Start Digging Your Well Before You Are Thirsty: What I have learned about personal finance in my 20s

Author: Karen Sing
Experienced Registered Nurse with an entrepreneurial spirit and mindset. Transitioning out of the "rat race" to stop trading valuable time for money and to be able to start doing things more purposefully, live a value based life and make an impact.

Q: What does your financial journey look like in your 20s?

A: My early 20s has been a bit of a blur for me.

Migrating to Australia when I was 19, I had to start from scratch: Finding new friends, doing a new degree, having my very first part time employment while studying, and learning about a new culture and lifestyle.

I was still pretty much a dependent living with my mum in my early 20s, and I had almost no financial education from my family. I know I should save for rainy days, but apart from that I don’t have much financial knowledge or responsibility.

My journey to financial education started in my mid 20s when I got married. My husband grew up with his family having a business, and his family was also very much into property investment. He was very mindful of his spending and savings. While me, on the other hand, didn't quite have that upbringing.

My husband got me into learning about property investment, and we both started to attend seminars and conferences on this topic. He is also the one who recommended me to read Rich Dad, Poor Dad and The Richest Man in Babylon. The 4 Laws of Financial Prosperity is another amazing book on personal finance. These books have shifted my mindset.

I keep educating myself financially and have learnt to seek advice from people who have the fruit on their trees - people who have the experience and the wisdom. Qualified, not just certified (you wouldn't take the advice from someone about property investing who doesn't have an investment property portfolio themselves, right?).

My mentors have always taught me to dig my well before I am thirsty. And that's what my husband and I have been doing for the past decade. Because when an emergency comes, it's almost too late to start doing anything. And I don’t want to be the one who crashes.

Now I have a much better relationship with money. From my mid 20's to now, my husband and I have had to financially decide about purchasing our first home, to living in together, to getting married, to purchasing our investment properties, to starting a family, continually educating ourselves, seeking mentorship and starting our own business.



Q: What are some of the common mistakes/misbeliefs on personal finance in 20s?

A: The biggest mistake I see is the notion of "study hard, get a good job, purchase your own house, then you'll be set for life".

This just does not quite work today anymore. Property prices are increasing, so as the cost of living. Having only one source of income (a job) means you won’t be protected if you lose your job. What happens with your home loan if you are made redundant? What about another pandemic, or another global economic crisis? What are you going to fall back on? Even if you are a good saver, how long can you sustain your current way of living before your money runs out, if you don't have more than one stable income?

And what happens after you retire? Are you going to rely on your pension only?

These questions tell me to always look for alternative income even when I have a job.

Another common belief that I don’t necessarily agree with is the “travel around the world while you are still young” mindset.

I strongly believe in the power of delayed gratification. There is a quote that says, "Grind in your 20s, build in your 30s, and chill in your 40s." A lot of people think it's impossible, but sometimes, what we know is NOT all there is to know.

Instead of partying hard, getting loans for travelling or having the "YOLO" (you only live once) mentality, if you can focus on building your social network and personal growth, you can create a strong foundation for your future. I'm not saying that you can't have fun or travel, but it is all about living within your means and delaying gratification. Live in the present, but be prepared for the future.

When you surround yourself with the right people, and continuously educate yourself financially, you will start to have a good relationship with money. Be careful with the "microwave mentality" - thinking that everything is quick and easy, or justifying your spending because "you deserve it" without first allocating your money wisely and appropriately.




Q: For young people in their 20s, what are your key take-aways from your personal finance journey?

A: Delay your instant gratification. Start digging your well before you are thirsty. Start early. Start NOW. Surround yourself with the right people, educate yourself, never stop learning, and seek advice/perspective from people who have walked the path, and have the results in their life that you are after.

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