As you may know, back in 2017 I wrote a big, massive, giant long post about getting my finances in order. I thought it was time to give a little big of an update on what worked and didn’t work about my 2017 decisions.
I am NOT a financial adviser.
This is what I have done based on my own research, my own personal situation, my own comfort levels, and my own risk tendencies. I highly encourage people to be engaged in their finances but I also highly encourage you to critically assess your needs and consult with qualified and hopefully not-being-sued-advisers who were the cause of the banking royal commission.
I share this for general knowledge. I think the accepted legal term is for entertainment value but I think that wording is fucking stupid in this context and I won’t use it. Apart from above, where I just used it. Hmm.
2020 Finance Review
General Financial Goals
Firstly, a note on goals. Pay off debt is usually the first thing you hear. A random thought I had is that pay off debt is terrible first line advice. My debt is manageable and affordable at more than the minimum repayments.
I decided to focus on the one expense I cannot delay, get assistance for, get from somewhere else – rent. My goal is to have three months of rent money saved up in cashey money. I realised that people with a mortgage can sometimes access hardship provisions but nothing like that exists for renters that I have ever heard of.
I chose three months of rent (not total expenses, just rent) as a goal after seeing a friend get screwed around by Centrelink for three months when they had a simple and totally eligible claim for unemployment.
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All of my bills (loans, bills, insurances etc) are broken down into amounts that match my salary pay period. I put the amount of money required into a bank account, which is not attached to an ATM card. Most bills auto debit from that account but some I pay manually by choice because I want to review the bill for anomalies first (phone/net and electricity). I don’t like auto debits that come off of an ATM card that I use. It results in unpredictable balances.
Is in a fee-free bank account. I have an ATM card for it. This is for the “oh shit unexpected expense this pay period” type of stuff. An unexpected script, fuel, public transport. That kind of smaller size of unexpected.
Big Emergency Fund
Is in a fee-free bank account that is not attached to an ATM card. This is where I am saving the three months of rent money I mention above. I put a minimum of $10 per pay in there. I also put any bonuses, tax refunds, profits from freelancing, and other such chunks of money in. The other way I fund it is by putting whatever is unspent of my pay each pay period into this account. Sometimes that is nothing, sometimes that is something.
As mentioned, I don’t like debits coming off my day to day ATM card. I also don’t like minor things coming out of my bills bank account. So I use a separate free-free bank account for internet stuff. This includes things like Netflix and Stan, cloud backup software for our computers, things I support on Patreon (also you can support me on Patreon!). I fund it each pay period to cover the debits.
You can read more posts about money here
Oh, so fun. Everyone’s favourite topic. Here’s where I ended up with insurances:
- Life and TPD – higher than default amounts, through my main super fund. Fully underwritten.
- Trauma – private company, fully underwritten. Roughly two years salary.
- Income protection – limited amount included by default in my main super fund. Also have a non underwritten, cheap, small private policy that provides for one year only with lots of conditions attached.
- Private health – still don’t see the point in hospital cover as I couldn’t afford to pay any gaps. Did upgrade my extras policy to a higher level and different fund. Has been handy with my increased physio needs, though does have preferred location bullshit to navigate.
Resources for Insurances:
- Things I wish I had done differently when researching life insurances
- MoneySmart insurance section
- Why is insurance so secretive?
- CanStar life insurance section
- Insurance is anti-health
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I’m not going to go into a whole bunch of detail here other than to say that I got my accounts down to only three. And I am keeping them as three. Most people will disagree with that and I don’t care; this has been an active choice of mine because reasons. I have issues with the superannuation system. But seeing as I have no choice but to be within it, I’m happy enough with how mine are set up.
And that’s how my finances have ended up in 2020! Any tips, questions or thoughts?