Money mistakes I made in my 20's

Today I'll be sharing with you some personal finance stories from my 20's - or shall I say, my early 20's!

This topic has often been on my mind, but I've always been a little hesitant. As a believer in the Law of Attraction - which encourages manifestation of your best life through thoughts, actions & beliefs grounded in positivity, gratitude, and living in the present - it has always felt unconducive to dwell on the past and on mistakes.

But, I believe reflecting on the past can be incredibly valuable. If you look back on your past self and dislike who you were, or where you were in life, it's a sign that you've grown and become a better person since then. Your growth is what makes it possible for you to have that realisation. It's the same with personal finances.

So, I'd like to introduce you to the hot mess I was in my early 20's, and the freeing changes I've made since. You could even call it my own financial #glowup! Please note these are definitely not all overnight fixes; whether they've taken weeks, months, or years to improve upon, they are all things younger me could have done better over the last 8 years.

Early 20's: Paying for stupid / unnecessary things
Late 20's: Being self-sufficient / making conscious spending decisions

University is such a beautiful time in your life. You are fresh out of high school; young, ambitious, and naive.. The perfect prey for banks and financial companies to sell you financial products and services you don't need. With all their exciting newfound financial independence, this is why students are the best targets for tertiary overdrafts, credit cards, and personal loans - easy! Effortless! Instant approval!

I was a naive 17 year old when I started uni. Luckily, even back then I was a little cynical. I remember having an appointment at the University of Auckland ANZ branch when the personal banker asked me if I wanted to protect my belongings (translation: buy contents insurance). Even with him insisting I needed it, I knew in my heart that I didn't. While a lot of uni students have high-value possessions, I had just the clothes and shoes that fit into my little inner city apartment plus a Sony Vaio laptop. He didn't get the sale.

Then, one day, I was walking through the quad when someone with a clipboard asked me if I wanted to have my 'tax refunds' managed by them. I signed up without thinking. And just like that, for the next 10 years, they were my tax intermediary.

This was incredibly foolish and it came to light just how stupid it was after I started working for the national tax department. And, sorry to say, it is a stupid mistake to make for most people who are 9-5 salary/wage earners. First of all, tax refunds are not guaranteed, as tax bills are just as common - intermediaries just use that to sell you a promise they won't always be able to fulfill. Secondly, if you are a salary/wage earner and want to find out if you have a tax refund or a tax bill, all you've ever needed to do was ask IRD yourself.

Intermediaries use the unjustified public fear and resistance against IRD to sell you their services, when it is just as easy - and completely free - to ask IRD directly.

The idea that IRD wants your money is a blatant lie. If you have an income tax bill, intermediaries can't make that go away; they will ask you to pay it on behalf of IRD. If you have an income tax refund, intermediaries will deliver this good news to you while pretending they made it happen - while discreetly taking a portion. IRD will give you all of it.

Even for people who aren't salary/wage earners, getting your end of year tax assessment is easy. I've seen too many people pay an agent hundreds to do something they could learn to do in 30 minutes. Even if you have 4 streams of income - say your salary, rental income, self-employed / side hustle income, and dividends, it's all entirely possible to grasp - and complete - filing an income tax return in one afternoon.

IRD's policies are also inherently very lenient and compassionate. But hey, I can't go into detail here or this post will never end.

As for thinking IRD is big and scary, instead of nice, friendly, and on your side? Absolutely untrue. I know for one that many people who I spoke to told me I had simplified and made tax easy to understand for them, really helped by educating them, made their refunds straightforward, and made their debt repayments painless & manageable. I can also say with certainty that the people are IRD are normal human beings like you and me, and some of the friendliest I've ever met at that!

Lesson: Do your research. Get quotes. Read the fine print. Do it yourself. 

Early 20's: Ignoring my bills
Late 20's: Diarising my bills

I used to dread receiving bills, so I never paid attention to them. As soon as I got my bills, they'd get lost somewhere in my paperwork, only to be forgotten until or after the due date. As a result, incurring late penalties, fees and interest was a normal occurrence - which, of course, I ignored too.

In recent years, it's given me satisfaction - a 'got my shit together' kind of satisfaction - to be super organised with my paperwork. In fact, I got a big pink ringbinder I call my 'Life Folder' - with tabs for inspiring articles from magazines, e-books I've printed, home related documents (such as rates), and bills. Even better, I've digitised most of my bills so I receive them via email and have access to them whenever or wherever needed.

But the most effective change is also the simplest: I started diarising my bills! In my diaries, on my monthly calendar spreads, I've made a habit of noting the date that a bill is due - whether it's to be paid by me or direct debited. My bills are always paid early or on time, and late penalties, fees and interest is now a thing of the past. I even do my best to avoid regular banking fees - my partner and I still have monthly account fees waived on our individual and joint accounts thanks to staff work perks.

Lesson: Diarise. Stay on top of things. Don't be lazy. Make it fun - my Life Folder and diary are illustrated and colour-coded!

Early 20's: Saving what I had left over after spending
Late 20's: Spending what I had left over after saving

Pay yourself first. This is one of the most important personal finance rules to live by, if not the most - one that I've talked about here.

If you don't pay yourself first, who are you working 40 hours a week for? Not yourself, that's who. If you receive your paycheck then pay all of it to your landlord, your bank, your power company, your supermarket, or your phone service provider, or give it all to Netflix, Spotify, or your favourite restaurant or bar, you've worked 40 hours for everyone but yourself.

Yes, I speak from experience. I used to spend my fortnightly pay on everything other than investing in myself. My money went to eating out at restaurants, going to the bar for drinks, buying new clothes, or simply paying rent and utilities. My mentality was that I'd save what was left over after spending - but, like many others with this mentality, there was never any left over.

In my mid-late 20's, I learnt that a good, realistic part of your income should always be invested back into yourself and your financial future - whether that's paying down your debt or saving for your goals and dreams. Paying yourself first ensures that no matter what, your finances are growing. They're progressing and become better and better, rather than staying stagnant or diminishing. Once I switched my mentality from spending first, saving later to saving first, spending later, my whole financial life changed.

Lesson: Pay yourself first. Save then spend; don't spend then save. 

Early 20's: Making minimum payments
Late 20's: Paying as much as possible

In my early 20's, I had a Q Card. Every month I'd receive my Q Card bill for a minimum monthly payment of $50, and every month I'd pay $50. What an idiot I was! This minimum monthly payment never reduced, but it should have if I had made more than the minimum monthly payment (quickly too!) .

The amounts financial companies ask you to pay on credit cards or personal loans (Q Card isn't either of these but is similar) pays off principal and interest, so by me always making the minimum monthly payment, the principal hardly made progress as the interest would always catch back up.

Since my mid-20's, I've transformed my mindset. I genuinely feel proud to pay as much as I can over the minimum monthly payment. The bank asks me to pay $50? I'll pay $100. I'll even keep on sending extra payments when I get unexpected money in the form of a work bonus, tax refund, overtime or holiday pay, side hustle income, or anything else. I may just be a personal finance nerd, but it is so satisfying to see the balance, interest, and minimum monthly payments consistently reduce. Ah, the freedom of having financial breathing space.

Lesson: Don't just pay what you can. Pay as much as you can.

Early 20's: Being completely out of balance
Late 20's: Following 50/30/20

When I moved to a new city by myself at 21, I rented the first apartment I could - a gorgeous, modern, centrally located but hella expensive apartment in the heart of Wellington CBD. With the high rent and expensive water & power bills (apparently, we couldn't choose our providers), my finances were completely out of balance. At one point, I remember my expenses taking up 90% of my income. That's 90% on fixed expenses and 10% on flexible expenses (eg. food). Completely insane.

When I became aware of the 50/30/20 rule, where 50% of your income should go to fixed expenses, 30% to flexible expenses and 20% to savings, I made a conscious effort to live on 80% of my income and save 20%, no matter what. My finances went from out of balance (90/10) to balanced and sustainable (80/20), to being in great shape (70/30 or 60/40)! If you are spending too much on the fixed expenses, you must find a way to cut down - whether it's moving somewhere more affordable, reducing your internet or phone plan, or downgrading 'nice to have' luxuries in your life. If 21 year old me had looked around for more affordable living situations, she wouldn't have been living paycheck to paycheck every fortnight!

Lesson: 80/20 your income.

Early 20's: Banking where my parents did
Late 20's: Banking where it's best for me

My parents opened up a bank account for me when I was young, which was with The National Bank. As The National Bank became ANZ, I stayed with them until even after I left uni and started working full-time. It wasn't until years later that I started making my own decisions about where I choose to bank, and realising that where you were isn't always where you should stay - in life, or with finances.

Since then, I've been with BNZ, ASB, and Kiwibank.. All depending on the financial products & services they're advertising at the time. I've learnt that loyalty doesn't necessarily get you anywhere, so open up as many accounts as you want, wherever you want, to maximise all of their benefits (just keep track).

For example, I love YouMoney at BNZ, Save The Change at ASB, and Notice Saver at Kiwibank. You've just got to find what works for you - what's a priority for your family, your partner, or your friends may not be a priority to you. Those of you who know me know how I feel about ANZ, and personally, I love knowing that BNZ and Kiwibank - the only two I'm with now - have ethically invested Kiwisaver schemes and support local NZ communities.

Lesson: As Fleetwood Mac would say, you can go your own waaaaay - go your own way!

Early 20's: Not believing in myself, staying stagnant because I 'just wasn't good with money'
Late 20's: Educating myself and believing in my own growth and potential

Believe it or not, this is the number one key to the success in my personal finance journey! Mindset is more important than numbers could ever be.

People dismiss manifestation as a silly spiritual concept, but manifestation is the entire reason your life is the way it is today; where you are where you are at today. Whether you know it or not, you've created your life as it is with your thoughts, actions, and conscious or subconscious beliefs.

My beliefs about my own potential held me back in life personally and financially. In my early 20's, I believed that I wasn't smart and knowledgeable, and - for some reason - that I couldn't be. In my mid-late 20's, I started believing in myself - and that has led me to be who I am today, the same person writing this very personal finance blog.

Years ago, I always told myself and others that I 'just wasn't a personal finance person' or just 'didn't understand money'. I dismissed educating myself in financial literacy as being too complicated and too much work, so I never put in the effort.

Once I started believing in myself, I had both the curiosity and the confidence to learn about personal finance and money management without the voice in my head telling me I couldn't. Working in insurance, banking and tax definitely helped, but that was only a tiny part of it. (I know because you wouldn't believe the number of people working in the financial industry who don't understand their own finances.)

I started reading books, watching Youtube, and listening to podcasts. I started taking notes of what financially successful people do. I started reading reviews of financial products or using financial tools online, like Canstar and Sorted. I started implementing different savings strategies until I found what worked for me. All of this, simply from believing in myself! I may not know everything there is to know about personal finance and managing money, but I definitely know a hell of a lot more than I did before I made the decision to just start. 

Lesson: Believe in yourself. Whether your goal is to be debt free, to own your own home, to travel, or to achieve the work/life balance of your dreams, you create and manifest your own financial freedom.

I hope you've enjoyed getting to know early 20's me - the one who wasn't so mindful with money. I also hope you've found value in my financial life lessons!

As always, you can share your thoughts with me on this blog or anything else by using the contact form.

Love,

Sophia

How I got 10% more of my pay

Recently, I discovered a way to get 10% more of my pay. Not to be confused with getting 10% more pay, I made a few simple changes over the last few months to get 10% more of what I already earn. Today I'd love to share with you how I did it, and how you can too.

It all started when I made a mindful habit of reading my payslips. One day, I realised that there was a large discrepancy between my gross income and my take-home (net) income - specificially that I was receiving about 74% of my salary in my weekly pay. To give you an idea, here's the same percentage based on different salaries:

If your salary is $52,000, making your gross weekly salary $1000, you would be receiving a net weekly salary of $740.

If your salary is $60,000, making your gross weekly salary $1154, you would be receiving a net weekly salary of $854.

If your salary is $45,000, making your gross weekly salary $865, you would be receiving a net weekly salary of $640.

Quite a difference, isn't there?

With some easy steps, I managed to close the gap and lessen the difference between what I 'earn' and what I receive. I'd like to make a small disclaimer and highlight that these were personal decisions. With that, here are the steps I took.

Figure out how much of your pay you are actually getting

You can simply divide your net pay by your gross pay, or if you want it laid out neatly and colourfully for you, you can use this PAYE calculator. Add and adjust settings as needed. You should now have your percentage. Happy with it? Congrats. Wish it was a little higher? Perhaps what I did may also help you..

Extra student loan repayments

I had a small student loan from a course I took last year. With student loan payments having gone out regularly, I had a feeling that it would nearly be paid off.. And I was right. Checking my balance online, I found that there was only a few hundred to go - a manageable amount that I could pay off even sooner by making extra repayments.

Most people treat their student loan repayments passively, letting their student loan repayments come out of their pay and waiting for it to be paid off by itself. I was no different, until I realised an active approach would boost my progress significantly. I started sending extra repayments whenever I could, and paid it off sooner than if I'd let it run its course. Success! The result: more of my own income, and no more student loan!

How to do this

• Go to your online banking or mobile banking app.

• Find IRD in the payee list. My bank has them listed as "IRD", yours might have them listed as "Inland Revenue". Save as payee.

• Put in these references: your 8 or 9 digit IRD number, tax type (SLS) and period (the current financial year). It should look like this: 123-456-789 | SLS | 31032020

• OR simply go to IRD's Make a Payment

Now all you have to do is send across extra repayments whenever you can. Even $50 every now and then makes a difference. Your future self will thank you when they check their student loan balance and keep seeing it go down, one step closer to being debt-free!

Remember that your payments won't show up straight away. Your student loan balance may not be up to date for a month (while it's also taking into account your regular repayments). Because mine took time to process, I actually made too many repayments, and after paying it all off, received my money back as a $200 refund. So if you are paying yours off and see your balance remain the same, don't worry - just give it time.

Pressing 'hold' on Kiwisaver contributions

Whether you're currently using 3%, 4%, 8%, or even the newest rates of 6% or 10%, your Kiwisaver is automatically deducted from each pay. When reading my payslip one day, I realised what a large dollar amount it was, and how saving this amount instead would be helpful in saving up for my wedding. So, I took a savings suspension.

Savings suspensions used to be called 'contributions holidays', before Jacinda Ardern took on board the recommendation of Retirement Commissioner and Head of Commission for Financial Capability (CFFC) Diane Maxwell and brilliantly changed the name to remove the positive connotation. She also reduced the maximum savings suspension from five years to one, further encouraging young people to save for a brighter future.

"Enough background, Sophia - what is it?" I hear you say. Okay, okay - I'll stop fangirling over Jacinda and get to it. A savings suspension allows you to temporarily stop making Kiwisaver contributions from your pay. You can take one if you have been a member for more than 12 months, so I definitely qualified as a member of 12 years. You can now choose to suspend your savings from anywhere between 3 to 12 months; I chose 6.

I'll note again that this is a personal decision, as I feel like 6 months of Kiwisaver contributions won't make a long-lasting impact for me. Personally, I am not very likely to need to withdraw money before I am 65, as I've already used my first home withdrawal, won't be moving overseas anytime soon, and sure hope I don't become seriously ill! My balance has also grown considerably faster ever since I switched my balanced fund for a growth fund, which I'm very happy with - but is also a personal decision.

How to do this

• Go to the Kiwisaver website then 'Go on a savings suspension'. Log in.

• Click on 'Request a savings suspension'. Complete.

• Ta da! You are done.

Another good option is simply changing your contributions rate. If you are currently on 8%, try 6% now that it's available. If you are on 4%, try 3%. Change back to a higher rate once you are able to afford it (or, if you already can, why not go up to 10%?). You'll receive more of your income, while still seeing your Kiwisaver balance grow. Win-win.

Leaving a union

A few months ago, I was convinced, along with most of my colleagues, to join a union. They claimed to be campaigning for fairer pay for us; mostly for it to be matched to the other staff in our workplace. Fair enough, I thought. They even offered perks for joining: discounts and special offers at retailers. Yay! I signed up, knowing I could cancel if or when I wanted to.

At the time, the weekly fees were low, as it was based on income tiers. So when I got a pay rise soon after (from proving my competency, not as a result of their campaigning), my fees also increased.

This would be okay if the union had kept their word and provided us with updates and, perhaps, the membership pack promised that would disclose to us exactly what we signed up for (along with the perks, which I was curious about).

But months later, I had received nothing. Not a word. They'd taken my money and continued to do so without anything in return. I wrote to them and they told me I'd receive my membership pack within a week. Of course, I didn't. So, disappointed, I cancelled my membership altogether.

With weeks of union fees paid for nothing, I'm just relieved this has stopped. However, this got me talking to my partner, who shared that he'd been part of a union for years and had similarly gotten nothing out of it, so he cancelled his membership too. More savings for both of us!

Of course, my experience may be different to yours - if you're part of a union that is genuinely supportive and helpful, more power to you. However, if your experience is more like mine where you're paying for absolutely nothing, I'd encourage you to look into leaving, or other options to support you in your workplace. Not only may it save you hundreds of dollars over the years, you deserve to be part of a union that treats you with respect.

These three changes have made a noticeable difference. While my Kiwisaver change is only temporary, it feels good to have eliminated student loan and union fee deductions permanently. With PAYE being the only deduction (income tax + ACC), I've successfully increased my take-home pay from 74% of my gross pay to 84%!

Going back to my examples, here's the difference this makes:

If your salary is $52,000, making your gross weekly salary $1000, you would go from receiving a net weekly salary of $740 to $840.

If your salary is $60,000, making your gross weekly salary $1154, you would go from receiving a net weekly salary of $854 to $970.

If your salary is $45,000, making your gross weekly salary $865, you would go from receiving a net weekly salary of $640 to $726.

What unnecessary things are being deducted from your pay? Take the time to look at your payslip and check if you're happy with everything you see. If something is no longer aligned with your desires, values, or priorities, put your money to better use. Whether you save it, invest it, put it towards a lifelong dream, or use it to fund your own passion project or side business, let your money serve a more meaningful purpose aligned with what you want out of life.

I hope today's post has helped or inspired you to be mindful with money!

Love,

Sophia

The costs of owning a home

Hi friends,

Today I'd like to share with you all the costs & expenses I've come across as a homeowner. Everyone's experience is different, so this is tailored to my personal expenses - after all, my house is no luxury beachfront villa; it's a modest, free-standing house in a safe and sensibly priced suburb. I thought it would be interesting to share what I pay for now that I own a home vs. when I was renting, and hope it will be helpful to both other homeowners and future homeowners with my transparency.

What costs do you think of when you think of buying a house? Personally, I think it's so easy to simply think of the purchase price and mortgage payments - plus mortgage protection if you want that peace of mind. I obviously knew there was going to be more, but now that it's been two years, I truly have a fuller picture to share with you all.

But first, some background..

What did I pay as a renter?

Here are my rents over the years..

2011 | $180 per week for my bedroom in a two bedroom apartment on Upper Queen St, Auckland, including power & water. Somehow, we went without internet for a whole year (I did everything at uni). And yes, that's right - you used to be able to rent a 2 bedroom inner city apartment for only $360 a week!

2012 | $140 per week all expenses included in a 3 bedroom apartment on Federal St, near the Sky Tower in Auckland City. I had to share a room, so even though the girls were lovely, fortunately I didn't stay for long!

2013-2014 | $205 per week for my bedroom in a two bedroom apartment at Soho Apartments, Wellington Central, plus water, power, and internet. The prices were astronomical.

2015-2016 | $200 per week for my bedroom in a three bedroom house in central Takapuna, all expenses included. (Very generous!)

2016 | $160 per week + $20 expenses for my bedroom in a four bedroom house in central Takapuna. At the time, the $20/weekly or $40/fortnightly savings made a huge difference.

Then I bought my home and moved not too far away on the North Shore!

I now live in my own home with my partner and his best friend, so our household consists of 3 adults.

Now that we have some background, here is everything I pay for as a homeowner..

Home Insurance
What I pay: $32.51 per fortnight

First: home insurance. I currently protect my biggest asset with Tower Insurance through Trade Me as members receive a 15% discount on premiums (20% at the moment during their birthday promotion). Along with my no claims bonus, good security (alarm), and no-frills policy, it's very reasonably priced. It's also a home only insurance policy. While it's usually in your best interest to combine your home & contents for both price and simplicity, after my partner moved in,  fortunately I was protected under his contents policy - at the insurance company where he works and where we met - at 50% off!

Rates
What I pay: $73.48 per fortnight

As a homeowner, your rates help fund public transport, clean, green public parks, weekly rubbish & recycling, and running libraries & other community facilities - in Auckland Council's words, 'the things that make Auckland a great place to live and work' (and I agree! I use my local libraries a lot; they're absolutely brilliant). Luckily in the two years that I've lived in this home, my rates have reduced twice and keeps going down!

Water
What I pay: $40-50 per month

I pay for water monthly, also to Auckland Council. Compared to my water bill when I was renting in Wellington, it's very affordable (if you know Soho apartments in Wellington, you'll know they cost a fortune for the central location and stylish, modern building). I'm not sure how it compares to other homes in Auckland, but would be curious to find out.

Power
What I pay: $50-60 per fortnight

Of course, there's also power. I've been very happy with Electric Kiwi's service, and love that they're an entirely digital independent New Zealand company - they got my power up and running in record time and have been reliable ever since. As I haven't tried any other power company, I can't be 100% sure how much of a difference it makes, but the daily 'Hour of Power' where our household enjoys free power is pretty sweet. I take advantage of this by charging my devices and turning on the dishwasher and washing machine at the same time every night.

Fibre Internet
What I pay: $85 per month

We have unlimited Fibre internet through 2degrees because 1) it's one of the few telecommunications companies I still trust, 2) I get a little discount for having my mobile plan with them. Hooray!

Transport
What I pay: $19 per week

You might be surprised to see transport here. Transport? Doesn't that belong to everyday expenses? I decided to include this here because I once read a personal finance tip that really stuck with me. The house you choose to buy or rent is so much more than just the house and where you live. It determines the size of your mortgage, how much your insurance is (based on risk in the area), your rates, maintenance, other living costs, and of course, the time it takes you to get anywhere. Where you choose to live fixes the new minimum amount you can expect to pay for fuel or public transport. In my case, if I take two bus journeys a day at $1.90 each way, 5 days a week, I have to top up my AT Hop card by at least $19 per week.

Other fun things..

On top of these, there are other fun things to think about. I also pay for lawnmowing every 3 weeks, and maintenance every so often - such as replacing lightbulbs and minor fixes to things like shower heads and downpipes (definitely not due to my carelessness.. It wasn't me!).

But the most actually fun thing you pay for as a homeowner? FURNITURE!

I started with the essentials. When I moved in, I had four brand new purchases: a fridge, microwave, TV, and washer dryer combo. I brought along my own sofa bed I'd bought when I was renting. Six months into my time at the house, one year into our relationship, my partner moved in and I sold my TV as we upgraded to the larger one he already had.

We then continued upgrading as we went along, one thing at the time - from a kauri wooden shelf to a more modern, chic white cube shelf, and from a wooden desk to a fantastic white, glossy desk-shelf combo that rotates. I absolutely love it.

A year after living in the house together, my partner and I invested in some wonderful, thick blockout + thermal curtains. We spent $260 on them at Curtain Studio during a sale and saved money on the installation service by installing them ourselves one long Sunday afternoon. And what a difference it makes! We used to have white curtains and I loved how the sun shone through them; but now, we can see the TV clearly even on a sunny day.

Because they are thermal curtains, they are also supposed to trap heat, so along with the insulation, help to reduce the power bill by keeping the house warm and dry in winter.

I chose to invest in quality brands for important things like appliances, but went for inexpensive when it came to the little things. None of our furniture or home decor is particularly expensive or luxurious, but our home feels like a home because of the small touches: a glowing Himalayan salt lamp, gold gilded agate crystal coasters, large framed art prints from independent creative artists on Etsy and Society6, homemade scented candles, and refreshing greenery & indoor plants - we have several Peace Lilies that are easy to care for and look full all year round!

Starting simple and upgrading as we go is one of the best things we did, and is much better than borrowing or going into debt in an attempt to make everything absolutely perfect. It's been two years and it may be two years more, but our dream home is worth the wait.

But one day? I hope to live in an apartment again. It's peaceful in the suburbs, but in my heart of hearts, I'm a city girl who loves bright lights, a good view, and minimalist living (the small space makes life simple.. Also why I want to try #vanlife). But apartments come with limitations - carparks, pets, Bodycorp fees - and are now costing as much if not more than actual houses, so who knows? I'll make the most out of suburban life while I can.

Love,

Sophia

How I save money on an inconsistent income

Just a few years ago, I'd rely on $1400 to hit my bank account every fortnight - and it did, each and every fortnight without fail. Even then, my income regularly fluctuated because I volunteered for so much overtime and, twice a year, received a performance bonus - but it was positively inconsistent in that I could always rely on at least that amount or more. It was blissfully easy to budget.

Fast forward to 2019, and I'm sure those of you who are freelancers, self-employed, contractors, or run a side business can relate to earning a wildly inconsistent income. It started in 2018, when I had six sources of income, one of them being a part-time job that would give me 21 hours one week, 4 hours the next; another being photography, where one month I'd shoot two events and others where I'd shoot none.

Here's a snapshot of my income now:

• I've taken a hiatus from photography;

• I still handmake and sell scented soy candles, though I don't advertise - so 99% of my candles are made for friends who ask for them personally and not via my Etsy shop;

• I'm working full-time and work the same number of hours every week, but being on wages rather than a salary means my pay occasionally increases or decreases in cases of sick leave, annual leave, or public holidays;

• I still have a casual/part-time job on the side;

• My only source of consistent income - hallelujah! - is my rental income, which is, thankfully, always the same.

I also get paid:

• Weekly from my day job;

• Weekly from one source of rental income,

• Fortnightly from the other;

• Fortnightly from my part-time job

• Every once in a while if a friend requests candles (I'm actually making candles for two friends' weddings at the moment - exciting stuff!)

So how on earth do I budget and save money when my income is never the same? For example, it's not realistic to set a goal of saving $200 every week if during the course of a month, you earn $1000, then $400, then $300, then $800.

But, for the past couple of months, I've successfully saved a considerable amount for building my nest egg, paying off debts, and investing in my future self through a few simple habits!

Pay yourself first

This is a personal finance rule I've heard countless times when it comes to building wealth, but now I get why it's so important. If your income is not consistent, it means you have to be. What it means for me personally is that I never have to worry that I'm not going to be able to save this particular week or fortnight because I've taken care of that worry straight away by paying myself first. Now when I get paid, it's the very first thing I do before anything else - even if I have bills to pay, new clothes to buy, a new book I really want - I always put money into savings & financial goals first. It's amazing the effect it has on my peace of mind.

"But what if I pay myself first then don't have enough to pay for everything else?"

1. 80/20'ing your finances really helps, and ensures that never happens. More on that later, or you can check out my blog post How to Live on 80% of Your Income.

2. There is always something you can do about your bill payments if, in a worst-case-scenario situation, you can't pay them on time. For example, companies can often offer extensions and waive late payment fees if you ask. It makes a difference if you are honest and let them know beforehand, because more often than not there are options available - I can say that having worked in customer service in insurance, banking and tax! (On that note.. Even our national tax department offers grace periods and instalment arrangement plans on debts; if they can, everyone else can too. So don't worry!)

Loosen up on your budget - save 20% instead

(Or: instead of using a dollar amount, use a percentage)

I used to write a budget for every week or fortnight, and it'd only work out half the time. Why? Because my income was inconsistent, so along with not having had the discipline of paying myself first, I often simply couldn't stick to my savings goal. But recently, I've adopted a new, life-changing habit. Instead of treating my budget like an absolute, I simply save 20% of whatever I earn.

It is so effortless. If I receive $600, I put $120 into savings. If I receive $1000, I put $200 into savings. If I receive $542, I put $54.20 into savings and $54.20 towards my credit card because it requires minimal effort to work out 10% off the top of your head. Now that I always save 20% of whatever income I earn, I always have peace of mind! Even if I overspend on brunch that weekend or treat myself to too many new books, I know that my savings has already been taken care of. It's that simple.

Always being able to save at least 20% is made possible by having first 80/20'ed my income. It's based on the 50/30/20 budgeting rule, where 50% of your income should go to needs, or fixed expenses; 30% of your income to wants, or flexible expenses; and 20% to savings and financial goals.

Note: The 80/20 rule is a famous rule that also applies to your lifestyle choices and time management! I consider it one of the best things I've ever done for my finances. :)

Underestimate your income, overestimate your expenses

The habit of consistently saving 20% has changed my life, but I still write an approximate weekly budget that I stick to more successfully than ever. It's coupled with another consistent habit: rounding down all of my expected income, and rounding up all of my expected expenses. For example:

Income
$602.61
$558.00
$202.00

Expenses
$54.00
$63.00
$76.00

becomes

Income
$600.00
$550.00
$200.00

Expenses
$60.00
$70.00
$80.00

I know this may be obvious and self-explanatory, but it makes a difference and has very often resulted in a surplus, not a deficit. And who doesn't want extra leftover money?

I hope you've found today's blog helpful and found some inspiration if you're in the same boat! Learning how to save with an inconsistent income has given me more peace of mind around my financial well-being - I hope it does the same for you too.

How to manifest money

My first experience consciously manifesting money was at the NZ Spirit Festival. I attended a workshop called 'Tapping into Money', which taught us the power of tapping on meridians to remove energy blocks and tap into a mindset of abundance, and was surprised to have seemingly manifested money that very night. From the $180 I made from selling concert tickets, to the $50 I made selling my extra festival ticket, to the $500-600 I'd receive later thanks to two photography enquiries in one night, it was excitingly strange and synchronous.

Since then, I've learnt plenty on the topic, mostly thanks to Youtube & books. Among the self-help books I've read this year, the money-related books I've read are Creating Affluence by Deepak Chopra, The Richest Man in Babylon by George S. Clason, and You are a Badass at Making Money by Jen Sincero. I've also bought Conscious Money by Patricia Aburdene and The $1000 Project by Canna Campbell to add to my reading list!

What stands out to me is that, no matter how practical and tangible people think money is, everything I have read or watched touches on the most important aspect of attracting more money and building wealth: your mindset.

No, manifesting money isn't praying to the Universe to give you money while you're sitting around doing nothing, or the opposite - working to the point of burn-out. It's not simply using Law of Attraction and positive affirmations to say, "I am wealthy" - it's so much more than that. Here's the best lessons I've personally learnt about manifesting money.

1. Transform Your Subconscious Limiting Beliefs

Your subconscious beliefs guide everything you do in life. They manifest themselves into conscious thoughts, which manifest into your everyday actions, which manifest into your behaviour, which manifests to become your character. Your thoughts & beliefs, conscious or subconscious, are so powerful, everything you have in your life now is a result of what you have manifested!

Put another way: everything is a result of your personal choices, and we often make our choices by doing what feels or seems right. This definition of what's 'right' stems from our beliefs.

When it comes to money, many people don't even realise they have negative subconscious beliefs about money. A lot of people still consider money to be a taboo topic to talk about - why?

Is it because we were taught that money is evil or corrupt? Or that rich people have no morals? Or that you have to be a sell-out to be wealthy?

Some examples:

• Jen Sincero shared in You are a Badass at Making Money one of her subconscious blocks: her father always expressed his love and support in the form of financial assistance, so subconsciously, she always thought that if she were to be financially successful and no longer need his help, she would be pushing his love away.

• Some women are afraid at the thought of earning more than their husband in the fear of emasculating him.

• Some people believe that you can't be rich and spiritual, or that your friends & family will treat you differently if you become financially successful.

• Other people may subconsciously push money away because growing up, money was the cause of conflict in their household, so they grew up to believe that money = bad.

I never related to any of these. For example, I'd love to earn more than my husband and be able to treat him to surprises while taking the pressure to provide off his shoulders. It'd be surprise weekend getaway galore! (Side note: everyone please watch the stand-up comedy Hard Knock Wife by Ali Wong on Netflix; it's vulgar and hilarious - but has so much truth regarding gender roles)

Then one day I had an epiphany and realised: I did have a subconscious limiting belief!

A few years ago, I remember constantly saying things like

"I don't know anything about personal finance."

"I'm not good with money."

So I never tried.

Fast forward a few years later and perhaps it was working in the financial industry, or perhaps it was becoming a lot more mindful about everything in my life thanks to minimalism, but my belief became that I am a person who is mindful with money. Good with money = me. Financially sensible = me. Knows and seeks knowledge & wisdom about personal finance = me. 

I had a mindset shift - from a 'fixed mindset' to a 'growth mindset' (search Carol Dweck). I cultivated my growth mindset, and identified with being mindful with money.

And so, I enjoy things like personal finance Youtube channels and books because I believe I am more than capable of understanding, learning and growing from them. I spend mindfully instead of just watching money leave my bank accounts then wondering where it went because I think of myself as a mindful person. I understand financial terms because I sought to learn instead of saying, "I'm not a personal finance person so why try?"

The lesson I take from this? Don't subconsciously limit yourself by defining yourself as what you are or what you're not. If you define yourself like I did, your subconscious will find ways to reinforce that, to make it a reality. Why? Because your mind has a very clever defense mechanism and likes to prove that what you believe is right.

So believe that your potential is limitless. Believe that you are always open to radical personal growth. I feel like nowadays, instead of dismissing something as simply something I'm not cut out for, I'll at least give it a chance - you never know, it could open up a whole new world of possibilities!

2. Embracing Opportunity + Taking Action

One thing I love about The Richest Man in Babylon is that, even though it is such an old, wise piece of financial wisdom from the 1920's about extremely practical wealth building techniques, it still touches on manifesting money. Not in those words, but there was a part I completely did not expect: how to attract 'good luck' and 'good fortune' from their goddess Ashtar. This is among tangible money advice like "save every tenth copper".

The answer? Opportunity and action. Be open to opportunity, and when opportunities arise, don't procrastinate - take action. According to the book, "men [and women, it's 2018!] of action are favoured by the goddess of good luck".

Another truth echoed in You are a Badass at Making Money: money is currency, and currency is energy. If you sensed negative energy or animosity from someone and felt like they didn't want you anywhere near them, would you want to make friends with them and become best buds? Energy matters. Once you raise your vibrational frequency, this shift opens you up to new opportunities you weren't seeing before, and attracts more of that abundance to you. It's been scientifically proven that people who are stressed out fail to see information that is clearly right in front of them; this also applies to opportunities in your life, financial or not (this can also be applied to finding love).

Have an open mind and an open heart. Take inspired action on the opportunities that come your way that excite you and speak to you.

3. Know Your Why + Practise Gratitude

You don't attract more of something you're not grateful for. Gratitude turns what you have into enough and brings more of what you love and appreciate to you. Referring back to my point before, if you subconsciously believe for any reason that money is negative, that association will manifest into a lack of money in your life. This isn't exclusive to money, either - if you're not grateful for other things in your life, you will spend money trying to fill that void, when all you really seek is happiness, contentment and fulfillment that money can't buy.

That's why it's important to have a heart of gratitude and express thanks for the ways that money has enriched your life. Receive it with gratitude. Use it with gratitude. Everyone has a reason they want more money, but don't often truly define their why. My why always connected back to my sense of purpose & passion and being able to give back and to inspire. Your why will drive your motivation in reaching your goals. Here's how some of my why's have manifested:

• I'm grateful for money because it allows me to volunteer every week and give back to the community.

• I'm grateful for money because it allows me to use my talents to inspire others and spread joy & happiness.

• I'm grateful for money because it gives me more time & freedom to do what I love.

• I'm grateful for money because it allows me to invest in my knowledge and my physical & mental health - like buying books of value and fresh nutritious foods.

• I'm grateful for money not only because it gives me the sense of security of owning my own home, but because it gives my partner a sense of security and peace of mind too.

• I'm grateful for money because it supports me in my wildest goals & dreams.

• I'm grateful for money because it helps me to reach my highest self. With money, I've been able to purchase tickets to so many events & workshops to upskill, inspire & motivate myself, and learn new things!

4. Believe in Abundance + Practise Generosity.

We live in an abundant universe. More abundance for someone else does not mean less for you, and vice versa. I say this not just about money but also about success. I've definitely come across toxic people who attack others' flaws and try to bring them down, and why? Because deep inside, they believe that more success for someone else means less success for them. That's why I love Rupi Kaur's poetry: one of them reminds us, "Your accomplishments are not my failures."

Another piece of advice I consistently come across in every personal finance book, Youtube video, podcast, e-book.. Is that you need to give! For example, from the financial advice of money experts Dave Ramsey and his daughter, Rachel Cruze, they always advise for everyone to include giving in their budgets. Giving is essential because it puts you in the mindset of abundance instead of one of lack. You are able to let go of the conscious or subconscious belief of, "This hard-earned money was so difficult to come by, I should hold on tight and never let go."

Instead of acting from a mindset of lack, acting from a mindset of abundance means that, hey, it's okay, by creating a flow of money/generosity I will also attract this flow of money/generosity back to me. When I have practised being generous, people have been generous with me - not just in terms of exchanges of money but time, effort, gifts, and acts of kindness.

There is so much more to manifesting money, and if you're interested I'd highly recommend the books I mentioned at the beginning of this blog post. I know it's been a lengthy one, so if you're here, thanks for reading and I hope it inspired and helped you!

Love,

Sophia

The six ways I’ve made money this year

Hi friends,

It’s only the end of September, yet so far, 2018 has been a very interesting year for me – in life, in love, and in finances. A few years ago, like most people, I worked full-time and had one income, but this year so far, I’ve earned income from several different sources – six to be exact. Today I’ll share with you these six ways I’ve made money this year.

First, let me take you back to last year, 2017 – where I lay the foundations for where I am today. Let’s go in quarters, shall we?

2017

Jan – March 2017

I was working full-time, earning the NZ median salary. In my spare time I’d learned how to make candles. I gifted a few to friends, who loved them so much they asked immediately if I could make them more, and were happy to pay for them. I was surprised and very flattered. Although I hadn’t planned to earn an income off my new passion, I said yes and made candles for them, pretty much at cost (earning literally a dollar or two). Honestly, candlemaking was a way for me to relax, de-stress, and create something beautiful. As I wasn’t earning a profit, this time was an opportunity for me to practise and perfect my skills.

It was during this time that I shot my first engagement! I did it for fun and experience, and fortunately both the clients and I loved my work. This added to one or two photoshoots I’d already done as early as 2014. Photography had been an on & off passion for me.

April – June 2017

Ah, three of the most blissful months of my life. I spent these three months job seeking, pursuing minimalism, making more candles, reading, aaand getting paid for a graduation photoshoot!

(I had been paid well for a graduation before, by one of my best friends, actually! But understandably I was excited about being paid by a ‘real client’ – someone who wasn’t a friend or referred by one.)

July – September 2017

I got a part-time job, and excitedly got a volunteering job for my other days. My dream had come true: to work part-time and volunteer. It was so simple yet so life-changing – easily one of the best decisions of my life.

October – December 2017

Still working part-time and volunteering every week, I’d photographed another graduation for ‘real money’. My partner and I are also friends with a lovely couple who’d just had a super cute baby, so I asked if I could do a photoshoot for him – honestly, I wanted to! I appreciated that they bought some candles to say thank you.

I also shot a beautiful wedding for a full day, and some of the photos are my favourite photos I have ever taken. They are stunning, colourful, and gorgeously vibrant – and added value to my experience & portfolio. The bride was incredibly lovely too. I’m now confident not only in the photography aspect but in the self-employed, business aspect: the realities of working on your feet from 8am – 9pm and what I’m comfortable charging for my work, travel, & time.

2018

I started 2018 by quitting my job. It was a toxic workplace where the health and humanity of everyone there suffered. Some of them, I know, are stuck in a bad relationship with The Most Unethical & Unhealthy Bank in the World but aren’t leaving. Why? Because like a lot of people who stay in bad relationships way past their expiry date, it’s comfortable, it’s what they know, and they don’t believe that they’ll find anything better or are deserving of true love, joy and happiness.

I moved on to making money in six ways – a mix of consistent, stable income; regular-but-variable income; and one-off income.

1. Photography

In 2017, I was excited about firsts in my photography career, including first ‘real clients’. In 2018, I had several!

I started by writing up a classified on Trade Me Services, thinking that the advertising fee was worth paying to see how well it’d do in 3 months. So far, it has been well worth it! I’ve been lucky enough to shoot several birthday celebrations – a joyful & worthwhile job by nature. What people don’t see is the hours I spend editing after, but this part of the job, while it can be tiring & time consuming, can at least be done at home or a coffee shop. A perk of freelance work.

2. Candles

This year I set up my very own ETSY SHOP! Etsy is the perfect place to buy & sell amazing, unique, handmade items. I love that everything is created with artistic talent & creativity.

Setting up my own Etsy shop was easy in theory, but in reality, it took a lot of work. I remember some nights when I would sit in my bedroom, by candlelight and meditative music, and just write. Write about what each candle means to me. Write about why and how I created each candle. Write about how I would describe the scent and what I love about it. Write about what I aim to do with my work: to spread love & light, and  inspire people to live authentically.

Then I dug deep and found my favourite quotes from all the books and literature I’ve ever read, and designed labels that were original and meaningful. I took some time designing these labels; they didn’t just happen! I then saved up and paid hundreds of dollars to buy all the labels. That’s 100 labels for 9 candles in my collection (so far). Of course, I also stocked up on beautiful satin frosted glass jars, gold lids, wax, wicks, fragrance oils, warning labels, boxes, etc..

…The result is Rosy Co Boutique, an extension of myself and an expression of love for cosy scented flames.

The income from my Etsy shop? Not much, as I haven’t promoted. The income from friends and friends of friends who love my candles and buy them through word of mouth? Considerably more. For example, one time, I personally delivered some candles to a friend’s office, and the receptionists simply smelt my candles and ordered some the same day (how sweet)!

3. Rent / Board

Perhaps I should touch on my most reliable, stable source of income: I own a house and live with two people who pay board. My partner and I share a spacious bedroom, and his best friend occupies the other.

What do I charge for rent? According to Tenancy Services, less than the lowest rent in my suburb. As for what my partner pays? What he chose to. In fact, when I tried to pay tax on my rental income, I was told that what they pay is under the threshold and there is no need. YAAAASSSSS.

4. Two Part Time Jobs

That’s right, I know I talked about working part time and volunteering, but I actually have two part time jobs. One of them is personal (no, I don’t work in the sex industry or anything fraudulent), so I’ll just address the other. It’s a fashionable retail job, where I’m a casual. The least I’ve worked is 4 hours in a week (what’s up Tim Ferriss), the most I’ve worked is 21 hours in a week.

The fact that two years ago, I worked 75 hours a fortnight and now work a maximum of 42 hours a fortnight – outside of my own ‘side hustles’ – means everything to me. It’s an indicator of healthy work/life balance, has done wonders for my mental health, and reduces the chance of high stress & burnout. I used to take annual leave for a day or two, here and there, just so I could savour mental health days and take care of myself. Now there is no need for annual leave for this reason as I have 3-5 free days every week.

Did I mention volunteering is also great for mental health? It has definitely helped my existential “what is my purpose?” crisis a bit.

5. Paid Research

Lastly.. I signed up for paid research! Chances are, what you like – whether it’s your choice in food, entertainment, shopping, etc – is valuable to researchers and marketers.

Disclaimer: just because you sign up to a paid research panel doesn’t mean you will be selected. Each research invitation comes with a survey on your household income, friends & family, frequency that you buy a certain product etc. I didn’t meet the criteria for a panel on subscription TV, even though I watch Netflix fairly often, because I don’t personally pay for it.

I was selected for a paid research panel on wine, thanks to my love for rosé & sparkling wine and general knowledge of wine brands. Haha!

If you are comfortable actively participating in research panels, where you have to share & articulate your opinions, do sign up! I’ve contributed to two panels, and each one paid $70-80 for approx. two hours of my time and thoughts.

So there you go – the six ways I earned income this year. While money is a factor, the most valuable thing to me is that I have gained more free time and breathing space. In all honesty, I appreciate that there is good to both lifestyles I have lived.

One is the stability and security of going to work every day and sitting in my own personalised, decorated desk with a cup of tea, surrounded by the same friendly colleagues I saw every day. The other is a lifestyle of work where no week is the same, which offers variety & flexibility, and having entire days to read books, write, do grocery shopping, run errands, create art, and organise and enjoy my life. (I do occasionally miss the former – a lot! As with opportunity cost and sacrifices though, you can’t have everything.)

The traditional 9-5 is fading away as millennials pursue meaning over money and purpose over profit. We have multiple interests, areas of knowledge, talents and skills – and because of this, ‘side hustles’ & self-employment are more attainable than ever. I truly believe that if you’re determined, you can switch the 9-5 for a work lifestyle of your own – and faster than I did, at that!

Love,

Sophia

How I saved $232 a month while looking for a job

Hi friends,

Today I wanted to share with you how I reduced my monthly expenses, and talk about whether I’ve noticed much difference in my life. I’d like to thank a brief period of unemployment that motivated me to make these positive changes, some of which were only temporary – if it weren’t for my need to reduce expenses, I might’ve never truly evaluated where my money was going, and what was important to me.

Here’s exactly what I cut back on..

Spotify Premium | This was the first to go, as it’s obviously a want and not a need. By cancelling my subscription, I saved $14.99 NZD a month. Not a bad start.

Have I noticed much? No. I still use Spotify, but less. Since I noticed that I always listened to the same artists & albums, I support them instead by listening, ad-free, to their CD’s. It’s a win-win in many ways. Having a tangible piece of work made with love, sweat, inspiration and creativity, is priceless. I love the original artwork, the lyric booklets, the quirky sentimental photographs, the artists’ personal thank-you’s – all of it feels so much more authentic than a digital music library. Plus, buying a new CD for $20-25 every couple of months only when I’ve actually found something I love definitely beats paying $15 every single month.

LinkedIn Premium (Career) | I was subscribed to this service because I enjoyed using LinkedIn Learning – the courses are well structured with helpful tutors and chapter quizzes to build your knowledge. You can find anything, from photography, to graphic design, to human resources, to leadership, to writing.. The possibilities are endless! Though I loved it, unsubscribing saved me $40.24 NZD a month. 

Have I noticed much? No. Shortly after unsubscribing, I added to my Youtube subscriptions of channels for lifestyle, organisation, productivity, minimalism, zero waste and personal finance. I also signed up to a two month free trial of Skillshare, another online learning platform full of exciting courses – plus earned extra months by signing friends up to a free trial! I’m divided – both LinkedIn Learning and Skillshare are great, so I’ll do an update further down the track as to my choice of online course self-learning.

Mobile Phone Data | After my mortgage & car, my phone is one of the priciest expenses. Looking at where I could save, I realised I had a ton of carryover data – about 30GB – which is enough to last me months! Reducing my data from 7GB to 2.5GB saved me $30 NZD a month.

Have I noticed much? Not at all – especially with my change of job and change of habits. I spend less time on my phone and when I do, I usually have WiFi.

Office 365 | I’d used only Word and Excel all my life in school & work, so when it came to wanting to type things up at home, they were my first choice – but I didn’t think of looking around for better, more affordable or even free services. I was so determined to use Office to be more productive, but I just never used it as much as I thought I would – so unsubscribing saved me $10 NZD a month.

Have I noticed much? No. After unsubscribing, I searched for something like ‘best free writing apps”. I ended up loving the brilliant WPS Office, which comes with Writer, Spreadsheets & Presentation, and have used it ever since. It does absolutely everything I need it to, like formatting text & pictures and converting to PDF. (And just for putting up with only one ad every time it opens – that’s all!)

Gym Membership | I’ve always been part of Les Mills because the atmosphere is bright, energetic and colourful, with brilliant classes and motivating instructors. Luckily, they have an option for you to suspend your membership for up to 90 days per membership year, at no cost. I took the opportunity to temporarily suspend my membership and fortnightly payment of $49, saving me a whopping $98 NZD a month.

Have I noticed much? With this one I did! I miss the runner’s high after a long treadmill workout, and feeling strong, refreshed and energised after a BODYPUMP sweat session. Unfortunately I’m not motivated to run at all in the drab winter weather. So while I’ve balanced out my lack of gym exercise with Blogilates, free yoga sessions (offered by Lululemon and Golden Yogi every Sunday morning!) and eating healthy foods, I’m delighted to go back soon.

Mortgage | When I first took out my home loan, I was overjoyed that I could change my regular payments online with just a few clicks. Rounding up my fortnightly mortgage payments and increasing them by only $19.49 saved me 2 years & 7 months, hence I went ahead and did it. So when I really needed to stick to a budget, I reversed the change – saving $38.98 NZD a month.

Since earning a stable income again, I increased it by $79.49 a fortnight – $158.98 a month – saving me 8 years and 3 months. Hooray!

So how much did I manage to save?

The things I managed to save on indefinitely: $95.24 a month.

Including the things I saved on temporarily (gym, mortgage): $232.22 a month.

The experience of reducing my monthly expenses wasn’t frustrating. In fact, it was enlightening and eye-opening. Much like decluttering my physical belongings, I felt lighter. Not only do I have less bills and less to remember, my life feels, once again, more intentional, devoting my time and money to bigger & better things.

Love,

Sophia

What’s on your reverse bucket list?

Hi friends,

Have you ever heard of a reverse bucket list? While a bucket list is a list of everything you want to do before you die, a reverse bucket list is simply the opposite. It's a list of amazing things that you've already achieved and experienced.

My kikki.K bucket list book is very dear to my heart. A brief stay in hospital in 2015 inspired me to purchase a timeless journal to write down all my goals, dreams and aspirations - where I want to travel, milestones I want to achieve, concerts I want to go to, and more.

It's fun to read over it when I'm going through a rut and feeling 'blah', sometimes adding to it - but now, I realise that it tends to constantly keep me focused on the future. Future goals. Future plans. Future achievements. Why not also count and celebrate everything I've already achieved?

If you have a minute, I’d love to invite you to take a moment to be mindful and grateful with me. Here's my reverse bucket list; I'd love to hear what's on yours.

Sophia's Reverse Bucket List

• Graduated from uni with a Bachelor's degree in Criminology

• Bought a house

• Travelled to Sydney & Melbourne

• Travelled to London & Paris (solo)

• Travelled to Hong Kong & Thailand

• Moved to a new city on my own and lived there for 2 years. One of the best cities in the world, at that - our capital, Wellington, New Zealand!

• Completed a year long 'Happiness Project' in 2014, inspired by The Happiness Project by Gretchen Rubin - dedicating 12 months to being my best self in health, spirituality, money, fitness, love & relationships

• Learnt & perfected the art of making candles, and started my online Etsy shop

• Seen my some of my favourite artists Lorde, Yumi Zouma and Paramore live - Yumi Zouma three times

• Photographed several weddings, graduations & birthday parties. I look forward to shooting many more!

As for what's on my bucket list?

I used to have over 50 goals & dreams written down, but since then, some of them have been achieved (yay), some of them I no longer desire, and some of them seem more like a to-do than a bucket list goal (ie. saving up for an expensive wedding photography workshop I want to attend). So at the moment, I've got a mini bucket list with my biggest goals, dreams & desires.

Sophia's Mini Bucket List

• Travel to Japan. In particular, I want to do it on a Topdeck Travel tour.

• Go to Eureka Skydeck 88 in Melbourne again, this time with my partner. Last time I went, it was so incredibly beautiful and breathtaking I promised myself that when I met the love of my life, I would take him/her there.

• Use my knowledge to teach something to the world. I have written a lot of blogs, but I want to get out there for real and write a book, start a Youtube channel or teach a Skillshare class. Who knows? I can only imagine it will be rewarding and exciting.

• Have a magical Queenstown mountaintop heli wedding.

• Do an escape room.

• Travel to Bali in Indonesia, Jaipur & Auroville (Pondicherry) in India, and Amsterdam, The Netherlands.

What's on your bucket list or reverse bucket list? Whether you share yours or not, I sincerely hope that you'll feel immensely accomplished, joyful, and grateful for everything you have already achieved and experienced. It's satisfying to realise that while we may have a long way to go towards living the life of our dreams, we have already come so far from where we used to be.

Love,

Sophia

3 ways I’m paying off my debt faster

Becoming debt-free has always been one of my biggest personal finance goals - and last year, I got to say that I achieved this. It was the moment I received a letter from my finance company confirming that my car, a gorgeous red Mini Cooper, had officially been paid off!

For a time, I had no consumer debt - and it felt good not to owe anyone anything. Unfortunately, this didn't last too long because shortly after, I had to get several expensive dental treatments. Fortunately, my local dental clinic partnered with a finance company to offer interest-free finance for 6 months - so naturally, I went ahead for the sake of my oral health.

This interest-free finance felt like a personal loan, but technically, it was a credit card - and once issued, I was approved with a credit limit way higher than I needed. Seeing that they wanted me to spend more, accruing more interest, I reduced my credit limit immediately to help myself resist the temptation to spend. On top of this, here's 3 more easy, effortless ways that I'm paying off my debt faster that you may find helpful too!

1. Creating an automatic payment - set to go out fortnightly.

Setting up an automatic payment means that I'm consistently paying down my debt, and it's so convenient to do so on your online banking - especially when you can choose your own day of the week and frequency. Mine goes out every second Thursday, aligned with the week of each fortnight when I receive my rental and job income.

But why fortnightly? It seems like there isn't much difference between paying fortnightly or monthly, so why not just pay monthly at double the fortnightly amount?

With fortnightly payments, you get to fit in a whole extra payment for the year! For example:

12 months x $200 = $2400 or 26 fortnights x $100 = $2600.

12 months x $100 = $1200 or 26 fortnights x $50 = $1300.

12 months x $150 = $1800 or 26 fortnights x $75 = $1950.

So if you can, set up your automatic payments or direct debits fortnightly. You'll save time, hassle, and potentially a lot of interest!

2. Refinancing at 0%.

Just before my 6 month interest-free period was up, I did a balance transfer. Shopping around, I was ecstatic to find that my bank had the best deal: a 0% balance transfer for 12 months. It was easy to transfer my credit balance across, especially knowing I was avoiding paying a high 25.99% interest rate!

So currently, my credit balance is sitting on a bank credit card (while the actual card itself is put away altogether), accumulating all of zero interest for a whole year while I take my time paying it off! There's still a minimum monthly payment every month of 2%, but the payments are extremely manageable.

If you have debt, I'd highly recommend taking 5 minutes to do a quick online search for any balance transfer specials banks are currently offering. It could be one of the best financial decisions you make; not only buying you time and saving you interest but giving you peace of mind. I'm certainly more relaxed with the steady pace I'm now able to go at.

3. Saving the change & zeroing out to increase repayments.

To pay off debt faster, you should always pay as much as you can over the minimum payment - and here's my favourite way to do it effortlessly. I call it 'saving the change' and 'zeroing out'.

It's incredibly easy to send extra repayments when your everyday account and credit card are with the same bank, especially when you can transfer payments instantly via their mobile banking app! From my knowledge, this goes for all NZ banks - ie. instant payments from ASB to ASB, from BNZ to BNZ, etc.

I love my instant payments. Every day, when I buy something or make a payment, I round up what I need and transfer it over, then pay the remaining difference to my credit card. I do the same for anything remaining in my everyday account at the end of the day. For example:

If I need to pay $24 for something, I transfer over $30, then send $6 (the 'change') to my credit card.

If I have $58.46 sitting in my everyday account at the end of the day, I'll send $8.46, $18.46 or $28.46 to my credit card and the rest (that's $50, $40, or $30 etc - all ending with a zero) to my 'Miscellaneous' account (what I named my on-call/flexi account).

The result? My credit card payments look extremely random, but since it's instant, I won't worry that there isn't some poor person manually processing each and every single one of my payments of $5, $12.50, $8.40 or $20.98! Yet, I can honestly say that it makes a huge difference because I do it often and consistently. I've actually paid off over $1000 without even noticing any difference in my life or feeling like I've made any sacrifices! Sometimes, if it's a day when I'm making a lot of payments (say I'm out grocery shopping, running errands, eating at a restaurant, or just paying a lot of bills), I even do it every few hours.

I hope you've enjoyed reading what I'm doing to pay off my debt faster and that these tips helped you too. Good luck!

Sophia

How to live on 80% of your income

When it comes to budgeting your money, it can be confusing to know where to start. How much should you be spending - and what should you be spending on? How much is 'normal' to spend on everything in your life, from your rent or mortgage, your car, entertainment and eating out?

If you have no idea where to start, or would just like to refresh your money mindset and give your budget a makeover, here's a super simple budgeting rule: the 50/30/20 rule.

If you have a 50/30/20 budget, that means that:

50% of your net income goes towards needs;

30% of your net income goes towards wants; and

20% of your net income goes towards your financial goals, like paying off debt or buffing up your savings.

Let's say that I bring home $1500 every fortnight. Ideally, my budget would look like this:

$750 (50%) for my needs;

$450 (30%) for my wants; and

$300 (20%) for my financial goals

So what does this mean? Because 50% goes towards needs and 30% goes towards wants, that means that 80% of your budget is allocated, leaving you with 20% to grow in your personal finance goals. Of course, if you can increase that 20% to 30%, 40% or more, even better! In an ideal world, right?

What it means for you is that you need to learn to live on 80% of your income. Here's how I did it, and you can too!

1. Know your net income.

A super easy first step! Your net income is not your salary, or gross income - like how you would normally say that someone's income is "$60k". It's what you take home. You don't need to calculate this; simply check your bank account for your weekly, fortnightly or monthly pay.

2. Work out 80% of your net income.

Sticking with the example of $1500 per fortnight, 80% of this means that ideally, you'd keep all your needs and wants within $1200 per fortnight. Or:

For $1400, $1120.

For $1200, $960.

For $1000, $800.

You get the idea.

If your needs & wants are under 80%, congrats! You do not need this blog. However, if your needs & wants are over 80%, my next step should help you out..

3. Reduce & simplify your needs & wants.

So your needs & wants are over 80% of your income. Let's see where your money is going and where we can reduce and simplify.

a) Write down what your needs & wants are. For me, my list looks like this:

NEEDS

Mortgage

Insurances

Power

Water

Internet

Phone

Fuel

Food

WANTS

Clothes

Books

Journals

Events

Food out

Subscriptions

b) Here is the time to question everything. Be ruthless with each expense! Ask yourself: "What can I do without, or get for less?"

Mortgage - can I refinance at a lower interest rate?

Rent - can I move somewhere with cheaper rent?

Insurances - can I switch to a policy with lower premiums (or increase excess)?

Power/Water/Internet - can I switch to a cheaper company?

Food - how can I eat nutritious food for less, or get more meals out of my food?

Clothes - how can I buy less clothes, or quality clothes that last longer?

Books - how can I spend less on books, or less often - perhaps by using my local library?

Gym - how can I work out and be healthy inexpensively, ie. switching gyms, going for walks in nature?

4. Do your research and save!

Now that you know where your money is going, it's easy to make change happen. Spend 30 minutes researching all your options, but remember: don't just look at the price, but the value you are getting. For example, another insurance company may provide a lower premium, but are you still just as protected and covered?

Here are all the things I have personally saved on:

My mortgage, by researching each bank's interest rates

My insurances, by comparing policies, premiums and excesses

My phone, by reducing my monthly data

Food - by making my food last longer (essentially halving my food portions)

Clothes - by buying new clothes less often, but at a much higher quality

Books - by going to the library and borrowing new books I want, instead of buying them straight away

Food out - by eating out less, and eating less meat when I do. Vegetarian & vegan options are just as delicious!

Subscriptions - by cancelling my LinkedIn Premium, Youtube Premium, and Skillshare, and sharing Spotify Premium with my partner

Gym - by selling my $49/fortnight gym membership and getting a $28/fortnight gym membership!

Once you shop around, you'll realise there are so many options out there; so many possibilities and ways to reduce your expenses. Simply repeat until your wants & needs are within that target of 80% of your income.

5. Work out your financial goals.

Success! You're now able to live on 80% of your income, and have freed up 20% for your financial goals. What are you going to do with all that money?!

Here are some ideas:

Pay off your debt. Challenge yourself to pay as much as you can above your minimum monthly payment.

Build your emergency fund - at least 3 months of your salary.

Buff up your savings.

Donate to a charity, organisation or political party you are passionate about.

Save for a big purchase, like a new car, laptop or holiday instead of borrowing from a credit card or personal loan.

Save towards your 10% or 20% house deposit!

So there you go - how to live on 80% of your income. I hope this has been helpful and informative and inspired you to refresh your budget.

Good luck!

Sophia