The Devil's Details

I was reading an article from Australia about a woman's budget she has for her 100K yearly earnings - which is a bit above average for a salary there. However, what was most interesting were some of the comments from others,

“So you’re earning $100k but only have 400 bucks to yourself a month?”

“That budget is not realistic. You haven’t included any money for general spending like gifts, hair cuts, medicine, dentist, new tires and clothes”

I don't watch TikTok videos, but supposedly people were upset at her setting aside so little for "fun" activities - the 400 a month - which is probably why so many people are struggling and don't have enough to invest. You know the old adage

"Save 10% of your salary"

Remember, this is 100K is pretax and once that and superannuation (retirement) is automatically taken out, as well as a small amount for her student loan, she is left with 5,300 a month, so that means that the 400 is 7.5% of her monthly disposable income. Is that too little for entertainment? Obviously for some, but what was also interesting is that after all of the oher payments like rent, food, electricity etc, she had a $300 emergency fund and $400 put aside for a holiday fund.

Notice anything?

Yeah... no investments. Other than her superannuation, it seems that she is not keen on putting anything into a generative asset, but is willing to save the 300 for emergencies. Saving is good, but it is a depreciating value against inflation, however as I have written about before, there are differences in this regard between men and women. Women are on average, better savers than men and have more held in savings but, they also have less held in investments. This means that while saving well can increase the savings account for a rainy day, investing well can powerup the value, beat inflation and increase that rainy day fund - but there is s a risk involved that it actually goes down. Risk aversion is real - this woman spends $500 a month on insurance.

It is a crazy world when we are spending more on insurance than investments, isn't it?

I think this is a good indicator of how we are conditioned not to look after ourselves financially and are instead encouraged to proxy our financial security to others - in this case, financial institutions. What this does is convinces us that renting is better than owning, so we spend our available resources on everything, except what we own and control.

The greatest trick the devil ever pulled...

It wasn't convincing the people he didn't exist, it was convincing people to sign their assets and potential over to him under the provision that he will use it with our best interests in mind. The only interest he cares about is, the one he collects from us after we fall into a debt trap, because we do not own anything.

But all in all, at least this person has a plan for her finances, as most people have none and live their economic life at the whimsy of their moods and desires. In this regard it is like the advice of, "don't shop hungry", because you will end up spending more on foods that offer less. the average person holds a consumer mindset, making decisions based on their desires of the moment, not their long-term goals. This means that those "down the track" goals can't be reached, because the energy that could be turned toward it, is continuously commandeered and redirected by the wants of the moment.

I am definitely not as structured as I should be with my finances and there is a lot of leakage on the unnecessary, but I find that what people consider necessary has shifted over the last decade, often at the expense of investments and savings. We are constantly buying more and owning less, but as the economic landscape changes, we are increasingly finding ourselves worrying, struggling, suffering. But, if we followed the paper trail, it would indicate that our decision-making processes on how we use our resources, has led us directly to this point.

Owning nothing and owing more than nothing.

What is an "unrealistic budget" for the long term, is one that favors entertainment over investment, because eventually, the budget runs dry and there is no position to fall back on, except deeper into the folds of the devil's debt.