This post is based on an interview we conducted with Julie in September 2021.
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: Julie
Age: 29
Where do you live? Sydney
Please tell us a bit about yourself.
I’m a Registered Nurse currently caring for COVID-19 patients in a public hospital.
I’m a wife and mother to two small boys aged three and one.
I stay home with the kids Monday to Friday and work on the weekends.
What's your current net worth?
-$176,300
How does it break down?
- Real estate: $302,312
- Spaceship Voyager: $13,000
- Superannuation: $40,076
- Cash: $3,000
- Car: $6,000
Do you have any debts?
- HELP debt: $13,000
- Mortgage: $527,688
How did you build your net worth?
Well, I am currently in debt! But I’ve been making a pretty good dent in it every year by moving back in with my parents (paying board), while renting out my property. This increases my savings rate per week enabling me to pay off my mortgage at a much faster rate without having to work more.
It definitely is a sacrifice that isn’t for everyone, but me being around more for my kids was more important than having our own space.
Earn
Tell us a bit about your career.
I'm a Registered Nurse caring for COVID patients in a public hospital.
Do you have any income sources outside your job? How much do you earn from each and how did you develop them?
I do “return and earn”. My parents and neighbours know I collect bottles so they contribute whenever they can which helps!
I used to collect bottles when I went on walks with the kids but because of COVID-19 I don’t do that now (for hygiene reasons). But I make around $27 a fortnight. It’s not much, but it’s a good gig for minimal effort! And I like to think it’s helping the environment :).
I also use Gumtree. I try to sell anything I don’t use anymore as long as it’s in good condition. I mostly sell baby things when my youngest has grown out of it, but I am able to get either 50% back from full priced items or 100% back for second-hand items. It’s definitely helped reduce the cost of having kids and has enabled me to use the money I make to buy more things for the kids.
What advice do you have for other people who want to earn more money?
Having a budget and saving goals really helps me. It puts me in a “saving money” mind frame, which can help fight the temptation to spend money impulsively.
Setting up different bank accounts for different things helps me to divide my income as soon as I receive it, placing it further from my reach helps maximise my savings.
Save
What's your savings rate? How has it changed over time?
About 70% of my take home pay. The rest are bills, expenses and spending. I feel this is pretty reasonable considering I have a young family and also kids are expensive!
Do you have a budget?
Of course! I have a strict budget for bills and expenses.
But I always leave a buffer amount of money around $300 sitting within reach in a joint bank account in case something comes up suddenly that I haven’t anticipated for within my budget. Such as an appliance breaks and I need to buy a new one.
This helps me easily survive within my budget week to week with the confidence that if something pops up unexpectedly I can cover it and simply replace the buffer amount next paycheck. This means my savings rate is predictable and not affected by life’s surprises!
How much do you spend per year?
Not much. If I need something I buy it. But I don’t often splurge on things we don’t need.
Do you make purchase decisions carefully, or are you loose with your money?
I make purchases carefully. Often I research before I buy and always check that it isn’t available second hand on gumtree first before buying brand new. I also live by the mantra of spending more money on the things you use everyday and less on the things that you don’t.
How is your work-life balance?
It’s great! I love being able to be home with my kids five days and only at work two days a week.
The only bad thing is I don’t get much time with my husband which is not ideal, however it is a sacrifice for this period of time in our lives.
I know when the boys go to pre-school or school, I can change my shifts and eventually get my weekends back.
What's your favourite thing to spend money on?
Things for my kids! COVID-19 restrictions and having to be home more hasn’t helped the temptation to buy more toys and activities in order to better occupy them at home!
Invest
How do you invest?
Property and Spaceship Voyager. I also make voluntary contributions to my Super account in order to increase my net worth.
What's been your best investment?
Property definitely.
What's been your worst investment?
Probably my car. They depreciate so much in price and cost so much to maintain.
What's been your overall return?
Well, once I pay off my mortgage it will be a very big return! Especially owning property in Sydney nowadays.
How are you building wealth?
Slowly, by dividing my money into different places and watching it grow overtime. I believe it is a good thing not to keep all your money in one basket.
What are your main roadblocks to building wealth? How are you addressing them?
Main roadblocks would be only working part-time while my kids are young.
However it is a choice I made that I wanted to stay home with them and I will return to full-time work once they are in school which will increase my income significantly in the future.
Do you have a target net worth you want?
No not really. I strive for financial independence, which for me is to no longer be in debt and not to have to stress too much about money. I feel I am on target to achieve my goals.
Behaviour
When did you make your first significant behavioural shift towards wealth building?
Probably high school. I had a part time job at my local grocery store at 15-years-old and soon learnt I was able to save a lot of money if I worked hard and exercised self-control when it came to spending. By the time I turned 20 I had $20,000.
If you could start again, what would you do differently? What advice would you give your younger self?
Probably get involved with shares earlier. I waited until I was in my late twenties to invest, as I was too scared from all the ‘stories’ I had heard about bad investments.
What mistakes have you made along the way that others can learn from?
Probably been influenced by my parents' way of doing things too much, which stopped me from realising that there are many ways to earn money other than just the mainstream way.
Thinking outside of the box and researching for yourself helped me forge my own path to saving money and building wealth.
Do you have any worries about retirement? If so, how are you planning to address them?
No, I am on track given my sex and age according to the superannuation research guide.
Also I consolidated my super accounts a while ago which was a big relief, so overall I am very happy with my progress so far.
How are you learning about building wealth?
The book The Barefoot Investor by Scott Pape helped me to divide my income between different financial goals. I would recommend it to anyone wanting to learn about money and building wealth.
I also listen to My Millennial Money podcast by Glen James. I find him simple to understand, quick to the point and practical steps to follow.
Do you give to charity? If so, what percentage of your time/money do you give?
Yes, regularly. I give about 5% of my income. Do your research though and give to a charity you know is using your money wisely.
I want to encourage my children to be generous with others so I have a system for birthday gifts: something you want, something you need and something for someone else.
When it is their birthday they get to choose what charity or organisation to give to. My kids really love doing it and it encourages them to be generous at a young age.
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.
