What Age Should You Get Your Financial Shit Together?
We asked the only people we know who've successfully done it—our parents.
This article originally appeared on VICE Australia.
Your 20s are a decade of financial mismanagement. Chances are you're working an entry-level job that pays only marginally more than your high school shelf-stocking gig. You're single, or at least unmarried. You're drinking a lot, mainly as a coping mechanism. You're saving up for some awful backpacking trip across South America. You have one of those tragic iPhone countdown apps for it—only 45 weeks to go!
Sure, the thought of buying a house and settling down someday occasionally crosses your mind... until you remember the whole housing-bubble thing. Is there any point in trying to save up for a deposit when you can rent in the inner city for half the cost of a mortgage in the distant outer suburbs? What's so great about the white picket fence anyway?
It's hard to know when to get your shit together. So we decided to check in with the only people we know who have done it successfully—our parents.
Mahmood Fazal, Staff Writer
My dad, Nafi, runs a bunch of shoe stores across Victoria, Australia. He also imports and distributes sneakers, while developing properties in his spare time. He is the most hardworking man I know. Mom stays at home looking after the family—she gave birth to me when she was 20, in 1990. They left Kandahar, Afghanistan, in the mid 80s to flee the Soviet invasion.
Mahmood Fazal: How has the way you spent your 20s impacted your life now?
Nafi: When I first moved [to Australia] in the 80s, I worked for Philips assembling fridges. I was paid $220 a week, working roughly 60 hours. I also worked with my uncle at the Queen Victoria Markets selling sneakers on Sundays. I learned from him that opening your own store could generate a lot more revenue, depending on the amount of work you'd put in. So after learning everything I could about running my own business, around 1992 I quit my job at Philips and opened my own stores.
Do you have regrets about how you spent your 20s? Do you wish you'd partied more, or gone overseas?
I regret not starting my own business earlier. I had no spare time or money to go out or travel. I was working seven days a week to support my family. I arrived fresh from Afghanistan. I had no other business opportunities I could take up, and no education, so I worked as hard as I could for the opportunities that were present. I had to learn how Australian business worked, and it was a big culture clash with the way I grew up in Kandahar learning about markets. That's why I took on the Sunday shifts at my uncle's shop, to learn step by step.
When did you buy your house?
I bought my first house when I was 20, in 1987. It was in Melbourne, and it cost me $69,000.
There's a lot of talk about young Australians being locked out of the housing market, especially in major cities like Melbourne. How do you feel about that?
I think it's because young people are lazy. They don't have the work ethic like we did back in the day. Just to save every last penny to pay the mortgage I was working seven days a week, skipping lunch, and riding a bicycle instead of taking the bus to the factory. I used to buy a Mars Bar and have it in portions over three days. The youngsters are too busy going out to nightclubs and spending money. Everyone wants to just buy things they don't need. I firmly believe if you follow the rules, do as the government dictates, study hard in school, and put in hard, honest work afterward, you will be successful. It's not easy, but if you really go for it, anything is possible.
Julian Morgans, Online Editor
My parents are the kind of people who give to charities every Christmas. Both were born in 1955—Mom in Melbourne and Dad in the UK. They've both been through the whole living with roommates phase, but these days they live in a nice Bayside home with two dogs.
Mom was a teacher, then a social worker, then a teacher, and now she's a social worker again.
Julian Morgans: Hey, Mom. So what sort of savings did you have by the time you were 30?
Amanda: I'd bought a house by myself when I was 26. It was pretty unusual for a single woman to buy a house by herself then, but it was important to me emotionally as well as financially. I'd lost my mom when I was young and moved out. I think that's why I wanted stability, and a roof over my head represented that. So I bought a cottage and had a $20,000 mortgage. It doesn't sound like much now, but I was working as a teacher and earning $200 a week, and most of my money went to the house. Then I met your dad, and we sold the cottage and moved to the country. I regret selling it now. Houses in the country don't accrue as much, but still, that decision to buy a house at 26 set us up for life. We wouldn't have the house we do now if it wasn't for that decision.
What sort of savings or investment should I have by the end of my 20s?
Well, financial planners say you should aim to save around 10 percent of your wage. So let's say by the end of your 20s you're on around $70,000. You should have saved maybe around $21,000.
That seems like a lot.
Maybe, but I think it's important to learn how to save. We don't really change much after our 20s. I think we just become older versions of ourselves. So you need to learn how to save and practice in your 20s. After that, you're much more a creature of habit, and it only becomes harder.
What have you learned about the correlation between money and happiness?
You just want enough to not have to worry. I've heard that anything above $80,000 won't add much to your happiness, and I think that's right.
Otis Tutton-Gill, Intern
My parents were born and grew up in Melbourne. They met in high school, and after graduating, they lived with four other friends. Ten years later, they got married.
While my mom was pregnant with me, they lived in a Thailand arts residency for three months. A year after I was born, Dad bought a store. By this time, my mom was working as a freelance curator in contemporary art. She now works at Art and Creative Materials Institute (ACMI), and Dad has been continuing with the store. Both have done an amazing job of raising me and my sister.
Otis Tutton-Gill: Did the jobs you had in your 20s affect the career you have now?
Sarah: Yes, I had a mix of jobs in the community sector and the arts. Eventually, I decided I was better suited to working in the arts. I gained a lot of experience doing volunteer work and starting my own projects.
Chris: Yeah, I had a mix of jobs, from being pizza-delivery dude to video-store dude. Then I eventually made the leap from the video store to buying a record store—it felt like there was a cultural link. Same with becoming a DJ—that led to radio work as well. Music is life.
Do you have any regrets about how you spent money during your 20s?
Sarah: I regret not living overseas, and traveling more.
Chris: No regrets, lots of smiles. It's all about happiness and spreading happiness.
What age do you think you got your shit together?
Sarah: Depends on what you mean! I got my shit together in my early 20s, but I didn't really settle on working in the arts until I was in my mid to late 20s. I kept switching between the community sector and the arts. I still feel torn!
Chris: Shit was brought together when children started; it happened in that particular chapter. I had to refocus my life to prepare for a child. I had to end video dude life and begin the record cat life.
When did you buy our family home?
Sarah: When I was 29, in 1999.
Chris: I was 28. We bought it at an auction with financial assistance from my parents.
How should I be planning for the end of my 20s? Should I be trying to buy a house?
Sarah: I think that people need to make realistic and practical choices. For example, a smaller house closer to the city is better than your dream home farther out. Being with your people and in a community is the most important thing—not the size and impressiveness of your home.
Chris: Swings and roundabouts. Whereas kids have crazy great access to culture now, they have limited access to the housing market. Maybe it's time to flip the dream on its head!
Kat, Staff Writer
My parents immigrated to Australia. Throughout their 20s, they lived all over Australia and the world, eventually settling in Perth to raise my brother and me. My dad passed away in 2007, and since then, my mom—who has worked as a geologist, nurse, and computer programmer—has re-married. She and my younger brother now own and operate a picture-framing business.
Mom definitely has a lot of thoughts on young people and money. Here are some of them.
Kat: Hi, Mom. Should you spend your 20s saving money or having fun?
Barbara: It's quite a long period, your 20s, so you can do both! I finished my science degree at 21, then went straight into nursing training, which was three and a half years. So up until the age of 24, I was studying, but in nurse training, I was based in a hospital, so I got paid for it. And then as soon as I got my degree, I went overseas and worked in London and a few other places as a nurse. I met your father when I was traveling, and after two and a half years, I came back and got married. When I was 28, I took 18 months to get certified to work with computers and decided to changed careers. Throughout that time, I still traveled a lot.
Throughout that time were you putting away money or thinking much about the future?
I was careful about money and what I spent. I was always saving up to do more traveling. I'd work a bit, travel a bit. That was the goal. Once we were settled in Australia, we wanted to save up for a house. We bought our house when I turned 30. Back then, housing was not very affordable—interest rates were about 18 percent, and we probably had to put down a deposit of $20,000 or so. Not very much. But prices were a lot lower then. I think we spent about $185,000 on the first house, and we were both working.
Did the jobs you had in your 20s affect your career now?
Yes, I think so. Being a nurse grew me as a person because it was a challenging role. When I changed to work with computers, I thought it would be a lucrative career to get into. I could that see it would give us a better financial future. That was a decision I made in my late twenties.
Do you have regrets about how you divided up your time over that decade?
No, I think I was very lucky. I had a great time in my 20s. I did the two things I wanted to do: study to get the career I wanted and see the world. I was fortunate to do both at a time when it was feasible to do both. And yes, toward the end of my 20s, have a house.
Do you think there's a certain age someone should have his or her shit together?
I don't think there's a fixed time. I do think it's shifted. For my parents, they would have had to have their act together when they were 18, maybe younger. I don't know when I got my act together, but it all started to fall into place around when I turned 30.
What do you think about young people who are struggling to save money or afford houses in 2017?
Well, the difficulty in the modern world is that there's a very high expectation of what an entry-level job is. We had much lower expectations. I don't think it's young people's fault; it's society as a whole setting a standard. In my time, you just got in at any ground level you could get in at, and you were happy to do that. These days it appears that people want to get into the market at a very nice level, which they can't necessarily afford.
Any wisdom to impart?
I don't think there's a certain age where you should have a certain amount of money. But I think there should be an attitude of fiscal restraint. It's easy not to be careful with your money because there are so many things to spend it on. But if you want to afford a home, for example, there are things you have to go without. It's less about setting a time frame and more about a mentality. If I want this, I won't be able to have a coffee every day. That can add up to a lot of money! Don't drive your car everywhere. It's a different mindset. Small changes can accumulate.
For more excellent advice on millennial money problems, catch PAYDAY.