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The Fierce Girl's Guide to Finance

Get your shit together with money

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Get a money mindset

Is the patriarchy making us poor?

Did you know that 2 in 5 Australian women don’t feel in control of their financial situation?

That’s according to an MLC survey of women, which also found that of the 43 per cent who do not feel in control, 61 per cent said low savings is the main factor.

While concerning, it’s not really surprising. But I’m not here to give you a lecture and say ‘girlfriends, think positively!’.

[NB: Feminist rant alert!]

You see, it’s not as simple as changing our attitude or outlook. We are not just struggling with our money; we are struggling with the patriarchy.

We are conditioned from a young age to think of money as something that buys us stuff. The kind of stuff that helps us win in the world of constructed femininity – first dolls, then clothes, then make-up, then diets, then surgery and then all of that shit that we convince ourselves we need. (Or society tells us we need).

I am guilty of this  – I got suckered into the Priceline 50% off sale last week too.

But before I beat myself up about it, I think about the forces at work. I’m nearly 40, single and work in a male-dominated industry. My appearance is part of my currency, for good or bad. I need that make-up, I need to cover that grey hair, or so my internalised misogyny tells me.

(OK, so, my boss hasn’t told me I need 10 shades of glitter eyeshadow – that is some creative licence from me).

The weight of it all

I am not suggesting we stop shaving or go bare-faced (unless we want to, of course). But when we look at how the beauty-industrial-complex sucks our money and attention away from us, we should have pause for thought.

Have you ever added up how much you spend on this stuff every year? I haven’t. On purpose – far too scary.

But even a vague mental checklist of hairdresser, make-up, fake tan and hair products is alarming. Add in all the clothes and accessories I buy, and it gets scarier.

And that’s me being a tight-arse, not buying anything full-price, having a low-maintenance hairdo, and refusing to get my nails done (oh how I miss thee, Shellac).

If I think of the women in my life, we all have those kinds of expenses. And it seems to be getting harder, with Instagram beauty demanding all sorts of high-maintenance appearances, including botox, fillers and surgery.

Now I’m not saying these things alone account for any money troubles we have. But there are two things to note:

  1. Men don’t have these costs.
  2. We are highly distracted by them.

Being chained to the costs and worries of our personal appearance, our body fat levels or our emerging wrinkles – this chips away at our sense of confidence, not to mention our bank balances.

What’s the solution? 

Being ‘woke’, as the young folk say these days.

In other words, being conscious of the impact the patriarchy has on us and our confidence.

Being alive to the impact of our socialisation as young girls, where money was rarely on the agenda but being pretty was.

We don’t have to burn our bras (that would be both toxic and wasteful). But we can rebel in our own ways.

  • We can take on the knowledge that has traditionally been the domain of men – finances, investment, capital.
  • We can create boundaries for our spending, so that we do the sensible stuff – like saving and paying off debt – before we rock up to David Jones.
  • We can make a plan, set goals, educate ourselves and take on financial planning with the same enthusiasm as we take on a Kayla Itsines bikini body challenge.

Knowledge, attention, action. Pretty much the key ingredients to any great social change. And remember:

6 of the best: Fierce Girl’s top posts to help you makeover your money

I’m gonna call it. The Fierce Girl’s Guide to Finance is going places.

Last week we had our first original content posted on Mamamia: a Money Makeover, helping Theresa make a plan to save $25,000. Check it out here.

Then The Daily Mail got wind of the story and got in touch. Let me tell you, after 17 years in PR, the idea of a journalist calling me (about something good) is absolute bliss! Usually we have to shop our stories around and beg journalists to write them.

The outcome was a story where I seemed to scold everyone a lot, but hopefully also provide some useful tips (read it here). And just in case anyone was wondering my age, they helpfully plastered it everywhere. I hope the undertone was ‘wow, doesn’t she look great for her age‘.

I think the reason for this momentum comes down to a few things. Firstly, there isn’t much competition. Not many others are talking to women about money in a no-bullshit way.

Secondly, it’s an idea whose time has come. Ridiculous house prices, rising energy costs, stupidly high uni fees, and a stubborn gender pay gap are just some of the reasons women are realising why we need to look after our own interests.

Turns out, middle-aged white guys in suits aren’t racing to share their power or wealth with us. Huh, who knew? (As a group that is – individually, my dad is actually pretty good at giving me money).

The third reason is obviously the awesome content being pumped out by these fierce fingers. But let’s not dwell on that.

The blog has been around for just over a year, but there are lots of new readers. Hi ladies! Thanks for coming by!

So, let me point you to some of the most popular or useful posts. (NB: this is not like a TV show where they run out of budget for a whole new episode so they just have a storyline full of flashbacks. It’s because there is good content that could be useful to you).

1. How to think about your money as though you’re in an episode of Sex and the City. 

The 4 best friends who will make you rich

 

 

 

 

 

2. Hacks to help you  overhaul your approach to money (even if it’s not January)

7 money resolutions you can keep in 2017

 

 

 

 

 

 

 

3. How to set up your banking to make your life easier and your spending more enjoyable

The secret to guilt-free spending

 

 

 

 

 

 

4. How mindful spending can help you have a better relationship with money

Mindful spending: what it is and why it matters

 

 

 

 

 

 

 

5. What to read if you’re thinking about buying a home or are freaking out about not doing it

Can I afford my own home? Part I and Can I afford my own home? Part II

 

 

 

 

 

 

 

6. How to get started with investing 

Buying shares is pretty much like choosing a husband

Maybe your grandma was right (about money, as well as that boy you were dating)

My late step-grandma* had a saying about choosing a partner: ‘Never stoop to pick up nothing’.

This post is not about that – I just wanted to share it because it’s great, and to prove that Grandmas know their shit.

My Grandma used to have five empty Vegemite jars, which she’d put her stray pennies into. There were different jars for different purposes.

“And if you keep doing that, soon you have a shilling, and then you have 21 shillings, which means you have a guinea to spend”.

(OK, I had to Google how  many shillings in a pound, but I did know that guineas are more exciting than a boring old pound).

This old-fashioned idea actually underpins a fancy new concept: microsaving apps like Acorns. I’m a huge fan of this app, which scrapes small amounts off your bank account – called ’round-ups’ – and invests them for you.

Say you spend $3.50 on a coffee, it garnishes the 50 cents (to round up to $4), and pops it into a portfolio of Exchange Traded Funds (ETFs) – click here if you want to know more about them.

I like this because it’s painless saving. Of course I have other savings. But my Acorns is a bonus stash that I actually forget about most of the time.

Words from the wise

My friend Cara has an Irish Granny who tells her to ‘save your pennies and the pounds look after themselves’. So true! Even if we don’t actually have pennies or pounds.

On one hand, little bits of good work all add up, in those real or virtual Vegemite jars.

On the other hand, it’s all the small purchases here and there that drain your finances.

In fact, I just went through an exercise proving this. My work is about to launch a budgeting tool which links to your bank accounts and categorises all the transactions (from the last 6 months!) into ‘essentials’ and ‘discretionary’.

But it can only do about 70% of them automatically, meaning I had to go through and label a bunch of transactions myself. Soooo many transactions in the ‘Bars, Cafes and Restaurants’. Soooo many in ‘Clothes and Accessories’.

Sobering but not too surprising. After all, my mindful spending manifesto says I can spend money on going out to brunch, dinner or drinks with friends. It says very little about buying clothes though, so I am going a bit too far with that.

Even though I’m still within my ‘spend and splurge’ limit, the process showed me that I should probably shave that allocation down a little.

Considering I just bought an apartment this week, after three years of post-divorce renting, I think that’s a useful and timely lesson.

So my hot tip is this: track what you spend. Even if it’s just for a month, you’ll quickly see where your money goes, and whether it’s in line with your goals or priorities.

I like the trackmyspend app from MoneySmart, but there are others in the app store. Or go old school with a notebook.

Other great tips from my Grandma and her generation:

A stitch in time saves nine – Looking after things properly means they last much longer. I notice this the most with shoes. If you spend the time and effort wearing in a  great pair of shoes, get them resoled and reheeled before they fall apart. I have some beautiful boots cracking the ten year mark now, thanks to some love and care from Mr Minit in Martin Place.

A penny saved is a penny earned – This is really, really important. Earning money is hard and annoying most of the time.

Every time you don’t spend money on something, you can not only keep it, but put it to good use.

My Acorns account is a good demonstration this. I’ve received an 8% return on my funds in the last year.  That means every dollar I put in is now worth $1.08 – for doing nothing!

Sure, I’m not going to spend that 8 cents all at once. But when you add this up over time, it’s powerful. Over the next year, I’ll be earning 8% (or whatever it turns out to be) on $1.08 – not just the original dollar.

And this, my friends, is the magic of compound interest. 

The graph below is from the MoneySmart compound interest calculator (which I freaking love). The pink columns show what happens if I keep my $1000, continue earning 8% every year, but do nothing else for 10 years.

It’s nice. You get $1220 of free money, and come out with $2220. Good outcome, but no reason to crack out the champagne.

However, if you add just $100 a month, look what happens. That is literally the cost of buying a takeaway coffee every day. If you allocate that to an investment fund for 10 years, you could walk away with over $20,000!

Those light blue columns are the ‘free’ money – the interest earned over that time.

Source: moneysmart.gov.au

There are lots of assumptions in this example, including getting 8% returns (not guaranteed with shares). But you get the general picture.

Every dollar you don’t spend is good. Every dollar you don’t spend, and invest in something more productive, is even better. 

That ‘productive’ thing may just be paying down your mortgage. Don’t get me started on how much you can save by doing that – I have a whole post in the works about it.

But you get it, right?

And finally, here is a tip from Grandma White, which has served me well over time:

If something has green mould, cut it off and it’s fine to eat the rest. If it’s pink mould, throw it out. 

I take no responsibility for public health outcomes on that one.

*Side note about my step-grandma Gwen: in her later years she told her daughters “If I die, don’t throw out my wardrobe without getting the $17,000 out of the back.” Over the years, she’d saved whatever was left over from the housekeeping money and stashed it there. Perfect.

Assumptions in calculator:
Scenario 1: $1000 deposit,  no additional payments, 8% interest each year.

Scenario 2: $1000 deposit, $1000 monthly payment, 8% interest each year.
Past performance of an investment isn’t a reliable indicator of future performance.

photo credit: Nicholas Erwin Change via photopin (license)

How to feel wealthier, happier and more in control of money

What do you get when you cross a yoga teacher with a financial adviser?

No, that’s not the opening line to a joke.

Lea Schodel is both of those things, and as a result, is the driving force behind a more mindful approach to money. Lea and I came across each other on the interwebs and were like “Yasss, you totally get it!”… “It” being the way money and emotions and wealth and being a woman all intersect.

Lea’s approach to the topic has seen her sprout a social enterprise, The Mindful Wealth Movement, focused on helping women connect their hearts and minds with their money. And then make better decisions about it.

One of the things she provides – for free – is a 30 Day Mindful Wealth Challenge, where you receive a daily email with a little task. Some of them are very practical, like renaming a bank account to fit with a goal – “Adventure Bucket” or “Freedom Fund” for example. Others are more reflective, such as, “Make a list of all the things that wealth means to you”.

What I enjoy is that each day has an affirmation linked to the challenge, like “I am creating a wealthy life”.  It’s a simple but powerful process to reassess your relationship to money.

Lea recently wrapped up a crowdfunding campaign, raising money to provide mindful wealth and financial literacy workshops to disadvantaged women. And she still found time to share some of her thoughts with you, the Fierce Girl community, in answer to my questions. So please read on for some tips from this inspirational woman. 

What prompted you to marry mindfulness with wealth?

As a financial planner, I completely understand the need for the technical knowledge and skills (left-brain) required to manage money well. But to me, this is only half of the skillset required to have a healthy relationship with money. As a yoga teacher and wellbeing coach, I also recognise that our mindset – our thoughts and feelings (right brain) – affect our ability to manage money well.

I often say, “in order to manage money well, we need to manage ourselves well”.

Our thoughts and feelings will either support or sabotage the actions we take with our money – and often we’re not even aware of it.

A lot of what we do with our money is sub-consciously driven: done out of habit or influenced by our emotions. We all have a complex money story and a whole range of beliefs and attitudes towards money. This can either support us or limit us when it comes to earning, keeping and growing our wealth.

After studying mindfulness, I saw it as an ideal philosophy and practice to apply to not only our finances, but our lives and relationships too. Mindfulness is all about creating attention and becoming present and fully aware of our current situation.

Why did you decide to build it into a social enterprise?   

I have this motto in business: Be guided by purpose and be driven by passion. I believe you can work in a space where you generate profit but also generate impact.

Money has such an impact on all areas of our lives. Having a good relationship with money and knowing how to manage your finances is fundamental to wellbeing as well as the ability to live healthy, balanced and stress free lives.

In my experience in Financial Services over the last 16 years, I’ve come to realise that many women (and men) are missing even the most fundamental personal finance concepts and it’s not really their fault – basic financial management wasn’t taught in schools or even households for most people growing up.

I’m on a mission – to help women create a conscious and purposeful relationship with wealth, help them take control of their finances and allow them live happier, healthier and wealthier lives.

I also feel that if as a society we are more conscious and purposeful with money, then it will address social issues such as depression, suicide, homelessness, domestic violence and poverty.

It will also help close the gender pay gap and retirement shortfalls that many women face. I’d also like to see more women become conscious consumers, practice gratitude and maybe even embrace the minimalist movement.  

The final reason I created a social enterprise is because I wanted to make financial literacy and education inclusive to all women, not just those who can afford to pay for financial advice.

It doesn’t matter how much or how little money women have, we all need to know how to manage it properly if we want to use it in a way that supports our dreams, goals and wellbeing.

What stories do you see women often sabotaging their finances with?

Money is so fraught with emotion. Fear, guilt, shame or embarrassment often prevent women from seeking help or even taking the next step to gain control of their money situation.

I see a lot of women who hand over the responsibility to someone else to manage their money, and those who secretly wish and hope someone else will save them – or sweep in and fix their finances for them!

I have a lot of women tell me that they find money boring, or that they’re too creative, or just don’t care about money. It’s almost as though they feel that it’s not really a feminine thing to be money savvy or an investor.  

I see lots of women mixing up their self-worth with their net worth – thinking that they can spend their way to higher self esteem, or trying to value themselves and their success based on the clothes they wear and the things they own.

Finally, I see many women completely disconnected from their future selves, too busy living in the now to consider the impact that their money decisions today may be limiting their opportunities for tomorrow.

If you want to start practicing mindful wealth, where do you start?

Mindful wealth is all about creating connection with and bringing awareness to your wealth, accepting your current money situation and then taking intentional action to create wealth. 

The simplest way to begin is by starting to notice how money is flowing in and out of your life. Whether it is quick to earn and easy to spend, whether you are hanging onto it too tightly, whether you are oblivious to how much you earn, spend, own and owe.

From this place of awareness, you can begin to notice how your emotions and habits may be driving your relationship with money.

Any time you spend or receive money, check in to see how you are feeling, or take a moment to explore the “why” behind your actions with money.

This helps us to create more connection to our money habits (which are often driven from our sub-conscious).

There is a saying that the way to “buy happiness” is not to buy things, but to spend the money you do have, on the things that you value most in life. If you know what you truly value, then you can begin to use the money you do have to bring more of that into your life.

See if you can define what wealth means to you personally. Have a go at thinking about what is present in your life already, or that you’d like to have more of in order to feel happy and abundant.

Whilst money may certainly be one of these things, see if you can list all of the other things that you need or like to have in life and that bring you the most satisfaction and happiness.

This can be an interesting exercise, as often we have this idea that to be wealthy, we need to have lots of money. Then, in the pursuit of more money, we can sometimes lose sight of the things that make us feel truly wealthy.

What if you’re partnered, and your partner isn’t on board? How do you manage that?

I so often see “opposite” money personalities in partnerships, whether romantic or business. Given money is a leading cause of relationship breakdown and divorce, we can certainly do ourselves and our relationships a favour if we can get on the same page as our partners.

In any partnership, it’s important to recognise that we all have a unique money personality, experiences, values and habits. If we can create awareness around what these are for our partner, and they can understand what they are for us, then we can understand what drives our behaviours.

I use a great tool with my clients, which helps couples to discuss their dominant habits and attitudes with money. Then they can begin to work out a plan to support each other’s strengths and challenges when it comes to managing money.

If you’re not on the same page as your partner when it comes to your finances, the first place to start is with communication.

If you can’t communicate with each other without arguing, then it could pay to see a financial counsellor or money coach to begin the conversation in a neutral environment.  

I’m a big fan of transparency between partners, but I also insist that partners maintain some financial independence.

 Joint accounts are great to manage joint and household expenses and debt, but I think it’s also necessary to have individual accounts for personal spending money, so that each partner can spend freely on the things that they value most.

So, these are just some of Lea’s wise words. There is a lot to process there! And because I know you guys like practical tips, I have crunched it down for you into 3 Top Tips for Mindful Wealth.

 

 

photo credit: MrJamesBaker http://bestreviewsbase.com/

What I’ve learnt from a year of running a finance blog

Today is the first anniversary of The Fierce Girl’s Guide to Finance. Yay! I feel happy and proud about that.

It’s been fun, hasn’t it? If you’re new to Fierce Girl, thanks for coming here. If you’e a long-time follower, thanks for being on the ride.

This whole thing was born out of lunchtime session at work called ‘Get your shit together with money’, part of the now-defunct National MoneySmart Week (long story about why it was canned). Anyway, it was a bunch of passionate advocates for financial literacy trying to put it on the national agenda. I was the PR chick, working on it pro bono.

During MoneySmart Week, I ran a session telling people to roll over their super funds and explaining the wonders of compound interest. And guess what, they got really into it! Weird, I know.

Then my friend Mindy Gold dared me to start this site. She was originally my partner in crime, but selfishly went to live overseas. (With a decent pool of savings btw, because she’s a Fierce Girl.)

The Divorce Thing

The other element of this story is that I was going through a divorce. I’m amazed by how short that phrase is when you say it.

‘I got divorced’. It’s like ‘I got my hair done’.

In reality, it was a slow, painful unwinding and rebuilding.

From the day I decided to leave, until the day the financial settlement was agreed, three years went by. And that doesn’t include the time spent watching my marriage fall apart. I’d say the last five years of my life have been spent in the strange, murky land of relationship failure.

I don’t say this to elicit sympathy, but to provide context. I’ve learnt many things from the process, some of which I’ve written about here and here. But the mistakes I made about money during my relationship, and the important role it played in allowing me to leave, have fueled my passion for this issue.

Put simply:

If you don’t control your money, you don’t control your life.

This is why it breaks my heart to see women hand over control to a partner, or to the universe. The attitude of ‘oh, I’m so bad with money but, haha, aren’t I adorably helpless‘ is still far too common.

Nobody is perfect with money. We all make bad decisions from time to time. But we need to remember who’s in the driver’s seat.

Not your credit card, not The Iconic, not the hipster-bearded bartender, and most certainly not your significant other. You, and you alone. (And maybe me, a little bit, haha).

Getting the basics right is hard – and important

When you hang out in the finance industry, you think everyone cares about whether your fund has beat the benchmark. And if you don’t know what that means, don’t worry – you’re not alone.

Finance people live in a bubble of complexity, products and jargon. Most regular people don’t care about alpha (which is how much an investment outperforms the benchmark, if you’re wondering).

They want to know how to pay off their credit card debt. Or to spend less on groceries. Or to have more money left before payday.

While I love explaining economics and investments, the readership stats for those posts are relatively low. My most-viewed post of all time is … wait for it … about bank accounts.

Turns out, how to structure your banking is far more interesting than the ingredients of Gross Domestic Product.  But the people running the banks and investment companies of the world don’t understand this. It’s taken me a year to fully appreciate it.

And that’s why so many people switch off and fall asleep when it comes to finance companies selling them stuff.

Success flows where attention goes

That sounds a little Tony Robbins, I know. But what I mean is that, since I’ve been thinking about money and finances and budgets A LOT in the last year, I’ve become way better at all those things. When you focus on something, you get better at it. Who knew!

My budgets are less liable to blow-outs, I feel confident about meeting my financial goals, and I feel comfortable about spending money on something if I’ve mindfully allocated funds to it.

I feel more in control, more confident and more optimistic. And that’s the goal, right?

Plus, I guess I have to really practice what I preach. Don’t want the paparazzi snapping me in the Jimmy Choo store.

At some point, you just have to back yourself

For someone in PR, I have a weird aversion to promoting myself.

But I have to remember I’m on a mission: to help you all take control of your money, give yourself choices and live your best lives. And a mission needs an appropriate level of bad-arse bravery and hustle.

So , as I enter Year Two of the blog, I’m getting serious. Site redesign, e-book launch, PR blitz – the lot!

If you love what I do, please be an advocate. Share things you find useful. Send me your feedback. Sign up for emails. And tell me when you’ve had Fierce Girl wins!

We are all in this together, fighting, dollar by dollar, to own the world and everything it has to offer.

So, go forth and be Fierce! And remember…

You have 300 paydays left. Seriously. So, what’s your plan?

Last week, I ruined everyone’s Friday by dropping this truthbomb.

Seriously, if you’re in your 30s and plan to retire in your 60s, you don’t actually have many paydays left.

It’s easy to work out (if you get paid monthly). Pick your imagined retirement age, minus your age now, and multiply by 12. Because I have aggressive early retirement plans (and am kinda old), it’s an even lower number.

Yep, just over 200 times to wake up and feel rich for three days. 200 times to scour my payslip working out how much leave I have accrued. 200 times to go down Pitt St Mall feeling like a baller.

That’s not really many times at all, in the scheme of things.

And if you’re planning to take time off to raise kids, then you can minus out at least 6 of those paydays,  and maybe a lot more.

So, now that we have all had a moment to face reality, let’s talk about what we do with this information.

Running the numbers

Our time in paid employment is a gift. Not just to our smashed-avocado-loving selves of today, but also to our future, chilled-AF party selves. We are all Baddie Winkle, somewhere in the future, drinking with Miley Cyrus.

Instafamous nanna, Baddie Winkle

How do we do we achieve this? We take charge, that’s how. We do a mutha-effing BUDGET! Woot!

Ok I said that in an excited way because I know you’re about to hit snooze. But go with me here.

How to do a Budget that doesn’t hurt your head or induce anxiety

A budget is all about giving you data that makes you better at decision-making. And information is power! So, I recommend a combination of:

  1. MoneySmart’s great online budget planner (click here), which sets out all the costs you have right now. You can choose weekly, monthly or annual for each item, and it averages it all out for you.Then you can run it as a monthly, quarterly or annual budget. It even gives you a pie graph – awesome!
  2. MoneySmart’s TrackMySpend app (in the App store or Google Play) – record everything you spend, and I promise you shit gets real very quickly. You can just do it for a month if you like – but it gives you powerful data.

Once you have this data – a combination of ‘forecast’ and ‘actual’ numbers – you can make informed decisions. In particular:

  • What does it cost to be me?
    These are your fixed costs. A useful way to think about this is to have different versions – the ideal you, the average you and the bad you. Kinda like Kylie Minogue in the awesome video for Did it Again.

    My ideal budget is when I don’t buy three pairs of boots at the Wittner sale (they were super cheap) and don’t have Priceline accidents (when you go in for Panadol and come out with three new lipsticks). My average budget is when I actually do those things.

    And my bad budget is when I buy stuff I don’t need due to premenstrual angst or emotional turmoil. To be honest that version of me has been tamed  these days, so I usually fall into the first two. And my latest budget has Priceline accidents built into it.

  • What’s a reasonable savings goal? 
    There is no magic number for this. At least 10% is good, but if you have done your real budget (the average you) and there’s genuinely not enough left over, then do 5% or whatever. If you can do more, then happy days! The key is to do something.
    Also, it may not even be real savings at this point – it could be paying down bad debt like a credit card. Or, at the other end of the scale, it may be going straight into an investment like a managed fund or ETF (more on that here). In any case, it’s the money you allocate to being a responsible adult who does sensible things with your future self in mind.

And once you’ve answered these questions, you can feel more in control and less like ‘it’s all too hard’. Simples!

Bad at saving money? Here’s why – and what to do about it

I got asked today ‘how do you have the discipline to diet?’.

Since I was eating a Bounty at that moment, I’m not sure why. (To be fair, it was a piece of someone else’s Bounty, so there are obviously no calories.)

My response was that it’s easier if you have a reason. In my case, it’s so I can compete in powerlifting in a lower weight class.

It’s the same with money. Another friend asked me, ‘What if you just can’t save?’. To which I answered the same thing: you need a reason.

AKA: a goal.

Goals, I know! So lame and hard and too much like adulting.

I’m not a massive goal-setter myself, but I have forced myself to create some clarity about where I’m going. So then I know how to get there.

Just before you get bored and switch off, let me offer you a gift. We’ll come back to it shortly.

Click here to download your printable A4 worksheet

Why do you need a worksheet?

So we can put the ‘plan’ into financial planning.

I know, a lot of people don’t trust financial planners. There are good and bad ones, just like any other profession. We’ve all had a hairdresser who takes ‘just a trim‘ and turns it into ‘radical hair makeover so you look like a lesbian biker‘. (Don’t get me wrong, I love lesbian bikers – I just don’t necessarily want their haircuts).

However, I’ve been having a conversation with a mate who’s a financial planner, and he messes with my head because he’s all about ‘plans’.

I would ask him ‘should I buy a property to live in or invest in’ and he was all like ‘well, what’s your plan?’.

I don’t know! I’m in my late 30s, divorced, childless. So far, all the ‘plans’ I made 10 years ago haven’t really turned out.

But that doesn’t mean I can get away without one. Without some goals, I don’t know where to put my money or how much to save.

And if you don’t know the destination, how will you know the how to get there?

Sometimes, choosing the destination is the hard bit

People often ask me about what to with their money. I can’t  tell them specifically (partly because I’m not licensed so it’s illegal). But I do ask them ‘what’s the goal’?.

Is it  saving enough for a property? Is it having enough to travel? Maybe it’s just being a bad-arse with a backpack and a round-the-world ticket (oh hey Betsy, how’s Iceland?).

Tactics are useless without a strategy. And a strategy is nothing without a goal.

If you’re  like me though, you find big life planning stuff daunting at best, terrifying at worst. But don’t worry, Fierce Girls, I got ya.

I came up with questions to help you create some clarity. And then I made a fucking worksheet! I know, I am crafty AF.

Doing the worksheet

Now, you can do this and not necessarily come up with a special number. You know, a savings goal or something. That’s a topic for another day.

But you will think critically about the factors that shape your decisions. So the questions in the worksheet are (and you can totally pick the timeframe that applies to you):

  • Where do you want to be __ years from now?
  • What things do you want to experience?
  • How will you spend your time? Who with?
  • What will you own?
  • What is a must-do or must-have?
  • What can you give up or cut back?
  • What is the ‘why’?

When I did this exercise, I came up with a general plan that I don’t want to be a full-time, salaried employee much past my mid-fifties. I want to write books and hold workshops and coach people and be generally useful. I also want to travel as much as possible.

So that means I have about 15 years to build wealth, take holidays, smash a mortgage and sock away superannuation. Scary huh?

It also means I can give up expensive cars, too many clothes, and general unnecessary ‘stuff’. When I am considering a purchase, my decision tree is something like ‘Could I better spend this money on my trip next year?’ or ‘Wouldn’t I be better to chuck this into my mortgage?’.

Of course I won’t be perfect. But I have a plan and sense of direction. And then everything else is easier from there. Try it yourself!

Next week: The Track Your Spend challenge: finding where your money goes and working out how to save more of it. Yep. I’m gonna make another worksheet. It will be amazing.

 

What’s holding you back from being Fierce?

It was always going to be tight. I found it hard to negotiate the notice period at my old job and the start date of my new job. Well, when I say ‘negotiate’, I mean I didn’t do that at all; I just did what everyone asked me to.

And so it was that I found myself at Queenstown airport yesterday, with heart racing and palms sweating. With all the demands from employers old and new, I ended up flying to a wedding in Queenstown for about 72 hours. What I didn’t know is that Queenstown is in the Top 10 most difficult-to-land-in airports in the world, with the runway flanked by mountains and choppy winds. The pilots tried to land twice, failed, then flew on to Christchurch to refuel and consider their options.

All this was revealed after we’d cleared customs and reached the gate, and so began a three-hour wait to see if the plane would come back to Queenstown, if it could land, and whether I could start my new job today.

I was pretty zen at first, but as the time dragged on, I cursed my decision to cut it so fine, and my failure – two year earlier – to negotiate down the excessive notice period in my contract.

Thank goodness for those lovely pilots at Jetstar (you didn’t think I’d be on a full-price airline did you?). They finally landed on the tarmac and hauled us back to Sydney.

Knowing your value

It’s a strange thing. If you ask me whether I’m good at my job, I’d say yes. My skills are in demand, I’m a specialist in my field, I bring a wide range of experience. And yet, I have never asked for a payrise. (Click here if you want some tips on that).

In fact, I forgot to ask about salary in my last performance review. I’ve never negotiated a starting salary, always taken what they offered.

This is nothing less than a failure on my part. Because most pay increases are incremental, the earlier you fatten your pay packet, the greater the increase next time. If I hadn’t been so damn nice, there’s a good chance I would make more money now.

This was brought into stark relief for me in the last few months. I was headhunted by a recruiter who was puzzled by the mismatch between my level of pay and years of experience.  I stumbled and mumbled when he he asked what salary I was looking for next.

Then when my employer replaced me, they hired someone with less talent and paid him more. It makes me angry, but at myself more than anyone.

Here I am, cheerleading for the girl squad and telling them to take life and money and career by the balls, but I’m not the best example.

However, I’m trying. I had an ex-investment banker give me a stern talking-to at the wedding. I had an old client make me promise I wouldn’t resign again without him coaching me. I had a colleague promise her I’d never again say in an interview “I’m not that focused on money”. Yeah, that was an actual thing I said. WTF.

The cost of pleasing others

I’ve been trying to unpick the puzzle about why I’m my own worst enemy in this sense. Why do I dislike asking for money? Why do I feel uncomfortable putting a dollar value on myself?

One factor was a fear of the price I’d pay. I believed that if a company paid you more, they expected a pound of flesh for it. That every pay rise would come with a concomitant increase in work. That’s not the case, in reality. You learn to work smarter, you find balance by being good at what you do and you learn to create boundaries.

Another issue is impostor syndrome. I question, in my heart, whether I deserve more money. Whether I’m that good or useful or worthwhile. Usually I can tell that bitch inside my head to shut the hell up, but not all the time. Sometimes she stands at the edge of my thoughts and whispers such taunts to me.

But I think the biggest issue is my tendency to be a people-pleaser. I don’t want to rock the boat by being troublesome. I don’t want to be the difficult one who makes a fuss. I feel uncomfortable making others uncomfortable. And so I leave difficult conversations about money well alone.

So now that I have identified these issues I can work on them. I can be alert to my own pitfalls.

When I was in that airport, waiting for the plane to break through the clouds, I decided that I had hit rock bottom on people pleasing. Today is the day where I start saying no more often. Where I value myself and my skills and my time more dearly. Where I start learning how to put aside the discomfort of negotiation, and do it anyway. I can do hard things in other areas of my life, so surely I can do it here.

I tell you all this not just because I am a massive over-sharer (although I am), but as a cautionary tale. I see a lot of women consistently undervalue themselves or question their worth in dollar terms. Granted, I’ve also seen women go hard in negotiations, (sometimes against me, their boss!) and succeed in getting more than they had been offered.

The tendency not to make demands seems to sit somewhere alongside the female tendency want to be smaller, less troublesome, less Fierce.

The world pushes us to take up less space all the time: to diet away our body fat, not to get ‘too big’ (as a weightlifter, I’m sometimes warned against this fate). We are told to quieten our voices lest we be called ‘shrill’ (god knows I have been).

All of these are simply attempts to stop us owning our power, and I admit, I fall for it sometimes. I doubt myself, I question my talent, I wish to be leaner. And so do many, many women I know and love.

So I encourage you to question which behaviours are holding you back from being truly Fierce.

What is stopping you from owning your power? Because whether or not we acknowledge it, our wealth is tied up deeply with our power. Our power to demand something from the world. Our power to say, “I am here, working and caring and sweating and delivering, and I ask you to remunerate me accordingly”.

Nobody will give us anything more than we ask, so we must to learn to ask.

And I am learning to ask.

Photo credit: Queenstown Airport by Curtis Simmons

What marriage – and divorce – taught me about money

My house was sold on Saturday. It sounds exciting but is in fact painful. It’s one of the last steps on the road to settling my divorce.

Regardless of the price my property commanded, selling it was one more loss in a long process of shedding – which is what a marriage breakdown all comes down to.

You shed your identity as a couple and as a wife. You leave behind cherished memories and possessions that hurt too much to think about, so you shed them too.

And when it’s all done, you find yourself stripped back to a strange hybrid self. The single self you were all those years ago, when you were on your own. But she is overlaid with a new, wiser, older version, burnished by loss and forged in fire.

So because I am a bit too sad and emotional to give you awesome happy money tips today, I instead give you some hard-won lessons. Take from them what you will.

You can walk away with (almost) nothing and be happy. I left a 3-bedroom townhouse with a double garage and extra storage. I ended up with 1 room in an apartment, no garage and no storage.

It was already furnished, so I left a house full of furniture, appliances, books and ‘stuff’. Left it there, threw it out, donated it or squeezed it into a few boxes in mum’s garage. I kept my (real) Tupperware though – that shit has a lifetime warranty!

So, I barely own any stuff now. And I am happier than I have been in years. Now, correlation is not necessarily causation – I am happy for other, more fundamental reasons.

But this process of leaving things proved to me that beyond the basics (like containers for your epic food prep sessions), you don’t need heaps of stuff to be happy.

Money means choices. Nobody gets married thinking it will end. I didn’t think it would happen to me. But sometimes it does, and it did.

And if you’re the one who wants to leave, you have to deal with the emotional upheaval just as much as the practical shitstorm. Finding rent and bond for a new place is a big expense.

I was able to do that because I had savings. I had an income. I could choose a nice apartment in a nice area. That meant I could focus all my attention on the essentials, like bursting into tears on the train every morning, for example.

You need to share the responsibility for money. You won’t be surprised to hear that I was in charge of all the finances. This wasn’t good for either of us. I felt burdened and he felt frustrated by my decisions.

I see both men and women fall into this trap. It seems easier to give up control, but it actually drives you apart. Managing money together means you share the wins and handle the challenges together, rather than one person shouldering the blame for your financial outcomes, or guilt-tripping the other one.

Ultimately, nobody is going to look after your interests like you do. No matter how happy your relationship, you’ll never regret giving yourself the knowledge and tools to be in control of your life and your choices.

You can always reinvent yourself – I’m the Arts graduate who fell into PR. I was all about words and books and writing. And here I am, rocking an actual qualification in finance and being called an ‘expert’ (haha thanks Mamamia).

I was the unsporty, uncoordinated one, and here I am about to compete in a powerlifting competition this weekend. (I won’t beat anyone, but will rock the outfit anyway).

You just never know how things will turn out. You are just one decision away from changing your life, or someone deciding to change it for you.

This is both liberating and terrifying. The only thing to do is be ready for anything – to embrace the new opportunities or tackle the crises. And to put away what money and resources you can, in order to do that successfully.

So that’s what I learnt once I picked my life up and put it back together. If I had to sum it up, I’d say, no matter what happens: you’ve got this.

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