When it comes to money, we’re all basically trying to do the same thing: grow our pot of savings. We try to play things smart and to resist our near constant urge to splurge on ridiculous items like $2400 bed sheets and $1125 face creams.
But we’re here to give you a nice excuse for handing over a big wad of cash. Because being financially savvy also means knowing when it’s worth your while to make a hefty purchase.
Our consumer culture means a lot of us are buying a whole lot of crap (you only need to look at our addiction to high street fashion to know this), when really we should be prioritising spending on the stuff that really matters – the stuff that adds real value to our lives.
We spoke to finder.com.au finance guru Bessie Hassan to find out what expensive things we shouldn’t hesitate to buy. So go forth and spend those dollars!
Okay, so buying a house might not be the kind of purchase you can make on a whim, but it should definitely be in your financial plan. As the saying goes ‘you need to spend money to make money’, and this holds true when it comes to buying real estate.
Buying property is a huge financial commitment. It requires at least a 20 per cent deposit (if you want to avoid paying lender’s mortgage insurance), and you’ll also need to fork out for multiple costs like inspections, conveyancing, and stamp duty (not to mention your ongoing monthly repayments).
However, Hassan says property should be viewed as a good long-term investment as the value of property historically appreciates over time. Corelogic data shows Sydney house prices have shot up by a whopping 63 per cent in the past 5 years, while units have increased in value by 41 per cent.
Having a hefty mortgage is a big responsibility, but getting on the property ladder will help you build equity in your asset and improve your future wealth.
Think of this as a version of self-care. It might not be as exciting as a spa day, but it’s more far more beneficial. You are your biggest asset, so investing in yourself is important.
“Individuals with tertiary qualifications will usually find it easier to enter the workforce and will likely earn more than their unqualified colleagues,” Hassan says.
The average study loan debt was $4200 according to the ABS 2015-16 Household Income and Wealth Report, but don’t let this put you off: it only needs to be paid off when you start earning over the threshold amount, and you pay it in such small increments you’ll hardly notice.
One of the most important financial milestones for Aussies is to be earning a salary of $150,000 or more, according to a finder.com.au survey of 2,004 Australians. Going to uni and getting a degree can help you to maximise your earning potential.