My first job in Australia has brought with it a new tax residency, a first Aussie bank account and my first dollars in Super. It’s also seen me cross the ravine from freelancing back to full-time employment. Crossroads like this are a natural time to reflect on your financial goals. This post shares three things I realised while reflecting on mine.

I wasn’t looking at the whole picture

A feature of employment versus freelancing is a regular salary instead of waiting for invoices to be paid. I have found this makes it a lot easier to make progress towards financial goals. Especially when you read about a great method like the 50/20/30 rule my colleague Mark LaMonica suggests for splitting up a paycheck.

The 50/20/30 rules suggests that 50% of your pay goes to non-negotiables like rent and food, 30% to “fun stuff” and 20% to your financial goal. My first thought for the 20% was that I’d buy more stocks. But the more I learned about setting financial goals, the more I realised that “buying stocks” isn’t one.

A financial goal is a desired state of being.

Investing in shares might be a way to achieve this, but it isn’t a goal. This made me think about why I have been ploughing a set amount of my income into equities for the past few years. And the answer (having enough for my retirement) made me see that 100% of my attention has been directed to very long-term goals. Why don’t I set an additional goal based on improving my financial health today?

I came up with the following:

“I want to be in position where big surprise costs don’t impact my lifestyle or cause me stress.” This may have been inspired by a recent parking mishap, but I won’t go into that here. To achieve my goal, I set a target of hitting $10,000 in emergency cash savings by the end of the year. This will require more than 20% of my pay, but it’s possible for reasons I’ll cover now.

Some of the best investments aren't in financial markets

The best investment I've ever made is not a stock. Nor am I going to say something corny like the money I spent going to university. Instead, it’s the $150 we paid to renew our membership of a housesitting platform this year.

In exchange for caring for their pets, owners let us stay in their house for a few weeks while they are away. By doing this, we’ve managed to skirt the Sydney rent crisis and avoid paying rent for 8 of the last 10 months.

We’ve also met new friends (one of whom gave my partner a job) and lived in areas of town we’d never be able to afford. In saved rent, our ROI on the $150 is upwards of 7000%. Most of that is going towards my emergency fund. And yes, quite a bit is going on Ubers too.

This next non-financial investment sounds trite, but stay with me. Because your next big pay off could come from a book. Imagine you work in sales and spend $20 on a classic like Robert Cialdini’s Influence. If what you learn gets you one extra sale per month, what would that be worth in commission after a year? In January, I bought a personal finance book and one chapter of it has transformed my financial situation. All thanks to the insight below.

Earnings matter most

The book in question was Jared Dillian’s No Worries. One of his points is that cutting costs only gets you so far. You also need to focus on what he calls “the earnings side”. In my case, I was also too focused on how to optimise my existing investments rather than maximising the amount of money going into my portfolio.

When it comes to changing job, people often have more time to retrain and get into a better paid industry than they realise. Even if this wouldn't work for you, there’s a good chance you could earn more in the line of work you’re already in.

Here are three ways you can do it:

  • Ask for a pay rise or promotion
  • Move to a competitor that pays more
  • Change your hours

I decided to do the last one. As a freelancer, I worked hard and earned great hourly rates. But it’s amazing how many hours slip through the cracks. I decided I would go full-time if the right opportunity at the right company came up. The result? I am now saving double the amount for my retirement every month without any real sacrifices.

Another bonus of my new role is having a front row seat to the content my colleagues are creating on everything personal finance. Here are some articles I’ve found especially useful recently:

Mark asks if we're defining financial success the wrong way. This article also features the 50/20/30 paycheck solution I talked about earlier.

Shani reveals tax tips for expats and migrants. This won't apply to all of you, but it made me feel a lot better about my first Aussie tax return.

Mark also sent me these basic tips for sorting your Super. Even if you've had a Super account for years now, it might be time for a quick health check.