The Fierce Girl's Guide to Finance

Get your shit together with money


July 2018

Shopping is not self-care (and other hard truths)

I have a friend who loves to buy designer handbags like I love to buy Kmart homewares. Unfortunately for her, a Gucci bag starts at about $2000, whereas I got an awesome bowl (that looks like it’s made of glass but is really plastic) for $7 this weekend.

Anyway, my friend, let’s call her Jen, said to me the other day, ‘It’s like I have a shopping addiction’. To which I replied ‘No, it’s not like it, you actually do’.

Now, I’m no psychologist, but I’d argue that anyone who has bought one pair of Manolos and one pair of Jimmy Choo’s in the last few months is not living her best financial life.

The thing is, Jen has a stressful and demanding job, and is well-paid for it. She can actually afford these things and still pay a mortgage (I know, right). She’d no doubt pay it off sooner if she avoided the Fendi store, but overall she ain’t going broke.

Thus, my argument against Jen’s shopping habit isn’t just financial. One person’s Kmart spree is another person’s designer outlet haul – just depends on your income.

My argument is that Jen shops to manage stress. She cruises around online stores in an effort to soothe her frazzled mind, filling her shopping cart in the fond hope of filling her soul.

Does it work? Maybe. A little. For a few moments anyway: the moment you buy something and the moment it arrives.

You see, shopping distracts us from our stress or pain or fear or sadness. Same as wine, drugs, or whatever vice we have.

It doesn’t make us deal with it at a deeper level. It doesn’t help us confront the difficulties of our lives.

Self-care has been co-opted 

A short cruise around #selfcare on Insta would have you believe that looking after yourself is all about making green smoothies or buying make-up. That is bullshit.

Self-care, in my opinion, is when you put your mental and physical health first.

It’s when you invest time in doing the inner work that will help you to be happier in your heart. Self-care is writing a journal or going to a counsellor to deal with some thorny issues. It’s when you take time to meditate regularly. It’s sitting down with a friend who  wants to listen to you and hear what you’re dealing with.

Or self-care is committing to a physical practice like yoga or running or weightlifting, because it takes you out of yourself and puts you back into yourself, only better.

You know, that feeling when you’ve nailed standing bow pose after weeks of falling over. Or you run 5km without wanting to die (so I hear, never done it). Or seeing your maximum bench press inch up over months. That’s some awesome self-care right there.

Sure, have a facial, open a bottle of vino or buy some new shoes. I’m not arguing against doing any of those things.

But be clear about the state of mind that’s behind it. You’re having a little break from your bullshit, and that’s it. When you walk out of the salon, or finish the bottle, or put the Manolo’s back in the wardrobe, you’re still there.

You … and your work stresses, relationship issues, state of anxiety, sense of insecurity or whatever aspect of the human condition is messing with you at that point.

So unless you make time to deal with the root cause, you’re gonna keep shopping, drinking or chasing the perfect complexion.

Not only does this hurt your credit card, it leaves you unfulfilled. You are your best investment, and always will be, so invest your time and money in productive ways as often as you can.

New year, new you: how to up your game this financial year

If I ran a fitness blog, I’d have to wait til January 1 to share good intentions and resolutions with you. Luckily for me, this is a finance blog and I can do it now.

It also requires no activewear or bikini shots, which is a relief, because I have been hitting the red wine and winter comfort food a little too hard.

So, while I commit to no booze and lots of tuna salads for the foreseeable future, you could commit to a few good habits for FY18/19.

Change one bad money habit – It doesn’t have to be outrageously ambitious. You don’t have to makeover your entire financial life. It just needs to be specific and actionable.

For example, you want to control your spending better. My friend Cara gets paid monthly and has a bad habit of ‘making it rain’ the first week, like Drake giving money to poor people. Then she lives like a monk the week before payday.

If you have a similar issue, your goal is to set a weekly spending budget. Look at how much your normally spend (I know: a painful yet necessary step in and of itself. But get out your bank statements and come clean with yourself).

Decide what’s an appropriate ‘discretionary’ budget – lunches, nights out, new shoes, Priceline sales etc. This should be close to what you already spend, otherwise you’re not going to stick to it. Maybe trim a cool 10-20% off it, but don’t go for the diet equivalent of Optifast shakes when you’re used to 2000 calories a day. Now, take that figure and divide by 4. Simples!

Then it’s a matter of putting in place the mechanism for sticking to the weekly budget. Perhaps you get that much cash out, then you see how much is left. Perhaps you have a separate account with weekly auto-transfers of the set amount. Maybe you check your bank account every few days and see if you’re tracking.

Whatever works for you, find a way to put boundaries in place, and automate some of it.

All of this advice is clearly not rocket science. I’m no behavioural psychologist. It’s about intention, action and habit.

Decide what to change, think about a solution, then make it as easy as possible to keep up the habit.

Check out my homeboy James Clear if you want to know more about changing habits – he is the guru.

Other bad money habits you might want to overhaul:

  • Paying too much for convenience: unplanned and expensive groceries, too much Uber Eats, buying a full price dress for a wedding next week etc.
  • Wasting food: throwing out what’s in your fridge, not putting it away properly in the first place, forgetting to eat leftovers – you know the drill. Make a plan, use your freezer and buy some Tupperware FridgeSmarts
  • Dipping into savings for everyday money – you need to re-do your budget, set a mindful spending manifesto, and get an account with a different bank that’s harder to access

Sort your superannuation once and for all – I know, I go on about super and it’s everyone’s least favourite topic. But how about you spend an hour or so on it now, and have thousands more when you retire in a few decades?

I have a deep-dive post about it here, but in short, there are a few basic things that make all the difference:

  1. Find your lost super – That crappy retail job you had for six months? You probably have a super fund for it. If you’ve had more than a couple of jobs there’s a good chance you have a tiny little super balance from it, sitting around in the ATO’s accounts, doing nothing. Get hold of it and put it to work! Some tips here.
  2. Ask your super fund to roll your accounts into one – Your main super fund probably wants to do this lost super thing for you – they often have a rollover service to find your multiple accounts and sweep it into your main one. Let them do the hard work!
  3.  Check your insurance – We get given life insurance without asking – but that doesn’t mean it’s either the right amount or free! Check what you’re covered for, if it’s too much or not enough, and how much it costs. I have a really exciting post about this here (because, let’s face it, the only thing more exciting than super is super AND insurance!).
  4. Review your investment option – Chances are, you’re in the same investment strategy as that 50-year-old bloke on the train wearing a too-tight shirt. Which isn’t ideal if you’re young. As a general rule, younger savers can tolerate more risk for higher returns (they have longer to smooth out the ups and downs). Most super funds will be able to give you advice on what’s right for you. Personally, I will be in high-growth until about the time I need to get botox.

Get a better deal on your boring bills – Once a year, it pays to go through all those dull fixed costs and see if you can cut them down. Are you in the right health fund? Who knows – do some Googling, or call one of those iSelect, ComparetheMarket type services.

Could you be getting a better deal on your phone? Probably, if you’re not already on a contract. They bring out better and cheaper plans all the time, so it’s worth shopping around. The tight-arse circles I hang out in online have  been raving about – not an endorsement from me, but can’t hurt to look.

Same goes for your car insurance, power bills and any other painful ongoing cost. Spend a bit of time once a year, and reap the rewards.

Learn about basic investment and finance concepts – Obviously being on this site is a great start. If you’re relatively new here, this post is a good primer.

But if you’ve put off ‘understanding compound interest’ to another day, that day is today.

If you’ve ever thought ‘I’ll look into share investments at some point’, that point is now.

If you’ve pondered ‘how much will I need to retire on?’, then it’s time to do some research.

A great resource is the government-funded – it’s designed by financial literacy experts so that anyone can understand it. And it covers a huge range of topics.

And that’s it.

Gosh that was a lot of information for a wintry Sunday morning huh? But you only have to do one thing to make a difference.

And none of those things require diet, exercise or bikini body transformations. So how good is that?

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