Would you rather sacrifice some of your happiness and comforts now and then eventually own a house
or live your life now, spend your money to your heart's desire and rent for the rest of your life
Hey everyone I'm Chris and welcome back to the channel where we talk about investing, real estate
and saving money to help you guys achieve financial freedom. So just a little update
about the housing crisis here in New Zealand, the government announced just last week some changes
and they are penalising mum and dad investors for owning an investment property. The government
used to say that save for retirement, don't depend on your superannuation and then they
come back and say that we are going to make it difficult for mum and dad investors to own
even just one investment property. I have so much more opinion about this but it will just have to
be in another video if you guys are interested. However this whole thing made me realise that
if you're a first home buyer and if you're waiting for the government to make houses more affordable
for you or if you're waiting for them to do something about these super inflated house prices
then don't hold your breath because it's not going to happen. You will just have to help yourself
however you can because the government can't help you. Hence we have this video about how to save
money for your down deposit for your first house and um let's get to it. I've made a lot
of videos in this channel about saving money but in today's video, I'm going to focus on cutting
back on the three major expenses that will make a huge difference. So first is rent you need to
sit down and calculate how much percent of your income is going towards rent. If you're spending 45%
of your income as most millennials are, you need to move somewhere else. You also need to ask yourself
these three things: do you really need to live in your dream apartment now or your dream house now?
Do you really need to live close to the city because that tends to be more expensive and do
you really need all that space? Because I know of a couple who lives in a two-bedroom house all to
themselves. Do you really need all that space? When you look into how much percent of your income goes
towards rent you'll realize that that's your number one biggest expense and also that's
where you can make a huge difference because there are so many alternatives. You can live with other
people, you can live with your parents, you can downsize, you can move away from the city or move
to a more affordable location or you can even live in an older home because they tend to be cheaper.
I wish I could say that it doesn't have to be like this but the reality is in New Zealand we have the
most unaffordable housing in the world so make the sacrifices now because you don't want to rent for
the rest of your life. If you want to take this a step further you might consider house hacking. This
is something I've already talked about in another video so I'm going to put it right here. House
hacking is when you generate enough income to offset your housing costs and there are three ways
to do this even though you're still renting. So first of all you rent an entire house live in one
room and rent out two other bedrooms. I personally know someone who did this and it turned out that
the rent from the two other bedrooms completely covered the rent of the entire house. So he was
essentially living for free. Another way to do this is to rent out your room or your flat when you go
on holiday and this is something I've personally done twice in the past. I never thought that
someone would want to rent for only three weeks or four weeks while I was on holiday but someone did.
I listed the flat for less than the rent that I was paying and that was better than paying
for the entire amount myself even though I wasn't living there. And another way to house hack is when
you live alone and you get someone else to live with you as a roommate and that way you can split
all your housing costs 50/50. Next big expense is food if you've been around my channel for a while
you'll know that I went for one full year without buying lunch at work because I was saving for a
down deposit of a house. Also with grocery shopping I just bought the absolute essentials I don't buy
magazines or fabric softener or like chocolate, cake, ice cream etc I didn't even buy
like cleaning products because I would only use vinegar and water and that works for everything.
You get the picture. You can also limit the number of times that you buy takeaway or eating out at
restaurants because a trip to a restaurant can easily set you back 30 dollars or even
more especially if you drink alcohol and let's say your grocery budget for one full week is around 50 to 60 dollars
so that means that your one trip to the restaurant is already half your grocery budget for the week.
The third biggest expense is transportation so the easiest way to save on transportation
is not own a car. Yes it's the most convenient way to get from point A to point B however most people
realise that there are so many expenses associated with owning a car. So first of all is the actual
money you spend on buying the car, interest if you borrow the money to purchase that car
and then there are ongoing expenses like insurance, car registration, petrol, paying for parking,
parking tickets and traffic violations like speeding or running a red light. So if you don't
absolutely need a car don't buy one and consider selling your car if you don't use it regularly
but if you absolutely need a car get the most fuel efficient, safest, most boring car for the lowest
price possible and that's what I personally own I own a Toyota VItz I bought it around seven years
ago second hand and I love it. I only spend sixty dollars on petrol and that will last me for about
two months because it has a 1.3 litre engine. I love it and I've had nothing wrong with it because
it's a reliable car. Some of you might think that this is extreme but also I think if you spend 45%
of your income on the rent I think that's extreme. If you eat out three times a week or order take
away every night I think that's extreme. Or if you spend two thousand dollars per month on a
car that you can't afford to drive I think that's extreme. Remember you don't have to make sacrifices
for the rest of your life. Take it from someone who has reached her financial goals I certainly don't
live like how I used to anymore. Like for example I would buy lunch at work now and my friend would
joke about it because she never used to see me by lunch at work. Practice delayed gratification
because would you rather sacrifice some of your happiness and comforts now and then eventually
own a house or live your life now, spend your money to your heart's desire and rent for the
rest of your life? That's something you have to decide for yourself. With that being said thank
you guys so much for spending your time with me. I hope this video motivates you in saving
your money for your first house. I actually have an entire playlist about saving money I'm going
to put it right here. Have a great weekend everyone and I'll see you guys next time. Bye.