New Zealand Money Month Q&A: Ruth Henderson, The Happy Saver

Ruth has a blog and podcast over at The Happy Saver all about how she and her family handle money. What's the secret? Spend less than you earn, invest the difference, avoid debt, and budget each dollar that flows through your hands. She firmly believes that if you can just get the basics right, life becomes easier from there on in.

Icebreaker! Buy Now Pay Later — yay or nay?

That’s a hard pass. Absolutely not. If someone could convince me that the $160 shoes they pay off in four $40 payments meant they better utilize the money that stayed in their bank account a bit longer, then I might be swayed. But they can’t, so I won’t be. It’s a false economy. Flip your thinking and save $40 a week for four weeks, then buy the shoes. The sooner you realize there are clever people in big companies scheming up ways to make you part with your money AND make you feel good about it, the wealthier you will be. I never borrow money, and BNPL is borrowing money.

What’s your approach to managing money?

I spend less than I make, invest the difference, and always keep a good cash buffer. I automate as much as I can, but I still regularly monitor my family finances, checking in to see that it is running smoothly and tweaking when necessary. I don’t always get it right, hence having a cash buffer to mop up any overspends. I’m constantly talking to my husband and thinking weeks, months, and years ahead, scanning the horizon for what might come up so I can prepare early for a situation instead of reacting to it. Simplicity is essential, plus I have a very positive mindset about money. 

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

I’m always playing around with my PocketSmith. I think it’s the middle-aged equivalent of a ten-year-old emptying out their piggy bank to count their pennies. I find managing money fun, and I love to talk about it. Money is simply a tool to help me live the life I want. I also always say yes to new information about money. If I see or hear something money-related that grabs my interest, then I follow it up. I acknowledge to myself that I can’t possibly remember everything I read, watch or hear, but it all adds something to my collective knowledge. The irony is that the more I learn, the more simply I structure our family finances.

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

I tend not to have set monetary goals. It’s more the desire to move in a general direction. I call it “the vibe”. Life has far too many variables and ways to ruin my best-laid plans, but if I have a general direction to head in, such as becoming financially independent so that work is optional, then each time I need to make a decision, I ask myself: “Is this taking me closer to that, or further away?”

Where do you get your financial knowledge from?

Books, blogs, podcasts, YouTube, and interesting people. I tend to shy away from information released by companies, as their motivation is obvious. I lean more towards hearing the experiences that regular people share about their experiences with money. They have nothing to sell and just want to share and help others. I have a soft spot for speaking with those over 70 because they remind me to keep my money simple, and they have an obstinate amount of common sense.

What do you love spending money on?

  • $6.50 for my weekly lane swim at my local pool. It’s my thinking time, and the locals and staff are friendly, plus the spa has the best view! 
  • $18 monthly, so I don’t have to watch endless ads on YouTube. 
  • $15 spent on pocket money for my teenager. The enjoyment comes from teaching her to manage her own money and her seeing the benefits of investing 50% of her income in the S+P500 from a young age. She gets to see compounding returns in action!

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

Signing up for New Zealand’s retirement scheme, KiwiSaver, when it was first launched in 2007. I didn’t understand it but knew I should do it anyway. It has since taught me to be a calm, steady investor and that compounding is fundamental. 

Second would be my first investment into an S&P500 ETF fund after listening to JL Collins from The Simple Path to Wealth explain why it was a good investment decision. Again, I learned on the fly, but I’ve never stopped investing in that fund, which now provides my family with passive income. 

Finally, it’s all the time I put into The Happy Saver and the emails I receive from people who have turned their financial lives around. I’m investing in my happiness when I help other people.

Have you ever experienced financial difficulties?

You betcha! Haven’t we all? Phoning my parents and asking for a plane ticket home when I realized I had drained my bank account dry while backpacking around Australia was an awkward conversation. They bailed me out and then (rightly so) made me pay them back every single cent! Which I eventually did. Still skint, I started university and lived below the poverty line week after week, using student debt to pay my fees. Those pivotal experiences ignited my aversion to debt, and I might have been broke, but I decided I wouldn’t stay that way. I decided not to stay stuck with the “I’ll always be poor” mindset and slowly learned how money works from then on.

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

Assess where you are at. Take out a pen and paper, pull up your last three months of bank statements, and work out exactly what you spent and earned for each month. Add up what you own and what you owe to find your net worth. Find out where the problems are and go about fixing them. Aim to increase your net worth each month and track your progress so you can see that you are improving.

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

A caricature screaming, “Nooooooo, don’t spend me!!! I don’t wanna go!”

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.

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