How to save for a house in Australia – this is a headline that attracts my eyeballs when I was on my morning tea break. To brief, the author Bernard Salt, a KPMG partner, suggested that young Aussies should spend less on brunch-out and instead should divert the savings towards down-payments for their first homes.
“I have seen young people order smashed avocado with crumbled feta on five-grain toasted bread at $22 a pop and more,” he writes.
“I can afford to eat this for lunch because I am middle-aged and have raised my family. But how can young people afford to eat like this? Shouldn’t they be economising by eating at home? How often are they eating out? Twenty-two dollars several times a week could go towards a deposit on a house”.
- The $22 “brunch” and several times a week – may be exaggerated;
- Housing for self-residence is not an asset – these millennials may see housing same as other living expenses – foods, transport, cars. They spend on as- and when- needed basis, therefore there’s no point to give up Paul for Peter;
- Savers mindset – is saving the only way to home ownership? To many of us, the answer may be a Yes, if employment income is the only source of income; to others who have additional income streams, eg. investments or business, will definitely say making more money is far more effective than saving money; thus a better way to home ownership. These millennials may be those on multi-income streams;
- Live below means – by his sayings Bernard is the fans of “live below your means” idea. This used to be a good idea when you are well paid and on a secured job; however times changed and so do job security. In digital age these days, products and services are digital; labour force is replaced by automated systems; the central banks in the globe carry on printing more fiat money or cut into negative interest rates… Is it still wise to save the ever depreciating currencies and salaries for a house (non-asset), by living below your means (eg cutting the $22 brunch to $22 meal the whole day)?
- Millennials should not be singled out – Baby boomers/Generation X/Generation Y all have been young once and they spent heavily at times although on different things. How many of us never indulged with parties/drinks/drugs etc when we went to or left schools/colleges?