Money

Money is one topic that Mark and I always struggled to talk about without a truckload of emotion. We come from very different backgrounds in our approach to money and back when we first got together there were a lot of arguments and a lot of tears.

I came into our relationship with a lot of debt including a massive student loan. Mark came into our relationship with no debt and savings.

We could never see ‘eye-to-eye’ about money and often could not even find a safe ‘middle’ ground to discuss money. We tried going to a money manager and we tracked our spending for over a month and we were still no closer to finding a happy medium.

Somewhere along the line we managed to get on-track with money and I reduced my debt.

When I was at university I got a credit card with a $500 limit for emergencies, suffice to say, my credit card was always up at the limit and I only ever paid a very small amount. I had store cards (Farmers was my downfall) and hire purchases etc. Gradually I started to reduce my debt, as I paid one thing off I added that payment to my next debt and so on. I finally started making in-roads on paying my student loan when the government stopped charging interest. Honestly, I make no apology for being glad that my loan was interest free as I paid interest on it for years including while I was studying. I still remember the day that I made my final payment on my loan and the sense of freedom and relief was incredible.

Then I made a huge error and decided to get a credit card with our current bank and get rid of my old one. I remember standing in the kitchen of our first flat when I opened the letter and had a limit of $4000 and Mark told me to reduce it straightway; I did not. I managed to rack up a massive amount of debt on my credit card and was only paying minimal amounts. My boss explained to me that a credit card limit “was not to spend up to” and I realised that I would have to just get rid of the card.

At the start of 2008 (the year we got married) I decided to get a personal loan to consolidate any debt I still had which would also include my credit card debt. This meant a monthly loan repayment, but then I could not spend that money once it had been paid and therefore my debt would reduce. In retrospect, it was not probably not the wisest thing to do in the lead up to our wedding as we were under a huge time constraint to get married and therefore struggled financially. However, I did manage to clear my debt before our wedding.

Since I got rid of my credit card, I have always been reluctant to get another because I felt that I would end up in debt again. We pushed back when the bank offered us credit cards and I made do using my debit card to make online purchases etc. Then 9 years later I had to get a personal credit card for work. I was absolutely petrified! A few weeks ago, I had an epiphany about my credit card and turned to Mark and said “I realise that if I want to buy something on my credit card and I cannot afford to pay it off in full when I get my statement then I probably should not be buying it”. Mark was blown away and so was I. It has only taken me 9 years to be comfortable to use a credit card in the way that I believe it should be used.

Mark and I have come a long way with our finances and are happy with the position that we are in. However, it took us a long time to get where we are!

The things that I would have told me younger self in relation to money:

• Learn to save for things
• Try not to practice emotional spending
• If you cannot pay the amount on your credit card in full then consider whether you need to put that purchase on your card
• Use your student loan wisely
• Sign up to Kiwisaver when it first started instead of listening your husband!
• Always divide the total hire purchase amount by the number of interest free months i.e. do not pay the minimum (I kind of did this)
• Do not get store cards, they are the devil!

Provide Solutions

Lately, more and more people are struggling to make ends meet.

As a culture we could keep focusing on the problems or we could actually look to others to provide suggestions and solutions to help people get through the toughest times.

I am sure that there are people in this country who take advantage of the welfare system or live well outside their means and spend their money on “wants” vs. “needs”. I do not want to talk about those people. I want to talk about the people that are seriously doing the best that they can to make ends meet and they still struggle.

I do not want to hear about the price of milk anymore. Yes, it is expensive but everything has gone up in price. Last year people were focused on the price of cheese. We do not have children, but we still buy 2 x bottles of Dairy Dale milk for $6 from our local dairy. We keep one for home and I take one to work.

There are some amazing people out there that have made HUGE lifestyle changes to try and get ahead and lessen the struggle:

• Hannah and her family moved to a smaller city; they have a vegetable garden etc.
• Liz can feed her family of 5-6 on about $150 per week through good budgeting and a lot of home-cooked meals and baked goodies. Here is a link to her blog
• Jane takes out the exact amount of money in cash for her weekly groceries and does not spend more than that
• Make your own cleaning products (Wendyl’s Green Goddess website can be found here)
• Carla who pulled money out of her “ass” last week by looking around for things in her home to sell
• What about talking to your friends or neighbours and buying bulk vegetables i.e. 10kg of potatoes and splitting them up?

Somewhere along the line I think that some people have lost the skill of cooking and baking and even having a simple vegetable garden. A vegetable garden does not need to be expensive you could even grow things in a couple of old pots.

I absolutely love the philosophy of Sophie Grey (Destitute Gourmet) who makes amazing, nutritious meals on a budget. Her circumstances changed and as a family they had to make changes to their life.

Seriously, someone (I’m looking at you Close Up, Campbell Live, Breakfast) needs to get Sophie Grey on instead of continually talking about the problems.

So what are your ideas for saving money and getting through the tough times?

Finance Companies Suck

Today with SCF going into receivership I have been thinking about finance companies and general and why I hate them. Adrian pointed out that for the most part farmers would have been buying machinery from SCF as opposed to new plasma televisions.

I will not tell a lie, I have had various hire purchases and store cards over the years where the debt has been managed by finance companies. Nine times out of ten a lot of these debts were incurred because I wanted something immediately and did not either have the savings for it, or did not want to save for it.

Do not get me wrong, I am not against hire purchases with interest free terms provided you need the item. To me household items that you need to replace immediately if they die are things like ovens, fridges, washing machines and possibly a dryer. I do not believe you should get yourself into debt for a new plasma TV, iPhone or Android phone, computer etc. It comes back to whether you believe something is a “want” or a “need”. Check out Jill’s blog titled 'Do you REALLY need it or just want it?'

A few years back in the lead up to Christmas I just about had a meltdown about a particular finance company’s advertising. It went a little like this “want a new XX or new boobs then come and see us”. Seriously, how are new boobs (unless you have chronic back pain) a reason to use a finance company?!! Shame on you finance companies preying on people during financially vulnerable times like Christmas! This also made me realise just how commercialised Christmas has become. There are also companies that target particular socio-economic or ethnic groups. GRRR they just make me so angry!

I am far from being a financial expert, so from my personal experience here are some advice/thoughts:
- Think about wants versus needs
- If it is not an urgent purchase then do your research and shop around. You might find that if you wait a week or two the initial “need to have it now” feeling has worn off. Or save up for it...it will mean more!
- If you do not have the money, but want something then how about selling some of the “stuff” you do not use or want anymore. Liz and her family did this so that they could have a family trip to Fiji
- Try and put some money aside for “emergencies”; even $20 a month is better than nothing
- Avoid finance companies like the plague!
- Be wary of store cards especially those that can be used everywhere! I used my Farmers card at book shops, to get petrol and to buy groceries and then was hit with the 20% interest
- If you cannot use a credit card properly then get rid of it. As my boss once said to me “Vanessa your credit card limit is not for you to spend up to”...stink!

Please feel free to add your ideas or experiences below!