Story

David & Beth talk managing money together

with Nicole Pedersen-McKinnon

Being in the presence of David and Beth Rees makes you want to smile. It was just two months ago that they were married. David is a 24-year-old mobile software developer and Beth is a 23-year-old graphic design student.

How does it feel, I ask?

Beth: Different, but in the best way.

David: We weren’t living together before we got married. Yeah. It’s been a bit of a different change because we weren’t living together and then married…

Beth: It just means that we’re able to build together and actually spend every day together without meeting in the middle all the time. Like it’s just this consistency that we really appreciate.

David and Beth sitting at a coffee table with Nicole chatting

Setting up house

The Reeses tell me this against the backdrop of the ornate, mostly original “Queenslander” they’ve rented for $370 a week… and in just two months, transformed into a home you wouldn’t want to leave.

So how did they set it up just so quickly? “Pre-loved”, they proudly, simultaneously, divulge. The table at which we sit was a workbench that cost $40 but – post David’s restoration – would easily come with a $500 price-tag.

Beth’s artistic touch is everywhere, from the pictures that hang on the walls to hand-painted handles on the ‘new’ furniture and a whimsical welcome flower at the home’s entrance.

The welcome flower made by Beth

Like many marrying couples today, the Reeses had a “wishing well” where wedding guests could make a financial contribution if they chose, rather than giving presents.

David: We were lucky to get some really generous ‘gifts’.

Fast facts: Marriage

  • In 1975, just 16% of couples lived together before marriage. But the figure had more than doubled by 1984, to 38.4%, and kept climbing rapidly. In the past decade, it’s remained hugely higher (and fairly static) at about 80%.
  • Marrying is on the increase, with 4.2% more couples tying the knot in the latest available year, 2016, than the previous year: that meant 4806 weddings nationwide.
  • The median age for males to marry was 31.9 years in 2016; for females, it was 29.9 years. The age of marriage has been increasing since 1974, when it bottomed at 23.3 years for men and 20.9 years for women.
  • Slightly more than half of couples who married in 2016 were both born in Australia (54.5%), while 31.6% were born in different countries and 13.9% were born in the same overseas country.

Source: ABS (various years) Marriages and Divorces, Australia; ABS (1997) Australian Social Trends; ABS unpublished data. As compiled on: https://aifs.gov.au/facts-and-figures/marriage-australia/marriage-australia-source-data

A wedding without the stress – or debt

David and Beth sitting at a coffee table looking at a laptop

Beth: The main thing was the vibe and even though we really like what we see in other weddings, we really wanted it to just be from us – we didn’t want super outside influence happening. So it was really good that we were able to just keep it within a circle of friends and family because then everything about it was just pure friendship and yeah, we could really feel that vibe happening of love and lots of laughter.

How much did it cost you?

David and Beth look to each other to confirm and then disclose that they paid for a move from Canberra to the Sunshine Coast, established the house and covered the wedding costs… with a saved $10,000.

And it didn’t even need to cost them that much.

David and Beth at their wedding function watching a speech

Beth [giggling]: We just got lots of bulk food… way too much pineapple and beetroot. We still have like 9 kgs left of both!

So it was burgers? What was it?

David: Yeah, we just did burgers.

As for the ‘wedding’ cake? A $60 wholesale slab of cake, and they popped strawberries on the top.

This was the bill breakdown of the Rees’s Sunshine Coast wedding, to which they personally treated the 110 guests, with the help of friends and family members who ‘gave’ presents that helped contain costs. The saving on photography and flowers in particular, was a big one.

David and Beth’s wedding bills:

  • Hire of a community hall: $1400
  • Decorations (old op shop sheets for bunting): $10
  • (They were given fairy lights, pom poms and a banner)
  • Printing of invitations (painted by Beth): $100
  • Wholesale burger ingredients: $530
  • Sliced tomatoes/onions, and crudités: $170
  • Cake and strawberries: $70
  • Drinks: $300
  • Hire of a fridge and BBQs: $700
  • Plates/cups/cutlery/serviettes (from café wholesaler): $100
  • Clothes (including for the groom's party, not the bride's): $1050
  • Hay bales: $300

Total: $4730

So who served the food though?

Beth: The bridal party served it. My dad was in charge of barbecues and then we just had mates helping.

David: It kind of organised itself, when people saw the need.

Beth: … it was really special.

As for the honeymoon, it was a two-week road trip to Queensland’s Maleny, Agnus Waters and Imbil.

David: We went all out on the first two nights but all the accommodation only cost us $1500… it wasn’t too outrageous. Then it was just food and petrol.

Fast facts: Cost of weddings

  • The cost of weddings in Australia varies hugely, but one of the more conservative estimates puts the average at $36,200.
  • 4 in 5 couples use their own savings for part or all of their wedding, while 56% get a contribution from parents. A frightening 60% get a loan and 18% reach for the credit card.
  • Food, alcohol and the venue are by far the biggest hip-pocket hit – typically totalling $18,683.
  • Clothing and accessories usually set couples back by $4271 and, while parental help is more traditional for the above reception costs, brides and grooms often pay for their outfits.
  • Photography and flowers are the next-biggest expenses: $3983 and $2896 respectively.
  • Sticking within budget is tricky… 35% of respondents to a moneysmart.gov.au survey blew theirs and 18% didn’t even have one.

Source: https://www.moneysmart.gov.au/managing-your-money/budgeting/simple-ways-to-save-money/how-much-can-a-wedding-cost

So as opposed to so many couples, who may even start their married lives with a wedding bill of tens of thousands of dollars, some of which they put on a credit card, Beth and David have a clean slate.

They’re perfectly positioned to build their lives together but…

Money is concerning day-to-day

The Rees’s savings are all but gone now, thanks additionally to an unexpected dental bill of $270 and all-of-a-sudden-two car regos that came in at once – to the tune of more than $1000. And besides, Beth’s 1984-model car may not be long for this world.

Beth: The savings were all down to David because I have been out of work for, like, six months. While I was in Canberra I didn’t find anything and I was with my sister at the time just helping around the house and with her baby. I’m a graphic design student at the moment.

Beth's art supplies

David: Beth’s really talented – she undervalues herself but she’s very, very skilled.

She is willingly, if not gainfully, employed designing invitations and the like for the couple’s friends and family.

David: Beth’s familiar with running out of money, being a student.

Beth: Oh absolutely. I’ve been between a few jobs, which has been hard because I’ll have periods where I’m looking for work, just part-time casual work, and just have to live off a very small amount of money in that time.

She’s grateful for the safety nets she has had in those periods, for instance, living with family, but it’s tough for Beth to accept that she’s not earning at the moment… particularly as a newlywed.

As a result, she’s not loved discussing money with David to date.

Beth: Whenever Dave brings up the conversation, I, um, I get quite anxious and it’s mostly because I just have no way of contributing right now. So…

Oh, you’re clearly contributing in so many other ways and you are studying.

Beth: It’s just hard internally to feel that way, I think, when you’re dependent.

But my take is that you’re investing in you, which is the best investment you can make and will have the greatest payoff in the future.

David: Exactly. I try to affirm that when I have money, she has money because we share the same money.

At the end of the day, the Reeses both recognise they’re in a ‘build it’ financial phase.

What’s more, David understands stress about money, because a while back he experienced some himself. He made the decision about two years ago to use all his savings at that point to chunk $12,000 off his HECS debt. There is $14,000 left today, reducing by the mandatory contributions from David’s salary.

As a bit of background, HECS-HELP debts increase only at the pace of inflation – so changes in the Consumer Price Index over any given year. That means that, in real terms, they don’t grow. But neither does money in the bank – much – at our current low interest rates.

David: I just wanted to have the debt gone because it seemed silly to have money in a savings account and earn a few hundred dollars a year when if I used the money for HECS then I would get an extra $600 off my loan [until January 2017, there was a 5% bonus for voluntary repayments]. Then, my indexation rate would drop by a few hundred dollars each year too.

So how did the move work out?

David: Well, I wondered before I did it if I shouldn’t give all my savings away, and then a week later I went to Malaysia and ran out of money – and I’m pretty much starting from scratch. I had a little bit saved but couldn’t really access it very quickly.

How did not having that emergency backing anymore feel?

David: It wasn’t great. Especially because it was in a different country.

So did you have access to credit?

David: Not at that time. I got my first credit card at the end of last year.

That’s a big step for David because, even at the age of 14, he was running a part of a household budget. His single-parent father asked him and his older sister how much they’d expect to be paid by somebody else to look after a house – cleaning, shopping and cooking – and, to do it, he gave them that much… in cash.

There was some additional money for the groceries they bought but what they made from their busy ‘job’ had to cover all personal bills. David managed to stockpile most of his ‘salary’ and saved the family money where he could too.

David: It taught me that independence with money and how to make it last.

Fast facts: Attitudes to money

  • More women (46%) than men (26%) find managing money stressful.
  • One-in-three Australians under the age of 35 report they have difficulty understanding financial matters.
  • 30% of renters don’t manage to save any money.
  • 81% of people couldn’t access three months’ salary in the event of an emergency.
  • But only 16% have needed to use a credit card, store card or overdraft to cover unexpectedly large bills.

Source: ASIC’s Australian Financial Attitudes and Behaviour Tracker 2017

So with your new household’s bills, do you have a strategy to make sure you can always cover them? They could, of course, be quarterly, annual or fluctuating… are you setting aside money each fortnight to smooth that?

Beth: That’s a good idea.

You’re welcome, I laugh.

David: Yeah, I guess it’s a really solid idea, but I put aside as much as I can anyway.

Perfect. And have you thought about having a monthly money date night to see how you’re tracking?

Beth: I’ve heard about the idea and I like it.

She agrees to give it a go.

… Skipping ahead in Beth and David’s Money Story

One date night – and a lot of beetroot and pineapple – later, I chat with the Reeses again.

They’ve now had a round of most of their monthly bills. They look like this:

Monthly expenses

  • Rent – $1603 ($370 p/w)
  • Electricity – roughly $100
  • Telecommunications – $81.50
  • Internet – $64
  • Design software – $44
  • Music/film/video/book services – $73
  • Charitable donations – $45

Total: $2010.50

They’re keen to begin reserving money from each fortnightly pay to stop unexpected and annual expenses emptying their savings account anymore… and ‘quarantining’ that portion of savings just for this purpose.

David and Beth also have a few longer range financial plans, something that before we met, had not yet made it onto their agenda. It was also previously a little confronting for Beth.

For now, the goals they’ve crystallised are about lifestyle and relishing being married.

David: I’m still trying not to think about big goals because we’re happy we’re done with all the big stuff. We’re just taking some time out to enjoy.

Beth and David’s life goals – for now

  1. Short term: Rebuild some savings, especially for emergencies.
  2. Short term: Find and buy a cheap caravan so their friend can stay in it as a granny flat
    (David: “We thought about giving her a room in the house but then came up with this idea instead”). They are happy to rent it to her for just their costs.
  3. Medium term: Continue investing in Beth’s talent – and her future employability. Look to set up a business for her online, designing invitations and stationery.
  4. Medium term: Start saving for a new car for Beth.
  5. Medium term: Start saving for a holiday to Japan, China, Mongolia and Korea, where they have a friend.
  6. Longer term: Buy a house… and hopefully have children one day.

David: There are mutually shared implied goals – a house and kids. But we don’t talk about them too much!

Beth, David and Nicole sitting down in the living room, smiling at the camera

Author


Nicole Pedersen-McKinnon

Nicole Pedersen-McKinnon

Money educator and commentator

Photos by Nicola Holland

HILDA tracks our attitudes to money