistic, but I think it's still 0:04:26.990 --> 0:04:30.470 wise for for Sam to to plan for all eventualities 0:04:30.680 --> 0:04:33.289 considering the the sort of state of housing and the 0:04:33.290 --> 0:04:35.000 set of housing over the past 10 to 15 years. 0:04:35.270 --> 0:04:37.159 You're right. Yes. It probably looks like things are not 0:04:37.160 --> 0:04:40.160 going to really get a great deal better for the 0:04:40.160 --> 0:04:43.640 first homeowners amongst us. But anyway, how about we we 0:04:43.640 --> 0:04:45.860 look through some we'll talk about some some options that 0:04:45.980 --> 0:04:47.840 Sam might have in terms of, you know, being able 0:04:47.839 --> 0:04:50.030 to put some some more money away for their daughter. 0:04:50.450 --> 0:04:52.789 I think we can sort of split the discussion up 0:04:52.790 --> 0:04:56.300 to things that Sam can do herself and things that 0:04:56.300 --> 0:04:59.750 she can help her daughter to do in terms of 0:04:59.750 --> 0:05:02.690 doing her own savings. So, I mean, just in terms 0:05:02.690 --> 0:05:06.229 of what Sam could be doing herself. We're currently putting 0:05:06.230 --> 0:05:10.580 some extra money towards paying off the mortgage and also 0:05:10.580 --> 0:05:14.000 putting more money into super, which won't be accessible, you know, 0:05:14.000 --> 0:05:16.969 until a bit later on. Although if Sam is 48 0:05:16.970 --> 0:05:21.980 now and she will be about 60 early sixties when 0:05:22.339 --> 0:05:25.220 her daughter might be looking to purchase a property, But again, 0:05:25.220 --> 0:05:27.680 she might want to do sooner or later. One thing 0:05:27.680 --> 0:05:30.770 that is open to people at this stage and super 0:05:30.770 --> 0:05:34.039 always changes is that when you get to that 60 0:05:34.040 --> 0:05:36.140 or you meet one of the conditions of release, you're 0:05:36.140 --> 0:05:39.560 allowed to access all of your super. You can just 0:05:39.560 --> 0:05:41.570 currently take it all out in a lump sum and 0:05:41.570 --> 0:05:45.109 we are seeing some. You know, access the super. Then 0:05:45.110 --> 0:05:48.230 gift the money to the child as the deposit for 0:05:48.230 --> 0:05:51.229 the first home. And then you've saved, you know, during 0:05:51.230 --> 0:05:54.200 those 10 to 15 years in the low tax environment 0:05:54.200 --> 0:05:56.810 of super. And then you pull it all out at 0:05:56.810 --> 0:05:59.270 that stage and help your child. But that sort of 0:05:59.270 --> 0:06:01.130 shackles you to you know, you need to meet some 0:06:01.130 --> 0:06:03.530 of the conditions of release of super. You need to 0:06:03.529 --> 0:06:06.710 actually stop working. That's just a fancy little thing that 0:06:06.710 --> 0:06:09.830 could come into play. Or we're looking at saving the 0:06:09.830 --> 0:06:13.550 money outside of super and not sort of paying down 0:06:13.550 --> 0:06:16.190 the mortgage and trying to accumulate some sort of outside 0:06:16.190 --> 0:06:18.800 of super accessible nest egg, which you could do in 0:06:18.800 --> 0:06:21.799 cash or with such a long time horizon, we could 0:06:21.800 --> 0:06:25.339 be looking at the ETFs or the shares. Even if 0:06:25.339 --> 0:06:28.820 you're hoping for a bit of a turbocharged gain above 0:06:28.820 --> 0:06:31.849 cash flow, that's also hard to predict. 0:06:32.029 --> 0:06:35.599 Yes. And like if we're looking at Sam's budget, she 0:06:35.600 --> 0:06:38.300 has a number of sort of different future funds that 0:06:38.300 --> 0:06:42.260 she puts money into, including one for just discretionary purchases 0:06:42.260 --> 0:06:46.339 like holidays. And it looks like she puts about $400 0:06:46.339 --> 0:06:49.279 a week into those various sort of future fund. So, 0:06:49.580 --> 0:06:51.480 you know, even if you divvy that up a bit, right, 0:06:51.560 --> 0:06:53.850 you know, you split it off, you maybe, you know, 0:06:53.900 --> 0:06:57.230 make a third future fund called, you know, house or 0:06:57.230 --> 0:06:59.510 something like that and you funnel a bit of money 0:06:59.510 --> 0:07:01.789 into that over ten years, even if you putting in, 0:07:01.790 --> 0:07:04.610 you know, 200 bucks a week, that's, you know, 50 0:07:04.610 --> 0:07:07.010 to $100000 that you've saved. And that's just only if 0:07:07.010 --> 0:07:09.980 you put it in cash. So like, that's one option 0:07:09.980 --> 0:07:12.290 because considering yeah, ten years is a very long time away. 0:07:12.500 --> 0:07:14.720 Like you start now, you can save quite a lot 0:07:14.720 --> 0:07:16.070 of money in that in that period of time. 0:07:16.160 --> 0:07:18.140 Yes. So that's an option for Sam just to hold 0:07:18.140 --> 0:07:21.950 that in her name. Another option in terms of saving 0:07:21.950 --> 0:07:24.740 outside of super, you know, if her daughter is approaching 0:07:24.740 --> 0:07:27.140 sort of 18 and the age at which you're able 0:07:27.140 --> 0:07:30.050 to hold investments in your own account and be the 0:07:30.050 --> 0:07:33.860 owner of shares, maybe you're gifting, giving the money to 0:07:33.860 --> 0:07:36.710 your daughter who can then invested in her own name 0:07:36.710 --> 0:07:39.110 and then when she comes to pay tax, know, presumably 0:07:39.110 --> 0:07:41.000 her tax will be at a lower rate because she's 0:07:41.000 --> 0:07:44.480 a lower income earner. So, you know, whether you hold 0:07:44.480 --> 0:07:47.180 back the deposit and save it in your own name 0:07:47.450 --> 0:07:50.150 or if you're starting to gift, you know, money away there, 0:07:50.660 --> 0:07:53.210 there's rules around gifting if you're going to get the 0:07:53.210 --> 0:07:56.390 age pension. But, you know, if it's smaller amounts, you know, 0:07:56.510 --> 0:07:58.640 you might want to get advice. If it's if it's, 0:07:58.640 --> 0:08:01.550 you know, really complicated for you. But, you know, just 0:08:01.610 --> 0:08:03.900 that question of how do you start? I mean, and 0:08:03.920 --> 0:08:05.840 this is the other strategy. How do you start to 0:08:05.840 --> 0:08:10.970 encourage the child themselves to start saving up in their 0:08:10.970 --> 0:08:13.400 own name? Because I think, you know, it would be 0:08:13.400 --> 0:08:17.450 doing a disservice for kids if you just sort of say, 0:08:17.450 --> 0:08:19.490 here's a bunch of cash, although what a lovely problem 0:08:19.490 --> 0:08:22.520 to have. You also want to be instilling the good 0:08:22.520 --> 0:08:25.880 habits and encouraging the saving with the child as well. 0:08:26.300 --> 0:08:28.489 So if you can sit down with your with your 0:08:28.490 --> 0:08:30.980 daughter or your child and sort of talk about saving 0:08:30.980 --> 0:08:34.100 strategies with them, you know, putting it all in context 0:08:34.100 --> 0:08:37.010 of how crazy things are in the in the Australian 0:08:37.010 --> 0:08:39.709 housing market, I think it's a really good thing to do. 0:08:39.710 --> 0:08:42.800 And also like you can do things like co contributions, right, 0:08:42.800 --> 0:08:46.670 where you're you say to your child that you will 0:08:46.670 --> 0:08:49.550 put in, you know, you'll match every dollar they save, 0:08:49.940 --> 0:08:51.950 you set up a sort of a super long term 0:08:52.220 --> 0:08:56.030 can't touch it savings account. The banks often offer these 0:08:56.030 --> 0:08:58.579 savings accounts where you can you know put a bunch 0:08:58.580 --> 0:09:00.530 of cash in, but you're and you get a great 0:09:00.530 --> 0:09:02.570 interest rate. But if you take it out, you lose 0:09:02.570 --> 0:09:03.950 all of your interest rate, all that sort of stuff. 0:09:03.950 --> 0:09:06.800 So something like that for the long term and you 0:09:06.800 --> 0:09:09.260 match everything they put into that account. I think that's 0:09:09.260 --> 0:09:12.590 a great sort of strategy for, you know, encouraging good 0:09:12.590 --> 0:09:14.570 saving habits. And then, you know, over a ten year 0:09:14.570 --> 0:09:17.150 period that that can get quite significant. 0:09:17.570 --> 0:09:20.959 Kids need to know that, you know, you save for things. 0:09:20.960 --> 0:09:23.240 You get a certain amount of income, you can spend 0:09:23.240 --> 0:09:25.610 it on things and you can allocate your money towards 0:09:25.610 --> 0:09:28.970 your toys. Now, whatever they are, as they're getting older, 0:09:28.970 --> 0:09:31.459 the different sort of toys that you're interested in. But 0:09:31.460 --> 0:09:33.679 setting aside something for the future, I think that is 0:09:33.679 --> 0:09:36.170 such a valuable conversation and I think Sam's in a 0:09:36.170 --> 0:09:39.650 really good position to try and lead that conversation, although 0:09:39.650 --> 0:09:41.920 I would just caution don't don't make it to in 0:09:41.929 --> 0:09:44.689 your face, just gently, gently so that we're not just 0:09:44.690 --> 0:09:47.720 turning the kids off the topic at all of saving. 0:09:48.440 --> 0:09:50.480 Yeah. So obviously there are some other ways to help 0:09:50.480 --> 0:09:53.059 your children get into the housing market other than just 0:09:53.059 --> 0:09:56.929 giving them a big stack of cash. And I believe 0:09:56.929 --> 0:09:59.210 this is something you actually have experience with just in 0:09:59.210 --> 0:10:03.380 terms of going guarantor or having a parents go guarantor 0:10:03.410 --> 0:10:06.290 on your loan. What sort of advantages do we sort 0:10:06.290 --> 0:10:08.150 of get from that? Like what's, what's the pros and 0:10:08.150 --> 0:10:08.810 cons I suppose. 0:10:09.260 --> 0:10:11.870 Yeah. Look, so this is if you're saving largely in 0:10:11.870 --> 0:10:14.510 your own right as the child and you've got a deposit, 0:10:14.510 --> 0:10:16.700 but it's not at that full 20% and if we 0:10:16.700 --> 0:10:19.370 don't get to the 20% we're incurring the extra charge 0:10:19.370 --> 0:10:21.920 of lender's mortgage insurance which can add up to thousands 0:10:21.920 --> 0:10:26.180 of dollars. One way parents can help, you know, without 0:10:26.179 --> 0:10:29.420 stumping up cash, but help kids avoid having to pay 0:10:29.420 --> 0:10:32.120 that extra charge. At least, you know, lenders will lend 0:10:32.120 --> 0:10:35.630 to you with a 10% deposit in your own right. But, 0:10:35.630 --> 0:10:38.960 you know, if you're missing, say, the 10% to get 0:10:38.960 --> 0:10:43.100 to the 20%, parents can go guarantor on that. Amount. 0:10:43.110 --> 0:10:45.950 So you're not actually committing as the parent to go 0:10:45.950 --> 0:10:50.120 guarantor on the whole loan. But so say, for example, 0:10:50.120 --> 0:10:55.970 it's a $500,000 property. We haven't got the full $100,000 0:10:55.970 --> 0:11:00.020 as the 20% deposit. We've only got $50,000. You can 0:11:00.020 --> 0:11:02.890 go guarantor, which is to say that I promise I'll, 0:11:02.990 --> 0:11:07.010 I'll give you the bank. The missing $50,000. And you 0:11:07.010 --> 0:11:09.199 have to prove that you would be as the parent, 0:11:09.200 --> 0:11:12.350 that you've got the security to give. So the kid, 0:11:12.650 --> 0:11:15.590 you know, falls in a ditch, stops paying the mortgage. 0:11:15.890 --> 0:11:20.300 It's very sad scenario just outlined. For whatever reason, if 0:11:20.300 --> 0:11:23.300 the child can't pay the mortgage, the bank comes knocking 0:11:23.300 --> 0:11:25.910 on the door of the parent. And in the worst 0:11:25.910 --> 0:11:28.370 case scenario where, you know, they were selling the home 0:11:28.370 --> 0:11:31.520 and reclaiming the money, they would be saying to the parent, 0:11:31.520 --> 0:11:33.920 where's the 50 grand? And if the parent has the 0:11:33.920 --> 0:11:35.990 50 grand to stump up. You know, because I've got 0:11:35.990 --> 0:11:39.079 it in cash, great. If not, they will be going 0:11:39.080 --> 0:11:43.040 after the parents house. So you are putting in most cases, 0:11:43.040 --> 0:11:46.100 putting security over your own home as well on the 0:11:46.100 --> 0:11:49.400 line in the case that the banks are foreclosing on 0:11:49.400 --> 0:11:51.650 your child or going up, having to go after you 0:11:52.220 --> 0:11:55.790 for the money. So it's not an insubstantial thing that 0:11:55.790 --> 0:11:58.730 you're doing. You have to probably trust your kids that 0:11:58.730 --> 0:12:00.770 they're going to keep paying the mortgage because it can 0:12:00.770 --> 0:12:03.290 rebound on you. That's the whole point. You're offering up 0:12:03.290 --> 0:12:06.949 the security of your home. There are consequences to it, 0:12:07.730 --> 0:12:10.570 but it is a way to save, you know, to 0:12:10.640 --> 0:12:12.860 to help at least a little bit, you know, if 0:12:12.860 --> 0:12:16.550 you're missing that full 20% deposit. So this is actually 0:12:16.550 --> 0:12:18.860 exactly what I did when I went to go get 0:12:18.860 --> 0:12:22.190 my loan. My parents stepped in and went guarantor on 0:12:22.190 --> 0:12:25.370 the missing deposit. I didn't have the full 20% and 0:12:25.370 --> 0:12:27.980 I was really worried about it. I was, you know, 0:12:28.220 --> 0:12:30.320 which is probably why they were so confident to do 0:12:30.320 --> 0:12:32.239 it for me. I was really worried about not being 0:12:32.240 --> 0:12:35.179 able to, you know, pay my mortgage and then getting 0:12:35.179 --> 0:12:37.819 them on the hook somehow. So as long as you 0:12:37.820 --> 0:12:41.750 have the open conversation, you know, talk to the lender, 0:12:41.750 --> 0:12:43.910 talk to the mortgage broker about what are the implications 0:12:43.910 --> 0:12:46.160 of going guarantor on the loan and making sure that 0:12:46.160 --> 0:12:48.950 you're comfortable, That is something that you can do to 0:12:48.950 --> 0:12:51.470 help if you don't have, you know, just the cash 0:12:51.920 --> 0:12:54.950 to give to your child, which lots of people will 0:12:54.950 --> 0:12:56.000 be in that situation. 0:12:56.540 --> 0:12:58.370 Absolutely. I mean, a lot of people, you know, their 0:12:58.370 --> 0:13:00.590 main asset is their home. Right. That that might be 0:13:00.590 --> 0:13:02.870 the only sort of, you know, significant asset they have. 0:13:02.870 --> 0:13:05.390 So this is a way for people who have, you know, 0:13:05.390 --> 0:13:07.400 at least that asset to be able to help their 0:13:07.400 --> 0:13:12.349 children get over that home ownership hurdle. Something else I 0:13:12.350 --> 0:13:14.359 did want to sort of talk about, which I think 0:13:14.360 --> 0:13:16.790 is worth mentioning when we're talking about this whole idea of, 0:13:17.720 --> 0:13:22.740 you know, helping your children. Purchase property is that it's 0:13:22.740 --> 0:13:25.470 all well and good to give your. You know to 0:13:25.470 --> 0:13:28.140 help your child and either go guarantor or to you know, 0:13:28.140 --> 0:13:30.689 give them some money or however you think you will 0:13:30.690 --> 0:13:33.599 do it. But there's this whole other like side of 0:13:33.600 --> 0:13:35.070 this that they also then have to be able to 0:13:35.070 --> 0:13:38.250 service the loan. Right. You can give them 100 grand, 0:13:38.250 --> 0:13:40.290 200 grand, and they can buy a lovely house. But 0:13:40.290 --> 0:13:42.780 if they don't have the income to actually support paying 0:13:42.780 --> 0:13:45.750 that mortgage, then it's all for naught. And especially if 0:13:45.750 --> 0:13:48.570 you're going guarantor, because then there's an even higher chance that, 0:13:48.570 --> 0:13:51.300 you know, it could backfire on you as well. So 0:13:51.300 --> 0:13:54.240 I think that is something to think about as well. 0:13:54.240 --> 0:13:58.500 Like whilst obviously a lot of parents want their children 0:13:58.500 --> 0:14:01.559 to have a secure a house and income and all 0:14:01.559 --> 0:14:04.349 that sort of stuff, you do really have to think that, 0:14:04.350 --> 0:14:07.740 you know, can my child actually afford to live in a, 0:14:07.740 --> 0:14:12.270 you know, $1.2 million property in Sydney, you know, and 0:14:12.270 --> 0:14:14.730 pay a giant mortgage every week. Yeah. 0:14:15.240 --> 0:14:17.579 And kids will be, you know, when they will they'll 0:14:17.580 --> 0:14:20.400 be adults by that time when they're purchasing the property, 0:14:20.670 --> 0:14:22.830 they'll be assessed by the bank as to what they'll 0:14:22.830 --> 0:14:25.140 be able to afford. So, yeah, another thing to keep 0:14:25.140 --> 0:14:27.450 in mind, you know, one of the best gifts you 0:14:27.450 --> 0:14:30.810 can give your children, you know, in in addition to 0:14:30.810 --> 0:14:33.360 the budgeting skills. But is that advice around, you know, 0:14:33.960 --> 0:14:38.370 thinking about your career, dedicating yourself to your education, you know, 0:14:38.370 --> 0:14:41.460 helping kids steer themselves down a path so that they 0:14:42.090 --> 0:14:44.580 are heading towards a job where that, you know, they 0:14:44.580 --> 0:14:46.860 you know, and unfortunately, it is the case that, you know, 0:14:46.860 --> 0:14:50.430 the full time permanent positions where you can earn the 0:14:50.430 --> 0:14:53.940 steady income. It's much easier to borrow against those if 0:14:53.940 --> 0:14:57.090 your child is going down a path of self-employment or 0:14:57.090 --> 0:15:00.660 sporadic employment, it is harder to apply to the bank 0:15:00.660 --> 0:15:02.730 and get the loans that you need to get into 0:15:02.730 --> 0:15:06.360 the home ownership. So, I mean, you know, if your 0:15:06.360 --> 0:15:09.780 child wants to pursue a career that is more self-employed 0:15:09.780 --> 0:15:12.420 or self-directed, you know, I'm not saying don't do that, 0:15:12.690 --> 0:15:14.910 but just being mindful of preparing your kid for the 0:15:14.910 --> 0:15:18.660 future by, you know, securing that that good job that 0:15:18.660 --> 0:15:21.330 can be the anchor for them for not only home ownership, 0:15:21.330 --> 0:15:23.910 but the whole financial future. You know, that's just something 0:15:23.910 --> 0:15:25.620 that I'm mindful of. And if people don't have the 0:15:25.620 --> 0:15:28.350 resources to throw cash at their kids to buy a house, 0:15:28.740 --> 0:15:33.300 you can still help them and shepherd them in terms 0:15:33.300 --> 0:15:35.190 of what you teach them, in terms of the values of, 0:15:35.360 --> 0:15:39.720 you know, getting jobs and building your skills, you know, 0:15:39.720 --> 0:15:41.460 and that's another way to think about if you're thinking, 0:15:41.480 --> 0:15:43.350 I don't have any money, that I can actually give 0:15:43.350 --> 0:15:45.900 in cash to my child, you know, the skills that 0:15:45.900 --> 0:15:47.970 you give them, the support that you give to them 0:15:47.970 --> 0:15:50.280 and the nurturing that sort of enables them to go 0:15:50.280 --> 0:15:52.320 off into the world and get a good job that 0:15:52.320 --> 0:15:55.200 is valuable to and, you know, when it comes time 0:15:55.200 --> 0:15:57.540 to buy the property that is going to to be 0:15:57.540 --> 0:15:59.340 helping them and putting them in a good position. 0:16:00.030 --> 0:16:02.520 If you are a parent and similar to Sam and 0:16:02.520 --> 0:16:05.280 you're thinking about helping your child to afford a property 0:16:05.280 --> 0:16:09.210 one day in the future, yeah, maybe just either start 0:16:09.210 --> 0:16:11.760 putting some money aside now. Doesn't have to be much. 0:16:11.760 --> 0:16:13.800 Can be a little bit each month or each fortnight 0:16:13.800 --> 0:16:17.280 or each week, you know, possibly thinking about other options 0:16:17.280 --> 0:16:19.710 where you could, you know, maybe not just put it 0:16:19.710 --> 0:16:21.479 in cash, maybe you could put it in some sort of, 0:16:21.840 --> 0:16:25.110 you know, investment if you feel comfortable doing that and 0:16:25.110 --> 0:16:27.270 over a long enough timeframe, you know, that will definitely 0:16:27.270 --> 0:16:30.540 help you accumulate a decent sized deposit or at least 0:16:30.540 --> 0:16:31.590 a start to a deposit. 0:16:32.250 --> 0:16:35.250 Yeah. And including your child in the conversation, I don't 0:16:35.250 --> 0:16:37.590 know how young is too young to have the conversation 0:16:37.590 --> 0:16:40.110 about home ownership amongst all the other conversations she's supposed 0:16:40.110 --> 0:16:43.380 to have with kids, you know, the home ownership conversation about, 0:16:43.560 --> 0:16:45.750 you know, beginning to save for your first home deposit. 0:16:45.750 --> 0:16:47.940 I really think as teenagers, you can be starting to 0:16:47.940 --> 0:16:50.220 have that conversation about where do you want to live? 0:16:50.400 --> 0:16:52.290 You know, you did you know that, you know, tax 0:16:52.290 --> 0:16:55.050 advantage to to purchase your own property that that is 0:16:55.050 --> 0:16:57.540 a good, solid foundation for your future. How can we 0:16:57.540 --> 0:16:59.880 afford that? I'm willing to help you. I want you 0:16:59.880 --> 0:17:03.120 to also be involved. Show me you can save and 0:17:03.120 --> 0:17:07.860 I will. I'll match your savings. Having that conversation early. 0:17:07.859 --> 0:17:11.310 And then as things progressed, you know, talking to lenders 0:17:11.310 --> 0:17:14.190 and brokers about how you can actually specifically help if 0:17:14.190 --> 0:17:17.190 it's in terms of doing a guarantee and that sort 0:17:17.190 --> 0:17:19.440 of thing. So for Sam, you know, having that long 0:17:19.440 --> 0:17:22.139 term horizon, I think she's in a great position. She 0:17:22.140 --> 0:17:24.900 has it. She is saving. She is a saver. I'm 0:17:24.900 --> 0:17:27.540 sure that she's passing on some of those skills, even 0:17:27.540 --> 0:17:31.320 only by demonstration effect that her child knows that mum, 0:17:31.320 --> 0:17:35.580 you know, has a budget. Mom is saving, Mum prioritizes homeownership. 0:17:35.730 --> 0:17:38.190 She's thinking of those long term goals. And I can't 0:17:38.190 --> 0:17:40.410 help but think that that sort of thinking, you know, 0:17:40.410 --> 0:17:43.890 you are what you see kids grow up repeating what 0:17:43.890 --> 0:17:47.190 their parents do. So there's some fantastic, you know, habits 0:17:47.190 --> 0:17:50.460 in place that should set her daughter up really well 0:17:50.460 --> 0:17:51.149 for the long term. 0:17:51.359 --> 0:17:55.590 Absolutely. And as always, thank you, Sam. And thank you 0:17:55.590 --> 0:17:58.380 for everyone else who's been sending in your budgets. If 0:17:58.380 --> 0:18:01.890 you feel like sending a budget, hit us up at 0:18:01.890 --> 0:18:04.740 it all adds up at 9:00 today. You send us 0:18:04.980 --> 0:18:07.800 some details, any questions you have, and it'd be really 0:18:07.800 --> 0:18:09.930 helpful if you could also send in a little voice 0:18:09.930 --> 0:18:12.190 memo of you asking the question. So if we if 0:18:12.300 --> 0:18:13.800 we do choose you, we can we can play it 0:18:13.800 --> 0:18:15.179 on the podcast like we did today. 0:18:15.240 --> 0:18:18.180 Yep. Just whip out your iPhone, do a voice memo, 0:18:18.180 --> 0:18:20.590 a voice note, and. Email it to us at. It 0:18:20.590 --> 0:18:24.220 all adds up at nine.com.au EU. And we would love 0:18:24.220 --> 0:18:26.229 to have a look at your budgets and respond to 0:18:26.230 --> 0:18:27.130 your questions. 0:18:27.400 --> 0:18:30.100 Thanks so much, everybody, and we'll see you next week. 0:18:30.520 --> 0:18:36.130 See you next week. This episode of It All Adds 0:18:36.130 --> 0:18:39.700 Up was produced by Chee Wong. The information discussed is 0:18:39.700 --> 0:18:42.340 general in nature and does not take into account your 0:18:42.340 --> 0:18:46.629 personal financial situation, goals or objectives. You should always do 0:18:46.630 --> 0:18:50.080 your own research or get professional advice before making any 0:18:50.080 --> 0:18:54.370 major financial decisions. If you like today's episode, hit follow 0:18:54.369 --> 0:18:57.520 in your podcast app. Leave a review and recommend it 0:18:57.520 --> 0:19:00.970 to all your friends. You can submit your listener questions 0:19:00.970 --> 0:19:04.180 in text or audio format at. It all adds up 0:19:04.180 --> 0:19:06.280 at 9:00 PM. You.