Pay your future self – Best way to save money in your 20s & 30s

Saving money in your 20s and 30s
Saving money and getting started investing in your 20s and 30s is something everyone knows you should do. However life gets in the way and saving can take a back seat to fun and entertainment when you’re young.

There’s nothing wrong with clocking up experiences, smashed avo brunches and great dinners out, but living pay-cheque to pay-cheque isn’t sustainable as you get older.

As a (reformed) lover of spending my dosh I’m here to strongly encourage you to start saving now. Today! The reason why is simple, saving money earlier in life has an EXPONENTIAL impact on your long term wealth. Start 10 years later and the maths could make it impossible to get where you want to be.

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Are your savings going backwards?

Have you ever thought you were doing something good for yourself only to find out it was having the reverse effect? Like having a caffeine-hit only to end up in an even bigger slump, or dry-cleaning that expensive jacket and having it returned ruined. Unfortunately the same can be said for many Australians who keep their savings in a high-interest bank account.

If the prices of the things you want are rising faster than the interest you’re receiving, you’re actually going backwards. This situation is now common for many Australians because interest rates have fallen to a historic low and are now below the rate of inflation.

This means that each year you’ll be able to buy less stuff with the same money than you could the year before.

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We need to talk about finance

We need to talk about finance
I love emojis. Admittedly I was a latecomer to the emoji party I (to my shame) thought I was above them. I was then convinced by a clever friend that they’re like modern hieroglyphics and a valid form of communication. I’m not going to argue with that.

What do emojis have to do with finance? Aside from my personal desire to see the finance news reported in a variety of smiley, joyous or sad faces, not a great deal… but this blog is about why we need to talk about finance more.

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How can I save and invest for my kids?

How can I save and invest for my kids?

Kids invest for free with Stockspot – find out more here!

Let’s be honest – saving and investing isn’t something a lot of kids think about. Life is mostly about friends, school, sports, parties, fancying someone, studying, learning to drive and trying to work out what to do with the rest of your life.

When it comes to talking about finances, the vast majority of people want to close their eyes, put their hands on their ears and sing ‘lalalala’ really loudly. Probably because the government, media, parents and well intentioned bloggers do a royal job of making it DULL. And scary. And way more difficult than it needs to be.

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Should you rentvest instead of buying a home?

Rentvest or buying a home?
Buy or rent? Rent to own? Or avoid investing in property at all? If you’re planning to be a first homeowner it’s likely you’ve heard the term ‘rentvest’ as an alternative to buying a home.

Rentvest is the latest portmanteau (also known as a word blend, ie ‘hangry’ or ‘brangelina’) given to a recent millennial buying trend.

Rent-vesting lets you buy an investment property without living in it

Millennials living in metropolitan Australian cities can no longer afford to buy a home in their chosen suburb. Many now opt to buy an investment property in a more affordable location which they rent out while also renting in their chosen location.

It’s a foot onto the property ladder and because the deposit and mortgage payments are lower, the millennials penchant for a flexible lifestyle still allows them to travel, eat out and the freedom to move around.

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How to quit your job and travel

It’s okay to quit your job and travel. Dropping out of ‘the real’ world for a while is good for your health. It’s fine to go and find yourself, travel the world, become a digital nomad or bake cakes every day for 3 months. If your career is holding you back from achieving a dream or a life goal you probably need to quit your job.

I quit my job to travel in November 2015, I was in my early 30s and cruising up the career ladder. I had a great London job at an awesome company, lots of perks and brilliant minds. Not the most ideal time to take time out.

But sometimes life happens and you realise the amazing career is less important than taking time to clear your head, hike up big mountains or start a business selling organic beef burgers at farmer’s markets.

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Property or shares? What is the best investment?


What is the best investment? Property and shares are the 2 most common ways of building wealth in Australia outside of superannuation.

The topic of whether to invest in property, shares (or both) often leads to heated debate. The 67% of Australians who own the house they live in are usually passionate about they believe is their best investment decision.

Shares and real estate have both generated reliable income and capital returns for Australians over the long-term.

Source: Corelogic, Housing Market and Economic Update March 2016

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17 money saving tips

Often the best money saving tips aren’t the ones you read in personal finance columns, but the insights discovered by real people. That’s why we recently ran a competition asking Stockspot clients to share their top tips.

We were inundated with entries which drew inspiration from many aspects of life, from budgeting & goal setting to negotiation, lifestyle & shopping.

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How to save an extra $2,016 in 2016

As we near the end of another year, many of us, for better or worse, will attempt to make New Year’s resolutions. It seems the food coma between Christmas and New Year’s provides the motivation for us to sit back and reflect on how we could have done things better, saved more, achieved more, made more healthy choices, kicked a bad habit – the list is endless.

Before you sit down and ponder what you’ll do differently in 2016, here are 4 simple ways you could increase your general wealth and save more money…

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Top purchases Aussies regret

According to market research by IBISWorld, the Australian Online Shopping Industry is growing at a much faster rate than the bricks-and-mortar retailing, with e-Commerce sales in Australia topping $16 billon in the past year and now employing over 62,000 Australians.

Each online consumer in Australia spends more than $2,000 per year, with the most popular online purchase categories being travel & accommodation, music & DVDs and clothing & jewellery.

Source: ACMA

But with wasteful consumption in Australia amounting to over $10.5 billion annually spent on goods and services that are never or hardly ever used, it seems as though the ability to buy online has just made it that much easier for us to make impulsive and regrettable purchases.

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Money tips for your next holiday

The cost of travelling overseas can quickly add up so it pays to know some tips and tricks so you can avoid being ripped off on exchange rates and unnecessary fees as well as get a better deal on your flights.

As someone who constantly has the travel bug, I’m always on the lookout for ways to get more out of my money so that I can afford to squeeze in more trips each year. Here are things that I’ve discovered from my travels over the years.

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Fun ways to use your tax refund

The end of the financial year means that many Australians will find themselves a few thousand dollars richer thanks to a tax refund. According to the ATO, 77% of taxpayers received a tax return in the 2013/14 financial year with an average refund amount of $3,630.

A tax refund can provide a timely opportunity to get your finances in order, a chance to splurge on something you’ve wanted or discover something new. The trick is in finding the right balance between these competing urges so you don’t feel regret once the money is used-up.

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Money apps: best budgeting apps in Australia

Managing your spending is getting easier with the growing number of free money apps now available. The more difficult task is trying to figure out which of these money apps best matches what you need.

Having recently returned from an overseas trip with twice the amount of luggage and a slightly dented credit card, I decided it was a good time to start tracking my spending and be more disciplined with my budget. After some investigation, I decided to road test some of the more highly-rated money apps currently available and share my findings.

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How fees kill your savings

We all know that fees eat into our savings and investments but how much of an impact do they really have? When we did the calculations, the difference in final amounts after fees ended up being hugely different.

Paying a few per cent per year may not sound like much, but it could easily end up making you poorer by $100,000.

Let’s say you invest $50,000 in a diversified portfolio and top-up $5,000 each year after that. If you were to invest in a traditional managed fund which costs 3% per year in total fees, you would end up with a balance of $292,995. On the other hand, if you invested in a low-cost option with 1% in total fees, you would end with a balance of $393,462 after 20 years*.

That’s a $100,000 difference from paying just 2% less in fees over 20 years.

* Assuming an investment return of 8% per year

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The real cost of raising a child in Australia


Kids invest for free with Stockspot – find out more here!

Raising a child is one of the biggest costs a family will face, and it helps to be financially prepared for it. Here we look at the cost of raising a child in Australia.

While it’s common knowledge that children bring indescribable joy to their families, they also come at a large financial cost. The most recent NATSEM report1 found that the cost of raising a child has risen twice as fast as incomes over the last 8 years. Meanwhile the median age of people moving out of home is currently at 20.9 years which is as late as its ever been.

If these trends continue, the importance of having a sensible budget and savings plan in place to ensure the best for yourself and your kids is critical.

Here’s what you can expect to fork out along the road ahead…

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Our top 5 financial tips

We dropped by Sydney FC HQ last week to talk to the players about managing their personal finances and discuss some of the money traps young people fall into.

Sydney FC has a relatively young squad so many of the team are in the early stages of their playing careers. Being smart when it comes to managing their personal finances will enable the players to build a solid foundation for their careers after football.

Here are the 5 general tips we shared with the players. We think they are equally relevant to other Australians wanting to get ahead.

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15 money tips for planning a wedding

The cost of weddings in Australia continues to rise, with couples paying an average of $36,200 for their big day.

According to market research by IBISWorld, over half of the cost of a wedding goes to entertaining guests at the reception, with food, alcohol and venue costs averaging $18,683 per wedding.

Source: ASIC, IBISWorld April 2012

Most couples have had to make financial sacrifices in order to afford such a large sum of money, including putting their social life on-hold [20%], delaying plans of buying a home [25%] or remaining unmarried [6%].

Source: ASIC MoneySmart survey, December 2013

Top money tips

To help couples prepare for their wedding, we reached out to our network of friends and Stockspot clients to ask them for their money tips based on their experience.

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5 Tips from Warren Buffett in 2015

Warren Buffett is described as the most successful investor of the 20th century and one of the world’s wealthiest and most influential people. Each year since 1965 he has published his annual letter to shareholders, a document considered by many fund managers to be investment gospel.

For the past five decades, these letters have become scripture not only for value investors, but also for anyone interested in learning how to become a better businessperson, manager, or a more effective leader.

Each year thousands of Buffett admirers, aspirers and affectionates then flock to Nebraska to hear what the “Oracle of Omaha” has to say in person. This year in his annual letter to shareholders and lead-up to the event he has shared some diet tips, travel tricks and investment advice for the year ahead.

Here are our 5 favourite Warren Buffett tips in 2015;

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Preparing for childcare costs: why starting early matters


Kids invest for free with Stockspot – find out more here!

Childcare costs have become an increasing financial burden on Australian families with fees rising 150% in the past decade.

According to National Centre for Social and Economic Modelling, almost one in 4 Aussie kids attend childcare today at an average cost of $75 per day, with some families paying up to $170 per day. This is up from an average of just $30 per day in 2003.

The charges have risen so significantly that parents who choose to return to full-time work can now expect to lose up to 60% of their gross income, once private childcare fees, loss of benefits and higher income tax rates are accounted for.

A recent estimate from the Australian Bureau of Statistics (ABS) predicted that the expense of childcare was now keeping as many as 70,000 women out of work. That means that proportionally, Australia has less working mothers than the UK, US, Canada or New Zealand.

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Making sure your money stays ahead of inflation


Inflation is an important factor to consider when it comes to managing your finances. High or rising inflation can make saving up more difficult as it can erode the real value of the savings you are growing.

For example, if you earn 3.75% interest from your bank and the inflation rate is 3%, the real rate of return on your money is only 0.75%. That’s before factoring in taxes you might need to pay on the interest earned – which means that after-tax you’re likely to have even less.

The Reserve Bank of Australia (RBA) cash rate has been falling over the past few years, with the official interest rate dipping below the inflation rate (CPI) for most of 2014.

Source: Reserve Bank of Australia

This means that you could potentially be going backwards by leaving the majority of your savings in cash and term deposits, as the price of goods and services are rising faster than the prevailing interest rates. Therefore it’s a good time to be exploring other options to make sure you stay ahead.

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3 tips for investing in your 20s

The wealth of younger Australians isn’t keeping up with the rising cost of living.

That’s according to The Grattan Institute which released a report1 this month that showed that those in younger age groups have increased their wealth much slower than those who are older. As a result, the proportion of total wealth owned by those under 44 years old went backwards over the last 10 years.


The housing boom is also making it harder for young people to work towards owning their own home and accumulate wealth, with home ownership rates falling the most in the younger age brackets. According to the Australian Bureau of Statistics, first home buyers now account for just 8.1% of all national housing sales, which is the lowest proportion on record and well below the long-term average of 15.4%.2

Despite housing affordability being at all-time lows, there are other investment opportunities to outside of direct property which can be accessed by younger Australians. In fact, being in your 20’s is actually the perfect time to start thinking about shares and bonds. With a reasonable time horizon, diversified shares and bonds have historically offered excellent investment returns compared to leaving savings in the bank.

Here are some tips to consider when looking into investing to grow your wealth when you’re young.

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