I know I usually blog about animals and weird, old thrift stores but I feel super compelled to chat about things I've recently learnt about...money - as I briefly mentioned in my previous post.
I don't even know where to begin so let me frame this impending waffle with some context.
FYI: I know some people consider it crass to talk about money but I'm a pretty open person whose made some blunders along the way and if I can help just one soul from making similar blunders, I'll be chuffed!
Ok, so this is me right now in a nutshell - money wise:
My current age: 31 (32 in Oct) My knowledge about personal finance up until now: Pretty abysmal My spending habits up until now: Fairly frugal coupled with some massive mistakes Where I am with money in a very broad sense: I'm by no means rolling in the randelas but I am rich when you consider that a massive chunk of the world's population lives without shelter and regular meals. I rent a small studio apartment, I drive a little run-around but I can afford a few luxuries like takeaway coffee, cheapish clothes and the odd splurge at Typo. My parents always insisted that I figure my own way out of money troubles (which I used to hate but am now grateful for) so I am entirely reliant on myself to pay my way through life. Random FYI: I used to be married and when I was sharing living expenses with my ex-husband, I had a lot more disposable income. It has been helluva challenging to pay for rent, food and utilities on my own but I kind of enjoy the challenge of it now.
So, what led me to take an interest in "personal finance?" (A term which I always thought sounded seriously dull and complicated.)
I guess it was a number of factors.
- I realised that my car will be paid off by the end of January next year which sparked thoughts like, "YAY! I'll have extra money to TREAT myself with"...and then, "Ooooh, but I could buy a cool NEW CAR!" I have since redirected these two dodgy lines of thought!
- Tall One started purchasing shares some time ago and one day I was like, "Just exactly, what the hell are shares, Tall One?"
- Jon - his actual name - got me hooked on one of South Africa's biggest forums and I stumbled across the Finance section and found some intriguing articles about how to build wealth. I started reading those, which led me to some hilarious but super insightful personal finance blogs like THIS ONE. READ IT. It is extreme but there are some general principles which we can all apply - even those of us who often feel like we are just scraping by.
- I recently paid off my credit card, camera and lens (there were tears of relief) and I started to think, "Well, what should I do with the money I was using to kill down my debt every month? TREAT myself???" Nooo, Lauren, nooo....
Ok, I could write a blog post about each of those things but - say, I could only ever write ONE post to one twenty-something who was about to receive her (or his! It's just easier to imagine myself talking to a girl for some reason) first pay cheque, this is what I would say:
Hello twenty-something year old!
You're finally about to start earning some money which could buy you all sorts of things! If you're anything like me when I was twenty-two, you're probably thinking, "Yay!! I can finally eat at restaurants with my friends and buy shiny new things for my home and hey, the bank said I now qualify for a credit card which means I can get a fancy clothes for work!"
Wooooah, there Sally. Yes, you can have fun doing SOME of that but before you start living it up like there's no tomorrow, do these things:
1. Go online and read about personal finance. Listen to lots of people. Try Suze Orman. Try Dave Ramsey. Try Mr Money Mustache Man! You will find it all overwhelming. You won't be sure whose advice to follow but you will find some LOGICAL common threads which you can discuss with your boyfriend/mom/wise uncle. And if you're thinking of getting married, PLEASE don't leave the budgeting and financial decisions solely up to your husband. Sure, he could be the most honest, wonderful, financially-savvy man in the world, but wouldn't it be cool if you totes understood your financial life too? The basic principles aren't that hard to grasp. That's from someone who has numerical dyslexia and flunked Maths at school. Yup, I did.
2. If you're not ready to invest (who can blame you, I am still figuring that all out) then, just SAVE something. I know you probably won't be earning much at your age but seriously, just get into the habit of stashing away a bit of cash every month because
SUDDENLY AN EMERGENCY WILL HIT! LIFE IS FULL OF THEM!!
For example, your car may break down. And if you don't have some cash stashed away, you may be forced to pay for the emergency with your shiny, new credit card. And then, you will be forced to use some of your hard-earned salary to start paying down this horrible debt every month. Take it from someone who has been there, IT SUCKS. Come on girl, you don't wanna ask the folks to bail you out (although they may kindly do so) - you want to get used to the challenge of solving your own money problems because that's bad-a$$. (I've been reading a lot of MMM!) I know some families generously share money with each other and that can be a wonderfully supportive thing. I just think it's kind of cool to first try and pay for it yourself. That said, I have called my parents when my credit card was on the verge of being maxed and I literally couldn't afford two-minute noodles to get me through to pay day. I may regret sharing that here but as I said, hopefully I can
frighten inspire someone into not making the mistakes I made!
3. Be mindful when it comes to spending. When you've just started earning, it is tempting to blow your newly acquired loot on clothes because you've never been able to do so before but be MINDFUL. Think to yourself, "Is this a want or is this a need?" Treat yourself to some wants, as long as you don't have a DEBT EMERGENCY on your hands, and as long as you are saving some cash.
Ok, let's leave it at that for now. I have just started to get to grips with money things and I have LIBRARIES worth of things to learn!
In my next post, I am going to share my money strengths (like, going on cheap and cheerful camping trips as opposed to frequent larny getaways) and my money weaknesses (like, spending too much at the canteen - ugh, my worst)
If you're keen to hear that, stay tuned! xxx
PS: I was also planning a picture post for this week but when I arrived at the dog park with my camera, I realised it was as dead as a doorknob. (The camera, not the park.) Charging that sucker now!
PPS: My parents are probably reading this and thinking, "Ya, we tried to teach you about compounding interest and all those things when you were sixteen, but you wouldn't listen!" Fair enough ballies, but I'm trying now!
PPS: I just happen to be facing what is going to be a very challenging month in terms of stress and lean-spending so I am going to have put some of what I've just learnt, into practice. This is going to mean saying 'no' and sucking it up while I learn the lessons and re-configure my budget. Wish me luck!