Financial Steps To Owning Your Dream Home: Pinoy Millennial Guide

Owning your dream home shouldn’t remain a dream.

Who here dreamed that we’ll have everything figured out and settled before reaching our thirties? Maybe most of us thought that after we’ve graduated and got that dream job, we’ll be able to save up for other goals in a year or three. Own a business, travel across the globe, get married, purchase that 4x4 pickup truck or own a house before 28 years old we thought. All those are possible but a challenge when you’re earning the average monthly income in the Philippines. Survey results from the Philippine National Statistics Authority showed that the average Filipino family earns Php 22,250 per month. The Filipino family spends around Php 17,917 leaving them with a monthly savings of Php 4,334. Save that amount for a year and the family has Php 52,000. That’s worth an iPhone Xr, a year’s school tuition in a private school, or a week trip for four in Korea or Australia.

“possible but a challenge”

A lot of millennials aren’t investing or saving up for a real estate property because it seems like a vague milestone to achieve. We put off that dream thinking that it’s better to buy it later when maybe prices will be cheaper or by the time we need to settle down. We don’t see the value of investing in real estate early, but now is the best time to invest long-term. Saving that solid Php 52,000 won’t be easy and all the more saving up for your first million.

“now is the best time to invest long-term”

With the right attitude and tools, we can achieve our goals for ourselves and our loved ones. Here are 5 financials steps that would bring you closer to your dream home.

Get Out of Debt

Like mountaineering, it’s easier to climb with light luggage. Getting out of debt gives you peace of mind that your extra money will be invested in the future rather than something you enjoyed years ago. Imagine the relief of not always worrying about the credit statement, late fee, and due dates. Plus, paying off your debt gives you good credit standing when applying for a home loan.

Pay Your Pag-ibig Monthly Contribution

One of the requirements to avail of Pag-ibig’s Affordable Housing program is only 24 months of contribution. This is very achievable since employers are mandated to set aside part of your income for HDMF savings. If you’re self-employed or an OFW, make sure your up to date with your contributions so that you can also avail of the housing loan programs and benefits.

Build An Emergency Fund

Emergency funds act as a buffer when there is an urgent need to spend for an unexpected situation. It helps you stay out of debt or sell assets. Set aside “3-6 months worth of your salary,” said Mr. Mario Miranda, SVP and Head of BPI Asset Management. Building an emergency fund may delay you from actually saving for the real deal but it really helps you avoid going back from scratch.

Get Investment Funds

Leverage your income now that you’re out of debt, on top of your Pag-ibig contributions, and ready for unexpected expenses. Learn more about how to generate income passively through mutual funds or stocks. There are a lot of insurance companies now in the Philippines and some of the investments will only cost you as low as Php 2,500 per month. Take note that it is important to buy investment insurance and not just health and life insurances. People often have mistaken the three to mean and give you the same benefit. Do your research on which insurance company to invest and talk with their financial advisers.

Choose the Best Payment Option

There are different payment methods to choose from. You can go for one time on the total price, one time on the down payment and loan the balance, or pay the downpayment monthly and loan the balance through Pag-ibig or a bank. There are still other variations on the payment options depending on the real estate developer. I often tell my friends and prospects that it’s better to pay more than the required down payment because it does not have interest. The remaining balance that you loan from the bank or Pag-ibig accumulates interest. We all have our preferences and budget, but this is the one I usually suggest.

Congratulations! You are all set to save and purchase your first real estate property. Check out the Freelancing Filipina for more tips and updates on real estate investment for millennials or schedule a free property investment consultation now.