Member Story with Lily

What is your current financial situation like? 

To be honest, the word I would use to describe my current financial situation is “tight”.  I need to carefully manage my money to meet my commitments and I’ve had to keep my enthusiasm for collecting trading cards in check. 

I’ve just moved into a share house, so rent and other living costs are now split. However, I bought an investment property a few years ago and keeping up with the mortgage repayments is getting harder with interest rate increases. 

When I can't save as much as I would like, or, have to turn down going out with friends, I remind myself that I am paying off an investment that will benefit me long-term. 

I'm proud to have never missed a mortgage repayment. I'm also able to pay my bills on time without any assistance. So, while I do have to spend mindfully, my finances aren’t currently a source of major stress. 

What did you learn about money growing up? 

I don’t remember my family talking much about money growing up. My parents separated when I was eight and my brother and I were brought up in a single parent household. We always had the things we needed, but I was always aware that my mum worked hard and made sacrifices to make this happen.  

Growing up in that environment, you’d think that I'd be good at being frugal and saving. However, when I started working, I had the mindset that I had spent many years going without, so I could now spend my own money on whatever I want. That’s how I got myself in a bit of financial trouble. 

I'd even spend my money before I earnt it. On payday, I would walk around to different stores and had things put aside on layby (paying a deposit on an item to hold it and receiving the item when the balance is paid). 

Luckily, my mum did teach me to work out what my fixed ongoing expenses were, like my mobile plan and car costs, and to ensure that I set money aside for those things every fortnight when I got paid. 

What is the thing that you spend money on that really makes you happy? 

In addition to gaming, I love food. So I try to make my food at home restaurant quality. This means that I often end up spending more on groceries but makes it more enjoyable to eat-in and bring my lunch to work. While the ingredients can be expensive, it’s worth it to me as I enjoy cooking and I’m still saving by not regularly eating out. 

What aspect of managing money comes easily to you? 

My mum taught me to budget for my bills in advance by adding up what they are for a whole year and dividing it by 26 so I know how much to set aside each fortnight when I got paid. From the time I started working, I've automatically transferred this money into a separate bank account for my expenses – it's second nature to me now. 

Conversely, what aspect of managing money do you struggle with the most? 

While I understood the importance of setting aside money for bills.  I never really understood the concept of active saving. Saving only made sense to me when it had a specific purpose – why would I put $100 away now for something unknown in the future? I still struggle with this idea today, but I’ve learnt how to get around this by always giving my money a purpose. Rather than just savings, I tell myself it’s my emergency fund. I find that works best for me. 

What prompted you to start working on improving your money habits? 

Once on a holiday in New York, I couldn’t check into my hotel as there were no funds left in my account and I needed to borrow money from a friend to pay for the room. At this time, I hadn’t learnt about saving a rainy day fund, so my solution when I arrived home was to apply for a credit card for emergencies. 

Pretty soon my definition of an emergency went from “when I’m in a foreign country with nowhere to stay” to “I need to buy this now before the sale ends”. Luckily, I recognised that I wasn’t using the credit card responsibly and cancelled it before it became an issue – but that was the wakeup call I needed to get on top of my money. 

What is the best money management tip or strategy that works for you? 

I work best with money when I give money a purpose. So, by using an Autopilot system, I can decide upfront what I’m going to use my money for – and allocate it to my various Needs and Wants. I also know I’m prone to impulse spending, but the upfront allocation of my money into Wants helps me to prevent this and allows me to spend guilt free. 

I've split my money into multiple accounts. While it may sound complicated, it works for me as my Bank First home loan has multiple offset accounts which make the process easy and the allocations all happen automatically with recurring transfers. I even have an account specifically for Christmas presents! 

Most of my savings go towards the mortgage, but I also regularly contribute to a rainy-day fund I keep with another bank. Keeping it separate removes any temptation to dip into these savings. 

If you could go back in time and give your younger self some advice about money what would you say? 

When I was younger, I had this belief that I was “bad with money”. It became a self-fulfilling prophecy. I would be carefree with my money and then get myself into trouble, which would reinforce the statement. I realise now that you are not simply born good or bad with money. It’s the good or bad money behaviours that make a difference. 

I would tell my younger self “don’t be too hard on yourself; learning good money habits takes time and effort”.  I would encourage myself to build on what my mother taught me with an autopilot system, as that has really helped me to mindfully spend and make better money decisions.