Starting Over? Tips and Tricks to Navigate Your Fresh Start
They say life begins at 40 and the best has yet to come.
I don’t know who “they” are, but what “they” really mean to say is that life is unpredictable, and you will probably have to start again at 40.
Well, the last four and a half years have not been easy, everyone took a knock, some of us more than others, and it feels like a fair few of us are starting over.
This is where I found myself a number of years ago. It can happen to anyone, for any number of reasons.
There is no need to feel embarrassed, you’re in good company!
Here are some of the questions I hear from people in the same boat.
So where do I start?
A new place to call home may not be the first port of call, but it is something I’m sure most Kiwi’s have it in the back of their minds. I know it was for my wife and I.
Buying a new home can be a daunting task; saving for a deposit, rebuilding your life, and finding your feet the second time around is very different than the first.
The place you start with any property purchase is saving for the deposit.
So how do I get one of those I hear you ask?
There are still many of us out there that owned property in a previous life that have not used our KiwiSaver First Home Withdrawal for a deposit.
If you are in that camp, you may be eligible to use your KiwiSaver for a Second Chance Home Withdrawal.
Well, how do I know if I can use my KiwiSaver?
If you have been enrolled in KiwiSaver for at least 3 years, not previously withdrawn your KiwiSaver funds to purchase a home, and no longer have a share or interest in any property (excluding ownership of Māori land), then you are in the ballpark.
This facility is reserved for people that really need it and is means tested as a result. If you have things tucked away outside of your KiwiSaver, but it is less than 20% of the price cap in the area you are looking to buy, then you could be eligible.
For example, in Wellington the price cap is $750,000 so the total of assets will need to be less than $150,000 (excluding your KiwiSaver) to get the second chance.
Here is a link to the Kāinga Ora web page that has all the conditions and the regional price caps https://kaingaora.govt.nz/en_NZ/home-ownership/kiwisaver-first-home-withdrawal/
Should I use my KiwiSaver?
This is where a good Financial Adviser comes in. They will sit down with you, discuss your goals, and run the numbers. Then once you know what you are in for, you can make an informed decision.
As luck would have it, our team of Financial Advisers at DUX are pretty dam good at what we do,and always happy to help.
What other options do I have available to me?
If saving for a deposit is important to you, there is merit in using a managed fund as your savings vehicle.
A managed fund is broadly diversified like your KiwiSaver and most KiwiSaver providers will offer managed funds as well.
Again, go and see your friendly DUX Adviser and discuss your goals. They will be able to set something up that meets your needs and compliments how you need to save as an individual.
What if I still have a fair whack of debt?
There is no point saving every penny if you are in knee deep in debt. Go and see your DUX Adviser and build a plan to get you out of that debt. They will help you look at the most effective solution for you.
The most important thing is to reach out when you are unsure, you do not need to do this alone. Come and chat with our team at DUX, we live and breathe this stuff and are more than happy to help where we can.