The Fierce Girl's Guide to Finance

New year’s resolutions are made to be broken.

I know that sounds a little Negative Nancy, but hey, I’m not here to piss in your pocket and tell you it’s raining.

Something about a new year fills us with good intentions. But just as the gym empties out by mid-February (thank God), our intentions fade away as time goes by.

Last year I made a resolution to meditate daily. I did it for like six weeks before I decided I don’t like it and would just keep meditating while I do squats.

So, let’s not say we won’t go into Priceline during their 2-day sales. Let’s not lie to ourselves that we will only have drinks in happy hour. Let’s not pretend we’re never walking into a nail salon again. I mean, we can aim to do those things, but will it actually happen? Probably not.

(Although, if you do want some practical money saving tips, check out last year’s very popular post.)

Instead, as we kick off 2018, let’s think about what we will learn, and be, and think. In fact, let’s try these thought experiments.

Question your beliefs – Humans like to build a narrative about ourselves and then stick to it, even if it ceases to serve our interests. But sometimes, we need a Tyler Durden in our lives, to come in and break our narratives apart. (Fight Club reference – and excuse to include a shirtless Brad Pitt pic).

So, I challenge you to identify and question some of your beliefs. You need $X00000 income to be comfortable? You need to spend $X000 a month to be happy? You can only save $X00 a week? Maybe you do, maybe you don’t. But go through the process of questioning it.

One thing my job revealed to me in 2017 is the ridiculous bubble I live in (inner-city, professional, finance industry). I think that a certain income is the minimum needed to be financially comfortable.

Then I see these loan scenarios where the applicant earns $60,000 a year and has saved $20,000 and paid off their credit card debt and raised two kids and whatever. And I realise there is a whole world out there of people who a) have it way harder than me and b) are way better with money than me.

So, while Australians have a strong aversion to discussing money, it can be worthwhile. See how others live. See how much they spend and save. Hang out in Facebook groups like ‘Frugal Aussie Families’ and you’ll find another world out there.

Question the world’s beliefs – We get on a train of middle-class aspiration in our late teens, and get off it when we retire in our 60s or 70s. The conventions of this journey are that we work one job at a time, put money aside for retirement, buy as many things as we can, have the nicest house we can and spend as much on our kids as we can.

But not everyone has to stay on that train, or stick to its rules. Maybe we want to work two jobs, so we can save more and retire early. Maybe we don’t have to constantly ratchet up our lifestyles as our income grows – instead, we could save the surplus and pay off our debts earlier. Maybe we don’t have to upgrade our TVs, cars, phones or wardrobes as often as other people.

I’m not saying there is one right or wrong path. But there are definitely some things we could consider calling bullshit on.

There is a movement called FI/RE that is all about being frugal, building your net worth and retiring early with a decent income.  These people (and I’m one of them) reject the notion that you need to be working for the man for 50-odd years. They believe that re-engineering your life can give you more opportunities.

The go-to guy on this is called Mr Money Mustache, who retired at 30 (WTF) and writes a wildly popular blog, if you’re interested.

It sounds a bit out there, and you might not believe it all. But the point is that it can be helpful to question the conventional wisdom about money.

Question your goals – That is, if you  have financial goals. Many people have one immediate aim – such as saving for a home deposit, paying off a credit card or getting on top of the mortgage. But while that’s useful, it’s not necessarily enough.

Having short, medium and long-term goals is a better option. Not just vague intentions – but actual, thought-through goals, with a strategy to achieve them.

My goals (simplified for this post) look something like this:

• Short-term: Fund an epic 2018 holiday with Gigi
• Medium-term: pay off twice the minimum on my mortgage repayments so I can smash the interest costs; look at ways to leverage equity for investment purposes
• Long-term: Have enough assets to cease full-time employment by age 55

Now obviously there are a shitload of variables that could derail those goals over time. But having them gives me a sense of purpose and helps me make decisions.

Question your influences – How do the people around you impact your money decisions?

In a financial sense, not being married has been a game changer for me. My ex-husband is a good guy and he works hard. But we had very different ideas about money (as many couples do). It was like being in a rowboat, each paddling in a different direction, with the result that we didn’t go anywhere.

But it’s not just your partner who plays a part. The way your friends spend money has a big impact too.

Firstly, there’s the practical choice of bars they want to go to or activities they choose to do, the ridiculous hen’s parties they make you pay for etc. In some cases you have to go along with these – while other times you can often suggest alternatives. In my experience, people usually welcome a tight-arse option!

But then there’s a more subtle influence. Sometimes it’s the desire to ‘keep up with the Joneses’ – having stuff that’s as good as theirs. But other times it’s a quiet, normalising influence. The notion that it’s normal to have new cars, to upgrade TVs, to get eyelash extensions, to buy daily coffees, or one of a thousand things that may in fact be a waste of money.

I’m not saying you should dump your friends! But maybe you can look critically at some of the things your social circle accepts as the norm. And don’t be afraid to do things differently.

So that’s my challenge to you this year. Think critically. Educate yourself on other perspectives and experiences. Go forth and be fierce!