When you factor in the Sydney property market, constant desire to book a holiday (Euro summer, anyone?) and the price of the smashed avo on toast you had for breakfast, it’s no surprise that Australian 20-30 somethings are struggling to get ahead. You’ll be lucky enough to stay on top of your weekly rent let alone accumulate enough cashola to put away for a rainy day—are we right?
After reading the headline, we know what you’re thinking… “I only make $XYZ, there is no way I’ll be able to save all that money in one year.” But, according to Canna Campbell, financial planner, creator of SugarMamma and author of newly released book, The $1000 Project (add it to your reading list if you haven’t done so already) it is possible and what you’ll need is a little discipline and a touch of an imagination.
The premise is twofold: Get into a good savings habit (ie. put a certain amount away with each pay check) and, this is the big one—dabble in other ways you can earn some moolah outside the limitations of your take-home salary package. Canna suggests exploring things such as selling pre-loved items online or holding a market stall, getting yourself a weekend job or #sidehustle, participating in market research, renting your house on Airbnb, start tutoring, babysitting or even asking for birthday money instead of presents—anything at all that will enable you to draw in a little extra income.
Canna herself managed to save $32,000 in 12 months by doing just that. By saving and earning extra money, she was able to build up small, but achievable parcels in $1000 increments. “I did lots of different things outside of my salary, but things that everyone can do, plus more. You name it, I did it. And because I set a meaningful financial goal for me, it was so worth all the hard work.”
For Canna, forming good habits is the key to financial success. “It is a bit like brushing our teeth, we don’t automatically think about brushing our teeth twice a day, we simply just do it and then receive the benefits of clean fresh teeth and gums. Healthy financial habits and routines create the same results and people quickly feel and see the benefits of these. Transfer a regular amount the moment you get paid into a operate savings account so that you cannot accidentally spend it. Let it build up whilst you decide what you want to do with the money.”
Not the best at sticking to your goals?
“Short term goals should reflect your immediate bursting desires or distresses. Such as the desire to see and have a lump sum amount of savings in your bank account or the anxiety of wanting your looming credit card paid off. Base your goals and then immediate actions around this.”
“Long term goals should be based around your long term dreams and goals. We can dream because we can use the benefit of time to put the steps in place today, make the journey so much easier and more enjoyable.”
Although it may not give you disposable cash, another huge contributor to achieving long term financial independence is managing your super—something that many people seem to neglect. “Have one main super account,” advises Canna. “Make sure that it is invested towards your long term financial goals (don’t go with the default balanced option if it isn’t right for you), make sure that your employer is correctly contributing to your account and always review it so that you know how much you need in super to retire when you want to and on how much money you need.”
As for small changes you can make everyday to help in the savings department?
Have a budget, so that you have boundaries and guidelines for spending and cannot spend more than you earn
Pay off all non deducible debts, credit cards, student debts, etc.
Have emergency savings
Start investing and building passive income
“Little savings and even spendings, add up quickly to be big savings or big expenses.” We’ll just leave you with that!