I’m in my late 20s. Closer to 30, really, and while getting older doesn’t bother me, my financial state, my feeling of a lack of adulting awareness and the feeling like I’m behind everyone else does bother me. Last week I woke up with this intense compulsion to get my life together and feel like a grown up. I can’t explain it, but it felt like the right time. It felt like I was in a place, emotionally and mentally, that required me to act like a grown up or fall in to a pit of wallowing and self loathing I may never crawl out of. So I chose the path of self education and took to it with a vengeance.
According to a report by Mebank, 1 in 2 Australians are spending every dollar of their paycheck and sometimes even more than that, and are having to dip in to their savings to make small purchases before the next pay day. THAT’S HALF OF THE POPULATION. Half the population of income earners are living paycheck to paycheck, regardless of which tax bracket they’re in. That’s insane. Less that $1000 in savings, dipping in to that to buy things or pay bills, and more than certainly getting further in to debt if they’re already in it by relying on credit cards.
I’ve been there. I got out of debt in October 2017 and it was the most liberating experience of my life. It still took a few months of acting like I was still in debt, but I’m no longer stressing about money. While I’m not necessarily living paycheck to paycheck, I live (mostly) frugally. I’m still tying to create a buffer/nest egg. I’m still trying to save money for a house, for a holiday, for an emergency. When I woke up on Tuesday with this insatiable need to get my shit together, a little research made me realise I was doing better than half the population of Australia. It was a relief, but it was a fricken hard slog to get to this point too. But I was also floored by the numbers. According to the numbers, most people never look at their super until it’s too late to do anything about it.
On Tuesday I looked at my superannuation. I’d never done that before. I began researching different investment options. I opened a no fees bank account (My bank still charges fees. How whacked out is that?!) I’m in the process of moving all my direct debit bills from my current bank to my new bank. I started looking in to how to buy a home so I’m not a nervous wreck or get blindsided when I finally have enough for a deposit (sensibly, at least 20%).
All of these things, Superannuation, budget, how to buy a house… NONE of it is taught in schools. We’re prepared to take exams, and if you’re lucky you’re taught how to study, but actual life skills? Forget it. Most people rely on accountants to do their tax. Most people have no idea how their Superannuation works, when it will be paid out or how it gets paid out. Buying a house is a guessing game that most people lose at. Unless you take a finance unit in university (which, by the way, is no longer free in Australia and the HECS system is just getting worse) There’s a solid chance you’ll never learn how to look after your money or how to invest in your future.
I feel like it’s a massive rant coming on, but that to me seems like a broken education system. We’re not taught how to survive in the real world, let alone build a future in it. Budgeting, bill paying, taxes and superannuation should all be taught in high school. from Year 8-10, minimum. Having spoken to my colleagues, most of them have no idea what their super does or why they should bother contributing to it. Most people don’t budget, and horrifyingly most of my female coworkers are happy to let their male partners take care of the finances. Those women that are single? They just don’t think about it. I’ll write another post later on why women should start to think about it.
For now, let my just say that I think finances, budgeting, even simply looking at your superannuation (or 401K for the Americans) is important. 1/2 of Australia has no buffer and is living paycheck to paycheck. 75% of Americans are in the same boat. That doesn’t seem right, does it?
Until next time, stay silly (but not with your money) xx