New Zealand Money Month Q&A: Emma Edwards, The Broke Generation

Icebreaker! Buy Now Pay Later — yay or nay?

The short answer: Nay. The long answer: Buy Now Pay Later is a complicated one because as a product, it’s a neat way of spreading the cost of things over time without being penalized with interest. In an ideal world, being able to spread that unexpected $800 dental appointment over three paydays is pretty smart. 

Unfortunately, it’s gone far beyond that. Until recently, BNPL was entirely unregulated. It’s marketed as a way to buy consumer goods like shoes, clothes, and tech before you have the money, and as more providers come to the table, users can open multiple accounts with very little friction. 

What’s your approach to managing money?

I’m self-employed so I pay myself a set amount each month into my personal account, and from there I take that number and pull it down into different categories. First I pay my bills (rent etc), and I pay that as a set amount from each pay. I total up my bills and expenses for the whole year and divide it by 12 months, so I set aside an equal amount every time. Then I move a portion over into a ‘salary holding’ account, where I pay myself my spending money weekly to help me spread my money out. Then I pull other money down into other categories and savers, like my personal care account for eyelash and eyebrow appointments, and a holiday saver for an upcoming trip. 

I really value autonomy and freedom, so I always allow myself that free, unassigned spending money that I drip-feed myself from the ‘salary holding’ account. I use it to buy coffee, takeaways, and other little discretionary items. 

Do you do anything special to keep engaged with your money?

I do a quarterly review, which coincides with doing my quarterly business tax reporting, which is handy. I use my PocketSmith account to look at the pie chart of where my money went and assess whether there are any opportunities to make better decisions.

I also use my own signature mindful money review, which I make available via my digital notion template and my Pulse Money Journal. It keeps me on top of where I’m getting value from my money, where old patterns or money leaks are emerging, and how other things going on in my life can dribble into my financial behavior. 

How important are financial goals and do you have any you’re working towards?

Financial goals are really important for our motivation because they help create discrepancies between where we are and where we want to be. When we get the size of that discrepancy right — not too big that it’s overwhelming but not too small that it’s not challenging — we can leverage that gap to drive better behaviors. 

Having a goal that excites you and tapping into that feeling is something you can train your brain to recall when you go to make financial decisions. Making it a choice of ‘buy this or get closer to that’ can help us assess whether things are worth our money or not. 

Personally, I’m saving up for a honeymoon with my husband — we got married in a micro wedding last year. We also need to get a new car as our shared banger is now 18 years old and, er, she’s getting a little bit clunky. 

Where do you get your financial knowledge from?

I’m mostly self-taught. I didn’t get taught about money growing up, and I had no idea about things like investing or financial freedom (or even financial stability!). Reading books and listening to podcasts got me started on my own journey, and since then I’ve undertaken my own further education. I’ve just finished up studying a graduate certificate in Financial Psychology and Behavioural Finance, which was a really interesting insight into the emerging field of research in the US. 

What do you love spending money on?

Hotels and nice restaurants. I’ve always loved hotels, and I love visiting new ones and soaking them in. Even if I can’t afford to stay there, I’ll go in and check out the bar and have a coffee or a drink. It makes me feel so special, and I worked in hotels when I was younger so there’s an element of nostalgia too. 

I’m a food lover, too, and I love trying new restaurants. I always try to get the chef’s selection menu (or the banquet or feed me option), so I don’t have to choose. I love just being brought a range of stuff to try, especially if it’s flavors I haven’t had before. 

What has been the best investment you’ve ever made?

Probably the ongoing investments you make in your business when you’re self-employed. I sometimes forget that I created this from nothing, that I started off writing for free, and then got so excited when I would earn $20 per article, and now I have a multi-hyphenate career that pays me a wage (just!). It’s so easy to forget how far you’ve come and focus just on the struggles of where you’re at — and trust me, there are many — but when I’m stressing about not making enough to cover my costs one month, I think back to the version of me that worked evenings and weekends to get her work out there and get noticed, and remind myself that I owe it to her to keep going. 

Have you ever experienced financial difficulties?

I have in a way, both growing up and as an adult before I sorted out my finances and I was in a cycle of debt. I’ve also had to provide financial help to my Mum at times because we’d never really had financial security. That said, I’m a white, able-bodied woman and I’ve always had the privilege of a roof over my head and food on the table, even if it meant paying with credit, so I haven’t experienced it to the degree others have. 

What advice would you give someone just starting out with their finances?

Streamline your expenses. Total up all your bills (rent/mortgage, utilities, subscriptions, memberships, car payment, etc) for the full year — it takes a bit of number crunching, but it’s worth it. Then divide it by the number of times you get paid, and add a 10% buffer. Then, every time you get paid, you set aside that set amount towards your expenses. 

The mental space you gain from knowing you’ve paid your bills first and you’re not going to realize rent is due in three days and you’ve only got $200 left is so powerful. It can give you the clarity you need to start budgeting the rest of your money without running into a speed bump every time. 

What’s the silliest thing you would put on a new design for the $100 note?

A cat wearing a velvet cloak. You’re welcome.

This interview is part of New Zealand Money Month 2023. NZMM is coordinated by trusted personal finance resource Sorted, in partnership with the financial capability community, and it involves events all around the country to encourage New Zealanders to talk about money and develop greater financial capability. To further the conversation about money we got in touch with some of our pals in the personal finance space to get their perspectives on their own finances.