Tag Archives: money

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

In which I reflect on my financial education to date, inspired by Blonde on a Budget’s post about financial literacy in schools.

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. 

How to deal with a layoff gracefully: Advice for couples

how to deal with a layoff gracefully
Like I blogged just last week, sometimes I feel like we’re never going to get ahead financially.  Still, things are what they are and whinging never got anyone anywhere.

That said, I’m big on honesty and I’m not going to lie, being forced back into one-income land sucks. Of course, it’s even worse for T, but I’m not particularly enjoying things either. Selfish? Yes. True? Abso-frickin-lutely.

Rather than subject you all to a wave of self-pity, I thought I’d consult some other smart bloggers about coping in the aftermath of a layoff and dealing with all the feelings that follow – gracefully. Here is our collective wisdom.

Be mad, but then shake it off

You will resent being the only one bringing in an income (particularly if your partner is not a good housekeeper, on top of it all). Acknowledge it, but remember that nobody is winning in this situation and try to move past the anger. Definitely do not lash out!

As Gina Marie Rose sagely observes: “I know it’s hard not to feel resentful toward your partner when you’re the only one bringing in money, but do your best not to make them feel guilty about it. Trust me, your partner does not want to be unemployed, broke, and having someone else support them financially.

“But sometimes, shit happens and we have to face circumstances that are out of our control, like layoffs. Being unemployed and broke is one of the worst predicaments in the world; the last thing your partner needs is for the one person they love most to make them feel even worse about it.”

Michelle from Fit is the New Poor says: “I often reminded myself how much I loved him and how he was there for me financially and emotionally in the past. He did his part by understanding when I needed space or to blow off steam.”

Sally from Tiny Apartment Design, for one, has left several jobs during her relationship. “It’s tough when you feel like you are carrying the weight of two people, but I find it helps to talk about it, uncomfortable as it is,” she says.

Vent to someone else

Let it all out … but not just to your partner.

Gina suggests venting to people you trust and who you know won’t change their opinion of your partner as a result.

And find some stress relievers that work for you.

“During the whole time Chris was unemployed, I practiced yoga 3-4 times a week. Probably one of the best decisions I made during that time!”

Lend an ear

And of course, let your partner vent too.

Says Gina: “Listen to them vent about their recent job rejection. Ask how that networking event was that they recently attended. Let them cry on your shoulder when they feel hopeless and like they’ll never get a job. Being unemployed and broke sucks big time, so be supportive. You’d want the same from your partner if you were in their shoes.”

Focus on the silver linings

No job is perfect. So take the opportunity to remember all the downsides of that old job, and thank your lucky stars that you guys no longer have to deal with them!

According to  Michelle: “I would be mad at him for losing his job, but then I would remember all the times he would complain about his boss making him stay late or emotionally abusing him, and I would go back to thinking that this may be a better way!”

Be supportive on the job-hunting front

Not that this really needs stating, since you BOTH want to get back to the full-employment bandwagon…

Check your partner’s resume, edit cover letters, trawl your list of contacts for anyone who might be helpful to him, keep an eye out for interesting job listings, rehearse answers for interviews.

“I remember the first time Chris did an interview role play with me: it helped me memorise my answers better and feel more confident when it came to saying them out loud,” Gina says.

Michelle suggests asking the hard questions your partner might not consider, be it in regard to interviewing or to choosing jobs.

Keep a tight lid on your finances

Now, more than ever, is the time to keep on top of your money. I revisited our 2014 budget but the key is tracking our spending, especially with T’s habits.

“Since you’re now providing for two people, it’s probably a good idea to keep a close eye on your finances so you can save money where possible,” Gina says. “I didn’t do this while I supported Chris, and I regret it! I feel like my money went so fast during that time because I wasn’t keeping track of what was going in and what was going out, and I didn’t change my spending habits even when money got tight.”

Budget in little treats

Much as I would like to forbid T from spending a single dollar until he finds a job, that’s pretty cruel and also insanely unrealistic. We’ve settled on $20 a week, although in reality that’s creeping higher.

Gina’s advice? Treat your partner once in awhile.

“While I was unemployed, I was depressed because not only did it seem like no one would hire me, but I didn’t have any money to go out and do things or treat myself. Chris saw how depressed I was and decided to take me out to lunch/dinner/a movie every so often to help get my mind off my job search. He also spoiled me rotten for Christmas. (Being unemployed during the holidays is the worse because it’s a season of spending buy you have nothing to spend!)

“When Chris was unemployed, I treated us to a little getaway to Santa Cruz for a couple days. Do what you can afford and know that your partner REALLY appreciates the distraction.”

Michelle encouraged her husband to be active outside of the home while unemployed. “He was depressed, obviously, but we would still go out with friends or on (cheaper) dates. I would also put him in charge of dinner so he felt like he had a purpose and was “paying me back.” Our house was spotless for the time he was unemployed!”

And plan to celebrate when your partner finally lands that job.

“We ended up going on vacation with our travel miles. I think all of that kept a ‘light at the end of the tunnel’ feeling going for us when we felt like our situation would never change.”

I’ll wrap up with this succinct summary from Michelle:

“Celebrate the good because there won’t be much of it, remind yourself that you love him despite his situation, give him tasks and jobs to do to keep him active, and try to think of an awesome celebration for when he does get a job!”

Do you have any pearls to add?

What we spent: February 2014

Click here for more info on my monthly spending roundups – your question will probably be answered there.

what we spent feb 2014 nzmuse  

So, some big medical expenses last month!

Financially speaking, it was not the smartest to have my wisdom teeth out right now. But the pain was getting bad, and T being off work meant he could help look after me while I recovered.

Physically speaking, it really wasn’t anywhere near as awful as I’d imagined – details here. And financially, it wasn’t as bad as I’d worried, either – only $1050 for all four out, the rest of it being for the initial checkup, clean and x-rays, plus the meds I had to get afterwards. (White Cross Dental New Lynn, highly recommended!)

I’ve considered applying for health insurance a few times over the years; Southern Cross has a partnership of some sort with many workplaces, including my current and previous employers. But the numbers just don’t make sense. We are pretty healthy - our  issues are generally accidents/emergencies on T’s part (the ER is free; the time off work not so much) and optical for me. Basic health insurance plans in NZ don’t tend to cover optical and dental; those add-ons cost more and aren’t worth it, and none of them ever cover the cost of wisdom teeth extraction.

In other less wise moves, we also went out to a late Valentine’s dinner after the layoff – we’d been putting it off until the week after the day because of work, which turned out to be … interesting timing. But I’m pretty happy with our dining out spending, and totally stoked with our grocery spending (we’ve definitely been spending less since we returned to NZ, thanks to our new eating habits and smaller appetites).

Seeing as T was laid off halfway through the month, his spending is definitely on the high side (that’s more like a full working month allowance…) But there’s no point going on and on about it. It’s always going to be a point of contention, which is the whole reason for a don’t-ask-don’t-tell allowance.

Thinking about the future … I veer between extreme optimism and hopelessness. Right now, it’s definitely skewed towards the latter. I keep thinking we’ll never be able to save for a down payment (previously, there were moments where I was thinking that given the money some of T’s colleagues make in a year, it might actually be within reach in a couple years! So much for that).

I honestly see no way for house prices here to fall unless something is done to stop both investors and nonresidents/citizens buying property, which isn’t going to happen. So I guess we wait until the next recession – and hope we don’t lose our jobs in it.

Friday Five: The business of car sales

the business of car sales

By: Ryan

There must be something in the air. First Krystal, now T. Still, we’ve dealt with layoffs before, and we’ll make it through this one. Whether or not he gets another role in car sales, the below (drafted a little while ago) still stands…

It’s not everyday your partner announces out of the blue that he wants to work in car sales. If I recall correctly, we were on the road somewhere between San Antonio and Roswell at that moment.

Unlike me, he’s not the introspective type. My gentle attempts to prod him into thinking critically about the kinds of things he might want out of a job over the past couple years had mostly fallen flat. (Alas, the Do What You Love philosophy has mesmerised, paralysed and flummoxed him – I’ve tried to deprogramme him of it, again with limited success.)

As it turns out, though, searching for jobs that come with company cars throws up a load of sales jobs, including car sales jobs. In this case, materialism overlapped with practicality. That’s what I call a win.

Sales is about the last thing in the world I’d ever do, and he’s very much a no-bullshit type – an extrovert, yes, but a people person? Not necessarily. So it never really occurred to me as a viable option.

Yet it seemed so right. He loves cars. He loves to talk. He was not cut out to sit in an office. He picks things up quickly, and what’s frustrated him about all his previous jobs is that performance was not rewarded – and of course sales is entirely achievement-driven.

Once he got the basics down, he reckoned a little bit of that old enemy, boredom, was popping up. But more importantly, he was still enjoying it and  called it the best job ever.

Some random reflections on his first job in car sales:

One bad thing: it’s normalising car finance in his eyes. “Everyone finances their cars!” he exclaimed to me one evening. Car debt is not something that’s ever fazed him; almost everyone he knows has taken out ridiculous loans for their cars, which I really hate, and it’s not something that needs reinforcing in his mind. On the plus side, he now sees what a terrible thing financing is numbers-wise.

They work surprisingly long hours. 50-60 hours a week, and commission only (though I’m not sure if this is the norm across dealers in general).

The profit on individual cars varies hugely.  The cars you see listed for rock-bottom prices in ads are basically loss-leaders, off which salespeople make nothing.

A lot of the salespeople actually get their shirts tailored. Yup. 

Sunburn is a real issue! They have sunblock provided and T has gotten to the stage where he reapplies it every couple of hours, but is still getting burnt. Between our enormous ozone hole and his precious Scirish skin that quivers in fear as soon as it comes into the presence of any UV rays, he’s screwed. And he refuses to wear the company’s uniform hat because it looks ridiculous and will put customers off. (Nobody wears it, ever.)

I’ve always been curious about how the auto industry does in NZ. We have so many tiny indie garages everywhere – is there really enough business for all those mechanics? (I guess so, since we all drive such old cars.) And do people REALLY buy enough cars to keep dealers afloat? Judging by the amount of foot traffic that T reckons they get, yes. And while not all prospects convert to sales, the ratio sounds higher than I would’ve expected – some guys will sell five cars in a single day. The top salespeople make well over the six figures. Hot damn.

Guest post: The Urgency of the Emergency (fund)

Today’s post is courtesy of Jacob, Ph.D. student in finance, frugal master, and one half of the Cash Cow Couple. Along with his wife, he enjoys living, laughing, and teaching others how to save and intelligently invest their money so that they can achieve financial freedom.

 In the blogosphere, it’s common to see recommendations for emergency funds. I’ve seen some who claim an emergency fund is unnecessary, and others who’d prefer if you kept one the size of Texas. There isn’t anything inherently wrong with either choice, but you should probably understand time constraints and liquidity before you decide on an emergency fund or any other short term investment need.

Let’s first define an emergency fund. It’s typically a highly accessible chunk of money stored in a checking, savings, or money market fund. It’s there for what? That’s right, emergencies.

But what does highly accessible mean, and why does it matter? Well, we’re speaking of liquidity here.

Liquidity is often defined as the ease with which a portfolio can satisfy an investor’s needs. Easy enough. But what comes next is frequently confused by investors, popular media, and everyone in between. Liquidity is comprised of two parts – marketability and price volatility.

  1. Marketability is an attribute that measures an investor’s ability to readily convert an investment to cash at prevailing market prices. This would be a function of fees, trading volume, and bid-ask spreads. In other words, the greater the cost of finding a willing buyer, the less marketable, and therefore less liquid an asset is.

  2. Price Volatility is very different. Even if you can sell an asset quickly at market price, you must still be concerned with the current market price. Stocks are a great example because they are volatile and therefore not liquid. Sure, you can easily sell a stock after it falls 50%, but you’ll be locking in huge losses.

A great example is a story I heard about a lady who was advised to put her million dollar portfolio in an easily accessible S&P 500 index fund. She was under the assumption that it was liquid. Sadly, one of her goals was to purchase a $500,000 boat in just over one year.  Of course, 100% equities is a terrible decision if you need half the principal in a year. The market fell nearly 40% and she was then in a terrible position deciding between the boat and almost no remaining savings.

The point of that story is simple. Don’t put your emergency fund or short term goal funds into the stock market. Doing so defeats the entire purpose of planning ahead. Keep the funds in a liquid account like the American Express high yield savings account that we use.

A matter of size

The next thing to consider is the size of your emergency funds. You’ve probably heard the rule of thumb that says 3-6 months of living expenses in your emergency fund. Maybe you heard 3-6 months of income. Whatever you heard may or may not be applicable to your financial situation. (Ed: No matter how much I have saved, it never feels like enough…)

There are several considerations here. First let’s consider employment and income fluctuations. If you are steadily employed, you probably need a smaller emergency fund than a traveling freelance writer with a variable income. Any variability requires an increased cushion.  The reason is simple; you must cover baseline expenses, and if your income doesn’t show up for 2 months, you’ll probably appreciate the protection that accompanies an emergency fund.

Likewise, if you spend far less than you earn each month, you’ll need less than someone who is living paycheck to paycheck. It’s just basic math. You have much more freedom and flexibility when you have excess funds coming in once or twice a month. You can quickly adapt to the situation at hand.

If you’re a young or old retiree, things are much different. Because you are living on your investment portfolio, you have much more concern with price volatility in the stock market (if you own equities).

Consider someone who must sell $20,000 in shares of stock each year to cover basic expenses. If the market falls 50%, they’ll be forced to sell twice as many shares to get the same dollar amount. This can destroy a portfolio.

Instead, consider holding several years of living expenses in a liquid account that can be accessed during bear markets. Additionally, keep the funds required for short term goals set aside in liquid funds to avoid a situation similar to the one I mentioned above. Ordinary bonds in a portfolio can provide an extended cushion if the market is still low when these funds are depleted.

What are your thoughts on emergency funds?

 

Drafting up a 2014 budget

nzmuse 2014 budget

At last, it finally feels like we’re back on an even keel! T is bringing in an income and now that the random payroll snafu that resulted in me missing my December paycheque (I got it in January) is sorted, we’re basically all caught up financially.

So, his new job. It involved a big initial outlay; that happens when you go from the kind of jobs where you have a uniform or can wear your normal casual clothes to a white-collar environment – particularly in face-to-face sales. As much as I hate to say it, those shirts and pants and ties and shoes were an investment.

The hours are long, though – 9-10 hour days and only three days off a fortnight. (Whether this is sustainable long-term is another matter – time will tell, I guess.) Now he’s past the training month, it’s entirely commission based, so his income is 100% variable.

The big bonus is the near total elimination of car expenses. Company car, a certain amount of fuel per week, not to mention the savings on insurance, registration and maintenance. I’m super stoked, because car expenses are ALWAYS what kill us.

The most logical way to manage our money seems to be to live off mine (the regular) and save his (the irregular) – even if that makes me feel a little uneasy. There is room to still save a little from my pay, which makes me happier. Here’s my projection for our weekly expenses (yes, we pay rent weekly in NZ, for any newcomers).

  • Rent – $280
  • Groceries – $130
  • Bills – $120 (I put this amount into my ‘bills’ account for power, water, bus fare, insurance, and all those boring things)
  • T’s allowance – $80 (spending money plus lunch money – their $6 subsidised cafeteria meals look amazing and are good value – this is a small luxury of convenience for the both of us)
  • Fun money – $80 (generally consists of us going out to eat, plus room to spend $20-30 on petrol for our own use)

The big hairy goal is saving for a house, but I’ve come to realise we probably first need to save for a second car, because we won’t be able to afford a house in a convenient suburb. Much as I would like to be able to save a 20% down payment, 10% is more realistic, and can be done through a Welcome Home loan.

Finding a house for under $485,000 isn’t easy (but at least they’ve updated their price threshold – they previously classed affordable houses as under something like $300,000, which was so far off the mark it wasn’t even funny). As for the income criteria, unless T turns out to be a total ninja sales star, or some flush-with-funding startup decides they need my wordsmithing skills like I need my weekly fix of Scandal and shower me with buckets of cash, we should be safe. I try not to think about one of my old classmates, an accountant who would’ve started out making roughly the same income as me, but then doubled that in her second job (I bet she’s into the six figures now) and is only going to go up from there. I try not to think about the fact that I will probably never crack $90k in my working life, and focus on the fact that I have the dream job that I actually enjoy going to every day. But why, oh why, couldn’t my talents and interests have had more lucrative leanings? Don’t answer that.

Femme Frugality

What would you pay to change about yourself?

You know what? Over a lifetime, laser surgery would probably be cheaper than the constant cycle of eye tests and new glasses/lenses/contacts. My squeamishness, however, prevents me from seriously considering it or finding out if it’s even an option for me. Plus, it’s a big outlay, even if it is a one-off. 

This got me thinking … what else would I pay to change about myself?

For one, I’d like to deal to my weirdly sweaty palms and nose. It’s like they both have a mind of their own.

For another, I’d be happy to never have another period again. For a blissful period (no pun intended) of maybe a year (which handily enough included most of our RTW trip) after changing my pill, I got to live out that wish. Alas, that grace period is over – though it must be said that life is still infinitely better than in the pre-pill days.

But most of all, I would pay good money to rid myself of my chronic hayfever and  assorted sinus woes. How much? A thousand, definitely. Two, quite probably. Three? Five? Maybe. What would it be worth to… be able to breathe through my nose overnight. Never feel that tightness in my chest again. To not be that workmate who sniffles day in day out, year round. To be able to leave the house without having stuffed my pockets and handbag with tissues. To not wake up sneezing every single morning – literally. To never again experience the horror of watching liquid mucus drip from my nose onto the floor, so quickly there’s barely a split second to compute what’s about to happen between feeling the first movement and seeing the splotch (this happens way more than it should).

Things could be a lot worse, I know. Some of you carry much heavier crosses and real medical problems. I’m grateful to have pretty minor maladies … even if I would pay good money to rid myself of them.

RTW budget: A six-month trip recap

what it costs to travel around the world nzmuse rtw

I can’t lie. I was putting off crunching the numbers for this post for a long time.

So, let’s get right to it!

Before we even left home, about $9477 had already gone into the trip (flights, insurance, Eurail passes, gear etc).

ASIA

For a little over a month in Asia, we spent about $3034, averaging $82 a day. I’d consider that a mid-level comfortable budget – we certainly didn’t deny ourselves anything (especially when it came to food and drink – it was our honeymoon, after all) but we didn’t stay in ritzy places or do anything super extravagant. We travelled by land – buses, trains – and took some taxis as well as hiring scooters. See also: individual country spending breakdowns for Thailand, Cambodia, and Vietnam.

EUROPE

For three months in Europe (with a week in the UK) we spent about $10,959 for a daily average of $117. I would consider this a comfortable backpacking budget. We were more conscious of our spending, but we ate well, slept reasonably comfortably, and spent probably about $1000, off the top of my head, on experiences (renting a BMW, canyoning, etc). We splurged more on food in Italy and Greece than in other places, and volunteered for food and board for a few weeks. Generally, we found hostels not good value as a couple and only ended up staying in dorms a handful of times – cheap hotels were our usual MO and we couchsurfed a few times.

USA

Alas, I don’t have exact data on our US spending as our iPhone crapped out right before the end of our trip. I do remember that we been averaging about $110 a day, so I’ll go with that and extrapolate that for the whole six weeks. That brings us to roughly $4840. Except for a few pricey nights on the east coast (Boston, WTF?), we mainly stayed in $40-50 motels or with incredibly generous and welcoming blog friends. We ate a TON of (good, cheap) Mexican food, BBQ, and at tiny diners. Can I just say: North America is the only region where even we had to admit portion defeat? Thank you for providing such excellent value for money. I would call this a frugal mid-level budget; we travelled in relative luxury, an American sedan (practically a truck by NZ standards) , splurged on Disneyland and hiring a motorbike.

I also need to add on a few more transport costs to that: $751 on internal flights abroad (Hanoi-Bangkok, Edinburgh-Brussels, Rome-Paris) and $1968 for our one-way car rental in the US.

If we exclude the personal shopping we did in the US (which I didn’t really track closely and isn’t really relevant to this tally), that adds up to just over:

$31,000

I should note, of course, that this would be a little higher, as exchange rates in real life are rarely as favourable as those listed on xe.com, but it’s not a biggie. The NZ dollar was strong last year – one reason we travelled in 2013 – but it’ll never stand up to the USD, euro or the pound.

Could you do it for less? Of course. Especially if you come from a country with a stronger currency (which I’m guessing is the majority of you). This was about extracting maximum enjoyment, not spending as little as possible. Otherwise we could have chosen to visit only cheap countries, camp (which I did consider, but campgrounds tend to be so out of the way and – like hostels – aren’t necessarily all that cheap), subsist only on bread and fruit, travelled more slowly (thus lowering our daily averages, though perhaps not our overall spend) and so on. I decided reasonably early on in the trip that I’d rather hustle harder to earn more and enjoy our travels than to focus on saving every dollar possible in order to make what we had last.

So this is about in line with what I’d expected, even if it is a slightly painful sum to swallow. If you exclude our initial outlay – flights, insurance, gear, etc – our daily costs on the road are essentially on par with what we’d spend just living our normal lives in NZ (and could even be lower if we stuck to cheap countries and splurged less). There’s only one thing I have any regrets about, and it’s paying to go on the London Eye. Aside from that, I feel it was all money well spent.