As the mornings get colder, we are well and truly headed towards winter.
I’ve had the same few wool and cashmere coats which I have worn for years and was feeling a bit bored of them. Instead of buying new ones, I instead bought new buttons and transformed them into completely different garments.
One problem with op/thrift shop coats is that they can look really dated – this frugal hack lets you update your wardrobe without buying extra clothes. I started by researching coats from luxury brands and noticed a lot of them had these big gold buttons that looked really trendy. I then scoured my local op shop, Etsy and eBay and bought some for $12.87. They were on the pricey side but they were high-quality, vintage ones which were perfect. It can definitely be done for significantly cheaper!
After a bit of hand sewing, my old coats were completely transformed! They look so high-end and has made me excited to wear them again. Instead of spending $100+ on a new coat, I spent just under $6.50 each. Furthermore, I reduced landfill waste and also got to have a more customised garment.
Recently, I was chatting to a girlfriend who mentioned that she wanted to invest in property but didn’t have the cash to do so.
She wanted the returns of the Australian property market without committing herself to purchasing an entire house. However, you really don’t have to – it is still possible to get real estate exposure in your portfolio.
How? The short answer is REITs.
What is an REIT?
“REIT” stands for real estate investment trust and is an investment product that gives investors exposure to property assets. Australian REITs are known as A-REITs and are publicly listed on the Australian Stock Exchange.
This means you can simply buy into these funds like you would a stock or ETF and can put in as little as $500. There are different kinds that provide exposure to retail, industrial, residential and even office buildings.
Furthermore, you can also invest in funds that hold a number of different REITs. One example is the Vanguard Australian Property Securities Index Fund (VAP) which uses S&P/ASX 300 A-REIT Index as a benchmark.
No, I wouldn’t. The reason for this is lack of diversification. I would like to purchase a home in the future that would be a large percentage of my net worth and if I started investing in REITs, I would be too overweight in one asset class.
However, I think it is a great option for those who won’t be purchasing a home within the next decade or so, or simply want diversified real estate exposure.
Five years ago, I made the big decision to buy a Vitamix.
Even after a sale, it ended up costing $595. Yes, I spent that much money on a blender. Is that insane? Maybe.
Why I decided to get a bougie blender
My family used to purchase cheap blenders that cost around $50 and they would always break within a year, it was so frustrating. We even tried getting “nicer” blenders which didn’t work out well, either. I decided enough was enough and I was happy to invest in a top of the line blender.
Basically, I wanted a blender that wouldn’t fall apart within 12 months…
I had heard great things about the Vitamix brand and decided to give it a shot. The model I wanted was $800+ but the white colour was on sale which is how I got a discount. It came with the machine, a blending jug, tamper, two extra blending cups and a really nice cook book.
Wow, did the Vitamix deliver! I have abused this poor thing the last five years and it has not acted up even once. I use it for a range of things such as making smoothies, cocktails, batters, sauces and soups. When I run out of breadcrumbs, I’ll throw in a slice of bread in the blender to make a fresh batch. I don’t think I’ve ever bought a smoothie out since my purchase, knowing I can make an awesome one at home.
Was it worth it?
Yes! I use it multiple times a week and it has helped tremendously with cooking and making drinks.
Even after five years, it is still running very well and I’ve heard that they can last for up to thirty years! That sounds a little crazy, but I’ll keep you updated on how mine goes, I would love for it to last as long as possible.
Whoa, whoa – buying jewellery that belonged to criminals?! Yes!
I didn’t even know this was a thing until I came across First state auctions through a sponsored Facebook post. The website mentions that they are “selected as auctioneers to various Commonwealth of Australia government agencies in the sale of seized, recovered and unclaimed jewellery.“
I browsed through the catalogue and my first thought were:
Not only were the pieces beautiful, but had rare items such as Argyle pink diamonds. I was salivating while browsing the catalogue. The other aspect I noticed were the very reasonable prices. I usually purchase my fine jewellery second-hand, but these prices were even cheaper than that. They were significantly less than what you would pay at a retail jeweller.
I know what you’re thinking “Is this even legit?”. Well, I decided to buy something and try it out so I’ll waste my money instead of yours.
I decided to sign up and place some bids. After being outbid very quickly, I managed to actually secure a piece! I bought this beautiful 1.05ct ruby, diamond and 14k yellow gold necklace for $475. With the 20% buyer’s premium, I paid a total of $570 which included registered shipping. This necklace was new and not pre-owned which was awesome for that price.
Winning the auction was such a thrill. Is winning auctions addictive? I could totally get on it. Moving on, the process post-purchase was excellent. I was immediately emailed a confirmation of purchase and my invoice. Later, a staff member reached out to confirm my address. After that, it was shipped out within a day or so by registered mail and I was provided a tracking number. Their efficiency was awesome and made me feel very confident about my purchase.
I received my package within 4 days of purchase and here is my beautiful new ruby, diamond and gold necklace! What do you guys think is the story behind this necklace? I wonder who it belonged to.
Would I do it again?
Yes! Not only do you get a great deal on beautiful fine jewellery, but it’s such a fun experience. I really enjoyed the process of browsing, bidding and of course the feeling of winning the auction. As someone with a regular income, I’ll have to save for months before I make another purchase but I am certainly going to browse regularly!
If I told my younger self that I still didn’t own a property, she’d probably freak out.
For the longest time, buying property was my number one goal. I educated myself on the nitty gritty and knew exactly what I wanted, with the means to do it. However, after a failed attempt I reassessed and realised that buying property was not a good financial decision for me, right now.
I live in Melbourne.
I think we can end the article here.
Just kidding! But, this is very much the case. Property prices in Melbourne are insane. A property that I could afford comfortably would be either a small apartment or a house at least 45 minutes away from the CBD. By “comfortably” I mean being able to afford a deposit which is at least 20% of the house price and monthly payments that are not more than 30% of my pay (after tax). This is very important to me.
For most of us, a house is the most expensive thing we will ever buy. It also is a commitment that spans decades. For such a large purchase, I don’t want to compromise and make a purchase that I am not 100% happy with just to have a property now.
I don’t want to be tied down…yet!
As a 20-something, I am kinda scared of responsibility.
A commitment that I need to honour for the next 30 years is a pretty big deal! It’s especially hard making that decision when I don’t know where I’ll be in the next 5, 10 years. What if I get a great job in a different country? What if I want to take time off work and travel the world? Can’t quite do that with mortgage repayments.
Investing in the stock market on the other hand provides me similar returns, but completely responsibility-free. Another major plus is I can sell my stocks at anytime and get my money in cash in a few days. It’s certainly a bit more of a process when selling a house.
I’m waiting to get 50% off
Okay, hear me out. I love the idea of being a strong, independent woman who bought real estate on her own in her 20s.
However, it makes much more financial sense to purchase a home with a partner. Not only do you instantly get 50% off your purchase but there is a backup income stream to pay the mortgage if you lose your job. You can purchase a better property in a nicer area and have less anxiety about shouldering all the responsibility of owning a home.
For these reasons I have decided to wait to purchase my first property, even though I have the financial means to do it now. This way I’ll be able to buy a property in an area that I love, won’t be burdened with paying a mortgage solo and will overall know what I want in life.
My electricity, wifi, water and mobile bill as well as my car insurance and Spotify are paid without me working.
How? The short answer is passive income.
Okay, so I do work full-time because I still need to pay rent, buy $25 cocktails and contribute to my investment portfolio. However, as a lazy 20-something girl – I love passive income. Earning money while doing nothing is the best.
How do I make my passive income? Is this a scam or MLM?
It’s a shame that the term “passive income” is being used by MLMs and weird scams which can put people off actual passive income! For me personally, I made my money primarily off dividends from my stock market investment portfolio. I also make some bank interest which is where I store my 12 month emergency fund.
I know what you’re thinking.
“Money Marketer. You’ve been investing for the last 5 years. Shouldn’t you have a bigger passive income stream?”
Yes, yes I should. As a long-term investor, I primarily focus on growth. This means I purchase investments that are likely to gain value in the future rather than ones that will pay me a larger dividend. I do this so I can make more money. Many of my individual stocks and commodities do not even pay a dividend. If I focused on high-dividend stocks, I could potentially double my passive income stream which is something I would like to do when I’m a bit older.
“Money Marketer. Is a couple of thousand extra a year really worth it?”
It’s easy to dismiss the power of passive income. You can instantly earn an extra $10,000 a year with a promotion at work so does an extra $2,000 or $5,000 really matter? Yes, and I’m about to show you why!
I remember when I first started making passive income as a student, I would make $14/month in bank interest. Excited, I shared this with my friend who said “Does an extra $14 month matter? That’s not even $200 a year”. That is, until I mentioned that my bank interest was essentially buying me 3 bubble teas a month. It made my little baby passive income stream seem so much more powerful!
Rather than seeing dividends/interest as $X amount per year, assign them to a bill.
This means my passive income from this year will “pay” for my:
Mobile phone bill
I can cover all of these expenses without working, how awesome is that?! My lazy self would love for my passive income to pay for all my expenses with some spending money leftover. I wouldn’t have to work at all, haha! Hope my boss isn’t reading this.
Don’t dismiss the value of a small passive income stream as it can be incredibly powerful – if you just view it differently.
I’ve had a few different guests to share their advice on this blog and I have a special one for you today – my parents.
Migrating twice to completely new countries with zero help, they have a unique financial outlook and perspective which I would like to share with you today.
First up, my dad.
A high-risk, high-reward entrepreneur, he has a very different financial outlook to myself. Preferring real estate to the stock market, he is also very pro-debt such as taking out mortgages to buy real estate or business loans.
Here’s what he said!
“Monitor your spending. Determine what you want vs. what you need.”
I remember when I was a teen with my first salary and if I wanted something he would ask me “Do you need it or do you want it?”. That might be a good question to ask yourself to help stick to your budget.
“Earn commission not allowances”
I wasn’t sure what he meant by this one so I clarified. He means try to get a commission-based role that can give you unlimited earning potential (e.g. sales) if you put in extra work vs. relying on the income you get.
“Remember that it is natural for money to a burn a hole in your pocket so make sure you save and have a spending budget”
“Communication in your family plays an important role in managing money well. Have honest money conversations with your partner – it can help avoid conflict about money. Involve your children in planning and budgeting, it can make it easier to achieve savings together.”
Next up, my mum.
My mother has always been more conservative with money and prefers less risk. I asked her what advice would be to a young couple just starting their money journey.
“I think savings for the future should be compulsory and buy what you need only. Don’t spend more than what is in your budget. Think twice before spending.”
And, there you have it! Be frugal, only buy what you need and stick to a budget!
Note: I discuss weight loss and calorie counting so if these topics can be triggering to you, please avoid this article! Everything mentioned is also based on my personal experience and not a substitute for proper nutrition/fitness advice!
Okay, I did cheat and bought a $13 food scale to help me measure my portions – other than that, all free!
Some numbers and a bit about me
I was 5.6kg (12 lbs) overweight at the start of my journey. Of course, I got a gym membership right away, costing me $80/month. After 8 months of hard work at the gym and eating healthier options – I weighed exactly the same. I was really frustrated as on top of my gym membership, I paid for personal training sessions and was buying expensive health foods.
I knew I had to try a different strategy.
And, it worked! I managed to lose 10kg in 5 months without spending any money.
1. Get a free calorie tracking app
One of the biggest mistakes I made previously was not counting my calories – it is one of the most powerful tools that can help you drop weight. The best part is that counting calories is free. While a phone app is really helpful, you can also use pen and paper. The internet is an incredible resource that can help you get started.
I love, LOVE food. Therefore, rather than eating the least calories possible, I always focus on eating the most possible calories that you can which will still allow you to lose weight. I am really careful about reducing my calories and won’t eat less unless I absolutely have to. For example, if I can lose weight eating 1,600 calories then I will refuse to eat 1,200 just to lose weight faster. My food is very important to me!
2. Exercise daily (even if it’s a small walk)
The incredible thing about exercise that is that while it provides you many benefits, it is also free.
I hate strenuous activity, I don’t get endorphins I just get uncomfortable and frustrated. Instead, my goal is to exercise for at least 30 mins daily which is usually low-intensity such as post-dinner walks around my area. I also use free YouTube videos for yoga and pilates to do at home.
While a gym membership or a fitness class can be a great investment in your health, you don’t have to if you’re on a budget. Plus, it’s easier to stay motivated to exercise when you know your $55 per session PT isn’t going to pressure you to lift heavy weights. It’s also a lot cheaper. Ugh, the PTSD.
3. Stop eating snacks!
This tip is a great one because not only is it free, it also helps you save money!
Confession time, I used to be a serial snacker.
I’d sit at my desk at work and eat snacks non-stop. I didn’t think this was so bad at the time because I’d be eating healthy options such as an apple, tub of yogurt or a handful of nuts. However, I was simply eating too much. Some days, my calories in snacks would be more than entire meals!
Just by cutting out snacks, I reduced my calorie intake significantly but also saves money grocery shopping! It’s also nice to not be thinking about food constantly. Now, I eat two meals a day and don’t think about food until my next meal.
While there’s nothing wrong with treating yourself and making lifestyle upgrades, it can be a fine balance between reasonable and a lifestyle that you cannot afford.
So, how do you actually know if you are living beyond your means?
What a lot of people do is compare themselves to others, especially those similar in age. However, this is not a great strategy as everyone is in different stages of life. We have all had different experiences, privilege etc. and comparing your financial situation to someone else can just lead to feelings of disappointment and insecurity.
Here’s how you can find out, instead.
1. You are not prepared for financial emergencies
If you were slapped with a $2,000 emergency that needed to be paid ASAP, how would you deal with this? Could you pay it off in cash or would you have to stick it on a credit card?
If you don’t, it’s likely that you haven’t prioritised creating an emergency fund. An emergency fund is a pool of money set aside to cover any unexpected financial costs that you may encounter. This is one of the most powerful financial tools that you can create for yourself – having one can ensure that you are putting your financial future first.
If you’re not making a large income or have high expenses, it can be very challenging to save even a small amount of money.
However, it could also mean that you are simply spending more than you can afford. For example, you may believe that your $100/month gym membership is a necessary cost. If you are unable to save any money at all at the end of month, it is likely that you cannot actually afford that membership and are living beyond your means.
Remember – just because you physically have the money doesn’t mean you can necessarily afford something.
3. You have to go into debt to pay for large purchases
Have you ever put costs for a holiday on your credit card because you didn’t have money at that time? Or, had to borrow money from family to buy a designer bag?
If you have to go into debt for a large purchase that you don’t need, it is likely that you are living beyond your means and that you can’t actually afford it.
Of course, this doesn’t apply to debt such as house mortgages or even car loans but rather discretionary expenses that are not a necessity. It’s a matter of asking yourself “Can I really live without this purchase? Is it truly worth getting into debt over?”
At the end of the day, no matter how much money you make – if you are overspending, you cannot build wealth. Similarly, just because you make a low or average income (like myself!) doesn’t mean you just give up and spend all your money.
Your money habits can be a much more powerful thing than your income itself.
As a finance blogger, I frequently get the above questions. To be honest, it’s pretty boring! I purchase Vanguard Diversified High Growth Index ETF shares every months, or VDHG for short.
By percentage, it is the largest holding in my portfolio as I think the breakdown of the fund is suitable to my personal finance goals. It has a great mix of Australian, international and emerging market shares but is unique in that it also has a small percentage of bonds.
Wait, you’re not 100% in shares?!
Yup. I’m not. It seems unpopular for someone in their early 20s like myself to hold bonds, however I think a small percentage for diversification purposes can be beneficial. As I don’t own any real estate, my net worth is primarily tied up in shares. As this portfolio grows bigger, I like having a small percentage of bonds in there to act as a defensive asset.
This is just the investment that suits my personal goals and is certainly not a financial recommendation or what will work for you, also. However, if you are interested in index and ETF investing, I would suggest checking out Vanguard and their associated investment products and choose one that aligns with your goals.