Before setting our 2020 goals, here’s what we learned so far
With Christmas Day over, we’re now in that weird time between Christmas and New Years’ Day. Many of us will use this time to catch up on sleep. Others start thinking about their resolutions for the New Year. I’m in the second camp and normally use this time to set my 2020 goals, particularly when it comes to my money. However, this year I’m still waiting for my gorgeous new 2020 diary to arrive and so instead, I’ve started to reflect on everything I’ve learned about money this year.
This process of reflection before setting new goals makes sense if you think about it.
- How can we know where we’re going if we don’t recognise where we are right now?
- How can we celebrate our wins if we don’t take time to see how far we’ve come?
Before you start your own reflections, here are the 7 lessons I’ve learned about money in 2019:
1. The power of selling second-hand items
In 2019, I took charge of my wardrobe in a way I never had before. Inspired by Marie Kondo, I went through everything I owned and challenged myself to judge whether I wore it, how it made me feel and whether it would ever be worn again. I took everything out of my wardrobe and made some tough choices. Everything I loved went back in the wardrobe, everything that no longer served me was headed out the door.
Marie Kondo was incredibly popular in 2019 thanks to her Netflix show. She was so popular that when I went to the charity collection bins to give my old clothes away as donations, I was shocked by how full the bins were. People were dumping bags of donations by the bins because the bins themselves were overflowing with ‘stuff’. I went online and read stories of charity shops who were forced to throw away donations or in some cases, had to pay money to have donations taken away.
I didn’t want my donation to end up costing a charity money. So, I found another way.
Instead of dumping my stuff, I took my clothes home and decided to sell them online. I bought a mannequin and ironed the clothes, ensured they were photographed accurately and put them online. Slowly, over time, items started to sell. I had to adjust my pricing and get to know how each selling platform worked but over time, I got better at selling things I no longer used.
Selling second-hand clothes won’t make you rich overnight but it will ensure that your clothes are bought by people who will wear them again, giving the clothes a second life. If you’re keen to get started, check our how you can make money from your wardrobe and save the planet.
2. You have to be consistent to achieve progress
Setting money goals is a great starting point but it won’t achieve anything unless you are consistent in your actions. This got really difficult in 2019. I had always placed great importance in saving money and having a liquid (cash) emergency fund. In 2019 however, interest rates for savings accounts in Australia were slashed. The interest on my savings each month was halved and then cut down further.
It was difficult at times to keep saving in 2019 when I saw the sales on, saw my friends enjoying their new purchases and knew that I would barely make any interest on my savings.
I made the decision to be consistent with my savings habits only after falling off the wagon. I indulged in the sales this December and I realised that unnecessary spending didn’t make me feel any better in the weeks afterwards. For me, I felt happier when saving money because it meant that weeks afterwards, I felt uplifted by seeing how the savings were moving me closer to my long-term goal. In 2020, I’m more determined than ever to be consistent in my saving habits.
3. I’ll buy a house when I’m ready
The fall in interest rates this year for savings also meant a drop in interest rates for credit. The Reserve Bank cut interest rates, making it cheaper to take out credit. The Australian Government also changed the rules so that in 2020, a few lucky home buyers will be able to buy a house with just a 5% deposit and not have to pay the added lenders mortgage insurance. All this has amounted to my friends rushing to buy a house. Rather than marriage and babies, my 2019 social media feed was dominated by friends declaring themselves new home owners.
2019 for me has been difficult in terms of feeling constant FOMO about home ownership.
It’s meant that I’ve been scrolling through home-buying websites during the week, monitoring the market and wondering if I should just jump in and buy a house to get it over with. Ultimately, I chose not to buy a house in 2019. I’m not wedded to my current location and recognise that I’ll need to buy and hold for a significant period of time in order to justify the taxes and expenses involved with buying a house.
Buying a house is a huge life decision which grounds you to a particular place. It’s not something you can do on a whim unless you come from incredible privilege and for me, I’m proud of my decision to wait and only buy a house when I’m ready.
4. I finally got my Super right
In Australia, whether you retire into acrylic or cashmere is determined by your retirement savings, which we refer to as Super. Its full title is Superannuation but every time I hear that term, I hit the snooze button. Super was something I didn’t know about when I started working, which is why my first employer got away with not paying me super.
I’m not a teenager anymore and 2019 was the year I finally got my Super right.
- I made sure I had 15% Super and it was actually paid by my employer
- I merged my accounts so that I only had one account that I paid fees on
- I looked into how of my salary I could sacrifice now to go into my Super fund for later.
The reason it took me so long to take action is pretty relatable: Super is incredibly boring and made so by finance gurus who profit off you staying ignorant.
Super is also a future-you problem and doesn’t feel so immediate that you feel you have to take action right now.
Young people have the biggest potential to make a difference to their Super thanks to compound interest. Compound interest is how your money grows over time and young people benefit from having much more time until they retire, time in which they could build up their Super. If you or someone you love has been putting off your Super, check out how to sort out your Super in 15 minutes (because we all have 15 minutes).
5. We have power as consumers to change the world around us
The headlines of 2019 were dominated by environmental concerns. Greta Thunberg was recognised as the TIME person of the year. The one thing that annoyed me throughout 2019 however was that the same people who held up climate change protest signs were the same people sipping lattes from a throw-away cup.
If you believe in a cause, you need to walk the talk. Whether you believe in climate change being the root cause of environmental concerns or not, we can all agree that reducing single use products will benefit the planet. I explored reusable products in 2019 and still try to take my keep cup with me when I go out so that I don’t contribute a single use coffee cup to the rubbish tip. If you’re keen to explore reusable product options, check out the 5 reusable products you need in your life right now.
6. Developing my financial fitness
As someone who tries to keep fit, I keep tabs on my fitness goals in the gym to monitor my progress. I also don’t compare myself to a Victoria’s Secret model because we’re not starting from the same place, we have completely different assets and I’m unlikely to grow a set of impossibly long legs overnight.
2019 was the year that I developed my financial fitness.
I started to see the connection between my progress with money and my progress in the gym. It felt difficult to get started on huge goals in same way that it felt difficult to step on a treadmill after months of not exercising and having to start again from scratch. For my money, this was seeing financial experts who running circles around me or friends who owned multiple properties when I didn’t even have one.
Developing my financial fitness was the difference in my outlook. It meant assessing where I was starting from, setting my goals and building up my financial fitness. By sticking at it consistently, I was surprised at seeing how much better I felt about my money over time and how much I was able to accomplish. Check out the 5 steps to financial fitness to get started.
7. I kept talking about money
Money is awkward to talk about. At times, it can seem like I’m alone in wanting to talk about money because it’s not something we’re taught to do. In my first ever Money Bites post, I outlined why we don’t talk about money as a society: we consider it taboo, we consider it rude, it can be boring or just seems too hard to get on top of.
I persisted and have started to carve out a space for Money Bites, a space where it’s ok to talk about money.
I’m most proud of talking about money in my relationship. Love and money are things we don’t often link together but given your chosen partner will likely have influence over your money in the future, it’s important to ensure that you’re on the same page. If you’re starting to have these conversations, check out how to talk to your partner about money.
To continue this discussion, we’ll also have a podcast launching in 2020 that showcases conversations around money so that more of us can engage in talking about money. Half of Australia doesn’t talk about money which is weird given that we all spend, earn and use money in our everyday lives. Money affects us all and in opening up the conversation and showcasing different experiences around money, we include more people in this discussion.
Those were my 7 lessons I learned about money in 2019. So now it’s your turn:
What did you learn about money in 2019?
Write down your reflections now so you can identify where you’re at and recognise progress you’ve made so far. And when you’re ready, take the next step and check out the goals I’m setting for 2020.