A beginner’s guide to being good with money.
Sim and Sonya from Girls That Invest.
You may have spotted them on Instagram but if you haven’t Sim and Sonya know a thing or two about money. Their brand Girls That Invest, has over 200,000 Instagram followers and over 2.5 million podcast downloads.
They are two women of colour who want to make investing seem less daunting to women & minorities around the world.
They don’t tell women what to invest in, they just simplify all the jargon and make it easier for women and other minorities to become financially independent.
In an effort to make finance seem even more accessible, Sim spoke with us here at Billie and has given us her tips on how to be good with money as a young female.
Why is it so important that females are financially literate?
I think the importance comes down to choice because when you have money and when you have financial freedom, it's less about the house, the car and the fancy things.It's about having the ability to choose the life that you want.
When you have money you can walk away from a bad job, a bad partner, a bad family, a bad relationship.
Situations that leave you uncomfortable or do not serve you are really, really hard for humans in general, but specifically women to leave if they do not have the financial means to.
And I’ve witnessed so many horror stories in my life where women were not be able to leave certain difficult circumstances because they were not financially free.
And how do we get financially free? It all begins with financial literacy.
How can girls start being smart financially from a young age?
I think it comes from one of two things.
The first being having good role models. If you can see someone that looks like you, sounds like you or someone that you could imagine yourself growing up to be, you're more likely to assume that you too, can reach that goal.
If you see maybe a man of a different ethnicity who wears a suit and speaks a different way from you, you might not be able to relate to them as easily and not feel like you can be financially smart. But if there are female or non-binary leaders in those spaces that you can look up to, I think that is step one.
And then step two is finding a source or a medium that works for you. That might be the Girls That Invest book or it might be Rich Dad, poor Dad, a YouTube channel or a podcast. It's just about finding role models and then finding resources by people that you can relate to.
What sort of things should you be saving for from a young age?
I think what I was saving for when I was younger was my first car and that took a good number of years of saving.
Having a car for a lot of people brings a lot of financial freedom. It means you can go get a job, it means you can take yourself places and you're not relying on time or other people. But that's probably a good place to begin.
Then number two in that category would be your KiwiSaver. You are never too young to open up a KiwiSaver account and put money in there when you're young. As it’s automatically taken out of your pay check, you don’t miss it and come time when you want to buy a house, you have a lump sum sitting there for you.
Have you got any saving tips?
I think it really helps me save when I have a goal.
If there's no goal then I'm not as likely to save. If I have $100, it's hard to justify putting that towards something that I can't even visualise it in my head versus spending that money right now on something that's going to make me happier in this moment.
So it’s good if you have a goal, a timeframe and you have a dollar amount: for example “I want to have $3,000 saved up by the end of this year and I'm gonna use that to go on holiday”.
And that is a lot more easier to save towards because you can look at this $100 now and go, do I want to spend it or is that gonna buy me something really nice on holiday?
So that's a good way to save.
At what age should you start investing and how?
I think as young as you can. If you can't legally invest, even just putting money into practice funds or where you are trying games and you're using play money to invest, just to get an idea of how to share market works. You could be doing that at eight years old - there is no minimum age.
Once you can legally start investing or investing with a guardian which you can do a little bit earlier than 18 years old, then that is probably a good way to begin using resources like Sharesies, Hatch, Stake or InvestNow.
These are all different ways to invest and you know, it's just about finding and choosing one of them and putting in just a little bit of money to see how you can handle risk, even if it's $10 a month, just to sort of get comfortable with the ups and downs of the market.
What are the must-knows to ensure you start off on the right foot financially?
I think three things that you need to know. First thing is as long as your spending less than you earn and you're investing or saving the rest, you'll be okay.
That is how you grow wealth. Spend less than you earn and put the rest away, either investing in yourself, investing in your education, investing in your career, investing in shares, investing in property, whatever it is.
Number two is to not let ‘lifestyle creep’ take over.
The worst thing you can do financially is get super worried about how you look, worrying about wearing the best brands, having the most expensive holidays, or having the fanciest technology, especially when you are young.
And if you are using things like Afterpay and credit cards to pay for that, you want to be careful that you do not start getting used to living a life that is outside of your financial capacity and taking on debt to live that life.
Because then you start using tomorrow's money for today's things and then future you ends up being left behind and in debt.
And the third is that money and financial freedom are not hard concepts to grasp. People make it seem like tax, credit, investing and real estate are so confusing.
But the truth is they're really, really simple concepts. You've just gotta find a good teacher, a good book, a good YouTube video, a good podcast or something that's gonna break it down in a way that you understand
What are the biggest wastes of money?
I would say trying to impress people.
Sometimes people spend $5 doing that and sometimes people spend millions of dollars buying a home that they don't really need or want.
It’s one thing to say, I really want this large home or this fancy car. But a lot of people, if you ask them, would you buy this car if no one else saw it or would you buy this home if you were never allowed to post about it on Instagram? Their answers might be a little bit different.
Where else can girls learn what they need to know about finance?
I'm gonna plug our book, Girls That Invest here. It's user friendly, beginner friendly, and it's sold 30,000 copies in the last four months.
If they have any other questions, who should they ask?
I think sorted.org.nz is a really great place that has answers to every money question that you could think of.
Like ‘what is tax?’, ‘how much should I put in KiwiSaver?’ or ‘what is the share market'?’ - That's a really great resource.
