Sunday, 4 December 2016

I blew the budget...again

Blowing all my money on cocktails on Friday. Illustration by Megan Hess.

I am so so sick of living paycheque to paycheque, yet I still manage to blow the budget every single month. I'm becoming more conscious about my financial health, realising that I don't have anywhere near 3 - 6 months cash as an 'emergency fund' to cover my living expenses in the event where I'm out of a job. 

Despite my frugal efforts across two cheap and very satisfying weekends, I've done a 180 and blown the budget this weekend - almost all on alcohol or alcohol-related activities. 

  • Work sample sale: $34
  • Lunch: $15
  • After work drinks: ~$60?
  • Dinner: $71 at Chiswick Restaurant for $44 dinner, $13 glass of wine and $14 glass of prosecco
  • Drinks: ~$50 drinks at Mrs Sippy and ~$20 drinks at Golden Sheaf
  • Taxis: $30 to and from dinner 
  • Brunch: $50 for Mr. Piggybanks and myself
  • Fish and Chips lunch: $20 for Mr. Piggybanks and myself
Total weekend expenses: $350

I work in the buying office for a large retailer and we have a seasonal (every 6 months) sample sale for any products that aren't returned to the vendor. This includes products from all departments; from kitchenware to shoes and accessories. Everything is sold well below cost prices, e.g. brand new leather jackets sell for $30, designer knife sets that retail for $900 sell for $5. It's a crazy flash sale however - I was in the office at 5:55am to line up for the sale - the first person in line arrived at 4:20am. 

I withdrew $400 cash thinking I was going on a spending spree and left spending only $34 on goods, all of which I'm very happy with and were things I needed or had been wanting for a long time, bought at a huge discount. On that note: all samples which were not sold, were donated to the Salvation Army. If you want cheap designer goods, head to charity shops!

My sample sale loot:
  1. Black weekend duffle bag with brown leather finishings: $10 (well made - super happy with this)
  2. 2x womens cufflinks: $4 (good for my next corporate job)
  3. Plush beach towel: $7 (my only beach towel!)
  4. Silk embroidered top: $5 (unfortunately poor quality and dye ran in the wash)
  5. Coffee plunger: $8 (Christmas gift for sister)
Total: $34

The big budget blowout started Friday night at after work drinks for a farewell of a staff member. Unfortunately work doesn't provide drinks for any occasion (this includes even Christmas parties) so often farewell drinks are at the local bar nearby. Having so much cash on me from the sample sale, I didn't take track of any purchases or ask for receipts as a reminder of where my money has gone (as I habitually do with my card purchases). Rookie move!

Woke up Saturday morning feeling like death and suffering from the worst hangover. Slept until 2:00pm. Saturday night was a farewell dinner and drinks at Chiswick in Woollahra. The food was amazing and delicious (total for food was $44 for numerous plates shared between 6 people) followed with wine and prosecco. Drinks followed at Mrs. Sippy and then to the Golden Sheaf. All in all, it was a great night, but as expected, expensive. 

Woke up on Sunday with no hangover. I had brunch with Mr. Piggybanks and a friend at our favourite cafe, followed by an afternoon of sunbathing by the pool with friends and fish and chips for a late lunch. 

The big realisation

Most of my entertainment expenses are from alcohol or alcohol-related entertainment activities. Would it be worth cutting out alcohol for a month to see whether my finances (and added bonus of health) improves?

Monday, 28 November 2016

Luxury is an experience, not an expense

The message that luxury is a frivolous and excessive expense is a tale that many frugal bloggers preach to FI followers. The old frugal folklore that luxury is the evil child of consumerism and the fodder to greed reins supreme in FI territory. There are articles upon articles telling readers to focus on the importance of cutting down on excessive lifestyle expenses in order to maximise their savings ratio and reach FI in record timing.

To put it simply, this message sets one up for FI failure.

For me, frugality is as much about minimalism and seeking quality not quantity as it is about saving money. It is about simplifying your life and focusing on goal-driven actions which are carried out with intent. Both go hand in hand and complement each other in spirit and aim.

Being frugal should not feel like punishment; the more frugality feels punitive the less likely you will adopt those frugal habits willingly and will not adopt frugality as part of your lifestyle. Frugality must be part of a greater goal which drives you towards your goal of FI.

This is the reason I will never give up my luxurious habits. I love good quality clothes and enjoying a glass of wine here and there. I can still enjoy these luxuries while being frugal - I focus on substitution instead of deprivation, that is, changing the method by which they are enjoyed. Instead of going out to bars or brunch, I now enjoy a glass of wine or cook at home. If I want good quality clothes, I now thift-shop in areas where I know designer pieces are donated, sometimes with the tag still attached.

Finding the core reason behind your purchasing behaviour is the centre of changing your lifestyle. It is about questioning the habit-loops which may have be ingrained for years and questioning why do something out of habit.

For example, think about how often you buy take-away coffee. I thought about what my actions and feelings were every time I bought a cup of coffee and realised my habit of buying a coffee had nothing to do with coffee itself! Usually I would buy coffee to escape the office, have a quick chat and walk with a colleague, de-stress from work or to have a warm drink on the brisk morning walk to work. Now I make coffee at home in a re-usable take-away mug or chat to a colleague in the office kitchen instead of head out. Same trigger, same reward, different habit.

Do you agree? I would love to hear your opinion in the comment box below.

Saturday, 26 November 2016

My relaxing, frugal Saturday

Illustration by Megan Hess

Mr. Piggybanks flew away to Bali for a week-long bucks party, so I was left to my own devices - a solo girl's pamper day!

This is my second weekend watching my costs. The best thing about focusing on activities that are more value-adding and less costly is that I'm making plans and taking actions with intent. I'm not going out as much, don't feel obliged to go out when I'd rather stay at home and feeling much happier as a result.


Today began with brunch with a visiting friend at my favourite cafe, tucking into simple but delicious toast with a lot French salted butter and berry jam and two lattes to get me ready for the day. This set me back $30 as I covered breakfast for both myself and my friend.

After, I organised for my most comfortable walking shoes to be repaired after puncturing a hole in the top of my shoe with my toes. I bought these from Muji a year ago and they've survived some hard wear over the past year, but weren't damaged enough to be thrown out. The cost for the hole to be repaired with leather was $24 but I asked for a discount and paid $20. That's $0.05 a day for the extra year of wear.

While waiting for my shoes to be repaired I treated myself to a Vogue magazine which came with a cute free tee with a Victor & Rolf sketch on it. This was a lucky find as I've been looking to buy some basic tees for summer. Also found some gorgeous Megan Hess illustrated card sets at the news agency and paid $3 for 24 cards which I can use for Christmas! Spent $10 on a Vogue magazine (with free tee) and $3 Christmas cards, but saved $30 by not buying a tee from Zara.

I spent the day sunbathing by the pool, reading my Vogue and swimming, which was so relaxing. I can't emphasise how nice it to have the luxury to relax in my own home (or apartment building), enjoy a sparkling water from home while pouring over the glamorous and glossy Vogue pages, and swim and sunbathe under the sun. Spent $0, satisfaction 100%.

Afterwards I cleaned the house as I'm having a couple of friend's over tomorrow for drinks instead of going out and then watched TV. Ate left over pizza and bacon-wrapped asparagus with ingredients already in the fridge. Spent $0.

Watched some Youtube videos on FI and minimalism and cleared out 11 items from my wardrobe. Every season I donate or sell unused clothes or accessories from my wardrobe with the aim of decluttering and consolidating my wardrobe to simple, high quality pieces. Today I donated 3 items (2 sunglasses, 1 pair of shoes) and posted 9 items on ebay (2 items has just sold!). Spent $0, earned $60.

Overall, spent $30 (brunch) + $20 (shoe repair) + $13 (Vogue mag and cards), but earned $60. Profit: $7 for the day. So happy with this!

I would love to hear what you do on the weekends which are fun, value-adding with the added bonus of also being frugal. Please write your recommendations below!

xx Miss Piggy

Shrinking my entertainment expenses by 70%

After discovering a $9300 budget blowout in this year alone, I've made great progress this week!

Last weekend I prepared all my food in bulk (total cost was about $200) which made about 3 weeks of lunches and dinner including other fresh groceries.

  • Laksa soup (4 servings)
  • Chicken and Leek Mini Pies (6 servings at 4 pies per serve)
  • Lentil Soup (6 servings)
  • Beef mince pasta sauce (4 servings)
  • Nacho beef mince sauce for nachos (3 servings)
  • Roast pumpkin, chickpea, pine nut, danish feta and spinach salad (3 servings)

I still have a lot of food left over so the $200 bulk grocery shopping has gone a long way!

As I already pre-packaged and frozen all my meals, it was so easy in the morning to quickly grab my lunch from the freezer and go straight to work, without worrying about running late or buying lunch out. This week I took my lunch to work every single day and ate my own pre-made food for dinner almost every day - a big achievement for me and has saved me an incredible amount of money.

This week's entertainment expenses: Total $38.35 (last week was $137)

  • Thursday dinner: McDonald's burger $8.35
  • Saturday morning: Brunch with a friend $30 (paid for both of us)
I've discovered that it's really easy to cut back on the wining and dining costs (entertainment costs), it just takes a few hours and a bit of effort to prepare meals on the weekend for the following week. By keeping focused on the convenience and the savings I've made through meal-prep, I'm going to keep this practise up so it becomes an ingrained habit. Every dollar I save and invest is a step closer to FI!

Sunday meal-prep here I come!

xx Miss Piggy 

Sunday, 20 November 2016

My $9,300 Cocktail Fund: Keeping up with the girls

Illustration by Megan Hess
For a couple of years I've been using the personal budgeting app called Pocketbook which links to my bank account and categorises all my transactions. I absolutely love it. It's become a habit to categorise everything I spend in the app and take photos of receipts, even if I don't watch and cut down on what I'm spending.

To say the least, my discretionary spending on eating out in restaurants and drinking cocktails and wine in bars has become CRAZY over the past year alone:

November (This month): $430 already!
October: $730
September: $788
August: $1,115
July: $900
June: $1,250
May: $1,088
April: $822
March: $910
February: $520
January: $795

Note: The above costs exclude grocery costs, clothing and beauty purchases, gifts, travel and actual bills. 

This year alone that is a MASSIVE $9,348 on cocktails, bottles of prosecco and wine, entrees, dinner, brunch and lunch. In under 6 months I've spent $5,213 eating and drinking through my hard-earned fashion salary. Did I mention that I clicked to see dining out & drink expenses from the beginning of my app use and saw I spent $25,000 on wining and dining since Feb 2013?!!

OMG. I could have had a nice investment portfolio by now. Talk about living beyond my means. 

To cut down on my 'cocktail fund', I am going to:

  • Say 'no' to expensive dinners out with friends
  • Eat before going out and buy smaller meals
  • Entertain friends at home instead of at bars
  • Pack lunch for work everyday instead of buying take-away food. If I forget my lunch then I'll buy food at the supermarket in the CBD. 
  • Go to my gym class on Friday evenings instead of going out for drinks at bars

This weekend there was some improvement:

  • Friday night: Went to the gym after work instead of going out for Friday drinks. Ate dinner at home. Spent $0. Saved $60.
  • Saturday morning: Had brunch with a friend at The Cornerstone Bar, Carriageworks. Spent $22 on food and coffee. 
  • Saturday day: Spent the day at the communal pool in my apartment building, brought sparkling water and snacks from the home. Read a book. Spent $0. Saved $20 on public pool entrance fee and cafe food.
  • Saturday night: Went out for dinner with the boyfriend (let's call him Mr. Piggybanks) and his friend for dinner at Mary's burgers. I had a late lunch so spent $13 on a cider and basket of fries and $17 on a taxi home for 3 people. Spent $30. Saved $40 (on dinner, bottles of wine).
  • Sunday morning: Went out with Mr. Piggybanks and his friend for breakfast. Mr. Piggybanks paid for this round (we take turns). Spent $0. Saved $55. 
  • Sunday day: Spent the day sunbathing and reading again. Brought snacks from the apartment. Spent $0. 
  • Sunday dinner: Bought fish and chips dinner for Mr. Piggybanks and myself. Spent $24.
  • Total weekend spend: $76
  • Total weekend savings: $175 (This is going towards my $1000 project fund)

Given that I didn't go out with the girls this weekend, I've saved a LOT of money simply by staying at home and going out minimally. However, I can cut down even more! The challenge is how to go out and socialise without being sucked into spending like my spendthrift girlfriends! 

I'd love to hear what you think! What ways do you socialise and spend the weekend without blowing the budget?

xx Miss Piggy

The $1000 Project: Investing my first $1000!

Illustration by Megan Hess
Happy Sunday readers!

Finally after having no money following a big splurge on entertaining visiting friends, moving apartments, paying bond, buying flights back home for Christmas and general socialising, this month I'm being smarter with my money and getting more bang for buck.

My first $1000 was earned from putting aside a big chunk of my monthly salary into my new Commsec account following payday last Friday.

I've never known how to invest in shares (a Bachelor degree in Commerce taught me nothing) and given that there is so much good and bad information and advice on how to invest and numerous bait-like get-rich-quick schemes, I've turned to my trusted FI bloggers for advice.

With my little investing experience and a lot of reading into FI blogs, I've decided to invest in the Vanguard Australian Shares Index Exchange Traded Fund (EFT), or VAS for short, which is a low-cost managed fund, indexed on the ASX S&P 300. I heard about Vanguard initially through reading the classic FI blog 'Mr Money Mustache'.

So how does the VAS index fund work? 
Instead of investing in one specific company which is individually affected by internal risks and external risks (such as the economy, international and local politics, tax and law), you can invest in a slice of (almost) the entire market. VAS is indexed on the biggest 300 companies listed on the Australian Stock Exchange across numerous industries from finance, real estate, retail and technology. Investing in the ASX300 means that you instantly have a diversified share portfolio, buffered from the risks of investing in one industry or company. While you may not reap the benefits of picking the next Facebook or Google and making multiples from a skyrocketing share price, the benefits of individually picking stocks which increase in value is shortly outweighed by price fluctuations in that stock itself or losses from other individual stocks.

Statistically speaking, if seasoned Wall Street investors who spend 100+ hours a week trading rarely beat the market, why not invest in the market itself?

Another reason why I'm investing in VAS instead of other funds is due to the exorbitant fees financial advisors and managed funds charge. Instead of paying a financial advisor large fees to be sold sub-substandard investment products for which they receive a big commission, with Vanguard you pay a tiny management fee to invest in the market as a whole. Fees for VAS are 0.14%, so if you invest $1000, then the annual management fee is $1.40, much less than a coffee!

I would love to hear any ideas you have to build passive income in the comments below :)

xx Miss Piggy

Tuesday, 15 November 2016

The $1000 Project

Inspired by FI blogger, SugarMamma, I've been inspired to try out her idea of a $1000 project as my first step towards FI.

I came across SugarMamma while youtubing FI videos and by luck one of her videos popped up in my youtube recommended feed. I particularly like it as her style and lifestyle is more relatable than other FI coupon-cutting frugallers; she's clearly loves designer and minimalism (tick tick tick in my books), simplifies ways to save money to invest and also is Sydney-based like Miss Piggy here. I've never met or talked with Canna Campbell (the blogger behind SugarMamma) but hopefully one day will be able to sit down and chat over coffee or a cocktail and talk FI!

So, what is the $1000 project?

The $1000 project focuses on using savings to build passive income, that is, money from non-active long-term investing in assets which will generate an income. Investments that you don't need to actively monitor day in, day out and instead leave alone to make you money.

Any money that I pull together from savings, cutting down on lifestyle expenses or additional income streams I will put aside in a separate investment account. Once I've reached $1000, I'll invest this into shares, real estate, bonds or any other asset classes which will generate me a passive income.

I am going to take this further by focusing on value investing instead of speculation. I'm still learning about the distinction between the two but, using shares as an example, value investing is long-term investing in companies which have sound and stable business operations and are priced in the market lower than their intrinsic value (figuring out the latter is going to be a learning curve for me). The opposite to value investing is speculation i.e. risky gambling in the short term that a stock or asset will increase in value. I'm reading a classic finance book called 'The Intelligent Investor' by Benjamin Graham at the moment which is all about value investing so this is giving me some good ideas how to become a guru in investing.

Keep posted for how I saved my first $1000 and how I'm going to invest it!

xx Miss Piggy

From Fashion to Financial Independence: A little bit about Miss Piggy

Miss Piggy (me) is a mid-20-something year old who has just started the path to financial independence.

After plugging away as a corporate guinea pig in one giant fashion guinea pig wheel, I have a new found determination to work my way towards financial independence after recently discovering the Mad FIentist podcast interviewing Mr Money Moustache - both who reached FI early and retired at the age of 30. As a complete n00b in how to achieve FI, I felt I struck gold listening to the interviews and the wealth of experience they had. 

I've always been entrepreneurial, money-minded and (in the lead up to payday) more frugal than a Jew, however in the past three of years following graduation I found myself leading a high-consumption lifestyle, working pay-check to pay-check and working stable jobs which pay the living costs of adulting while increasingly becoming more distanced from my dreams. As my living costs increased, my entrepreneurial spirit and risk tolerance decreased, because you know, those ridiculous Sydney rents.

This personal blog is not focusing on how to get rich (though hopefully this will be a positive side effect). This is a blog that's going to catalogue my journey towards having the financial freedom to have the choice to do what I want, when I want. 

Why do I want FI? Pretty simple. I want to:
  • Have enough F.U.* money to not have to chain myself to a job I don't particularly like in order to pay the bills
  • Be able to travel around the world on extended trips (3+ months) without worrying about how I will afford it or having to get approval to take more than 1 week of annual leave
  • Focus all my time and energy on doing things that I love and value. I don't want to spend years doing work I don't love to get to do the level to do work I might like. 

How am I going to do this? I've pin-pointed three ways I am going to work towards to achieve FI, from least to most difficult:
  • Minimise expenses
  • Invest with a focus on passive income
  • Build income from a side business

What is my time frame? I'm aiming for:
  • $1 million dollars by the year 2025.
Using a 4% withdrawal rate, this would give me a total yearly living allowance of $40,000. Not glitzy but pretty comfortable. Nine years to go... the countdown begins!

I would love to hear from you - are pursing FI? How are you doing it?

xx Miss Piggy

*F.U. Money is having enough money to literally say bugger off to a job, boss, working the 9-5, status quo etc and having the financial freedom to make your own choices without turning into a financial hobo (or just a hobo in that instance).