Phoebe’s Finance and Barefoot Investor Learnings – Chapter 1

The Barefoot Investor has given me basic tips and tricks for where to start investing for your future. Starting small and implementing the building blocks so you don’t have to worry later. This along with advice from Hamish Ferguson will help you find some balance and responsibility in your finances.

Many young people don’t even think about investments and managing their finances until they consider making big financial steps. But that leaves a gap where your money goes into your bank account and then straight out!

Using these routines and tips from these experts can help you be financially savvy before getting serious about your future. Financial management can be summarised in one word: balance. Its aim is to give you a set of steps that will give you control over your money and your life. Become ‘financially fireproof’ – ready for anything to come your way.

I am also learning that expanding your financial knowledge is also very important. There is a lot of benefit in spending our time – and sometimes, money – into getting the right information. Going to university is investing time and money into my career development, so shouldn’t I be investing in my financial development too?

This chapter is about monthly ‘Barefoot’ date nights

The Barefoot Investor’s Scott Pape suggests sitting down once a week for a month (then once a month for a year) with your partner, spouse, friend or family to open up the lines of communication about managing your finances. This will keep you accountable on your goals. Offloading your financial woes (to a friend or financial planner, like Hamish) can remove the worries around your money and it means you aren’t struggling on your own.

As money is still a taboo topic, this makes it difficult to open up and get advice when you really need it. A changing economy means a need for fluid advice. The everchanging Australian lifestyle means that finances and how we manage them have to change as we do.

Let’s start simple.

Managing everyday spending and immediate expenses is the most important:

Pape suggests having a few different accounts will help to mentally and physically keep your money separated.

  1. Daily spending
    Things you need to buy weekly or between pay periods. This includes rent, groceries, petrol (maybe a coffee a few mornings a week before work)
  2. Expenses
    These are things you need to pay within the month to within the year. This includes rent, insurance, etc – not as regular but necessary
  3. Savings
    This account is for things you need to pay for in over a years’ time. It should be used for bigger payments and travel – not to be dipped into on a regular basis (for emergencies only)

Small steps are better than no steps. Getting your finances right can take a while so don’t give up if you get off to a rocky start. Find out what works for you and tailor this advice to your needs.

Although Pape promotes independent financial management, my interactions with Hamish Ferguson suggest otherwise. Going to someone and handing over your financial burdens can be just the thing you need. There is a reason why financial planners are still around and still successful. In my opinion, personalised advice and assistance is a better path for those who want to get ahead of their finances.

This is just the beginning of a cohesive and solid foundation for financial management. I have found that reading this book and getting advice from Hamish has really opened my eyes to the world of finances. It will not be easy but at the end I will have a steady head and a full bank account. I hope you do too.

Happy saving!

Until next time,

Want to read more about The Barefoot Investor…The NY Times recently wrote a Profile piece here