How the bank almost got me

Banks are funny things. Credit cards are funny things too. There’s something about turning money from something heavy and real to numbers in a computer that seems to make it much less…worthy. More like monopoly money that we shuffle among ourselves than real,  valuable currency.

 

Prior to this year, I’ve never had a credit card. I was burned my first year out of home when my bank offered a ‘complimentary overdraft’ on my account of $2,000. It vanished in a matter of months (a good chunk of that went on a shopping spree when my little sister came to visit), and I’m pretty sure I was paying it off for the next two years. Lesson learned! There’s nothing more depressing than getting a paycheck and realising that none of that money is even technically ‘yours’- it all has to go straight to the bank.

Cut to five years later and I was finally tempted back into the world of credit by an unmissable offer on a card with no annual fee. I’m pretty on top of my spending now, so as long as I was careful to pay off my card each month, I was getting 50,000 frequent flyer points for free! How could anything possibly go wrong?

 

Ahhh, but here’s the thing the credit card companies know that we’ve all probably figured out the hard way – chances are, you’re going to be unconsciously spending a buttload more if you’re putting it on plastic.

Don’t ask me how it works, I reckon it’s hoodoovoodoo. All I know is, for the three months I was putting every payment on card, my spending was sitting a lot higher than it normally would- even though I have a rock solid budget and I knew exactly how they were trying to hook me!

Now I’m not saying I’ve been flashing around dolla dolla bills y’all…

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Does anyone think that getting hit by a solid gold coin would really hurt?

…probably worth it though

…but a brunch here, a book purchase there- it all starts to add up across the course of a month. And if you’re not seeing those purchases appear on your statement for a few days, it’s easy to forget that it even happened, and so you’re ok to spend juuuust a little more until that hideous bill arrives at the end of the month. Hoodoovoodoo!

So I’ve tried being a credit-carrying adult, and I guess I failed? Or maybe realising that I was altering my spending habits means that this counts as a pass (after all, you should never let the bank win).

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This card came with a year of free usage and as a newbie to the credit card rewards world, I have to confess that I’m still bemused and amazed that every month I’m racking in more frequent flyer points off my daily spending than I did flying to the other side of the world (!!) I still have seven months of free card usage before I have to cancel it, so it seems a waste to leave it in a drawer and miss out on some of those points that could help me get back across the world in the next few years. But how to do it without having to chip into my savings to cover that extra bit of free spending I’ve been suckered into?

I’ve decided to come to a compromise- bills are going to keep going on the card, but for the rest of my spending, cash is back to being King, baby. I’m going ol’ school and withdrawing my spending money for the week until I’ve built up my savings again. Time to go back to filling that piggy bank with change!

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Yes, I’ll take any excuse to GIF my spirit animal

This post was triggered by the extremely disturbing ‘debit card for pocket money’ that facebook threw up at me because apparently it thinks I should have spawned some rugrats by now. It looks like a great idea on the surface- parents can preload cash for their kids and the app seems to have integrated savings system- but with Visa pulling the strings, it all gets a little icky. On top of an annual card fee for the pleasure of not handing your kids cold, hard cash, I’m not sure parents should be comfortable letting one of the biggest credit card companies in the world groom your pre-teen for credit card ownership. What do you think?

 

 


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How the bank almost got me

I solemnly swear that I’m up to some good

It’s easy (for me, at least) to spend a fair bit of time thinking about where my money is going- or rather, where it’s vanishing to.

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This month I want to start spending more time thinking about where my money is going. And yes, that is a very important set of italics.

I’ve reached a stage with my money where I’m no longer the panicking, impoverished arts student. I wouldn’t say that I’m functioning with a grown-up level of income (what’s a real job again?) but I am at a point where it’s time to start thinking about how my spending is serving the world – what lives am I changing, what values am I representing?

I’ll be the first to raise my hand and confess that I’m frequently guilty of going for the bottom line. Why bother spending top dollar on some boring essential when I can duck down to Big W and get what I need for just a few dollars? But it’s time to stop kidding myself (and yes, this hurts). More often than not that bottom dollar is supporting sweat-shop labour, unsafe conditions, and probably terrible environmental practices.

If I’m voting with my money, then I sure don’t want it to be going to those people. I want to live in a world stuffed full of companies that are truly trying to make a difference! Hell, I want to live in a world that still looks like our world in fifty years. If that means shopping a little more mindfully and perhaps forking out more for businesses that support my goals, then I guess that’s a small price to pay.

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WALL-E is adorable, but not if his world becomes our reality

While I’m at it, I’m going to do my best to support the people with the dreams! The good folk in my area who have taken the dive and are trying to make good when the whole world says they can’t. I’m talking delicious freshly baked breads, beautiful plants (from somewhere other than the supermarket I’msosorryIcan’tleavethemtheretheyneedmeeee), handmade ceramics, locally grown organics, coffee from that new spot that just needs time to become the next big thing. Doesn’t that just sound like the dream?

And maybe I will have to make some sacrifices to follow through. Maybe I cut down my takeaway coffee habit to so there’s money to pay more for my veges, or maybe I save for the items I truly want to bring into my life from suppliers that I honestly want to support. The great thing about having a budget is that it’s totally possible to look at your spendings in black & white and re-evaluate as circumstances change.

I’m not going to lie, this is going to be hard for me. After so many years of being dirt-poor, parting with more money than I absolutely have to is going to take some getting used to. But I’m going to take a big ol’ breath and let go of the reins a little, putting my money where my mouth is. Because what’s the point of money, if we’re not using it to make the world a better place?


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I solemnly swear that I’m up to some good

How to win at Rewards Programs

I love a good reward program.

Growing up in a family with three young children and a business to run, I think that money must have frequently been tight for my parents. I don’t recall ever noticing that it was a problem though, because if the toaster broke down, a new one would arrive through flybuys. Grandparent’s birthday coming up? There were department store gift vouchers to spend from credit card points. I learned from watching my parents that if you were patient and consistent, reward schemes could be used to bridge gaps or nab those products no-one ever really wants to spend money on.

Once I moved to Australia, I discovered that loyalty schemes really weren’t as big of a thing- back home in NZ, it seemed to me growing up that everywhere offered Flybuys! I think people of my age saw me as a bit of an oddball as I dutifully signed up for a variety of reward programs and scanned my card with every purchase. What about my personal data?? (Look, if The Man wants to know how many times a week I buy bananas, they’re welcome to that knowledge)

It took a while for points to accumulate but when my trashy plastic smoothie blender started spewing smoke about six months ago, I jumped online & voila! Enough points saved up for a slimline fancy model and free shipping to boot. One less thing that I have to waste my hard earned money on, and a pricier  model than I could have ever afforded to splurge on! Which is win-win, because I’m trusting that it will last longer than an inferior version, and the warrantee is better if it doesn’t. Quality over high-churn plastic, folks!

The benefits aside, nothing every really comes for free, and most Reward Programs are very cleverly set up to slowly tempt you into parting with more of your hard-earned money. Here are a few things I’ve learned (some the hard way), that mean you can be sure that you’re always coming out on top.

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THOU SHALT NOT CHANGE THY SPENDING HABITS

The Man never wants you to have something for free. Any loyalty scheme you sign up to will constantly be trying to edge your spend a little higher, and then just a liiiitle higher again. Resist, friends! If an offer is tempted you to spend more than you’ve budgeted or intended to spend, disregard it immediately. Spending more than you want to means that you’re not winning at all- if you weren’t intending to drop $40 on that shiny new product but the thought of those extra 300 points is oh-so-tempting, step awaaaay from the offer. You’re not that easy to play!

THOU SHALT SIGN UP WISELY

Never really shop at a certain store? Don’t let them talk you into signing up for their reward scheme. You don’t need that sort of clutter in your life and handing over your contact details just results in the temptation of endless sales. Save your buying power for programs where you actually have a chance of redeeming for a reward.

THOU SHALT RECONSIDER PROGRAMS AS CIRCUMSTANCES CHANGE

There are two main supermarkets near my house. Coles offers Flybuys, and Woolworths offers Everyday Rewards. As you can probably guess, traditionally I’ve been more of a Coles girl, preferring to save points towards a product redemption than a cash discount off my shopping. However, recently Everyday Rewards recently upped their game by offering conversion of their points to Qantas Frequent Flyers- the same rewards system my credit cards work towards. What’s a girl to do? With over $100 of Flybuys value stockpiled for a rainy day, my efforts don’t need to be focused there. Time to watch those Frequent Flyer points grow!

THOU SHALT PLAY REWARDS SCHEMES OFF AGAINST EACH OTHER

Here’s the thing- rewards schemes do farm my data. Do I really care? Not particularly- how much I spend on Cookies n’ Cream isn’t information that I would care about handing to a stranger on the street, so I have no problems with the supermarket knowing it either. And there is a massive upside to them tracking my spending. After my switch to Woolworths, you know what happened? Coles got a little bit lonely! They started sending me emails- ‘Spend $90 a week for four weeks and get $50 off your next shop!’

Sorry Coles, that’s more than my weekly budget, and as we all know from the first rule of Rewards Programs, you don’t change your spending to earn a reward. Even spending an extra $10 a week on products I don’t need would have made the $50 reward redundant.

I stick to my Woolworths spending.

A few weeks later- ‘Spend $70 a week for four weeks and get $50 off your next shop!’ Now we’re talking! $50 is a decent chunk of a week’s shopping, so I switch my supermarket for a month and enjoy a final week with a sizeable chunk off my final spend.

Can you guess what happened next? You betcha- I get an email from lonely little Woolworths- ‘Spend $80 a week for four weeks and get 12,000 bonus points.’

Now I know it’s hard to grasp the value of those points, but to give it perspective, Woolworths normally offers one point per dollar spend- so those 12,000 points are a mighty big apple that can be converted into some pretty big savings. I swap back.

Do I think that either of these huge supermarket chains actually care about me as a customer? No way. But I do think that they have very smart computers that track changes in my spending habits and link me to offers accordingly. Make them panic and see what your big dollar reward scheme will do for you.

THOU SHALT NEVER LET THE CREDIT CARD WIN

For the most part, I am SO against credit cards- like most financial nerds, I see the spiraling holes that they can suck people into. Any support that I’m about to offer for their schemes is conditionally that you’re in control of your finances enough to be currently living debt free. Again, THOU SHALL NEVER LET THE CREDIT CARD WIN.

We good? I’ll continue.

Credit Cards offer some of the fastest ways to earn rewards on everyday spends- however when tempted by a credit card reward scheme, it’s important to consider the value of what they’re offering to you. Amex offer a huge return on rewards, but their cards are also hella expensive. Do you want to be paying $400 a year for your card to receive $400 of travel credit you’re realistically not going to have time to use?

And then there’s the other trap, where a card seems reasonably priced, but when you get down to the nitty gritty, the points on offer still aren’t worth it. Indulge your inner financial nerd, google the actual dollar value of the points on offer. For those playing along at home, apparently a Qantas Frequent Flyer point is currently worth around $0.02 (depending on how they’re redeemed). So if a company is offering 10,000 bonus points, you’re looking at roughly a $200 usable value. If the card has an annual fee of $150, is it really worth it? Or if you have to meet a minimum spend to activate those points, is that spend going to push you way above your usual budget? Could it be that they’re really just trying to groom you into a spending habit? THOU SHALT NEVER LET THE CREDIT CARD WIN.

But Abbie, don’t you have a credit card?

You’re right, dear reader. Consider me busted. But while doing all my credit card research, I stumbled across a credit card that was offering me Qantas Frequent Flyer points- the same points I had already collected for flying to Italy and back. If I met their minimum spend for the first three months of the card, I received 50,000 bonus points (to put that in context, I received about 5,000 for flying to the other side of the world). On top of those points, I would continue to receive 1.5 points for each dollar spent- and the kicker?

The card is absolutely free.

The bank is so keen on turning me into a dedicated credit user that they’re happy to offer me a carrot I can’t refuse. Why? They’re trusting that having to meet my minimum spend for the first three months is going to groom me into a spending habit. They’re trusting that I’ll be negligent about paying off my balance every month and they’ll get me with interest. They’re trusting that I’ll either forget to cancel the card, or be so hooked that I’ll happy pay the $249 annual fee the following year.

Falling prey to any of these points means the Credit Card wins –THOU SHALT… I’m not going to repeat the point again, you get it.  You’re playing the banks at a game they pay people a lot of money to ensure you lose. You’ve got to keep on top of the ball if you want to come out on top.

….

THOU SHALT NOT LET THE CREDIT CARD WIN

(Sorry, I couldn’t help myself)

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Do you participate in any rewards programs? Did I miss anything? I would love to hear what you think!


Thanks for reading! Don’t forget to subscribe for updates, and if you want to see more of me, come say hello on my Instagram or Twitter, I would love to see you there!

How to win at Rewards Programs

So why do you need a budget anyway?

Budgets are boring. Cocktails are fun!  Why should you even have to worry about something that your parents probably did at the kitchen table with a pencil stub and their trusty abacus when we’re living in a digital age, baby!

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Who needs a budget when your bank balance is at your fingertips and the world is your money-loving oyster. Besides, you’re not an idiot. You know how much you have in your account, and you have no trouble paying off your credit card each month.

So why should you have a budget?

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Because it’s time to enter the big-kid world now, my child.

If you’re earning money and spending money, and you want to continue earning and spending that money in a stress-free manner long into the future, then you need to have some sort of idea of how you’re going to do that. Do you really want to leave it up to chance?

Budgeting can be as simple or as complex as you want it to be. I have a digital envelope budget system because it brings me joy and I like to see my ‘binge’ accounts accumulating for a guilt-free spend- your budget might basic as an account you spend out of and an account that you don’t.

What really matters with a budget is that you have an idea of how much you can spend at the supermarket before you have to cut down your coffee allowance, or that when that big annual expense creeps up, you know that there’s enough money set aside to cover it. Anything beyond that is extra-level adulting. When you’re ready to step up your game, here’s a few ideas?

-Like to have a big night out most weeks? Make sure there’s a set figure in your weekly budget for it.

-Planning a trip? Set aside a place in your budget to save for it.

-Sick of feeling guilty after an unexpected spend? Funnel some money into a ‘Splurge’ account every week and enjoy.

At the end of the day, a budget is there to make sure that what you’re spending is less than what you’re earning. But with a little time to asses your finances and a teeny, tiny bit of ongoing maintenance, a budget can help you master your money and make sure it’s working for you, and not the other way around.

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How about you? Do you budget already? Would you like to hear more about my budget? Do you wish I would just shut up about money and get back to the acting thing? This gal wants to know!

 


Thanks for reading! Don’t forget to subscribe for updates, and if you want to see more of me, come say hello on my Instagram or Twitter, I would love to see you there!

So why do you need a budget anyway?

5 Ways I Slash My Spending (because actor’s life y’all)

As a performer, life can have some ups and downs. Even with my Diversified Income Stream (I’m thinking of getting a trademark on that), without the regularity of a salaried 9-5 job money can sometimes get thin on the ground – perhaps I’ve taken some time of for a fun independent project or for a holiday. Or maybe it’s just been an expensive week!

Either way, here’s a list of the first five things I cut when it’s time to start trimming the budget. Ready? Let’s do this

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1. Bought Lunches

Yes, they’re easier and yes, I get that little hormonal kick that comes with spending money. BUT if I’m buying lunches for a week then that’s probably close to $100 that could be stretched into a full week of groceries. If money is tight, buying any prepackaged food is off the table (badum-tish). Bulk buy, cook a batch of something you’re happy to look at every day for a week, and get ready to save that moolah.

2. Movie Outings

Movies are my haven. When I emerge blinking into the sunlight after a good movie, it feels like my brain has gone through a wash-dry cycle and it’s ready to face another week. I normally head to the cinema on a Monday or Tuesday when tickets are cheaper, but even then I’m easily tempted by popcorn or a bottle of local brew. If I can’t trust myself to steer clear of the snacks, movie outings are out until my income stabalises. Time to stay home and make the most of Netflix instead!

3. Meat

Yup, you heard it. I’m not a vegetarian, but I always opt for free-range produce which is at the top end of the price range. Adding meat to a meal can instantly up the price by $10 or more so if I’m trimming my spendings, meat is one of the first things to go. No, I don’t replace meat with beans- beans are death.

4. Fancy Food

Yes, most of these points revolve around food. That’s because A) it’s my weakness, and B) The supermarket shop is the easiest way for me to slash my short-term spending. If I have less money than expected for a week or so, fancy foods are out. That means no protein bars, no out-of-season fruit and definitely no super-flash ice-creams. Remember, these are my short term solutions – I’m pretty sure that I can survive without Ben & Jerrie’s for a week or so (….pretty sure)

5. My Bank Card

Because I just can’t trust myself (see Point 2.)

Leaving my bank card at home means there is no way those extra little costs can accrue. I have a mental blind spot when it comes to pot plants and books, so those always seem to wrangle their way past my iron resolve to not spend money. Deciding in advance how much money I can spare for the week and pulling out that money in cash is the best way to ensure that I don’t end up in debt before that next paycheck comes through.

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And there you go! Five steps to cut that daily spending fast.

Take a cold, hard look at your bank statement and be honest with yourself, what’s on your list? If you had to survive for a few weeks less than your normal budget, what would you cut?


If you want to see more of me, you can check out my Instagram & Twitter, I would love to see you there!

 

5 Ways I Slash My Spending (because actor’s life y’all)

Why I don’t own a car

Growing up in small-town New Zealand, finally reaching driving age was like receiving the keys to the kingdom. It meant being able to break free of the mum-taxi and holding the reins to your own life. Weekend trips! A part-time job! Late night hangouts!

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Even once I moved to the ‘Big Smoke’ to study, public transport options were limited enough to make having access to a car the only real alternative to walking. And I loved my little blue bomb, even if I did leave it on the side of the road more than once while I walked for emergency petrol (gas to you yanks).

All of this meant that once I moved to Melbourne, finding a car seemed to be a no-brainer to me. Melbourne was even bigger than Christchurch, how could I possible find my way around without wheels?

Fate smiled on me & I ended up with a housemate interested in sharing the costs of a car. We wrote up an agreement  (very important with something as pricey as this) and the arrangement worked nicely.

Sort of.

The thing was, as time passed I realised just how little I really needed the car. My co-car-er was a photographer and so was often using our wheels to lug heavy equipment from place to place while I caught the bus, train, or tram. As the car bills continued to mount, it gradually dawned on me that it was time to pull the plug. Here’s some of the maths that made it clear that I wasn’t engaged in the best arrangement for me:

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*roughly calculated on the average insurance cost of someone my age owning a car manufactured prior to 2014

**roughly estimated as one 20min trip (ie to work) and back a day. No allowance made for longer trips or more than one journey a day

For those playing along at home, that makes a monthly difference of $86.60! And that figure doesn’t even take into account any other ongoing costs like replacement tyres, car repairs, toll road charges, parking fines or time wasted in traffic. From my brief experiences with Australian car ownership, those can also skyrocket these estimates, particularly with an older car.

That $86.60/ 4.33 (the average number of weeks in a month) comes out to a nice round $20 per week extra in my pocket.

But wait! I hear you say, what about the convenience of my car? I couldn’t live without that!

Well fair reader, let’s crunch a few more numbers:

  • Supermarket shopping is always a pain- if I take the tram to my nearest supermarket, I can grab an Uber home for an estimated $6-8
  • Sometimes I stay late for a drink at work, and those last trams home are so gosh darned easy to miss! – if I catch an Uber home from my most distant workplace, that will run me an estimated $15-20 (a further note here: after that drink, there’s normally about four of us that share this trip home & split it evenly through the app’s Share function, making the fare a much more attractive $7-8 per person. Friends are great!)
  • Ahh Ikea. How I love you. How I hate your giant blue bags when I’ve spent my estimated 30% more than intended. If my poor wallet has had a hard trip, I can jump in an Uber (are you seeing a trend here?) and get home with my shopping for an estimated $12-17.

Out of all of these scenarios, the ‘missed the tram home’ is probably my most frequent – around once a month. My other main trip expense would be when an audition pops up somewhere more annoying to get to, but looking back over the last year of auditions, that cost has never gone above $10 per trip.

For me, those figures are pretty clear cut.

Opting to ditch the car and pay for a monthly transport pass means I have one pre-defined outgoing expense, no unexpected or difficult to anticipate ongoing costs and even with the occasional Uber trip as required, I’m still coming out on top!

Now, I totally understand that the factors involved in car ownership are hugely varied and this situation probably only applies to a very small number of you. For me this was an eye opening moment to actually calculate the huge cost I was paying for simply assuming that I still needed something that I had relied upon in the past.

As an interesting side note, about a year after ditching the car I was offered a new-model mini to test drive. After five days of car expenses, parking hassles and a marked decrease in my daily activity, I actually ended up giving it back well before the end of my trial period. I guess even without rego & insurance expenses, the cost of owning a car is just too high for me!

 

 


If you want to see more of me, you can check out my Instagram & Twitter, I would love to see you there!

 

 

Why I don’t own a car

Is your caffeine habit costing you millions?

I love coffee. As a Melburnian, I need that caffeinated magic like a sapling needs water. The problem is (as I’ve mentioned previously) I also love money.

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(Reminder: accurate depiction of me with money)

And coffee costs money.

This is where the Latte Factor come in. Coined by financial author David Bach, the term refers to the small amounts of mindless spending that can add up to a small fortune over time. In Australia, this was briefly linked to the Smashed Avocado scandal that arose when columnist Bernard Salt blamed the millenial’s brunch addiction for their lack of home ownership (as you can imagine, that went down well).

Both men have the same argument, although Salt approaches it in a fury of finger-pointing at the ‘younger generation’ while Bach restrains himself to diplomatically pointing out how much money can be amassed if these incidental spendings can be curbed.

Now I’m in the lucky position of enjoying discounted coffees at most of my workplaces, so I basically never spend more than $3 on a coffee (when I’m at home I use my trusty french press instead- love you baby). That $3 is cheap(ish) by Melbourne standards, and as far as I understand, is basically free if you’re a coffee drinker in America. However according to this handy dandy calculator, even my four or so coffees a week means that over the next say…25 years, that $12 per week means that I will be $21,790.24 out of pocket.

$21,790.24

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For the curious, that breaks down to $15,600 of actual money saved, and $6,190.24 from interest that I missed out on, assuming that I keep the money tucked away at my current savings rate of 2.5%.

If I were to keep saving for another 15 years (bringing me to approximate retirement age), that figure would be $43,317.72. I don’t know about you, but that’s seems like a sh*t ton of money to me.

But how do those numbers hold up if they’re broken down? Annually, the total figure equates to $1083.

OR

Just over half of what I spend on public transport a year. Or less than my monthly rent. Or about the same as my phone plan.

If I could double my phone bill in exchange for unlimited coffees, would I? Would you?

I think what I’m trying to get at here is that any number can make a difference when accrued over that length of time and with the miraculous benefit of compounded interest. $2 noodles start to look like an extravagance if you calculate 40 years worth of them. But if something gives you joy (and coffee definitely gives me joy), is it worth $43k to me to live without it?

If you want to play around with the idea of saving via reducing your ‘latte’ factor,  this is the calculator I used for my figures. Scott Alan Turner also has a fun tool that allows you to choose from some popular vices such as daily soda, repayments for a car you could do without, or weekly Ben & Jerry’s (guilty). Have a scroll through your bank statement and let me know if you spot an unconscious spend that could be costing you thousands! I’m off to have a hunt right now (I’m coming for you, lunch wraps that I could be bringing from home).

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If you want to see more of me, you can check out my Instagram & Twitter, I would love to see you there. Many thanks to Kyle at Steward and Slave for reminding me about the Latte Factor with his great post!

 

 

 

Is your caffeine habit costing you millions?