Tag Archives: money

I like big bucks and I cannot lie

Money stress? No thanks

“Money is the biggest stressor in Kiwis’ lives, and it is the young that are feeling it most.” – Stuff

Man, do I know that feeling. Money was the number one source of stress in my life for the majority of 2014 and 2015, and it was THE WORST.

We spend most of our lives working for money, and you can’t get by in the world without it. My life has only improved as my income has risen. It is not the #1 factor in my career decisions, but it is a significant factor.

I’m no longer ashamed to proclaim that I like, nay, LOVE, money. Like Bianca Bass, I’m taking a stand and putting it out there. She sums it up wonderfully in these three sentences.

“Money is wonderful. It’s the difference between having choices and having none. It’s the difference between worrying about bills and having the mental space to think about more creative things.” – Bianca Bass

Being broke is a time suck, and an energy suck. Things like navigating public transport in many cities, bargain shopping and researching every single purchase to save every possible cent takes up a huge amount of your time.

They say wealth is the ability to fully experience life. Hell, even a modest existence requires money – and in New Zealand, quite a bit of money, actually.

It’s not very PC to say that you like money and want more of it. People like to argue that money doesn’t solve all problems, that having too much money is just as big of a problem, etc… Which I just find so hilariously out of touch with most people’s realities. More of us than not are worrying about how to make ends meet, how to support a family, how to afford a comfortable retirement. Your average person is never going to have #richpeopleproblems – myself included.

“I think about how much money I’m making and how I could find more of it, not out of greed but out of a pressing need to know that regardless of what happens, I will always be able to take care of myself. I love money for the security it represents. Worrying about money has been a defining characteristic of mine for as long as I can remember.” – Megan Reynolds

Preach it… To me, money means options. It means peace of mind. I spent a solid chunk of time feeling panicked about money on a day-to-day basis. Downgrading that to mild worry has been awesome. I want to accumulate money, not for the sake of it, but for the security and freedom (ha yes, two slightly contradictory words) it brings.

Why millennials need to save for retirement

Why millennials need to save for retirementIt’s safe to say I never really gave retirement very much thought at all until this year.

But now that I’m not deathly worried about bouncing from cold damp rental to cold damp rental for the rest of my life, I can focus on other things.

Also, some of the things work has sucked me into lately are all about retirement savings and planning for the future. Heavy shit, in other words.

All around the world countries are struggling with the affordability of supporting retirees.

In the future we probably won’t be able to rely on superannuation, and will probably have to pay more of our own living costs and health costs.

Currently NZ has low levels of elder poverty – our  high levels of home ownership, and NZ Super being universal, non-means-tested, and pegged to 66% of the average wage play a role in that. But soaring house prices mean home ownership levels are falling, and I can’t imagine NZ Super will be immune to the kinds of pension reforms that are underway around the world.

Seeing and hearing some of the things people say on this subject makes me shake my head.

I can understand indifference and inertia. I know it feels hopeless. You need to save so much for retirement and it seems like your money isn’t going very far. Hell, I know *I* should really be saving more. But something is better than nothing.

What I don’t understand is all the ignorance and paranoia out there around KiwiSaver. Seriously. 1) Take the free money, the rest of us are! 2) Your KiwiSaver funds belong to you, not the government. Let go of those tinfoil hats, people.

Save for the futures, dudes. It’s one thing to pay for the less fortunate – the non-able, whose who don’t earn a living wage – those who aren’t able to take care of themselves. It’s another (and kinda immoral IMO) thing to be a drain on the system because you simply didn’t plan ahead.

As soon as you can, get started. Even if you start small, you can always ramp it up. Every little bit helps. Time, at least, is on our side. Just do it.

When She Makes More: 3 outtakes from this breadwinner

What happens when she earns more money

I put off reading When She Makes More by Farnoosh Torabi until now, because of the criticism I’d heard about this book: patronising, sexist, heavy-handed on the stereotypes.

There’s some truth to those points, but you know what? I loved this book. LOVED it. I felt so much less alone reading When She Makes More and honestly, I wish I’d read it earlier when I was really in a bad place. I just devoured all of the stories of the couples she interviewed. It was incredibly validating, and that for me was the real value in When She Makes More – just knowing that others out there totally got it, went through similar experiences, and recognise that it IS hard.

While I didn’t come away with any groundbreaking insights or practical tips, I appreciated what I got out of When She Makes More. Based off the pages I nodded at/bookmarked the most, here are the key points that most resonated with me.

 

Who we are

Of course there are thriving couples out there with female breadwinners, and that’s not really who this book is for. It’s more likely for those of us who fall into the category defined by the divorce lawyer Torabi quotes in one of the chapters: the husband who sort of has a job but isn’t trying very hard to generate more income, or is self-employed but not really working.

Why it’s different for women

The stress we feel as primary income generators is just not the same.

We live longer. Any financial decisions need to factor this in – how might they affect the stability of your future if you outlive him?

It’d be remiss not to mention the gender pay gap in here, too. Our earnings underpin everything. Yet on average we tend to earn lower incomes than our male equivalents.

If you’re not planning on kids, this isn’t so applicable – but the question of starting a family is where it really starts to get complicated.

If the household is dependent on your income, then there isn’t even a hypothetical choice about whether to scale back or stop work. Plus, that’s assuming everything goes smoothly. What if you have health complications during pregnancy or after birth – or the baby does? And what if you want to take a longer maternity leave than normal? What if your mindset totally shifts after birth and you decide you want to be primary caregiver? There are so many unknowns.

Obviously, the ideal would be if both partners earned an income that was individually sufficient to support the household. If that’s not the case then there may need to be some serious conversations and forward planning – whether that means working toward a plan where he can bring in more income, or something else that works for the couple.

In many of the couples cited, the woman had a seriously high powered, high paying C-suite job, and presumably this was less of a concern than in couples where the woman earned more but not necessarily a huge salary. At a high enough income you’d at least be able to bank a lot to hedge against those hypotheticals.

Torabi writes that female breadwinners with a dependent family are living in a high stakes world – it’s vital to remain sought after in your work, to learn to navigate the biases and double standards at play, and build the reputation and professional capital that will serve you well later on.

Another point that probably belongs in here: the so-called second shift. Even when the woman makes more, even if the man doesn’t work, she almost always puts in a significant amount of housework/childcare. Even when the financial roles are reversed, the roles at home do not typically fully reverse.

The risks

Resentment, resentment, resentment. Particularly when paired with the point above re: equality of housework. Resentment is the most dangerous feeling of all, particularly when it leads to wondering if you’re better off without him. (And maybe in some cases you are. It wasn’t until I actually left that he bucked up and started to get his act together.)

“The longer the woman has to support her lackadaisical husband, the quicker her feelings of frustration move into the bitter zone, after which the resentment takes over,” Torabi writes. It’s common for breadwinning mothers especially to feel at least some resentment, guilt and anger.

Female breadwinners are more likely to be unhappy, feel pressured to work less and even get divorced, she says. There’s the pressure to keep your job, the worry of having everything depend on you, and the desire to have an equal relationship with your partner.

Let’s face it, this permeates every facet of a relationship. When we talk about money, Torabi points out, we’re actually talking about our entire lives. Money affects how each of you feels about one another and about your relationship – and it also directly influences the frequency of and satisfaction with your sex life. (Can confirm. Broke sex is bad sex.)

If the guy has made financial mistakes in the past and is yet to prove he can be financially responsible, it can be difficult to trust him. Often it leads to mothering and controlling in an effort to remedy that, which sucks for both parties. I never liked being the mean/boring one saying no – we can’t afford that – or assuming responsibility for handling all the finances, or feeling unable to rely on anyone but myself. When a partnership turns more into something resembling parenting, it’s a bad sign.

Often couples that struggle the most are those whose incomes were fairly equal until he lost his job. But whatever the cause, what matters is how we cope in response. And figuring that out takes time. Financial and emotional equanimity are moving targets in any relationship, Torabi says, and this is so true in my experience. Ultimately, it’s a process.  




One last point I liked in the book and would love to see play out: the suggestion for a shift in the campaign for paid parental leave that puts the focus on the benefits for families. How could anyone be against working families?

But ultimately, the biggest strength of When She Makes More is that it’s not too concerned with how things should be; it’s about how they are in reality, and how to cope with that. Yes, things should be perfectly equal at work and at home. It shouldn’t matter who makes more, practically or emotionally speaking. BUT. We live in an imperfect world and we as humans are flawed – we just have to work within these constraints the best we can.


brokeGIRLrich

7 reflections on money and financial resilience

doors

This month I was at the latest OECD conference on financial education, bringing together attendees from nearly 50 countries from around the world.

I jotted down various random points but I wanted to put down in a post some of the thoughts I came away with – some new, some simply reinforcing.

5 new things

So glad KiwiSaver is as simple as it is: administered centrally, goes along with you even if you change employer. It would be great if there were tax incentives and if provider fees came down but overall it could be worse.

Economic anthropologists are a thing?! If I was more academic, this would totally be an ideal career path.

Designing financial products for people in a variety of situations is so crucial. I’ve read a lot about apps like Digit but always from the perspective of bloggers trying to hack savings, essentially. But it was raised here as an example of tech that can be used by people with unstable incomes to save when they do have money, but not force it when they don’t.

Financial resilience: I really liked these four indicators of financial resilience. 1) Control over your day to day finances. 2) Being on track to meet your financial goals. 3) The ability to cope with financial shocks. 4) The freedom to take advantage of opportunities and make choices to enjoy life. Speaks to me.

The notion of retiring with dignity: Look, wealth is not just about money. But we will all need money to get by when we stop working. The non financial aspects of wealth will absolutely help make retirement enjoyable but without sufficient funds to cover the basics of living, retiring won’t be much fun at all. I know I want more than just ‘getting by’; I want choices. Working toward a dignified retirement is something I can get behind.

2 reminders

Job and income volatility is a killer for financial security. Between that and other systemic factors like stagnant wages and rising costs, the gig economy and the rise of automation, things really are different for this generation. The benefits of certain trends are borne by certain parts of society but the costs are typically borne by others.

Obvious but something those not on the frontline of financial education/literacy sometimes lose sight of: how hard it is to save when there isn’t much money and life is chaotic. For those in real hardship it’s about triaging the now in order to get to ‘later’. To do otherwise is like swinging a baseball bat while standing in a canoe. At that stage, retirement is the Ferrari of the savings world.

My love/hate relationship with my mortgage

My love hate relationship with my mortgage

I’ve always felt … oddly grateful toward my mortgage.

I feel much better about making mortgage payments every two weeks than I ever did about paying rent. My mortgage is a means to an end:  better health, quality of lifestability (and peace of mind). And one day it will be gone, gone, GONE.

But it does weigh on me sometimes.

I recently got my 6-monthly mortgage statement.  Since buying my house in March I’ve paid off $6574 of principal. Sweet! But nearly half of that was extra repayments, which I made straight to principal. Eeesh.

Much as I want to throw everything at it, though, there are other things I want to do in life. Like modernise my 1960s kitchen, for starters, and invest regularly (outside of KiwiSaver, that is).

I’ve always been terrible with balance, and balancing my mortgage against other financial priorities is probably going to be an ongoing struggle.

Homeowners, how do you feel about your mortgage?




Finding our financial footing (again)

Finding financial balance with your partner

If there’s one thing I wish my parents had taught me about relationships, it’s the importance of financial compatibility.

Instead, the one lesson they imparted was the importance of genetic testing early on – you know, to ensure we didn’t have any horrible nasties lurking in our cells that might pass on to our kids, when combined with the other person’s DNA.

(I didn’t really take that one on board – not when I was 16, and not when I was older, either.)

High up among the criteria for a suitable prospective partner, according to How To Be An Adult In Relationships author David Richo, is this:

Has no disability with respect to money (e.g., cannot earn, spend, share, save, lend, contribute, receive)

Isn’t this just the most perfect phrase? I’ve never seen it articulated quite so well.

I still think there’s value in different styles. Here’s a really nice way to look at it.

When you think about it, a spender in a relationship is really working on improving your quality of life right now. Savers, on the other hand, are improving your quality of life in the future.

I’ve got a lot of priceless memories; fun experiences I would have missed out on otherwise for sure.

Savers can complement spenders, but it’s certainly not always easy.

I honestly believe we would have well and truly found our groove a long time ago, had multiple bouts of unemployment not derailed things so badly.

Lately we’ve been finding our way again, working toward a workable financial equilibrium.

As it stands now, what I see happening is a rebuilding of trust. Proving that we are both pulling our weight, adequately protecting our income through insurance, so we can work together towards a shared future.

I wish it were the kind of thing that could be done with the flick of a switch, in the blink of an eye, but it’s a process.

How homeownership saves me money

The surprising ways home ownership saves me money

Over the past decade I’ve wasted thousands of dollars renting (not even counting rent payments – those would be in the tens of thousands and at least I got shelter in exchange for those).

There are costs that come with home ownership – some unavoidable, some totally up to you – but those are covered extensively elsewhere on the internet and I’m not getting into those today.

No, what I’m talking about are the surprising ways home ownership has saved me money here and there.

Power

A poorly insulated house is less efficient to heat. We’ve lived in iceboxes half the size of this house that cost the same in power bills as this one. And in the case where we’ve lived with flatmates, well, other people often don’t care about saving power the way you do.

Related: I’m probably saving a small fortune on tissues. I no longer have a constantly blocked or runny nose – it’s the exception rather than the norm now.  Rental standards in NZ are pathetic (and here’s even more skin-crawling stuff).

Now don’t get me wrong. This is still an older house and we’ll need to add more insulation to the roof, which will be in the realm of $1500-2000 if we DIY and more if we get in the pros to install it. On the very coldest nights this winter the roof has gotten down to single digit temperatures overnight, with the rest of the house plunging to low double digits, which isn’t ideal. But it’s noticeably drier and warmer than the many rentals I’ve endured.

I’m sure winters are getting colder (either that or I just feel it more with age) and T agrees. We experienced some record low temperatures this year and last, so I don’t think it’s entirely my imagination.

Insurance

My content insurance dropped to a third of its former cost once I became a homeowner. I’m deadly serious. Car insurance also decreased by a tiny bit. Just another way renters get ripped off.

Going out

Home is a haven now. Not a cramped, damp place to escape. Not a place with flatmates who grate on your nerves. I love my house so much, warts and all. I’ve always been a homebody and at last, after so many years, I have somewhere I can honestly nest and settle in for real. I feel an unbridled sense of joy and serenity every time I  step out onto my  sunny deck or sit down in my dining nook.

As you can probably guess, I have had zero regrets about buying a house. Home ownership has been everything I dreamed of and more.

brokeGIRLrich

PSA: Check your credit!

Credit check
Credit check
It’s that time again: time to check up on my credit report!

As a commenter wisely pointed out, my recent drama with collections (over $50, of all things) means I should definitely check and make sure that it has been fully withdrawn and isn’t on my credit record. If it is, I’m seriously going to go ballistic.

If you’re not sure how to check your credit report in NZ, here’s how. There are 3 reporting agencies. Below are the current links to request your free credit record:

You can do it all online – just enter your details and request a copy to be emailed or posted to you. They ask for your name/s, address history, and employment info. You will need the details of your ID (eg driver’s licence info) and may need to upload a scanned copy as well.

NZ credit reports include your personal details, a list of credit enquiries, any default, judgement or insolvency details, and repayment history. The repayment history isn’t exhaustive – not all credit is reported. For example, my 2015 report included my credit card history but did not include my car loan history at all.

Although I was able to obtain my credit score for free back in 2010 when they were first introduced, it seems you can no longer see your credit score unless you pay for it. Not like in the US – where you can easily get your free credit scores in a jiffy.  I have no idea what mine is now!

Unpopular opinion: Money CAN buy health

When money CAN buy health
“Go spend some money,” a nurse once told me when I sought out advice.

Thinking about that incident still pisses me off, even though I’m a long way from being that broke student. But to be fair, she wasn’t wrong.

Lack of money has caused many physical problems for me over the years, and money has in turn also fixed them. Full circle.

On the skin front

Know what disappeared once I solved my money problems? My intense eczema. It was a horrendous cycle – financial stress led to eczema that required expensive cream that didn’t exactly help the financial strain and made everything worse until the core money issue was dealt to. My stress eczema got so bad I couldn’t even wear a bra for some time. Now I just have to deal with the scars, and rosehip oil (again, thank you money) is helping with that.

Know what else disappeared and reappeared accordingly? My period. Not that I missed it from a practical perspective, but I knew its absence was a bad sign.

On the respiratory front

I quite like breathing. Unfortunately it can be a struggle sometimes. Years of living in cold damp New Zealand rentals will do that to you. Buying a house is the only thing that’s made a real difference in this area.

On the intimacy front

Okay, maybe a bit of a cheat here. A good sex life isn’t a requirement for health and wellbeing but it’s nice to have. Post-dinner bloat is a mood killer. A dirty house is a mood killer. But for me, money stress is the biggest turnoff of all.

Disease Called Debt