The Plan towards Home Ownership
Plan 1 :: Clean start
If you have just started out and have decided that a home of your own, or as an investment is a good thing and something your prepared to work on, go to the New Home Loan page and the 3 Bucket Budget page. Work out what you need to aim for as a deposit in savings and what you need to save to get there. A quick call to our free phone advise Helpline to help with the budget and plan is always available. Ring 1800 825 010 or click for a call back.
Plan 2 :: Got Debt
Been having a good time and not thinking about saving. Had problems that cost a bit to fix and now have some debt. If your Credit is ok, but you want a plan to get out of debt and move into purchasing a home of your own. The following may help.
Look at consolidating debts with an Interest Free credit card Transfers. Credit card companies are competing hard for your business and are prepared to offer up to 18 months Interest free on your existing Debts. The trick to making this work for you is to not put any additional Debt on this card. Work out a weekly or fortnightly payment plan to clear the whole debt as quickly as you can. Putting anything extra on this card before you clear the debt entirely, will quite often generate interest on that purchase from day 1. It is most important that you do not use this card until you have cleared the debt to Zero. This will be an option for people with good credit and a disciplined payment culture.
If you can't clear the debt this way, set up to pay more than your minimum payment. If you work out 1% of the debt as a weekly repayment, even high Interest credit cards will disappear in under 4 years, that is IF you don't add anything to them.
For example: a $7000 debt on a card can be cleared within this time, if you continue to pay $70 a week till it is gone. Don't add anything additional on. Live off the budget you set in the 3 Bucket Budget System.
Don't borrow money at high Interest rates on short terms. When you start down the track of payday lenders you are in the end game of finances and risk being trapped as a slave to the lenders. We see many people whose cost of living has doubled after doing a few of these loans. Any ability to save is gone.
Keep your car costs down. If you do not have a large income, expensive cars will blow your budget. If finances are a little tight, keep the purchase of cars to a low cost and long warranty. The amount of people we see who have gone and borrowed over $30,000 to buy a car and pushed their finances to the limit is astounding. There are plenty of new and near new cars available that are good value. Car dealers are good at getting expensive loans for expensive cars and they slip in extras that push the price to figures you weren't expecting. All of a sudden you owe upwards of fifty to sixty thousand dollars on cars that are worth half of that.
It is easy to let your emotions run away with the thought of a new car and not add up the cost of what they were buying. If your wages are under a $1000 a week after tax, don't sign a contract to buy a car for any more than around a $100 a week.
Anything over that is not going to leave you the money to service repair and run the car and have a savings plan. You can kiss your home loan plans goodbye till you've paid it off.
Pay your loans weekly or fortnightly if your pay frequency allows it. This way you don't have big bills at the end of a month that catch you short.
Don't use credit cards and loans to live on. If you are at this stage go to Plan 3.
Quite often the catalyst of wanting to buy a home is that you are now a couple. Sensible joint budgets with the sharing of living costs can pave the way to freeing up money for a savings plan. This can work very well where both partners are committed to the plan.
But a word of warning. New couples be cautious! Especially if this looks like being a one sided affair with money. We do have a number of clients both Female and Male who have had their partner run up debt in their partners name, empty bank accounts and disappear. More than you might think.
Set the Debt repayment Budget up with the Money Buckets Budget system. Use the third bucket for extra debt repayments until the Debt is gone.
Plan 3 :: Got too much Debt in Trouble
OK, you've used the Money Buckets Budget sheets to add up your finances and there is a big minus at the end. Right now you are falling behind quickly and actually going in reverse. Address your Debt problem NOW. Every week you wait to address your Debt problems puts you further away from your own home and Financial Security. Don't borrow any more money.
Call in Fast Debt Help to see if you are in a position to freeze the Debt and Interest. We will work out a Payment Plan to clear you of Debt. Then you are in a position to start saving . We will work within your income to achieve this and still give you enough money to live on, without borrowing further money. See Debt Agreements and Informal Arrangements.
Quite Often, once you have cleared the debts and you have learned to live within your means, the money you were paying for a Debt Agreement or Arrangement can be put into the Savings Bucket.
Plan 4 :: It's a mess. Game over. Start again.
If you have done your budget and the cost of living doesn't even allow for a payment plan for existing Debts, let alone a savings plan, it may be time to push reset. Bankruptcy may be an option you need to look at. There is recovery from a bankruptcy, remember it is a protection for you not a punishment. It lets you start again and not dwell endlessly in a deep hole full of Debt.
If you find yourself in this position contact Fast Debt Help to go over the full ramifications of what this will mean and look at a plan to move forward.