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What does a recession mean for you? What will the impact be on your life?


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Answers (11)

We don't have a mortgage but I'd never be so cocky to say we won't be affected

 Well done. That would be one less stress for your family (no mortgage is great for anyone) 💕
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 Thanks won the lotto
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 Nope ^
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May mean we can buy a house but the concern is getting one and the interest rates skyrocketing after all this

 If it helps, rates are expected to stay low for a few years. The RBA has even indicated this. Then they won't skyrocket. It's unlikely a boom is going to happen anytime soon.
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 Interest rates drop in a recession. It’s in the banks best intrest to be able to have debits paid at intrest then to foreclose and sell for shit. Maybe in 6-10 years you will see them rise but I’d you stay within limits rising interest rates won’t matter either.
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 Rates are low because the economy is stuffed. Low rates are designed so people have more money to spend in the economy and prop it up. Truth is rates should be lower but the RBA doesn't want negative interest rates. They need to balance low interst rates and making sure people with savings get some return too

When interest rates are rising it's a sign the economy is going well and the gov wants to try and control economic growth and inflation. It's designed to stop hyper inflation.

Expect interest rates to be low for a number of years. The gov will want us to go on spending sprees when things settle.

People won't spend money because they are worried about job security and not being able to find new work if needed. People are also worried about rising costs of living too

People are more likely to save for a rainy day so they aren't in a situation like they are possibly now. They will want a good buffer of money the gov won't want this because it doesn't stimulate the economy

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Our business is doing very well and is quite specialised so work is just piling up, we can’t keep up. Mortgage is under control as we currently pay double the minimum amounts and have a good chunk in the redraw if we need it. I can always go back to work in education if we need to.

 Well done 💕
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In general I don't think much will change. My husband has a pretty secure job and we currently have no issues covering the mortgage and bills etc.

 That's great. Good for you guys 💕
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For me it evens the playing field and i will probably be better off. Like others have said, i may finally be able to buy a house, i have a slither of hope on that front now.

It'll either provide us with the means to buy our first home (provided house prices come down) or push it further away. Other than that it's business as usual.

It will benefit us. My job is fairly secure. We plan on retiring from our investment properties so a recession would see interest rates fall further with could shave a year or 3 off paying down the mortgage. We could be looking at 41yo retirement

 That sounds amazing. You could also look at shares, it's a good time to get a few bargains.
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 We pulled our money out of shares last year. I didn’t feel right about it. We also made a nice chunk of money on but coin.
Instead of the money in shares we bought 3 properties, all of them are 75% paid for and the rent covers the mortgage and then some. Our house we live in was already low mortgaged and on acreage with a second house on the other side of the property. We will be out of this mortgage is August.
Covid also allowed us both to access our super so we will both take out the 20k and use that 40 to finish the house we are living in and buy more bitcoin.
I don’t believe the Stockmarket is stable enough and won’t be for a while. I personally feel we may be heading for a major crash. Something worse than 1929. And I don’t want my future hanging on that or my super dependant on that stock market either
I could be wrong but iv never been a gambler. My properties will give me over and above what I would consider a comfortable retirement.
A bird in the hand...

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 Early retirement sounds wonderful 💕
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 If the house market crashes?
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 You buy more houses.
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 How will a house market crash effectne if I can afford the mortgages? I have about $350 k in mortgage. All being paid by renters. Even if I couldn’t rent any of the houses out I could afford $350 a week. My job is almost impossible to be made redundant and even I’d I gave all 4 houses for $100 a week I’m still ahead.
A housing market crashing only effect people forced to sell houses that don’t pay of their mortgage.
Even if I had to dump sale these houses I will sill make money on them.

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 But since you mentioned it, in a housing crash or recession typically the trend is for rents to increase as there is a bigger margin of renters.
We’ve intentionally set ourselves up in an almost fail proof life.
7 years ago, things could have gone belly up really fast with anything going wrong which is why we just worked our arses of getting mortgages paid down...
we’re in the tail end of mortgages now and the risk has significantly decreased.
Could the possibly go I rented? Perhaps but unlikely as they are all in beachside suburbs.
We made a substantial win 3 years ago in palm beach which I’m glad we sold at that time cos iv been watching houses fall back under 1 million again.

Clearly you’re not into housing or stock markets but I urge you to do some research and study it. It’s not as hard as people think and a great way to set yourselves up.
If people in fortunate positions in a recession capatalise on it you could be sitting pretty inn10 years

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 My husband works in finance, has several degrees including a masters and would disagree with you. You need a diverse portfolio and if you look at what you pay vs what you get out of it rentals are not a great investment on their own. You could end up struggling to live. There are people who own apartment buildings that are positively geared, and not collecting any rent at the moment.
I think what you are doing sounds fantastic, but please don't advise others because there is risk in your strategy. While retiring at 41 sounds like heaven you could be re entering the work force at 60.

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 Yes that’s why I would never by apartment or apartment blocks lol. Too much risk.
People in finance are most of the time the ones who’ve a) advised against the route I took b) of the people iv seen loose everything 5/8 of them were in finance so I’m super glad I didn’t take their advice over bbqs lol.
Both times I had the large sums of cash, they were literally begging me to let them help me invest.
I have no intrest in making any more money. I want security. I was willing to play a little with Bitcoin still but even then.
Never been a gambler which is a lot of what finance sectors do.

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 Oh and c) only 2 of them could have retired in their 40s.
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 Incidentally, how’s your husbands financially position with all his degrees? Is he looking at retirement with young children?
Just obviously with all his knowledge I would expect him to be in a better financial position than myself....

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 If you understood how it worked you would know it goes up and down. But what you are doing sounds great, but please don't think it's without risk, and please don't give financial advice that you aren't qualified for.
Our financial situation is shit because he made partner and had to buy into the business. His plans are to sell out and only work one or two days a week at around 55. And as with everything we could end up doing very well, or lose everything as nothing is guaranteed.

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 If you have a lot in super and you main interest is property look into self funded super, you can buy property within that.
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 Similar story to many people who “are in finance” Or have degree to say how to make money. They just as good at losing it.
Sorry your literally just a case and point as to why they don’t know how to work money well. If he did you’d be in my position not his

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 Lol she’s got a point.
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 She can argue with me all she likes. But please anyone else reading this PLEASE DON'T TAKE HER FINANCIAL ADVICE
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 You go girl 👍 I don't believe a thing she says anyway
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 Yes this lady’s husband sounds like a much more smart man with money, after going in to debt for degrees on how to make money he still finds himself in a shit place financially 😂😂😂 also OP never told anyone what to do she replied why she didn’t think shares was a good idea then suggested that if done well property can be a solid investment given the impending financial climate.Many people in finance back in Brazil and Argentina are similar to your experience too, they tell people who make lots of money who to make money.
My grandfather always tell me, people like to talk, let them talk. Listen closely only if they life reflects they words.

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 Lol op here. Yeah at the end of the day I literally just replied saying in my opinion and my experience I didn’t wanna be involved with shares. A lot of wealthy people I know believe the Same. The only “advice” I gave was for people financially able to capitalise on a housing price fall. Because prices inevitably rise again. Not sure how that’s bad advice lol. And I didn’t need to bring in someone else’s education to make my opinion valid.
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 No-one is trying to validate your opinion or that of the other dog with a bone
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 Nothing wrong with not being interested in shares. I was pointing out that it's not risk free, more for anyone reading this who might be looking at doing something similar.
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 To the person who thinks both them and their husband can just oull 20k each out if their super- you have to prove financial hardship to be able access that money, you cant just 'have' it. If you are almost mortgage free and have several other properties 75% paid off, you are not in financial hardship and wint be able to get any money out of your super
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 They probably bullshat on the application just to get the money
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 We already have pulled 10k each.

No the requirement is that you are unemployed. Literally that’s the requirement, unemployed. Which I technically was at the time because of the restrictions.
My husband is currently on job keeper (the other requirement)
They waived they asset test for it, and the requirement is literally just being unemployed. They waived all the usually strict criteria to suit people basically covid effected.

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 It was designed to suit people like me (and other people in different more uniques situations so I could still pay the banks their money, but was not elible for centerlink payments.
Just so happened in our case the job keeper helped. Enough. How we did have private school to pay for that came Out of savings, so again the access to super was about people in these sort of situations.
All the things they did was to make sure they covered as many people as possible effected by stopping everyone from working.
So that being said, I guess if they lockdown the country again and for a longer period of time I may lose some savings? BUT that’s literally what we have the savings for, we have a fund that sits there to cover us for 18 months of no income including no rentals.

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Having my dream come true to have my 3rd baby won’t find true

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Not sure, depending on bad things get I don’t think anyone’s job is stable.