Smart financial decisions I have made.

I'm a long way from being a finance guru, but my frugalness means I keep an ear out. The Barefoot Investor and Alan Kohler are handy people to pay attention to. They speak plainly. So here are three things I've actually done as per general advice/advertising. Each one involved filling out a form.

Starting a First Home Saver Account. I ummed and ahhed for a year or two when they first started. I disliked the idea of being locked in for 4 years and then if I can never afford property the money is locked up forever. But they loosened the restrictions a bit, and I decided I'd wasted 2 years and could have been halfway through the time already so I might as well stop faffing around. So what if I never buy and it only ends up in my super, the return is still great. If you save $6000 in one financial year, the governments adds $1020. That is a LOT of free money. One year I forgot to put the whole amount in and I am still grumpy about it. So even if you don't think you're in the "first home buyer" category, I say take the plunge before the end of June. No term deposit will give you over 17%.

http://en.wikipedia.org/wiki/First_home_saver_account

Opening an ING Everyday account for the 5% cash back on paywaves. 5% doesn't look like much, dribbling in a couple of dollars at a time, but when the 6 months is up, I will count up what my 5% savings adds up to.

https://www.campaigns.ingdirect.com.au/everyday-banking?cid=dpy:Fairfax%20Digital%20AU:DRx:AU_INGD_OE_Q3_2013:7336405:9502877#!/CashbackSavings

Thirdly, I switched my super into a high-risk high-growth investment. Because that's what you are supposed to do when you are under 35, and as you get older it shifts into progressively safer investments. No short-term benefits there but it's the proper thing to do. Although in a few years I think it will be the default anyway.

The Buffer.

Elsie and I were talking about flat-breaking, which is where your flat is sold or your flatmate(s) moves out or you have some kind of BIG uncertainty about where you will live and what you should do and how much your rent will be and specifically, how long to pay the rent on a 2 bedroom unit while you try and find a flatmate. We've both been very lucky and never had to pay the whole rent on a unit in a flatmate gap. And the idea is quite frightening, paying 2 or 3 times your rent for an unknown number of weeks. I mean, my rent is not far off 1/3 of my income already. What a horrifying thought. Anyway, Elsie said "I actually shouldn't stress about spending my buffer, because that's what it's for." Mind Blown. I'm the kind of person who saves a buffer, which is to prevent stress at times of financial uncertainty. But then if I stress about spending the buffer, that defeats the purpose of the buffer. It's there so you don't have to worry. You've got the money, it's for a rainy day, it is actually raining right now, so don't worry about whether you should stay wet or spend it! Focus your worrying on other things, haha.

Bank accounts.

So I'm going to be supremely boring and talk about banking. Actually, money is one of my favourite topics, I'm just shy.

Due to my own triplicate stupidity* earlier this year I went a week without any access to my money and then another 3 weeks without a PIN for cash withdrawals. That was a really inconvenient month. I cancel my card about every 18 months and during that time I'm always kicking myself for only having one accessible bank account, because when that's unaccessible I'm totally stuck. And then I forget about it. I just hate having more than 3 cards in my wallet—ID, Visa, medicare.

Last week one of the Spotify ads for ING finally sunk in. You get 5% back on all paywave transactions <$100 for 6 months. I use paywave! I love it. So it sounds like easy money to me. That's finally the incentive I needed to open another bank account.

I've also overcome my hatred of cards and signed up for Flybuys. This is a big ideological breakdown for me. Of all cards, loyalty cards like this annoy me the most. They track your spending and clog your wallet. But I'm going to try and make money out of it. We'll see.

Here is my new card. I opened the account on Friday and it came on Wednesday and I used it at the chemist today.

Look! I've cut the barcode off my temporary paper flybuys card and taped it to the back of my new card. So I don't have THAT piece of plastic in my wallet!

* (First stupid thing: I like to keep my wallet slim, and minimise the number of cards I have, so I only have one card to access money. Second stupid thing: I stuck my only card into an ATM one night and it didn't suck in, so instead of taking a step to the left and trying the other ATM, I kept pushing my card in, and then when it was all the way inside but nothing was happening on the screen I got my drivers license out and stuck that in the crack to give it an extra deep poke. That ATM broke. I had to cancel the card. And due to the first stupid thing I had zero access to my money. Third stupid thing, I then destroyed my new PIN before I memorised it accurately. That cost $10 for a replacement PIN and another new card.)

Frugal is as frugal does.

I'm somewhat famous for my frugal talents, delayed gratification challenges and jessenomics in general. I think, though, that this is not because I'm naturally very frugal. I don't like spending money on boring things, but who does? I do see money as worldly security, but, well, it's basically better to be secure than insecure, isn't it? And I live in the Eastern Suburbs, where my frugal looks like a real squeeze—but compared to the rest of the world I've got way too many clothes. I don't like getting blinded by the lifestyle around me.

But I also know that new clothes, music and concerts, nice food and craft things as making me happy happy happy!!! I can spend money alright. So the "frugal talents" stuff is what I have cultivated to balance things out. Really frugal people don't make a song and dance about it, they don't "Spend no money on clothes for 6 months" and then make up for it the next 6 months. They just dress like dags and cut their own hair and never go to the movies and eat homebrand cheese.

New month.

Looking at my spending record, March was a bad month. I blame the visit to the dentist, but that wasn't half of it. It was such a FUN month though! Oh well, April is a new month and I have only spent $4.80 so far.

Avoiding iTunes.

I like to buy music, but I like to make my money go further. So buying an album full price on iTunes is my last resort. Partly because I don't like the fixed prices when the exchange rate is so different, and partly because I don't like a monopoly and Apple is just a little bit too big for its boots. Here are some other resorts I investigate, before spending $16.99.

1. Direct from the artist. A quick google might turn up an artist or record label website where you can buy direct. If it is an artist from the US, you get the US price which is usually at least 30% cheaper, and the artist doesn't miss out on the cut iTunes takes. Even if they don't have a webstore, they might point you to their preferred retailer like bandcamp.com. Indi artists and labels seem more likely to sell direct or bypass iTunes. Big names not so much.

2. Check if JB hifi has the physical album for a good price. I wanted the Paul Kelly album Foggy Highway, it was $13 at JB which is a few dollars cheaper than iTunes, plus you get the album art.

3. Wait for an iTunes sale. I ended up getting Foggy Highway for $10 cos he released a new album so iTunes did special prices on the back catalogue.

4. Bigpond is slightly cheaper than iTunes. If it comes down to the principle of the matter, avoiding iTunes and saving money, it's a good option.

5. If I'm buying on iTunes, I only use iTunes cards which I buy on sale.

The downside of taxes.

Having to pay a tax bill is not much of a reward for doing my tax return. (When I say "doing my tax return", I mean my dad doing my tax return.) To me, the refund is the whole point of the exercise. It's fair payment for me keeping my receipts organised for a year. It's my main incentive. I deserve it. Filing is annoying. This year I have to pay for the privilege, unfortunately. I know, first world problem. At least I get to use my cheque book, which is a rare treat.

Budgeting.

If you have the ability to have apps, and want to track your spending, I know some of you do, I recommend Smart Budget. It's like a spreadsheet, but better looking. It has cute pictures, and you record things by the month, and can set up repeating things like salary and direct debit giving. That's about all I want to do. It's not instantly easy to use, it took me a while to discover most of the functions, but I've got it now.

It has a column which totals the general categories, like transport, entertainment, food, and then a tracking column for adding the individual things as you spend, like a travel10, a movie, a hot chocolate. When I put in a hot chocolate, it's under the "Restaurant, Cafe" category so at the end of the month I can see how much all my hot chocolates and Eat Streets add up to.

See the cute pictures? You can also change the font if you like. There are 4 fonts.

It's free to try and $3 to buy. I'm on the second month and haven't paid for it yet, but if I have to I will because it's worth $3.

UPDATE: you can draw your own little pictures! I decided to break chocolate out as a separate category from groceries, and I drew a square of chocolate.

Dental Value.

Back when I was getting my jaw splinted and x-rayed and quoted for orthodontics one of the biggest stresses was making decisions about money. Decisions are hard anyway, but I hate spending big amounts and there is no way to know if one treatment will be better than another. $8000 for this or $7000 for that? What do I know?! When I got the quote for the oral surgeon to remove 3 wisdom teeth for $1600, + more $ if I wanted a general anesthetic, I literally sat down and cried on the street behind Coles. Actually having the teeth pulled was less traumatic than the financial decision. Wisdom came much later, when I was reflecting on it to Elsie. Who didn't have the same struggle as I did, so it was one of those times when you preach to yourself via a listening friend.

"In the end, dentistry is one of those areas you can't ever be satisfied about the price, it is always expensive. You just have to be satisfied with some peace of mind about your dental work. You will forget about spending the money in 12 months time, but if something goes wrong you could be in for long term problems and more money as well, so don't worry about the money as long as you are comfortable about the dentistry."

Probably also applies to expenses relating to cars and tradesmen.

Jessenomics: Friendship Float

In general, we should not rely on others for money or favours. If you go out for dinner with friends, be prepared. Or order to your budget. If you get caught short, pay your friend back. Scabs aren't cool.

Same with housemates. Make sure everything is shared equally. Don't let small things build up til people resent you.

The only exception I make to this general rule is the Friendship Float. Sometimes friends come to a sort of understanding about such things. You cover their occasional small costs, and they cover yours, and you promise to shout them a coffee next time, and so on, and it all evens out.