Everyone has a money story; something She’s on the Money podcast host, Victoria Devine, and co-founder of investment platform Sharesies, Brooke Roberts both passionately advocate for. It’s made up of the values, beliefs, and behaviors demonstrated to us as a child and develops as young as the age of seven.
Our money story is what makes it possible or impossible to manage our money and completely shapes our own unique relationship with our finances. By understanding it, you could be on the path to financial security and capability!
Before you jump into the big bad world of EFT’s and capital gain, it’s important to give yourself permission to learn, and allow yourself to make and acknowledge your financial mistakes. As Victoria and Brooke suggest, you wouldn’t expect to learn French in a day, so cut yourself some slack when learning to speak in dollars!
But, where should you start? Never fear as Brooke and Victoria have shared with The Weekly how you can take control over your financial journey…
Have an emergency fund
“You should have what I call a squirrel fund to get out of any situation. Squirrels, they hide their nuts away for a rainy day or for winter, and we should be doing something similar because that means you can get out of any situation you don’t want to be in. That puts you back in control,” says Victoria.
The financial freedom that comes with allowing yourself access to a pool of money that has no direct impact on your personal investments or savings is so important.
Know your outgoings and create a budget
Before starting your money journey, it’s important to have a clear understanding of where you’re starting . “How many dollars are going out? If you do a budget, often we all look at how many dollars come in. But we’re not actually that clear on how many dollars leave our account, what that means, and whether they’re aligned to our values.”
Creating a budget can help manage your outgoings, forecast your future spending, and identify what expenses we as an individual consider important.
Care about your super now
“A lot of us in Australia don’t care about our superannuation, and in New Zealand, they don’t care too much about their KiwiSaver until it’s too late. And honestly, especially for women, that is probably going to be the biggest asset you retire with. It shouldn’t be but it is because that’s the way of this world,” explains Brooke.
For many, the panic sets in later down the track when we realise this investment hasn’t worked as hard enough for us as we need. Putting a little bit extra each month into your superannuation fund could double it by the time you need access.
Be aware of the lifestyle creep
We are all guilty of succumbing to the lifestyle creep. “Every single time you get a bigger, better job, your expenses increase. Imagine that invested over the long term, that would be a significant financial change,” says Victoria. “It’s important to be super aware of what you’re doing with your cash as it’s increasing”.
It may seem like it’s not making much of an impact but trust us when we say, your $100 foundation is doing the same job as your old $20 drugstore product.
Make investing a habit
That gap in your foundation price could be the difference between increasing your investments and not. “Some people might not think there’s enough to invest, but I think there’s a self belief that people think a little won’t go a long way. Where actually that habit is the most crucial part,” explains Brooke. “Thinking, how can I make this as easy as possible, something I don’t have to think about. It can be a little bit over time, it doesn’t have to be like, once I get to $10,000 or $100,000 then I’ll invest. It’s actually something you can do with that five or ten dollars.”
According to Victoria, “If you’re not investing, you’re making a mistake. You can now invest for such a small amount. It’s not a boy’s club anymore, where you need minimum investment amounts.” Making investing habitual is putting future you first, and through platforms (like Sharesies) it’s more accessible than ever.