Why Upgrading Your Home Could Be the Most Expensive Decision You Ever Make
So much of the media today is focused on the obstacle of getting into your dream home.
Whether it is your first step onto the ladder or upgrading into something that better suits your lifestyle, the story is often told as if everyone faces the same challenge.
But the reality is, we do not all have the same problem.
For some, the big hurdle is pulling together a deposit and proving enough income to get a bank to say yes. That is real and significant.
Yet I also see a different issue among people who are fully capable of achieving their goals but end up stuck. They fall into what I call a kind of learned helplessness.
Let me be clear, there are genuine barriers that stop people.
But I want to pick on a group I know well, high income earners in their 30s and 40s. This is the demographic I work with most and I see the same patterns play out time and again.
The deposit is not always the real issue
If you are a high income earner, the deposit can usually be solved. With the right strategies and a good mortgage broker in your corner, it is often not the barrier people imagine it to be.
So if you are earning well and not in your dream home yet, the likely reasons are:
A lack of strategy
A lack of structure in your spending
Or you may not be quite the high income earner you thought, and the answer is to focus on increasing earnings
Now, if you are self-employed and only a couple of years into business, there is an added layer of complexity. Most lenders do not care what you earned as an employee or what you think you will earn in the future. They want a few solid years of profitable financials - or a good story from your broker.
So yes, you can tick every box of being a high income earner and still hit this structural roadblock.
The bigger trap: overcommitting to the dream home
Here is where I see many people go wrong. If buying a home was as simple as counting bedrooms and making sure the furniture fits, life would be easy.
But what complicates things is lifestyle inflation.
Once upon a time, a walk-in robe, a butler’s pantry, or a pool was considered a luxury. Today, these extras creep into the list of what is standard. The higher your expectations, the higher the price.
Why does this matter so much?
Because every dollar you funnel into your home is a dollar you cannot put towards anything else.
For the average Aussie, this is not a disaster. Many are not great savers. They will get to retirement with their home mostly paid off, plus whatever their employer contributed into super, and not a lot more. And that works as a default system.
But if you are someone with bigger ambitions, if you are intentionally planning for financial freedom, then what you choose to spend on your home has a direct impact on how long it takes to get there.
The trade-off no one talks about
I have seen families who were on track to reach independence in their 30s or 40s, with no need to work unless they wanted to, give up that trajectory by upgrading their home. That one decision locked them into another decade or more of dependence on income.
And there is nothing wrong with that if it is a conscious choice. But often it is not. People rarely sit back and weigh the cost in terms of years of freedom.
On the flip side, I have also seen families deliberately choose less house so they could buy more freedom. It gave them flexibility to work fewer days, spend more time with kids, go on regular holidays, or even start a business without the same level of financial risk.
It comes down to this.. more house generally means more debt, or less money available to invest.
Either way, it slows your path to financial freedom.
Why the bigger house is so tempting
The hard part is that a newer, bigger home is tangible. You can see it, touch it, invite your friends around to admire it.
Financial freedom is abstract until you have felt it yourself. But when you do, it is powerful. True freedom is when you have what I call F U money. That is when you can walk away from a boss, a client, or even a customer without a second thought because you do not rely on them financially.
Most people say they have flexible work. But if you cannot walk out the door right now, without notice, and feel no worry about the financial consequences, you are not free.
You are still working for money, whether you need it or not.
So how much should you spend?
The right answer is not a neat percentage of your income or some rule of thumb. It is about being honest about what matters most to you.
Do you want the bigger house and all that comes with it? Great, but recognise the cost is more years of dependence.
Do you want more freedom, flexibility, and options sooner? Then maybe you do not need the dream home just yet.
The real question is not how much house you can afford, but how much freedom you are willing to trade for it.
Want to know more?
1) You can click here to book a free 15-minute free clarity call with Sam Woodhouse to discuss how this may relate to you.
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