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Are you ready for the next round of our Beginner to Blogger series?
In each interview, a personal finance blogger shares a glimpse of what motivated them to take control of their personal finances. You’ll learn what mistakes they’ve made, how they’ve overcome those mistakes, and what you can do to learn from their experiences!
Today’s interview is with Kara from The Flawed Consumer. Take it away, Kara!
Hi! I’m Kara, and I write over at The Flawed Consumer. The Flawed Consumer is a personal finance focused lifestyle blog that follows me, a flawed 31 year old Generation Y consumer, in my quest to achieve wealth the easy way by simply spending a lot less than I earn. As TFC, I share my financial learnings (successes and failures) help stop others from making the same silly, debt-inducing financial mistakes I did in my 20’s.
What prompted you to start focusing on your personal finances?
Last year, my wife and I traveled to New Zealand for a week-long holiday to celebrate my 30th birthday.
We celebrated in style by flying business class, hiring an expensive Ford Mustang to travel around in, and eating at fancy restaurants costing up to $350 per meal for the both of us.
When we got home, we were left with great memories… and a nasty credit card debt of a few thousand dollars on top of the few thousand dollars we had already spent in cash on the week-long trip.
Shortly after this, I came across an article about frugal living and early retirement. I read the article and had a light bulb moment about my beloved and I’s financial situation.
At the time, we were both earning above average salaries, but had a lot of debt and were only managing to save about 5% of our incomes. Consequently, we didn’t have much to show for our working lives to date other than fancy stuff and great travel experiences.
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Freaked out but inspired, we decided to change our spending habits quickly and drastically to avoid a life of snowballing debt and stress… And, that’s what we’ve been doing ever since.
What was the greatest financial obstacle you faced or mistake you made during the “early days” of your personal finances? How did you improve the situation?
Oh God, where do I start?!
One of the mistakes I made that I regret is adjusting my lifestyle when I received pay increases (i.e. lifestyle creep). I should have figured out how to live on my entry-level job pay. Then, when I did receive a promotion, I should’ve automated the transfer of the extra money into my savings account so I never got used to having extra money to spend.
If I had of done that, we would (A) have a lot more savings now, and, (B) not had to make such a large lifestyle adjustment over the last year in an effort to move towards saving 50% of our net incomes.
What is one area of personal finance that you still struggle with?
Whilst we haven’t entered into any new debt since starting our financial clean-up journey, we had plenty of it to start with and are still paying it off. We are on track to pay off the car loan and credit card by the end of 2018. If we do, it’ll be one of the only New Year’s resolutions I’ve ever achieved!
What does financial independence mean to you?
Having choices. Not being dependent on anyone or anything for my living and enjoyment expenses. Not having to work five days a week so that I can spend more time with my family.
Since making your personal finances a priority, how has your quality of life changed (happiness, relationships, career, hobbies)? What’s improved that you may not have expected, or what unexpected challenges may have surprised you?
That’s a good question. Since making personal finances a priority, our lives have changed quite a bit.
In the beginning, I was very strict about what we could and couldn’t do with our money, and wanted to save everything we had left after living expenses. This placed a lot of unnecessary stress on us and resulted in tension between us because I got stressed every time my beloved spent money.
However, as time went on, I realized the importance of freedom and mellowed out a bit. We now have a 10% rule, whereby we can each spend 10% of our incomes on whatever we want. This has helped us stick to our savings budgets with minimal stress and anxiety.
As a result, I think our relationship is better than what it was before we started focusing on our personal finances as we’re working on long-term financial goals together whilst still having the freedom to enjoy our now too.
Additionally, we’ve developed hobbies which revolve around saving money such as home brewing beer, growing food in our garden, and spending time at the local library. These are hobbies that my beloved and I do together, so from a hobby perspective we are spending more time together and enjoying each other’s company more as well.
What advice (money or career-related) would you give to a recent college graduate just starting their first full-time job?
Also… If you’re an introvert, put yourself out there and don’t second guess yourself. Extroverted people won’t hesitate to jump at opportunities and will get ahead of you because of it, regardless of whether they’re better at the job than you or not.
What is a common misconception or belief about money you’d like to warn beginners about?
That it will always be there. When I was younger, I didn’t realize how easy it was for income to disappear overnight and the impacts that this can have on you if you don’t have an appropriate emergency fund.
I started my first job during a major organizational restructure in which a lot of people were made redundant. As a result, I would come into work on a Monday and people would be talking about how so and so has to sell their house as they can’t find another job.
I was lucky to keep my job during this restructure, but employment uncertainty and the impacts of financial downturns are always in the back of my mind.
In the last three years, what is one new behavior or decision that has most improved your financial situation?
Before I buy anything now, I stop and think, “Do I really need this? Is there an alternative?”.
If I decide I don’t need it, then 95% of the time, I don’t buy it. Before starting my personal finance cleanup journey, if I wanted it and had the money, I’d get it.If you're an introvert, put yourself out there and don't second guess yourself. Extroverted people won't hesitate to jump at opportunities and will get ahead of you because of it, regardless of whether they’re better at the job than you or not.Click To Tweet
What is one item you like to splurge on? Be specific (brand name, model, etc.)
Single malt, Scotch whiskey. My favorites are The Glenlivet 12 year and Aberlour 15 Year Double Cask.
If you could give a personal finance book to everyone just starting their financial journey, what book would you give them?
The Barefoot Investor by Scott Pape.
This book is set out really well for beginners. It is written in a simplistic style that is easy for anyone to understand. It provides a step-by-step guide for readers to follow, reducing the possibility for them to become overwhelmed with information and switch off.
As an introductory guide to personal finances, I think it ticks a lot of boxes.
What led to your decision to start a blog, and what has your experience been like so far?
Writing is a great outlet for me. As a very introverted person, I don’t engage in a lot of verbal conversation as talking and listening to others is mentally draining for me. However, I really enjoy engaging with people in writing.
As a result, I was looking for a way to write about my experiences, mistakes, and learnings for my own benefit, and thought that it would be great if I could “talk” to others about it, too. So I decided to start a blog to share my personal finance mistakes and learnings in an attempt to help people in similar circumstances to myself, as well as learn from them too.
So far, I have really enjoyed blogging and have discovered a great community of fellow bloggers to engage with. This has helped me teach and learn in a format that suits my personality.
If you had to delete all of your blog posts except for one, which post would you keep and why?
That’s a tough one. I have a couple of altruism and ethics posts that are important to me. But, I think it would have to be my post about Lifestyle Creep, as it’s something that affects most of us. As per the name, it creeps up on you and you don’t realize it’s even happening. Given the impact this has on a person’s savings potential over a lifetime, I think it’s an important concept to point out to others.
Thank you for sharing your experiences with us, Kara!
Do you consider yourself an introvert, and if so, how do you feel it’s affected your career? Share your thoughts below!