I’m a big fan of home ownership especially as paying off a mortgage is like a form of forced saving. But it turns out that owning a home can also provide psychological benefits.
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A study by RaboDirect confirmed that while paying off a home calls for financial discipline, it can make us feel better about life in general.
Of those surveyed, 50 percent said they were happy with life; 44 percent reported being in great health; and over half said they felt in control of their lives.
I suspect part of the feel-good vibe associated with home ownership stems from the awareness that we are actively doing something to improve our financial security. But you don’t have to own your home to achieve this.
There are simple steps we can all take to improve our financial health. It starts with budgeting, having control of your money and committing to the concept ‘if you can’t afford it, you can’t afford it’.
Saving is also critical because if you can save on a regular basis you will become financially comfortable. If you can’t, you won’t - it’s that simple. If you don’t own your home, it becomes even more critical to invest your savings in assets that will provide long term capital growth in the way residential property does.
Paul Clitheroe is a founding director of financial planning firm ipac and chief commentator for Money Magazine.
