Start your chil­dren’s sav­ing strat­egy as soon as pos­si­ble

Sunday Herald Sun - - News - SO­PHIE ELSWORTH

WOR­RIED par­ents be­lieve their kids are des­tined to be “a gen­er­a­tion of renters”, with soar­ing prop­erty prices mean­ing they will strug­gle to buy a home.

About 40 per cent of peo­ple think their chil­dren will not be able to af­ford to save a home de­posit, the West­pac Fi­nan­cial Fu­ture re­port has re­vealed.

Na­tional house prices rose 10.7 per cent over the past 12 months with Syd­ney record­ing the strong­est growth at 16 per cent, CoreLogic data has found.

West­pac’s head of youth and mil­len­nial mar­kets, Ash­ley Gray, said the re­sults were “quite con­cern­ing” and high­lighted that home own­er­ship is be­com­ing in­creas­ingly out of reach.

“The re­search found 39 per cent of Gen Ys found that home own­er­ship is al­most im­pos­si­ble,” Mr Gray said.

“So much so that they face be­ing a gen­er­a­tion of renters.

“But by hav­ing a sim­ple sav­ings ac­count early on in that child’s life ... they know they have funds avail­able for longterm goals such as univer­sity and home own­er­ship and it sets them on the right path.”

In many cases first-time prop­erty buy­ers need at least a 10 per cent de­posit to buy a prop­erty, for ex­am­ple on a $400,000 home they need to have saved at least $40,000.

Syd­ney mother of two Gisella Vollmer said she’s wor­ried her stu­dent daugh­ter Tani, 19, who also works three jobs, will never af­ford a home.

“She’s re­ally cau­tious with her money,” Ms Vollmer said about her daugh­ter, who hasn’t trav­elled. “Ba­si­cally it’s im­pos­si­ble for young adults to save, say, $100,000 by the age of 30 to buy a home.”

But Front Row Fi­nan­cial di­rec­tor Bren­dan Turn­bull said “sav­ing money is a habit that is ab­so­lutely in­flu­enced from an early age” and the ear­lier chil­dren start, the bet­ter.

“Whether it’s help­ing or en­cour­ag­ing kids sav­ing to buy a new push bike or teenagers sav­ing to buy a car, it goes back to the idea of sav­ing to buy some­thing you want rather than bor­row­ing.”

The re­port found par­ents be­lieve the mo­ti­va­tion for open­ing their chil­dren a sav­ings ac­count from a young age is be­cause it will give them a fi­nan­cial head­start (46 per cent).

Dol­lars & Sense helps par­ents plan for the costs of hav­ing a fam­ily and rais­ing fi­nan­cially savvy chil­dren

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