August Spending Review

It’s been a while since I’ve given a thorough insight into my spending habits. That’s partially because it’s been a busy year. It’s partially because I got myself into a pretty spendy pattern of behavior. And it’s mainly because I wasn’t tracking my spending.

I was on vacation at the beginning of August and began to feel a bit sick about how little I knew about my spending. I set myself the goal of getting through the month by tracking every cent I spent. The mid-term goal was to use the impetus of that knowledge to begin pursuing a 40% savings program in September, October and November.

The win: I did track every cent I spent. I tried a bunch of apps, but settled on my tried and true ASIC Moneysmart TrackMySpend app. It may not be the prettiest, or the smoothest – in fact, it can be frustratingly clunky and visually quite average, but it is inherently simple to use and that is truly all I could ask for. I’ll save it for another post, but the discipline and learning from tracking my spending really comes from having to individually input each of the items every time I spend (or withholding spending to avoid the shame of inputting an item I didn’t want to show up at the end of the month), and this was the only app I found that met this simple goal with ease.

In the end, August became about two things: tracking every cent I spend, and re-building my sidehustle savings account. I’m proud to say I met both of those goals – and want to display my victory for you in glorious colour!

Behold, my August spending breakdown, in pie form:

August Spending

Man that is pretty. It’s also a very eye-opening insight into my spending habits. The labels don’t capture all slices of the pie (despite my best efforts on Google Sheets), so for full disclosure, fees amounted to 0.6%, Uber 0.3%, parking 0.3%, doctor 1.4% and eating out 1.5%.

I’ve done some personal analysis of these figures:

  • Rent is exceptionally high as we pay rent fortnightly, and August was one of those delightful months where there were three payments instead of two.
  • I love clothes, and my eBay habit has become a little uncontrollable. Although I hadn’t realized quite how much these great deals online were taking up of my monthly spend.
  • Cosmetics is outrageously high this month – thanks to replacing a broken perfume (and my expensive taste), and an exceptionally long layover in Dallas airport resulting in an accidental Mac foundation spree.
  • There’s no fuel spend this month, thanks to mum and dad filling up my car before I arrived home in Perth on the 12th ❤ The very low transport costs are generally due to living in the inner city, and walking to work, a lifestyle for which I am extremely grateful.
  • Event spend incorporated a ticket to a ball, raffle tickets at a quiz night, and tickets to that quiz night. It was a pretty darn fun month. There will need to be much more free fun nights from now on.

Basically what I learned in August is I spend to make myself feel better, and that typically results in me feeling more stressed or just generally worse. I also learned (for the one thousandth time) how much knowledge truly is power – just by being able to see regularly how much I am spending, and how much I don’t need to be spending, is an empowering reminder of my general financial position.

And now, to the more heart-warming statistics: the side hustle. This second half of 2017 is a lucrative time for earning money on the side – I’ve picked up two tutoring students of a weekend. I also have begun teaching at the university, which has given me a new lease on life, and love of the law. Total side hustle earnings were rounded out by a handful of Etsy sales, and cashing out some Swagbucks. In total, my sidehustle increased my total income for August by 11%, which I’m pretty thrilled with. The side hustle bank account is looking healthy again, and I’ve earmarked that money for the long list of wedding extravagances that I spend hours lusting after.

September will be the real test of my ability to commit to some pretty stringent living. I kicked it off in spectacularly inconsistent fashion by going to a ball and doing a wedding hair trial, as well as splurging on a bottle of Veuve to celebrate some huge life milestones of my very dear friends. All of this was fun, fabulous and (mostly) prepared for; but it is a long month, and there are a lot of shiny distractions waiting for me. I anticipate my key stumbling blocks to be eBay (clothing addiction), my 10 year high school reunion (how did that happen??) and a family weekend in Adelaide. In the end, the goal is to save 40% of my salaried income (side hustle is a bonus). Looking forward to updating you next month!

 

 

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April Monthly Challenge: Cash crash diet

April has rolled around. I’ve been dreading it for quite some time, but unsurprisingly, all the dread and fret and worry in the world did not stop time passing, and here we are. The month where my fiance and I have put ourselves into the position of doing long-distance again, for four months until I sneak over for a three week holiday. To distract me from this horrible future, I have set myself a financial monthly challenge, inspired by an article I saw bouncing around the internet recently: I’m going to live on $60 a week, also known as the cash crash diet.

Why am I doing this? There are many reasons, as always.

Solo living is expensive

One necessary outcome of my fiance heading to the United States, and me continuing to rent our apartment, is that there is one less Australian stream of income, and 50% more of living costs to cover. I do not intend skipping any rent payments or missing any bills, and unfortunately my trusty and reliable team account contributor will be making the wrong kind of dollars. So, how I arrange my money is going to take some planning and practice, and the main way I see forward is to start with a very tight belt.

Wedding saving!

I may also have mentioned there is a wedding to pay for in December. We have been fortunate to have very generous parents contributing. However, I’ve been dreaming of this wedding of mine for quite some time, and it is not going to be cheap. Every bit of cash I can squirrel away now results in significantly less stress later.

Learning to be content with less

I often spend to solve my problems. I’m feeling sad – I’ll buy myself a treat. I’m feeling stressed – I’ll buy the latest mindfulness or stress-reduction technique. I’m feeling overwhelmed – I’ll buy new stationery to organise my office. I want to be more stylish – I buy new clothes. None of these steps are necessary or important. In fact, they’re expensive, and are a band-aid over the real issues. This month will be packed with challenging scenarios, and I want to push myself and prove to myself that I am capable of dealing with them, while sticking to the bigger picture.

So this is all very nice. But how will I do it?

Withdraw the cash

Every Monday I’ll withdraw $60 from the ATM on the way to work. Then, when I run out of that $60, that’s it, until the next Monday. This will form a visual reminder of how much I’m able to spend.

Define the bounds of the challenge

This $60 is intended to cover all non-essential or non-budgeted spend for the week. Not included in the $60 is my Netflix, Classpass, Headspace and BBG payments, as well as standard spends such as rent and groceries. I’m also allowing myself a haircut.

Included is takeaway coffee, meals out, treats (including those pesky creme eggs that I can’t seem to resist), entertainment, stationery, clothes, shoes, make-up, skincare (the real test, I desperately want to get a face oil but I don’t need it yet), and any other thing that I don’t absolutely require to get me out of bed and to work, and back again.

Make it possible

I’ve set up a basic notebook where I will write down everything I spend. I’ve also written in that notebook all the things I can do when I feel like spending money. The list is so long: go for a walk, catch up on my Project Life scrapbook, catch up on my 365 daily journalling, write my April letter of the day, practice brush script lettering, go visit my dog, go to the gym, go to a Classpass class, do the ironing, find a new recipe for the week, get on top of wedding planning, deep clean the apartment (I’m ashamed of how badly it needs it), declutter and sell items on eBay, go to the library, read my backlog of paperbacks, do a yoga class on youtube, write an article, write a blog post… seriously I couldn’t write fast enough to keep up with my ideas. It was a fresh reminder of the fact that these ideas exist even when I have cash I think I can burn.

So, wish me luck! Have you ever done a cash crash diet? I’d love to know any tips you have to survive!

Personal finance: Sweating the small stuff

I absolutely adore personal finance blogs. When I’m looking to curl up into a nook of the internet for a few hours, they’re my first port of call; I’m obsessed with reading about tips for saving, frugal living, paying down debt, planning for retirement. Initially I wanted to run a personal finance blog, with my own take on all of these topics.However when planning what I would write, I realised how totally out of my depth I was; I’m a half-assed saver, I live in a magical universe where I have no debt (standard millenial receiving extremely-appreciated support from my family through uni), and I still have zero idea what I want from my life, despite being 2.5 years into a legal career.

Felt even more acutely is my total inability to curb my big-ticket spending. I’ve been reflecting on this a lot lately. I generally stick closely to the standard tenets of a thrifty life, like packing my lunch and healthy snacks during the week, spending my weekends meal prepping, curbing how much I spend on takeaway coffee, not drinking at bars (also read as being a nanna), borrowing books from the library rather than buying them and living in a location where I can walk most places or take free public transport. However these small wins over the course of a week are quickly outweighed by the huge losses of impulse buying.

I also have a personal definition of impulse buying. Rarely is the thing I’m impulse buying not well thought through. Typically I find the product online and obsess about it. I save it to wish lists, and do daily procrastination check-ins on price and availability… or just to look at it. I’ll ponder on it for a month, or more. Obsess, obsess, ponder, and reject. Then one day – boom, buy. So my impulse buying is more obsessive-stalkerish than  My Garmin Fenix is a perfect example of that – I’d been desperately wanting one for 8 months, thinking about it, looking at it online, searching for the best price, and then telling myself it’s an outrageous outlay. Then one day (okay, my birthday, the most dangerous of treat yo’self events), I just decided I was going to buy it. No saving or planning, or sacrificing other things. I just found it for a slightly better price than normal, added it to my basket and pressed ‘buy’. My Amex was debited $660, and I had an absolutely beautiful watch in my hand a few days later. (I don’t regret the purchase at all, but more on that in another post).

Trying to recover $660 from my budget by not buying a $4 coffee or bringing my lunch to work is just impossible. So is the amount I outlayed on participating in a handmade market this past weekend. Or the amount I want to spend on two absolutely beautiful work blouses I found online to replace my very gross ones. Or the amount I need to spend as a bridesmaid in my friend’s upcoming wedding. Or the entry fees to upcoming triathlons I want to participate in. Or the new desk stationery I want to purchase. These are inevitable impulse purchases for me, but ones I know that my day to day behaviour can’t accommodate for.

And that is why I could be a personal finance blogger. I sweat the small stuff, and am wilfully blind to the big. I’m a living and breathing embodiment of the penny-wise pound-foolish philosophy. I battle with the competing desires of embracing a life of less expenses, particularly expenses wasted on things I know I don’t want, and spending on my (very wide) array of hobbies – crochet, running my etsy store, triathlons, fitness/activewear, stunning stationery, and generally keeping up with the latest activity trends.

I’m feeling very reflective on this topic, and I think it’s something that’s worth exploring further. I’m back on board with tracking my fritter expenses, which will provide a great insight into what’s going on and what my triggers are. I’m very confident it’s hobbies, but we’ll see how true that is!

Sidehustling: Babysitting at 25

I’ve shared my foray into sidehustling over the last two months; I’ve netted over $500 in various alternative financial pursuits and learnt so much about taking opportunities as they’re presented to make extra dollars. I’ve done countless online market research surveys, sold all kinds of perplexing junk on eBay, dealt with the pre-pubescent rage of a young kid who hates maths while tutoring and wasted hours clicking through various ‘offers’ online in pursuit of increasing my overall income pie. All these activities have their ups and downs; flexibility is traded for significantly less return, while eBay and etsy attract fees and effort. However, my most hated yet valued side-hustle is babysitting.

The boyf and I are lucky to continue to get ad-hoc babysitting opportunities from our family. Typically this nets us $100 for the night – the kind of income where if you consider amount per hour, you cringe. But it was these $100 nights that gave us opportunities to pay a $1500 holiday in cash in January. Buy a Wii. Get things we couldn’t possibly afford on our unpredictable income. It also saves us money – these babysitting opportunities come up on Friday or Saturday nights. Typically, great nights for spending on takeaway or a bottle of wine, or a night out. 

The way we have learned to realise value from these $100 nights is to stash the cash. We have the ‘Fun Party Jar’ (very over the top name). All our cash jobs fill that jar. Each individual job can feel pointless and annoying. $100 can feel like it’s not remotely worth it. But slowly and steadily, we add to that jar. And it starts to add up. $500. $1000. Enough to make a big difference to our lives. 

To make it bearable involves acknowledging the special time it nets with family. We get the kids outside. We learn a bit about what we’d be like as parents. We shamelessly exploit screens. We make up games and learn the most delicate lessons in dispute resolution. And slowly we add to our wealth and grow our tools at our disposal to build the life we want. 

May Money Round Up

I’m really starting to get into the groove with these money round-ups or spending reports. It’s been a great provider of perspective during those moments of weakness, where I just really want to buy something. And as the data has collated over the months, it becomes more and more interesting to examine trends in my spending. The biggest change has definitely been the almost complete eradication of spending on clothes. And I have noticed a definite general trends towards awareness of waste and how to reduce it – waste of money in buying things I don’t use and waste of time in spending on events I don’t care about because I was pressured in to it.

This money round-up looks at how I spend my $120 weekly pocket money on completely discretionary things. It does not assess our team expenses (groceries, rent, other boring necessities), nor does it track savings. It does however provide a monthly report on my side-hustles, as I continue to pursue and refine the side-hustle experiment.

So without further ado, the May Money Round Up…

Screen Shot 2016-06-01 at 8.05.36 PM

 

It’s far from perfect, seeing as I completely forgot to track a week (what a fool), but there it is…a very inconsistent month.

The best thing I spent money on this month was the $30 on boxing gloves and wraps for my 3-month scoopon to local gym, Box & Bike. It is a unique work-out class that combines 2 minute boxing combinations with 2 minutes on the spin bike. You sweat your face off, and it’s a good chance to reinvigorate yourself if you’re working late, or to end the day by releasing a lot of rage. The other best thing was my Leuchtterm bullet journal, which I’m currently obsessed with filling, and already has brought me much more peace than my previous system.

The worst thing I spent my money on was … well, nothing. Generally I did overspend, but I’m not heartbroken about it, since everything had a purpose. I’ll be subsidising my overspend with my side-hustle income from the market research surveys I’ve participated in. I’m really going to miss that money when it’s gone!

Now onto the much more exciting table – my May side-hustle income:

Screen Shot 2016-06-01 at 8.08.29 PM

This was a really exciting month for my etsy store! I received 13 orders, and made a total of $97.40 in revenue – that figure subtracts the approximate value of fees (which are charged in USD). I don’t think I’ll be able to replicate this month for a while, so I’m holding on to the lessons and excitement while I can. And I was exceptionally thrilled to make my first commissioned crochet baby blanket. My profits were extremely small on this little project, but it was a real thrill to think people actually like my work.

Otherwise I’m continuing to do the occasional survey on Swagbucks and MySurvey, and managed to earn a voucher from each. That’s just about my max limit, as I mentioned last month, as earning points can be really labour intensive if you’re trying to maximise your options, and that significantly reduces your return on investment.

I did make a big move in reducing my side-hustle commitments, and possible income, this month, by winding up my tutoring student. The lack of consistency, the difficult student and the lack of commitment had really started to plague the relationship, and neither of us were getting anything out of it any longer. It was definitely something I should have brought to an end much sooner, but as it was my best return on investment side hustle option ($40 for 45 minutes of work + 15 minutes travel time), it was hard to let that go. However plenty of things matter much more than money: sanity, quiet Sundays and a clean home come to mind. And I’m glad to be constantly assessing my priorities and using the power of no to help me create a life I’m happy with.

June is a really exciting month – it’s my birthday (!!), there’s a long weekend, and I’m heading to Melbourne for a weekend, just to name a few of the highlights. I’m anticipating it will involve quite a lot of spending, especially while I’m in Melbourne, so I’ll be going easy on myself for that, and generally working on reigning it in on the other weeks. I’m moving tracking my spend from various hand-written worksheets to my Bullet Journal, and I’m looking forward to sharing how that goes. The key goal this month will just be consistency: consistency in writing down every dollar I spend and every dollar I earn.

 

 

Accidental Side Benefits

I’ve been tracking my discretionary spending since February – every dollar I spent has been written down and considered and agonised over. It’s been a very rewarding practice in discipline and in attention to detail. I’ve learnt a lot about how quickly money can vanish when you aren’t paying attention, turned into coffee and glitter and blown away. 

While I’ve learnt a lot about what I spend, the most surprising thing is that for once, I succeeded in not buying clothes. I have set goals on countless occasions to stop buying outfits and shoes and accessories, only to be thwarted by my own materialism. I allowed too many flash sales and pushy friends and bored lunch breaks spent window shopping to get in the way of actually exercise some willpower. And so I never did. But this time, with my focus on using my $120 a week on things I truly need or that spark joy, all of a sudden – I have only bought one item of clothing since January. In comparison, I was too scared to even look at my credit card statements (other than to pay them off in full) in 2014, as I always knew I’d spent hundreds more than I could acknowledge ok clothes I didn’t even like that much. This shift says so much to me – that clothes do not, in fact, spark great joy. That there is more to my life than looking a certain way or being a certain way. And that my willpower is much stronger when it is directed to creating a small habit of writing down my spending, than pushing myself to quit something or utterly overhaul my life. 

I continue to track my spending in handwritten A4 sheets, and entering the data weekly in to my spreadsheet. Some weeks still suck – for example, I was right on track last week until an extremely aggravating parking ticket pushed me over the edge by $3.62. And sometimes, the urge to splurge is so overwhelming it hurts. I use a bunch of strategies to stop me in these moments: looking at my savings balance; physically walking away from the temptation for five minutes; looking at my sheet of tracked expenses to remind me what it’ll do to me; just saying no. And slowly it works. 

The best part about tracking my spending is that by the end of the year, I hope I can report back that I have only bought a few more items of clothing. Starting with socks, because if I don’t get a proper pair of socks that actually match soon, my adult status is going to be revoked and that would be a tragedy. 

Visiting a Financial Planner

Okay so I finally did it. I went to a free initial consult with a financial planner. I’ve been trying to get this element of my overall ‘rehaul your financial education!’ gameplan moving for a few months now, but thanks to a lot of bank crap (the Commonwealth Bank truly is the absolute worst), it was proving very difficult. I finally ditched the bank route and struck out to an independent financial planning consultant that I picked thanks to a quick google as to what was near me.

After doing a quick online survey providing some key information about the current status of our finances (read: no debt, a little savings of around $25k), the consultant got in touch and made a lunch time appointment to meet for an initial chat. This initial chat proved to be a weird combination of really interesting and kind of pointless.

I met with a man who spoke very slowly, which oddly and unfairly is a trait that can really irritate me. However, he was very kind, and took everything I said seriously, unlike Commonwealth Bank who considered me to be a complete idiot. We had an awkward handshake and sat in a meeting room, making weird small talk for a little while and I was generally feeling a bit confused about what I’m doing. He then ran through our current financial and life status. Speaking some of the information out loud to a disinterested but expert stranger was surprisingly beneficial, and I learned a lot about the very large gaps in our life goal-setting.

I then had to sit through a powerpoint presentation – a pretty strange process to be honest, since I was the only person in the room. It was a very insightful and useful guide, but in some ways I felt as though I was being talked down to, which is another trait I detest in people. However, the financial planner was a very earnest type; he was direct, and was pretty honest about the fact that we needed to tie this general “we want a financial plan!” to a tangible and emotional goal, such as buying a house, or our imaginary children’s education, or an epic international holiday, and then work backwards from there to setting up various options to match our goals. So I forgave him the talking down, and even believed him when he told me that he knew he wanted to be a financial planner since he was nine years old.

Once we got through the various pieces of the financial puzzle – budget, debt minimisation, wealth growth, wealth protection, tax efficacy and estate planning, we got to the hard stuff. To really formulate a plan we could believe in and commit to, we needed to hammer out our life goals. That would require clearly identifying what we wanted, the associated dollar value and timelines for those things – all topics that we have kind of bounced around without head-on addressing for all kinds of reasons.But these things are extremely doable.

However the big red flag was the quoted $3,000 price tag. I completely understand that the financial planner is an expert, with expert knowledge, and that expert knowledge deserves payment. But it doesn’t necessarily deserve my payment, particularly $3,000 of my money. That is a petrifyingly high amount of money, when our total net worth isn’t even enough to put a deposit on a home.

So, while I’m glad I did it, and I’m glad I met a very nerdy financial planner, we have opted out of the professional route and decided todo the work ourselves. We have a budget, so our focus now is wealth growth. The word ‘wealth’ feels like a bit of a lol, since I relate wealth to legitimately rich people, or people who are much older than I am, and as I am neither rich nor older than I currently am (obvi), I feel no right to be using the word ‘wealth’ in relation to my dollars. However, I suppose the long-term goal is wealth, to whatever dollar or lifestyle value that may be, and there is a lot to be said in using the right words for overwhelming concepts.

I still would recommend taking advantage of the typically free initial consult with a financial planner; there’s a lot to be said for starkly discussing your finances to a non-invested third party, and the accidental insight you get by having to cast a very in-depth spotlight into your financial life. But whether you’re comfortable for paying for an accompanying plan and the work is a different ballgame, and I would prefer the $3,000 in my pocket.