Welcome to How Do They Afford That, The podcast that peaks into the financial lives of everyday Australians. I'm Michael Thompson. I'm a writer and the co host of the podcast Fear and Greed business news. As always, I'm with Canna Campbell, financial planner and founder of Sugar Mama TV, the financial literacy platform that you will find on Instagram and YouTube and podcasts like this one and books, threads, TikTok and more.

Welcome to How Do They Afford That, The podcast that peaks into the financial lives of everyday Australians. I'm Michael Thompson. I'm a writer and the co host of the podcast Fear and Greed business news. As always, I'm with Canna Campbell, financial planner and founder of Sugar Mama TV, the financial literacy platform that you will find on Instagram and YouTube and podcasts like this one and books, threads, TikTok and more.

Hello Hannah, good morning, how are you.

Hello Hannah, good morning, how are you.

I am going well? Thank you? And today's episode is really for anyone who is hoping to get into the property market, and it is something we hear an awful lot about the fact that house prices are still rising. And if you are hoping to kind of get your foot on the ladder in the door, however you want to, however you want to see it, it may be that the market and prices, house prices are still rising faster than you can actually save your deposits. So today it is all about how to save a depot as fast as possible canad There's a bunch of different tactics and a bunch of different strategies, but I wanted to share some of the stats about this first, if I can, I would.

I am going well? Thank you? And today's episode is really for anyone who is hoping to get into the property market, and it is something we hear an awful lot about the fact that house prices are still rising. And if you are hoping to kind of get your foot on the ladder in the door, however you want to, however you want to see it, it may be that the market and prices, house prices are still rising faster than you can actually save your deposits. So today it is all about how to save a depot as fast as possible canad There's a bunch of different tactics and a bunch of different strategies, but I wanted to share some of the stats about this first, if I can, I would.

Love that because I feel like it's become very intimidating and overwhelming to be able to get your foot in the door.

Love that because I feel like it's become very intimidating and overwhelming to be able to get your foot in the door.

It really is. And the fact is that the amount that you actually need for your deposit has grown so much. And there were some statistics, some data from Domain that came from the June quarter of twenty twenty four that show just how much it has changed by that this is in the last five years, right, So comparing twenty nineteen to twenty twenty four, that if you were say buying the median priced house in Sydney, you would need in twenty nineteen a deposit of two hundred and seven thousand dollars if you were saving a twenty percent deposit two hundred and seven thousand. Now five years later, that deposit has jumped from two hundred and seven thousand dollars to three hundred and thirty two thousand dollars because of the rise in house prices. Wow in Melbourne five years ago one hundred and sixty five thousand dollars now two hundred and thirteen thousand. Brisbane one hundred and thirteen thousand, now one hundred and ninety five thousand like that is extraordinary. That is an extra sixty two thousand dollars in just five years. That is a perth as well, one hundred and six thousand now up to one hundred and seventy thousand dollars. And look that they are just kind of some of the main capital cities. But it's quite kind of indicative because that is where a lot of people are hoping to buy, because in many cases that is where a lot of the jobs are, and that is kind of where families are and things. And so I know we are talking about capital cities there, but there have been price rises as well in regional areas throughout that whole period as well. So that kind of sets the scene. It shows just how big the challenge is. Just how much the deposit required if you're saving a twenty percent deposit, how much it has grown by over the last few years. How do we do it? I know that's a big question, isn't it? How do we Is it just I shouldn't put this out there? Is it just cutting down all unnecessary expenses? Even as I say that, I know that's just silly. I mean, there's no way that you're going to be able to cut enough kind of fat out of your budget in order to save that amount of money.

It really is. And the fact is that the amount that you actually need for your deposit has grown so much. And there were some statistics, some data from Domain that came from the June quarter of twenty twenty four that show just how much it has changed by that this is in the last five years, right, So comparing twenty nineteen to twenty twenty four, that if you were say buying the median priced house in Sydney, you would need in twenty nineteen a deposit of two hundred and seven thousand dollars if you were saving a twenty percent deposit two hundred and seven thousand. Now five years later, that deposit has jumped from two hundred and seven thousand dollars to three hundred and thirty two thousand dollars because of the rise in house prices. Wow in Melbourne five years ago one hundred and sixty five thousand dollars now two hundred and thirteen thousand. Brisbane one hundred and thirteen thousand, now one hundred and ninety five thousand like that is extraordinary. That is an extra sixty two thousand dollars in just five years. That is a perth as well, one hundred and six thousand now up to one hundred and seventy thousand dollars. And look that they are just kind of some of the main capital cities. But it's quite kind of indicative because that is where a lot of people are hoping to buy, because in many cases that is where a lot of the jobs are, and that is kind of where families are and things. And so I know we are talking about capital cities there, but there have been price rises as well in regional areas throughout that whole period as well. So that kind of sets the scene. It shows just how big the challenge is. Just how much the deposit required if you're saving a twenty percent deposit, how much it has grown by over the last few years. How do we do it? I know that's a big question, isn't it? How do we Is it just I shouldn't put this out there? Is it just cutting down all unnecessary expenses? Even as I say that, I know that's just silly. I mean, there's no way that you're going to be able to cut enough kind of fat out of your budget in order to save that amount of money.

You know, like I say, with frugal February, you can only you know, trim a certain amount of the end of the day, you've still got to eat and have a roof of your head and obviously close on your back. So you do need to start to get creative in the way that you bring money in and the way you earn money. And this is where you know the first thing is obviously to look at your mindset and to set some really exciting goals for yourself with a deadline and not a in three months time, I want to save ten thousand dollars, but in a with a deadline that's actually a line in the sand where you say, like the first zamba twenty twenty four. So that's really important because that having that mindset is going to mean that you approach that goal with so much more excitement, passion and that required dedication and commitment that is needed for such a big goal like this.

You know, like I say, with frugal February, you can only you know, trim a certain amount of the end of the day, you've still got to eat and have a roof of your head and obviously close on your back. So you do need to start to get creative in the way that you bring money in and the way you earn money. And this is where you know the first thing is obviously to look at your mindset and to set some really exciting goals for yourself with a deadline and not a in three months time, I want to save ten thousand dollars, but in a with a deadline that's actually a line in the sand where you say, like the first zamba twenty twenty four. So that's really important because that having that mindset is going to mean that you approach that goal with so much more excitement, passion and that required dedication and commitment that is needed for such a big goal like this.

Otherwise is there a risk of it actually feeling completely overwhelming hearing those stats and just going this is going up faster than I can ever possibly say absolutely.

Otherwise is there a risk of it actually feeling completely overwhelming hearing those stats and just going this is going up faster than I can ever possibly say absolutely.

And this is why I say you've got to invest time understanding your why, because that will then feed you and help you get through those confronting times, all those challenging times where you feel overwhelmed, you feel like you've completely defeated and you can't see the purpose behind it anymore. This is what allows you to sort of have see the light at the end of the tunnel, or know that it is all worth it, and things like, you know, little things like having a separate savings account and then nicknaming it, you know, my deposit money, so you can actually see that this goal is actually on its way, it's happening. But then you know, you've got to look at the reality of the situation. Is going to take that commitment that time. You know it's short term pain or medium term pain for a lot of us, but that long term gain. And then you know you look at, okay, well, how do we get creative it with our living expenses and how can we be more efficient? Yes, you trim the fat as much as you possibly can, but you also look at what does stay and go? Well, how do I you have these living expenses in an efficient way where I can save money or get more usage out of what I have to pay for anyway, So is it.

And this is why I say you've got to invest time understanding your why, because that will then feed you and help you get through those confronting times, all those challenging times where you feel overwhelmed, you feel like you've completely defeated and you can't see the purpose behind it anymore. This is what allows you to sort of have see the light at the end of the tunnel, or know that it is all worth it, and things like, you know, little things like having a separate savings account and then nicknaming it, you know, my deposit money, so you can actually see that this goal is actually on its way, it's happening. But then you know, you've got to look at the reality of the situation. Is going to take that commitment that time. You know it's short term pain or medium term pain for a lot of us, but that long term gain. And then you know you look at, okay, well, how do we get creative it with our living expenses and how can we be more efficient? Yes, you trim the fat as much as you possibly can, but you also look at what does stay and go? Well, how do I you have these living expenses in an efficient way where I can save money or get more usage out of what I have to pay for anyway, So is it.

Kind of looking at the big ticket items kind of in your life? And for most people, the biggest expense is going to be their living expense, right, Yeah, that's probably fair, isn't it that the biggest expense is going to be.

Kind of looking at the big ticket items kind of in your life? And for most people, the biggest expense is going to be their living expense, right, Yeah, that's probably fair, isn't it that the biggest expense is going to be.

Your existing rent basically, yeah.

Your existing rent basically, yeah.

And so are there ways to do that more affordably that would allow you to then perhaps kind of funnel more money into that savings account that we've now kind of renamed made it very clear house deposit, and you've set the goal in your mind that it's going to be by kind of December the first one, twenty four or whatever it is.

And so are there ways to do that more affordably that would allow you to then perhaps kind of funnel more money into that savings account that we've now kind of renamed made it very clear house deposit, and you've set the goal in your mind that it's going to be by kind of December the first one, twenty four or whatever it is.

Yes, and this potential will help you achieve that goal sooner, you know, so things like you know, moving into a shared house. So if you're living on your own, that's very expensive. You know, you might think, well, I really want to have a place on my own, Okay, I need to look at living with another person or living with you know, a group of other people, and you know, this can be a great way of cutting down your ranch and obviously all those additional living expenses when you're sharing it across say three people, maybe four, like through such as a sharehouse, or you know, maybe finding a friend that has a similar goal as yours, and you go, you know what, we're going to live move in together, and we're going to keep each other accountable. We're going to be saving money because our rent comes down as we're sharing the costs, we can share our living expenses. That's a great way, and I've seen this actually in a couple of different situations and it has been really helpful for both parties to actually start saving up a deposit. And then another idea is moving in with a friend or moving in with a family member or another family where you go, you know what, I'm going to rent a bedroom off you, and you know that family benefits from some cash coming in to help pay for, you know, their own living expenses, particular at the moment where things are so incredibly tight, but allows that person to free up their cash flow so they're not paying say three hundred dollars a week and rent, they're now paying one hundred dollars. Almost bored to now save up more. And you know, if you're in a fortunate position, and I've had a lot of friends do this, and they've done this as a married couple, and even a married couple with kids, they've moved on with mum and dad. And I know that there is obviously a small percentage of people that can actually do that, and if you can do that, you're incredibly lucky. But these are the ways that people I've seen friends actually been able to afford to build up that deposit so they can get their foot in the door.

Yes, and this potential will help you achieve that goal sooner, you know, so things like you know, moving into a shared house. So if you're living on your own, that's very expensive. You know, you might think, well, I really want to have a place on my own, Okay, I need to look at living with another person or living with you know, a group of other people, and you know, this can be a great way of cutting down your ranch and obviously all those additional living expenses when you're sharing it across say three people, maybe four, like through such as a sharehouse, or you know, maybe finding a friend that has a similar goal as yours, and you go, you know what, we're going to live move in together, and we're going to keep each other accountable. We're going to be saving money because our rent comes down as we're sharing the costs, we can share our living expenses. That's a great way, and I've seen this actually in a couple of different situations and it has been really helpful for both parties to actually start saving up a deposit. And then another idea is moving in with a friend or moving in with a family member or another family where you go, you know what, I'm going to rent a bedroom off you, and you know that family benefits from some cash coming in to help pay for, you know, their own living expenses, particular at the moment where things are so incredibly tight, but allows that person to free up their cash flow so they're not paying say three hundred dollars a week and rent, they're now paying one hundred dollars. Almost bored to now save up more. And you know, if you're in a fortunate position, and I've had a lot of friends do this, and they've done this as a married couple, and even a married couple with kids, they've moved on with mum and dad. And I know that there is obviously a small percentage of people that can actually do that, and if you can do that, you're incredibly lucky. But these are the ways that people I've seen friends actually been able to afford to build up that deposit so they can get their foot in the door.

Yeah, so that is one that's that's quite I mean, there's a whole look a lot of pain, but it also it's not going to apply to everybody, but there are variations on that exactly. Yeah. I like that it is about kind of looking at the biggest expense in your life, which is your accommodation, and going okay, there are ways that I can do this, and it might not be ideal, it might not be kind of what you want to do to move home, or to move into a sharehouse or move into a or kind of move in with a friend. But it's all about the mindset, then, isn't it that looking ahead exactly that it is short term to medium term pain, even though it's not really that painful. You've still got a roof over your head, and you're still kind of with people that you.

Yeah, so that is one that's that's quite I mean, there's a whole look a lot of pain, but it also it's not going to apply to everybody, but there are variations on that exactly. Yeah. I like that it is about kind of looking at the biggest expense in your life, which is your accommodation, and going okay, there are ways that I can do this, and it might not be ideal, it might not be kind of what you want to do to move home, or to move into a sharehouse or move into a or kind of move in with a friend. But it's all about the mindset, then, isn't it that looking ahead exactly that it is short term to medium term pain, even though it's not really that painful. You've still got a roof over your head, and you're still kind of with people that you.

Know exactly, and I mean Aasa said, I know a lot of people who have done this and they have no regrets whatsoever. And you know, you can even things like becoming a pair, you know, where you don't even pay a cent to live with a family. You get all your food paid for and you actually earn money cash in hand at the same time as well. So that's another option.

Know exactly, and I mean Aasa said, I know a lot of people who have done this and they have no regrets whatsoever. And you know, you can even things like becoming a pair, you know, where you don't even pay a cent to live with a family. You get all your food paid for and you actually earn money cash in hand at the same time as well. So that's another option.

And so there you are essentially looking after children children, yes, but it's not necessarily full time.

And so there you are essentially looking after children children, yes, but it's not necessarily full time.

Oh no, No, you normally do like a set amount of hours and so obviously you agree all this upfront. So you know, for example, we had no pair and I think she had to do twenty hours a week and it was you know, ten hours sporadically during the week and ten hours over the weekend. And she got two hundred and fifty dollars cash each week, so you know, she wasn't paying a cent, and we paid for lots of extra things on top of that. And you know, if we needed to go over the twenty hours, we gave her you know, double time and so forth. But it is another way, and in fact, tom when he finished school he was seventeen, and he had to move out of home straight away and moved to the city and to start university. And he desperately wanted to get the foot his foot in the door in the property market. And he Wow, he was motivated, very motivated. And I know this is the same time that saved one CeNSE by not filling up. You know, he'd fill up his petrol tank would say twelve dollars and you know, three cents of petrol, two cents of petrols. They couldn't round it up. But he had a really smart idea and he did this. It's one of the best things that I've ideas I've ever heard to save money in order to build up a deposit. But he became a house master at a local private school where he was living.

Oh no, No, you normally do like a set amount of hours and so obviously you agree all this upfront. So you know, for example, we had no pair and I think she had to do twenty hours a week and it was you know, ten hours sporadically during the week and ten hours over the weekend. And she got two hundred and fifty dollars cash each week, so you know, she wasn't paying a cent, and we paid for lots of extra things on top of that. And you know, if we needed to go over the twenty hours, we gave her you know, double time and so forth. But it is another way, and in fact, tom when he finished school he was seventeen, and he had to move out of home straight away and moved to the city and to start university. And he desperately wanted to get the foot his foot in the door in the property market. And he Wow, he was motivated, very motivated. And I know this is the same time that saved one CeNSE by not filling up. You know, he'd fill up his petrol tank would say twelve dollars and you know, three cents of petrol, two cents of petrols. They couldn't round it up. But he had a really smart idea and he did this. It's one of the best things that I've ideas I've ever heard to save money in order to build up a deposit. But he became a house master at a local private school where he was living.

So that's looks after the borders, is that.

So that's looks after the borders, is that.

A borders And he had all his rent covered for or his food, didn't have to worry about having to pay electricity bills and gas bills, and he was able to study full time physiotherapy and do his master's in equine physio and not have to worry about those expenses. And he was able to save up a deposit and didn't need a guarantee, didn't need mortgage Insuran or something like that. That is how he saved up his deposit. And the wonderful thing behind this is he is still the closest of friends with all of those boys that he looked after, and they are some of his best friends today and they're almost like brothers. They actually say when they eaves drop on Tom's conversation when they end their calls, they say, I love you really, Yeah, isn't it beautiful? But He's like, you know, this is twenty something years later, he's still incredibly close with these guys, and you know who's actually in one of their groom's party not long ago. But that's how close down it was. Allowed him to save up all this money to get his foot in the door, and he was so motivated, so so desperate, and had no help from his parents whatsoever, and had to pay for his own education his own way.

A borders And he had all his rent covered for or his food, didn't have to worry about having to pay electricity bills and gas bills, and he was able to study full time physiotherapy and do his master's in equine physio and not have to worry about those expenses. And he was able to save up a deposit and didn't need a guarantee, didn't need mortgage Insuran or something like that. That is how he saved up his deposit. And the wonderful thing behind this is he is still the closest of friends with all of those boys that he looked after, and they are some of his best friends today and they're almost like brothers. They actually say when they eaves drop on Tom's conversation when they end their calls, they say, I love you really, Yeah, isn't it beautiful? But He's like, you know, this is twenty something years later, he's still incredibly close with these guys, and you know who's actually in one of their groom's party not long ago. But that's how close down it was. Allowed him to save up all this money to get his foot in the door, and he was so motivated, so so desperate, and had no help from his parents whatsoever, and had to pay for his own education his own way.

That's creative. Well, this is what I mean.

That's creative. Well, this is what I mean.

You've to start thinking, you know, outside of the squared you need to look at what you were capable of doing.

You've to start thinking, you know, outside of the squared you need to look at what you were capable of doing.

Okay, so we have cut our spending down wherever possible, trimmed the fat. We've looked then at our other big expense being our accommodation and some creative ways. That is the next thing to do. Just try and bring in extra revenue. Extra extra work on the weekend, all that kind of thing when we've talked about kind of side hustles.

Okay, so we have cut our spending down wherever possible, trimmed the fat. We've looked then at our other big expense being our accommodation and some creative ways. That is the next thing to do. Just try and bring in extra revenue. Extra extra work on the weekend, all that kind of thing when we've talked about kind of side hustles.

Yeah, extra jobs. Whether you can pick up something on the weekend, you know, whether you have a particular skill perhaps you know you're a great photographer or you're a great copywriter, things that you can do after hours, you know, at home or on the weekends to bring in some extra money. And again, I know this is going to sound silly, but you do need to be creative if you want to get into the property market because it is moving at such a rapid speed. Have you heard of the paper clip story?

Yeah, extra jobs. Whether you can pick up something on the weekend, you know, whether you have a particular skill perhaps you know you're a great photographer or you're a great copywriter, things that you can do after hours, you know, at home or on the weekends to bring in some extra money. And again, I know this is going to sound silly, but you do need to be creative if you want to get into the property market because it is moving at such a rapid speed. Have you heard of the paper clip story?

I have, I know this one, but share it because if we just if I had just said yes, I know it, and then he said yes, isn't it good? And the story ended there, it would be a very disappointing listening experience.

I have, I know this one, but share it because if we just if I had just said yes, I know it, and then he said yes, isn't it good? And the story ended there, it would be a very disappointing listening experience.

All Right, So this guy called Carl McDonald, and I believe this is back in two thousand and six. He is a Canadian living in Canada, and he desperately wanted to get into the property market. He wanted to have his own home, but he didn't have any money and he didn't have a job. So he got creative and he traded his way into a house, starting with a paper clip. So he took a paperclip and he traded it into with someone that you put it online like, this is my goal, this is what I want to do. I want to trade my way eventually property. So he put it online the paper clip in his story. Someone saw it and then gave him a fish pen, and then the fish pen was converted into a door handle, and then it went. The value went obviously increased over time, and eventually he ended up with a farm, two story farm in Kipling, which I believe is two hours east of Virginia in Canada. So there you go to someone who's literally bought a house with absolutely nothing with a paper clips but obviously the time doing it all, but it built momentum, and it really is incredibly if you go and look at the story up, it's incredibly inspiring.

All Right, So this guy called Carl McDonald, and I believe this is back in two thousand and six. He is a Canadian living in Canada, and he desperately wanted to get into the property market. He wanted to have his own home, but he didn't have any money and he didn't have a job. So he got creative and he traded his way into a house, starting with a paper clip. So he took a paperclip and he traded it into with someone that you put it online like, this is my goal, this is what I want to do. I want to trade my way eventually property. So he put it online the paper clip in his story. Someone saw it and then gave him a fish pen, and then the fish pen was converted into a door handle, and then it went. The value went obviously increased over time, and eventually he ended up with a farm, two story farm in Kipling, which I believe is two hours east of Virginia in Canada. So there you go to someone who's literally bought a house with absolutely nothing with a paper clips but obviously the time doing it all, but it built momentum, and it really is incredibly if you go and look at the story up, it's incredibly inspiring.

It is very cool. I remember actually talking to him, no way, it was yeah, I was working in radio at the time, and it did an interview.

It is very cool. I remember actually talking to him, no way, it was yeah, I was working in radio at the time, and it did an interview.

Like I'm sitting in the presence of someone.

Like I'm sitting in the presence of someone.

Who spoke to someone who was famous fifteen years ago, and yeah, it was a fascinating story and very kind of like experimental. I don't know if this is going to work, but I'm going to give it a crack. And it's just one of those things that took off off. So we're not necessarily saying you should go out there and try and trade your own way to a house, but it just kind of shows some of the creativity that goes into.

Who spoke to someone who was famous fifteen years ago, and yeah, it was a fascinating story and very kind of like experimental. I don't know if this is going to work, but I'm going to give it a crack. And it's just one of those things that took off off. So we're not necessarily saying you should go out there and try and trade your own way to a house, but it just kind of shows some of the creativity that goes into.

Let's not put any self limiting boundaries on anyone listening right now.

Let's not put any self limiting boundaries on anyone listening right now.

If you walked into the bank and they said, all right, now, what's your plan here, Like, I'm going to trade my way? Can I have that paper clip?

If you walked into the bank and they said, all right, now, what's your plan here, Like, I'm going to trade my way? Can I have that paper clip?

Look? Who doesn't love a great story and also love helping people? And I know if I saw that, I'd be like, you know what, I'm going to trade you something a greater value to help you on your path.

Look? Who doesn't love a great story and also love helping people? And I know if I saw that, I'd be like, you know what, I'm going to trade you something a greater value to help you on your path.

I don't mean to be a downer, but it's probably not going to work for most people. And I feel like we probably do need to be quite practical. We're going to take a quick break. And now I feel like I've crushed you you have.

I don't mean to be a downer, but it's probably not going to work for most people. And I feel like we probably do need to be quite practical. We're going to take a quick break. And now I feel like I've crushed you you have.

If there's anyone out there that feels like they want to take on this challenge of the paper clip and they want to do it in Australia, let me know, because I'm going to be behind you one hundred percent of the way.

If there's anyone out there that feels like they want to take on this challenge of the paper clip and they want to do it in Australia, let me know, because I'm going to be behind you one hundred percent of the way.

What would you kind of would you kind of trade with them at some point?

What would you kind of would you kind of trade with them at some point?

I'd help them on the way and help them connect to them with the people who will could give them a leg up each way. I love helping people.

I'd help them on the way and help them connect to them with the people who will could give them a leg up each way. I love helping people.

Okay, That's what I live for. All right, Well, let's take a quick break. I want to talk to you about some of the other, probably more conventional ways to get into the housing market, the ones that are probably going to be used by more listeners to actually do this.

Okay, That's what I live for. All right, Well, let's take a quick break. I want to talk to you about some of the other, probably more conventional ways to get into the housing market, the ones that are probably going to be used by more listeners to actually do this.

Fine, okay, all right, we'll take a break.

Fine, okay, all right, we'll take a break.

Can we are talking about ways to save a house deposit faster? Because the market is moving so quickly, and it has been moving quickly now for a number of years, and it is really quite look honestly quite depressing I think for a lot.

Can we are talking about ways to save a house deposit faster? Because the market is moving so quickly, and it has been moving quickly now for a number of years, and it is really quite look honestly quite depressing I think for a lot.

Of people who very disheartening.

Of people who very disheartening.

Yeah, for people who aren't yet in the market and hoping to do so, that really saving for a deposit almost feels like something that's quite futile, that they could save and save and save and cut out all of the expenses and really scrimp and just like forego everything and still not quite make it. And I don't mean to be depressing, but it is the reality. And there are a couple of other ways to get into the housing market, and we should mention these two because they are things that we've seen a lot more people turning, for instance, to the bank of mom and dad. Yeah, is that typically a gift or is it a kind of a We've talked in the past about investing in property together with someone else, a family member, But when you hear references to the bank of mom and dad, is it usually a gift of money?

Yeah, for people who aren't yet in the market and hoping to do so, that really saving for a deposit almost feels like something that's quite futile, that they could save and save and save and cut out all of the expenses and really scrimp and just like forego everything and still not quite make it. And I don't mean to be depressing, but it is the reality. And there are a couple of other ways to get into the housing market, and we should mention these two because they are things that we've seen a lot more people turning, for instance, to the bank of mom and dad. Yeah, is that typically a gift or is it a kind of a We've talked in the past about investing in property together with someone else, a family member, But when you hear references to the bank of mom and dad, is it usually a gift of money?

Look, it really does vary. It comes with different terms and conditions, and you know, it's very situational. So for some people, yes, it is a gift. It's a deposit, or it's a I'll match you dollar for dollar, or you know, but in some form it's a gift with no expectation to pay it back. For other people, it's a loan that comes with terms and conditions, whether it be interest or there's a deadline as to how much well when that money needs to be paid by or how much needs to be paid back by a certain date, And for some people it's an early inheritance. And I have to say I have a lot of admiration for this because, and I think about this myself as a parent, I would not want to have my children wait until I'm dead to actually see them benefit from me being able to give them money. I would rather help them in a helpful way along the way and actually see the relief and see them, you know, make smart, intelligent money decisions with that money as I gave it to them along the way. So I think there is you know, people are starting to look at the whole concept of a gift differently as a part of an early retirement, and they're all, it's got to be managed very very carefully, particularly if you've got you know, one child wants to buy a house and the other one isn't interested, and they might get their nose out of joint thinking well that my sister just got a you know, fifty thousand dollars deposit or a check just because I don't want to buy a home. That means I missed out. So it's got to be managed carefully obviously with a very sensitive approach.

Look, it really does vary. It comes with different terms and conditions, and you know, it's very situational. So for some people, yes, it is a gift. It's a deposit, or it's a I'll match you dollar for dollar, or you know, but in some form it's a gift with no expectation to pay it back. For other people, it's a loan that comes with terms and conditions, whether it be interest or there's a deadline as to how much well when that money needs to be paid by or how much needs to be paid back by a certain date, And for some people it's an early inheritance. And I have to say I have a lot of admiration for this because, and I think about this myself as a parent, I would not want to have my children wait until I'm dead to actually see them benefit from me being able to give them money. I would rather help them in a helpful way along the way and actually see the relief and see them, you know, make smart, intelligent money decisions with that money as I gave it to them along the way. So I think there is you know, people are starting to look at the whole concept of a gift differently as a part of an early retirement, and they're all, it's got to be managed very very carefully, particularly if you've got you know, one child wants to buy a house and the other one isn't interested, and they might get their nose out of joint thinking well that my sister just got a you know, fifty thousand dollars deposit or a check just because I don't want to buy a home. That means I missed out. So it's got to be managed carefully obviously with a very sensitive approach.

Communication, Yes, is key, isn't it. Like when we've talked about this through every element of money, and particularly when it comes to families and relationships, Communication is the key to it, isn't it.

Communication, Yes, is key, isn't it. Like when we've talked about this through every element of money, and particularly when it comes to families and relationships, Communication is the key to it, isn't it.

But also in this situation of the bank of Mama Dad, also, how does that impact the will? You know, does if you gifted a one child a deposit, does that mean that that needs to be rebalanced in the estate. You know, there's all sorts of things that could potentially go wrong and get messy quickly, so.

But also in this situation of the bank of Mama Dad, also, how does that impact the will? You know, does if you gifted a one child a deposit, does that mean that that needs to be rebalanced in the estate. You know, there's all sorts of things that could potentially go wrong and get messy quickly, so.

You would get potentially both legal advice and financial advice.

You would get potentially both legal advice and financial advice.

Yes, But one thing I have to say is with gifting money to children for something like a deposit, it's got to be done very carefully because you I've seen a situation this is a long time ago, but where someone I know was basically given a huge deposit and with a very small mortgage, and because they didn't have the financial literacy, they struggle to understand how to actually pay a mortgage, and the parents actually end up having to pay off the mortgage because it created so much of a disaster financially. So it's really important that when someone does give them the money, they understand what to do with that money and how to make sure that that money counts and that money works. And you know, that's why I'm a big fan of the idea. If you do want to help your children, say to them, Okay, I'll help you, but we need to go dollar for dollars so that they learn about the importance of budgeting, about the importance of having a goal and understanding your why behind that goal, and the power of having a deadline to make you accountable and stop wasting time, and you know how to be financially responsible, so that you know that money is going to help add value to that child's life.

Yes, But one thing I have to say is with gifting money to children for something like a deposit, it's got to be done very carefully because you I've seen a situation this is a long time ago, but where someone I know was basically given a huge deposit and with a very small mortgage, and because they didn't have the financial literacy, they struggle to understand how to actually pay a mortgage, and the parents actually end up having to pay off the mortgage because it created so much of a disaster financially. So it's really important that when someone does give them the money, they understand what to do with that money and how to make sure that that money counts and that money works. And you know, that's why I'm a big fan of the idea. If you do want to help your children, say to them, Okay, I'll help you, but we need to go dollar for dollars so that they learn about the importance of budgeting, about the importance of having a goal and understanding your why behind that goal, and the power of having a deadline to make you accountable and stop wasting time, and you know how to be financially responsible, so that you know that money is going to help add value to that child's life.

What about instead of a gift, what about somebody going guarantee for you? How does that work?

What about instead of a gift, what about somebody going guarantee for you? How does that work?

Look? The way it works can really vary from bank to bank, okay, And that's why you want to get a good mortgage broker to make sure that they can go through all the different options and then know which bank is the right bank. And it's going to really vary on the situation of the parents, like how financially stable. Do they have a mortgage themselves or do they have invest mines? Are they self under retirees or are they still working. There's lots of intricacies that come in with being a guaranteur.

Look? The way it works can really vary from bank to bank, okay, And that's why you want to get a good mortgage broker to make sure that they can go through all the different options and then know which bank is the right bank. And it's going to really vary on the situation of the parents, like how financially stable. Do they have a mortgage themselves or do they have invest mines? Are they self under retirees or are they still working. There's lots of intricacies that come in with being a guaranteur.

But in quite a maybe in its simplest form, it would be say that the parents own their own home and then they go kind of guarantee of for that twenty percent deposit. Essentially they are putting up their own house or a slice of their own property as kind of collateral exactly.

But in quite a maybe in its simplest form, it would be say that the parents own their own home and then they go kind of guarantee of for that twenty percent deposit. Essentially they are putting up their own house or a slice of their own property as kind of collateral exactly.

And look, it means that your children then can get into the property market even sooner. You know, some banks will land up to one hundred percent of the property price when you've got a substantial guaranteur there. And that also then may mean that you save on fees, you may be able to access a lower interest rate, and also you save on mortgage insurance.

And look, it means that your children then can get into the property market even sooner. You know, some banks will land up to one hundred percent of the property price when you've got a substantial guaranteur there. And that also then may mean that you save on fees, you may be able to access a lower interest rate, and also you save on mortgage insurance.

Okay, so there's and again that is talk to a mortgage broker, get advice on that one, because it's not the kind of thing that you just walk straight into, exactly.

Okay, so there's and again that is talk to a mortgage broker, get advice on that one, because it's not the kind of thing that you just walk straight into, exactly.

It's one that you need to throw a lot of what ifs.

It's one that you need to throw a lot of what ifs.

Yea yeah, because there is an element of risk, and that.

Yea yeah, because there is an element of risk, and that.

Risk is not just for a year. It's you know, to a certain point in which the bank say, okay, well we've got enough security on that other property you can you are relinquished of your responsibilities of being garent tol.

Risk is not just for a year. It's you know, to a certain point in which the bank say, okay, well we've got enough security on that other property you can you are relinquished of your responsibilities of being garent tol.

All right, there's a fair bit in this one, and it's not I was hoping to be quite motivational with this, but unfortunately I think I depressed myself right at the start when I went through the statistics of just how difficult it is now to save a deposit.

All right, there's a fair bit in this one, and it's not I was hoping to be quite motivational with this, but unfortunately I think I depressed myself right at the start when I went through the statistics of just how difficult it is now to save a deposit.

I feel like you tried to depress me, but you didn't, because I really believe where there's a will as a way, if you really want something bad, it can still happen, but it just may not happen necessarily in the way that you originally wanted or would like it to happen. It will come, but perhaps you know, you buy it in a different area, or you buy it as an investment, probably rather than a place to live in, or you know, you maybe buy something overseas. You know, there's there are ways around.

I feel like you tried to depress me, but you didn't, because I really believe where there's a will as a way, if you really want something bad, it can still happen, but it just may not happen necessarily in the way that you originally wanted or would like it to happen. It will come, but perhaps you know, you buy it in a different area, or you buy it as an investment, probably rather than a place to live in, or you know, you maybe buy something overseas. You know, there's there are ways around.

And we've talked about rein resting exactly.

And we've talked about rein resting exactly.

And there's often a blessing in disguise.

And there's often a blessing in disguise.

All right. If anybody wants to find more information from you, where do they get that?

All right. If anybody wants to find more information from you, where do they get that?

The best place to get in contact with me is through my Instagram account. Sugar Mama TV or Canna Campbell Official.

The best place to get in contact with me is through my Instagram account. Sugar Mama TV or Canna Campbell Official.

And you can hear me every day with Sean Aylmer on Fear and Greed, Australia's best business podcast. Thank you for listening to How To They Afford That remembered hit follow on the podcast and please, if you think somebody you know might benefit from hearing this episode, then send it on to them and help spread the word about how to They Afford that? Thank you for your company Join us again next week.

And you can hear me every day with Sean Aylmer on Fear and Greed, Australia's best business podcast. Thank you for listening to How To They Afford That remembered hit follow on the podcast and please, if you think somebody you know might benefit from hearing this episode, then send it on to them and help spread the word about how to They Afford that? Thank you for your company Join us again next week.