First Published in Onya Magazine on August 26th 2010

“I have just quit my job. My steady, stable, well paid, close to home, flexible, source of main income, job. And I don’t have a job to go to.

I’ll pause here while you decide what to say. Do you cringe inside, smile and say, ‘Wow, that’s really brave!’ Or maybe I sense that hint of ‘Oh my god, what have you done?!’ Perhaps you know me well and your first reaction is to say ‘Congratulations!’

So, now that you have decided how you feel about my life changing decision, I have one question to ask you before I tell my story. Would you do it? Would you quit your job, with no job to go to, when you still have a mortgage, and rent, and bills and unexpected expenses? Think about that now, then assess it again after you finish reading. I wonder if you will feel the same way.”

Click here to read the full article in Onya Magazine

I am your classic paycheck to paycheck kind of gal who adds things up in her head as she goes. The problem is the little things (otherwise known as crap I could live without) add up to be much more than I expect. My other serious financial faux paus is that I have NEVER saved. Not ever. I approach putting away money for holidays or large upcoming expenses, like I did with my studies in high school – I cram at the last minute.

It might have something to do with my adverse reaction to words such as frugal, stingy, shares and b-b-b-b-udget. The mere mention of them make me feel ill … excuse me, just a moment, I may just have to take an asprin and have a little lay down.

However, unless I overhaul my finances, I will never summer in a chateau in Provence or live in the swanky apartment of my dreams. I’m not talking about following the dow jones or all ordinaries on a daily basis, I’m talking good old fashioned money management, so that I can pay my bills with ease and actually have more money to spend on things I really want. This is in stark contrast to spending all week being inventive with a bag of brown rice whilst avoiding the phone for fear of being stalked by an Indian call centre wanting to know when I’ll be making my next payment on my overdue bill.

1. Keep a list of everything you spend this week, and when I say everything, I mean EVERYTHING (trust me a magazine here and a latte there adds up to much more than you realise). At the end of the week, divide up your spending on a spreadsheet into necessities and non necessities. Calculate how much money you spend on non necessities and times it by 52 to come face to face with the full extent of your financial frivolity. Once you see how much you are REALLY spending on an annual basis on things like buying lunch and a bottle of wine with dinner, you will have more motivation to change your ways (especially when it could mean laying on a beach in Bora Bora sipping cocktails in the sun every summer).

2. Now that you know how much money you really need, write up a budget – a real budget. Decide how much money you want to spend squander on yourself and factor it into your weekly expenses. This way you can still spend money on having fun or being a product whore, but you are now in control of just how much.

3. If you don’t already have a savings account, set up one immediately. If you have one, then start using it – even if you can only afford to save $5 a week initially, it will get you into the good habit of saving. Ideally you need to have at least 3 months wages behind you, so that you can take care of yourself if you lose your job (or you want to quit because your new boss is a wanker), leave your boyfriend and move into a place of your own, or have a life and death emergency requiring you to invest in a new pair of Manolos.

   

4. Now it’s time to get smart, really smart. Set up separate accounts for your bills, savings and spending, so that you don’t accidentally use the money for your bills on an impulse buy. If you keep your money in separate accounts, it is much easier to keep track of how much money you’re spending on what. If you want to get really clever, you can keep your bills money in a high interest online savings account, so that it earns additional interest and also can’t be accessed with a card when you’re pounding the pavement on Chapel St (a good strategy for those who struggle to maintain restraint in moments of weakness).

5. Now that you have those separate accounts set up, you can direct debit your bills, savings and spending money directly into them when you receive your pay. This means that the bank automatically transfers the money for you, so that you don’t overspend on pay day because you’ve been broke for so long, that you need to hit the shops to numb the pain that was the previous week of poverty.

6. Why wait for the bill to come in before you pay it? Why not pre-pay some of your utilities with one of those trusty and marvelous direct debit thingies? By the time your bill arrives, it will either be paid, in credit for the following month or have a smaller amount owing (much nicer than getting a nasty quarterly electricity bill). It also means that you avoid those equally mean and nasty late fees – at $35 a pop, it’s a real incentive to pay your bills on time, instead of putting them off as long as you can before they send it to a debt collector (yes, I see that pile of envelopes containing bills you don’t even open).

   

7. Often we’ll go into 3 different stores to get the best price on a pair of shoes, but when it comes to our utilities we just accept the plan or contract we are on. Look at your phone plan, mobile, internet, credit card interest rates, bank accounts and shop around for a better deal. Comparing contracts can be more painful than going to the dentist (oh, sure, whatever, stick that six inch needle into my gum, I just spent an hour on the phone with my mobile phone service provider the other week), but it will be worth it. Promise.

8. Do you really need a post paid phone contract? What about going pre-paid, so you’re no longer in danger of running up a phone bill bigger larger than the Greece’ national debt.

9. STOP tarting yourself around with other banks’ ATMs (guilty as charged). I often withdraw money from another bank’s ATM because I can’t be bothered walking another block to find my own bank – but let me tell you, I pay through the nose for being such a floozy. In Australia we are now charged by the bank we are withdrawing from and our own bank when we withdraw from another bank’s ATM – this means we pay around an extra $5 per transaction, which can have you gasp in horror and shame when you receive your bank statement.

   

10. Cut up your credit cards – yes, now! If you can’t afford it, go without it. Seriously.

Image credits: 1, 2, 3

So, yes, my relationship with money. If I was to sum it up, I would say “never enough”. It’s not that I have a wardrobe full of irresponsible purchases (okay, well my bathroom cabinets may tell a different story), but largely it’s a case of not having enough income.

I struggled through my 20s with poor health and a very limited capacity to provide an income for myself. It’s not something I ever complained about, but it was an intense struggle at times to pay medical expenses and keep a roof over my head. I often found myself staring down the barrel of choosing between food or medication. Now that I have recovered, my capacity to earn money is much greater, but I am on a path that doesn’t always bring financial serenity.

So, I’ve learnt to be savvy with my money (well, I do try my best). I’ve learnt to be patient. I’ve learnt to make my money stretch. None of this is a natural state for me, because underneath all this restraint is an extravagant and frivolous woman who likes nice things. But, I choose to have less things of better quality, and find ways to have little luxuries in my life such as buying flowers every week. Admittedly, v. occasionally I have to say “fuck it”, and buy something I need or want, when I don’t have the money – The MCFC (Melbourne Cup Financial Crisis) took a particularly long time to recover from, and it then hitched a ride on the coat tails of Christmas.

There are the times when, no matter what I do, the roof collapses in on me and I find myself drowning under bills, that I can never seem to get on top of. That would be now. I am managing it like I always have in the past (when the bailiffs come knocking at my door threatening to throw me in prison unless I pay a $440 internet bill – which by the way, I am currently disputing with Optus, because there is no way I used 100GB in December) with calmness, knowing that everything always sorts itself out in the end.

However, the real question I am contemplating, is whether I am hard wired for lack, no matter how much money I have? Once I do have money in my life (because 2010 is my year), there will be a whole lot more extravagance, because, well, that’s who I am. However, I don’t think this would be my undoing, because there is a growing desire within me to save and build myself financially (which I am sure is a replacement for the nesting phase due to the absence of my maternal gene). For someone whose eyes glaze over at the mere mention of “dow jones” and “all ordinaries”, this is quite a big step. However, will I be thwarted in my attempts, because my financial auto pilot is set to self destruct?

Now, I could head to the self help section and read a myriad of books on the topic. But I won’t. Because my current capacity for in-depth self analysis is low (quite frankly, I can’t be bothered). Instead of taking a shovel and digging into the depths of my past, I find myself wanting to gently mull over the thought of self worthiness. Something I will let sift through my sub conscious of its own accord and reveal its answer to me when it’s ready. Then there’s the hypnosis route, which for the lazy girl, is the perfect way to circumvent your unhealthy patterns running your life. I think I may have a new addiction – lets see how long this phase of mine lasts.

If you need some therapy, head to my Facebook fan page, and list your most irresponsible purchase that you couldn’t afford.

http://www.facebook.com/pages/The-Modern-Womans-Survival-Guide/58785309998

Image source