“The thing I have discovered about working with personal finance is that the good news is that it is not rocket science. Personal finance is about 80% behaviour it is only about 20% head knowledge,” – Dave ramsey
For the longest time, I am so ignorant when it come to personal finances. As far as I am concerned, I started working when I was 18 years old and I have plenty of time to safe my money for my future.
Well, girl… you couldn’t be more wrong!
Fast forward to now, 16 years later, I still do not have savings nor assets to my name, despite working full time for a good 10 years of my young life. Isn’t that ridiculous? Luckily, in Australia where I live, anyone working is set up with a superannuation fund, which pretty much our retirement funds. Aside from that amazing security, I pretty have no other savings. Shock horror!
As we grew in both maturity and age, we started to receive few reality checks every now and then from life. Whether it is a small health challenges or a challenging financial situation, like getting into credit card debt, things happens that pretty much will burst your bubble one day. For me that bubble was burst because COVID-19 happened. My bubble of always feel secure in my 9-5 job, has suddenly became obsolete. Luckily, I did not loose my job but what if? I am sitting on $7500 credit card debt which I realised I needed to tackle luckily, earlier pre-COVID but I do have few thousand dollars left to tackle plus still a large lump sum of student loan that still needed to be paid off. WIth all that is happening, I have decided that I am turning my financial illiteracy around and stop making excuses for my past. Therefore in 2020, I am kicking start my financial journey to get to a point where I feel comfortable enough to be able to gain personal independence as well as, personal financial freedom.
I am getting some education in my brain. If I could do over, I would totally pay more attention to my finance classes at university, but well that is all in the past so forward, I am putting time and effort into financial education in ways that are available to me. I just finished re-reading, properly this time, Rich Dad, Poor Dad by Robert Kiyosaki and really listen to what he is saying. Digesting the informations and relook at more explanation where needed. On top of that, I have ordered and will adding to my learning two more books, The Total Money Makeover by Dave Ramsey and I Will Teach You to be Rich by Ramit Sethi.
Get my finances sorted. This started in 2017, I finally admit that I am out of control and brave myself to book an appointment with a financial advisor at the bank that I am with. Most banks I believe, offer this service for little or no charge. I love my financial advisor and here are few things she changed in my life,
- Tackling down my $7500 credit card debt. Most credit card debt has high interest, therefore she proposed to take out a personal loan with smaller interest (still a high interest), with 3 years term, weekly payments coming straight from my everyday accounts
- Creating separate banking accounts to enable money management and budgeting. Therefore I started to have more than 1 bank account in 2017. I have one account for my daily spending, one account where my salary and bills comes in and out from and finally, one online savings account.
What am I doing right now to further my knowledge and commitments to this adulting business. In 2020, I decided to learn more about education and how I can reduce expenses as well, here are some things I have change,
- Creating a new bank account that allow for higher interest for Online Savers. I did some research in order to find a bank that can offer a higher interest for my savings, therefore resulted in me opening an account with ING Direct, who gave my online savers a high 1.65% interests to my online savings
- Budgeting – woohoo… onto the fun stuff. I have decided to be honest with myself and look at my finances in order for me to be able to create an honest and realistic budget. The hardest part about this budgeting is actually disciplining myself in order to stick to budget that I have set out, but again, finance is 80% behaviour!
- Track my expenses – know where I spent the most money and learn from my spending habit every month. When I track my expenses, the aim is to learn from it not to punish myself or feel guilty because I spend. Part of educating myself is to learn from my mistakes as well as other people’s
Have you thought about your finances lately? What are you going to do to get your finances sorted, I you haven’t already…