Money Matters

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My mum always taught me the value of money. We were living in a women's refuge when I was 5 years old, with myself and 2 sisters sharing a room with another single mum and daughter for 6 months. It was weird at the time, but I didn't know it any other way. I remember using handi-downs and eating only rice, cucumber and salt (to give it that extra flavor) every meal to save on money where we can. We didn't live an extravagant life, legitimately just enough to survive. 

Fast forward without all the details, my mum managed to get a place of her own to rent, raise children, and now have one of them living overseas (i.e. me) who attempts to come back home from time to time. 

It's this experience as a kid and teenager that always reminds me the value of money, where you "don't waste your money when you have it" (a repeated phrase in my household). 

Now that I've been working full time formally, I've really wanted to make a very deliberate effort to make sure I'm understanding where I'm putting my money and how I making strides to larger savings goals. Saving money doesn't have to be complicated, it's just about making sure that you're aware of where your money is going, and making conscious decisions to reach these longer term goals. 

I hope to now share some of my personal tips to saving money and living a fulfilled life.

I usually start off with creating an overall savings goal - what financial goal do you want to achieve 5 years from now? Is it saving for a house deposit? A big holiday around the world? Is it paying off a lot of debt? Whatever it is, write it down and make that your north star. For me in 2015, this was to pay off my HECS debt by 2020. After much budgeting, I'm happy to say that I've been able to pay this off! Whilst life definitely gets in the way and you can't always reach these goals, they're good to have to keep you focused.

Ultimately, the most important way of keeping on top of your money is to track your total income versus your total expenses. My savings goal for 2019 is to make sure that every month I put aside at least 30% of my total income (40% if I'm feeling reeeally frugal). I track all of this on an excel sheet I've created myself (you can use online resources I've outlined below as a starting point).

My total expenses are then divided into 3 main sub categories:

1. Bills & Utilities: the costs that you need to pay each month - think your phone bill, rent, electricity, maybe taxes. 
2. Variable Expenses: the costs that fluctuate and vary month to month. These are divided between 5 categories, which are food, transport, shopping, leisure, personal care, gifts/donations, investments & miscellaneous. I'll explain these further later. 
3. Savings: the regular monthly payments to sub accounts for an emergency fund & holiday fund. 

At the end of each week, I record how much I've spent on the following categories, allowing me to track where my money has gone. This is a great way of really understanding what your money habits are and allows you to potentially modify those habits throughout the week, month and even year. In my excel sheet, I also have a pie graph which tracks how much I am spending on the variable expenses. 

I've found that my biggest slice of the spending pie is leisure & transport. This isn't necessarily a bad thing, but rather allows me to be more aware in situations and know my budget for that month. Know what your regular spends are, and evaluate what you're happy and comfortable paying for each month. 

Another slice of my variable expenses pie in 2018 was shopping. A technique that I've used many times to make sure that I am only buying the things I truly need is to think about the item for atleast 1 week before buying it. Often eCommerce shops and retailers will use urgency as a tactic to make a quick sale, speaking to that impulse buyer within us. But very likely, 9 out of 10 times that item you so badly (.. suddenly?) want is actually still in stock, and we've just bought something that we already have in our wardrobe! I personally try to only purchase clothes 2 times a year - summer and winter.

I've also attempted to start getting into investments, but I'll leave discussion for this in perhaps another blog post (I'm still trying to understand it all ... but will keep you updated!)

After telling my close friends about my new journey to financial independence, many of them may have called me out to say I'm a "penny pincher"... to be quite honest I don't mind this phrase because it means that I understand even a single dollar can really translate into a whole lot more down the line. I definitely acknowledge my privilege in having a full time job where I am subsided for food and transport, and for this I am immensely grateful for.

Managing your money can seem daunting from the outside, but it's actually one of the greatest things to start doing if you want to start #adulting (whatever that means). I try to stay close to my roots of rice, cucumber and salt through budgeting, and hope you can too.

As much as I am happy to share my tips with you, here are some more qualified resources that have helped kickstart me on my learning journey 12 months ago: 

• Pennies to Wealth: A blog about an incredible couple who paid off $130,000 in debt. They have also served as the main source of inspiration for my excel sheet 
• Clever Girl Finance: A blog to empower women to achieve their financial goals through personal finance courses, a supportive community and access to trusted experts 
• One Big Happy Life: A family that is consistently trying to budget and maintain their wealth (both the parents are attorneys and they have a side business ... a pretty big income) 
• Hey Berna: A blog about the coolest gal who paid off her $50,000 student loan debt to travel the world after budgeting! She also used to work at IG so we're basically soul sistas in another life! 
• Rich Dad, Poor Dad, written by Robert Kiyosaki and Sharon Lechter:  A book about the importance of financial literacy, financial independence & building wealth 

Also note that all the above resources are ALL from people of colour - don't fall into the stereotype of rich white men being able to spread this great knowledge. It's time to hear more diverse voices, even in the financial world.