Published on May 5, 2015 5:59 pm, by Melody Williams
I find it a hard to talk about money with anyone but my best friend – I started getting financially sorted very young & people seem to be envious, however when I try to help them they don’t bother to put in the hard yards like I did yet expect the same results…
I grew up very poor…so I don’t have the need for fancy things
Basically my story is…I grew up very poor, basically on charity (Dad earned $27k a year and I have 6 siblings) so I always wanted more for my own family, however living on basically nothing means I don’t have the need for fancy things. I’d much rather have my bills paid & savings in the bank than a new pair of shoes.
So I got my first job at 15 & saved up just over $3k cash for my first car. Two years later I had another $5k and combined with the FHOG I bought land and built my first home. Unfortunately some issues with the builder walking off the job meant I didn’t move in til 3 years later, and am still owed over $200k, but that’s a long other story!
I have a granny flat at the back of my home that pays 2/3s of the mortgage and at one point I was paying more than double mortgage payments, on track to pay it off by the time I was 30. But I ended up pulling all of that cash out to purchase my second property.
How did I afford a property when my friends can’t pay their bills?
I am a single parent to Max, recently turned 5, and all my friends are like “how’d you do that on your own, we have boyfriends/husbands etc and we can’t even pay our bills, much less save for a house”. So I’ve done a few “budget plans” to try to help – advised which major bills to pay off first, how much they need to put away each week to make sure their bills are all covered and how much they can realistically save once everything is accounted for and some spending money taken out (a girls gotta have her weekly coffee catch ups!)
However…only one of my friends has put it to any use (another single mum like me, she bought her first home in January), while another couple put their tax return into tattoos instead of paying the bills. Mind you, they have 3 children under 3yrs old, so I’d rather have a bright future than a pretty arm and it’s gobsmacking to me that they can’t see it!
In my head I see two pictures when I feel like blowing cash – whatever it is I’m looking to buy next to a hunched elderly person wrapped in blankets with no food. It’s a pretty compelling reason to walk away from anything silly and expensive. I’m not a Nun & I do buy things I want, but I just don’t go overboard and I think of them as treats, not justification for my hard work or whatever.
Wants versus needs
Basically, I think it boils down to the “want vs need” and the “now vs then” factors. I remind myself with the saying “What we do with our money now directly means we cannot do something else later on”. I also worked out my expenses, added on $50 spending money a week (which is quite a luxurious amount for simple little me) & stash the rest.
I think we have to get them while they’re young. Too many kids I know get car loans & credit cards & personal loans for holidays etc because they’re at home with mum & dad, not realising they’re a noose around the neck if they want to do anything else.
If I were talking to a bunch of kids, I’d start out with “Who wants to be rich?” Then ask “And how do you plan to get rich?” I think there’s a real lack of planning. Most of the clients we had in finance were mid-40s and realising they needed to get something in place for retirement. I also think that’s way too late to start thinking about your money.
Also, compounding calculators for little expenses really opened my eyes! Like buying lunch or getting my hair done vs doing it at home. Over a year it saves a bunch, and if that is invested and returns the average, what it’s worth at retirement age outweighs having a sad sandwich for lunch.
Its all about mindset
I’d rather be fed and warm during retirement than have ridiculously expensive “nice things” while I’m young, and that’s what keeps me going, as well as watching my net worth grow and knowing I’m all my son has to rely on financially (his dad pays the minimum child support, but is over his head in debt, has no career path and just had a new baby so he really has nothing to offer my son in the way of a comfortable future, sadly).
It’s all in the mindset. If you have the patience and dedication and self control to think of your future instead of the now, and learn as much as you can about money management & investments, you’ll be successful.