As you might have seen from my interview with the ABC, in the past year my partner and I bought out first home and we lucky enough to be lumped with our first mortgage. Anyone who is looking at taking this leap themselves will know that everyone is full of advice about your first year with a mortgage, and generally these people fall into two categories: either those who got a mortgage in the 80s when the economic and political climate was very different; or people who don’t have a mortgage yet.
There are a lot of things that I wish I had known and wish that we could have done better in this first year, and so here are the top 10 things I learnt in my first year:
1. Job security is more important than your dream job this year.
The reality of the workplace for most young people is that its transient. A members of Gen Y we aren’t expected to last in any job for more than about 3 years. And I’m expecting that the last three years, you have been saving for your mortgage, and as such might be thinking its time to move on.
Put down the résumé and step away from Seek.
Right now, the most important thing is to get in a routine with paying off that debt. It’s not about job satisfaction right now, having the dream job or changing careers unfortunately. Now is the time where job security, which usually comes from being in a position for a few years, is the most important thing to you. I’m not saying don’t stay aware of your industry and stop thinking about what jobs you would like – but know, for this first year, this is where you will stay.
2. Stash some cash
This is the hardest part. We know most young home owners in their first year get their mortgage and want to get it paid of quickly, so they can move onto the next thing – whether that’s the holiday they’ve been putting off, the new car, or the next house. Bt there’s absolutely no point in pouring all your income into the mortgage and having nothing to pay your strata fees and electricity bills with. Put a bit of money aside every pay check, somewhere you don’t have a key card for – consider that your untouchable fund. You never know when that rainy day is going to come.
3. “But you’re so young…”
We get this all the time and this frustrates the pants off me. Yes, we are young. Yes, we do know its a big commitment. Yes, we know it’s a lot of money that could be spent a million other ways. What you have to do is be absolutely sure of your decision and stand by it. A simple “I know” is usually the best way to shut up these kinds of statements.
At the end of the day, the people who are concerned about how old you are and owning property are either projecting some of their own issues onto you (maybe they feel they bought their house too young), they’re jealous because they didn’t buy this early in their life or wish they were buying now, or they are genuinely concerned. That’s ok, it’s not their decision. have conviction in your decision. You’ll need it when those bills arrive…
4. Bills, bills, bills…
This is the worst. Invariably, at the same time every month or quarter, all the bills arrive in the letterbox at the same time. This really connects to point 2, where you have stashed that cash aside. That money is for this time. When your strata bill arrives, and you have a huge month on your phone bill, and then there’s that car insurance you forgot was just around the corner.
The best method that we have used is paying a little off our accounts each month – as soon as we get paid, we send 1/3 of our expected electricity bill (because we get charged quarterly) straight to the company. That means no nasty large bills, and even if we go over, it’s not a major worry. We can easily do this for our phone, electricity, water and strata bills, even our insurance and Internet. Your other option is to ask your company to bill you monthly, if that’s how you get paid, but we have found some companies don’t like to do this – too much handling.
5. Itchy feet
I’ve got a bit of a claim to fame amount my family and friends – 6 houses in 6 years, and always moving onto something else. Even in our last rental, part of the reason we bought when we did was because I got that movin’ feelin’. Now, we have been living in the same house for a year and I couldn’t imagine moving any time soon. I don’t feel that need, because its my home, my house, and I’m setting in roots there. If you’re someone who gets itchy feet or travellers bug etc. buying a house is the quickest way to fix that – if that’s what you want to do!
6. “So now you have the house, when are you going to…”
Often had in the same conversation as the question “oh but you’re too young” is the “what’s next” question. Nothing has to be next. You don’t have to be moving onto kids (although you will for sure get asked), or the next house (thought you might be) or a new job or anything! You can just buy a house, and that’s totally fine. Appropriate responses in this scenario include “paying bills!” Or “painting!”, because generally this is what you do when you first buy a house. Don’t play into the pressure game. Instead acknowledge the giant leap that you have taken – you’ve made a strong commitment and investment in your future. Let that settle.
7. I said Money Money
The great Billy Idol sang about Money (or Mony, who knows) enough times for us to all make the connection – it makes the world go round. And it’s firmly acknowledged by experts as the biggest issue in a relationship – money, who’s got it, where its going and by whom.
The easiest way I have found to deal with the money question is be completely upfront and honest. We have adopted a system for a few years now where we each put money into joint accounts, and keep some aside for our own personal spending. So far, that’s working for us. But money isn’t an issue because we sat down and spoke about what we were earning, what it was going to cost to keep the house running and what our aims were in terms of other things that are expensive, like travel and renovations. How can you expect to start a partnership like this mortgage when you’re so busy trying to keep it all fair and equal and you don’t know what that actually means for the other person? Maybe fair and equal is the whole of someone’s pay, and the other has enough money to splash about on fancy new clothes. That’s only going to breed discontent.
8. Freelance
For designers and social media managers in particular, this is really important. There’s a regular freelance gig going, or a wedding that needs to be done? Got some overtime shifts going at your work? Do it, charge appropriately (more on that later) and stash that cash. Whether you’re stashing it for bills, or putting it towards a new summer wardrobe, take the freelance opportunities that come your way. That extra bit of cash flow can mean the difference between a heap of stress and a fight with your partner and a cute noodle dinner date.
9. Decorating
Ahh decorating, the renters dream. Everyone who has ever rented had dreamed of the day when they could paint the walls anything other than cream, get their own wood floors and hang a billion pictures. And Pinterest completely feeds this addiction – we all have boards full of the kind of style that you will do your home in as soon as its bought.
The only problem? You can’t afford it right now. You just paid a massive deposit, a bunch of stamp duty and you’re staring down the barrel of your first mortgage payment. Spending $300 on a giant ampersand (like this one here) is not within your budget right now. That’s ok. Buy a $30 tin of paint, paint your walls using some borrowed brushes and rollers, and put your mark on your place that way. Look at new ways to arrange your home with the things you already have, investigate upcylcing some furniture with new paint or trawl the opshops. But the reality is, creating a Pinterest worthy home is a bit out of your reach this year. That’s ok, next year things might be different.
10. There’s no place like home
Everyone click their heels with me, squeeze your eyes tight and wish… Well guess what, you’ve got the wish already. There really is no feeling in the world like going around a place and knowing that its yours. Well, almost – you still have those payments to make. By from the day you buy it, you’re in charge of that home, and that’s wonderful – you can’t get kicked out, you can hang your paintings and you can gripe with your coworkers about the pain that is bills. But really, there’s no place likes home, and this is yours.
I would love to know – have you just bought your first home? Are you experiencing the same growing pains I am, or have you got other lessons you learnt? I’d love you to share them in the comments section or on my Facebook page – you can even tweet me!
