Hello, beautiful people and welcome to the first post in a category I’d like to introduce to my blog: personal finances. Hold up – before you all pack your bags and walk on out, I’ll try to keep it entertaining and it’s not going to be all the time. But honestly? Money is really fucking important and I think it’s so helpful to talk about.
And you know why? Because, before I started working in the finance sector, I had basically no concept of money and all the fun, critical, adult things that surround it. In fact, my whole idea of money was “do I have enough to afford that dress I want? Great, now it’s gone!”.
Over the past year, I’ve worked in super (Australia’s pension scheme, essentially) and at a normal bank’s call centre. During COVID-19, I’ve been working for the financial hardship team for said bank – so I’ve had quite a lot of exposure to personal finances. Exposure that has greatly changed my attitude on money for the better.
Today I wanted to share with you some of the biggest lessons working for a bank has taught me about personal finances – so none of us have to learn them the hard way!
1. Saving is important. (I know this is obvious, but I cannot emphasize it enough.)
If you’re anything like me, savings are probably a loose concept followed by “for”. Saving for a new laptop, saving for a holiday, saving for that fancy dress . . . I’ll be the first one to admit that the idea of saving money is generally synonymous to spending it.
Train yourself out of this.
Have a savings account with a different bank than your everyday current account. Chuck some money into it every payday and forget about it.
A great way to save money without realising is using a cashback app or browser plugin. Cashback sites offer you normally 1-5% of your order total back when you shop from an eligible store. (So you might earn $5 back on a $100 haul.) If you sign up for Rakuten Cashback through my link, you earn $10 off the bat – and they offer cashback on big names like Ebay, Amazon and Urban Outfitters too!
2. Old age poverty is real – and it is scary.
One of the most depressing parts of my role was speaking to 70 and 80 year olds who had $10 in their account, a personal loan repayment due and rent coming out next week. Old age poverty is real.
In our post-COVID times especially, we are not going to be able to rely on the government to support us in our old age.
I think this harsh reality is one of the biggest things that hit home the truth of saving for me. As a 21 year old, if my bank account hits flat I can get a new job. Hell, if shit really hits the fan, I could run home and live with my parents.
As an 80 year old woman, the work opportunities will be significantly less. The fallback options will be significantly less. I’ll be able to rely on a pension, hopefully . . . but what else?
3. It is easier to make money with money – make your money work for you.
One of the most infuriating things about working in a bank is witnessing the poverty gap in action.
If you have money, it’s easy to make more. You can chuck money into a term deposit and benefit from a higher-interest, guaranteed return at the end. You’re eligible for higher-interest bank accounts – hell, you can negotiated interest rates with banks if you’re ballsy enough!
One of my biggest take-homes is learn how to make your money work for you. Investigate term deposits, high interest accounts and even stocks to see if you can put your savings to good use and make money out of them.
4. Budgeting makes a massive difference.
I don’t feel like I need to say too much about this one – learn to budget, guys, it’ll change your life. (Well, your life savings.)
5. Check. Your. Credit. Score.
I know that some people will fall into the “I don’t want to borrow money or be in debt” camp – but, honestly, it’s such a good option to fall back on. Shit hits the fan real quick; it’s better to have the option to nab a credit card or a personal loan if you need one.
If you have existing debt, check your credit score. It’s not going to magically disappear over time and it’s something that can have a massive impact on your life.
Need a personal loan to start up your business? Credit score. Want to get a mortgage to buy your dream house? Credit score. Just lost your job, but you’ve got a new one starting in a month from now and you want a credit card to tide you over until your first payday? Credit score.
6. Not all debt is bad debt.
This ties in well to the previous point.
I think we all have a negative opinion of debt. We don’t want to be tied down by it and owing money sucks; not to mention, I think there’s a negative perception around having debt meaning you can’t manage your money.
While this can be true, it doesn’t always have to be.
Mortgages, for example. They’re a massive debt – but often are cheaper than renting and you’re paying for something you own.
A personal loan taken to start your business. It might be a debt but if it’s something you can easily afford the monthly repayments on and you’ve got the start-up capital it would take you years to manually save . . . maybe it’s not a bad thing.
7. I 100% want a house, sooner than later preferably
And I suppose this also ties in with the previous point.
Before COVID, I didn’t particularly want a house. It’s a massive task to save up for a deposit, it meant (to me, at least) being more tied down than I like . . . and, like, what’s the point? To be honest with you, it seemed more like a power play to me than something useful.
“Look at me, I have enough money to own land! I’m rubbing my belly as I eat bon-bons, hu-zah.”
Yep, nope, my opinion has completely swung the other way. Mortgages are often cheaper than rent – and you own your house at end. You own it. It might be 25 years from now, sure – but you know what you’ll be in 25 years?
Old. You’ll be old. You might want to retire. Hell, you might need to retire. And once you reach that age and, like I mentioned above, your options for making cash are wearing a little thin . . . don’t you think the security of not paying rent will be a big relief? I bloody do.
8. Having money doesn’t make you a fat cat – fucking save.
Look, maybe you’re all way more switched on than me – it’s not hard. But I had this work association of money = soul, sucking corporate greed.
I viewed attachment to money as being part of capitalist evil and viewed it very much in the sense of “money is there to have fun and be spent with! You can earn it back! Don’t be one of the evil, will-stomp-on-anyone-for a-bonus-cheque black suits”.
This is so dumb. I am so dumb. Having money doesn’t make you a fat cat, it just makes you someone that has money. That has some savings – that has some security. All of which are good things.
And with that (and a word count of 1,110 plus…) I will round this post off here! I hope you guys enjoyed this – well, as much as you can enjoy finance anyways. Are there any money tips you swear by? Do you agree with these ones I’ve learnt? Let me know your thoughts down below!