I used to be afraid of debt. Now I understand how to use it to my advantage

USING DEBT TO GET AHEAD

I was super lucky to sidestep the burden of student loans. Thank you, scholarship! I’m getting to the age where a few people are starting to clear their student debt, but I’d say the majority are still paying theirs back.

I’ve always been debt averse. I’ve never really bought anything I couldn’t afford, and have avoided going into consumer debt.

(Granted, I have carried a balance on my credit card during some of the super fun times of unemployment and being down to one income. Paying that interest sucked – they were small balances of a couple grand but still. That shit stressed me out.)

Using debt to get ahead

We paid for all our cars in cash. But unfortunately that never turned out too well for us, because we couldn’t afford very good vehicles.

For this car I took out a loan and paid it down aggressively, eventually pulling from savings to pay it off  in full 9 months in. This saved so much stress and at the end of it we have a reliable paid off car that should have years left in it (touch wood).

And after years of enduring substandard NZ rentals, I have bought a house of my own and am already enjoying the benefits. The peace of mind that comes with the stability of owning is priceless; I am finally able to own a dog; and I’ve noticed my health is better now I have a warmer, drier home environment. This means I can be more productive – not to mention be taken more seriously as a professional when I don’t have a constantly literally dripping nose through winter and sniffles year round.

I don’t expect interest rates to stay this low so I’m directing extra money to the mortgage where I can – early repayments at this stage have a massive impact on the long term total cost.  Reaching retirement with a paid-off home will be a big win.

Going into debt as a calculated move has been one of the best things I’ve ever done. I’d probably be better off had I done so sooner.

Debt is debt and I still hate it – but money is a tool and debt can be too, done right.

In an ideal world nobody would ever need to borrow money (and we’d have 0% unemployment, poverty, homelessness etc…).

Sadly, that’s not the world we live in – and if we do need to borrow money then the key is to do it wisely.




How I doubled my pay and halved my stress

How I doubled my pay and halved my stress

Since graduating with my degree, I’ve managed to double my pay. Most of that growth has happened in the past couple of years, thanks to two strategic job moves. Here’s the process I went through.

I realised it was time for a change

It’s a long running truism that you don’t go into journalism for the pay. Young, energetic and idealistic, we rushed into the trenches with shining eyes and grand notions.

It’s thankless in those trenches. The work never ends. You’re constantly being forced to do more with less. Media organisations keep cutting back; the whole industry is struggling to find a sustainable model.

I loved my job, but it was tough. When I took a six-month sabbatical, the person covering for me quit after just a few weeks. For what it’s worth, I’d always worked at that pace and this was a bit of an awakening. It really did get me wondering what a normal workload outside of publishing might feel like.

When I started thinking about my next move, I looked around and saw no opportunities in journalism that excited me. Forget advertised positions; even just considering what roles existed and were currently filled, there was nothing that spiked my interest. Nothing I wanted to aspire towards.

And just as importantly, I saw little opportunity to increase my income. I was getting by fine, but in order to get ahead, or to afford a family or a halfway decent place to call home, I had to make a change.

I assessed my transferable skills

I took the skills I had and started applying to jobs outside of publishing. The decline of journalism has led to lots of new opportunities in all kinds of companies – as content marketing grows, editorial talent is in demand on the brand side. (The typical trajectory for ex-journalists is to head into PR or communications, but you could not pay me enough to do media relations.) They need people who can write, understand their audience, and manage digital channels.

I researched salaries as best as I could

I talked to people. I looked at salary surveys. I spent time on TradeMe and Seek just playing around with the filters and seeing how the results changed when I altered the salary band in my search parameters. (This works for real estate listings, too. In both cases you typically won’t see a number listed outright but you can use the filters to see when listings disappear from the results and make an assumption about the range based on that.)

I sucked it up and negotiated

Full disclosure: it took me until my fourth job to actually negotiate for the first time.

In Job 1 I was on union pay rates. My hourly rate wasn’t very high. But a few months into the job I accepted a change in duties that had me working weekend shifts. As a result, I actually took home something like 40% more than that every pay day unless I had a weekend off.

In Job 2 I was willing to effectively take a small pay cut for better hours, (though technically my actual base rate was higher).

In Job 3 – my first outside of journalism – I had every intention of negotiating. But the application form asked for a salary range and I was afraid to leave it blank. They offered me more than the figure I wrote down, and more than I would have even dared to expect, to the tune of a 25% effective increase. And so, I didn’t negotiate further. But this was a real eye opener. There was money to be made! My skills were valuable in the marketing world!

In Job 4 I negotiated and received the exact salary I wanted – a 25% increase again. Boom.

In hindsight

Life after journalism is sweet. I’ve been picky about the organisations I apply to and the kind of work I want to do – and as as a result I find even more meaning in my job now. Plus I’m better resourced to do it (though of course, as is the way, there’s usually still too many ideas and too much to do compared to actual capacity). I’ve been able to save more and start to build wealth. And that is incredibly important to me.




Link love (the is-winter-over-yet? edition)

NZMuse - Link love roundup with awesome reads from the week

I always imagined that once I bought a house I’d like to get a cleaner in maybe quarterly for a deep clean.

This month I bought a GrabOne daily deal for a house clean from a local company. I’m not sure I’d use them again – they don’t have a website and only a cell phone, and despite confirming spare key access over the phone (because I’d be at work when they came) I got a text that morning saying that nobody had answered the door. They sent someone back and I came home to a clean place, at least.

While they did more of a regular clean rather than focusing on the other stuff like windows and baseboards and high cobwebs (maybe I should have been more specific? Definitely looking for a specific spring clean package next time) they did a 1000x better job on everything than I do. Shower, floors, etc. I could easily get used to this, I tell ya.

This week’s links

The reality of renting. Fuck that shit (pardon my language, but seriously). I’m so glad to put that phase behind me. I get enraged just thinking about it, especially our last tenancy – though at least it wasn’t on this level of bad

Another reality check: the financials of being a best-selling author (a great if not surprising read from my perspective as someone who would kinda like to write a book one day if I could come up with an idea)

 The importance of (good) coworkers

Ain’t no room for shame in your budget

You’re allowed to leave any story you don’t love yourself in. Sometimes leaving is the best thing you can do for yourself (I know this to be true)

Does your budget reflect what you value?

Does your budget reflect your values?

“Don’t tell me what you value, show me your budget, and I’ll tell you what you value.”

Everybody does money differently – we all have our own way of approaching things. But ultimately the key to happiness is spending in line with our values.

There are infinite things I could spend money on. Being mindful about my money and where it goes – specifically, spending it on things that enrich my life – gives me immense satisfaction.

I don’t really drink; I don’t have a clothing budget. Here’s where the bulk of my budget goes.

A home environment I love

For me, that’s an Auckland-sized mortgage in order to live in the city I love and grew up in. To have a dog I love. To live in a home free of mould and mushrooms, where I can literally breathe easier. Surprise: warm dry air is a lot better for you than cold wet air. (Sure, theoretically it’s possible to achieve the latter while renting, but quality rentals are rare and expensive and the market is competitive. At that kind of price to me it made more sense to buy – even in a less central location – and pay the premium of rates and maintenance in exchange for long term security and quality.)

Food­­ that makes my tastebuds tingle

Eating out is our main form of entertainment, but we don’t do that very often either. Quality not quantity (although we do tend to do at least one weekend bakery breakfast run). I buy cheese and dips and olive oil with minimal guilt and don’t fret too much at the supermarket checkout till.

Travel and getting away

At this point in time I’m not specifically saving for travel. I’m more than happy just to burrow in at home since buying a place. But at some point a holiday will definitely be in order – I’m just not sure where in the pecking order it will fall as a financial priority just yet. I’d like to do another South Island road trip; visit Melbourne and the Gold Coast; and head back to the US to places both new and old.

How does your budget stack up against your values?

Disease Called Debt

What to think about when buying appliances

Dream kitchen
I wish…! By: WalkingGeek

Recently I attended a focus group where we got to talk about shopping. Specifically, shopping for whiteware. Although my experience with buying appliances has been pretty dang limited to date, I anticipate buying a crapload of them in the next 1-2 years as a freshly minted homeowner.

The only new appliance I’ve ever purchased was our Samsung washing machine in early 2015. Aside from that, I’ve only ever bought cheap secondhand washing machines and fridges at a pinch, when our old one died or a house move forced a change of some sort.

In that session, we discussed things like brands, reliability, efficiency, design, functionality, upfront cost and running costs. In particular, when it makes sense to go for the option with a better energy rating, whether it’s worth calculating annual running costs, calculating the break even, etc.

Being a broke student and then a broke journalist for most of my adult life, upfront cost was always paramount. Not only did I have a limited budget, I never knew what the future held or how long I would need that appliance for. Efficiency and the longer term view just didn’t play into it then. The ability to be pound wise rather than just penny wise assumes a certain level of privilege.

A new kitchen is in my future at some point – a fridge, rangehood, stove/oven and definitely a dishwasher. I want a gas stove for sure, but efficiency will be a consideration for the fridge and dishwasher.

Have you renovated a kitchen? What do you take into account when buying appliances?

 

Link love (the money-on-my-mind edition)

NZMuse - Link love roundup with awesome reads from the week

Need more cash! Want to buy all the stocks – build my managed funds balance back up (raided this last year to pay off the car) and venture into dividend investing.

Semi-related: I’m so sick of financially secure bloggers who like to go on about how money isn’t important. Also, those of the same ilk who own homes but go on about how great renting is. It’s bad enough when those people have never struggled; it’s kinda worse when they HAVE, and now seem to have forgotten what it was like. Check your dang privilege (and yes, I know the blogging world rewards strong stances over nuance, but this is my space to bitch and moan).

On that note…

Dreams don’t pay the bills. Dreams don’t stop the monster from gutting your happiness.

Does attachment theory explain all of our relationships?

The best business strategy is the one that makes you money

Scripts to make customer phone calls a breeze

How to check for quality when buying clothes

What are our responsibilities in a relationship?

What’s your latte factor?

What's your latte factor?
By: Kenny Louie

I really hate the ‘latte factor’.

We were talking about this at work the other day, and I pointed out that I don’t drink coffee, so it’s an instant turn-off.

‘So what would you cut back on?’ I was asked.

Truth is, I don’t have an equivalent. I don’t regularly spend on anything. I don’t have anything I could easily or obviously cut back on like a daily coffee. Most of my days are no-spend days.

For me, it’s always been about the infrequent but big ticket buys. Mostly travel, with a bit of a concert-going phase.

What’s your poison?

Link love (the grumpypants edition)

NZMuse - Link love roundup with awesome reads from the week

I’ve come to realise that I have a deep seated mistrust of authority.

I – and people close to me – have had too many sour experiences with authorities. Just a few examples:

  • Police who profile and fabricate charges.
  • Property managers without scruples.
  • The driver licensing tester who literally got out and kicked our car.
  • Telcos that overcharge, have opaque billing practices and that make it impossible for you to contact them.
  • Agencies that fail to communicate with each other and send you to debt collection.

I’ve dealt with great cops and case managers, to whom I am forever grateful, but equally have seen so many instances that were not up to scratch. It makes it hard to trust people in authority roles to be honest and to do the right thing.

This week’s links

The many, many problems with ‘follow your passion’: “Most people’s passions just don’t fit well with the world of work… Our interests and passions also evolve over time…  And while we’re at it, the idea of “following your gut” to find work you love is also terrible advice. The evidence suggests that we’re bad at predicting what will make us happy.”

Experiences often require THINGS:  “All of the people who are all “experiences are more important than things” are using a lot of airplanes, backpacks, hiking boots, and $200 bottles of wine to get those experiences. YOU CAN’T DO IT WITHOUT THINGS, PEOPLE.”

Racism and inequality (and how fascism thrives): “Racism, and fascism, are very successful scams that sell to the desperate. Fascism understands that people want to feel valued and integral part of something larger. Racism is, sadly, the easiest and cheapest way to do that… If you hate racism, then you really really really should hate any economic and social system that creates and rewards massive inequality. Because when you get that. You get racism.”

The career crossroads checklist: “This crossroad looks unfamiliar—for the first time in your career, you have options. You now have experiences under your belt, connections in the industry, and a work history that reflects your talents. This next decision is different than your first career decision because where you land and the work you do influences your trajectory.”

A financial sanity fund: “I don’t know exactly when I will spend the monies in the fund but I know that I eventually will. Like an emergency fund, this fund helps me sleep better at night, knowing I can still live the life I want to now while building a better one for my future.”

The changing world of media employment: “The system seemed broken on a variety of levels but especially for those actually creating the content. On the other hand, brands seemed to be doing the opposite; they were paying writers on time and had the marketing side figured out in a way the industry I worked for simply didn’t.”

What makes a good marriage: “Is it bad if you’re not happy every day? Is it bad if your partner cheats? Is it bad if it ends in divorce? Or does badness come down to the big stuff, like abuse?”

What happened when I got my first ever collections call

What happened when I got my first ever collections call

I don’t love answering calls from unknown numbers, especially now I’m out of journalism and don’t feel obligated to pick up every incoming call. But often these mysterious calls are from one of the market research groups I belong to and HELLO free money!

This was a different kind of call, though…

Debt collections calls … sound surprisingly scammy

I thought it was some kind of weird phone based scam at first.

As soon as I put the phone to my ear, I heard an automated message start repeating itself. This soulless robotic voice told me I had to stay on the line for a very important matter to do with Dun and Bradstreet.

WTF? I was tempted to hang up, but I stayed on hold. After a few minutes that felt like an eternity, a human came on the line. She started asking me personal questions to verify my identity and to be honest, I still wasn’t sure this was a legit call. But reluctantly, I confirmed a few details, trusting that they were who they said they were (seedy automated call aside).

Long story short: they told me I had a $50 ACC debt that had just gone to collections. Except I had literally never received any notification of this at all. Apparently it had gone to a very old address from about 3 years and 3 houses ago. And as I told the rep, I am always careful to keep my details up to date with the government (through IRD, because taxes!) and if I did owe this debt you’d think they’d tell ACC where to find me. Also, I’m not self employed, so I don’t know why I would owe ACC anything at all.

Without proof of this alleged debt, how was I even meant to begin sorting this out? Seeing as I had literally no documentation relating to this alleged debt I asked them to send me whatever they had on file.

A few days later I got a lovely letter full of capitals and red and threats of legal action. Standard template, I’m sure. It wasn’t exactly proof of the original bill, but it was something at least.

Armed with a reference number and a dollar amount, I contacted ACC. A couple of days later they told me they would be withdrawing the debt from Dun and Bradstreet. Sweet, I thought – that puts an end to this saga.

Debt collectors are relentless

Of course it wasn’t that easy. I continued to get calls from unknown numbers during the weekday and in the evenings – many of which I missed, and the rest I actively ignored. Then they started texting… Seriously.

I forwarded my email from ACC to three separate email addresses I found on the Dun and Bradstreet website (two of which immediately autoresponded with out of office replies).

Then, I also emailed ACC back to see what was happening…

Bureaucracy reigns supreme

Dun and Bradstreet eventually responded, only to tell me that a) I needed to call ACC because b) they had just spoken to their contact at ACC, who had said there was no intention to withdraw the invoice and c) it remained outstanding at this stage.

Uh, NOPE. I’m not going to waste time on the phone, particularly when that does not generate a paper (or email) trail. A lack of documentation is what brought this whole mess about.

Then, I heard back from ACC again. Another email saying the invoice had been withdrawn from Dun and Bradstreet…

The calls seem to have stopped, so I am assuming the message has finally gotten through to the right people.

It’s a stressful and dehumanising process

Look, I know Dun and Bradstreet were just DOING THEIR JOB. But from where I’m sitting, their systems and processes suck. I felt thoroughly dehumanised throughout the whole thing. Stalked, even.

I’m probably being oversensitive, but I didn’t like feeling like I’m being treated like subhuman scum. Not a debt dodger. Not even a legitimately decent person who’d fallen on hard times and fallen behind. I was literally someone stuck with a mess because someone in a big agency made a mistake. It’s scary how little power individuals actually have and how hard it is to sort things out that other people have screwed up. Here’s another story from a fellow Kiwi in that vein.

Have you ever had to sort out a mistake on your credit report or deal with debt collectors?

Disease Called Debt