This post is based on an interview we conducted with Jos in February 2019.
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.
Name: Jos
Age: 29
Where do you live?
Erskineville, Sydney.
Please tell us a bit about yourself.
I’m a ‘young’ graduate architect; I’ve been working in the medical architecture field for about two and a half years now. In my spare time, I like to compose and produce music with both live instruments and electronic elements. Further, my sports background is gymnastics, but also water sports have always interested me.
What is your current net worth?
$35,000
How does it break down?
$5,000 in my everyday account, $22,000 in savings, $5,000 in super, and the rest is what I estimated my furniture and music equipment to be worth.
Any debts? (including HELP from Uni)
Yes, about $6,000 due to uni.
How did you accumulate your net worth?
I started working when I was 13 in the Netherlands, selling fruit and vegetables at markets. I’ve always saved a lot and spent a little. I’ve also received money from family members who’ve passed away.
Earn
Tell us a bit about your career:
Working in architecture has great creative potential. But the prospect of earning seriously great amounts of money? Not so much. Career wise, I’d say I’m gaining experience with experts in this specific field. In the future, I’ll probably try other fields as well, to broaden my view as a designer and eventually move into a more managerial role.
Do you have income sources outside of your job? If so, how much do you earn from each and how did you develop them?
Not at the moment. I used to earn a little with music and freelancing, but not right now.
What advice do you have for people who want to earn more money?
Work more if you want to earn more, speak up about your wage, know what you’re worth. Invest in property (if you can).
Save
What is your savings rate? And how has it changed over time?
About 20%. If I get $5,000 in a month, I’ll put $1,000 into my savings.
Do you have a budget?
No, I do not have a budget for anything. Well, I might have a budget, but it’s a subconscious one, not a hard one that I agreed on with myself.
I basically live as cheap as I can, however I do allow myself life’s joys every now and then and purchase some music equipment. When it comes to clothes, I buy second-hand when I can and I hate to spend a lot on them.
Honestly, I do not think I need a budget, because I hardly ever spend my entire monthly wage, meaning I save a little every month, while allowing myself to do what I love.
We cook at home a lot and take leftovers for lunch the day after. I also make my own coffee at work so I don’t buy them. That’s part intentional to save money, and part my preference for living simple and effectively. I’m vegetarian so I like cooking at home!
How much do you spend per year?
No idea. I reckon if I make around $65,000 in a year, and the last year I’ve saved around $20,000, I’d say I spend around $40,000 to $45,000. But I could be wrong.
Do you make purchase decisions carefully, or are you loose with your money?
I consider things quite a lot. However, for some things (instruments and such), I am more likely to spend the money. But I cannot recall buying something very expensive (say, more than $500) in the last year. Airplane tickets to the Netherlands maybe, which my richer and better-earning partner mostly gets for us. I can quite confidently say I am not loose. When given a great amount of money, I will not spend it simply because I have it.
How is your work-life balance?
Too much work, too little life. However, that is architecture, and I’m better off than some others. Also, when liking work, which I generally do, work equals life. I used to work four days a week, which was great. My partner works five days, so I would do the grocery shopping on that day and spend time making music or at the gym. Now I’m working five days though. It was a bit of an adjustment to make but it’s okay.
What is your favourite thing to spend money on?
Music equipment such as instruments, headphones, speakers, and other stuff like that. They give me joy. Also, presents for my partner, my other great joy, who I do not spoil enough.
Invest
How do you invest?
Putting money into a savings account. At the moment, nothing else.
What has been your worst investment?
My Dutch bank account. It has a horrible interest rate at the moment. It even was negative for a period of time, meaning it would cost money to have money in the bank. Ridiculous.
How are you building wealth?
By slowly saving more and more.
What are your main roadblocks? And how are you addressing them?
It’s expensive to go and see my family in the Netherlands. I also love going to concerts and festivals. I always have the money for them, but I guess I’d save more if I didn’t. For me it’s worth spending the money. I don’t really fly to Europe that often, and I could always go to more concerts and festivals!
Do you have a target net worth you want?
No clue, but the feeling of small increase is nice.
When did you make your first significant behavioural shift towards wealth building?
I think I have always been a saver. I was so bad with not spending money that my parents told me I should live a little. Can you imagine yourself being 14 years old and your parents tell you that? That was me. That changed a little though, I do enjoy life more, knowing I am allowed to spend money. But I’m very good at keeping an eye on my spending, so it’s funny that I have no idea on an annual basis. I guess I’ve never had to know!
If you could start again, what would you do differently?
Not much. Probably borrow more for my uni and put it in a bank account with high interest. For the rest, not much.
What mistakes have you made along the way that others can learn from?
Not many, I don’t think. The only thing is that good value is worth a lot. Cheap things don’t last. Investing in quality eventually catches up.
Do you have any worries about retirement? If so, how are you planning to address them?
I actually do not. I find that regulations change and I cannot really say what the situation will be like in 40 years. Also, the work I do is something you can do for a long time; it’s not too physically exhausting. It’s more mentally demanding, though, possibly explaining why there isn’t too much headspace to think about the distant future.
I can imagine people that got their lives sorted out would start to think about those things, but my life is so uncertain still, I couldn’t say.
How are you learning about building wealth?
Mostly from family and friends who own a house instead of renting, investing money in their own wealth. So that’s kind of where my head’s at.
Do you give to charity? If you do, what percent of time/money do you give?
Yes, I do, however I have reduced the monthly amount drastically, so I can every now and then give something to people in need that I feel more connected to.
Anything else you want to say?
Money is a tool to live your life. You don’t have to love it, but you need it. So, owning a comfortable amount of it is somehow soothing while owning too much brings worry again.
I cannot figure out money, but I can live with it.
