Start your children’s saving strategy as soon as possible
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