Real Money Talk is our series where we interview Australians from all walks of life about their personal finances. The views expressed are those of the interviewees, based on their experiences with money, and as such are not necessarily representative of Spaceship's views.
We have changed the name of the interviewee for their privacy.
Overview
Name: Emma
Age: 27
Please tell us a bit about yourself.
I'm a Senior Environmental Consultant.
What's your current net worth?
$90,000
How does it break down?
- Savings: $40,000
- Shares: $15,000
- Super: $45,000
Do you have any debts?
HECS: $10,000 left.
How did you build your net worth?
I started as being a terrible saver and am verrrrrry good at spending all the money I have, primarily on eating out.
I've been more aware the last three years of working full time (even though I've worked full time for six years eeee!), and have tried to be a lot more vigilant on how much I'm spending and on what.
The app WeMoney really helped me determine I spend a RIDICULOUS amount per month on food (around $900 per month not including groceries (but I don't buy lots of other stuff)).
I have slowly been building up my worth by setting up automated investments and debits into separate accounts because it needs to be out of my hands or I will disappear it.
Also in COVID when the price of cars went up I sold mine for a $5,000 profit which really boosted my savings.
I also buy additional shares around every quarter to keep growing and diversify my investments.
Earn
Tell us a bit about your career.
Been working since I was 14 to help mum pay bills.
Learned my terrible money and lavish eating out habits from her. While she never had much money, we always ate well.
Didn’t work during uni because of some generous scholarships but did not save them. I spent it on, you-guessed-it, food (but they did allow me to fully commit to study rather than being stressed about needing to work, I am very grateful and lucky).
Then got into environmental consulting as a graduate and have worked my way up the ranks.
Been working full time for 6 years.
Do you have any income sources outside your job? How much do you earn from each and how did you develop them?
I also assist on a family farm as a general farm hand/carer 2 to 3 weekends per month.
This isn’t really paid work but I occasionally get some fuel money or the earnings from a bale of wool.
What’s been important for you to learn about money?
Be a stern advocate for yourself, especially as a woman (if you are) you really need to push hard for bigger pay rises and promotions and back yourself!
You should never feel bad about asking for more when you do valued work. In those discussions with bosses, it is not yucky asking for more, you are entitled to commensurate pay, it is a negotiation, you do not work to make a company money because of good will or trying to be nice.
I always think of what does the person above you do? Could you do it? Do you do more than them? What would happen if you leave? Use these to frame your discussions. If you don't feel adequately recognised, find someplace that does.
Also keep an eye out for additional things you can part with to make some more money or something you enjoy doing that you could turn into a side hustle (i.e, I like plants and have propagated and sold some, I’ve also dabbled in plant styling etc).
Save
What's your savings rate? How has it changed over time?
I love spreadsheets and have a pretty intense saving projection one that shows my average saving rate over the past 39 months is 16%.
So not great.
What I do know from this is that it changes drastically per month based on when big expenses and bills land etc however if you take out some of those outliers my average savings rate is closer to 27%.
Do you have a budget?
I have loose targets that don’t work.
I try to keep normal monthly spending to $3,000 per month including rent.
This has almost every month ballooned to just over $4,000.
It's really frustrating that I love data and tracking how much and on what is spent but it doesn’t stop me from continuing the same trends over and over.
I am really determined to get this in check and do a system overhaul to set up more rigid accounts that don’t allow me to go over my budgets.
How much do you spend per year?
Depends on what goes on and holidays etc but around $60,000.
Do you make purchase decisions carefully, or are you loose with your money?
Loosey goosey!
I do try to implement a self rule for expensive things (i.e over $150), that I can't buy them on the spot.
I have to leave it and if I am still thinking about it a couple weeks later I can buy it.
I have a great life and I treat myself all the time.
I would have at least two to three times what I currently have if I didn't have these habits, or I wasn’t me??
How is your work-life balance?
O.K. REALLY want to drop down to part time however I am trying to buy property so I need the power full time income provides.
What's your favourite thing to spend money on?
Fuel, JOKING. It's food.
Invest
How do you invest?
Spaceship Voyager automated weekly amounts.
Also quarterly and ad hoc shares based on when I come across something interesting or that is doing well.
My share portfolio is only environment adjacent things related to innovative technology for power generation and transmission, renewables and supporting minerals etc.
What’s been your best investment?
My car! Sold for $5,000 profit! Shares are not doing so well however I plan on having them for at least 10-20 years. Also I've been making a couple hundred bucks per month from interest on savings!
What’s been your worst investment?
Progressing with expensive reports and lots of additional costs related to buy a property that did not eventuate. Big waste of money. Oh well.
What’s been your overall return?
Not selling shares until they are up so only return so far has been the car profit, so $5,000.
How are you building wealth?
Trying to continually invest and take risks (no risk no reward). Also trying to get into property from an investor perspective and starting with unconventional property types.
What are your main roadblocks to building wealth? How are you addressing them?
You need so much capital to start in the property market! Despite serviceability, the deposit is such an annoying roadblock that seems to function to lock out a lot of people from getting in. I’m addressing it by trying to think outside the box and approach the same issue from a different angle. I’ve learnt it is all a game of finance.
Do you have a target net worth you want?
$10-20M.
Behaviour
When did you make your first significant behavioural shift towards wealth building?
I listened to heaps of the She’s On The Money podcast at the start of COVID and for some reason that really hit me despite previously reading the Barefoot Investor etc. I had a stress headache for a week I reckon. In that week I set up investments, opened new bank accounts, transferred money around, changed my super, and set up a bunch of other stuff like income protection etc. Now I listen to lots of money and finance related podcasts.
If you could start again, what would you do differently?
From when you start working, set up automated weekly savings, investments and super contributions that you can't touch or change.
What are some mistakes you’ve made along the way?
Spent way too much on food and going out etc. I don't have any regrets because I have a good life and still have time to get my finances sorted. It will all be ok.
Do you have any worries about retirement? If so, how are you planning to address them?
No.
How are you learning about building wealth?
Podcasts, talking to older people and people that have things sorted.
Do you give to charity? If so, what percentage of your time/money do you give?
No.
We want to hear your Real Money Talk
At Spaceship we’re big believers in sharing our money stories. We want to hear yours, too. In our ongoing Real Money Talk series, members of our community share what they’ve learned about managing money. We’d love you to take part. Here’s a link to our Real Money Talk survey where you can share your story.
