How you can use super to buy your first home
From 1 July 2018, individuals can use certain additional superannuation savings to help buy their first home.
Millennials are on track to take over the world. By 2025, the tech-savvy generation will make up 75% of the global workforce, according to Deloitte1, wielding both huge influence and purchasing power.
If you’ve ever wondered how your fellow young Australians are spending their hard-earned money, we've spoken to three everyday Millennials to find out what's on their financial horizons.
Ryan, 19, student, Croydon North, Victoria
Ryan is a shoulder to the wheel kind of guy. In recent years, he's spent just $10 to $20 a week, which he “hounded mum and dad for”, and most of that's been spent on coffees to get him through early morning university lectures.
But, that could be set to change as Ryan's about to receive his first pay cheque for part-time work at an accounting firm.
“I'm quite controlled. I don't go spending willy-nilly. I'm hoping to spend half and save the other half,” says Ryan.
Ryan's situation reflects findings from a recent Triple J survey2, which found that 42% of young people who work also live at home with their parents, and most have less than $5,000 in the bank.
Over the long term, however, he's confident he'll one day save up for a house. But, he adds, he'd be just as happy in a one-bedroom inner-city apartment – a trend that's expected to bolster city apartment markets for the next decade3.
By 2025, Millennials will make up 75% of the global workforce, wielding both huge influence and purchasing power.
Kathie, 27, researcher, Annerley, Brisbane
Own a house, travel and eat well. These are Kathie's medium and long-term financial and lifestyle goals.
“I'm chipping away at a deposit by saving money wherever possible. I'm almost there,” says Kathie, who plans to buy her own home, just as 79% of her peers believe they'll do, according to the triple j survey of 11,000 Australians aged 18 to 29.
“But I'm also saving for other things like travelling and unexpected expenses.”
Kathie also uses a spreadsheet to keep track of her monthly budget.
“It's nothing fancy, it's more just to help me average out the quarterly and annual expenses,” she says.
Is retirement factored into the spreadsheet?
“I'd love to say I'm thinking about retirement but I'm really not. It's just too far away for me,” says Kathie.
Despite Millennials leaving private health insurers in the tens of thousands each year, according to APRA data4, Kathie says she still sees enough value in it to keep it alongside other expenses in her spreadsheet, such as the phone bill, internet, Spotify and Netflix. However, her boyfriend disagrees, having ditched his private health insurance.
“My parents were rather insistent that I continue with it though,” says Kathie.
Gretta, 24, office administrator, central Queensland
For Gretta, you've got to spend money to save money, she feels.
The mother-of-one doesn't hesitate when it comes to paying for several online entertainment subscription packages each month in order to curb her weekly spending habits.
“When I'm at home watching Netflix or Stan I'm not out buying lunch or coffee with friends every day,” says Gretta, whose situation reflects research that young Australians are the first demographic to watch more video on their devices than television broadcasts5.
Gretta, who is currently on maternity leave for a year, says she hasn't had to change her spending habits too much since she and her husband had their first child earlier this year.
“I've just become smarter with my day-to-day purchases, such as buying boxes of coffee sachets when they're on sale and inviting friends around instead of meeting them out,” says Gretta.
Gretta says she and her husband save 50% of their pay cheque each month, which will eventually go towards buying their first home and starting a new business.
“We've saved enough for a house deposit. We're just waiting for the right house now,” she says.
To keep their budget on track, Gretta and her husband limit their spending to $200 each a fortnight, after paying rent and recurring expenses.
“I handle all the money because he's really bad at it,” she laughs, “It's in a joint account but he doesn't know his log-ins, so he can't see it or touch it.”