Budget

Risk Taking

This year we took a risk. We sold our house without having bought a new one. We packed up all our belongings and stored them at families and friends and moved in with my parents with our 2.5 year old and 6 months old. All the while living with the unknown, how long would we be without a home of our own?

It got me thinking about risks though…

How and when do we take them?

Do all people that take risks really fail?

Do I pick the safe option over the risky option in my life?

Do we take less risks once we become parents?

Property

When we considered moving we looked at the risks vs the benefits. I wanted somewhere that would reduce my commute and make us closer to my family. The risk is that we would lose money on our property and be without a house for a while. The benefit would be living in our dream area in which our property would increase in value far beyond where we were. We took the leap and actually made a small amount of money on our house after realestate fees. But we are without our own house and that’s scary. We don’t know if we’ll be living with my parents for a month or a year. But when the right property comes up we’ll be ready to buy and our offer will be strong.

Superannuation

We recently reviewed our superannuation and insurances. The biggest questions is whether to keep the money in the superannuation company we always have or move to a lesser known one that invests more in big Australian shares and reviews our investments yearly to personalise them. How will we ever know which one would do better. We don’t have a mirror ball that allows us to see into the future. Instead we weigh up there risks and benefits. I guess if the new superannuation company has good reviews and is run by legitimate investment managers then the effort of trying to secure a larger retirement amount is a positive and worth the risk? Who knows..

Career

I work as a teacher. It’s what some may call a safe profession. But its a stressful one, in which you can only be promoted so high. The money isn’t great but the holidays are- if you aren’t working them making and prepping. I could train as something else but its very hard to match what I’m earning now straight away, it could be year before I make that kind of money again and no other career is going to offer me 12 weeks holiday and weekend off. However I might make a lot more money and one day be my own boss in which I could pick my hours. It’s a very difficult decision to make. A benefit could be reduced stress and the possibility of work independence. But in the short term the risk is high. One would suppose if the new career venture did go belly up I could fall back on teaching. Could I live with the regret of never giving something new a go? As I’m writing this I’ve almost convinced myself to try the new venture….

What are the risks you’re thinking of taking?

Are they relationship risks? financial risks?

How did you decide whether to take the risk or not?

Have you taken a risk and failed? tell me about it!

Mumma Z xxx

Stay at home Mumma seeking to work from home… how hard can it be?

Job Wanted: Must suit mum with small children, can work from home, flexible, doesn’t cost a fortune to set up, earns decent income.

I wouldn’t be the only mum who’s looking for more flexibility in their work. Coming from a full-time position with 8-hour days work life balance is a joke. When I went back to work after my first, I was lucky enough to have my mum care for my son every day, but I still found the mental load of mum-life, work-life and homelife extremely heavy and draining. I was missing out on so many firsts with my son and when I was home, I was so tired I barely had energy to play. Now with two sons I have spent countless nights restless trying to come up with ideas that will allow me to work from home and be there for school drop offs and pickups. I’m seeking a job that allows me to work the hours I want whilst earning the same amount I was whilst working full-time..how hard can it be?

Turns out there’s a reason so many mums have to go back to work after babies. Establishing a business or income from home that provides enough income is bloody hard. Not to mention the fact that even entertaining an idea is extremely expensive. Setting up blogs, buying inventory/materials, marketing all comes with quite a substantial initial investment which sometimes isn’t viable whilst you’re living on parental leave payments.

For example, I brainstormed the idea of having my own baby clothing website. I research suppliers who quickly pointed out how much in advance you have to buy stock, and that they wouldn’t even consider selling to you until you’ve set up a website. Enter in another cost factor, setting up proper websites with payment options, logos and hosting even on a budget is close to $1000 minimum. Then add the marketing needed and small business insurance, it’s quite the risk for a stay at home mum to take especially if money is tight. Even if you do take the plunge and invest in yourself the hours required initially take you away from your babies the very people you are fighting to spend more time with.

In the great quest to gain financial freedom and work for yourself you may find you’ve ended up spending money and time instead.

I’m not particularly crafty so making something to sell would be quite difficult for me, but again selling your own work may also require selling at markets on weekends again being away from your babies.

Alternatively you could study something that allow you to work from home such as Marketing or Design but again there’s a large financial and time commitment to make before any income is made, and you may need to return to work whilst studying again taking you away from your babies.

As a teacher I could hope that my Principal offers me part-time work but it’s rare and still wouldn’t allow me to do school drops offs or pickups. I could tutor but this involves working hours when the kids are home, normally around dinner and again defeats the purpose of me wanting to spend more time with them.

I don’t mean to dishearten you or your ambitions to work from home. You have every chance of succeeding in whatever goal you set. Even I’m not giving up yet I’m still going to try for my family. I guess that shows the world just how great us Mum’s are. Even when we’re working as full time Mumma’s and managing the household we’re doing extra work on top, always trying to make life better for our families. We are the heroes of multitasking and through all the hard work we’re teaching our children vital skills for life. Not to settle, to work hard, chase your dreams, and that family is the most important thing.

Good luck in your endeavours Mumma’s, and if you do come up with a solution for me let me know!

Mumma Z xxx

Mumma Z tries to buy a dream-house

Every tried to buy a home? Then you may be able to relate with our current situation…

When I was working full time one of the biggest stressed of my day was travel time. Not to work but to my mums each morning and afternoon to collect my son. On average it would take between 20-30 minutes in traffic each way. That calculates to approx. 5 hours per week!

We recently welcomed our second son into the world and have decided that before I return to work next year, we need to move closer to my mum. It also so happens that our dream suburb is only 5 minutes away from her house.

We started with the usual initial steps. We enlisted our broker to work out what our budget was and discussed borrowing power. When doing so we talked about using my parents as guarantors as we were only just shy of being able to borrow what we needed to buy in our dream area and don’t want to waste money on mortgage insurance. We calculated what we could comfortably repay per fortnight and then proceeded to check real-estate sites daily to see what was around.

Our weekends became full of home open after home open, aimlessly walking around properties we weren’t interested in just to meet realtors and try to get our heads around what properties were worth. I spent countless hours on the phone to realtors who told me they NEVER sell homes that they don’t put online, only to get a phone call from them later in the week about a property that are selling off the market.

Then the most beautiful property came up, advertised in the 900k’s in our dream area. We quickly added it to our weekend schedule of viewings. We fell in love with the property and eagerly walked around it twice to ensure we couldn’t see any issues. The market moves quickly, and we knew from past experience that we couldn’t rely on being able to see it the next day before it went under offer.

After conversation with the realtors we were informed that the seller actually wanted between 1-1.1mil way more than advertised and certainly out of our budget. After careful research of the area I found many comparable properties going in the 900s and we decided to try our luck.

We put in an offer of in the high 900ks- subject to finance/the sale of our property & building/pest inspection. The first draft contract had so many errors including the address of the property we were buying. I couldn’t help but think the mistake represented that fact that the realtor wasn’t taking us seriously and that we were more of a joke to them.

However, I sent the contract off to another realtor to look over and he wrote a list of amendments. A day later we had a second draft contract that was corrected, and we signed across the dotted line…well we email signed but still it was official.

The next day the phone rang, it was the realtor. She informed us that although we were the first offer there had been two others and they were 50k higher than ours, and not subject to sale. It was like being told you hadn’t got your dream job. I’d already dreamt of myself in the house, we’d talked about where our furniture would go, and what initial renos we would do. I bravely said I understood and tried not to cry and she explained how difficult it would be for us to buy a property with a subject to sale, and how that only works for some sellers who are still trying to find a property to move to themselves.

I put the phone down a promptly rang another realtor to see if she had any new properties coming on the market, anything to distract me from losing out on that dream house. I mustn’t have been the only one because she was so patronising on the phone, “if we were to buy subject to sale than we’d pay for it” our offer would have to be “higher than anyone’s else’s” and basically she wasn’t interested in helping us. Who knew there were so many cash buyers around with an easy $250k saved? We were just plebs looking with no chance basically.

So, what were our options…

Basically, it was suggested that we sell our house. This would mean we would risk being without a home and would need to put all our belongings in storage and live with my parents indefinitely with two kids under 2.
Lower our budget, not use my parents as guarantors and consider a bridging loan and mortgage insurance ($12,000) to get our dream home.
Keep putting offers in subject to sale of our property knowing full well that a cash buyer could come by and trump us if ours didn’t sell quick enough.

For the meantime we’re going to go with option 3. I can’t face not having a house! I don’t want to waste money on mortgage insurance, and surely the right one will come along and if it’s meant to be our offer will be successful.