When we arrived in Australia back in 2000, my son was 9 years of age. My wife and I made an agreement that we would provide the best life possible for our son; opportunities that we could never dream of when we were his age. This is certainly a common motivation for most immigrants. It serves to justify the sweat and tears you will no doubt shed as you begin to restart your life in a foreign land.
While we were driven by the hopes of a better future for us and our son, our pathway to achieving that future was far from certain and straightforward. We came to Australia with a total savings of A$18,000, which resulted from a sale of a small property we held in India. With my sales background, I was able to find short-term sales jobs here and there, but nothing substantial – I only moved into real estate about 8 months after relocating to Australia.
My wife however had a very tough go of finding employment. Almost every job she applied for required “Australian work experience”, a cruelly ironic joke played on new immigrants. While she possessed an undergraduate education and over a decade of administrative work experience, this was not enough to secure her gainful employment.
At the same time, relocation presents its own challenges to your budget. We had no established credit standing or prior residence in Australia (for obvious reasons), so we were required to pay a larger security deposit than other tenants. We also purchased this beaten down Holden that, shortly after buying it, we got into a non-fatal yet expensive accident. The costs of repairs ending up being almost half the car value. In light of these unanticipated considerations and setbacks, our A$18,000 budget quickly lessened to A$8,000.
While I maintain that our financial hygiene practices saved us from near catastrophe, it was some of the hardest times of our lives. My young son unfortunately got caught up in some of it, although when asked, he doesn’t recall it as vividly as we do.
There was one instance where I yelled at him at a supermarket for requesting a 50 cent gumball, resulting in tears all the way out the store. Another example was where he couldn’t attend a $70 school excursion, because we frankly couldn’t afford it. The painful irony of it all was that, in striving to provide a better life for our son, we ended up having a stricter hand on finances than our parents.
Despite these painful moments, we endured and stuck to the habits we developed over time, scrounging every last dollar earned from part-time jobs and side hustles. As a result, at the time of commencing my real estate career a few months later, we had amassed a savings balance of A$34,000, representing a 425 percent increase from our previous savings lows.
Starting to save from nothing is not easy. In fact, it is one of the hardest things you can do, as you are effectively exchanging immediate gratification for temporary unhappiness and discomfort. Over time, saving becomes easier as you become more disciplined, but it certainly doesn’t make up for the initial struggle. I wanted to pen this blog post as an open letter to the younger generation that are about to commence their own journeys and are frightened by their financial future.
Regardless of your starting point, it is certainly possible to save away for your future goals and aspirations. View it as an investment into your future self. For example, if you’re 20 and you wish to have $100,000 saved away by the age of 30, figure out where you are currently, and then work backwards to see what it will take each year to get to that goal. Once you’ve done that, add in a 10-15 percent buffer to account for life uncertainties and complications.
After performing this calculation, if you feel you may be over-saving your after-tax income, you are likely in a good spot to meet your future goals. I certainly don’t advocate over-saving at the expense of your survival. What is desirable is saving to the point where you become selective with your current wants and desires. I prefer advising others on this approach as opposed to assigning an arbitrary savings threshold, as I find that places unnecessary strain on those that are looking to practice their financial habits.
Despite my journey effectively restarting after coming to Australia, I was able to build something for my family through tenacity, perseverance and sacrifice. It wasn’t easy, but looking back it was definitely worth it. Those savvy financial practices also served as a compass for when I started to build my property portfolio, and were valuable life lessons that I was able to impart to my son.
As far my son, he’s no longer upset about the gumball…
The content outlined above was written, edited and published by the Lost Realtor. The author has over 20 years or real estate sales and investing experience in the Australian property market. He has held senior positions in Australian building companies, including being the General Manager of the residential sales division of Collier Homes. His qualifications include a Bachelor of Commerce degree and a Graduate Diploma in Building and Construction Law.