It turns out that for the past nine years or so I’ve been looking at my finances all wrong. My income isn’t the problem. It’s actually been pretty good since about the age of 23. Even when I travelled to Europe and taught English my monthly income was almost double the national average on an excellent month and on par with the average on a mediocre month (national average of the country I taught in). If I had saved 20% of my income over the that time and invested then things would be much different right now, at least on the financial front.
Which makes me wonder: are our financial fates set in stone?
I estimate that over the past ten years I’ve earned around $400,000. That averages around $40k per year. I started on that wage in my early twenties, then I went to Europe earn a little less, and finally upon my return to Australia, earned $50k (2011/12), $63k (2012/13) and $73k (2013/14). This financial year (2014/15) I estimate my income to be around the $35k mark as half the year was spent on maternity leave. Next year it should go back up to $75K+
I could earn more but I could also earn significantly less. Our joint household income is a little higher than the national average which really doesn’t say much because the national average doesn’t include pensioners and those on government support. It’d be nice if more people earned around the $70k per year but that’s not the reality. A large number are struggling on $25k per year while others are complaining about $200k per year. Go figure.
So is your financial fate set before you even enter the workforce?
Sometimes I think that financial freedom is not on the cards for me. I work hard, I try to save, I constantly learn about investing, I love writing and reading about personal finance, and yet here I am still no where near where I thought I would be by the time I hit 31. But then I think a little more and realise that would be taking the easy way out.
Our financial situation is the result of our every day actions. It’s the choice between going out for dinner twice a week or cooking a healthy stir fry at home. It’s buying coffee every day or leaving it as a treat at the weekend. It’s filling up your wardrobe with clothes you’ll rarely wear or storing all that cash in a savings account. It’s challenging and educating yourself to get a better job or staying in the same position because it’s easy and comfortable.
The choices we make every day determine how well we do financially.
Today. I choose to make better choices.
Today instead of buying a pair of shoes that I really liked but would probably rarely wear, I immediately transferred the cash into my savings account and walked away. I’m now $180 better off and one step closer to making a habit out of making smarter choices.
What are you doing today to benefit your financial future?