Am I Doing Ok? What Should I Do Next? (23F)

[kknmksmama]

I (23F) am starting to think more seriously about my future financially, and want to create a bit more stability in my life

I am currently living overseas (a mixture of working seasonal jobs and travelling) but planning to move back to New Zealand in around 6-9 months

I’ll be looking to get back into my previous career, working in conservation, most likely finding a $48K - $55K + staff accommodation job in the South Island

Currently, I don’t have a lot of savings (because of travelling in North America & Southeast Asia on and off for the past year) but I am very disciplined when it comes to saving and managed to save just over $25K when I was last living in New Zealand in 1 year working a minimum wage full time job which I think is a great effort (but I could be wrong)

I have no debt, I have thought to possibly study Environmental Science or Outdoor Education in the future, but I first would like to get a good chunk of savings and put a deposit on a house ideally within the next 4-6 years

KiwiSaver: $10,500 (NZD)
New Zealand Chequing acc: $1,100 (NZD)
Canadian Chequing acc: close to $3,000 (CAD)

I’m a little scared that I am far behind in terms of saving/ where I should be for a 23yr old

you could stop reading here, the next part is a bit wishy washy and just some more background information

Right now, I am kind of in a tricky spot, I moved to a big city in Canada a couple months ago and then had a few unexpected costs (transmission issue on my car and my iPhone was stolen) plus living in the city is a bit more expensive than I hoped and I have a low paying job, but I am trying my hardest to budget and save money where I can

I am looking to move out of the city and find a higher paying job, ideally ASAP but I do have a summer job lined up where I earn more and have pretty low living costs

I am hoping to save between $7,500 - $10,000 (CAD) over the summer and I will have a car to sell (hoping to get between $5,000 - $7,000 but I cannot guarantee that money because unexpected things could happen to the car over the next 6 months), some of the cash will be used for a bit more travel in North America and then to fly back to New Zealand

Gosh this post is a little long, apologies for that, but basically I am worried that I am screwing over my future self by spending 1.5-2 years of my mid 20s travelling. I also want to say that I am a very adventurous soul and I do love to explore and travel. I have really enjoyed the last year or so, and am looking forward to the next 6-9 months abroad

 

[yourking]

@kknmksmama You certainly are not behind the vast majority. Sure you will read about person X on this sub having 60k saved away by 20 years old, but this sub is absolutely miles off from the average kiwi. The finamcial literacy of the average kiwi is truly awful and very, very few have their finances on track by 23 - I'd argue the majority are probably paycheck to paycheck or in debt.

The amount you could save prior to travelling on that kind of income is absolutely nothing to scoff at and very impressive. However you should focus less on the $ amount and instead on the budgetting and principles you follow - what I mean by this is you're saving a substantial portion of your minimum wage already so you just want to stick to those same principles as you move up the pay scale and that 10k a year will only grow and grow as your base pay grows.

Also consider the value of the travel you have had. That experience and likely personal growth you have had in that time period is extremely hard to put a $ amount on. You've done it at the "right" time where now you're coming back ready to plant your feet and move forward on your career.

All in all, you had great saving habits before you left which once settled you can hopefully continue with, you have some great life experience through travelling and actually have the financial sense to be thinking about your financial future at 23 years old. Maybe your $ amount saved is a little less than some friends you know, but your financial habits are better than many people even in their 30s. Keep to these habits and you'll have zero issues in future, it just takes time.

 

[kknmksmama]

@yourking I’m hoping that I can get a slightly higher than minimum wage job once I get back to New Zealand, and I have over the past 6 months created an excel sheet to track my spending and income, which has greatly helped me to see where my money goes (I did a huge road trip across Canada, so most of it went to petrol ) thank you

 

[yourking]

@kknmksmama Yep based on your post, once you're back and grounded here that's going to be your biggest hurdle/step forward. You have all the right habits and the best way to increase the amount you save going forward is going to be to earn more money.

I think the extra you could maybe save by trimming bits here and there will fall well short when compared to even earning an extra $2 or $3 an hour

 

[saviati500]

@kknmksmama I am commenting to only make you feel better. 26m who loves traveling. Played around to much with fast cars and wound up with nothing at age 24/25. Got disciplined and now have a decent house deposit and investment in Sharesies. You’re good, you’ve got a strong mindset so you will be fine, it only takes a few years of grinding to set your life right you got this!

 

[kwild]

@kknmksmama You're doing great. Do not sweat it. It's easy to spend your 20s falling into debt and then crippling your ability to get out of it by tying yourself to dependent children, and many do exactly that, so you're way ahead of the game. Your ability to live frugally and save substantial amounts without having a large income is just as, or more, critical to success as being able to command a large salary. Saving $25k in a year is an outstanding achievement, many folk on six-figure incomes are unable to do so.

When you get back to NZ and commence regular employment again, your best next step will be to think about long-term retirement savings. Choose an index fund like Kernel or Simplicity's High Growth options, and settle in for a few decades of contributing regularly to it. 15% of your after-tax income is a good ballpark amount to target for those savings, but it sounds as though you might be able to do more.

All you need to do is lock in a plan like that and stick to it, and you'll be able to retire comfortably. Plenty of folk don't get serious about saving for retirement until their 30s or 40s. The fact that you're even thinking about it at 23 puts you ahead of the curve.

On the topic of whether to buy a house - there's a real cult in NZ centered around the idea that buying a house is the only path to financial success. I'd encourage you to run the hard numbers on that assumption before taking it at face value. Plenty of folk take the view that doing what I've described above can give you a better life financially, and that buying a house is something to do if you need a house. Our rental laws are pretty shit, so you will probably need to buy a house if you want to have kids, but aside from that, as a financial strategy, it's not obligatory for success.

 

[kknmksmama]

@kwild Thank you! I just was told about Kernel by a friend yesterday, so I will look into that. I will also think more into owning a house etc… I have just always assumed that ownership is the goal, my parents own their home and encourage us kids to do the same for security

 

[kwild]

@kknmksmama

my parents own their home and encourage us kids to do the same for security

Yes, that's a very common view, but it's not always a fully-informed view.

The best thing you can do next is put your head down and understand the relevant personal finance topics.

When you get to the point of being able to construct an Excel spreadsheet to show the lifetime financial impacts of renting and investing in diversified funds versus buying a house, and you understand the different variables that can impact the outcomes of each, you'll be ready to make decisions that will maximize your chances of long-term happiness and fulfillment, which, after all, is the entire point of worrying about personal finance planning.

Good luck ^__^

 

[uspsdiva1]

@kknmksmama Sometimes it isn’t the best option depending on your lifestyle. If you want to work in Outdoor Education or anything Environment, you probably need flexibility to move around for work, especially in your earlier years. Savings and investments can make up for that, and you can purchase later when you’re a bit further ahead careerwise and settled in location. I’d also be wary of buying before studying, it isn’t impossible but it can be quite tricky to keep paying a mortgage while on a lower-income studying. Yes you can get flatmates or tenants, but what if you go through a period of struggling to find tenants or someone comes in and trashes the place or their room and you need expensive repairs done before you can re-let, will you be able to cover the mortgage + maintenance + insurance + rates without a full time salary and rent? What if you buy somewhere and then need to move somewhere else to study?

 

[kknmksmama]

@uspsdiva1 Yeah I have thought of that, but thank you for bringing it up, I am still on the fence about studying at all, but do sometimes consider enviro or outdoor ed

 

[ptw]

@kknmksmama When you get older and you’re locked into that mortgage for the next 10-30 years you won’t be regretting having had fun exploring overseas. It sounds like you’re doing it while being relatively disciplined financially at the same time, which is great.

 

[kwild]

@ptw

When you get older and you’re locked into that mortgage for the next 10-30 years

See, this is an example of people just assuming that that's how life has to go. You don't have to buy a house, OP. You can plausibly spend the rest of your life alternately working and traveling while saving enough money to retire comfortably.

 

[rtaylor11214]

@kknmksmama I don't think you're making any mistakes travelling. I wish I'd done more of it when I was your age. 30 now and want to start but I just started studying, have a mortgage to worry about, etc.

Enjoy your time travelling and worry about it when you're back.

 

[luvdreamsnjesus]

@kknmksmama Just by being mindful of your finances is worth points. The fact you’ve got the balance between living life & being financially responsible is amazing too.

I have a degree in personal finance, the one thing I’d suggest is building up emergency savings. Something that’s super liquid & there for those times when your phone gets stolen & unexpected car repairs so it doesn’t interrupt your financial plans!

I’d also think about financial stability looks like to you.

If it’s retirement, you could definitely start looking at some ETF managed funds, or building up a deposit for a house (I recently brought a property via co-ownership so it’s not breaking the bank).
If stability means not stressing out with unexpected demands, a higher emergency savings may be the thing for you.
It may been being financially free, so then you can start putting money into assets & investments so you can get return in the future etc.

 

[joslyn04]

@kknmksmama I moved to Canada when I was 20 and didn’t come home for 6 years. What I lost in “time” I wouldn’t trade for the world. Just before I moved home I got two different serving jobs to earn a decent amount of money to be comfortable enough to find a job I wanted in Auckland and not have to worry. You have said you’re good at saving so enjoy the time overseas while you have it and be ready to hit the ground running when you return.

 

[wordnord]

@kknmksmama You're doing fine. Here's my take from my own experience. I've done both, I lived a similar life in my 20's, struggled for years on low wages to save and get a house, then lost it in a breakup when the market had gone backwards and didn't get much out of it. Later in life I studied, got a good job with good pay and bought a nice house.

It's much, much easier to study first, build up to good job and then get lending with a good income, than waste years of your life on a lower income - sure you have freedom now, but you have so many more options with a good income coming in. By the time you've built up your professional life you'll likely meet a partner and then life gets even easier with a larger household income

Once you're done traveling - study/career first, then worry about property and finances later - that's life on easy mode.

 

[in_jesus_i_trust]

@kknmksmama You're basically coming back to a minimum wage job (minimum wage goes up to $48k in April). Does conservation have any kind of career progression potential, ie do you see yourself going into management or project management in the future?

The #1 thing you can do is invest in yourself - that means upskilling, increasing your experience to branch out into better paying jobs, or getting further education.

You mention studying Environmental Science or Outdoor Education. I'd imagine Environmental Science has a pretty good future coming up and is an interesting field to study, however Outdoor Ed probably pays pretty poorly. Since this is a Finance sub, your future career aspirations should factor in earning potential as well as enjoyment, not just solely enjoyment. There may be other jobs with good earning potential that you hadn't considered to get a degree with.

but I first would like to get a good chunk of savings and put a deposit on a house ideally within the next 4-6 years

Unfortunately in NZ you will not be able to get a mortgage on a house when on minimum wage, even if you have the deposit, because you will fail the affordability test unless you get a mortgage with other people (partner or friends/family - and I would never recommend getting one with friends/family) - even committing to tenants in your house you will struggle.

Personally I think you should:

• Come back and spend 6-12 months evaluating your options, including heavy research into job opportunities in NZ, while working in Conservation
• If you don't have good career progression options in Conservation, I'd go to Uni in Feb 2025 and upskill. Leverage the contacts you build now to secure yourself a job in the future. If possible try to get paid internships over summer to get a foot in the door.
• Only then start saving for a deposit (I would put all savings towards a deposit personally and not start retirement savings until you have a house, since it will just drag out the time you're paying rent to someone else)

Once you have a mortgage, there is a balance between savings vs paying off the mortgage sooner, my personal opinion is that paying off the mortgage sooner should be prioritised since it is risk free and tax free

 

[kknmksmama]

@in_jesus_i_trust Ok that’s all good to consider, thank you. I do love working “out in the field” unfortunately the more you get paid, the more time you spend inside an office but I am only 23 now, so I am sure that my opinions on that will change. I’ll give a think about those things but it is good food for thought

 

[johnbiggs]

@kknmksmama You’re doing fine for your age

 

[taylormade86]

@kknmksmama As the old saying goes, "comparison is the thief of joy".

I personally have no savings, have a 6 digit student loan to pay off due to doing 2 degrees, and I'm in my mid 20s so you're doing fine, you just need to prioritise.

It'll be difficult to save equally for a house and for travel. I'm in the boat of "I want to travel while I'm still young so I'll save up at least X amount of money every year and any left over savings I can save for a future home, a car, rainy day funds in case things go south etc". I know I'm not going to be travelling much when I'm in my 30s so I might as well prioritise travelling now and have that as the first thing to save up for. What your main priority is up to you.

I recommend going on facebook and joining "Kiwi First Home Buyers Group" and asking anonymously there as well.