Tag Archives: money

How long will your car last? A fun rule of thumb

We’ve always paid cash for our cars, with the exception of our second car (a strategy I think we’re going to buck for our next car, which will hopefully last us a minimum of 10 years). Based on our automotive history, I have drawn the conclusion that every $1000 spent = 1 year of life.

Car 1: Red Mazda 626 sedan, $1500

I remember the bank teller looking at me all sideways when I said the cash I was withdrawing was for a car. “Half a car,” I hastily lied, to get him off my back. It served us for probably a little over a year before the gearbox totally gave up.

In between car: We also had a freebie white Corolla hatch worth next to nothing for a few months that helped bridge the gap between the first and second car. I don’t actually remember how it came into our lives/who gave it to us or what specifically happened to it. 

Car 2: White Toyota Levin coupe, $3000

This was all T’s car – his chance to fulfill his desire to have a ‘cool’ car, and learn an expensive lesson in the process. Thanks to this car, we also learned how dang useless the police can be sometimes when it comes to car accidents. I’m really proud of T for going to court and coming out with the result we wanted (in a nutshell: the cops at the scene screwed up, basically tried to lay blame on him rather than the other party, and we refused to lie down and let them walk over us). This one didn’t quite make it to 3 years – maybe 2, actually.

Car 3: White Mazda Familia hatch, $1800

Left in the lurch and scrambling for a vehicle, we wound up with this little thing – again, all we could afford at the time. It is, I think the only car to break down on the road and actually strand us to date. This also remains the only car we’ve ever had that was in an accident where we actually wound up getting damages fixed at the other party’s expense. Unfortunately the engine and rust issues only got worse and eventually proved too much; we farewelled the car not too long after that incident (shiny new back bumper and all). I’d say this lasted us close to a couple of years.

Car 4: Silver Mazda Familia wagon, $4500

Our most expensive car – and the newest we’d ever bought, only being about 12 years old with barely 100,000km when we got it. Also the only car that ever managed to get through a warrant of fitness with no issues at all – you get what you pay for. It was still a pretty old car though, so that lovely streak didn’t last and after one or two warrants, we were back to the stressful cycle of expensive fixes every  6 months in an effort to get it to pass. It also has a weird ghost problem (to do with the tyres/steering/alignment)  that nobody has ever been able to fix.  Nothing that’s terribly off, just an annoying niggle – the pea to T’s princess, if you like.

It’s in a sorry state right now – rubber chunk missing from the steering wheel, no handbrake, no power steering, the ongoing tyre issue, and most recent and worrying, dodgy brakes. It’s coming up on four years, and needs to retire.

Hitting the financial reset button

Comparing myself to others is always going to be something I struggle with. I’m old enough to realise that this is not a part of myself that’s going to change. And the best way to slay that demon is not to try and squash it, but kill it with reason.

Mostly, whenever I fall into the pit of comparison, I wind up feeling pretty depressed. Yes, we are mid 20s with no debt, but also no assets to speak of and little hope of escaping the hamster wheel of grim, mouldy rentals anytime soon. I can’t help but feel like we’re never really going to pick up pace.

When I think about the people our age I know who’ve managed to buy houses, they’ve all had advantages in one form or another. Most have had parental help – parents who paid some or all of their deposit, either using cash or equity in their own houses. Some have lived at home for years rent free. A couple have had cars bought for or given to them. Some have one partner in the relationship who earns significantly more.

For our situation to change, I think we need two things. One, steady and reasonably-paid employment on T’s part – considering his stints of unemployment add up to a couple years, plus a few more months’ worth of reduced and lost income from injuries on top of that, maybe it’s a wonder we aren’t even further behind. As this Billfold piece wisely observed last month, we really need to start accounting for unemployment in the current environment, and adjust financial advice accordingly.

Two, a steady and reliable car. Going the cheap secondhand route has not served us well. After so many years and a handful of different cars, we’re still exactly where we were on the car front as when we first started out – treading water with maintenance and repairs, with nothing really saved for a better and newer vehicle. Debt-averse as I am, I’m increasingly open to the idea of borrowing for a decent vehicle that we can drive into the ground (10 years at least?) so depreciation doesn’t matter. Vehicle financing options here are still kind of unappealing, but the other day I saw what might be the best offer I’d ever seen – something like 2 percent on new cars? – so things may be changing on that front. I’d much rather pay 2 percent on a new car than 10 percent on a used car that could have had any kind of history, and T’s experience from his stint in car sales should help us in the negotiation stage.

But for my own peace of mind, I think I need to scale back on my expectations. In some ways, this year has worked out better than I expected, but in many ways it also worked out much worse. The long term goal remains buying a house and escaping the terrible Auckland rental market for all the reasons I’ve covered on this blog before, like health, stability, pets, kids – but I’m going to refrain from setting a timeline or any hard measures, because I honestly don’t know what the next few years hold for us.

Haggling in Asia: Tales from the street vault

nzmuse bangkok haggling

It’s hard to believe that a year ago we were waving goodbye to Bangkok, hopping the Airtrain and winging our way to London. Suvarnabhumi was one heck of an airport, I’ll say. I’ll always remember it for the crazy fast travelators, our last fix of Mr Donut and oh, yeah, the fact I managed to lose my boarding pass somewhere between checkin and boarding.

One thing I wasn’t looking forward to about travelling in Asia was bargaining. I’m not used to negotiating, and even if it was expected of me, I just didn’t know how I’d cope.

As it turns out, we didn’t have much to worry about. We weren’t there for the shopping; we were there to eat and sightsee. We did buy a couple of things, though.

Our first haggle came courtesy of T, who took it upon himself to acquire a flip-knife he spotted amongst the treasures at a street stall. (Result: 50 baht off for a total of 300 baht. If I recall correctly. I don’t think that was hugely successful.)

There was also his tattoo, a totally out-of-the-blue purchase. While he’d been bugging me about getting inked in Thailand, I simply kept giving him The Look. Then, one night, we headed out to Khao San Rd for a drink run at about 10.30pm. (I think the hardest part about Cambodia and Vietnam, for him, was the absence of 7-11s and his beloved Big Gulp drinks.) We stopped so he could flip through yet another tattoo parlour’s lookbook. The owner ushered us inside and started doing his sales spiel. To say it was a tough sell would be an understatement – I totally stonewalled him. He threw out an initial quote of maybe 6000 and eventually came down to 5000 in an attempt to convince me… and since T was able to pull up his second family crest online to show the artist, and the price was way less than we’d pay here, I conceded.

And that’s how we ended up going out for a Coke and coming back many hours later with a tattoo.

The other occasion where we found ourselves forced to haggle was with drivers. You might find drivers unwilling to use the meter, for whatever dodgy reason, who quote you absolutely outrageous fares for a 5-minute ride when you KNOW it should cost, at the most, half of that number.

And yet … the sums involved are usually fairly small in the grand scheme of things. There’s the principle; you know what’s a fair price to pay, and you don’t want to get ripped off. At the same time, we may have been budget travellers , but a dollar or two would have meant a lot more to locals than it did to us.

Got any haggling stories to share?

ClearlyContacts: Is buying glasses online a false economy or genuine bargain?

Confession: it’s been about four years since I got new glasses.

I got my eyes checked and got a new prescription last year, but figured I’d deal to it post-trip. That time came a couple of months ago, hastened by the breaking of my current pair.

My eyes are a lot more sensitive than they used to be (age? allergies?) and I can’t bear the thought of wearing contacts everyday. Laziness and comfort wins over vanity.

ClearlyContacts.co.nz has a great offer – first pair free – but with my terrible vision, my first pair was still gonna cost about $120 with shipping and high index lenses.

In comparison, getting new frames and lenses from a brick and mortar place would cost at least $400. However, I’d have the peace of mind knowing that those glasses would fit perfectly.

That’s a big difference in cost and a hard saving to pass up, I know. But I can’t overstate how important fit is. I’m one of those people who will be driven crazy if my glasses don’t fit just so and sit just right on my head. Which is easier said than done.

I have a freakishly wide head that rules out the vast majority of frames, which pinch into my temples. I need nosepads because of my pancake flat Chinese face, as I can’t just perch my frames on the bridge of my nose. (I wonder if this is why I have such trouble with snorkelling masks…)

Did I mention I’m also super picky about colour and style? I’ve only found one pair offline that I really like and that also fits well.

Most frames look and feel wrong before I’ve even got them all the way onto my head, so I’m very wary about buying frames off the internet. Even if I find a frame looks good on the virtualthat is a perfect numerical match on all my measurements (did you know those numbers on the inside of the arms of your glasses actually correspond to the length of your lens, bridge and arm? I didn’t!) and thus theoretically a good fit, and looks good in the ‘virtual mirror’ on the site, that’s not necessarily a guarantee that it will work in real life.

Everyone says they’re the real deal; I’m not concerned about quality or legitimacy. The only issue is true fit – something that’s hard to determine online. But since Clearly Contacts has a 365-day refund policy, I figured it was worth giving it a go. After all, it could only go one of three ways:

Outcome 1: Pay $120, find the Clearly Contacts pair fit like a dream, and voila, I’ve saved maybe $300

Outcome 2: Pay $120, find the Clearly Contacts pair don’t quite work for me, return it, and then buy the full priced pair in store. Once I get my refund, I’m no worse off financially.

Outcome 3: Pay $400 or so for the full priced pair in store and rest in peace with the knowledge I have a pair I love that fit perfectly (but wonder if the Clearly Contacts pair might have sufficed)

My first pair from ClearlyContacts just weren’t right. Technically they should have been more than comfortable – maybe even a little wide, on the loose side – but they pinched in. I thought they might wear in like a pair of shoes after a few days, but they didn’t.

Returning them was pretty easy – I just had to repackage them and send the box back, and my money was returned to my Paypal account not long after.

I thought I’d give it one more go before throwing in the towel. The second pair cost me a bit more – I couldn’t find any other frames that qualified for the ‘first pair free’ offer that a) I liked the look of and b) fit my measurements. But what do you know! It fit like a dream; the only downside is that this frame feels a lot flimsier and I’m not sure how long it will last. If it manages at least a couple of years, I’ll be okay with that.

Have you bought glasses online recently?

What cell phone plan should I get? (Probably none.)

By: closari

I am slooooowly getting used to having two phones. It’s a first for me.

At my old job my work phone and personal iPhone were one and the same, with the same number. Work and play overlapped a lot more.

Currently I have a super cheap personal phone that’s only good for calls and painful texting, and a work smartphone. It’s an Android, which I despise, and doesn’t have a great battery life.

The $1200 question is: shell out for a smartphone of my own, or just keep a basic dumb phone and have the work smartphone?

It would very definitely be a want rather than a need. I don’t need Instagram, after all.

If I were to get a nice phone for myself, it’d probably just be an iPhone 4s like my last one (based on price, mainly, although the fact that I can charge older style iPhones on my radio clock dock is a bonus. We also already have an awesome iPhone 4 sized case).

I’ve been looking at what the best deals for iPhone 4s plans are in NZ. Here are my choices (my hastily Photoshopped in numbers to the right represent what I would have to pay for the phone itself upfront; the blue numbers on the left are the monthly plan cost).

2degrees iphone monthly plans

To get a free phone I would have to pay $69 a month which just seems too steep somehow for a regular outlay, even though all the plans actually equal out cost-wise over the full 2 years.

For now I’m going to live with the status quo and see how I cope.

Would you rather pay more upfront and less monthly, or more monthly and less upfront?

Renting for life: how bad would it be?

After recent conversations with friends who are flathunting (renting) and househunting (buying), I’ve been giving serious thought to a scary and depressing scenario: renting for life in Auckland.

Let me cut you off right here: I don’t want to hear your comments about the pros of renting for life, unless you live in Auckland. I have been a renter since age 17. I know all about the pros, and for me, in the Auckland context, they don’t outweigh the cons, especially because we want to have a family. I am not interested in uninformed opinions from people who don’t have any clue what it’s like to rent, buy, live in Auckland. Okay, onwards…

This post over at The Conversation tackles the state of the property market in Australia, but it could just as well have been written about New Zealand.

“Renters are the losers in the property game. Not only do they struggle with high rents but tenant protection in Australia is among the weakest in the developed world. This is not coincidental: Australia’s 1.8 million and counting property investors support and are supported by tenancy legislation heavily weighted in favour of landlords. This produces a fundamental lack of security in rental housing.”

(I note that the UK is looking at introducing tenancy reforms, recognising that members of ‘Generation Rent’ need more rights. Good for them. We could use some of our own, since “compared with many countries, New Zealand and Australia are some of the most restrictive rental jurisdictions”.)

That piece at the Conversation argues that factors like tax laws and rapid appreciation create “effectively an infinite demand for property in Australia”, which I think is also applicable to us; NZ is right behind Australia in terms of ratio of housing stock to GDP.

A Forbes post recently did the rounds warning of a housing bubble here in NZ, and much as I would like to hope that Jesse Colombo is right (being an aspiring homeowner myself and all), I am more inclined to agree with local writers Brian Fallow and Bernard Hickey’s assessment of the situation. They both lay out some high-level reasons as to why they think a huge crash is unlikely, and while I’m not going to pretend I know anything about the Reserve Bank or exchange rates, here’s my plebeian take: here in Auckland we continue to have a shortage of housing; land is limited; and there are obviously still people with the means to pay current prices – and potentially higher.

The NZ Initiative isn’t afraid to tell it like it is:

“New Zealanders face a shortage of dwellings of just about every description, while paying far more for those we do have New Zealand houses are not only expensive compared to income but their prices too have been rising. New Zealand’s house prices have increased by a staggering amount over the past 30 years, aided by a mixture of policies and social and cultural changes that have forced up the price of building or buying a house.”

Let’s break that down:

“Someone in an inner suburb of Auckland who bought a home for, say, $70,000 in 1975, lived in it for 37 years, and did little but basic maintenance on it might find the house worth $1.5 million plus today. Someone in, say, Torbay on Auckland’s North Shore, who built a ‘standard house’ (land and section) in 1969 for $16,000 and did basic maintenance would find the property worth about $1 million today. The malign effects of the MUL [Metropolitan Urban Limit] that planners produced – believing that constraining the boundaries of urbanisation would work to the advantage of ordinary people, save transport costs, and restrain unnecessary local authority outlays – are absolutely
clear. The MUL has benefitted mostly older people who hath, and hurt younger people who hath not. The MUL favours the old and the rich and it punishes the
younger and the poorer.”

Ain’t that the truth. According to a Salvation Army report:

Housing has become more and more expensive for first-time home buyers and home-ownership rates have fallen. This fall has been aided by tax policies that favour existing property owners, and easily available debt that allows those who already own property to buy up lower-valued houses as rental investments. To some extent, this rental investment has been propped up by Government housing subsidies to low-income households that have now grown to $1.8 billion annually.

We, therefore, have the worst of all worlds when it comes to housing. Housing is too expensive for up to a quarter of all households to afford without Government assistance. Much of the housing is poorly-built and now needs further public subsidies to repair.

Worst case scenario: we are permanently priced out and left with no choice but to rent for life. What would this realistically mean for us?

No dogs in our future. It is damn near impossible to rent with pets – maybe cats, definitely not dogs. That said, based on my observations, I am not surprised that many landlords don’t want to rent to dog owners. Compared to the US where even apartments allow dogs, I found the dog culture over there a pleasant surprise – overall I felt most pet dogs were well trained, well behaved, quiet and clean, moreso than my experience of dogs here. I suppose a lot of that comes from having more of an indoor pet culture rather than an outdoor pet culture, as a result of density.

Spending a fortune on heating and dehumidifying. Aside from the top-priced tier of the market, the quality of housing here is generally quite ridiculous. It’s no good having a mild climate if you don’t actually insulate your buildings – might as well sleep under a bridge. Thanks landlords who don’t care about providing healthy accommodation and updating old houses! Longtime readers will recall my stories of mould in bedrooms, in wardrobes (trying to clean spores off your favourite dress blows), being able to see our breath in front of us while INDOORS and mushrooms growing through carpet.

Poor quality housing has been identified as a public health issue of major concern in New Zealand, with evidence that dampness and “thermal inefficiency” (which I’m pretty sure is a bullshit way of saying FREEZING COLD) are more prominent in rentals. Unsurprisingly, these things are associated with higher rates of respiratory conditions, among other icky problems. I don’t think it’s a coincidence that I have gotten sicker more frequently and to worse degrees since I moved out of home. I started having trouble breathing a few winters back. And I know many immigrants who developed asthma for the first time after moving to New Zealand.

Most likely bouncing around and around. Literally almost everyone I can think of who has rented a family sized house for any significant period of time (think your typical 3-bedroom) has been forced out at some point due to the landlord selling. Or, in a few cases, the landlord moving in a family member (in which case the notice period is only 42 days instead of 90 – this seems to happen suspiciously frequently, actually). Cash in those capital gains, quick!

This is mildly annoying at best. At worst, if you’re settled with kids in school, I imagine it’s a freaking nightmare. We don’t exactly have an oversupply of rental housing, let alone quality affordable rental housing, and add in our lack of density and it can be a tough call to find a comparable nearby place in a pinch.

Renting is still cheaper, though the gap seems to be narrowing. I was surprised to plug in some numbers and find out that the mortgage on a $500k house would only be $550 a week; rent for a 3 bedroom house would start at about $400 for a crap place and run up into, oh, the 600s for somewhere nicer. (I’m not even talking central Auckland here, obviously, where a starter house is $1 million.)

While mortgage payments may fluctuate with interest rates, rent always goes up eventually over time. Here, rent can be increased as often every 6 months – granted, it usually isn’t raised that frequently, thankfully. And yes, there are additional expenses that come with being a homeowner, but at least they’re going into an asset. The problem of course is that coming up with a six figure down payment is a hell of a lot easier said than done, even if repayments are manageable. Thus, my fading dream of buying a humble house, insulating it, and living happily after with kids and dog. Who even knows how we’d house ourselves in retirement? The Productivity Commission itself states that people in New Zealand who enter retirement while renting may face financial hardship.

Stuff reader Susan Wells is apparently living my future fear:

We continue to rent a tiny 105sqm, three-bedroom, leaking, crooked, mouldy, old house, that barely fits our family of five.

Do we upsize our rental so we are not falling over each other and pay out to a landlord more of what we could save as deposit, or sit tight for three to four years to save that money to reach our dream of getting a small lottery-sized deposit together?

Commentators report that it is better to be renting now than buy, but what happens when we retire in 23 years at 65, and if still renting, will this be affordable on superannuation income?

Could we afford to pay a landlord rent out of our Super or Kiwisaver until our 90s if we live that long? Will we be constantly on the move when rental properties are sold, and have no solid foundation steady home dwelling in which to welcome grandchildren and our children to?

But even if leaving Auckland were feasible work-wise, I simply wouldn’t want to. T threw out the idea of re-enlisting and moving to an army base – and that’s when I realised what I am NOT willing to sacrifice for cheap housing. I would not want to move to the middle of nowhere away from friends and family and my job. Financially I can see that it might make our lives a lot easier – lower expenses, and I could do some freelancing – but I know I would be miserable in all other aspects.

The Salvation Army recommends creating an affordable housing agency with meaningful and long-term budgets actually to execute its mission, but we all know what happens to these kinds of reports. I don’t think anyone who lives here would disagree with the following:

“Any ambition Auckland has to become the world’s most liveable city will be defeated if the housing future being offered by current trends continues to play out. Access to safe, decent and affordable housing is already the single biggest issue facing hundreds of thousands of Aucklanders. This problem will grow in size if the present wishful approach of Auckland Council and the present wilfully negligent stance of Government continues.”

But any fix is probably not going to come in time for us.

“Auckland’s housing problems are at least a generation in their gestation and most likely will be a generation in their resolution. There are no short-term answers or quick fixes—the problems are too big and the causes too ingrained in our social and economic fabric for that.”

Auckland, I love you, but I’m not feeling the love back. Let’s figure this out, stat.

Joint credit cards and other such shenanigans

By: PersonalMoneyNetwork

Ah, credit cards. Love ‘em or hate ‘em, there are times when they are just an outright necessity.

Before we left on our big RTW trip, getting a credit card organised for T was one of the many annoying things we had to do. He’s the driver in our pairing (I hate driving and don’t have my full licence) but had never had a credit card of his own. He didn’t go to uni, so he never had banks offering him sweet deals on overdrafts and credit cards on campus during orientation.

Ironically, as it turned out, he didn’t even need it. Yes, car rental companies require you to show a credit card in the name of the driver when you turn up, but we prebooked through CarHirePlanet, which took a small deposit early on and then charged the full amount a couple of weeks before pickup, strangely. I had used my credit card to make the booking, so at no point was any part of the rental charged to his. And of course, when we picked up the car there was no balance owing, and the terms of the booking meant we were fully insured with a zero excess so even if we had an accident there would be nothing to pay.

When we popped over to Australia last week, although I booked through the same site, things were categorically different with this particular Cairns rental company. The excess would be $3300 (yikes) and payment was to be made on pickup using a card in the driver’s name. Debit cards incurred an extra fee and of course require you to actually have the full amount available in your account. It’s one thing to have a few grand of credit placed on hold; another entirely when it’s a few grand of your own cash being held hostage.

We’d cancelled his credit card when we got back to NZ, and with so little time before we actually left for Australia (last minute trip!) and the fact he’s currently between jobs, the odds of him getting a credit card with a high enough limit were not looking good.

The solution: an additional credit card for him linked to my Visa. This is different from a joint credit card – this means as the primary card holder I remain responsible for the account. The process was relatively quick and easy and his card arrived just in time a couple of days before we departed.

While I’m not loving the idea of paying another $12 in annual fees for his card, you never know when you might need it – and I reckon it’s easier to have one on hand than to find yourself scrambling for one. We’ll probably keep this one this time around.

Do you have a shared credit card with your partner?

The day I first realised I was expensive

NZMUSE THE DAY I FIRST REALISED I WAS EXPENSIVE

They say kids cost about $250,000 each to raise. I have no idea how accurate that figure has been for my parents, but I can tell you that now I’m grown, I no longer resent my parents for not taking us travelling (airfares are bloody expensive and they did a lot of their travel pre-kids), buying secondhand clothes and only ever shopping supermarket specials.

Through braces, swimming and tennis lessons, music classes, library fines and more, they spent thousands on non-essentials for me. I have to say, though, they got lucky: I was never a kid who nagged for stuff. I simply don’t like asking for things, and for some reason I was always a little bit scared of my parents somehow. I can only think of one instance in which I sort of pushed to buy a pair of orange boardshorts (they were like $10 at The Warehouse) when I was younger, and I got my way. Thing is, they were on the small side to start with, I was a growing kid, and they only lasted a summer. Fail.

But the day I truly, honest-to-God realised I was expensive for my parents was the day I told them not to send me to One Day School. It was a programme for ‘gifted’ kids who weren’t necessarily being challenged at normal school. We went to see the place – I vaguely remember it looking somewhat uninspiring, to be honest – and then came the big question: did I actually want to go?

I can’t remember if I asked, or if they randomly disclosed to me how much it cost, but either way, the financial aspect came up. The details are a bit hazy to me today, but I’m pretty sure I worked out that one day there would be the equivalent of one or two hours’ pay for my dad. (Ah, ye olde hours-worked formula! Keeping us in check since the beginning of capitalism!) Of course, today that seems quite reasonable to the adult me, but to the 8-year-old me that seemed an outrageous expenditure. What a heinous waste of money, I reasoned – there was no good justification for it. I hadn’t been all that taken by my first impressions of ODS anyway, so I said we should forget the whole thing. And we did.

Don’t for a moment think I missed out on anything. I was perfectly happy in mainstream school, reading years ahead of my age level in my spare time and agonising over my social awkwardness. Really, English was the only thing I was advanced in – I was most definitely average in all other subjects. (And being less than totally exceptional is something I’m more than okay with. Genius is a burden, and often the greats among us are deeply tortured souls. RIP Philip Seymour Hoffman.)

For a kid who really just wanted to fit in – who still had a slight accent, wore weird clothes and wasn’t sporty – going to a special school one day a week would probably have been the worst way to prove I was just like everyone else. I’m sure a much more deserving and needy kid would have filled my spot.

(This post was inspired by Young Adult Money!)

Did you ever have a similar epiphany as a kid?

Class, race, and money: My response to Rookie mag

class race and money - nzmuse

Every once in while you stumble across something online that just sparks SO MANY FEELINGS that you have to respond in some way. For me, this discussion piece on Rookie covering class, race and money ticked all the boxes.

‘Class rage’

“I had/have an ingrained prejudice against people who grow up wealthy that I am trying to work past. Like all prejudices, this one is based more on my own insecurity about money, class, and my worthiness/abilities than on anything real, and I often catch myself trying to invalidate the achievements of people who grew up with privilege (“Yeah, of course you’re an editor at the Paris Review, YOUR PARENTS STILL PAY FOR YOUR APARTMENT PROBABLY” or “I grew up with what you did, I’d have SO MUCH MORE to show for it”). It would be a lot easier to get over my unfair attitude if it didn’t contain at least a little bit of truth: I mean, growing up privileged does make it easier to get into a good college and get jobs and stuff.” 

 

Oh, man. I can’t tell you how hard this resonates. I have had a lot of luck in my life so far professionally, but also a whole lot of shit happen, and because I was fully independent from a very young age, I admit I have a bit of a chip on my shoulder.

 

 “One thing I’ve noticed is that people who are quite poor tend to think of themselves as richer than they really are and people who are quite rich think of themselves as less well off than they are.”

 

Also very true in my experience. I’ve also noticed that those who are less well off are often looser with the money they DO have (and whether that’s because of a lack of money management skills, desire for pleasures in an otherwise grim existence, etc is another subject altogether).

Class shame 

“My mom’s personal class shame was also tied up with the racism she experienced when she was young. She often acted like she was ashamed to be Mexican. She was never racist against other races or other Mexicans, but she definitely hid her culture and did not speak Spanish at home with me.”

As I’ve blogged before, I used to be painfully aware that I was different and hideously ashamed of the fact. Right after we moved to New Zealand I wanted nothing more than to lose my accent and distance myself from my ‘weird’ parents (they were highly educated professional immigrants, but still immigrants, and I just wanted to be white like most of the other kids at my upper middle-class school). It’s not a part of my past I’m proud of.

 

 Class and food

 

“Food was one of the big eye-openers for me in terms of privilege. When I was in grade school, most of my friends got free school lunches (and I was actually jealous because I had to bring a bagged lunch). At my new, wealthier school, everyone went out to lunch at this hot dog stand around the corner at least twice a week; I could only afford to join them about once a month. Then when I was a teenage punk and beginning to go vegan, one of my friends who had grown up in a poor family went on this rant about how being vegan was a sign of privilege. At first I was like, “But if you don’t shop at Whole Foods and get the fancy fake-meat products, vegetables are cheaper than steak, and you can make a giant stir-fry for like nothing.” And she said, “Stephanie, vegetables are not cheaper than like the cheapest brand of lunch meat, and they go bad.”

 

From my observations of one family close to us: when you don’t have a car, don’t live near transport and the supermarket/butcher/fruit shop are too far away to walk to easily, fast food from the takeaway around the corner is the way to go. Cheap and filling. It’s hard to beat that kind of bulk value with produce that is 90% water and goes bad easily. 

I once took them supermarket shopping and it broke my heart a little to see them buying a huge roll of what I think was luncheon meat for the week – which isn’t really food, let’s face it. I bought the kids some chocolate for a treat. I don’t know if that was the right thing to do.

Speaking of food – shortly after we moved here, I was invited to a sleepover with a group of other girls. They were a lot posher than us and had a huge spread at breakfast, including boiled eggs. I seriously had no idea what they were or what to do with them. The mother saw I was the only one who hadn’t taken one and insisted Katherine, her daughter, give me one of hers. Luckily, she had already peeled one – and that’s the one I got given.

 

 Class and career

 

“They never question my credentials because I went to good schools, and they “like” me because I know how to talk to such people, because I am comfortable with them, because of my privilege.”

 

I’m from a very middle-of-the-road suburb and went to a high school that doesn’t have a particularly great reputation. That doesn’t really matter these days and it doesn’t often come up, but I often feel a pang of shame if it does. I felt this most acutely when I first hit university; my course was overflowing with wealthy white girls from the central, eastern and northern suburbs. In response, I kind of retreated into myself a little bit and focused on working two jobs to support myself.

I still feel wayyyy out of place when I go to events or fancy lunches or black tie dinners, but at least I have done it enough to be able to fake my way through now. My upbringing did not prepare me for any of this kind of stuff.  

T has always worked very blue collar jobs, but recently has ventured further into the white collar world, which is not necessarily an easy transition to make. He doesn’t really have any role models in this regard; I’m the only person really placed to be any sort of guide at all.

 

Class markers

 

“Obvious ones: education and membership in any of the networks of rich white people who enjoy perpetuating themselves. (There is some overlap between these two things.)”

“CREDIT.”

“BRACES.”

“The way people speak is a huge indicator. Also cultural references. Also personal style.”

 

Oooh, this is a goodie.

I definitely think the way people talk is a dead giveaway. I also have seen firsthand how poverty can start to breed racism. I recently heard someone (who is now technically related to me, alas) say something along the lines of: we may be poor and breed like rabbits but we’re still better than (insert derogatory term that rhymes with ‘triggers’). It was rather worrying; it felt like I had suddenly stepped onto the set of American History X or something.

For me growing up, one big marker was whether kids and their families went away on holiday. It’s common around here to have a bach (holiday house)  in a beach town, but I also knew a lot of kids who would go on overseas holidays every year. (We never went anywhere. We stayed home every summer.)

 

One last anecdote: when I was maybe 5 or so we did an assignment at kindy/school where we wrote about our families. One of the questions was ‘do you live in a small or big house’? I honestly didn’t know, as I didn’t really have anything to compare our house with, and went back and forth in my mind about how to answer that. We had a pretty nice house but I settled on ‘small’ – apparently I’ve erred on the side of modesty ever since I was born. When I came home and showed my mum, she was definitely surprised and corrected me on that.

 

 

Finance = money & money = sexy. If only my 13-year-old self had known that

money is the most important thing - financial literacy and financial education

My first memory of year 9 maths in high school is being teamed up with two others, going to the local supermarket  and calculating what food and supplies would cost for a family for a week. Let me tell you, it’s really awkward talking about toilet paper and tampons with people you barely know…

But that wasn’t my first foray into this kind of thing.  I’ve long known the value of a dollar.

Growing up, I literally do not recall seeing my mother ever buy anything that wasn’t on sale. When I was about 10, my best friend and I went to the supermarket to buy snacks and drinks. We were super proud about finding a 1-litre Coke for $1 and gushed about our frugality to her dad.

“That’s a good buy,” he said, and smiled. But when I told my mum about it later on? Her reaction: I can get 1.5 litres or 2 litres for the same price. Way to shoot down the kids, but she’s always been the bargain queen, and a blunt one at that.

Shortly after that I got my first paying gig, a paper run, and later on I would work TWO jobs in high school so I could buy an electric guitar and amp. I’ve always, always saved. I couldn’t really say why, as for years there was nothing I was saving for; I just knew it was the thing to do. Somehow my parents instilled that in me (thanks guys).

Business as a subject, though? I thought it was deadly dull and wanted nothing to do with it. Business studies was compulsory for a little while (maybe over the duration of one term) early in high school. You could then go on to do accounting or economics, and as you can probably guess, I chose not to do either. My mother is an accountant, something I thought was the most unimaginative and boring thing one could possibly be, and economics held no draw for me, either.

Of course, the older I get the more important I realise all of that is. Getting a grip on how the economy works is kind of a basic requirement of adulthood, I reckon. 

Knowing how the official cash rate impacts interest rates, for example – that affects savers and borrowers alike.

Understanding general business principles too, which will serve most of us well because most of us do wind up in business, one way or another, to some degree. Yes, even those of us who pursue creative fields – who in many ways would benefit MOST from learning what being a professional in a capitalist society really involves. I‘m in an industry trying to figure out how to make money to sustain itself, and understanding the market and customers is vital to that. And amazingly, I’m finding this is actually quite interesting – and challenging.

I also believe understanding finance from a broader point of view is invaluable. While I’ve never been hugely interested in passive income – I like my work and don’t have any ambitions to retire early – recently I’ve been thinking about income security and growth. It really hit home for me that apart from trading your time for money, there are only a few paths to earning income. Here’s how I see them:

  • Investing in the stockmarket
  • Investing in real estate
  • Producing products (presumably digital) that you create once and then continue to sell indefinitely, no extra effort required on your part

It would  have been good to learn some of this stuff in school, because, um, who DOESN’T want to make money? Everyone, even high school kids (maybe ESPECIALLY high school kids) is interested in making more money.

I’m not saying there aren’t opportunities to learn and get involved in this kind of thing. For example, there are student stockmarket challenges you can participate in –  one of my classmates did really well on those, making a ton of (theoretical) cash. But that kind of thing didn’t interest me back then, and in fact kind of intimidated me, so I didn’t seek them out. Also, it was all kinda nerdy and I was desperately trying to escape the pigeonhole of nerd-dom back then.

How things change. Money is sexy. I know that now. I REPENT.