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The Fierce Girl's Guide to Finance

Get your shit together with money

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Fierce Girl

Hi there, I'm the Chief Fierce Girl. I work in the finance world, and moonlight as a blogger helping to empower women financially. Thanks for stopping by; I can see we are going to be great friends.

If you’re not making your own bowls, do you even like money?

If there is one food trend I can get on board with, it’s bowls. Poke bowls, buddha bowls – call them what you want, they rock.

I’ll be honest, I make a lot of bowl-based meals at home because I live alone and feel empowered to eat on the lounge (more than I should). Pre-chop your steak and veg, throw it in a bowl, add some hot sauce and you’re ready for a solid session of one-handed bliss in front of Queer Eye.

On occasion, I’ll stump up and buy a poke bowl from Nudefish and holy moly the price hurts. If you want avocado on that baby you’re spending fifteen bucks.

But judging by the queues at the food court the good people of Sydney can’t get enough bowl action. It’s like they enjoy spending too much on takeaway!

Well Fierce Girls, I’m here to combine two of my favourite things: food prep and saving money!

The thing is, it’s annoying to make just one bowl because there are all these separate elements. But if you do a batch, you’re set for the week. And you’re in control of all your diet and money resolutions.

It’s not complicated. It comes down to:

A base: rice, quinoa, buckwheat – or if you’re feeling low-carb, try shredded cabbage, zoodles, or even the good ol’ salad mix.

It’s super easy and cheap to buy some red and black and brown rice, cook up a cup or two and have it ready in the fridge all week. It’s more exciting and nutty than boring old white or brown. And less plastic waste than the microwave packets.

Veggies: I like to roast them up for sweetness and general deliciousness, then add some microwaved or steamed greens like broccoli. You get a nice mix of flavours.

Protein: If you feel fancy, some hot-smoked salmon is fantastic, but you can also do some normal smoked salmon. You can marinate and grill up some chicken breast (or buy the pre-marinated one from Aldi – no judgement). And if you’re really desperate you can totally throw in a can of tuna or salmon.

For an extra tasty flourish, I fry an egg or two that morning and throw it on top. I also like to add some hot sauce, some avocado or some tahini – whatever condiments get you going.

The process is really simple. Pre-cook as much as possible and put it all in separate containers in the fridge.

Did I ever tell you about when I was a Tupperware lady?

Maybe your fridge doesn’t look quite like mine, but also, you probably don’t have a lifelong Tupperware obsession.

The key points I want to make are:

Food prep is not that hard to get right. It just takes some planning and an hour or two of time.

BYO Lunches are the absolute key to saving money and cleaning up your diet. I love bowls because it’s so easy to track your macros (if you weigh and measure like a nerd).

Once you have a few go-to meals, you can mix and match to avoid boredom. It also helps to buy seasonal veggies, so you can change the ingredients over time.

Simply put: bowls are a great way to rock your diet and wallet.

*Sorry about my lame food pics – need to really work on my skills. But you get the idea. I’ll also give you some more serious financial tips soon. In the meantime, get cooking!

How to hack your goals and nail everything in 2019

In 2018, I leaned out and toned up, losing about 5kg ahead of my 40th birthday.

People asked me how I did it, and I’d detect a hopeful tone. What wonderful secret had I found?

Sadly, there are none. I tracked and weighed all my food, stopped boozing and trained for fat loss (i.e. so many reps).

Probably the biggest thing was setting a goal. I’d been powerlifting for a few years, and building strength was always the main game – my goals were more like ‘squat 100kg’.

I was more focused on what my body could do, rather than what it looked like. This year, I switched to an aesthetic goal.

Neither of these goals are good or bad, in my opinion. There is something empowering about reaching a lifting goal, but also in feeling lean, fit and attractive.

The key point is, they provide something to work towards. They were specific, measurable and kept me focused. They kept me home on a Friday night, so my coach wouldn’t kill me on a Saturday morning. They encouraged me to spend time on a Sunday night preparing food for the week. They gave me a reason to say no to high-calorie foods.

New year, new you?

I’m telling you this because it’s a new year, and we all have good intentions. Often it’s about weight loss, but it’s a good time to take stock of finances too.

If I’m honest, my 2018 wasn’t great financially speaking. I was trying to get in the groove of being a homeowner, and quarterly strata fees, coupled with a kitchen renovation, really challenged me.

I had all the basics covered and I saved money, but I could have done a lot better, especially if I’m meant to be a good Fierce Girl example.

Know your weakness, then kick its butt

My biggest weakness isn’t a lack of knowledge or a tendency to spend money on stuff. It’s my lack of organisation. I try, I really do, but it’s a constant struggle against my nature.

You know those people who hate mornings, and you try to make them get up early? They’ll do it, but it takes fives snoozes and the threat of unemployment. And when they do wake, they are cranky arseholes.

That’s how I am with any type of life admin. And it’s why I have a shameful stack of papers in my cupboard, full of tasks that I need to file or action. I just add one more thing and shut the door again.

I know that I’m shit at this, and that I need a way to hack my bad habits. So I’m taking my approach to training and diet – which I’m good at – and applying it to money.

Boiled down, my weight loss success was based on:

  1. Set a goal – fit into the very skimpy outfit I purchased for my party
  2. Track everything – all food, every workout
  3. Rely on habit – regular food prep becomes a non-negotiable activity

Applying this to money, I’ve realised I need to:

  1. Set a goal – I’m going to pay an extra $20,000 off my mortgage in 2019
  2. Track everything – yep, I have to manually enter it into the TrackMySpend app
  3. Rely on habit – once a week I have to sort that pile of admin out and do at least one task

That third one really gives me anxiety, because I know I will struggle with it. But I need to start somewhere if I am going be a fully functioning adult.

The missing piece here is reward. At the gym, I get rewarded with endorphins, and I get validation when people compliment me. So it helps me to stick with it.

But this plan is boring and low on quick wins. So I’m adding in a bonus that if I stay on track with saving, I get to have a trip overseas. And if I do my weekly chore torture, I’m allowed to give myself a monthly treat, up to the value of $50.

There will be other behavioural modifications I need to achieve these goals – for example, the point of tracking is to ensure I spend less on crap (I’m looking at you Priceline and Sephora).

But I feel more prepared and confident knowing I have a plan and a framework.

Setting Goals

If you’re keen to nail your finances in 2019, have a think about what you want to achieve. I have a post about goal setting here, and it includes a simple worksheet you can download.

The goals don’t have to be big and hard. They could be as simple as ‘save $200 a month’. Or they can be specific – ‘Pay for my end of year holiday without a credit card’.

The point is to have them. Without something to work towards, we humans tend to drift into whatever’s easy and in front of us.

But with a goal, you can have a plan. And with a plan, you can have global domination (eventually).

So, here’s to an amazing 2019, and I hope you get all the good stuff you deserve!

I turned 40 and here’s what I’ve learnt about money

To be honest, I was freaking out about turning 40 at first. Thought I’d run away for my birthday and hide in shame.

Then I remembered who I am. Bad-arse bitch who loves attention! I have a great job, my own, sweet bachelorette pad, cash in the bank and a zippy 2005 Mazda in the garage (lol, it doesn’t even have power windows).

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I kept the celebrations totally low-key and subtle, of course

So now that the Festival of Belinda has successfully been celebrated, I give to you four gifts of wisdom – one for each decade.

Money isn’t about stuff, it’s about choices.

I know, I say this a lot. But the longer I live, the more I see it play out. I have watched friends stuck in marriages they can’t afford to leave, or stuck in jobs they hatett. When I left my marriage, the quality of life I had afterwards was a direct outcome of the money I could save and earn.

So, the more you spend on clothes, jewelry, homewares, cars and other ‘stuff’, the lower your buffer when you want to make a change. I controversially believe in having a ‘FU Fund‘, even if you’re married, because you honestly just never fucking know when you need to leave something or someone.

Money’s always hard, because temptation’s always there.

I’d like to think I have my shit together financially. But I still struggle.

Whether it’s the small temptations (I swear this is my last Shellac for a long time), or the big decisions (do I renovate the bathroom or sit on the cash?), it’s hard.

We are wired to like shiny new things and fun experiences. And they get advertised to us everywhere! The gym, the toilet, the elevator – nowhere is safe.

Plus modern life is complicated and relentless. I got a credit card for work and forgot to pay it off the second bloody month I owned it. (I’m smart but so, so vague).

So we need to create frameworks for ourselves. I diarised my credit card due date, for example.

We need to pay attention to what matters, by creating a mindful spending manifesto.

We need to practise saying no to things if they don’t align with our goals.

And we need to check in with our bank statements reguarly, not wish them into another dimension.

It’s a grind, but we just need to suck it up, buttercup. The alternative is to be broke AF and/or not meet our life goals. And who wants that?

Nobody cares about your money as much as you do.

Remember the post a while back where I got my friends a $6k refund from their bank? The short version is they were on the wrong interest rate, and nobody – neither their mortgage broker, financial adviser nor the bank – gave a shit.

It was only when they picked up The Barefoot Investor and started asking me stuff, that we realised they were getting screwed over.

I’m not against using advisers or brokers or accountants. But you still have a responsibility to keep an eye on things and to educate yourself. The more you know, the likelier you are to ask tough questions or spot bullshit.

Similarly, no energy company, telco or insurer is going to offer you a better deal for the hell of it. Do your research, call them up,  give them a hard time, or simply switch. It’s your money, so be a tight-arse with it.

Only you can decide what’s important to you.

Remember my friend Jen who loves designer bags and shoes? Girlfriend got two pairs of Valentino heels delivered to the office just a couple of weeks ago. About $1500 all up and that was ON SALE.

And yet she can’t fathom how I’d spend over a hundred bucks on LuluLemon leggings, when I could get them for $30 at Cotton On. I could give you chapter and verse about the superiority of the Align leggings, and how I train every day etc.

But at the end of the day, I care a lot about exercise and all the stuff that goes with it. Including sneakers that are technically just for walking around. (Hey, walking is exercise ok). So I spend money on it.

And I spend less on other stuff. I don’t spend much in bars; I buy cheap wine whenever I need it; and that aforementioned Mazda is worth so little I don’t even pay for comprehensive insurance for it.

It’s ok to have things you splurge on. The trouble comes when you splurge on everything. When you feel out of control so you end up saying ‘YOLO’ and whacking it on the credit card.

You can always stop and reset (read this post). You can always do better. And you can pick one or two things to treat yourself, while still achieving your goals.

If I had to sum up my financial life, from my first job at 13 until now, I’d say it was a work in progress.  I’ve been broke, learnt the hard way, had some good luck, made a shitload of mistakes, had some great help and advice, and muddled my way through. The best thing I’ve done is stay interested and curious.

After all, if you keep learning, you keep improving. Which is pretty great life advice right there. You’re welcome.

photo credit: donbuciak Another Hot Year via photopin (license)

I don’t mean to alarm you but it’s nearly f@*#king Christmas!

Ladies, this is not a drill. There are only seven shopping weekends left until Christmas.

Maybe you’re the type of girl who excitedly starts playing Mariah Carey at the first hint of festivities.

Maybe you’re a cynic who likes mince pies but dreads the consumerist orgy of yuletide.

Maybe you hate the enforced family proximity of holiday season.

But no matter where you fall on the Grinchometer, you can’t avoid Christmas (ok, maybe if you’re Muslim or Jewish or Hindu. But even then, you probably still watch Love Actually and eat a box of Favourites).

Nor can you avoid the financial pressures that the season brings. Not only are there all the gifts to buy, there are other sneaky costs.

The extra social events are a big one – not all of them include free booze from your work, so you end up eating out and drinking more.

Then there are extra party season outfits, accessories and salon trips. (It’s my birthday in December too, so the pressure is on).

And of course there are holidays themselves, and all the expense of going away, if you’re lucky enough to do that. I only have to hang out at my cousin’s place in WA but that bitch is gonna make me get drunk and buy wine in Margaret River, I guarantee.

So this is a short post, but with some important take-aways:

  • Start planning and buying gifts NOW – there are no sales in December, friends (until it’s too late, on boxing day). So try and start looking for bargains now, or at least space out your purchases so it’s not one big shitfight for your cashflow. Then check out different vendors to see has the cheapest version. Don’t just wander into Myer and hope for the best. A new release book, for example, can be $40 in one store and $20 in another. Do your research.
  • Make a list of people to buy for and what you’re getting them – and do it before you hit the shops. It will stop you panicking and buying too much or the wrong thing, in a moment of exhaustion or panic.
  • Have a conversation with your family NOW to set limits and expectations – if you’re feeling the pinch financially, now’s the time to fess up. Say to mum and dad and siblings ‘hey, I have some savings goals, can we put a limit on gifts this year?’ Or do the kris kringle thing. What you’ll often find is that when one person tries to de-escalate the gift war, other people are relieved.
  • Make a special ‘Festive Season’ mindful spending manifesto – this is an exercise where you think seriously about where to allocate your spending (read more here). In this season, it’s easy to get sucked into a whole bunch of costs, as mentioned above. So have a talk with yourself about where to scrimp and where to save. If you choose to splash out on gifts, then put that party dress back on the rack. Want to buy French champagne? Then tone down the seafood platter you bring on Christmas Day. You get my drift – the key is not to start spending, and then think ‘oh well I’m screwed now, let’s keep going’. Go in strategically and be a tight-arse on some things. Like, I promise not to buy any new Christmas lights. Well, maybe just one set…

Of course I would tell you not to smash the credit card too hard, but you know that. And you’re going to do it or not, regardless of my lecture. But hopefully the tips above can help you limit the damage.

So, have a great party season and get cracking on your festive dance routines!

By the way, as a bonus, this is a message I got this week from my above-mentioned cousin. You can see where I got my thrifty habits…

1 science truthbomb and 3 ways it will help you save money

Do you ever find that when you’re being ‘good’ with your diet, you’re really good in the morning. No muffins for me!

Pretty good at lunch. I’ll take the sushi instead of the schnitzel thanks.

And by 3pm? If I open the work pantry and there happen to be TimTams, it’s not my fault if they fall into my mouth.

Well, you’re not alone my friend. There is a real scientific concept called decision fatigue.

From the moment we wake up, we’re forced to make all these small decisions. What to wear, what to eat, when to leave, how long to spend on Instagram.

And this literally drains our brains of power.

In fact, a study on this topic found that judges hearing parole cases were more likely to grant parole in the morning, when they were fresh and unfatigued. When they got tired and cranky, it was easier just to say ‘no, go back to jail’.

The one variable was that straight after lunch, they perked up and started saying yes more. Until TimTam o’clock, that is.

There’s a really cool article about it here if you’re interested. One of my faves, James Clear, also has a great post.

But the take-outs for me, in relation to money, were three-fold.

1. Don’t shop at night – I’m as fond of a Thursday night jaunt as the next girl. But if you’re tired and over work, there’s a good chance you’ll make questionable decisions about what to buy.

Of course, we may have shopping emergencies (who doesn’t?). But in general, try and save your shopping sprees for a weekend morning, or at least a lunch break after you’ve eaten. Much better chance of buying something you actually need and like.

Similarly, cruising the ASOS or Iconic websites in front of the TV might not be the best habit if you’re trying to save money.

Maybe just limit yourself to filling your shopping cart but not hitting the checkout til the next day. You’ll feel differently in the morning – I very rarely make a purchase in this scenario.

2. Sometimes a ban is easier than moderation – If you’re trying to make decisions about whether to buy something, and you’ve already made a bunch of choices that day, it’s pretty easy to say ‘bugger it, spend the money’.

But what about if it’s not even an option? No decision required in that case.

If I’m trying to save money, I ban myself from shopping for a month. I also find it easier for losing weight. For instance, if I have to try and weigh up whether to have a wine, I usually go with yes.

But if I just say ‘no booze in October’, then I don’t expend energy trying to justify it.

I get that not everyone works like this (the rebels among us). Some people just need to break a rule as soon as they impose it.

So, my friend Jo said that when she moved to being a vegetarian, she gave herself a ‘once a week’ option of eating meat. She didn’t end up using it much, but was comforted by that slice of freedom.

So maybe it’s not a shopping ban – instead, it’s ‘I can buy one piece of clothing this month’. And you may not even find anything. But the rebel in you will feel ok about not being told what to do.

3 . Automate the shit out of everything – One of the most important parts of achieving financial security is to pay yourself first. In other words, put your savings aside in a nicely inaccessible account as soon as you get paid.

Do you ever spend the weeks after payday going out, buying lunches, hitting the shops and all that cool stuff, and then seeing how much you have left over to save? If so, the odds are it’s a big fat zero.

So try and automate things like saving and paying bills. Have a direct debit into various accounts. Check out this post for some tips on how to structure your bank accounts – boring but possibly life-changing!

So there are three things that science can help you with, and they apply to other good behaviours too. One of the reasons I food prep like a boss (some of my tips here) is that it takes away the need to decide. You don’t have to weigh up healthy or unhealthy, expensive or cheap. You just eat your darn curry and shut up. It’s strangely liberating, I promise!

Just some stuff about money you need to know but probably weren’t taught

Disclaimer: literally no connection to Channing or Ryan – I just wanted you to read this.

I had a conversation at work today about a journalist failing to understand the difference between real estate ‘debt’ and ‘equity’ as asset classes.

And then realised that this is totally normal, and I’m just surrounded by nerds who get paid a lot to think about this stuff all the time.

Really, most financial education happens on the fly. We don’t sit down at school and get taught about the capital stack in the same way we get walked through trigonometry.

That is crazy! Like when was the last time you needed to work out the angle of an isosceles triangle? (My vague memory of what it’s for).

But I’ll bet, sure as shit, you’ve wondered if you can afford to save for a home or your retirement.

So today is a quick primer on some of the basic stuff that nobody ever took the time to publish in your Year 11 textbooks.

What’s Capital Growth and why should I care about it?

It’s when the value of an asset goes up over time, often without you having to do anything.

The most common place we see this is housing. You know how your folks bought a bungalow in the suburbs way back when, and paid like five bucks for it? Well, the fact that it could now fund a small developing nation is thanks to capital growth.

Similarly, some people who bought shares in Apple, back when they were making Macs for Where in the World is Carmen San Diego. Now, they have seen the value of those shares increase by about a bazillion. That’s capital growth.

How does this magic happen? Well, it’s complicated.

When you buy shares, you’re often hoping that a company will grow over time. Certain styles of investor will only buy these types of shares – betting on their future.

With property, it mainly boils down to population growth. You’re betting that over time, more people will want to come to the area you’ve bought in. Supply is under pressure, demand is up, and voila, somehow it costs a million bucks to live in a shitty two-bedroom cottage miles from the city.

This is how a lot of people make money in Australia.

But it’s also the reason people freak the hell out when property prices look flat – or even worse, decline. If you’ve bet the house (haha get it) on prices going up, it all looks a bit scary when that stops happening.

But wait, is capital growth the only way to make money?

Glad you asked! The answer is no. Sometimes you buy an asset for its yield (aka income). For example, Telstra shares have gone nowhere fast in terms of capital growth (pretty much since they were floated onto the market).

But they usually pay sweet dividends (i.e. a little thank you payment from the company), and thus are beloved by retiree investors, who need the income to live on. (Be annoyed with Telstra’s service as much as you like, but they likely funded your last birthday present from Grandma and Grandpa.)

In terms of investment property, you have tenants who pay the equivalent of dividends. If the value of the property is flat or declining, ideally you’ll still get income from rent to pay the mortgage and possibly have a bit left over.

Some investments don’t have any growth, but give you reliable income – like a term deposit. The advantage is low risk – you know how much you’ll get back at the end.

So, should I look for growth or income or what?

Well it depends on your goals and timeframe. If you have a long time horizon, like retirement saving, you’re looking for capital growth with a bit of income thrown in.

If you are living off your investments, you’ll be more focused on steady income, and would look at things like bonds or dividend stocks.

Big difference between those two things, however, is that one is predictable and one is not. Also known as ‘fixed income’, bonds are based on an agreement that the issuer will pay you – the bondholder – a certain amount of income.

With shares, dividends are not guaranteed. It’s like dating a total player (or in fact any guy I’ve dated in the last four years): they’ll promise you a lot but when the chips are down, they’ll disappoint you.

Kind of not their fault though: under corporate law, companies are only allowed to pay dividends if they have their shit together. (I feel like this should apply to men on the dating scene, but there is a sad lack of law in this regard).

zac efron shirtless
Also no reason for Zac Efron, but just wanted to reward you for reading this far

And hey, what’s the difference between debt and equity?

Here’s a quick primer as it relates to investments.

Equity is when you take an ownership stake in something. It might be your home or it might be a small chunk of a company, which you buy on the stock exchange (hence why the asset class is called Equities).

You become an owner, and that means taking on all the risks and rewards that come with it. Like this week when my apartment started leaking through the roof, I was reminded of the sheer tedium of home ownership.

With shares, if the company tanks or even goes out of business, shareholders cop a lot of the losses. In fact, if it goes bust, shareholders are last in line among creditors (i.e. all those people queued up trying to get their money back).

On the upside, if it goes gangbusters, you’re set to make a lot of money – hello Apple shares!

Debt is the more sensible friend of equity.

If you don’t want the volatility or hassles of ownership, you can lend money to companies instead.

Yep, you heard me, be your own bank baby!

That’s what bonds are: a loan to a government or company. You agree to give them $XX and they agree to pay XX percent interest (often monthly or quarterly). Usually it’s a fixed rate, but there are ones called ‘floating rate’ which move around. Maybe that’s TMI but there you go.

Bondholders are also at the front of the line if things go belly-up, but the downside is they won’t increase in value over time – much. (I could talk about yield curves here but that is 100% TMI).

So, this is an example of this truism: what you give up in sexiness you gain in comfort. Bonds are just like … Bonds! As in, the undies.

A pair of Bonds hipsters isn’t going to set any boudoir action alight, but goddamn it, they will save you from an all-day wedgie.

And for a retiree who won’t be earning an income from work, bonds can provide a predictable income without so much stress.

Wow, do I have to choose one of these things?

The key thing to remember is that a cluey investor doesn’t have to choose just one of these. Most diversified portfolios – like the one your super is probably invested in – have a bit of everything.

Like the joy of owning the perfect eyeshadow palette, a diverse portfolio gives you a little bit of everything. It also spreads the risk, so if one asset class tanks, you’re not totally exposed.

You can build your own portfolio with some careful selection or pay a fund manager to do it.

What if I am freaked out by this and want to do nothing?

It’s fine, no big deal. You’ll likely have some exposure to all this through your super (which I am sure you’re going hard on).

Most people in Australia will go through life with probably one big equity investment that relies on capital growth to make money: their home.

Maybe they’ll buy an investment property and hope for some more capital growth, plus a bit of income to service it.

About a third will give the share market a red hot go, picking stocks based on professional advice, their own research or maybe a tip from a random on Hot Copper (like Reddit but for investor nerds).

Some will make money and some will lose it, but overall they will be looking at a Total Return generated by combination of Yield and Capital Growth.

But basically, you can go out there and live your best life knowing all these things that nobody ever bothered to explain to you.

(Oh, and this is a long post and if you’ve read this far, go you! Brad says well done).

Image result for brad pitt shirtless

Do you need a financial planner – or just a bit of planning?

I got a message from a friend recently, asking me if I could recommend a financial planner.  This friend, let’s call her Gemma, is 27 years old, a few years out of uni and in PR – all of which suggested to me that she isn’t on the big bucks (yet!).

I said hey, why don’t you come over and have a planning session with me. If all you need is some goal setting, then the only cost is that you have to be a case study on the blog. If you need the real deal, then no worries.

She came over, we gossiped about everyone in PR, then we finally sat down with some coloured pens and blank paper (which I effing love!). What follows is of the bones of our conversation.

Let me preface it by saying I’m not a planner. All I am is a person who knows how to ask questions, provide life advice and use a smartphone calculator. The latter one, not even very competently.

But this is the kind of session many people never really do. I had a similar one over cake and coffee about 18 months ago with a mate from work. Sure, he is the head of a Wealth business, but really, he just helped me frame some goals and put some numbers around them. And it was massively useful – it led me to buying my current home … which I bloody love.

Question 1 – What are your goals?

Gemma had helpfully come prepared with these! One short-term goal was to ‘enjoy my lifestyle’, which sounds vague, but seemed to translate to ‘please don’t stop me buying a coffee every day’.

This is where mindful spending comes in. If you really, really love that coffee, and it’s the one thing standing between you and the despair of the working world, then cool. Build it in. Take some other cost out.

Other goals were to move overseas in a couple of years, and to buy a property in her mid-30s. So are these goals do-able? Let’s see.

Question 2. How much are you earning and spending? 

This wasn’t the most exacting process. Ideal world, you’d track every purchase for a month or two, and/or go through your bank statements. But we broke it down enough to get a sense of money in and money out.

This step is so damn critical, but people have a strong aversion to it. They seem scared to look their money dead in the eye, as if it will reach out and punch them.

But actually it’s the opposite most times. Stare that balance sheet down, and it will give you clarity and power.

We worked out that Gemma would have roughly $700 to spare every month, after expenses.

That surplus amount is where all the magic happens. Whether you want to save or invest, you need to play around with incomings and outgoings til you end up with an amount of money you can put to work.

If you are struggling to get to that point, you have two choices: earn more or spend less. So, get a second job, start a side hustle, sell some of your stuff etc. Or go through your spending and work out what you really need, and what you can live without.

Question 3 – How will you allocate your surplus? 

This is where it comes down to timing and priorities. Yeah, you probably can’t do everything you want.

So, what’s most important now, in a year, in five? If you’re looking at goals within those timeframes, putting it in the bank can be the best option, or maybe a low-risk investment  like an enhanced cash product.

That’s because anything less than five years means you don’t have time to ride out the ups and downs of markets.

If it’s longer than that, you can look at higher-risk things like shares and managed funds. This is where it can make sense to see a financial planner, because sifting your way through products is a bit of a mission.

For our friend Gemma, we decided to put most of it towards medium-term goals like going overseas (so, in the bank).

Question 4: How committed are you to your goals?

Then we looked at the viability of saving to buy a property seven years from now. While the idea of saving $100k (a pretty modest 20% deposit these days) sounds bloody hard, it’s not impossible.

The good thing about Gemma’s situation is that she’s at the start of her career. She is also whip-smart and ambitious AF. So even though she is on pretty crap money now, she is going to keep going up and up. The real trick for her is not to allow too much lifestyle inflation.

What if you avoid lifestyle inflation? Today on the left, future on the right. Stay real and you can do some real saving.

That means not spending more as you earn more. And goddamn that is haaaard.

I’ll confess. I earn pretty good money these days, and do a decent job of saving. I’m smashing my mortgage and stuff. But I have pitfalls. Like, I’m currently in a cycle of Shellac manicures (nothing but a dirty addict).

And it’s hard to talk myself out of the $35 spend when I have money in my account. So I am giving myself a few months of enjoyment. I swear I can give up whenever I want. But anyway, I feel your pain babes. If you have money, it’s natural to want to spend it on sugar hits like clothes and restaurants and make-up.

Anyway, you’re going to have lots of growing expenses if you’re in your 20s or 30s. You have so many decisions to make about what to splash out on. You can’t avoid them all. What you can do is stay mindful, set goals and check in on them regularly.

When we worked it out, Gemma can indeed save for a home if she keeps earning more, but doesn’t give into the temptation of pissing it away on fancy stuff. Too often, anyway.

Goal-setting is like going to the gym

It seems hard and sometimes scary beforehand. Gemma told me as much. It’s like you don’t want to hear bad news.

But just like the high you get walking out of a Spin class, it’s a fantastic feeling to have your goals all mapped in front of you.

So don’t be scared. Get your pens and pencils out babes, and get cracking on your future!

Hot tip: Check out this post for more on goal-setting, and a free worksheet I made for you!

The property market right now: headed for a full-blown Britney meltdown?

If the residential property market was a person, it would be an Instagram influencer selling you slimming tea right now.

Any article about house prices is clickbait gold for publishers.

If you have a property, you want to know what it’s doing.

If you don’t, you want to know if you’ll ever afford one.

(If you’re a communist hoping for the proletariat to expropriate the bourgeoisie from private property, it’s less relevant).

So it’s in the media’s interests to run story after story predicting housing Armageddon.

The other night, a story on 60 Minutes proclaimed the end of days for property. It was alarmist claptrap. Some of the points were accurate, but the tone and conclusion was an irresponsible media beat-up.

Making sense of the drama

I work in an investment firm specialising in real estate, and I spent last year working in the mortgage broking industry. So I’ve seen it from a few angles.

Nobody has all the answers (and don’t trust anyone who says they do). But this post will hopefully give you a bit of insight into the headlines.

Are we heading for a property market crash?

Nobody knows for sure. But it’s important to remember that property follows a cycle. Just like sharemarkets, property prices rise for a while, get so high they are unsustainable and then come back down.

This is as normal as your menstrual cycle. Home prices will moderate eventually, just as sure as I will turn into a bloated eating machine a week out from my period. (Hey, I did the sums in MyFitnessPal today and was totally allowed to eat that TimTam).

But the crazy thing about cycles is that when they’re peaking, people forget they end.

You know how when you’re drunk at 2am and having the best time of your life, you assume you’re gonna feel like this forever. Life is ah-mazing.

Well, house prices in Sydney, Melbourne and Brisbane have had a long, intense party. Many tequilas were slammed. Many tables were danced on. But in the end, the ugly lights have come on and the bouncers are shooing us out.

What we do know about these cycles is that the pain will be unevenly shared. Some areas will fall faster and further. Outer suburbs and regional towns are often in the firing line.

Inner city areas and premium areas will fall a bit, but it’s very unlikely we will see the 40% price falls one analyst mentioned (although he only said there was a 1 in 5 chance of that).

For one thing, our population is growing at 2.6% a year (ABS stats), which creates ongoing demand for housing. There is also pent-up demand from buyers who have been priced out of the market until now. When prices cool, first-home-buyers and upsizers pounce on the discounted properties.

Long story short, most industry people see this as a market cooling – not crashing.

Is there a massive debt bubble that will burst and cause havoc?

Probably not. But there may be some pain ahead for people who are stretched to the limit. One of the big issues is interest-only loans. Strap yourself in for a quick primer on this – it’s kind of important.

A normal principal-and-interest (P&I) mortgage sets the minimum repayments based on the interest, plus the amount you borrowed – remembering that in a 25-year mortgage you can end up paying almost as much in interest as you borrowed originally.

mmm, cheesecake…

So if you think of it like eating a cheesecake – in a P&I loan, you eat some of the cheesy goodness (interest) and the crumbly base (the principal) all on one delicious spoonful, a mouthful at a time.

But in an interest-only loan, you just eat the filling and leave the crust till later. Sure you’ve spent less calories but now you’re stuck with a dry old base.

This is where the analogy probably falls apart, but the outcome of interest-only (IO) is it’s cheaper at first, but somewhere down the line you probably have to stump up for the principal repayments.

Traditionally these IO loans were given to investors for tax reasons. They can also be good if you have temporary cashflow issues like two small kids in daycare.

But they became much more popular when property prices went through the roof. Why? Because it’s hard to afford the repayments on million-dollar mortgage.

So some greedy/stupid/careless lenders and brokers have shoveled a bunch of people into these loans. And the regulator, APRA, took a look at it and was like:

So they told the banks to dial it down as part of several ‘macroprudential reforms’.

And the best way to reduce demand for a product? Make it more expensive. IO rates went up, the loans were harder to get and APRA was happy with the reduction in new loans.

However, there are literally millions of old IO loans kicking around. Two-thirds of these are going to hit the end of their five-year IO period by 2020 (source).

Some borrowers will be able to roll those into another interest-only period, but others won’t. And some will be shocked and/or disappointed about this, as it can be a big jump in costs. Some people may be forced to sell if they can’t afford it.

Either way, it’s going to be a period of transition in coming years.

If you’re interested, I recommend this speech by the RBA’s Christopher Kent. But the TL;DR is that it’s not going to be a total disaster. He is pretty chill: “For the household sector as a whole, however, the cash flow effect of the transition is likely to be moderate.”

There are other commentators out there saying otherwise, because they like drama and headlines. But if our nation’s central bank is chill, then I’m chill.

If you personally have an IO loan and you haven’t thought about how you’ll afford it when it rolls onto P&I, then you’d better start. Because there’s no guarantee you’ll get another crack at IO.

What’s the verdict then?

Is the housing market about to do a Britney: mess up at the VMA’s and shave its head in public?

I don’t think so. It will go through some tough times. Gain a few kilos. Have a few drunk nights. Marry a random in Vegas maybe. But it always does that when it’s stressed.

Overall, it will be ok.

You know, I really could go on and on about this stuff because I find it super interesting. But I’ll stop here, and encourage you to get in contact with me if you have questions or ideas for related posts.

Three tips to impress your friends while secretly saving money

Since unveiling my new kitchen I’ve been on quite the entertaining streak.

I’m not afraid of a mid-week dinner party, because a) it’s cheaper than going out and b) I can control my protein/fat/carb intake.

So, I’ve had some requests from my dinner guests to share some tips for knocking up a midweek feast with maximum taste and minimal cost (to both your wallet and your hips). Even if the word ‘dinner party’ strikes fear into your heart, I promise you can nail these meals.

1) Everything is better roasted

When I say everything, I mean vegetables. Somehow, roasting takes them from humble to sublime in less than an hour.

My fave roasting subjects are:

  • Cauliflower – cut into florets and sprinkled with sumac (a fancy spice that you can buy at the supermarket)
  • Brussels sprouts – cut them in half first for extra crispiness
  • Zucchini and carrots – cut in quarters or eighths lengthways, depending on size
  • Broccoli – yep, roasted broccoli is a game changer. Just be careful as it usually cooks the fastest.
  • Beetroot – peeled and cut into segments. Take mental note that you’ve eaten them though, so you don’t pee the next day and think you’re dying cos there’s blood in your urine.
Roast ’em up baby

You can also roast the usual suspects like potato, kumara and pumpkin. Spray everything with olive oil, and salt it after its cooked.

I also use a silicone baking mat to make cleaning easier and avoid the waste of baking paper. The key is to give them a bit of space between each other so they crisp up – jamming them all up close means the air doesn’t circulate enough.

If you want to go one step fancier, put them all together on a platter, sprinkle crumbled feta, drizzle over some caramelised balsamic glaze, and call it a warm vegetable salad.

 

2) Fresh salsa makes everything fancier

What to serve with the veggies? I’m fond of salmon fillets with fresh pico de gallo salsa. But you can add the salsa to anything, like steak or chicken.

I get my salmon from Aldi because it’s close to home and I can buy it fresh. Comes out about $4 per person, which is pretty cheap really.

I either pan fry it for a few minutes each side, or wrap it in baking paper and do it in the oven (while our little veggie friends are cooking). Pan frying is easier if people have different preferences – I like mine fairly pink inside but others find that gross.

For the salsa, it’s basically:

  • Tomatoes – I prefer cherry or grape tomatoes because they are sweet and firm
  • Red onion
  • Coriander
  • Fresh jalapeno (optional)
  • Fresh lime juice
  • Olive oil

Dice them all up as finely as possible and throw them together in a bowl. Simples!

How much to use? Just guess. Probably half a punnet of tomatoes, quarter of a red onion, handful of coriander, one lime and a splash of oil. I deseed the jalapeno to take the heat out, but that’s also optional. Basically, it’s flexible depending on how many people and what’s in your fridge.

This salsa is also what they serve with corn chips at nice Mexican restaurants, so don’t be afraid to make a bunch of it and eat the leftovers.

If you have hungry guests with carb-a-licious expectations, you can also cook up some rice to have as a side dish. Although I would argue most people won’t notice the lack of carbs if you load up the veggies.

3) Pre-cook your way to dinner party triumph

One of my go-to, make-ahead dinners is a pasta-free lasagne. Ok, it’s more ‘inspired by lasagne’, but who cares about labels. You can make a vegetarian version or a meat one, depending on guest preferences.

Ingredients (they don’t have to be exact, you can just wing it)

  • 500g Mince or 2 x tins of lentils
  • 1 onion
  • Cumin, coriander, paprika, cayenne pepper
  • I jar passata or tin of chopped tomatoes
  • Half a butternut pumpkin
  • 2 x large zucchinis
  • 1 x eggplant
  • Olive oil spray
  • 1 x tub ricotta
  • 1 x tub cottage cheese

Make the filling:

  • Chop and sauté and onion in a frypan. Add either 500g of beef mince, or a couple of cans of lentils, and any spices that take your fancy. (Try paprika, cumin, ground coriander, cayenne pepper or some combo of those).
  • Add a jar of tomato passata, or just some tinned chopped tomatoes. You don’t want it too sloppy, so add about half the jar and see how it looks, then add a little more at a time. Add some salt and pepper.

You can also add some chopped frozen spinach if you’re thinking about your leafy green intake. Which I often am.

Make the layers:

Slice up  eggplant and zucchinis lengthways, as thinly as possible (about 0.5cm-1cm is fine). Peel and slice the butternut pumpkin into thin discs. You can always add some big pieces of capsicum if you have one.

Place them all on a baking tray and spray with olive oil. You want to roast them for about 15-20 mins or so, just to soften them. They will be the equivalent of your pasta sheets.

Make the sauce:

Take a tub of ricotta and a tub of cottage cheese and mix them up together. That’s all for this step!

Assemble the layers:

Grab a lasagne tray, casserole dish or whatever you have. Start with the vegetables – I find eggplant is a good base. Then simply alternate the layers between meat, cheese and veggies. It’s best to end with cheese on top.

It’s totally freeform. I made one this week with no eggplant and only a small tub of cottage cheese (bit of a grocery shopping fail). But I added a bunch of fresh spinach and it was all good in the hood.

And that’s it kids. Just serve it up and let the conversation flow.

PS: Yes, that is my table in the pic. Those are the flowers I rescue when they get rid of them at work every week. The placemats are from Kmart. Fierce, I know.

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