How SMH business writer Jess Irvine transformed her financial life


As my career blossomed in my late 20s and early 30s, it never occurred to me to drop $400 on a new designer suit jacket, a meal at a fancy restaurant, or a night at a classy hotel.

I remember spending so much to get my childhood copy The Lord of the Rings bouncing around in an expensive fabric-wrapped hardcover by a specialty antiquarian bookstore.

Pretty cool, right?

But then one day you find yourself turning 40 as a divorced single mom who doesn’t own a home, has never invested in stocks or property, and has no idea if she’s on the right track. for a comfortable retirement.

I’m the classic example of someone who knows a lot about something in theory, but was clueless enough to apply it in practice.

But, as the dust began to settle on my new life, I began to slowly pick myself up and put my financial life in place.

At the root of all my progress, I believe, is a budgeting system I created to sort, organize and track my money: the system this book is ultimately designed to teach you how to use yourself.

For two decades, the authors of the Australian Unity Wellbeing Index survey have asked Australians to rate, on a scale of 1 to 10, their level of satisfaction with their lives. Their clear conclusion is that it is not money per se, but “financial control” that matters most. “People with lower incomes may actually achieve higher well-being than those with higher incomes, as long as they have better perceived control over their financial situation,” the study authors conclude.

Indeed, financial control is part of a golden triangle of happiness that primarily determines our well-being, alongside personal relationships and a sense of purpose.

During my career as a financial journalist, I have observed how many people – such as readers, editors, fellow journalists, politicians and voters – think about money.

Overwhelmingly, I see people stuck in a thought pattern that money is just too complex – too overwhelming – to understand. It’s also common to believe that money is boring (this one hurts my soul!) or that it’s just the case that some people suck at money.

The good news is, if you’re one of those people who believes these things, honey, you’re wrong. Don’t feel too bad about it. A whole financial system exists that benefits from your submersion. To combat it, you must learn to manage your thoughts and feelings about money.

Flashback to 2020: Jessica Irvine records a podcast with Commonwealth Bank CEO Matt Comyn and Treasury Secretary Steven Kennedy (appearing remotely from Canberra).Credit:Dominique Lorrier

Because, let me let you in on a little secret. Basically, money is easy as pie.

Ultimately, money is just a medium of exchange. You give your time and your skills to your employer and, in return, he gives you money. You then take that money and exchange it for all the goods and services you need and want to live a happy life.

There it is: money explained in a few simple sentences.

The clever thing is that if you can learn to limit your spending desires over your lifetime, you can reduce your need to work as hard or as long. Alternatively, you can work harder and improve your skills to get more money to trade for more things you want to buy. You choose.

The only problem is that, throughout your life, you will probably come across periods when you are less able to trade your time for money. You’ll still need to buy stuff, of course, but you won’t have the money to fund it. Economists call this the ‘life cycle hypothesis’ and it requires a process known as ‘consumption smoothing’.

When you are very young, your parents are likely to notice the difference, paying for your food and accommodation until you leave home.

Jessica Irvine's new book.

Jessica Irvine’s new book.

In early adulthood, when you are studying or not earning a lot of money, however, you are likely to take on debt to make up for your shortfall. Borrowing to finance your studies or to travel can be a good decision if, over the course of your life, it broadens your horizons and increases your potential for future income.

At some point, however, you will have to pay for the things you bought and pay off the debt.

To do this, you need to keep earning money and start scoring pay raises. It’s time to start thinking about paying off your debts and start putting some money aside to support yourself in the future when you’re older and can’t work or don’t want to work.

And that’s really all there is to personal finance.

Many personal finance books allow you to start by imagining your individual “financial goals”. But I think there’s really only one goal people need, and that’s to generate enough lifetime income to fund their lifetime wants and needs.

If I had to sum up personal finance (for non-retirees) in one sentence, it would be this: Spend less than you earn; invest the rest.


  • HOUSING: Check the price of your mortgage in less than a minute by typing “MoneySmart Mortgage Calculator” on Google. It defaults to the average interest rate on new home loans. Lenders all reserve their best rates for new customers, so check to see how yours compares!
  • CLEANING: Check local council websites for regular ‘Trash’ or ‘Trash’ collection days. I once got a couch worth about $3,000 for free from a neighbor who was moving interstate. This is recycling and saving at its best.
  • UTILITIES: Shop around for the cheapest energy provider in your area. Victorians head to the Victorian Energy Compare website and everyone else to Energy Made Easy.
  • TRANSPORT: Shop online for great prices on tires. Find your tire size, usually displayed on the side of your tire. For example, mine is 215/65 R16. Type these details into google for some great deals.
  • FOOD: Buy your pantry first. You’d be surprised how long you can last without restocking. Challenge yourself to last as long as possible before heading to the shops!
  • HEALTH: Only pay for “additional” health insurance if you actually receive more in benefits than you pay in premiums. You are only required to have eligible hospital coverage (not extras coverage) to avoid paying the Medicare surcharge.
  • EDUCATION: Download your local library’s app to access a world of free books and audio on your iPhone. BorrowBox is common.
  • APPEARANCE: Space out your beauty appointments. If you usually go every eight weeks, try 10 weeks instead.
  • LIFESTYLE: Try to quit alcohol for a while. Start with a week and see if you can extend it to a month. Otherwise, try to drink only on weekends or when you’re away from home.
  • PROFESSIONAL FEES: Take advantage of zero percent credit card balance transfer offers. Just beware of high fees or reverse interest rates (and aim to have the card paid off before the interest-free period ends).

Many people believe in the money myth that “I left it too late and I will never have enough money”.

The reality, however, is that most Australians retire with enough money to live on when their private savings are combined with full or part-age pensions.


According to a report by the Grattan Institute, many Australians can indeed expect to enjoy a higher retirement income than they had during their working life, due to the relative generosity of the old-age pension compared to other social benefits of working age.

The old age pension for singles today is around $25,000 a year and $38,000 for couples. The JobSeeker unemployment benefit, on the other hand, pays only $16,367. So many Australians actually get a pay rise on retirement.

Which isn’t to say that living off the old-age pension alone will fund a particularly lavish lifestyle, and especially not if you don’t own a house. But it is something. And it’s not going anywhere.

Of course, the only real way to know what income you might want in retirement is to track and project your actual spending habits.

How much do you spend on food each month? What about trips to the doctor? How much does your health insurance cost? How much do you spend on gasoline?


If you want to buy a house, retire comfortably, or borrow to build wealth, you’ll need an idea of ​​your annual expenses. You are going to need a “budget”.

I believe the reason many people cringe when they see or hear the word budget is that it signals something too restrictive, similar to a diet. This word diet also has a bad reputation. This is because it is usually associated with a kind diet – that is, a diet in which the amount of food consumed is restricted to less than a person’s daily caloric requirements, with the aim of achieving weight loss.

A budget is simply a statement of what you earn and spend over a period of time, along with a calculation of the resulting surplus or deficit.

A budget can be as simple as a piece of paper on which you write your estimated income, expenses, and resulting surplus or shortfall. Yes, this information will show you whether you are saving money or not. But the budget itself is agnostic as to whether or how much you should save. It is entirely up to you.

The real purpose of a budget is to give you a picture of your overall financial situation. You might be scared of what this photo might ultimately reveal, but a budget can’t hurt. In fact, I think it can only help you by giving you the clarity you need to start making better decisions about where to allocate your precious money.

I firmly believe that creating a budget is the cornerstone upon which all good financial decisions are made.

My name is Jess and I’m good with money. Damn, actually.

And you can be too.


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