by Serina Bird
One a penny, two a penny, hot cross buns!
There is always a bit of competition to see who can spot hot cross buns in the supermarket first. This year, a friend reported on Facebook that he saw them on Boxing Day morning.
Boxing Day hot cross buns! The day after Christmas? Before New Year's Eve? But it's not even close to Easter yet? That's ages away! Why on earth would supermarkets put out Hot Cross Buns too early?
Store preparations for Christmas are even earlier, often starting in September just in time for 25 December.
It might seem crazy to us mere consumers, but in the supermarket world, they are prepared. They think strategically. They plan the year. They use their shelf space for maximum advantage. They plan what they will buy to have it there on time. And by starting early, they make sure that consumers don't forget about the end goal – buy big for Easter! Buy big for Christmas! Buy now!
Here we are now at nearly the end of March, and a quarter of the year has gone already. I can't help but wonder – how has time gone so fast? It seems like only yesterday that I was thinking about my New Year's resolutions and how I would achieve them. For me, this was a weight loss resolution (again!), and a goal of smashing my mortgage by half.
As I pause to look at hot cross buns on the shelves, I am also pausing to ask myself how I am tracking with my goals. Some are going well, but still, I keep thinking that I still have heaps of time until the end of the year. Tomorrow I will start.
It is easy, when young and starting out, to think that you have heaps of time before you start saving and investing. And then, life has a habit of getting in the way.
I remember, as if it was only yesterday, what it was like to be a poor, struggling university student. I juggled part-time work with study, and I thought that one day, when I finally graduated and got a real job, that I would have heaps of money and I would be able to buy lots of things, including a big home and a fancy car.
Well, I did graduate and get a solid, real-world job. We did save, and we bought a house. And a new car. And then we got married. Meanwhile, other things were happening.
My ex-husband changed jobs, and changed again, and had a few periods in-between jobs. I went part-time for a year to study for a Masters degree. I needed urgent surgery a week before Christmas, and we spent over $10,000 out of pocket on the ‘gap'. We had two children, including one who was born prematurely and needed expensive specialist appointments and was later diagnosed as having a permanent disability. We moved overseas for three and a half years and went down to one income. Still, we saved like crazy and built up a portfolio of ten residential properties.
Five years ago, my ex-husband and I separated then went through an expensive property settlement process. Then I met someone new. Happy days! Then nine days after our engagement, he had a massive heart attack followed by pneumonia. Thankfully after three weeks in hospital, he pulled through well, but he needed three months off work (full time) before transitioning back to work part-time over another three months. We had a big wedding last year with over 200 guests and went on an extended family honeymoon cruise for two weeks. And earlier this year, we upgraded our car so that we could have something that was more suited to us both.
All of these things interrupted the nice, steady trajectory of income creating abundance that I had foreseen when I first thought about what my life would look like when I entered the real world of full-time work. My early strategic planning didn't factor in off the chart contingencies. And just like seeing hot cross buns on the shelf, I am still in denial that my working life is fast approaching the post work phase where I will need a giant golden nest egg.
Thankfully, I am prepared as I have saved and invested over many years.
A key thing I have learnt is there is never an ideal time to start saving or start investing. There are always reasons to put it off. It is so tempting to think "I don't have a full-time job yet, so I can't start saving yet". Or "I'll just wait until I earn a bit more." Or "I'll start after Christmas is over." Or "When this busy work project is finished, I will find time to meet a financial planner and get myself organised."
If you put off saving, you'll be at the Christmas of your life before you know it.
Recently, I did some analysis about how much you could save if – instead of buying a takeaway cup of coffee every day – you invested that money instead. (I'm a tea drinker, and I was teased last month on The Project for saying you could save hundreds of thousands of dollars by switching to tea instead). $4 a day invested over 42 years of an average working life could deliver up to $1.2 million if salary sacrificed and invested in a high performing superannuation account. Even if invested in a bank account, it could earn over $100,000 on retirement.
What I found fascinating when doing these calculations was that the contributions were only $61,320 (based on a $4 cup of coffee, seven days a week over 42 years). The rest was compound interest. You can crunch your own sums using Summerland's online calculators
Albert Einstein is famously credited with describing compound interest as the eighth wonder of the world. It's like a rolling snowball; it starts small, but it gathers momentum and grows and grows by itself. The best time to start saving is as soon as possible, and to make it a regular part of your life.
Summerland Credit Union has a range of account options to help you start saving, with tailored products for youth and students, and a special gold class accounts for those with golden retirement eggs. They also offer financial planning provided by Bridges.
So next time you see those hot cross buns on the shelf, remember it is time to check in to see how your New Year's resolutions – especially your financial ones – are tracking.
Serina Bird is a single mother of two children, now remarried, who has a $1 million net worth. She is the author of The Joyful Frugalista and writes extensively about saving money, investing and finance.
