Really proud of myself today

I know its silly but you've got to recognise small victories.

Today I received a renewal for a magazine subscription in the mail...and I ripped it up. Technically I will only save $40 or so per year on the actual subscription however, the amount I will save by not being tempted into unnecessary purchases - priceless!

On another note, I also made my first donation to my emergency fund. I sold a few things on ebay and when the payments came through I transferred $250 to open my new account. Its nice to see something other than a zero dollar balance in there.

So here's my standing so far:

House deposit $10,000
Emergency Fund $250
Holiday Fund $0
Short Term Savings Fund $0

I know that there are a few small numbers up there but it's a start!!

The emergence of the ‘throw-away wardrobe’ and the plague of the ‘lunch-time buy’

A lot of my money-saving, life de-cluttering focus lately has been on my more than abundant wardrobe. I have concentrated on this, not because I am that shallow a person that I think fashion is the be-all and end-all but because I see it as one of my major weaknesses. In the past few months I have whittled down the piles of tops, skirts, dresses, shoes, you name it, to a skeleton of their former selves. I have also been loath to add anything new without first considering whether it:

1. Will fill a gap in my closet, or
2. Should replace an existing item because it is more versatile/of superior quality/more flattering etc.

I still have a running list of things I need to create my perfect wardrobe but despite having less clothes I am, overall, a lot happier with my selections. I find it easier to get dressed because I have less to choose from. I by no means am wearing the same clothes all the time either. Instead, because I have thought things through I have a small selection of clothes that mix and match easily. With the addition of a few select accessories I think I am doing very well. What has amazed me the most is how much happier I am spending less money on fashion. Admittedly, I still spend more than the average person (well I think so anyway), and I am trying to curb this, but now I spend on pieces I know will last me and I know I won’t get sick of and this, in the long run, will save me money.

The emergence of the ‘throw-away wardrobe’

In an age of environmental concern and increased awareness of human rights the thought of buying an item of clothing for $5 or $10 repulses me. These ‘throw-away’ clothes, although temporarily easier on the pocket will, in the long run cost me more. They will cost me more because they will be poorly constructed and fall apart soon, they will ocst me more because they are mass-produced and everyone will be wearing them, they will cost me more because they will be synthetic and make me itch or sweat or not handle themselves in the wash, they will cost me more because they are made in sweatshops in South East Asia that pay no heed to human or environmental rights, they will cost me more because they need to be imported in polluting bulk carriers or by airfreight and they will cost me more because they are more likely to end-up in landfill. In more ways than just the financial, cheap clothes are a lot more expensive.

I was really thrilled a few months back when I stumbled across an article in UK Elle. It talked about the changing attitudes towards sustainable fashion – not just manufacturers who are going organic or designers who opt out of animal-derived materials – but regular people who are reverting back to the old ways and buying fewer but better quality clothes; select pieces that they love and won’t ever throw-away. It reminded me of mum and how when she was a child she would be given her school shoes for Christmas each year. I don’t think I will ever resort to that (though of course my grandparents did it out of necessity rather than miserliness) I do love the idea of buying pieces that are special and that we can treasure rather than the seemingly identical flimsy polyester garments that hang in the majority of fashion chain windows.

But of course, I flipped over a few more pages and there it was- the exact antithesis of sustainable purchasing; a page dedicated to the ‘lunch time buy’.

The plague of the ‘lunch time buy’

In the past two days I have been appalled by the attitude towards thought-less spending promoted by fashion magazines. Yesterday, while I sat in the local café having lunch (my boss pays for our account or otherwise I would bring my own lunch and eat it in the park) I flicked through a copy UK Elle another customer had left behind.* I was so disappointed to see that there is a regular feature entitled ‘Lunch time buys’ (or something to that effect). I’m not really sure what qualifies an item as a ‘lunch time buy’. I thought perhaps it would have to be something cheap that you wouldn’t need to give much though to but rather buy on the spur of the moment as you wandered past on your way to eat. Something like a lip gloss or a new moisturiser. Maybe even a hair accessory or some costume jewellery. Apparently, the readers of this particular mag have a bit more money than I do. Since when is a $1500 bag a ‘lunch time buy’?

I know that technically it would take less than an hour to physically purchase the bag and that, provided you worked in the CDB it would be quite likely you could walk to the store, pick up the item, walk to the counter, swipe your credit card, sign the slip and leave the store with time to spare for a Nori Roll and a Diet Coke but would anyone actually do this? Even if they could afford to? Since when did a $1500 bag become a mindless impulse purchase? Well I guess I just didn’t get the memo because lo and behold last night when I open up my considerably lower-end of the market glossy there was whole fashion spread carrying the moniker of ‘lunch time buys’ and this time it was for cocktail wear! Yes, evidently $600 frocks and $300 shoes, not to mention the jewels and bags to match can all be snapped up on your daily 60 minute break. Even a spend-a-holic like me would at least need two lunch breaks to pull together a complete evening look; one day for trying everything on, overnight to think about it and the next day to go back and buy. Come to think of it, I would then need a third day to actually sit and eat the two lunches I have missed.

Now of course, this article was also matched with an editor’s letter that praised the delights of shopping over the internet and boasted of a whole web-based shopping feature inside. Now I have nothing against shopping on the internet. I have extolled the virtues of getting your groceries online and I have been known to snap up pieces from my favourite Parisian designer (not available in Australia) from an online boutique located in Brooklyn, NY. I also have a much loved silk scarf from the UK and firmly believe that you just can’t beat the prices for Marc Jacobs when the US department stores have their sales. But ‘hard to find’ or ‘sale you won’t believe’ was not what this editor was pushing. The idea of the feature was that internet shopping made shopping in general easier and faster and yes, more thoughtless. And I think this is the saddest part of all. In an article entitled The Building Blocks of Wealth Barbara Drury explores the ways in which the modern home can save money. One of her comments is that kids these days have little concept of the finite quality of their parents' money. Why? Because when you use a credit card you always have it handed back to you. Unlike cash, where you either get less or nothing back with the plastic all you do is sign (or enter a PIN these days) and off you walk with your purchase. No harm done.

Much has been said about the fact that people who use EFTPOS or credit cards don't feel like they have spent as much as those who have had to actually hand over cash and see the amount in their purses shrink. When I use my credit card while shopping I atleast have heavy bags to give me an appreciation of how much I have spent. I can go home and look at my new purchases and feel a sense of satisfaction. With internet purchases I can have completely forgotten about them by the time they arrive. As far as I am concerned, for me, and probably for anyone with a penchant to overspend, the internet just doesn't have the same 'handbreak' mechanism of shopping with cash or physically carrying purchases. And that's the most dangerous thing of all. How are we ever going to curb our spending when we do everything possible to reduce the shopping experience and remove all those triggers that would normally tell us to stop?

*Just a side note but I think this is a great idea. I have often left barely read magazines on trains in the hopes that someone who doesn’t usually splurge on them will get a bit of joy from my leftovers. I have also recently taken to listing my old mags for free on a fashion forum and then mailing them on to someone else.

Momemtary Magazine Induced Lunacy (and my avoidance of it)

I have been thinking a lot about spending habits recently. My own spending habits have, in the past, been appalling. Even yesterday I found myself seriously considering making stupid spending decisions. Here’s how it happened…

When I got home from work to my delight my favourite magazine was sitting on the coffee table waiting for me (I have given up buying magazines but for this one I already have a subscription). I quickly cooked, ate and cleaned-up after dinner, made myself a cup of tea and settled down on the lounge to enjoy it. As we are just half way through winter here in Oz the summer clothes are beginning to trickle into the pages of the fashion monthlies and the light breezy dresses and delicately strapped, glimmering heels make you begin to despise the dull greys and blacks of your dreary winter wardrobe.

My fashion addiction/philosophy and the improvements I’ve made

Now let me just pause here for a minute. I should note that I am an avid fashion follower and if I were to completely give it up I would be unhappy. I definitely know my obsession is expensive and should be cut back on but if I completely disregarded all fashion or just bought cheap clothes all the time I would feel miserable and probably a lot less confident. I’m a believer in spending money on good quality items that will last but I admit that I fall prey to expensive ‘trend’ items too and this is definitely where I could improve.

Over the past few years I have become a lot better, my wardrobe now contains about ¼ of the number of items it used to, I don’t spend a ¼ of the amount I used to though, however, on a cost per wear basis (which I think is the most important) I am definitely coming out on top. I used to be the type of person who couldn’t be seen in the same thing twice. I went out at night a lot (especially before I met my husband) and I had to dress fashionably for work (rather than my boring suit and shirt ensembles these days). I worked in event styling so there was an expectation for me to look good. I also am one of five sisters (the youngest in fact) and so talking about clothes and going shopping was a regular occurrence at my house.

These days I am a lot more methodical and thoughtful in my purchasing habits. My strategy is to make lists of what I have, need and want. I divide clothes into categories so I know that if I have 5 pairs of jeans I probably don’t need any more but if I have only one cardigan I could probably get another. What I have become really good at is paying attention to the types of clothes I wear. For example, I used to buy a lot of summery silk and satin camisoles with shoe-string straps. These were ‘going out’ clothes. I had a tonne. I loved to buy them; they were just as pretty as a dress but cheaper and there were always a million in the stores all year round. Problem was; I never wore them. When I got dressed to go out I would put one on. I would try it with a skirt but all my skirts were either patterned (so clashed) or too corporate looking. The proportions were always wrong or I would be trying to combine pastels with black. It just didn’t work. I would then move onto jeans but I hate wearing jeans when I am trying to get dressed up – I always wear jeans so it wasn’t really dressing up at all. Black pants were boring and shorts seemed too casual. That didn’t really leave many options. So the camisole would be flung on the floor and I would slip into something tried and true like a dress.

Living in uniform

Now I have decided that there are certain types of clothes I wear; uniforms almost. In summer I have 3 casual uniforms:

1. bikini, denim shorts and a plain tee or tank with rubber thongs
2. khaki tailored shorts and a loose cotton or silk blouse with jewelled sandals, and
3. cotton or silk above-the-knee length dresses with jewelled sandals

In the cooler weather these don’t really change except that

1. I swap my shorts for skinny jeans and thongs for ballet flats
2. I throw on either a cardigan or a cropped blazer (more dressy)
3. I layer finely knit wool tops underneath and scarfs on top

With finely-knit wool tops and opaque tights under my dresses and the addition of flat knee-high boots I can wear my summer dresses all year round. When I am going to somewhere more dressy I tend to wear the same type of thing every time (a silk dress) and mix and match between wedges (if I know I’ll be standing a long time), heels (if I’ll be sitting) or jewelled thongs (if it’s a bit more casual and summery). If its cold I have a cropped leather jacket I throw on top. I tend to use the same metallic clutch every time and switch around statement earrings depending on the dress and my mood.

So my wardrobe (apart from work stuff) basically consists of:

• shorts (4)
• plain cotton tanks and tee mostly in white/cream/grey/black/navy (10+/-)
• light weight cotton and silk short sleeve blouses (5)
• dresses made from either silk or cotton (5)
• cardigans (3)
• cropped blazers and jackets (3)
• skinny jeans (4)
• ballet flats (4)
• flat knee-high boots (2)
• jewelled metallic and rubber thongs (2)
• wedges (2)
• heels (10)

Knowing this, and knowing what was on its way to the charity bin (some of my jeans and shorts and both of my thongs) a few weeks ago I made a plan of attack for summer. When the Spring/Summer shows were on in Sydney I gleefully checked them all out on the net and made a short list of the things that were ‘must haves’ and that slotted into my categories. I don’t mind paying a bit more for a few designer pieces that I know not everyone will have. This year the list consisted of:

1. a white Lee Matthews blouse with lace trim,
2. a Thurley dress and blouse, and
3. one or two bikinis from Club Bondi Swim.

If I had limitless funds I would have added a Kate Sylvester blazer and an Akira dress but I am trying to be very conservative.

I also knew that there were a few ‘basics’ that I needed to pickup that were either replacements for garments that I lived in last summer but have seen their use-by date or were, after very careful consideration, severely lacking from my repertoire last year. Basically, this list was things I will ‘live’ in. These included:

• some above the knee khaki tailored shorts (I have my eye on some from Fleur Wood)
• plain white t-shirts (possibly Bassike)
• a few tanks (these can be cheap ones from Bonds)
• a pair of rubber thongs (probably Havaianas slims in gunmetal grey)
• some dressy flat sandals (I have worn my NineWest ones for two and a half years and the soles nearly have holes in them), and
• a pair of pale blue skinny jeans (I’d love Ksubi but may opt for something cheaper).

These items will all work back with what I already own and, if I got them all, I wouldn’t ‘need’ anything else all summer, apart from sunglasses, which I plan on asking my family to donate towards for my Christmas present (I’m lusting after either Chanel or Tom Ford hence the need for donations). If I were to splurge on anything else it would be a silk slip dress from Bulb by Julie Lantry that I have been eyeing for 2 months now (this is actually quite a record for me and, you may thinks its sad, but I am very proud of myself for not having bought it yet) or some Dinosaur Designs resin bangles (maybe a pressie from the hubby?). The bangles don’t really fit into my list though. I don’t usually wear anything on my wrist apart from a watch. In fact I don’t really wear jewellery unless I am going to work (some stud earrings and either a locket on a gold chain or a pearl on a silver one – both gifts from my husband) or dangly earrings when I get dressed up. So maybe they should be struck off the list. However, I have decided that if I am restricting myself to wearing plain shorts with plain tops a lot this summer having a few bangles would make it a little more exciting and it wouldn’t matter if I wore them everyday because you can do that with jewellery. So they are staying on my splurge list.

Momentary Lunacy

But back to the magazine. As I flicked through I began to want more and more. There was the Lara Bohinc rose gold clutch (I could do with a new metallic clutch and rose gold is my favourite and suits my skin tone and matches my favourite earrings but it is $1500 although if I shipped it from England it would only be $750), the Country Road short sleeve trench (I have lived in my Country Road long sleeve trench for two winters now and it would be so handy and the colour is my favourite shade of stormy blue but then how practical is it to have a heavy-by-Australian-standards coat just for summer though it’s a good price for a coat so maybe I could justify it) and the Wayne Cooper cocktail frock (I’m young and have lots of friends who could possibly announce their engagement anytime so I need another dress because everyone has seen my other dressy dresses and there will be an engagement party and then a wedding so that is two dresses, oh wait, there was a great Seduce one on the last page as well). Yes, I kid you not; this is how my mind works. I mentally prepared a list of all the things I now ‘needed’ for summer. Let me tell you, it was not short. In fact, when I realised this I scrapped my old (sensible) list and started a new one.

I thought, in my magazine-induced rush that I was being responsible. I thought that by making a list I would weed out what was non-essential and then, be able to tot up how much all this would cost me and, safely in the knowledge I was being fiscally responsible, determine how much I needed to set aside each week from now until these must haves started appearing in stores. But when I added up all the prices of my new ‘needs’ I discovered that by the end of summer I would be about $6500 out of pocket. And it wouldn’t stop there, I already knew there were things that I couldn’t afford now but needed this winter that I was definitely purchasing early in the season next year. So even if I was to spend $6500 (which I wouldn’t/couldn’t) it still would not be over because there would be a new season in just six months and a whole new list of ‘needs’.

Magazine = Devil

So what’s my point? Well, here’s the thing. At about 11pm last night I got up and took my dog outside for some fresh air. I had been pouring over a magazine and my ‘list’ for a few hours now and had begun to get really caught up in the whole process. Despite the fact that I had spent the last week blogging about my personal finances, setting up targeted savings accounts, tracking my spending and reading ‘Affluenza’ I was still falling back into my old habits of want, want, want. And all because of 200 or so pages of glossy pictures and pretty women that had found its way to my coffee table. I am intelligent woman – how can this have happened? Well, my only answer is that fashion magazines are evil. I love them, but they are bad for me. And just like cigarettes, alcohol or anything else you can get addicted to I need to cut them out of my life…Cold Turkey. So tonight, rather than going home and reading that magazine again, and again the night after and again the night after that (like I would normally do until I buy a new one) I am going home to throw it out. I’ve flicked through it once, had a look at the pretty pictures and now I’m saying goodbye.

And my list? I’m not adding anything to it. Hell, I might even take a few things off.

How to save money by using your credit card

I know that really you should steer clear from owning a credit card at all but I have made a educated decision to keep one – not for “emergencies” or because I “earn” points. These were my previous justifications, hell it only took spending $3900 to get a ‘free’ $25 gift voucher at my favourite department store.

I have recently cut up one credit card and I am keeping the other one to save me money! I have worked out that by doing all of our grocery shopping online I will be able to save quite a lot of money. Now of course, this will only work if you are as useless as I am when it comes to grocery shopping sensibly.

The thing is, the second I step foot in a grocery store I spend $50. I will run in to buy milk and bananas and poof! $50 is gone. I don’t know how this happens. Seriously, I honestly can’t work it out. Now, when I do the weekly or fortnightly ‘big’ shop I will spend anywhere between $250 and $350. This is for only two people. Admittedly, I like to buy nice food. I try to buy organic though sometimes I baulk at the price of organic meat. I tend to buy branded cleaning products too. I don’t really buy snack foods just basics like rice and pasta, fresh fruit and veg, cheese, yoghurt and milk. Add in the odd spice or two and maybe some orange juice. There will of course usually be a block of chocolate in there too. If my husband comes there will be corn chips, salsa, pretzels, cashews, flavoured water and some sort of mystery fruit he has never seen before and just has to have. If I am in a good mood the odd dog treat will be thrown in as well.

I will have all this and still throughout the week I will discover that there is something essential missing. I will run up to the local (and expensive) supermarket and poof! goes my $50. Meanwhile, vegetables will languish in the crisper unused until I remember them and, discovering they have gone limp or worse, mouldy, I throw them out. There goes my $4 organic corn.

So I am switching to online grocery shopping. Not only do I plan on saving money, I plan on saving time too. Here’s the plan…

1. Cut the crap
I am going to go through my cupboards. I am going to take out any of those stir-fry marinade sachets I had forgot were there. I am going to take out that packet of chickpeas I thought I would one day have the foresight to soak overnight so they would be ready to use the next day. I am going to take out all those things that aren’t regularly used basics (flour, yeast, pasta, rice, canned tomatoes, tomato paste, soy sauce etc) and I’m going to use them. My cupboards will now be filled only with the above-mentioned basics.

2. Stocktake
I am going to write down everything I use regularly. I am going to be particularly nerdy and print this list and keep it somewhere in the kitchen. When I run out something I will mark the list. This won’t just be for food. It will be for toiletries (shampoo, soap, toothpaste etc) and cleaning goods (dish washing, clothes washing and surface cleaning). I am also going to take note of the non-basics we use regularly. These are things we probably won’t have to buy every shop, one because you can stock up when they’re on sale as they don’t go bad and two, because we just don’t thought them as fast as we go through other foods.

3. Create an everyday list
I know that everyday we both like to have a banana and two other pieces of fruit. I know that every week we go through about 2 litres of skim milk, two litres of soy milk and 6 tubs of yoghurt. We have a loaf of bread every fortnight or so.

4. Plan menus
I’m not going to be too pedantic with this. We won’t stick to it. We will go visit my parents and stay for dinner. We will get invited over to a friend’s house or on a Saturday night we will just feel like going out for dinner ourselves. But I do want to know that if I buy groceries I at least have the ingredients for 10 meals (I plan to do the shopping once a fortnight and we often just eat leftovers). So if I were to write spaghetti Bolognese I would know that I have pasta and canned tomatoes in the cupboard. I would just need to write mince, carrots, onion and side salad. Now if I’m getting onions, carrots and some salad I might as well make some other meals that week that need those things.

5. Go shopping
So then I go online. And this is the best part. I tried it the other weekend and it literally took me 20 minutes to get all my shopping done. Normally I wouldn’t have even parked the car yet 20 minutes after leaving the house for a shopping trip. I have my list in front of me and I can go methodically through, typing each item into the search bar and then picking which is the cheapest or my preferred brand (the unit pricing is particularly helpful).

Online shopping costs me $9.95 in delivery fees but the savings are well worth it. I figure that I save in numerous ways including:
- There are no petrol or parking fees
- I don’t enter a shopping centre so there’s no temptation to also stop in at the shoe store or grab a takeaway coffee
- I don’t wander aisles being tempted by sale merchandise or impulse buys
- I can look at all options for a particular food and work out which is the cheapest easily
- If I’m not sure if I’m out of something I can just walk to the cupboard (or look at my inventory) and check rather buying something I already have plenty of and letting it go to waste
- Since all meals are planned nothing goes to waste (well, that’s the plan anyway)
- I also save a few hours of my time and, if you have ever been to my shopping centre on a weekend you will know, I am also saving my sanity

Who knew a credit card could be so good for your health?

Are women really that irrational?

Today I wanted to share a great post from one of my favourite PF blogs – I Will Teach You to Be Rich. It’s about the different way magazines approach personal finance and namely, the differences tend to run along gender lines. In a nut-shell Nina Smith from Queercents discovers that women tend to be talked down to when it comes to personal finance while men get given ‘real’ financial advice. Things aren’t sugar-coated in periodicals that have a high percentage of male readership where as women’s magazines focus on ‘the basics’ and make assumptions that women are starting in a poor financial position and should be ‘investing’ by cutting the grocery bill or starting an emergency fund.

I know personally that I am no idiot. I know exactly what I need to do in order to be financially secure. There is a difference however, between knowing and doing. It is the same principle as weight-loss. I think it fair to say that most people who want to lose weight know how to do it, it’s simple right – you have to consume less calories than you expend. But that’s just it; it’s not simple. It’s hard to deprive yourself of things you want. It’s hard to motivate yourself to exercise when you don’t want to. And what’s worse, when people fail they feel bad about it and when they feel bad food is their comfort.

In personal finance it is easy to avoid debt and to save. It is as easy as living within your means. All you have to do is spend less than you earn. Yet, for millions of people this is not simple at all. True, for some it is because they just don’t earn enough to make ends meet even when they do live frugally. For many, I would even venture to say for most, this is not the case. The problem is not that they don’t know what to do; it is just that they don’t want to do it – not really. I could easily have tens of thousands saved by now. I have worked full-time in ok paying jobs since I left high-school (7 years ago). Even while studying law I worked 9-5 everyday. I didn’t have many expenses; in fact for a while I didn’t even have to pay rent. But somehow I managed to spend the lot. To be fair I have traveled a fair amount and I think that was definitely worth it. I also think that being young is about having fun with your friends and not about sitting at home watching your pennies pile high. But even taking into account a yearly overseas trip and a night out with the girls once or twice a week I should have a lot more saved.

The problem is I don’t always make rational decisions. I know that someone on my salary can’t afford to wear the same brands as celebrities making millions of dollars. But that doesn’t stop me wanting to. I also know that it is cheaper to eat in or take my lunch to work but that doesn’t mean I’m always going to. My husband on the other hand is completely and utterly rational. In fact, he can’t even comprehend how someone allows themselves to get into debt. After talking about it last night he laughed at the idea that people tie their emotions to their money, in fact I believe his exact words were ‘money isn’t emotional; its math’.

Although, I don’t think I would ever let myself go into debt,* I can see how easy it is for others. I have been tempted to put things on credit or get a car loan in the past when I knew it wasn’t the most sensible option. I stopped myself, but I was tempted; very tempted. And now I am in a position where I have very little of what I could have possibly saved/invested sitting in a high interest bank account.

I don’t know if it is a coincidence that I, with my money weaknesses, am a woman, and my husband, with his 100% rational thinking, is a man. In my parents case I would say that my mother is probably the thriftier of the two but I don’t know if that means she is more rational. I definitely know men who have been very stupid with their money and I know women who have been very smart. So I don’t think it is as simple as saying that men are better with money and so women need their hands-held as they are taken through the PF process step-by-step.

For me, it is a bit of a ‘chicken or the egg?’ scenario. I don’t believe that there is something inherent in a woman that makes her a poor manager of money so I wonder why women are treated as though they are a little clueless financially. Are articles aimed at women written from a ‘start at the bottom’ perspective because women are at the bottom or do women feel that its ok to be at the bottom because these articles reinforce that other women are and hence, if other women are its ok if the reader is too?

I think it’s important to remember where these female-friendly articles are in the first place. As an avid (well formerly-avid now) reader of women’s magazines I can tell you one thing for free – each page is usually a thinly veiled advertisement. And guess what, no one, not even banks, are advertising the virtues of saving money. So wouldn’t articles that actually encourage women to be responsible with their money actually be bad for the magazine? If I read an article on how much money I could be making by investing in this or adding that to my portfolio I am going to start thinking twice about spending a month’s (or more!) salary on the latest ‘IT’ bag. And, if I am in a financially secure position and therefore, not suffering any of the stress related to debt I am going to feel a whole lot better about myself aren’t I? So why would I want to know about that new fat melting laser treatment or even the latest perfume that will make him fall in love with me.

For me, the fact is that women and men are treated differently because of the expectations society puts on them. My husband said to me not long ago ‘you know Liz, the difference between you and I is that when you get dressed you try to look as good as possible; when I get dressed I just try not to look bad.’ Although with the metrosexualisation of men I think this is beginning to change the fact remains that traditionally women are meant to look better than men. Older men are congratulated for snagging young attractive women – their financial status doesn’t matter because the man can provide for them both. Women try to catch themselves a wealthy husband and so looking good is an investment. Hundreds of dollars on hair, clothes and make-up could earn them a life-time of financial security, seems like a good investment to me. Of course, this isn’t true for everyone. As mentioned above, things are changing (helped along by the higher rate of tertiary educated women for a start). In my case I did marry a man 9 years my senior but I didn’t do it for financial security. In fact, in the next couple of years I should begin to out-earn him. And he’s just fine with that.


*I should clarify that when I say debt I mean bad debt, I think a mortgage is good debt (so long as you can afford to repay it) because if you are buying smart you house should always appreciate. A HELP loan is a good debt because without it I could never earn what I will earn as a solicitor. A car loan, especially for a new car is bad debt. There's just no way you're going to get that money back. A credit card that is accumulating interest is bad debt, no explanaination necessary. A purchase plan for new furniture/appliances etc is a bad debt- it will never be cheaper than paying upfront and once again, those items will never be worth more than they are on the day you bought them.

Minor measures to start me off

It has been four days since I started blogging about my PF goals and I want to share a few little triumphs I have had.

1. I have cut up my credit card
I have two so I guess this isn’t the greatest triumph but I just decided that there was zero need for two. One was just sitting there tempting me. So it got the chop.

I do have reason for keeping the other one which I’m going to detail in a later post (it is going to save me money… no seriously).

2. I have given up magazines
This is a big one for me. I spend hundreds a year (possibly more) on magazines (fashion, food, gossip, home and travel). So I have decided that apart from the subscriptions I already have (paid in full so they can’t be cancelled) I will no longer be buying magazines. I have even listed the ones I already have on a fashion forum so that I can send them to anyone who wants them, this way I don’t have to feel bad about throwing the pile in the recycling bin.

I buy so many magazines because I like to flip through them at night while my husband and I sit and watch TV. But since I will be starting my Masters soon I figure I won't have as much time for that. Plus, if I don't see sll the new things I could buy I won't want them, right? I have started raeding books at night instead of magazines and this is proving much more educational.

3. I have created targeted account
It takes a few days to create each account but so far I have one for each of the following:
Everyday- this is where mine and my husband’s pay gets deposited. It also has keycard access.

1. House Deposit- it currently has a balance of $10,000 and I will deposit $500 a week into it. It is fee-free and has an interest rate of 7.00%.
2. Emergency Fund- unfortunately this is a zero balance account now. But I will be devoting some recent profits from eBay to it soon and after that there will regular deposit until I reach my $10,000 goal. It is fee-free and has an interest rate of 7.00%.
3. Expenses and Bills- this account is my old one from before hubby and I got a joint account. For some reason I have kept it even though it costs me $4 a month. I’ve decided to keep it because it allows me to have as many fee-free high interest linked accounts as I want whereas the ‘Everyday’ joint account does not. My plans for this account will be revealed in an upcoming post.
4. Holiday Fund & Short Term Savings- the bank has been a bit slow in opening these but fingers crossed I will see them soon.

What to do on a lazy Saturday

I have a completely free day today. My husband is away and I have no jobs that need to be done. Normally I would go shopping. Shopping would fill the void of nothing to do and no one to do it with. I would wander aimlessly through I giant shopping centre. I woudl look at clothes- though I have plenty in my wardrobe I don't wear. I would look at books - though I have plenty on my bookshelf I haven't read. I would look at jewellery, make-up and homewares, trying to find something I need so that I can buy it and feel happy.

So instead I spent the morning doing housework. Not the weekly chores like vacuuming, cleaning th ekitchen and washing clothes but extra housework like cleaning out the spare room and sweeping the backyard. Then I went for a walk with my dog and we sat in the park and she ran and played and I read Affluenza by Clive Hamilton & Richard Denniss. I will be reviewing it when I'm finished but so far it is making me hate advertising and cringe at the thought of shopping, so I guess it is doing me the world of good.

I do have to do some shopping this afternoon as I want to make a roast dinner for my hubby tonight (he has been away for two weeks) and I need some vegetables. But I will be writing a list before I go and will only buy what is on the list. And on the way I will be dropping 3 big bags of stuff into the charity bin. So I'm feeling pretty good about my de-cluttering.

Not Buying It

Since I am focussing on money this week I thought I would share a great book with you - 'Not Buying It' by Judith Levine. As the name suggest Judith set out on a quest to not buy anything - for a year. Now not buying anything (apart from necessary groceries and in Levine's case, renovation materials) may seem a little drastic but when you think about it, if you were to be locked in your house right now for a whole year all you would really need to be supplied with in order to survive would be fresh food and water. To make things a bit more comfortable you would also need a few toiletries. But other than that everything else is superfluous.

Now for me, and I'm guessing for most people, this would prove very difficult. It was for Judith too (and yes, she cheats a little). But the point of the book (or at least what I took from it) was that when it comes down to it, we do not buy out of necessity, rather, we buy out of habit. In a lot of cases the vast majority of what we buy we do not need or really even want. We buy because someone (advertisersing agencies, celebrities, the Joneses) tells us to. I know myself that I can walk into a shopping centre not wanting anything and yet as I wander past the shop windows I will begin to think to myself 'yes, I really could do with some new black heels- just like those ones there. And look they're on sale. I should get some now while they are cheap. That way I'll be saving money'. Believe it or not, this is how my brain works. I do not need new black heels. Yet, within about 15 seconds I will have gone from not needign something, to wanting it, to convincing myself I need it to justifying a purchase by saying it will actually save me money. I would now be about $150 poorer. I would now feel a bit of a high. But it would be temporary. And it would not fulfil me, it would make me feel guitly for spending , in the end it would make me feel depressed.

This cyclic reaction - temporary high, financial guilt, depression is exactly what the marketers want us to feel. Because once we are back to depressed we want that high again and the easiest way to get it? - Buy something!

I don't think not buying anything for a year would be a good solution for me. Drastic changes would be more likely to make me rebel or crash and burn. But, I do plan on instituting a less stringent vesion of Levine's plan. I'm going to stop buying things on impulse. As far as shopping goes, here are my new rules:

1. When it comes to groceries and toiletries, make a list.
2. When it comes to impulses, just say 'no'.
3. When it comes to "needs/wants", wait.

I think there is still a place for buying things we don't really need - i.e. 'wants'. Things like books, clothing and entertainment items are all important for our happiness. They enhance our lives in other ways by educating us and expanding our mind, making us feel confident, beautiful or professional and allowing us to socialise. All these things make us happier. But they could definitely be cut back on. Books can always be re-read, swapped between friends or borrowed from the library. You can always wear last season's clothes or not buy 'trend' pieces from the start but classic well-made items that will last for years. Catching up with friends or family can be cheaper too. Picnics in the park are free. You don't have to eat out- you could always eat in. Livign frugally or simply is the answer. And simple, frugal living is one of my long-term goals.

The plan...

As I mentioned in my last post I am not in any debt (or at least debt that is accumulating interest*). Apart from my credit card bills that will be due in a few weeks I do not have any where that I need to put money before saving it. So far, I am in pretty good shape.

But I do have a lot of weaknesses - most of these centre around my wardrobe. I find it very easy to spend money really fast without even realising. And it is just so easy to put new purchases on my credit card and worry about where the money will come from later. At the end of the month it is usually what ever is left over in our everyday account that pays for my expensive/excessive taste. This is the money I am supposed to put into savings. So you see my problem.

After doing some research I have decided that a goal is the first step. Unlike most of the PF blogs from the US that I read I don't have worry so much about saving for retirement (employers in Australia automatically contribute 9% of your income to your retirement fund- called superannuation) so my number one concern is buying a home. After that, I would also like an emergency fund, a holiday fund and a short term savings fund. So my major money goals (for the end of 2009) are as follows:

1. $50,000 house deposit
2. $10,000 emergency fund
3. $ 5,000 holiday savings
4. $ 2,000 short term savings

This may seem really ambitious but I want to push myself. Plus, I think I can do it.

In order to achieve this I am implementing a few things I have learnt from GRS (most of which are quite standard among PF literature and none of which are ground breaking). They are:

1. Pay yourself first
2. Ditch the credit
3. Track every penny, and
4. Target your savings

Pay yourself first

My savings account should not be added to on the odd occasion that there is money to spare at the end of the month. It should be the first priority. Well, maybe after paying the rent.
I have worked out that with my current savings of $10,000 in a high interest (7.00%) account it will take $2100 a month to get to $50,000 by December 2009. That's over $500 a week! But I am determined. So each week, before anything else, I will be transferring $500 into the savings account. Then I will pay the bills. Then I will allocate discretionary weekly spending money for my husband and I and hopefully at the end of the week there will be a little left over for the other savings goals.

Ditch the credit

My credit card is my best friend. It is also my worst enemy. Every month I almost max out two credit cards. Now calm down, firstly, they have relatively low limits ($2,000 and $3,000 respectively). Secondly, everything goes on these cards- groceries, petrol, bills, etc. Thirdly, I pay them off in full before the due date every month. I do not pay any interest. So far, I actually think I am doing ok. I know a lot of people who are in worse shape. Still, I know they are my weakness and they stop me from realising the real status of my finances. So I will be putting a stop to them for everything but necessary online purchases.

Track every penny

This is exactly as it sounds. But be warned, it may seem like a no-brainer but in practice it is tough. You forget so many things, well at least I do. It's so easy to forget the cup of tea on the way to work, the chewing gum at the newsagency, the milk on the way home and the list goes on.

Target your savings

I mentioned above what my savings goals were. Working out what you want to achieve is step one. Then you have to save for them. For many people (like my husband) they can throw everything into the one account and still have it mentally allocated to specific purposes. They will know when they have enough for their short term goal or when their emergency fund is adequate.

I am not one of these people.

I am a box person.

I like things to be seperated.

I like things to be uncluttered.

I like things to be clearly marked.

Commonwealth NetBank is my new best friend (sorry Visa, it was fun while it lasted).

* For any non-Aussies reading- my University fees were paid using HELP. This is an interest free loan from the federal Government. You are not charged any interest however the amount owed is indexed annually according to the Consumer Price Index (about 2-3% each year). Once you reach a certain income level a small percentage of your income is taken automatically each week by the tax office until the loan is paid off – if you never earn enough to pay off the loan then it just never gets paid off. My current loan is about $35,000 (two degrees – Politics and Law). You can make voluntary repayments at any time to receive 10% off.

Money, Money, Money

Since I am currently a little obsessed with personal finance (PF) blogs I thought I would start my little makeover there. So here’s my problem…..

I’m a spender. I can’t help it. I try to not spend money. I say to myself ‘you’re saving for a house/holiday/anything’ but I just can’t resist. When I walk past something I like all rational thoughts disappear and I completely forget that I’d like to move out of my 125 year old freezing- cold, dark, gloomy terrace and into something that I own.

On the upside, apart from HECS (which doesn’t really count… does it?), I have no debt. Despite my penchant for pretty things I do manage to pay the good ol’ Visa off every month (and the MasterCard too). Admittedly, this is often at the expense of my savings account. It is also often at the expense of my wardrobe (thank you eBay).

There are three things that really get me down about this:

1. My husband is a saver. He hardly buys anything that he doesn’t need. He is the type of person who can go a whole year without purchasing any new clothes/shoes/books/CDs, in fact, if it isn’t food, alcohol or an internet bill he can pretty much live without it.
2. All the stuff I buy doesn’t really make me feel very happy. I think it will when I buy it. I think to myself that I can’t possibly be happy unless I own Christian Louboutin shoes or a Miu Miu handbag but in truth, I could be very happy without these things (the perfectly unworn condition of my Christian Louboutin’s will attest to this).
3. I feel much happier when I see my savings account growing, when I think of buying a house or taking a year off work to travel or being able to start a family in a few years and know that we could be comfortable on one income for a while.

I’ve read a lot about how being in debt can be incredibly stressful (in fact, after sex, money is the number one things couples fight about) and I know that although I am not in debt (in fact after emptying our savings in January for our wedding/honeymoon my hubby and I are back to $10,000 in savings) money still worries me….daily. I really hope that by taking a few minor steps and making my self a lot more conscious of my spending I will be able to turn things around a little. So here we go!

Me? A blogger?

I’ve never been a particularly huge fan of Blogs – they seem a little too akin to reality TV for my liking. But the other day I stumbled on a few I really like (my current favourite is Get Rich Slowly) and have become hooked ever since.

Before reading GRS I had only a passing interest in personal finance. To be honest I am one of those pay-check to pay-check type people. Saving is a low priority and whatever is left in my bank account at the end of the month usually goes towards my credit card bill to pay a series of impulse purchases (mostly clothes and accessories but also a few dinners out and other random purchases).

Over the past couple of months I have had a growing dissatisfaction with the way my life is going. Don’t get me wrong; on the most part I am very happy. I’m recently married, have a job that is pretty good (I graduated at the end of last year so still finding my feet career-wise) and no real cause for complaint. But there is just a constant niggling feeling that things could be better. You know how it is – you can always be richer, thinner… happier. The thing is though; I wasn’t actually doing anything to make these things happen.

And so I have decided to start my own Blog. Probably, no one else will be interested but it’s just my way of putting down what I want to do and how I’m going to do it on paper (or at least on computer screen). For some strange reason I feel like if I put in out there then I’m making more of a commitment to change.

Anyway, we’ll see how I go.