The idea of personal finance is many things to many people. It doesn’t always mean good things either. It screams of penny-pinching and not of having fun. I’m sure it doesn’t need to be like that, well I hope it isn’t. I’m about to begin paying a lot more attention to it and sharing what I find.
I will introduce more of myself as we progress but for a start, I’m a mechanical engineer in my mid (ahem… late) twenties and I’ve been working for a few years. I’ve got a student loan, don’t own a house. I’ve got a small amount of savings and just signed up to Kiwisaver.
Like lots of things, it seems setting yourself some goals is a key part of being successful. You’re less likely to arrive at your destination if you don’t know where you’re going. The first goal for lots of people is getting out of debt. It’s easy to know why and easy to measure when you’ve achieved it. After that, the goals become less clearly defined. Buying a home, saving for an OE or a flash new car are all typical goals but what are our other options? How do we assess ‘good’ goals against ‘bad goals’?
It’s important to set rules (or guidelines) for yourself, not take them from someone else. Lots of personal finance writing I’ve read uses the daily coffee as an example about small spending adding up. The idea is if I stopped buying a coffee before work, I’d save a thousand dollars a year. Except, I really enjoy that coffee so I don’t want to give it up. I’d rather spend the money on coffee and save it elsewhere.
The next blog will establish our golden rule and from this rule we can make personal rules to suit. The golden rule won’t be a revelation for anyone, it’s just common sense.
However, the most important aspect of all this is actually doing it. Action beats inaction every time. So I’m going to put myself right into the thick of it as well. I will set my own goals & make my own rules which I’ll share. I’m happy to discuss my particular personal finance shortcomings for your amusement and potential ridicule.
Personal finance is a journey made up of small steps and in this journey, it really is the little things that matter. Together, we can look at these things – goals, rules, tips, tricks and tools to find some things that work for each of us.