Why I can’t commit to Frugal spending…yet

My current position

Age: 28
Salary per year: $57000 NZD
Debt: Nil
Pension savings $800 NZD
Savings Account (2.65% interest p/a):  $10273 NZD
Easy access savings (0.1% interest p/a): $6187 NZD
Managed Funds:  $1700 NZD

NET WORTH: $23,960 NZD

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As you can see from the information above, I am fortunate not to have any debt but I have also been slack with regards to my pension fund.
The reason for the lack of pension savings is down to 2 things:

  1. I was trying to save as much money for my move to New Zealand.
  2. I was oblivious to the importance of it! I thought I wouldn’t need to worry about pensions until I was older. This is the type of information we should be taught at school….. Maybe we were and I just wasn’t paying attention.

Anyways, my financial awakening took place about 2 months ago. I was very interested in the FIRE method of saving, generating passive income and aiming to retire early.

I haven’t fully embraced this method as I think it will be too restrictive on my current aspirations. I will likely be moving back to the UK in the next 2 years. Therefore, I want to enjoy my time in New Zealand by travelling the country, enjoying the landscapes and maybe a cheeky holiday in Fiji or Tonga.

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I also have to save for a deposit, a wedding and the arrival of children all within the next 5-7 years.

Therefore, the complete conversion to a frugal spender is unlikely to happen…yet

Investing

I had never given investing a thought until 2 months ago. The most exposure I have had to investing is watching movies like The Wolf of Wall Street. Even in the movie a lot of the financial jargon went over my head.

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But hey, you cannot deny that whatever Leonardo DiCaprio’s character was doing was making decent money (albeit illegally).

My interests were peaked one weekend I was at home alone. I was scrolling through Twitter and I came across an article about investments for beginners.

I had seen those plus500 advertisements which would give you a pile of fake free digital money for you to fake spend on stocks and shares. I wouldn’t have had a clue what to do with free money, never mind my own.

However, after reading the blog entry about shared funds it appeared that I would not be the one making the financial decisions. I had a review of a couple of different articles such as this one by The Smart and Lazy blog. It gave me a real understanding of what investment opportunities were available to Joe Public (me).

My main take away points were:

  • I had no debt

This seems to be important as debt interest is quite high. So even if you are making great investment returns the debt will stifle your profits.

  • I was already contributing into my pension

I am currently paying 4% into my pension and my employer is also adding another 3%. The New Zealand government add an extra lump sum by the end of the year too.

  • Investing involved placing money on certain companies. If they do well, you do well.

A good example is Apple, who have been valued as a trillion dollar company. Their share price have increased over the last 10 years. If you invested $1000 in 2008, it would now be worth $9,222.50 today.

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  • Invest when you can

I am just beginning my journey of investing but every blog I have read and every financial advisor I have spoken to has recommended investing. In my case……only time will tell.

So what did I do?

Catch up on the next blog post

 

Beginning my financial journey

I have decided to start a blog tracking my financial path. My aim is to review how I can improve my financial position whilst also enjoying a relatively comfortable lifestyle.

A little about me first:
I am a 28 year old physiotherapist who lives in New Zealand. I studied in the UK for 3 years and worked there for another 2.
My partner and I decided we wanted to broaden our horizons and left our families behind and moved to Christchurch.
I never really paid too much attention to my finances during my early twenties. I was fortunate enough to have the NHS fund the physiotherapy degree I completed which allowed me to leave debt free (I worked in a bar to support living costs).
Upon leaving university, it was nice to have spending money but I didn’t overly splash out. I was oblivious to things like workplace pensions, savings accounts and money in general.
The only thing I did was use an excel spreadsheet to manage my expenses versus my income.
Since moving to New Zealand and getting closer to 30 I have had to focus on my personal finances. As per 90% of my age group, I am beginning to worry about mortgages, children and the future.
I’m June 2018 I stumbled upon FIRE (FINANCIAL INDEPENDENCE: RETIRE EARLY). You can read more about this here. I found the topic very interesting but the frugal lifestyle just was not for me despite the benefits. I enjoy my travelling and socialising with friends and family too much to cut back on all frills of life.
However, I have taken plenty of tips and tricks on board and that is what this blog is about.

I hope to share some of my experiences with my readers