Wisdom with money helped us buy our first home

Money Lessons we learnt while we saved for our first home.Since our very first date, my husband and I have always enjoyed going to the movies.

My husband in particular had always been a big movie buff and after we got together we found ourselves heading to the cinema at least once if not twice a week.

When you add in popcorn and drinks and potentially dinner out afterwards we were easily spending a couple of hundred dollars each week on entertainment. Our spending was getting out of control.

But the years 2007 and 2008 were to be different.

These years we had agreed, as a couple, to forgo the fancy dates and instead spend time together without the drain on our wallets.

You see, we were saving for our wedding, honeymoon and a house deposit. There was money wisdom to learn.

Wisdom gained

Now, don’t get me wrong, we really wanted to pay cash for our wedding and also have enough to buy a place of our own but two years of saving and missing out on all the fun stuff seemed like so long.

Especially when all our friends where going out a lot and buying the latest gadgets and new fashion trends.

And here we were staying at home, shopping at Aldi before it became mainstream and sticking to a tight budget.

Buy you see, I had dreamed of getting into the real estate market ever since I read Steve McKnight’s From 0 to 130 properties in 3.5 years.

My goal was never to get to 130 properties but it sparked my interest in using real estate as a tool to build wealth.

I started reading a whole bunch of property investing magazines including Your Investment Property and Money magazine and became sure that becoming a property investor was the path for us to reach financial freedom  A financial plan was set.

Planning

Planning is not always easy or fun but the strategies you put in place at the beginning of your journey can really help to make the process a whole lot smoother and the achievement so much sweeter.

I knew this, as I had read Dave Ramsey’s The Total Money Makeover (can you tell by now I did a lot of reading when I was younger?) which helped me to get the basics right in terms of setting a budget, paying off debt and saving.

If you have not read it I suggest you do, as his baby steps approach is really simple to understand and was great for someone starting out.

If you would prefer a local based book I hear a lot of people raving about the new book by Scott Pape The Barefoot Investor – The Only Money Guide you’ll ever need,  which might be a great alternative for you if you would like something aimed at the Australian market.

I will be honest with you and tell you this one I have not read as I think it introduces topics that I feel pretty comfortable with these days.  All I know is that every person who has read the book seems to be opening up lots of ING accounts.

So getting back to my plan for saving for our wedding and house deposit, besides reading the books and magazines above I also signed up to a savings website that had a forum where other people would chat about how they had saved.

I found it really helpful to chat with other like minded individuals and it helped us to stay the course for the time we needed to.

The first thing I did in the planning stage was to draw up a budget (you can download my free simple monthly budget to get you started).

There were two really important things I did that helped set us up for success. The first was to work out how much all of our bills costs us per year. Once I had thisFinancial Lessons we learnt when buying our first home. figure I divided it by 52 to determine how much we needed to save a week and then as soon as we were paid we transferred this amount across to a separate bills account.

The second thing we did was made sure we paid ourselves first by setting up an auto transfer to a high interest account as soon as we were paid.

That way we never really saw the money so didn’t really miss it. My Savings Plan Calculator can help you to work out when you will reach your savings goal.

I found the calculator helped in staying motivated because  at the time it certainly seemed like a lot of effort and sacrifices while we were saving.

Looking back

10 years later we now look back at how far we have come in terms of owning four properties and having a net worth of over a million dollars.

If it was not for those two years where we tightened our belt and lived a very frugal lifestyle we would not be where we are today. Funnily enough we look back on those days and smile.

The smile is about the memories made during that time, things that we still remembers to this day. It is also about being proud of reaching our goals to be married and debt free as well as buying our first place a few months after we were married.

We don’t look back on the journey to get there and think about all the movies we missed or the things we had to give up along the way.

Ultimately, this wasn’t as memorable as the memories of our wedding and honeymoon.  The frugal years taught us valuable lessons which are very precious – the gift of financial wisdom, that we still use to this day.

We certainly have some great memories from this experience.  Plus we also gained some priceless financial management tools that will be with us forever. We totally get that working towards a goal can be worth the effort.

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1 Comment

  1. I am struggling to repay my only mortgage and small debt being on rather high salary. I uploaded your simple budget tool and looking at that now to see how I spend money. Thank you for the tool. Lets see how I will be able to manage my finances.

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