How to create financial freedom in your 20s with Fox & Hare Wealth
I’ve always been a spender. My attitude to money has been frivolous at worst and ambivalent at best. I’d watch pay cheques flood my account, only to dry up within a few days of reckless spending on brunch, booze and bags I knew I couldn’t afford.
I still remember landing my first job as a Christmas Casual at a fast fashion retailer in the CBD. I’d spend my breaks browsing the stores, immersing myself in the sparkling world of boutiques and personal shoppers, filled with the feverish desire to collect and consume. I was young, single and ready to spend.
Fast forward through a few poorly paid hospo jobs and junior marketing roles later, and a few things have changed. After scrapping my way through share house living with only a few hundred dollars to my name, I decided enough was enough. I couldn’t live off canned soup and black coffee forever.
During your 20s, it’s tempting to ignore your finances armed with the misguided belief that things will all just fall into place. The Australian Millennial Report 2019 reveals 25% of Aussie Millennials are living pay cheque to pay cheque, with over 20% already ditching the idea of ever owning their own home. But the truth is, Millennials have time on their side with the greatest opportunity to establish healthy money habits that will set them up for success now and into the future.
I recently spoke with Jessica Brady and Glen Hare, co-founders of Fox & Hare Wealth, a Sydney-based financial advise consultancy who specialise in helping Millennials regain control of their money. We chatted about everything from crafting a successful savings plan to the importance of setting clear goals and targets to build your wealth.*
So, what are their golden rules for creating financial freedom in your 20s?
Pay yourself first
If your current savings plan is waiting until the end of the month to squirrel away $50 of leftover cash, it’s time to re-think your approach. Regardless of how often you’re paid, it’s important you treat your savings like a non-negotiable bill. By paying yourself at the beginning of your pay cycle you’ll avoid the traps of overspending and will be more likely to gain traction and grow your savings successfully over time.
Take the guess work out of savings by setting up automated payments that distribute funds into clearly defined accounts, one for long term savings (like a saving for a home or starting a family) and the other for short term savings (like your next trip to Europe or that luxe pair of shoes you’ve been eyeing off for months). “Our mantra for cashflow is automation and segregation, so segregate your accounts and automate your payments to each of them,” tells Brady.
“We are massive advocates for having purpose based accounts,” Brady reveals, “so having accounts that have really specific goals and making sure you are putting away the right amount to match these goals.”
Consider your investment options
From Bitcoin to buying an investment property, there are endless avenues to explore when it comes to investing. But, its crucial to consider your goals and values before diving into a new venture.
“Whether its cash, a term deposit or investing in property or shares, understand what the associated risk is with regards to all of those different asset classes,” explains Hare. “It’s also really important to ensure that the investments you pick are aligned to your tolerance to risk but also your goals. What I mean by that is there is no point in taking on additional risk if you don’t need to to achieve what’s important to you in life.”
Considering what is important to you is the best place to start when investing. Are you working towards an early retirement? Do you want to live abroad, or maybe own multiple properties across the country? Taking the time to pin point and understand your personal goals will help you select the right investment path to suit your needs.
Create a plan, and be prepared to adapt
During your 20s, the idea of planning for the next 5 or even 10 years can seem impossible. Who knows what job you’ll have, or what city you’ll be living in? With so many potential paths ahead, it’s no wonder developing a long term financial plan can seem pre-mature or even unachievable.
However, the plan you develop doesn’t have to be set in stone. In fact, it should be agile and change as your life circumstances shift.
“One thing that we always talk about is that things will change. It’s important that the way you manage your finances pivots when your goals change,” explains Hare.
Think big picture, and consider where you want to be in 2 or even 5 years time. Do you have mounting credit card debt that you’re struggling to get under control? Have you always dreamt of renting your own apartment? Maybe a career break and trip abroad is on the cards? Whatever the goals may be, clearly define what they are and create tangible milestones to help take actionable steps towards them.
“One thing our clients in their 30s always say to us is ‘I wish I had got this sorted earlier’. So don’t underestimate the power of just doing something because life is busy and life will always get in the way, there will always be something preventing you from starting. You just have to start anyway,” tells Brady.
Find someone to hold you accountable
Brady shared a fantastic analogy during our discussion that really hit home for me.
Think about the process of getting fit. Sure, we can sign up for a gym and watch a few videos online to create a workout regime to help us grow stronger, leaner, more flexible. But at 6 am on a rainy Monday morning when your alarm rings, it’s all too easy to roll over and hit the snooze button.
Why? Because no one is holding you accountable.
“We live in an environment where there is so much information online, so for people who want to go and do the research themselves there is absolutely a huge amount of information to be found,” tells Brady. “There’s so much content out there that people aren’t quite sure which path to go down because lots of the advice conflicts with each other.”
If you’re looking for a nudge in the right direction or someone to keep you on track with your financial goals, speaking with a financial advisor can be a great place to start. Do your research and reach out a variety of advisors to find someone who aligns with your goals, values and personality style.
“If you’ve got someone there who is keeping you accountable, who is really checking in on you and making sure you’re sticking to that plan, the success you are going to have is far and beyond what most people could achieve doing it themselves,” reveals Brady.
To kick start your path to financial success, the team at Fox & Hare are offering you 50% off their next Wealth, Health & Heels workshop (all about getting your career, health and financial world on track!) Enter the code LUCISTARR50 at the checkout to redeem your discount.
*Disclaimer: The information in this article is for general information and advice only. Please consult a trained financial advisor directly for strategies tailored to your specific needs and situation.