2009 Financial Goals

Now that 2008 is coming to a close, and the goals for 2008 are done for the most part, it’s time to look forward to 2009 and the goals I’m chasing after over the next 12 months.

• Reduce my Jan 1 2009 Ugly Truth balance by a minimum of $12,000 ($1000 per month). I’m trying to be realistic with this one; $12,000 is a fair chunk to reduce my debt by in a year, while still going after other goals that are important to me.
• First Home Saver Account funded to $5,000 by Dec 31 2009. I really didn't get far with this one in 2008, so really want to get into saving my deposit over the next few years, even while I’m paying off my debts.
• Increase emergency fund to $5,000 by Dec 31 2009. I just think I’ll feel more comfortable having a larger amount put away in the current economic climate.
• Increase voluntary super contributions to 6% pre-tax salary from May 2009 (40th birthday gift to myself). With the 9% Superannuation guarantee I’ll be socking away 15% of my gross income into retirement.
• Pay for 2009 university fees upfront (approx $8,000, less $3,000 rebate from work), not via HECS. Yup, decided to go to Uni. It’s only 3 subjects, with a view to review at the end of 2009 as I’ll get a certificate/diploma/masters for each year I attend, so it’s not wasted if I have to stop.
• Car replacement account funded to $5,000. My poor old car is not on its last legs, but could be in the next 12-18 months. I’d like to have at least some sort of deposit for the next one, as I don’t expect anything much in the way of a trade-in on a 1995 Lancer hatch with dents and scrapes all over it)

As you can see there is somewhat of a shift away from pure debt reduction for me in 2009. I am still aiming to reduce my debt by $1000 a month, but I have turned my focus to long term goals (being debt free is one, but not my only long term goal) and educational expenses.

With the current economic climate the way it is, I want to have more of a buffer in the unlikely event I’m retrenched. I've been through that once before (in 2001 when the IT bubble burst), it sucked and I know what I need to do to feel more secure financially now.

It’s also the big 4-0 for me in 2009, so it’s a case of if not now, when? I’m single, no kids, so a ‘sista’ has to start doing it for herself (my sincerest apologies for trying to talk ‘street’ but it seemed to suit the tone I was trying to get across).

I've also become mildly fascinated with simplicity and feel very ready to live a more simple and streamlined life in 2009, so keep an eye out for posts on my other as to now unused blog, ‘I Can’t Believe It’s Not Clutter’.

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How Did I Go with My 2008 Financial Goals?

It’s getting to that time of year, when I look back and see how I went with the goals I set myself this time last year.

4 of my 7 Credit Card balances paid off in full

Not quite done, but I do now only have 3 cards to pay off, not 7.

Half marks? +0.5

Personal Loan under $20,000

Done and by a fair amount, as of today the balance is $18,135 (interest for the month still to hit this before January 1st though).

A full mark is warranted here +1

Emergency Fund funded to $1,000

Done and doubled actually, I've got $2000 in my starter emergency fund. I've also set up travel, goals & car funds.

Another full mark +1

Retirement Savings at 3% personal contributions (on top of the 9% Superannuation guarantee)

Done, and just quietly could I have picked a worse year to do this? *lol*

Or maybe it was a good year as I’m getting extra units at bargain prices? I've contributed over $10K to my retirement account this year and the total balance went down $50K – Ouch!

+1 as I didn't stop contributing even though the share prices tanked. I learnt my personal risk profile is exactly as I thought it was which was surprising.

Total outstanding debt under $35,000

Move along, nothing to see here *whistles while looking away from you all*

No marks a big fat 0.

So all up I've given myself 3.5 out of 5 or 70%, which I’m pretty happy with.

Progress not perfection is the name of the game.

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To Postgrad Or Not To Postgrad, That Is The Question.

(Apologies to Bill Shakespeare for my paraphrasing.)

I've just completed an Executive Certificate in Marketing Management through work, which I really enjoyed (especially as work paid for it in both course costs and actually running the course on site during work hours – sweet!)

It’s got me thinking about continuing my studies. I had commenced an undergrad before this opportunity presented itself, but my course through work was at a post grad/MBA level and I did OK, well even.

I’d really like to go after a Masters in Marketing, as I think the next few steps of my career will require tertiary education as well as experience, so it’s now or never really.

I've got myself booked in to an information evening next month to find out more about it from lecturers and speak to current and recently graduated students about what the workload is like, as I’ll be working full time as well as studying.

The big question though is the cost. I’d be looking at approx $2,588 a subject, and I’d have to complete 11 subjects (as I've already completed one subject), so that’s $28,468 over the life of the Masters or $9,490 a year (assuming two subjects a semester and two semesters a year).

That’s $791 a month I’d need to find in my budget each month to pay for it upfront.

Alternatively, I can pay a 20% surcharge and have 8% of my salary deducted each month (the joy of HECS/Fee-HELP) until the total amount is paid off. 20% equates to $5,694 though, which is a lot of surcharge, so I’m leaning towards paying upfront.

The other two things with paying upfront are:

• I can ask work to contribute up to $3,000 per calendar year, which could reduce my outgoings by $9,000 over the life of the course, and would mean I’d only need to find $541 a month in the budget.
• The other is the course fees are tax deductible, which could also help pay for things as my annual taxable salary would be effectively reduced by $6,490 (after the $3,000 I’d get back from work) which would push me down a tax bracket.

I was in a meeting with our ad agency yesterday and they showed us reports that MBA applications have gone through the roof, which is an unforeseen side effect of the global financial crisis.

People are investing in themselves rather than the stock market it seems.

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Another 2008 Financial Goal Achieved!

Even though this month’s ugly truth showed a backslide, this doesn't mean it's all doom and gloom in Debt Dieter world.

I got paid today & I’m pleased to report my personal loan has finally dropped below $20,000! This was one of my financial goals for 2008, so I’m happy to see that one happen at last.

Goals 1 and 5 on that list have no chance of happening now (although goal 1 will be pretty close), but I am aiming to get my total debt under the $50,000 mark by the end of this month, just for my own sense of achievement.

The other good news is Credit Card 2 is now under $6,000 too, but I won't know final balances until the November 1 update.

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IKEA Heaven

The new IKEA catalogue has landed! A new IKEA catalogue is as exciting to me as a new Apple product launch would be for other people. I just love their stuff and daydreaming about my perfect apartment set up.

I show restraint though and don't actually go into the store unless I have a very specific item to pick up, as it's completely set up for the impulse buyer. It's an incredibly clever marketing and sales strategy really, which I have to appreciate!

My current goal fund for new bedroom furniture will be spent almost entirely at IKEA, and I've now worked out I'll need just under $2,000 to realise my goal. It's a complete refit of my bedroom, with queen bed and latex mattress, bedsides, lamps, a chest of drawers, new pillows, doona (quilt/duvet/comforter) & linen.

Yes it's a lot of money, but the ensemble I'm sleeping on is well over 15 years old, so it's worth spending decent money on something you'll spend a third of your life in. A good night’s sleep helps you in so many ways, from protecting your health to being more focused at work and with your family and friends; it should be invested in wisely.

This weekend will be dedicated to drooling and daydreaming. I may even take the catalogue down to the Posh Garden Centre to enjoy with this month's my free coffee! The weather here is just glorious at the moment, when it's not pouring with rain of course.

Work and study have been so full on the last few weeks; it’s going to be nice to just think about lovely new things for a change.

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A Year Ago Today

A year ago today I started this blog. I was $56,772 in debt, and horrified, so decided to do something about it.

• I had a personal loan that consisted of a car loan and a previous consolidation loan of my credits cards, which I had run up again & added new ones to – I was so smart – not.
• I was making decent money but only paying the minimums & then reusing my cards over and over.
• I was paying for things I didn't need or use and did nothing about it (gym membership, online DVD rentals etc)
• I was buying my lunch every day, and buying up to 4 ‘bought’ coffees a day too
• I ate a lot of take away meals & ate out in cafes & restaurants most weekends too
• I was driving to work every day, and paying $17 a day for parking.
• I was paying for my broadband service, even though there was a free staff plan available

I got a great new job in October, which I still love coming in to do each day, and pays me a lot more money!

In November I found out I had to move house. I had no emergency fund at all, no savings, so onto the credit cards it all went. Right before Christmas, and in the Sydney rental market, it was a nightmare.

December and January were consumed with the joys of finding a new place to live and actually moving house. I had a couple of nice financial surprises in the forms of some found money in my travel wallet & all my share dividends, as I’d never updated my mailing address. So I managed to still get my numbers down.

In February, all the moving bills came in and my total debts had actually increased to $61,836! Talk about two steps forward & three steps back. The credit crunch has also hit the world hard by this stage & all my interest rates had gone up, many more than 2%.

March saw my Baby Emergency Fund reach $1000 for the first time – Hurrah!

In April I shopped around for a cheaper Greenslip for my car, and knocked the front bumper off in the local KFC carpark – good times…

I bought a snazzy new vacuum cleaner in May, turned another year older and saw a run of 4 months of consistent debt reduction kick in – finally, some progress, small, but consistent.

June was an awesome month, my annual bonus arrived so I was able to make a serious dent on my debt and still put some money aside for my other goals. It also saw petrol prices in Sydney hit record highs.

July saw me get back under my original debt amount of $56,772 for the first time since February, it was a great feeling. I also scored the employee of the month award at work, which is worth $150 and I still haven’t spent it yet.

August was a pretty boring month to close out my first year, I am getting a lot more offers in the mail to increase my limits though and calls regarding financial advisors, so someone’s noticed I’m trying to pay down my debt.

What will the second year bring? Not sure yet, but I’ll continue to reduce my total debt every month, set goals for myself, and blog about it here!

So as numbers go:

• September 2007: -$56,772
• February 2008: -$61,836
• September 2008: -$51,704

Total debt paid off so far: $10,132 – not too shabby, but I can do better!

I've got a new medium term goal, to double that amount in the next year, so my goal for September 2009 is a total debt of no more than $31440, which is $20,264 less than today. Plus still have my overseas trip in May/June in 2009!

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Financial New Year Resolutions

It’s the last day of the financial year here in Australia, and I couldn't think of a better time to review my 2008 Financial Goals to see how I’m tracking, it’s the calendar year midpoint for the non Aussies too:

4 of my 7 Credit Card balances paid off in full

I've paid off two cards so far, and expect to pay off another next month, but getting that last one paid off by December 31 will be a serious stretch. I’m still going for it though.

Personal Loan under $20,000

This goal is on track, as I increased the repayments on my loan to accommodate the 3 (yes 3!) interest rate increases I've seen come though this year alone (damn credit crunch). I actually expect to reach this goal by November 2008.

Emergency Fund funded to $1,000

This goal is completed, I've actually got $2000 in my emergency fund as of this month, so I’m pretty chuffed about that. In addition I've established separate savings accounts for car maintenance, saving for new things (like a bed), and my 40th birthday trip to the UK in 2009.

Retirement Savings at 3% personal contributions

This goal is completed, I increased my personal contributions earlier this year so that chugging along, and I don’t even notice the difference in my pay packet these days.

Total outstanding debt under $35,000

Ah, yeah, this one isn't going to happen, it was an ambitious target even before I had all the expenses of moving house at the beginning of the year. I’m not going to achieve this one at all this year, but I’m still plugging away at reducing my total debt number.

So all in all I feel I’m tracking at 60% success rate, with a lift to 80% if I can manage to get that fourth credit card paid off.

That’s still a pass mark isn't it? :-)

As with a weight loss diet, you can’t throw in the towel if you don’t hit all of your targets, doing something right consistently will get you where you want to be, even if it takes longer than you originally thought.

How are you doing with your 2008 financial goals? Still on track, overachieving, adjusted for life impacts or given up? (I hope it's not the latter)

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Starter Emergency Fund Sorted

I received my annual bonus late last week, so was able to complete funding my starter emergency fund to the $2000 I was working towards. Yay!

As a very pleasant extra I also receive the Superannuation Guarantee on the bonus payment, so got a nice boost into my retirement savings this month, on top of my regular monthly salary contribution, plus the 3% I'm contributing myself pre-tax.

For the non Aussies, the Superannuation Guarantee is our version of a retirement fund, the big difference to say an American 401K is it’s mandatory for employers to contribute on your behalf. Employers must pay a minimum of 9% of your pretax salary into your superannuation (retirement) account. As my bonus is considered part of my package, it counts toward that 9% total for the year. Sweet!

As for the rest of the bonus, I've:

• set aside $1000 to go into my First Home Savers Account once it starts here in October,
• paid a decent chunk off my focus card,
• paid a double payment on my personal loan,
• boosted my goal account to $1000 (I really need a new bed and mattress),
• bought a new outfit for work (from Target, 30% off),
• put $500 aside to start my 40th birthday 'UK tour' fund for June/July 2009.

July’s Ugly Truth is shaping up to be a very good news story!

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First 2008 Goal Achieved – Check!

I took the plunge and increased my pre-tax superannuation (retirement for the non-Aussies) contributions to 3% today, checking off one of my 2008 financial goals.

This means I now have a total of 11% of my salary going into superannuation, once the governments 9% superannuation guarantee amount is factored in as well.

This may seem a controversial decision for some, as I’m still carrying such a high debt load, but I’m single, almost 39, and rent. I need to start looking out for my future today, to maximise any compound interest benefits I can while they can still make a difference. Even waiting 2-3 more years will make a big difference at this point in my life, so I’m going for it.

As the money is coming out pre-tax, it doesn't have a have a huge impact on my life today, however every bit will help at the retirement end of things. I wasn't aware we had a ceiling on the pre-tax contributions you can make to your super, but as of July 2008 it’s $50,000 (indexed) into your super account each year, to take advantage of the lower tax rate on retirement savings. Anything over that is taxed at 31%.

I guess that’s why I had no idea; I’m not even close to contributing that amount, even at the higher 3%!

In reading around the blogosphere about retirement options, plonkee's post on planning for retirement really struck a chord with me. It was short, sharp and to the point, and definitely worth a read. I’m glad to know I’m following those three steps myself.

It also seems louise at My Journey To Eliminate Debt is also looking to boost her retirement savings, and Matt at Frugalize just used his annual pay rise to boost his; a really smart idea if you’re living comfortably at your current income.

Do you actively contribute to your retirement funds pre or post tax? Or at all?

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The Ugly Truth – Day 186

The Ugly Truth

• Personal Loan - $23910
• Credit Card 1 - $7444
• Credit Card 2 - $7333
• Credit Card 3 - $6288
• Credit Card 4 - $11382
• Credit Card 5 - (paid in full)
• Credit Card 6 - $4148
• Credit Card 7 – paid in full!
• Emergency Fund - $501

Total = $60,004
Debt reduced from last month = $1832
Debt reduced from Sep 2007 = $3232

I can’t believe I've been at this for 6 months now. It’s gone so quickly, but I've also learnt so much.

February turned out much better than the last two months, as I've settled into a routine at my new place, work got busy (but fun and challenging) and some money rolled in!

I got a nice stack of dividend cheques, which helped right at the end of February, plus I also finally got my bond money back from my old place, which will cover upcoming car expenses over the next few months.

The best news is I paid off Credit Card number 7 last month. Other than that, it doesn't feel like I've made any progress when I look at the numbers; as I’m still over $3000 worse off than when I started! Erk.

I can’t believe I was only $5 dollars off dropping back below $60,000. I know I could have just paid the extra $5 before I posted this and made a big deal of the drop, but if I can’t be honest with myself, I’m not changing any habits. It's also a really easy win for March!

I feel really different about my money now, and I'm very aware of how conscious I am about my spending and debt reducing habits these days. I think it bodes well for the future, my future in particular.

That has to count for something doesn't it?

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Big Wins - Second Credit Card Bites The Dust!

I’m very proud to be able to say I paid off my second credit card in February!

Only more 5 to go from here (yes I know I still have 5!), and only 2 more to meet one of my 2008 goals of paying off 4 of my 7 cards by December 31, 2008.

Credit Card 7 - $0. Paid in Full 29/02/2008

It was both my lowest balance and my highest interest rate, so regardless which snowball method you follow it’s all good. From now on things will head down a modified Dave Ramsay plan.

I now have a $400 payment to snowball onto my next focus debt, namely Credit Card 6 which is now my smallest debt, plus my increased focus on my Personal Loan, which now has the highest interest rate of all my debts, and is also the highest balance.

Onwards and downwards!

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Gives With One Hand And Takes With The Other

Remember how happy I was when my bank increased the interest rate on my online savings account?

It was of course a glimmer of hope in sea of bad news about rising interest rates here in Australia. However, that bad news has caught up with me and the same bank has now increased the interest rate on my personal loan too. It was so great while it lasted those few heady days in February...

This of course increases my minimum monthly payment, which reduces my ability to save anything in that high interest savings account with all it's delightful extra interest rate!

My personal loan now has the second highest rate of all my debts, which at 14.2% is more than all my credit cards except one. (That one is both my highest interest rate and lowest balance, so it's my focus debt at the moment)

With that in mind, and a strong desire to achieve as many of my 2008 financial goals as possible I've decided to permanently increase the amount I’m paying off my loan each month. One my goals was to get my loan balance under $20,000. The minimum payment has jumped to just $4.00 less than I’m paying now (I was paying an extra $10-15 per month since the beginning) and won't come close to achieving that goal.

After crunching the numbers I’ll be increasing the loan payment to $700 ( was $570) per month from March. This means I can set it to be paid monthly, comfortable in the knowledge that I’ll easily meet one of my goals for the year. This change alone will save me over $1000 in interest over the term of the loan, even without taking my debt snowball and snowflaking into account. It will make a bit of a dent in my snowball amount, I still have one, it's just smaller for the credit cards.

How are your goals for 2008 tracking so far?

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Taking Advantage Of 0% Interest To Get A Jump On 2008

I decided to consolidate two of my credit cards (1 and 7 on my ugly truth list) into one today to take advantage of a reduced ongoing interest rate on card 1 (down 2% to 9.95%) and 0% for 6 months (then 9.95% ongoing) for card 7 (currently 18.75%) once they’re both together.

The new balance will be just under $7500 combined and will mean I only have 5 open credit cards instead of the original 7 I started with in September.

Card 7 is currently my focus card that also receives any snowball payments, which I’ll now combine with the fixed minimum payment I've been paying on card 1 ongoing. This should help speed the repayments along when combined with the lower ongoing interest rate and the interest free period on the balance transfer, which will get paid off first.

Card 1 would have been the next card on my snowball plan anyway, so it makes sense to me to take advantage of this offer.

The other interesting thing I found out was that as long as there’s a 0% offer running on the new card and I have enough available credit on it, I can transfer future balances onto it without having to set up a new account, and start another 6 months at 0% on that new balance. Something to ponder once I've got this first lot paid off!

My stretch goal is to have the entire $7500 paid off by the end of May 2008.

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Financial Goals For 2008

I’d set some goals to achieve by September 2008 (the anniversary of my starting my debt diet):

• 4 of my 7 Credit Card balances paid off in full
• Personal Loan under $20,000
• Emergency Fund funded to $1,000
• Retirement Savings at 3% personal contributions
• Total outstanding debt under $35,000

I've realised now that these are pretty ambitious targets for September 2008, what with moving expenses etc, but a girl has to have a goal, and if I can nail all of these by December 2008, I’ll be thrilled.

I’m also looking at that retirement savings line. I already contribute 1%, but that extra 2 % may actually go into a managed fund instead of Super, or into a First Home Saver Account if the government kicks the scheme off this year instead.

From January 2008, I’m also going to start tracking and reporting (in my Ugly Truth posts) the amount of debt interest I’m paying out. I've avoided seeing the real cost of my financial choices to date, and it’s time I face up to the impact.

If I’m sticking to my plan, the number will go down every month as the balances go down, which will provide extra motivation.

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Keeping Up With My Joneses Part 2 – The Investors

The investors are both very smart with their money. He lived at home until he got married (she moved back home after they got engaged), she is still driving her first car, a 1992 Ford Laser! He swapped his beloved ute for his brothers 4WD when their baby came along.

They were one of the first people in my circle of friends to buy a house. I remember thinking when they bought it that $250,000 was an unbelievably high number, especially when I saw the house! It’s was awful, but they saw the potential and the ‘bones’ of the place.

He’s a mechanic by trade and has lots of other tradie mates, so getting their kitchen, deck, garage and bathroom sorted at cost saved them a lot of money. He did most of the renovations work himself and their place is just lovely now, and worth more than 3 times what they paid for it!

They’re also very good savers/investors. I don’t know the finer details of their investments, but I know that when he got laid off over a year ago, they have been living off their investments ever since. She’d on extended maternity leave, so there’s been no wage related income coming in for over a year and they’re doing fine. They also don’t carry any credit card debt.

They love to travel. They recently got back from an extended trip to Europe (we’re talking months not weeks) with their baby, who started walking in Italy! They rented out their house to friends while they were away to keep funds coming in.

They also have a share in a large boat that he and his partners built themselves, so they spend a lot of time out on that in warmer months. Yay for the invites to join them!

How have I incorporated their way of life into my own?

• Appreciating my car for the reliable mode of transport that it is, and delaying upgrading any time soon.
• Really thinking about long term investing and wanting to get into a position to do so as soon as possible.
• Spending money on something that increases in value is OK.
• Travel more, but never use credit to do so. (I now have a goal to go to more countries than their 18mth old has been to!)
• Having friends who have known you forever and want only the best for you is an asset I already have in my portfolio.

This is part 2 of my series Is Keeping Up With ‘The Joneses’ A Bad Thing? In order to protect the privacy of my ‘Joneses’ I've tried to be as generic as possible about their particulars.

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December Challenges

Well here I am at month 4 of my debt diet. It’s also Christmas, New Years and I have to find a new apartment and move in before the end of January!

Nothing like a bit of pressure on the finances to make you realise how much better off you’d be without the weight of over $55,000 in consumer debt eh?

Not putting too much extra pressure on myself this month, but I still want to move forward if only 1 step; so here are my simple goals for December:

• Cash only for Christmas gifts
• Cash only for Birthday presents/cards (I have a stack of December birthdays to contend with every year)
• Snowball something this month (if not the full ball, as many flakes as possible!)
• Live to new budget for the full first monthly pay cycle (this one actually takes me through to 15 January 2008)
• Use my starter emergency funds towards moving costs, use card only as a last resort. (I'm being realistic here, if it's using it for this or not getting moved, I'm using it)
• Consolidate all my superannuation into my current account now I've located it all

Ugly Truth for November to come…

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Superannuation Hunt Update

I've had great success with tracking down my superannuation accounts from old jobs so far. The account from my years in hospitality (harks back to the inception of the Superannuation Guarantee), has been located and I’m awaiting the amount and details for transferring it.

Payroll at work have advised 2 more days in regards to the super from my first 8 and a half years at my current company (I was retrenched, and then went back a year later). I had a different employee number so it’s a separate account that I’d lost track of.

I've also found the $1897 from my ‘year in the wilderness’ when I worked in an insurance call centre for six months as I had been unemployed for six months and was going mad. I actually made pretty good money there really, plenty of weekend shift penalties to be had plus commissions.

It’s quite nostalgic talking a walk through your career path, to see how far you've come and how you got there.

I’ll really be able to assess how I’m tracking for retirement once it’s all in one spot, which I’m really looking forward to (who knew super was so exciting!).

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New First Home Owners' Policy

The Australian Labor Party (ALP) swept to power in the Federal election last night, and it will be interesting to see if their housing and broadband policies manifest. I have a particular interest in both (both personally, and one professionally). I’ll focus on the housing policy in this post though.

It seems that owning a home in Australia is becoming more an more difficult. According to the Bureau Of Statistics:

• The average home now costs seven times the average annual wage - up from four times the average annual wage just ten years ago;
• Nationally, first home buyers are now spending 31.7 per cent of their total income on mortgage repayments – up from 17.9 per cent in 1996;
• The proportion of homes being bought by first home owners declined from 21.8 percent in June 1996 to 17.1 percent today.

If you are buying your first home, you may be eligible for benefits under the First Home Owners Grant Scheme here in Australia. The Scheme was established to assist eligible first home buyers to purchase their first home by offering a $7000 grant.

The First Home Plus Scheme (which varies from state to state) also provides generous exemptions or concessions on transfer duty and mortgage duty for eligible first home buyers.

For example, if you buy a property valued up to $500,000 in NSW, 100% of the duty will be waived. If I was looking to buy a property with a purchase price of say $350,000, that’s a saving of $11,240 in duties.

Unfortunately these schemes have become been part of the reason housing prices have got so expensive, especially in major cities.

The ALP want to introduce an additional scheme called the First Home Saver Account.

Essentially, people will be allowed to make pre-tax contributions from their salary up to $50,000; which will be taxed at 15% and then invested in a superannuation style account. From what I've read on the flyer, couples will be allowed to combine their respective savings!

Deposits do have to be saved over a 4 year period (which may rule out some people, possibly even me), and of course while returns may be greater than an online savings account (plus the benefits of pretax investing); it is also possible returns could be lower too as with any investment.

I think this policy for first home owners is just stunning. It is such an incredible idea for promoting homeownership and getting people investing their money to benefit from management and compounding interest, without simply throwing money at people and artificially inflating home prices.

Anything to increase financial literacy in this country can only be a good thing. It will be interesting to see how it pans out.

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Keeping Up With My Joneses Part 1 – The Car Guy

One of my friends is a very successful, well paid professional; who travels overseas at least 3-4 times a year, has a gorgeous apartment filled with beautiful things and drives a luxury convertible. He just loves luxury cars, we talk about them all the time (I’m a bit of a car nut myself).

He’s very smart with his money. His car is fantastic, its 12 years old though, not brand new. He bought it second hand ages ago and he just loves it. It’s just so him. He’d like a new one some day, but is perfectly happy with what he has right now, and works towards anything new he wants.

He works incredibly hard. His travels are how he loves to spend his downtime, visiting his family and friends all over the world. He comes back with so many stories and experiences.

He’s incredibly generous with his time. He helped me buy my first car last year, spending numerous weekends driving me around town test driving cars under $5000, and he genuinely enjoyed it. He also talked me around from wanting to spend $10,000 for my first car, so he saved me $5000 in effect.

He enjoys the simple things as much as the big shiny things. He spent a very pleasant yet simple evening at my place fixing my rickety dining table and eating the dinner I made with gusto (I’m a good cook though, so he’s only human). He also enjoyed jetting off to Europe to go to a car show with some friends for a couple of weeks not long after.

How have I incorporated his way of life into my own?

Living within my means is an obvious goal I’m working on, buying quality over quantity, working hard for the things that bring you genuine pleasure in life, and remembering to enjoy the simple things.

Why wouldn't I want to ‘keep up with this Jones’?

This is part 1 of my series Is Keeping Up With ‘The Joneses’ A Bad Thing? In order to protect the privacy of my ‘Joneses’ I've tried to be as generic as possible about their particulars.

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Is Keeping Up With ‘The Joneses’ A Bad Thing?

I believe it’s who your ‘Joneses’ are, and what your motivation for keeping up with them is.

My entire life seems to have been spent comparing myself to others, from the ‘cool’ girls at school, through to people getting promoted around me at work, to seeing the successes of my friends and family manifest for them.

I've come to realise that this is because I didn't have any real goals or dreams for myself, so I relied on tagging along on other peoples. Or became envious when they had or did cool things, when I of course could have had or done those cool things if I’d made the same choices as them in many cases.

Now my focus has shifted more towards identifying what’s important to me, and what my dreams and goals are, I see things differently. Rather than envy those who have done and achieved great things in their life, I look and ask them how they did it, and if it’s something I can replicate in my own life, to pursue my own goals and dreams then I can and do!

I have quite a broad range of friends, all of whom I consider successful, as they are living their lives the way they want to. It’s not all about money, but having it, (or not having debt more importantly) does play a part in each. It’s the freedom to make choices for yourself that really stands out, not the level of income/money itself.

I've got a few examples that come to mind, so I’ll be looking at each of these people in more detail and writing separate posts about them (names changed of course) over the coming weeks.

• Part 1: The Car Guy
• Part 2: The Investors

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