Home loan essentials vs. Home loan wants
Did you know that when people make decisions, they base it on emotion and then rationalise it later? No one is a totally rational person – we’re all governed by emotions.
So what does this have to do with our wants and needs?
Our wants and needs are all decided by our emotions.
When a person has to choose between their wants or needs, 9 times out of 10, they’ll choose their wants. That’s right, people will choose something they want over something they need.
Do these statements sound familiar?
- “I just fell in love with it.”
- “It’s like it was straight out of a dream.”
- “It’s almost like it was made just for us.”
- “I can’t believe how perfect it is.”
These statements are coming from an emotional place and have to do with your ‘wants’.
It’s important to have the things you want as part of your home, but they should come secondary to the things you need. Knowing your ‘Wants’ is really easy – everyone wants a 10-foot swimming pool with jet streams that massage you while you’re swimming, right?
Having lots of wants is a good thing. It gives you options and lets you aspire to work toward having nice things in your home. But, it’s important to shortlist the wants that are within your budget and ones that are realistic to have now, versus ones that are better left to the future.
A simple ‘movie’ rating system is perfect to help you shortlist. Give yourself a total of 25 points to spend. Then, make your list of all the ‘Wants’ you can think of, and then rate each of them out of 5. Remember, you only get 25 points to spend, so you can go rating every ‘Want’ a 5/5. This is a great hack to help you think hard about which ‘Wants’ are worth sacrificing for.
Questions to figure out your needs:
- Are you planning to have a family?
- How many bedrooms do you need?
- How close do you need to be from public transport?
- Will your home function as a workspace?
- Do you want to live in the home long-term, or are you planning to rent it out, or sell for a profit?
- Is your lifestyle more ‘on-the-go’ or is it more based around communal moments in the home?
For example, if you’re planning to have children, you need a house with more than one bedroom. If your house is the common meetup location for the extended family on Sundays, you probably need a backyard. Focussing on your needs doesn’t mean that you have to live a boring life. It means choosing the absolute necessities first; the stuff that supports your physical, mental and emotional health. Your needs are the important stuff, it’s just that sometimes they can be blurred by our enthusiasm about our wants.
This will help make clear what the essentials are, and what you live without. It may seem like a huge moo-killer to go through this exercise, but considering how expensive the modern house is ($800,000 on average), you won’t be able to get everything you want. But, if you plan well, you can get everything you need.
Get more insights with a lending specialist
At Mortgage House, we’re no strangers to the homeowner’s journey. It’s a long (but rewarding) one.
But don’t worry, we can help with that. If you’re thinking of investing in property, you can contact us for advice about the best options for you when it comes to your mortgage. The cost of your mortgage can drastically affect your financial planning, so it pays to speak to the experts about it.