People often think that financial advice only makes sense if, for example, you own a house. Nothing could be further from the truth. The same applies to tenants. Are you or is your child looking for a house? The following is then probably of interest for you.
Housing shortage
No doubt you know there is a major housing shortage in the Netherlands. Especially young people now entering the housing market are having an extra hard time. Houses for sale are sold at prices for which these young people are not yet able to take out a mortgage, because their income is currently too low. Not everyone has a sugar relative to make the purchase possible. The chance of qualifying for social housing is also very small in most parts of the Netherlands. In most municipalities, there is a waiting list of several years.
Private sector housing as an emergency solution
For many house hunters, the only option is to look for a rental home in the free sector. That word “free” may sound like a positive thing, but it’s not. The characteristics of a private sector home include:
- No maximum rent limit: The landlord determines the rental price.
- No fixed rent increase: The landlord may determine the rent increase unless restrictions have been laid down in the rental contract.
- No housing benefit: Because the rent is too high, many people are usually not eligible for housing benefit (huurtoeslag).
Scraping bits
In the free sector rental market, most rents are well above € 1,000 per month. By living very frugally, it is possible to pay for these housing costs.
An income disappears
What happens if one income is lost because your partner dies unexpectedly? Covid and daily traffic accidents show how fragile life is and that fate can strike anyone. No matter how careful you are.
The outcome for someone in an expensive rental home is predictable: there is usually no entitlement to rent allowance and the rent can no longer be paid from the remaining income. In addition to the sadness of the unexpected loss of a partner, the question is whether the home will remain affordable or whether it will have to be vacated.
One breakfast a week
The risk of this fate befalling you is small, but the consequences are very large. Term life insurance can provide financial security in a simple way. With such insurance, the surviving partner gets a capital that prevents them from having to leave the house, or at least buys time so that no hasty actions are necessary.
How much is the premium? This depends on the age of the insured person (the younger, the lower the premium) and the amount to be paid out in the event of death. For example: do starters want to be sure that in the event of the premature death of one of them, the surviving partner will receive a benefit of, for example, €50,000? Then that costs about one coffee and croissant breakfast per week.
Advice
Are you renting at a high rent now? Or do you, as a parent, see that your child is in such a situation? Don’t postpone it, but call or email us. You will then receive a good proposal from us and with it the opportunity for financial security in times when grief and worry are great.