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Should I Focus More on Saving or Making Money? 💸

26th February 2019

make or save money

Honestly, it’s never that simple.

Some people will make a ton of money but their spending is out of control, and others will focus so much on saving that they forget what they’re saving for. So where do you want to be? In the middle 😛.

Yes it’s true that ‘There’s always a limit to how much you can save, but not on how much you make’ and therefore you want to be focusing on the making money part. But I disagree with this, because as we’ll see later, you don’t want your twenties to be about making as much money as you can…

Your twenties are for exploring, not committing, and for building essential money making skills. Your focus should be figuring what you like, what fulfils you, what you want to dedicate your next few years on. If you focus too much on the money making side doing something you don’t enjoy, you’ll get burnt out at the age of 25 – not fun. If you focus too much on living cheaply and saving as much as you can, you  won’t be enjoying life itself – not fun either. 🙄

So how do you find that perfect point where you’re making enough that you can save for the future, but also you have in turn enough time and flexibility to keep exploring? Well, well… read on 😉.

 

The Saving Part

You don’t want saving to be your sole focus, but you still want to have it under control. This is especially important if you’re not making much; ever single pound/euro/dollar is doing a job for your future. In order to have the saving part of the equation under control, you want to have certain systems in place. Here they are:

 

  1. Reduction of mandatory expenses

This is a one time thing – you make sure the bills, rent and mobile plan you’re paying are as cheap as possible. And then you’re done! If not you’re literally throwing money out the window, and that ain’t very efficient. 

 

  1. A budget

If you download Revolut, managing your budget could not be easier. As my FM’s budgeting in 10 minutes post says, it takes less than 10 minutes and all it does is guide you. You don’t have to budget every single penny, but having a rough idea of where your money is going can only be a good thing. Check once a month and voila, another pretty much automated system 👌.

 

  1. Pay Yourself First

Every time you get an income, take 15% and send it off to savings/investments. This system is key to getting out of the rat race, of building up Cash Cushion and for investing for the future. And if your broker/platform allows direct debits, then it’s all automatic, and you don’t have to check anything!

(not always the best idea 👀)

With these three systems in place, you’re doing more than enough to take care of the saving part. And as you see, most of them take a few minutes to set up and bam! When you’re starting out, this is all you need to focus on for the saving side.

It is true that it also comes down to knowing thyself. If you are someone who frequently overspends and doesn’t quite control the money aspect, then you may need to have a tighter budget or simply increase the percentage you’re saving. You can also work on your mentality by practicing the Essentialist perspective, meaning identifying what is truly important to you and going big on them. 

 

The Making Money Part

Ah! Those two beautiful words that we all think are the keys to being financially stable. But the truth is, as a young adult we don’t need that much money. We have few responsibilities (normally) and we only have ourselves to take care of (in most cases). So why not take advantage of this and use this time to try different vocations? To, as I said before, ‘explore’? This could be an internship in another country, this could be travelling to the other side of the world, this could be spending your days reading non stop. 

If you go straight into the whole job-40h-work-week-average-pay cycle, you’ll stick to it and might not even enjoy it. And next thing you know you have a mortgage, a car payment and eventually, kids. Then it’s a bit more complicated to spend days reading or travelling to the other side of the world (from what friends tell me 😛).

(it certainly doesn’t feel like a piece of paper)

 

All you need during your exploration phase is a Cash Cushion – it could be 6 months or 1 year of expenses. With that, you have the flexibility to quit an internship if it sucks, to pay for upfront expenses, to help you out in case of emergencies.

So really, what part of ‘making money’ part should I focus on? Ideally you want to be making enough so you can put 15% of your income aside and not be struggling too much. So if you’re making 1,000€/month, you’ll be setting aside 150€ for investments and savings. That means you would have 850€ left to live on. Is that enough? Will you be struggling with that amount? If so, then you need to up your income to 1,100€ or 1,200€. How? Working on your money making skills and hustling. Find more clients, more online gigs, figure out a way to make enough to not be living on rice and beans.

And then, once you’re older and you have career capital, essential skills and have figured out what you want to do for the next few years, then the big bucks will follow.

 

A lil’ summary

You want to be finding a balance between saving and making money through systems, because right now your actual focus is exploration and skill building.

For the save $$ side, you want to have systems in place so you don’t have to worry too much about ‘saving more money’ or cutting every expense possible:

  • Reduce mandatory expenses
  • Have a rough budget
  • Always Pay Yourself First

For the make $$ side, you want to be making enough that 15% of saving isn’t much of a stretch. If you’re not sure where your career is heading or what you want to do, build money making skills such as marketing, translating, teaching etc and practicing these to build an online portfolio. Focus on making big money once you’ve figured out a way to do so which fulfils you at the same time.

saving or making money
build that portfolio one block at a time

So there you go, finding a balance is key, as usual. Don’t overspend but don’t overobsess. Don’t overly focus on one or the other. Don’t make money the centre of everything – remember that it is simply a tool, a tool to get to where you want to be. And for most of us, we want to have a happy and fulfilling life. So focus on exploring and enjoy your twenties 😉.

 

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Financially Mint is on another break! ☕ I will Financially Mint is on another break! ☕

I will be living in Kuala Lumpur, Malaysia for the next few months, and then hopefully heading to Australia. 
My plans for the next year:

I'm putting the career testing theory into practice. My next career test is working for an NGO here in Kuala Lumpur. This week will be my first week. I will be working with sex trafficking survivors and I've also been asked to do some financial education presentations to help the staff.

After that the plan is to move to Melbourne, Australia, and do my next career test: consulting. If that doesn't work out I will try another career test which may be more achievable: business development in a startup. Thanks to the amazing career books that I've read, I'm pretty confident I can get an interesting job. We'll see how it rolls. 🏀

How am I funding this? I'm very excited to say that I've managed to grow my part-time freelancing income to a full-time income that can sustain me in South East Asia (I would need to work full-time in Europe). I'm calling myself a 'Freelance FinTech Writer'. Rent is crazy cheap (like 300€/month) and it's literally cheaper to eat out than cook. I'm still able to save 15% of my income. 🎉🎉 The increase in clients and pay has been thanks to all the effort I put into Financially Mint, and to some crazy cold emailing and networking in the past few months. 
After some thought, I concluded that learning mark-up language (HTML + CSS) was a more efficient use of my time than writing blog posts and working on FM... so I am now taking a break to learn some basic coding and decide what to do next.

I will still be podcasting and taking part in the FI community on Twitter and everywhere else... so I'll still be seeing you around 😉

To our success 🎉🎉
Only 30% of jobs are posted online. 🙄 Let's sa Only 30% of jobs are posted online. 🙄

Let's say you've got a list of career paths to test. You've figured out a direction, you know which sector you want to work in and you've got some cool companies in mind.

But then what? How do you get an internship in the company you really want to work for? How do you get a job in that specific NGO? How do you get them to notice you? 🤔

In FM's latest post I share a strategy that I am still testing but seems to work - copied from a book titled 'Designing your Life' by Bill Burnett and Dave Evans:

The strategy: Conducting 'Life Design' Interviews. .
A Life Design Interview is basically meeting the person that has your 'dream career' for coffee. ☕

You find someone who is working at the company you want to work for, in the sector you want to work for or simply has a position you're interested in, and you reach out to them (LinkedIn helps). You ask about their story, their position, how they got to where they are and their advice to people starting out. 
This is what I've been doing for the past month in Edinburgh, and of the 40 people I contacted, I met 8 of them for coffee, my goal to simply learn about their story.

With an added bonus: Trust. ✅

Not only did I learn stuff about working in a startup, or as a content writer or working in an NGO, but I also built a trusted connection. It's those connections that help you find the hidden jobs, the dream careers and the best opportunities.

Check out FM's latest post for a proper run down on Life Design interviews. 💪 (Last week we organised the FI Europe podcast retreat! An amazing 4 days doing speeches, masterminds, debates, boat trips, beach and surfing. Post on this coming soon 🔥)
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#financiallymint #budget #budgeting #personalfinance #savinghacks #makemoney #savemoney #money #shoestringbudget #moneyhacks #moneysavinghacks #financialeducation #financialfreedom #adulting #savingtricks #earnmoney #lifeadvice #counsel #careeradvice #retirement #investing #careerbuilding #skillbuilding #career #selfimprovement #inspiring #fieurope #lifedesign #interviews
Investing in yourself now will return bucket loads Investing in yourself now will return bucket loads in the future. 🔮

I talk a lot about this on Financially Mint - how taking the time to build career capital and explore career paths will allow you to find a career of best personal fit, which will then make you the money you need.

But it is true that I am personally at the very start of this journey, and so can't offer many examples of this working. 🤷‍♀️ Well today, this changes as I interview the Financial Gladiator, who did exactly that.

He went to university to study business in Poland, and finished his masters in Australia. In the meantime, he was doing internships, making connections, building skills and beefing up his portfolio. 
He says it himself: ' I always looked to add experience and skills to my repertoire rather than dollars' 💸.
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7 internships later in several different countries and industries and a lot of hustling, moving around and learning about what career fitted him best, FG ended up in a job that paid him a six figure salary. This kept on snowballing, and in his early thirties he hit a salary of over $500,000. .
That goes to show how much investing in yourself can return in the future.
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$500,000 annual salary doesn't need to be your goal, but it still goes to show that you'll make the bulk of your money after investing in your own career. 📈

A great interview filled with actionable career advice and FG's complete story, check out FM's latest blog post! (Edinburgh castle 🔥)
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#financiallymint #budget #budgeting #personalfinance #savinghacks #makemoney #savemoney #money #studentmoney #studenthacks #studentlife #shoestringbudget #moneyhacks #moneysavinghacks #financialeducation #financialfreedom #adulting #savingtricks #earnmoney #lifeadvice #counsel #careeradvice #retirement #investing #careerbuilding #skillbuilding #career #selfimprovement #inspiring #work
Most of us don't know what we want to do in our tw Most of us don't know what we want to do in our twenties 🤷‍♀️. And that's absolutely normal.

But that's why we don't want to be committing to one thing - who know what you might want to do in 5 years? 🧐

Instead of committing, why not be exploring, investigating and testing career paths. But how can you do this cleverly without being a typical 'millennial-career-hopper'? By building career capital at the same time.

This means that every career test you do will help you build skills, connections and a more solid portfolio. If you have no idea where to start, here are some examples of jobs/activities that can help you build career capital:

1. Working for a growing organisation with a growing performance: this could be consulting, a startup - anywhere with a good mentor and team 👨‍👩‍👧‍👦
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2. Graduate studies - for those who want to work in research, a think tank, etc.
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3. Building a valuable and transferable skill - skills such as writing, programming, designing, data science, etc will always be useful in the future 💻
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4. Creating content - you don't always need a shiny piece of paper or a medal to show that you've done something. Creating your own thing can be just as useful.
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And much more amazing career advice... in FM's latest blog post 🤓
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(I’m running out of pictures to post so here’s one of a beautiful evening in Edinburgh) .
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#financiallymint #budget #budgeting #personalfinance #savinghacks #makemoney #savemoney #money #studentmoney #studenthacks #studentlife #shoestringbudget #moneyhacks #moneysavinghacks #financialeducation #financialfreedom #adulting #savingtricks #earnmoney #lifeadvice #counsel #careeradvice #retirement #investing #peoplemanagement #skillbuilding #career #selfimprovement #inspiring #work
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