Happy birthday to my TFSA and RRSP! It’s been 2 years since I’ve opened them and a couple of months shy of this blog’s birthday as well. Let’s combine both and talk about lessons I learned after 2 years of tracking and blogging about my net worth.
First, the usual monthly review for January condensed into 3 images and 3 bullet points.
- Hanging out with friends costs money, and I regret none of it.
- Skiing is fun, ski clothes are expensive.
- Still on track to reaching my savings goal of $150k+ by the end of this school year.
I’m sorry to disappoint but there are no charts beyond this point. You’re devastated I’m sure.
Now the long-term lessons from 2 years of tracking my net worth.
Read, not too much, mostly books.
The fact is, ‘adult’ finances is a daunting topic to get into in person because there’s always the risk that they’re trying to sell you something or present themselves in a better light. In addition, people are happy to offer general advice but rarely as happy to show you their numbers.
So if you wanted to know more about managing finances, don’t talk, read.
I started off by reading a lot of blog articles, then the books those blogs recommended. Anything I couldn’t understand, I asked Google and Youtube. Whether you choose books or blogs depends on what you’re looking for.
Read books for information:
- The longer length allows for greater nuance and more specific examples.
- More likely to give you a wider, more solid foundation of knowledge
- Published books go through an editing process which it’s much more likely to have better content.
Read blogs for motivation
- There will be a blog out there whose author you really connect with, or they’re in a similar situation to you
- Blogs are less polished though more authentic, you can see how the author changes over time
- It normalizes financially healthy behaviour
Check out my list of recommended reads here.
All this being said, there will be a point where you’ve got more or less all the relevant knowledge you can use. When that happens feel free to stop reading so much about finances and put it into practice. Let the good habits you’ve built up by then run in the background and go enjoy your life.
We see, but we do not observe
One for you Sherlock fans out there.
I thought I was 8/10 with money when I first started working. I saved more than 10% of my pay on a new teacher’s salary even while living in London, my credit card(s) are always fully paid off, and I lived a pretty good life. Of course, my high opinion of myself was because I really was not scrutinizing my finances properly.
I only did three things related to money at that point
- Checked that I got paid the right amount
- Checked that money showed up in the right account
- Made sure I saved at least 10%
It was easy to see that I was spending money, however, it wasn’t until I decided to blog about it and collect the data that I really knew how I was spending my money. To change your money habits, find out what they are first. There are a few different methods out there but I just use the notes app on my phone since I have it with my all the time.
- Designate the big categories of spendings (food, transport, shelter, entertainment, healthy & hygiene etc.)
- Categorize every single purchase you make in a month
- See what you spent after the month is over
Here’s what mine has looked like since I started keeping track.
I prefer this over an app like Mint because this forces you to confront your purchase and remember each one a little bit more. If you don’t want to wait a month, you can instead dig through your previous months’ purchase history and categorize those instead. Whichever you prefer, I still recommend the low-tech option because it makes for a bigger emotional impact.
For those who don’t like budgets, this isn’t one. This is a way for you to be more aware of where your money is going.
Internal motivation alone is not enough
To change, you have to want it first. That’s the internal motivation part, and it is really fucking difficult to keep going based on that alone. I failed at changing enough habits now that I’ve noticed a trend. There is a higher chance of success if I create a source of external motivation for myself, typically making it a responsibility to another person or letting people know what I have planned.
I find it much more difficult to let down others’ expectations of me than my expectations of myself. For example, if I tell my friends I would meet them at the gym after work I am much less likely to skip than saying I’ll go to the gym by myself later. Letting people whose opinions you respect know what you’re planning on doing will force you to do those things.
Whatever you do, keep track of your progress somewhere. It can literally be on a piece of paper taped to the back of your door for all it matters. This blog keeps me accountable for my financial choices. My monthly finance reviews force me to confront all my purchases so I do my best to minimize any potential regrets beforehand.
Internal motivation is tough and fickle, it’s quite the rare person who can go on that alone. Enlist all the help you can get to force yourself to keep going.
Money is important, but not the most important
I’m going to ignore the incredibly unlikely chance that any of you readers is a multi-millionaire and thus money has ceased to have tangible meaning to you.
For me, having enough money is pretty damn important. In the initial stages, it was about having enough to cover the necessities like shelter, food, bubble tea etc. etc. Later on, it was about saving for the future and ensuring I will have enough for retirement. Money was an important consideration in almost all of my decisions.
The thing that changed was that over time, I got better at recognizing when money should or shouldn’t be the #1 concern. When I first started, I missed out on some great adventures because I felt I did not have enough to justify having fun with my spendings. Now, I am more balanced. It would be more accurate to say I feel like I can afford to be better balanced because I have a lot of savings. My spreadsheet is an objective measure that tells me I have enough.
Depending on where you are with your finances, it may suit you to prioritize money in order to become financially healthy, or it may be better to recognize that you have enough and think about what else you want. It’s not a hard and fast rule though, there are plenty of exceptions however much you have.
Final thoughts
If you were looking for some numbers in this post I’m sorry to disappoint, it’s mostly a reflective post and not a finances one. When trying to distil 2 years of reflections down into one blog post a lot of details have to be omitted.
Anyways, I highly recommend keeping track of your net worth one way or another. You might not consciously notice that your habits are changing for the better but they will.
I like keeping a blog more than I thought I would, it’s like a weirdly finance focused diary haha. Anyways, I’m going to sleep now. Good night everyone!