Smart choices are the key to financial success
When Megan and Johnny Crane relocated to Sydney from Perth with their two children, they realised the higher cost of living would require a new approach to budgeting. Fortunately, they’d already spent seven years focusing on their financial goals – and despite their transient lifestyle this has allowed them to buy a family home in Sydney.
The Cranes have bought and sold four properties in Melbourne and Perth – always adding some value along the way through renovations or subdivisions.
“The one thing we’ve always done is had a vision, and we've made some sacrifices for the bigger picture,” says Megan.
“When we got married we sold my apartment in Melbourne and bought a bigger house, but we never lived in it. Then Johnny had the opportunity to work in the country for three years; so we rented and I stayed at home with the kids.”
They were then relocated to Perth, and while renting a home there they bought a property that needed a lot of work.
“We ended up subdividing it and selling two blocks while we were living in a tiny house. We knew it had potential.
She describes their approach of upgrading and selling properties as a ‘formula’. “We look for properties where we know we can add value. It’s about looking at the market and taking calculated risks.”
“We’ve certainly made sacrifices, and we’ve always had side projects to enable the situation we’re in now, and I think we’ve made good choices.”
When they were then offered relocation to Sydney they decided to sell their properties, as they felt the timing in the market was right for them.
“At that point, we turned to Macquarie again – we’d had our investment loan with them. My dad had also been a customer of Macquarie Private Bank for many years, and he suggested Alan would be able to help us. He totally fit our brief as a Private Banker who we could have a long-term relationship with.”
Megan says Alan’s advice and support through their move and the subsequent decision to buy their first family home has been pivotal.
We don’t work in finance, so we knew we had to outsource our investments. We’ve been really happy with the returns while it’s been in a managed portfolio, and now Alan and Berhan, in Macquarie’s mortgages group, have made it really simple for us to buy our new home.”
“Alan was always available, and helped us understand the Sydney market. He also suggested we talk to an accountant about the tax implications, and we realised it would make sense to finally invest in our primary residence.”
Megan and Johnny’s journey is not typical, as most people start with their home and then look at other investments. But as they've moved so much, it has worked for them.
However, even with this strong investment base, they still found it hard to make ends meet once they moved to Sydney. So they implemented another unusual strategy: separate personal bank accounts.
“We call it a black card and red card: the joint account is the black card and the personal account is the red card,” she explains, crediting a friend with the idea.
“Every month we get an amount for our own accounts to spend just on us personally, and the rest is in the joint account to cover household expenses, childcare, rent and so on. If one of us wants to shout the other to lunch, we can pull the red card.”
She says that simple idea of a set budget has not only meant they are reducing costs – it’s improved their relationship.
“Johnny always thought I was the spender, but it turns out each month he’s the one with nothing left! It makes you think twice before buying something, and I think Johnny now pauses before he ‘buys another round for the boys’.”
Megan describes herself as the ‘financial controller’ in the family. “Johnny is savvy, he’s the driving force for our direction and I’m the sanity check. We each have a role to play. We're both risk-takers and we’re both focused on our goals. I think that understanding has helped us manage our finances.”
She says Macquarie has helped them to diversify their investments, rather than having everything in property. “We’re hoping to keep our investment portfolios going, even with the new mortgage. Having that flexibility is really important to us.”
“We don’t really know where the next move is going to be… we might stay in Sydney or Johnny might get an opportunity somewhere else. That’s why we’ve always focused on the future – we always need to have something working for us on the side.”