The family finances – Financial Psychology part 1

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It’s a scary thing putting your family finances out there for all to see, but in the interests of encouraging others, I have developed a five part family finances series.

Part 1 – Financial psychology

Part 2 – The year of austerity budget and the new normal

Part 3 – Where to from here now that our income has been halved

Part 4 – Net worth tracking

Part 5 – Retirement planning

So the starting point for us:

We were both in the public service in middle to senior management levels. I’m not prepared to disclose our family income, but suffice to say that in household surveys we were always ticking the $250 000 and over box – and it was substantially over.

We moved in together with our blended family of seven in 2009, both reeling financially from two divorces with some superannuation and a mortgage of $350k against a house now worth about $700k.

Then we kind of financially dicked around a bit. We put in a new pool (above ground, but with a fancy deck); renovated some rooms, bought a second hand seven seater car and I realised mid-way through 2014 that we were still sitting at $140k on the mortgage some five years later, and had only managed to get through just over $200k, despite our reasonable income earning reality.

So – the year of austerity was born. Just like Greece, we decided to cut back on expenses and knock over the mortgage within a year. I can happily report that we have achieved our goal, which has enabled me to take the next year off work and spend some more time with my children, as well as potentially go back to work after that on a part time basis.

So what was the psychological shift that enabled us to make the transition? I read Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence by Joe Dominguez and Vicki Robin and in a nutshell, I realised that each time I purchased a new item of clothing, something new for the house or bought a convenience meal that I was trading my life hours for money.

The premise is this: everyone only has a certain number of life hours available to them. Each time you purchase something, you are trading some life hours away. EG I could buy this nice $200 shirt that will bring me immediate pleasure, and perhaps the next two to three times that I wear it; but to get that enjoyment, I have to work for four hours (of half a day) to net that kind of cash. You add this up over a whole wardrobe, a new car, brand new kitchen appliances – you get my drift and you realise that you will need to work for most of your life to achieve short-lived consumption happiness.

The other thing I realised is that purchasing new things each pay day is like being on crack cocaine. It feels good at the time, and even the first few times that you use or wear your new thing – but then the “thing” you have purchased becomes a part of your new “normal” and you find yourself still craving for more. This is called hedonic happiness – short lived, but leaves you wanting for more. And it’s insatiable.

So the shift in gears in my mind has been two-fold:

  1. Each time I want to buy something, I think about is it worth the life hours – adding an extra half day/year/five years to my working life; and
  2. Is this purchase just for hedonistic reasons, or is it something that we actually need.

What have you learned about your financial self?

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Cosmetics shame and empties challenge

So we went to the States in 2013, the AUD was holding up strong and everything was cheap including make-up and I wasn’t considering minimalism back then.

Oh and I am a GWP junkie. At least I was. A Gift With Purchase offer would have me hovering over a David Jones counter, pronto.

Consequently, in a small cupboard in my bathroom, I confronted a shameful fact today:

  1. I have 23 lipsticks
  2. I have over 50 containers (small/medium/large) of various moisturisers, creams, body lotions, shampoos and conditioners, facemasks, exfoliates, toner, makeup remover AND THEY ARE MY SPARE ONES.

It’s funny – simple living and paring back to the essentials is a process and not a project. Six months ago, I would have been proud of myself that I had organised them into neat little zip lock bags into their little categories.

Now, six months on, I am looking at them in horror. So much consumption. No end in sight in terms of getting to the bottom of the storage bin and just having one of everything, like a real minimalist.

Possibly, if I was hard core, I would think about donating them just to clear my clutter immediately. But I’m not hard core. I know I will use these products at some point in the very near future. So I have set myself an empties challenge. The challenge is:

No more makeup or moisturisers until all of the little bottles are used. I am going to set up a little bucket in my wardrobe to put the empties in, to remind myself of the challenge, and I will post on progress.

Here is some shameful before evidence:

all lipsticks

hair products

What is your shameful hoarding secret? (PS I’m sure I will continue to horrify myself as my expectations are reset with this simple living process).

Root to stalk, suburbia style

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One of the amazing things I am learning as I reap the benefits of my slow growing brassicas and beetroot is that the winter/early spring crop can provide a family like mine an abundance of greens for dinner. I’m almost at an over-supply moment where I am going to have to start blanching and freezing. How exciting.

I’ve learned to cut off the broccoli head and to keep harvesting as smaller off shoots present themselves. This alone is keeping our family of seven every second week well feed. My cauliflower is now being harvested and eaten as well.

But the true gem of the garden, to provide sustenance during the lean late winter/early spring months is all wrapped up in amazing little book called Root to Stalk cooking by Tara Duggan.

I did know about cutting off the outside of broccoli stalks and slicing the inner stalk thinly for a stir fry, but my mind was completely blown when I realised that not only could I utilise the broccoli or beetroot in my suburban paradise, but I could also utilise their leaves. Kaboom. World blown.

Just like the snout to tail philosophy, much more of the vegetables grown organically in the suburban back yard can be eaten, providing essential nourishment.

So now, as I see the tender little leaves of broccoli and cauliflower growing, I harvest them, wash and slice finely for stir-fries. Beetroot leaves are harvest also and used for salads or stir-fries.

My brussel spout plant heads are also harvested (as well as the brussel sprouts of course !)

And my garden has become so much more interesting as a result, as I learn about the parts of the garden that I can harvest for nutritional value) and feed my family. It doesn’t get any better than that.

My sour dough education – still in primary school….

sourdough mark 2 soughdough loaf

Right so I might have underestimated the task and the science behind making sour dough……

Things I have learned as I am finally getting bubbles into my bread (as opposed to dense bricks of flour):

  1. The starter, which should be renamed the slower takes some time to mature.  My early bubbles within the first few days were not the required bacteria and natural yeast to leaven fairy floss. The starter is now three weeks old, smells like a cross between rotting fruit and nail polish remover and is bubbly in the mornings.
  2. Bubbles are your friend.  Because bubbles are your friend (to offset loaf density) your dough needs two periods to rise.  Today, for the second rise, I left mine out in full lounge room sun in the morning and when I got home it was filled with wonderful bubbles. Because of the long periods required to rise, the bread maker just does not cut it.  Bake and rise settings are too short in a machine.
  3. The way you knead counts.  You need to stretch and fold (as opposed to just getting your biceps into it without any precision).  The gluten needs to stretch.
  4. Even though I want to make a rye sour dough, I am not yet enough of a sour dough aficionado. I need to use the lightest possible bread flour with the most amount of gluten to get these babies to rise. Denser flours – you’ll have to wait.
  5. A pan with water also in the fridge provides sufficient moisture in the oven.
  6. The oven needs to be super hot (I crank ours up to the max of 250 degrees centigrade).
  7. Finally – I need to oil the pan a little bit more.  Today – pan remnants, scraped off, slathered with butter received some teenage daughter squeals of “give me more” but my bread today had no bottom (still stuck to the bottom of my loaf tin…….).

So in the interests of not curating a perfect life in a blog – here is today’s improved loaf. Still not high enough, still not enough bubbles, still a little bit moist in the middle – and stuck to the pan – but it’s improving. I am so excited. I am definitely the type of person who starts exciting things and leaves the finishing to others. I am persevering. I WILL learn to be a sour dough expert. I can’t wait to share my (perfected) Canberra north side suburban sour dough starter to someone else, to engender a love of making bread at home.