Organise Your Money

Be Financially Free

Nina Dubecki, Vanessa Rowsthorn

• Publisher: Wiley
• Year: 2013
• ISBN:
  9781118678787
• Edition: 1
• Topic: Personal Development
• Subtopic: Personal Finance

You don't have to earn megabucks or have a degree in economics to gain control of your finances.

Organise Your Money will show you how to set financial goals, move out of debt and start saving for the future.

Learn how to take control of your financial destiny and make your money grow.

Authors Vanessa Rowsthorn and Nina Dubecki of moneygirl.com.au are passionate about inspiring women to get smart about their money.

Chapter 1

Setting your goals

There once was a girl called Sheree

Who dreamt of sailing the sea

She wrote a great plan

Worked hard as one can

And now sails her yacht off Fiji.

Ah, money. We have such a complex relationship with it. On the one hand we’ve grown up being taught that ‘money makes the world go round’; and yet on the other hand, we’re taught that ‘money isn’t everything’. Confused, anyone?

Before you can jump on the path to financial success, you need to look at the way you think about money and get rid of any preconceived ideas and bad money habits that might be holding you back. Like it or not, money affects every aspect of your life from where you live to how you live, so it’s vital that you’re the one calling the shots in your relationship, not the other way around.

You also need to stop for a moment and decide on your financial goals. Life whizzes by so fast that if you don’t pause to give serious thought as to what you want to achieve financially (and why), future decisions may get made on the run without taking into account what’s really important to you.

Then, as with any good makeover, you need to commit yourself to taking action. As they say, there’s no time like the present — so giddy-up! In this chapter we’ll cover:

• your relationship with money: taking a look at yourself in the mirror

• money myths: 10 thoughts to banish forever

• setting goals: working out what you want to achieve

• taking ownership: committing to making it happen.

Your relationship with money: taking a look at yourself in the mirror

As trusty old Dr Phil will tell you, you can’t move forward until you have addressed the past. The same goes for your relationship with money. Over the years you’ve probably collected baggage that you might not even know you have.

Often the way people behave with money is not built on reason, but on emotion. For example, splashing out on an expensive dress can be more about getting swept up in the adrenaline of a shopper’s high (or perhaps caught in the grips of a very persuasive salesperson) than anything else. How you think about money can also be related to what you’ve been taught (or not been taught) growing up. Your family’s attitude towards money can have a huge influence on the way you behave. If you grew up hearing that the only chance you’ll ever have of becoming wealthy is by making it as a high-flying lawyer or a doctor, why would you think otherwise?

Nina’s story (age 39)

It was completely by accident that I became interested in investing. In fact, until my mid-20s I’d thought my only chance of becoming wealthy would be to marry someone rich or to win Tattslotto. These were notions my parents had unconsciously instilled in me, but not through any fault of their own — it’s just that no-one had ever taught them about money, either.

About 12 years ago, I was in the city one Saturday afternoon when it started to rain, so I ran into a bookshop to escape. Walking down the aisles a book called The Wealthy Barber caught my eye and I picked it up and started to flick through. I’d never read a book about money before, but this one sounded interesting and seemed accessible so I paid for it and left. Reading it later that night was a revelation. For the first time in my life, I realised that I wouldn’t ever have to worry about money again if I took a few simple steps. I understood that my financial future was firmly in my hands.

Luckily, I didn’t have any credit card debt — that was one thing my parents had taught me about money: to always pay my credit card balance off in full every month. So the first thing I did was to open a managed fund with $2000, after which I committed to monthly direct debits of $200 straight out of my bank account. In the space of three years, the balance had grown to around $20 000. I’d also saved enough for a deposit on a little apartment in the inner city. It was the start of my life as an investor.

It’s time to air your dirty laundry

Do you have any long-held notions about money that aren’t doing you any favours? Have a good think about your attitude towards money. For example, do you think you’re just not one of ‘the lucky ones’ and that you’ll never be well off? Or are you waiting for that big pay rise or Tattslotto windfall to head your way before you start investing? Consider the way you behave with money and look at your habits closely — try to be as honest as you can. By understanding your attitude towards money and committing to changing those beliefs and behaviours you’re taking your first step towards financial success.

Examples of bad habits

Just like biting your nails, there are plenty of bad money habits that hold women back when it comes to taking control of their finances. Do any of these sound a little too familiar?

• Pay Cheque Patty lives from pay cheque to pay cheque, finding herself with no savings and no cash left over at the end of each month.

• Spendy Sasha finds it hard to resist a sale and easily gets caught up in buying frenzies, purchasing things she doesn’t really need, only to regret it later.

• Generous Georgie shouts dinner and drinks for her partner, friends and family way too frequently. She spends too much on gifts, and often finds that she doesn’t have enough money to pay for essential living costs and bills for herself later. Generous Georgie has been spotted ‘loaning’ money to family members and friends who she knows are unlikely to pay it back.

• No-Responsibility Nicki knows she’s bad with money, but takes little action to change. Nicki knows that she can call on her friends, family and partner for a loan whenever she needs help — so she does.

• Credit-Happy Chrissie views the money she has on her credit card as her own, and is all too happy to whip out the plastic to buy things she knows deep down she can’t afford. Chrissie usually finds herself unable to pay off her credit card balance each month.

• Bad-Deal Belinda doesn’t shop around for a good deal on anything — bank interest rates, mobile phone deals, a new fridge, you name it. She never asks for a pay rise or promotion although she knows she deserves it.

Confession time

Grab yourself a notebook. At the top of the first page write: ‘Money habits I want to change’. Think of at least three things you recognise as bad money habits you want to change and jot them in your book. Writing things down can really help as it makes them ‘real’ and will give you a reference point to come back to later on.

Money myths: 10 thoughts to banish forever

We’re a nation of list lovers — rich lists, best (and worst) dressed lists, the Triple J Hottest 100 list, we love them all. So we thought we’d join the ranks of list builders and come up with our very own. Without further ado we present the ‘Top 10 myths about money that you must banish from your mind’ list:

1 Money is dirty. While accumulating riches for the sake of it or aspiring to have three sports cars sitting in your garage could be considered questionable pursuits, having money can give you the power to do good by supporting the causes you believe in. It also gives you personal freedom. There are many ways to invest your money ethically and in line with your personal beliefs.

2 You can only become rich if you marry someone wealthy or win Tattslotto. Apart from the fact that your chances of winning the lottery are pretty small, you’re actually very capable of becoming independently wealthy over the long term if you acquire the right knowledge and exercise discipline. By using your money smarts you can create a comfortable future for yourself on your own terms, rather than leaving it to chance.

3 I don’t earn enough to be an investor. Becoming a financial guru has very little to do with how much you earn. There are many examples of people on über-high salaries who squander their earnings away, and of people on average incomes who’ve learnt to invest wisely and become wealthy and financially free. Of course, it’s easier if you’re bringing home the big bucks, but it’s absolutely not a prerequisite for financial success and happiness. You have to start somewhere, and as little as a few thousand dollars is enough to get you on your way.

4 I work hard for my money and deserve to spend it on whatever I want. Sure, you can spend your hard-earned cash on three lattes, lunch and rounds of drinks after work each day if that’s what you really want. But is it really what you want to spend your money on? Or is it just habit? If you saved some of that money and invested it wisely, in a few years it could mean the difference between having enough for a deposit on your own apartment and living with your parents or renting indefinitely.

5 Finance talk is boring and doesn’t interest me enough to get my finances in order. There’s no denying that the finance news can be as effective a sleep aid as a warm glass of milk. But the truth is that you don’t need to know how the All Ordinaries are performing every day in order to be successful with money. Financial success is all about knowing where t...