This post is based on an interview we conducted with Helen in July 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.
Where do you live? Sydney
Please tell us a bit about yourself.
I’m a freelance writer from Sydney. I’m into travel, food, and spend way too much money on skincare.
What is your current net worth?
Debt: About $22,000 in HECS debt, that’s it.
Investments: None (for now).
How did you accumulate your net worth?
I started working pretty young; odd jobs, babysitting, that kind of thing. After high school, I went travelling and spent pretty much everything I’d saved up. After that, I worked in both retail and hospitality.
Tell us a bit about your career.
I started working young, doing whatever odd jobs I could. In high school, I worked at a bakery and a few different cafes. After my final exams, everyone was partying but I was working six days a week so I could go travelling, which I did. I spent pretty much everything I’d saved (almost $20,000) travelling for a year. It was impulsive and expensive, but I don’t regret it! When I came back, I held down two jobs (retail and hospitality) while I was at uni and living out of home. It was pretty brutal, but when you’re young you can handle it. In my final year of uni, I got an internship which eventually led me to get a part-time job at a magazine. The pay was terrible, but I needed a foot in the door. It’s hard in media. Now I’m a full-time freelancer.
Do you have income sources outside of your job? If so, how much do you earn from each and how did you develop them?
Yes, I have a cash job, but I prefer not to say as it’s pretty identifying. I’ve been doing it for almost six years, and last financial year I made about $5,000 from it. It took time to develop. I started out by reaching out to people for work, then I slowly built a reputation. Now I have regular clients and often have to turn down work.
What advice do you have for people who want to earn more money?
You have to go beyond what you can physically do. Otherwise, you’ll always be limited by the hours in a day. Plus, you don’t want to be working every hour of every day. Life has other things that are important too.
What is your savings rate? And how has it changed over time?
I’m only new to full-time freelancing, so I don’t have a specific savings rate at the moment. In the past I’ve put a certain % aside; I’ve put a certain sum aside and spent the rest; and I’ve kept a certain amount to spend and put the rest in my savings. I've never really had regular, reliable income, so I change my tactics a lot depending on my needs and goals. Travel is important to me, so I often have a goal for that, but at the moment it’s not really on the cards.
Do you have a budget?
Yes. Here’s the monthly breakdown:
Groceries and dates with my partner: $500 (this is an overestimate; this amount usually covers our bills too).
Other (food/coffee/clothes): $300.
I try to keep money aside for my business expenses and my tax bill too, but I’m still tracking them. They vary so much that I couldn’t give you an average yet.
How much do you spend per year?
Do you make purchase decisions carefully, or are you loose with your money?
I have phases of both. At the moment I’m pretty careful.
How is your work-life balance?
It’s okay. Freelancing means I can shape my days as I see fit, but I end up doing more or less 9-5 because it fits around my partner's schedule and I try to spend time with her too. I try to switch off my work-brain in the evenings and weekends. Sometimes it’s harder than others.
What is your favourite thing to spend money on?
Food, makeup, and travel.
How do you invest?
I don’t, but I’m planning on it. I was waiting until after my tax was sorted this financial year to see how much I had left.
What has been your best investment?
A business coach when I was just starting out. I couldn’t really afford it at the time but it accelerated my business and income and it was the best decision ever.
What has been your worst investment?
I sign up for a lot of courses. Some of them haven’t been worth the time or money.
How are you building wealth?
Trying to grow my business. I paid myself a lot of super this year and claimed it on my tax. I also put money into my super for the First Home Buyers Scheme, even though it’s going to be a while before I can think about buying. Historically I’ve always kept a lot of money in my savings as a buffer. I’m planning on investing everything I have and just keeping around $5,000 or $6,000 in my account.
What are your main roadblocks? And how are you addressing them?
Not having a reliable income, and I don’t know much about investing. It’s scary thinking I could lose my money if I don’t choose wisely. I don’t understand the information, and I’m not sure where to start educating myself, so I’ve been avoiding it.
Do you have a target net worth you want?
I don’t think so.
When did you make your first significant behavioural shift towards wealth building?
I’ve always been good at saving, but maybe now at 25, deciding to invest?
If you could start again, what would you do differently?
Don’t buy so much damn clothing. And plan your travels better. Last-minute flights and trains are too expensive!
What mistakes have you made along the way that others can learn from?
When me and my ex broke up, I was stuck paying huge rent on our master bedroom in an apartment. I should’ve insisted I move out or we both do. I really screwed myself over being accommodating to someone who didn’t deserve it.
Do you have any worries about retirement? If so, how are you planning to address them?
Yeah, but I’ve started addressing it by putting extra money into my super.
How are you learning about building wealth?
I read these blog posts! Ha.
Do you give to charity? If you do, what per cent of time/money do you give?
Yes, in June. I check my spreadsheets and see how much I can give that’ll make sense from a tax standpoint. Most recently I gave $500, which felt great.