20-something Erin would hide her mail and pretend like the bills didn’t exist. She would blissfully ignore calls from the credit card company which eventually turned into calls from the collection company. Yes, that doesn’t sound like someone who now has a very healthy relationship with money, does it? It’s proof that things can turn around, and you can empower yourself no matter your past.
And schools, if you’re listening, teach kids about finances and mortgages instead of forcing us to line dance, mmmmk?
I know the guilt that comes from feeling less than because your finances are a mess. The most important takeaway is that your past does NOT dictate your future.
I have been financially independent since I was 18 and had to work to support myself – some jobs included Winners, hostessing, Starbucks, Aveda, and in my late teens, even selling security systems door-to-door. I started my career as a makeup artist after moving to Vancouver in 2004 to go to makeup school… I had $700 in my bank account the day I moved. All of that said, I always knew if I got into trouble, I could lean on my mom, and I’m sure she helped me buy some furniture and stuff to set up home in Vancouver. I’ll also never forget when my uncle called me to pay off my credit card. My mom had told him in passing I had $3000 sitting on it, and he called me to tell me he would pay it for me. What a kind gesture that was and I think it was a huge kick start to me feeling like it was time to really get on track financially!
I worked in the makeup field for a few years before realizing that it was a financial dead end for me, and started working as a receptionist. I worked my way up in the company, then moved to a new corporate job, heading corporate communications in a public gold company. When I was laid off in 2013, I started my business, and NEVER looked back. I found something I was so passionate about and so good at that I succeeded. I found my THING. I believe this is a really important part of getting yourself to feeling financially sound – loving what you do means you’ll want to grow, and that passion will drive you to build your career, and bank account, in the process.
Financial independence is so important to how we move through the world and feel about ourselves. Financial esteem can contribute to self-esteem. I can only talk about my own experience and while I’m not a professional on the subject, I know what has worked for our family. I’m the breadwinner in our family and the one who takes care of our finances – not exactly where I thought I would be one day, that’s for sure.
OUR APPROACH TO FINANCES
I am not frugal, we eyeball our finances (in other words, I don’t live on a budget), and we probably eat out more than we should be. My approach to finances is that I prefer not to stress out and pinch pennies. I appreciate a good quality of life, and don’t guilt myself about spending – we have enough external stress to content with. That said, I’m not out treating myself to designer bags or shoes every month, or buying a ton of things because I just don’t think we really need MORE things. I also don’t have a huge, revolving wardrobe, or feel the need to keep up with every trend – IMO, Instagram has created a consumerism issue where we all feel like we need to acquire MORE to be happy and “compete” with the masses. I actually find that I’m happy with less so we are choosy about what comes into our home!
MONEY AND RELATIONSHIPS
I’ve been known to be the friend who encourages my friends to talk to their boyfriends about money. That dreaded money talk, I know. I see a huge value in just laying things on the line with finances in a relationship and if you’re going to progress to marriage, I believe it’s very important to disclose your financials. That can seem really scary, but really, shame lies in secrecy, and it’s better to rip off that bandaid.
The surprise of marrying someone with a large debt or someone who has a very different money philosophy as you can really kill the romance pretty quickly. As they say, money is one of the biggest marital stressors. I know couples who helped each other pay off their debt which is to me, an amazing feat and partnership opportunity. Talk to each other openly about how you run your family finances – one joint account and credit card (that’s how we do it, to me it’s the most simplified way and makes sure I know where our money is at), or one account for family expenses that you contribute to, and a private account you do what you want with? You get to decide what makes the most sense. Assign someone to take care of the bills and maintenance – in our house, that’s me, basically because I’m a control freak.
I’ve talked about this before, but I am the main breadwinner in our family, and Roberto and I don’t conform to the norm. Roberto works 4 days a week and contributes to our home life which works really well for us, allowing me to work more than average to build my business and not worry about keeping our home in order. My advice is to create a system that supports each of your strengths and that may not look like everyone else!
I have an incorporated business which means that I get to put an Inc. after my business name (ha), it also means that I file corporate taxes and personal taxes and have an accountant do that for me. I track all of my expenses my accountant has asked me to and write offs by keeping my receipts and capturing them in an expense workbook. My accountant dictates all my write offs, and does this all at year end, but I ensure it’s all organized to save her billable hours.
SECURING YOUR FINANCIAL FUTURE
I never thought we would own real estate in Vancouver. Literally, I thought I would be a lifetime renter. I wrote a blog post on how we bought out first home that you’ll find helpful. After a finance chat on Insta about saving for a down payment for our home purchase, I received SO many questions on how that was possible… here’s how we did it:
LIVING BELOW YOUR MEANS
The most important aspect to gaining financial freedom is living well below your means. What the means is that you make more (preferably significantly more to speed things up) than you spend. In my 20’s, I was absolutely a paycheque to paycheque person, and that was mostly out of necessity. Rent was expensive, and I wasn’t making much. Now, as I’ve grown professionally, I’ve made some sound business decisions over the years – keep in mind, this doesn’t happen overnight, but as you build your career, the money starts to increase, and if it doesn’t, it’s really up to us to step on that gas pedal to make it happen and hit our goals.
To expand, living below your means really is where the magic happens. It means that I’m never forced to take on work I’m not excited about (clients, or brand promo contracts) because I have a buffer between what I make, and what I spend. I’m never depending on one opportunity to pay my mortgage. To me, freedom is having CHOICE. It would be a lot of fun to have our dream house right now, but the stress of keeping up to that lifestyle is not worth it for us. To save for the down payment of our home – I saved just over 1/3 of our purchase price to secure a sensible mortgage – I saved for years and what allowed me to do so was spending about 1/3 of what I made, and banking the rest for our nest egg. I still do this as well as I possibly can. As a business owner and solopreneur, a safety net is important to me in case of any emergencies, illnesses etc.
On Instagram, I received a lot of specific questions like “how to save living in Vancouver”. It’s hard for me to speak to individual circumstances – for instance, if you make $50,000/yr and want to live downtown while you save your nest egg, the strategy would be different than if your household income was $200,000.
I can provide some general guidance, mind you.
Realistically, if you’re saving for a home, paying down your debt or school loans, saving what you may need can take a lot longer so don’t beat yourself up. Cut where you can, and realize that it’s not a race, it’s the long game. If saving more means changing up your housing situation or spending habits to get what you ultimately want, that short term sacrifice may be well worth it.
I once spoke to a friend who was building their dream home, and her strategy really made sense. They mapped out what was really important to them: cooking, buying great food, gifting friends, and cut out what they could do without for a few years, which was traveling and eating out.
OUR NEXT MOVES
We are overdue to consider investments and retirement savings. I would like to move forward with a financial planner to start the next phase and that will be a goal for us in 2020.
A few fave blog posts I’ve written for business owners:
AND! I’m so excited to share that I’m working on business resources for you! I’ve wanted to help a wider audience with strategies to build their business and secure their finances in the process (i.e convert that hard work to make MONEY!). I also offer two-house business strategy sessions to kick your business into high gear.
That sums it up, and I hope it helps you make some financial moves that work for YOU!