Feeling a bit bipolar

I don’t mean for the title of this post to sound flippant but I really do feel inspired one minute and flat the next when it comes to our finances. All day I’ve felt up and down about our plans to buy a house and how we can stay in our current situation long enough to save the necessary funds to do it. I’ve looked at homes online, checked our bank account and checked my budget from front to back to look at how we could move early. But it just isn’t possible … apart from the cost of buying (mortgage duty, stamp duty, lenders insurance) there’s the cost of moving the gear, the need for a fridge and washing machine (ours are entrenched here in this household we share with hubby’s dad now) and I also want to have the first six months’ rates ready before the move.  And even though we will be eligible for the $7000 First Home Owners Grant, we plan to use that to repay a no-interest debt that we owe to a family member. So if we want to offer a $15,000 deposit, we will probably need another $10-15,000 for duties, costs of moving and to buy a few extras we definitely won’t be able to afford until I start working full-time (eg a couch!).

The end result is, we ain’t moving yet, even though I am really over our current living situation. However, I decided to finish our taxes and when I did, I found that we were due at least another $600 from what we were expecting. Great news!  Suddenly I’m on cloud 9 …

Here’s the thing: I can’t stand to stay here longer than another year, so we want to save our 5% deposit plus the cost of fees/moving in 1 year. That’s $30,000 folks, and I’m not going to pretend I think it will be easy. In fact, everything is telling me it can’t be done. But I am just going to hope it can and will it to happen. Let me tell you how I’ve worked it out. When you divide the year into quarters, we have to come up with $7500 every three months. We can save $420 a week on our tight-squeeze budget (that’s over a third of our income but our budget is pretty tight these days) and over 13 weeks that adds up to $5460. So that means we’re still $2040 off the mark each quarter. I know … it doesn’t look promising.

However, I intend to try to find ways to make that $2040 each quarter – whether by selling stuff I don’t use, making more money or taking advantage of lump sums we receive. If you divide $2040 into 13 weeks, the amount needed is $156 a week, which is a huge amount … enough to make you want a cup of tea and a good lie down! But this is how I am thinking about it: I have three items I don’t use that I can sell on eBay for a minimum of $250 each (a good price). That’s $750 – that’s 5 weeks covered. Also, I just did our taxes and I realised that we have an extra $600 coming back that I wasn’t expecting – that’s another 4 weeks’ worth. So now I only have to come up with 4 weeks’ worth of `extra money’ for this quarter and I will be on target!!! 

Now don’t get me wrong, I’m not silly enough to think that in every quarter I will have luck like this. Defintely October -December will be devoted to passing my exams, not making extra money. But this example shows that there is often money around that you don’t think or now about in advance …

I have also realised that around the time we aim to buy, another financial year will have passed and we will be entitled to another set of tax returns ($2000 back in total  if I’m conservative?). We will also be likely to receive about $1000 in welfare that the Australian Government holds back from every family in case they over pay you – they pay us only about $20 a week under this system but at least there is a guaranteed windfall at the end of the financial year. (I should say at this point – for the benefit of any American readers  – that the Australian Government offers payments of some kind to most families).

Anyway, I digress. The point is that I can see that the last quarter before we buy may also be a successful one because of the payments I’ve just mentioned. So even if my target of $30,000 is off the mark, $26,000 is looking quite possible … it’s amazing what you can do when you make sacrifices. In another post, I’ll detail our budget and how we can manage to come up with $420 a week.  I’ll also talk about the role of an emergency fund in our lives and making decisions about how much it should be.

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