7 Women On The Best Financial Decision They Made In Their 20s
Need a little guidance on how to get ahead? We’ve reached out to a bunch of smart, successful women at various stages of life to ask which financial move of their 20s had the best impact on their future.
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The Term Depositor
When she turned 20, Business Consultant Jess (now 29) opened a long-term savings account. She couldn’t withdraw from it for four years and had to contribute between $1000 and $4000 each year to benefit from the high interest rate on offer. Initially, Jess thought this would be a good way to save for a deposit on a house – something she thought she should be working towards even though she was working part time in retail, earning $17 an hour.
Jess didn’t buy property, but four years of enforced saving became a long-term habit. “I continued saving beyond the intended four years, and after eight years split the money between the ongoing goal of a house deposit and travel, and used some as a safety net to take a leap of faith from one career to another.”
“As the first generation expecting to be worse off than our parents, it can be hard to set long-term financial goals. Why bother, right? While my goal posts shifted throughout my 20s, and shifted from the aim of owning a home, the end goal remained the same – financial freedom and enough spending money to feel like I never have to say ‘no’ to anything based on my bank account.”
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The Hard Grafter
Digital Consultant Nicole, 39, took the trip of a lifetime in her 20s, travelling for over a year through Asia, Europe and South America. Unfortunately, she was heavily in debt when she got home. The best financial decision Nicole made was to get a second job. For 18 months after her trip she worked 3-4 nights a week in a bar, in addition to full time work during the day.
“I didn’t have great earning prospects as I was still working entry-level positions. Working a second job was the only way I could see to make headway on my debts in a short amount of time. It also helped the transition back into regular life, as I got to meet new people constantly,” Nicole explains.
She made enough money in 18 months to pay off $14,000 worth of debt. “I also made a bunch of new friends, lost some weight and developed very toned arms pulling beer!”
“Looking back, I have no idea how I managed to survive in such a sleep-deprived state, but I’m proud that I had the physical stamina to do it. It put me in a much better position financially and meant that rather than chasing a well-paid job, I could hold out for something that I was really interested in, which has led me down an excellent career path.”
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By her late 20s, Morgana was on her way to a cracking career as a lawyer with one of Melbourne’s top tier commercial law firms. Her best financial decision was to leave town.
“I had always thought that I might like to work overseas and a role came up in Hong Kong. I liked Hong Kong and I was keen for a change of scene after more than ten years living in Melbourne, so I applied for the job and, happily, I got it. I didn’t move to Hong Kong for the money, but it turned out to be great for my bank balance.”
Morgana spent seven years in Hong Kong, benefitting from a competitive salary market and relatively low taxes. It allowed her to save enough money for a deposit on a house when she came home to Australia. “Hong Kong provided me with some great professional opportunities, as well as being a fun place to live,” Morgana says. “I’m just lucky that it was also a good financial move.”
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The Early Adopter
Buying your first property at 21 is no mean feat, but it was the best financial decision Financial Consultant Emily made in her 20s. While still living at home with her parents, she bought an investment property, using rental payments to help pay down the mortgage.
“My parents encouraged me to start saving when I started earning a full time wage, and helped me find a small 2 bedroom apartment to buy in Adelaide. So long as I was paying the mortgage, they didn’t want me to pay them rent or board, which was a huge incentive for me.”
Emily, now 32, still owns the property almost 15 years later, and the mortgage against it is all but gone. She’s now married with two kids, two dogs and a beautiful family home, but her investment property is still a fantastic asset. “I’m happy that I put the money into property instead of buying a new car or wasting it. I’ve wanted to sell it at times, but I’m glad I held onto it – it’s now more than paying for itself. It’s also comforting to know the property is there, giving me a little extra security.”
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The Home Owner
IT Programmer Bonnie, 36, bought a home when she was 23, though it wasn’t a low maintenance/high income investment property. She bought a house she fell in love with, “wonky walls and all.” Although her purchase was driven by the heart, it turned out to be a great financial decision. “Although I spent most of my 20s paying interest which exceeded the rental potential, the effect was of an enforced savings program, helped along by some good capital growth in those first five years,” she explains.
Like Emily, Bonnie was strongly encouraged by her parents to get a foothold on the property ladder. “I began working in IT at 19, and so had a steady (if not very high) income by 23,” she says. “My parents effectively nagged me into taking advantage of the First Home Owners Grant, and managed to convince me that a mortgage wasn’t necessarily going to impede my freedom. It did mean that I couldn’t afford any long periods of unemployment in the subsequent years, but that goes against my nature anyway.”
Bonnie lived in her property for a year before moving to London in 2005. When she returned to Australia, the property was waiting for her. She’s been living there for almost four years and the mortgage is virtually gone. “I just feel incredibly fortunate to have been able to buy a house, with the support of my parents. It’s still the best decision I ever made.”
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Public Health Consultant Silvana, 46, didn’t have the funds to buy a house in her 20s, but she still had the foresight to invest in property. Together with a visionary collective of like-minded friends, she purchased 17 acres of tea tree forest on the coast of southern Victoria – a communal holiday retreat that features several individual dwellings and a communal living area.
“I had no plans to purchase a coastal property initially but the land is so beautiful that after a visit I was hooked,” Silvana says. She was drawn in by the promise of community – a group of people all pulling towards the same dream. “Ownership of homes and land is increasingly beyond the capacity of individual earnings and it often creates scenarios where financing a loan leaves us little time to share life with each other. Collectively purchasing land enabled us the space to navigate smaller financial commitments and remain less constrained… it enabled us to make use of a wide diversity of skills within the group to support us to both build housing and maintain the landscape.”
Twenty years later, Silvana shares this gorgeous hideaway with her children and her friends, including the partners with whom she first invested, their children and their friends. Their beachside holiday idyll has grown into beautiful, multi-faceted world.
For Silvana, the best financial decision of her 20s has a profound spiritual resonance: “The original intention – the ownership of land and the creation of a holiday retreat – has evolved to be an experience of deep and intimate belonging and community.”
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The Leap of Faith
Photographer Jessie’s best financial move was a total change of career. At 29, she walked away from an unsatisfying job in business development and went back to school to study photography.
“I read Tim Ferris’ 4-Hour Work Week in 2006 and it changed my life and how I thought about work. However in 2009 I was still trying to work in the corporate world unsure of how to take the leap,” Jessie explains.
“Why did I change career direction? Because I was miserable in the job that I had. I was earning great money, but depressed to the point that I was struggling to get out of bed to work each day. I’d spent a great deal of time wanting to pursue a creative career as a photographer, but had great doubts about how I could do it or even if I was good enough. Then the Global Financial Crisis hit and I was made redundant from my job. I knew at that point that if I didn’t take the risk to see if I could make a career out of photography, I never would.”
Jessie is now 35, and in her case, making the decision to earn less money in the short term has made her extraordinarily happy. “I’m surrounded by wonderful supportive creative people that have mentored and helped me achieve great things and I haven’t really looked back,” she says.
Since starting the Diploma of Photo Imaging at RMIT University, all of Jessie’s income has been related to photography somehow. She is now teaching and mentoring other photographers and has recently published her first book.
“It takes a lot of guts to change career direction and start at the entry level of any career… I feel everything is measured and there are so many milestones people are expected to achieve. It’s difficult sometimes to go against that, and I have less financial stability than I would with a regular 9-5 job, but I feel great!”
All images supplied.
Simone Ubaldi is a ghostwriter, music journalist, film critic and has co-authored four books, including memoirs of Bon Scott and Mark ‘Chopper’ Read. She stashes a lot of her writing here.