As someone who's journeyed through the ups and downs of personal finance, I've come to realize that financial literacy isn't just about what you do, but it's also very much what you don't do. Today, I want to share with you six practices that I've consciously decided to avoid in my quest to become more financially literate and financially empowered. These decisions have not only shaped my financial journey, but have also allowed me to live a more intentional and fulfilling life rather than just going through life mindlessly, just spending money here and there and not really controlling the reins of my own personal finance.
These are lessons I've had to learn personally, but also lessons that I've learned through observing other people making mistakes with their money. Here are six things that I do not do as a financially literate girly. Number one, I do not maximize my spending. What do I mean by that?
One crucial lesson I've learned is the importance of not stretching our finances to their limits, especially when it comes to massive significant purchases like cars, houses, or even tech gadgets. It's a very common trap that we look at what we can afford in terms of the maximum affordability. It's a common trap to want to spend as much as we are allowed, often underestimating the real cost.
of those things that we want. For our example, my boyfriend and I, we were approved for up to $800,000. Now on paper, the monthly mortgage payment seemed manageable.
However, that would have meant we would be living paycheck to paycheck because the $800,000 mortgage loan was the maximum that we could afford to spend. So if we had gone that route, We would have been completely trapped with our jobs, with the monthly payments, and we would have been living paycheck to paycheck, constantly struggling to stay afloat. And let's not forget the additional expenses beyond the mortgage, like taxes, condo fees, maintenance costs, all of which add up really quickly.
And here in Canada, when you buy a property, you have something called the welcome tax. Welcome to your new home. Here's a large sum of money that you now must...
pay in a short period of time. I think for us, it was around like $10,000. Luckily, we were well informed before purchasing our property and we had already budgeted for all of that.
So for our property, we did not spend the maximum mortgage loan of $800,000. We stuck around half of that. As someone who prioritizes financial wisdom, I recognize the dangers of maxing out our mortgage and it would have left us in a perpetual state of financial stress.
So we chose a more sustainable, more manageable path, opting for a lifestyle that one income could comfortably support. Because we just did not want to get trapped in having to repay the mortgage and everything if one of us was to lose our job, for example. This decision was more than just about numbers. It was about ensuring our financial stability and protecting our relationship from undue stress. Money is one of the major, major topics that couples fight over.
And so we just did not want that stress to be put on our relationship when we really didn't need it to be a stress point. By living within our means and allowing room for the unexpected, we created a safety net that gives us a peace of mind and financial freedom. The second thing I do not do is I no longer waste money on disposable item. I've become acutely aware of all the countless products that we are encouraged to buy without a second thought. And this is especially towards women.
Items that are like destined for single use. I've shifted away from purchasing disposable items like paper towels, those single use makeup removers, and even makeup removers themselves, as well as single use menstrual products. Basically anything that I know that after the use, I'm going to be throwing it directly into the trash.
I will always look for a more sustainable option or a reusable option. And oftentimes that saved me more money than just getting the disposable convenient item. For instance, we spent about $50 to $100 per year on menstrual products. For myself, by switching to a menstrual cup, I've been able to save more money that way while reducing my waste.
Side note, I personally believe that every menstrual product should be free but that's like a topic for another discussion. Another thing I do if I have old t-shirts I'll cut them up so I can use them as like wiping rags. I don't buy makeup removers. I don't buy single-use makeup wipes.
I remove my makeup with coconut oil and a cloth but basically If you can remove the need to buy single-use disposable items, either remove the practice of using those completely from your life, or switch to a more sustainable option, that option will often end up saving you more money in the long run. The third thing I do not do is I do not fall for lifestyle inflation. We've all heard about this. Sometimes it goes by lifestyle creep.
As your income grows over the years, well, guess what? So does the temptation. to increase your spending proportionately. However, I've learned to resist the allure of lifestyle creep.
It's not easy and sometimes, yeah, I do fall into temptation here and there. However, I will question myself and ask myself if this is something that I truly want or if it is like a lifestyle creep temptation type of deal. Instead of using every pay raise or bonus or tax return or...
whatever is coming in as an income, as an excuse to go out and spend more and upgrade my lifestyle, I focus more on investing in my future. Now, that doesn't mean that I never treat myself or enjoy the fruits of my labor, but I do so in a way that doesn't compromise my financial well-being and my peace of mind or my long-term goal. One trick that I use to fight lifestyle inflation is, let's say I really want something. I'll pick an amount that I am willing to spend on it.
And if I'm able to find that item either for free or if I'm able to thrift that item or find it secondhand, then whatever difference in the amount I was able to save, I'll put that in my investment portfolio. For example, recently I had been wanting like a long satin skirt. I had set a maximum amount that I was willing to pay for it if I found one that I absolutely absolutely loved and I set that amount to $60.
So $60 new old whatever if I really loved the skirt I was okay with paying $60. Then I went out and I found one at a thrift store for $7 and so the difference that I saved of $53 I had put that in my investment portfolio. This trick works for me because I find it makes it kind of like a game.
Whenever I want something I first state a specific amount that I'm willing to spend on it. and then I kind of go out into the world keeping my eyes out to find that item at a lower cost just so I can put the difference into my investment portfolio. The reason I do this is because I heard somewhere that like a dollar invested today in the long-term future equals to like $21. Let's say I had spent $60 on that squirt plus tax since I'm in Montreal, Canada. That would have been about $69.
So $69 invested now for the long-term, 69 times 21 would be... close to $1,500. When I look at the numbers that way, obviously I'm going to try to find the item secondhand or for free just because I know that every dollar I spend now in the long term for my future is going to be times 21. And this brings me to the fourth thing that I no longer do.
I don't ignore investing. Investing used to intimidate me and, you know, the jargon, the terms, the risk, and just all the options seem very overwhelming until you learn. the basics. You do not have to work in the financial industry or be a trader or work on Wall Street to master your finances.
You can become financially literate at a very base level and just knowing those basics will get you to financial freedom if you stick to the plan. As I became more financially literate, I realized that ignoring investing is ignoring the potential for your money to work for you. And so what you want to do is you want to educate yourself and seek advice. There's a lot of information out there. However, there are basics that every single financial advisor or financial education influencers will repeat and you will see similarities.
And those are the basics. That's earning, saving, investing. The most common basic financial advice is not sexy.
It's often very boring. and repetitive, but there's a reason for that. And that's because it's the tried and tested way of becoming financially literate and financially free. And if you can, start investing small.
You don't want to go all in right away just because you can. You want to start small. Maybe you want to start with $50, $100, you know, dip your toes a bit.
You don't want to just jump into shark infested waters. You want to dip your toes and make sure that the water is clear. and how to swim and tread water before going into the deep end. Especially these days with inflation and all the prices rising, investing your money should be a non-negotiable part of your financial strategy. And it's the only way that's going to really allow you to build your wealth and work towards your financial independence in the future.
future. I'll say one thing that I know for sure. There is no rich person out there that does not invest their money, that does not have their money work for them.
The fifth thing is I no longer compare my journey to others, especially when it comes to finances. In the age of social media, it's really easy to assume that everyone is doing great. But the truth is we have no visibility over other people's money management.
And so oftentimes, the people that seem like they're doing the best on social media, they're in credit card debt, or they don't have any investments, or they're often living paycheck to paycheck, or they're just waiting for that next contract that they think might pull them out from the red. With social media, unfortunately, it's really easy to fall into the trap of comparing our lives to the highlight reels of others. And that's just what social media is. It's just the highlights. I never post when I'm feeling down or if I can't afford an item.
Of course not. I'm only going to post what is a highlight. But that doesn't mean that my day-to-day is exactly like that. And it's the same thing for every single social media influencer you are following.
I guarantee that. They are always thinking about what is next. What is next? What's the next thing that's going to bring them money? When is their next paycheck?
However, I've learned that financial success is deeply personal and looks so different for each person. So by focusing on my goals and my progress and my losses, I've found peace and confidence in my financial journey. And I want you to find that for yourself. For example, my financial goal was never to have a massive house with five bedrooms and 10 bathrooms and three car garage like That was never on my financial goal.
However, for others, it is on their financial goal. And so it would be irrelevant for me to compare my journey to somebody who has a complete different financial goal from me. Focus on your financial goals and focus on your financial journey because it's going to look very different from you versus Becky. And this brings me to the sixth thing that I no longer do.
I do not just accept societal norms without question. What do I mean by that? I question.
Everything. Could be the Aries in me, I don't know. But I grew up questioning everything. Do I want to be married? Do I want the white picket fence with kids running around?
Do I want that type of lifestyle? Everything that society has told me, or like tried to shove down my throat to tell me that I want, I have questioned it. because ultimately I'm going to be living my life for me. I actively challenge societal norms and narratives to make sure that they align with my values and the life that I aspire to lead. And so I will never push myself into doing something with my money that I don't believe aligns with my values or that doesn't lead me to the life that I want to live.
So I call this active living versus passive living. So I actively question everything. in my life to make sure that they align with the life that I want to live versus passively just taking in what society tells me I should be doing with my money and my life and just brainlessly going that way.
And that has allowed me to live a more financially independent life. And there you have it. Becoming financially literate is a transformative journey and it's an empowering journey.
One that teaches you as much about what to avoid as about what to pursue. The six practices that I've listed here, or rather like the avoidance of them, have been instrumental in shaping my approach to money and life. If you're on your journey to financial literacy, I invite you to consider what practices you need to leave behind to move forward more confidently and intentionally.
Follow along with my journey for more insights and tips on navigating the world of personal finance. Together, let's embrace the power of being financially savvy girlies because that is the only way, unfortunately, in this capitalistic system, that is the only way that we will gain independence and power to where we do not have to depend on others and we have the freedom to choose. And the freedom to choose along with a peaceful mind, I believe. are two luxuries in life that are just priceless. So thank you for watching and I'll see you on my next video.