Hello from a new home owner!

A big HIIIIII from Sydney!

Me and my wife are in our mid 20s and have just bought a new house and put all our money into the deposit+stampduty+mortgage insurance. Being a newbie to investing, I was looking for someplace to provide me with good financial guidance and stumbled across investEd!

I hope to get my bearings and to get some sound advice as to how to proceed further!!!

Welcome to InvestEd - great to have you here.

Welcome and congratulations on your purchase

Thanks guys!! Now that we have made this purchase, we've got an offset account set up and are aiming to pay off as much as possible each month to chip away at the principal as much as possible!

I was wondering what would be the best way to do this. Should I also look into investing a bit of my money monthly into shares as well?

Wolven
If the place you've just bought is the place you live in
then IMO it's best to leave your money in your offset account.
Cheers

Wolven,

The trick is doing the above..........

Are you allowed to have two offset accounts against your mortgage? If so set up a second as a `savings account' and do not touch whatever you put into it.

Funny why most banks won't allow you to do this.....

Tailcat

Hi Wolven and welcome to the forum

If you don't mind me asking, where did you buy? The first home is so exciting- I remember it well, and now that I'm up to my 3rd PPOR it's still a huge buzz!

We have all our spare cash parked in the offset, as it's better off there, reducing your interest, rather than being anywhere else. Work on paying it down as fast as possible and think about shares later.

Thanks a lot for the warm welcome guys!

Tailcat,

I'm not entirely sure if I'm allowed a second offset account, but I can find out. Right now, I've planned to live off my credit card for every 55 interest free days and then use autosweep to pay it off. Would this be a good way to maximise the amount of time my money works for me.

Jacque,

Yes, it is a huge rush and it still hasn't worn off!! Hoping to use all this rush to work on a bit of landscaping I have in mind As for where, I've bought a house at Castle Hill, its a good suburb though not exactly investment material.

Just picking some numbers.

Assume $10k in offset account.

Monthly wage of $5k dumped into offset.

Assume 1K per month used to pay interest.

Assume normal monthly living expense of $3.5k.

Ideally, offset should increase by $500 per month.




What happens if you spend $4.1k on the credit card?

Setting card limit to $3.5k might prevent this, but you can always get around this by paying a little top-up into your cc. (I know I've done this before.)



If you have a second offset account then move $9k into it (Keep 1k buffer in first account). set up auto transfer of $500 from 1st to 2nd offset account (on the day after you get paid!!!!!!!!)
Hopefully, it is easier to leave the second offset account alone???????

Taking it a set further, have a third account for paying bills. Each pay-day transfer money to this account and then have big bills (car rego, 3 month electricity etc.) paid (automatically) from it. (Use a buffer in this account to cushion some of the larger payment spikes. This is ok since the buffer is still doing a 100% offset.)


The above three accounts (with a debit card against the first offset account) form a pausible budgeting system. `Unexpected' large bills are catered for (2nd account) and pay yourself first (3rd account) is handled. Budgeting then just requires you to live within the first account.

Tailcat

Further to the above:

Has anybody tried to split their PPOR mortgage into three (or more) accounts and managed to get an offset account against each?

Tailcat