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Marketing student Sophie's tips on setting long-term financial goals

30 November 2020

It’s never too early to start planning for a solid financial future and today’s Money Diaries interviewee is a case in point. Sophie is only in her early 20s but she already has an investment portfolio. She also plans out how much she spends and saves each month, and is reaping the rewards of compound interest. Here’s a bit more about Sophie and her financial habits.

About Sophie

  • Age: Early 20s
  • Location: Hurstville, NSW
  • Occupation: I’m a marketing student
  • HECS / HELP debt? Yes
  • Any other debt? No
  • Income: 40K-60K
  • Do you have any savings? Yes
  • Are you actively saving? Yes

RUBY: Thanks for talking to us about your financial habits, Sophie. Are you the type of person who has a savings plan, or do you wing it month to month / week to week?

Sophie: I have savings invested in what was a high-interest savings account and I allocate a percentage of money every month into a long-term investment portfolio so I guess you could say I usually plan my savings from month to month.

RUBY: What does a day in the life of your spending look like?

Sophie: An average day would be to grab a morning coffee, although I try to cap this at three times per week, and I’ll tap my Opal card if I take public transport. I’ll buy lunch out, and take public transport again to get home. I probably also buy snacks and groceries on the way home, and fortnightly my gym membership comes out of my account.

RUBY: How do you feel about your finances today?

Sophie: Pretty comfortable and confident overall, but there’s always more to learn!

RUBY: Where did you learn about money? What is one piece of advice that you have always stuck to?

Sophie: Start setting up passive streams of income as early as you can (whether it’s a high interest savings account, rental income, share portfolios etc) because ‘wealth grows wealth’.

RUBY: How do you prioritise your finances and has this shifted as you’ve matured? Do you budget or consciously save for large purchases, or are you an impulse buyer?

Sophie: I’ve started looking at the big picture and I’m trying to achieve more long-term financial goals. I stick to a budget or saving ratio (I spend 40 percent of my income and save 60 percent) and try to limit splurging on impulse buys, compared to when I was younger.

RUBY: What do you wish you’d known earlier about finances and managing money?

Sophie: I wish I knew earlier about compound interest. The earlier you start the better, no matter the method of investing or saving. I also wish I was taught earlier about how you can use your super account to invest and also reallocate your investments into more sustainable / ethical companies.

“I’ve started looking at the big picture and trying to achieve more long-term financial goals”

Loved this? Check out more in the Ruby Money Diaries series. We’re putting up a new interview each month. Hannah's experience is here for you.

Things you should know: This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness for the information to your own circumstances and, if necessary, seek appropriate professional advice.

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