My first degree was Arts, with Honours in English literature. If you want to know about Latin declensions or 19th century novelists, I’m your girl.

I don’t tell you this to impress you (although, feel free to be impressed), but to give you the context of how financially literate I was when I started my career. I even dropped maths in Year 12!

Now, I’m about to finish the final exam in an Applied Finance course. It’s not a full degree or anything crazy like that, but it’s the pathway to becoming a financial analyst (which I don’t intend to do).

In the 16 years between my first graduation and my imminent second one, I’ve muddled along on my own. I’ve learnt from smart clients and bosses, and the great Tom Buchan hounded me into loving economics. But I am not a numbers person, I don’t love maths and I can’t split a bill to save to myself.

Yet here I am, talking about money and stuff.

If I can do it, anybody can. However, there are things I wish I’d known earlier. If I sat my 21-year-old self down, this is what I’d say.

Capital Growth + Income = Returns. Think about all your savings in this way. Capital growth is when your asset increases in value without you doing anything to it. Your house’s value goes up while you live in it, or your shares increase in price while you own them.

Income is what you receive along the way. Think rent on an investment property, interest on a savings account or dividends on shares.

Every investment or asset will have some or all of these ingredients, e.g:

  • The house you buy to live in receives no income, but it gets capital growth.
  • A bluechip share portfolio will usually have a bit of each but skews towards income (more about that here).
  • A savings account has no capital growth but will pay income from interest.

There is no perfect combination of growth and income; it’s like lipstick. One that’s super glossy and glides on beautifully won’t stay on past your morning coffee. You can get one that makes it well past lunch, but it dries your lips out like a desert. Every lipstick has some combination of shine and durability, but the perfect ratio doesn’t exist.

Generally, the younger you are, the more you look for ‘growth’ assets because you’re building your wealth. When you’re retired, you generally need more income because you don’t have a paypacket. There are a hundred different scenarios in between, so you need to decide what’s important to you.

Every dollar you spend is a dollar you can’t make money from. The thing about money is that it can make you more money. Buying a house, investing in shares, contributing to super, even just getting interest on a bank account: all of those things give you more money – FREE money! Because that’s what capital growth and income are: money you DIDN’T HAVE TO EARN by working.

So, while it feels good to drop 100 bucks on eyelash extensions (don’t get me started on the ridiculousness of that price point), that’s money you could have put towards a holiday, or a home, or a degree, or any number of things that will actually improve your life.

If you can look me in the eye and convince me that extensions have genuinely improved your life (better job? hotter man? happier heart?) then go ahead. For example, I genuinely, deeply believe being blonde is an expensive but essential part of my life. But that means I don’t do other things like spray tans or nail salons.

It’s part of my approach to mindful spending and while it’s not perfect, it means I have some money leftover to do other, more productive stuff.

Get to know your money personality – and manage it. Everyone has their own approach to finances . I’m the ‘going broke saving money’ type: I can’t go past a sale … but still buy stuff I don’t need. (And, of course, it’s not a bargain if you don’t need it).

The key is to identify your own quirks and work around them (e.g. I try to avoid shopping malls in January). It’s all about self-awareness.

In a partnership, it’s more complicated. I was often in a tug-of-war with my ex-husband because we had different ideas about our money. He spent far more on ‘stuff’ than I’d like; I spent more on travel than he wanted. Neither of us was right or wrong, but if I had my time again, I would keep more money separate, accept that we have different priorities, and work from that basis.

Nobody is perfect, and I’m certainly not . I still get mad at myself for breaking my own budgets. I am the worst at claiming back money from my health fund and the tax office. I never have all of my shit together, all at once.

But like most hard things, doing a little bit to improve, all the time, can have a big impact.

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