There is a popularly held opinion that it is almost impossible for young people below 35 to own property in this day and age. This is compounded by recent reports that bankruptcy among the younger generation is at an all-time high here in Malaysia. Young people themselves struggle to pay back education loans like PTPTN right after graduation and this put a big strain in their finances. Not to mention that some have to support their family.
However, despite how negative and hopeless the situation seems, owning a home before you turn old and grey is entirely possible. Through whatever tough times, keeping optimistic and positive will help on the journey. Here are some things you can practice.
Discipline, Discipline, Discipline
When it comes to putting a down payment for any house, some young people are fortunate to have parents who can sponsor and help them. However if you are from a humble background, you will have to save for a house the moment you start working, as you will have to pay your own down payment.
The first thing to know is that down payments are usually 10% of the total house costs. This means young people will have to save around RM 20, 000 to RM50, 0000 on average depending on what type of property and which area you want to buy from.
Planning monthly expanses sounds fairly easy, but carrying out and sticking to the plan is more challenging than expected. In order to actually help yourself save, aim for at least 20% of your salary to start with. A really helpful way to discipline yourself to save money is to start a separate savings account and make a deposit of 20% of your salary every month as it comes in.
Live an Austere Life
Austerity doesn’t mean that you have to live like a beggar, but it does mean that you should cut back on luxurious items. Always ask yourself, is that branded watch necessary? Do I have to buy limited edition perfumes/colognes? Does my bag have to be imported from Italy? Living within your means is the best way to save. If you can’t afford it, don’t get it.
Sometimes, we need to also look at the type of people around us. If they are somehow pressuring you to spend more to look wealthy, are they a good influence? True friends and family will love you no matter what you have or have not. Sincere relationships are built on character and actions, not things that you have or can give.
Another tip you can practice is not to own a credit card or to minimize your credit limit to remove the temptation to spend money that you don’t have yet. If possible, get a debit card instead if you have to make big purchases or don’t like carrying much cash around.
Think of Investing
Once your savings reach a reasonable amount, you should consider investing it in a bank or in stocks and shares. This is one way you can grow your money. Of course investing it in banks and bonds are safer and less risky than investing in company stocks. However, stock market interests are higher than what the banks offer. Therefore, it is a give and take situation.
The best advice is not to put all your savings into a single investment but break them up into smaller more manageable amounts. Always reach out and get professional advice before investing in anything.
After working out how much you need to save for a down-payment and how much you can save each month, try to set yourself a realistic savings goal. These goals should be set yearly or every 6 months.
Patience and Determination
We live in an era where many things have become instant, like instant noodles, fast food, instant videos and instant messaging. However, saving up takes up a lot of time and requires you to stay the course. Do not get discouraged if you suddenly have to dig into your savings for an emergency as this is very normal. As such you should not feel guilty if you don’t achieve the goals you set.
Sharing is Caring
In order to ease financial burdens, you can always partner with a family member, spouse or trusted friend in order to share loans and share the burden of paying the down payment. That way, you can speed up the house purchase and cut down the period needed to save for a down payment.
We hope that these simple guidelines will be able to help you save and own the house of your dreams in the future. Good Luck!