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When I first thought about writing this blog, I toyed with calling it “bad money habits” or “things that kept me poor.” But then I realised that wasn’t really fair. My old money behaviours weren’t necessarily “bad”, just uninformed. I was never “poor”, like poverty-stricken, so using that word felt unfair to those who truly are. But I definitely had some habits that chipped away at my wealth. So, here’s a quick confessional that maybe you can relate to as well.
There are loads of things that could be on this list, but here are my key ones.
While growing up, my dad worked at General Motors for decades, and the cars we always had were Holdens. They were just about part of our family brand, so it was natural that, being part-bogan and living in Lower Hutt, I would also end up in the Holden camp. Unfortunately, I discovered (when driving rather than being a passenger in these beasts) that Holdens are expensive to run. I pretty much bled cash on that gorgeous, (in)glorious tank. Nowadays, it is a very vanilla Toyota wagon, and I save myself stacks as a result.
There is only one way this ended, and that is with crowns, root canals, and extracted teeth - each “event” costing thousands of dollars, an empty savings account, and a very sad, numb dribble face. This is because I am blessed with the “special” kind of teeth that need a six-monthly visit, and for me to neglect that gets expensive fast. Now I work to stay on top of those visits and the maintenance of my “special” (aka. crappy) enamelled teeth.
Speaking of health, here’s a biggie. How many of us have needed specialist treatment that requires prompt attention and then (at best case scenario) had to make the choice to wait a year on a public waitlist or fork out thousands to go faster through private care? In my younger years, I didn’t have health insurance, and boy, those scans were bloody expensive. I am so glad I have it today.
Yep, cash in envelopes, in a tin, in a drawer, etc. The problem with cash is that inflation erodes its value. It also doesn’t earn interest. It was also easy to just grab a note and spend it. Nowadays, my savings strategy includes high-interest cash savings accounts, managed funds (thanks Elizabeth), having the correct KiwiSaver settings (thanks Simon), and an emergency fund.
The cash is working to grow itself, instead of eroding away.
In my past life, we adopted a dog that cost $6,000 in vet bills within the space of three years. She was particularly nuts, had a passion for getting into the compost heap (and making herself almost sick to death), and chasing cats through the hedge (where there was an old wire fence to rip her to shreds on the way through). (Cats were fine, BTW.) Of course, we loved her to bits and paid the cost. But on the credit card, then the interest on that, and so forth. So, we paid the cost with bad debt and, of course, ended up paying extra as a result.
I avoided money conversations with my ex to avoid a fight, and this resulted in mismatched money personalities living together and making poor financial decisions. I was also too embarrassed to talk about money with others outside the relationship, so that meant I missed out on a lot of learning and wisdom from others who had a better idea of what they were doing financially. Nowadays, I talk about money a lot because money is a tool I need to survive this crazy world, and I want to help people.
Nowadays, I talk about money a lot
I have never once expected a raise, mostly because I chronically undervalue my own worth. This is a shortcoming I am working on, and it helps me to meet up with strong women who help me see that asking for a raise when you have earned it is actually okay and not selfish or greedy.
There was a time when Mojo Coffee and Holy Bagels knew both my name and my order. It was little costs that added up to a lot. If I focus on the cost of two coffees per day alone, five days a week, fifty weeks a year, for ten years, that is $25k. I could really use that in my KiwiSaver about now. Today, I have an espresso machine at home and take coffee to work in a giant thermal cup. No, I don’t look cool, but hey, at least it is good for the environment. I do, however, still buy myself a coffee or two on the weekend.
I could really use that in my KiwiSaver about now.
This was a habit I had in my twenties when I wanted a new outfit every week to wear on a night out. I would pay $100 for a jacket that I would wear twice. That equates to a $50 per use price tag, on top of the gig tickets, drinks, and taxi home. Crazy sauce. Now I consider the $ per use principle – if it costs $50, will I use it 50 times?
To be fair, at the time I didn’t even know that service actually existed. Nowadays, I am fascinated by what Brendon has to say every month in his fixed versus floating blog about interest rates and what he suggests for fixing, and I use this advice for my own investment property.
This was possibly the biggest anti-wealth (and anti-health) mistake I ever made. It took me years to give up the habit, despite hating it. I have deliberately not worked out the cost of my former smoking habit because it will only make me feel down and change nothing about my current situation. But I am sure that this was, by far, one of the biggest anti-wealth mistakes I ever made.
A lot of my new good money habits have come from working in a financial services company (funny that) and from the advice of my colleagues.
What I would say to my former self is to not fear money, but to tame it. Also, I would say don't be afraid to make it a priority. It is not THE priority, but it is important, and it is ok to ask for help if you don't have the answers.
Honest conversations, financial education, and professional advice can make a huge difference. If you’re like me, just try one thing at a time. You won’t get rich in a week, but you will definitely be better off for it.
Shona.
About Shona: Hi, I’m Shona, the communications and marketing support person for Velocity Financial. Designing effective communications in a complex industry such as Finance is a worthy challenge. Finding ways to bridge gaps between complex financial information, and the everyday needs of people trying to navigate that world through informed choices, is something that I relish. I love deciphering and disseminating the expert knowledge and ideas of our clever team, into simple messages that speak directly to our clients, who are hungry for more knowledge and better understanding. In my outside life, I am a keen photographer and, like others in the team, I have a passion for the outdoors, hiking and mountain biking. I also train in martial arts and have been known to wield a sword on occasion.
Disclaimer: I am not a financial adviser and what I have shared is general advice that has been peer-reviewed by my team. As always, make a time with our financial advisers for expert advice about your own situation.
Always get professional advice
The information shared in this post is meant to be general guide to support you on your journey. When making important decisions about your finances, we encourage you to seek independent financial advice first, tailored to your unique situation. As well as talking with a financial adviser, make sure you talk to your lawyer and accountant too – together they'll help you find the best solution for your specific situation. Our knowledgeable financial advisers are here to help. Check out our website for the details about our financial advisory services in our disclosures https://www.velocityfinancial.co.nz/disclosure-statement.