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Story of A Girl: She’s Got Saving Skills

Posted: 07.15.2012

Written by a 10thousandgirl who wished to remain anonymous – thank you for sharing your financial story and how you’ve created a fantastic savings system!

I have notoriously been an average money-manager throughout my life.  Even before I started earning an income, I remember being 16 years old and given access to $10,000 that my parents had saved for me.  I blew that all on food, drinks, clothes and smokes.  In my early 20s, I tried to find some resources to help learn more about money.  Short of reading very technical books about investment and attending ‘wealth creation’ seminars, there wasn’t much out there that was straightforward and understandable to use.  I received an inheritance from Grandad when I was 23 and asked someone else to invest it for me.  I had no idea where to start and my investment strategy of getting someone else to do it never eventuated.

‘Phase 1′ of my financial (self) education came when I turned 25 and moved out of home with no concrete job.  I truly learnt the value of $1 because I knew I had to earn (and save) $150 each week to at least cover my rent.  To manage this, I set up two bank accounts with different banks – one of which any income would be paid into, and the other was linked to a card.

This system meant that I had to plan ahead if I wanted to withdraw money due to there being a 2 day clearance between external bank transfers.  I would withdraw $150 each week to cover my rent and I kept it in a sock in my drawer (I understand this isn’t ideal but it worked for me because I could physically see my rent).  Any money left over I spent on groceries, bills and a social life.  I didn’t have a regular income at the time and was only just covering my expenses.

Two years later I landed myself a stable job with a regular income.  I had nailed being able to cover my expenses and curbing impulse purchases but realised I had to step up and learn to save.  It was time to implement ‘phase 2′!

I realised that one of my two banks had quite a good netbanking system set up so I decided to move all operations across to that particular bank.  I kept my other bank account open in case I needed it.  I found out my bank didn’t charge me fees on my accounts so I opened six of them and labelled them:  Income, Spendings, Savings, Rent, Recurring Bills and Rainy Day.

I started budgeting by ‘preallocating’ money each fortnight to each of these accounts.  I figured out how much my bills cost each month and then saved half each fortnight.  For example, my phone bill is $99 per months, so I put aside $45 each pay into my Recurring Bills account.  My rent us $587 a month, so I put aside $290 each pay into my Rent account.  I have a whole system that covers major expenses, recurring expenses and money for a rainy day.

By doing this, not only does paying my bills feel more manageable, but it also means that what I do have left over, I can feel comfortable saving knowing that my main expenses are covered.

I was quite proud of myself when, with the help of the 10thousandgirl goal setting worksheet, I was able to save $5,000 in 5 months which was roughly a third of my income.

I expect that ‘phase 3′ of my financial education will be around managing loans and debts – as I have not yet had the experience of a credit card, car loan or mortgage!!

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