Rachel & Underspent

Rachel Smith is Underspent. She didn’t buy anything new or 2nd hand in 2014 and saved 38% of her take-home salary. She changed her spending and transformed her savings. It started as a lifestyle experiment, but it changed her life, so she kept on going.

Rachel is the Author of Underspent and the Founder & CEO of Underspent, Australia’s #1 financial behaviour change and money saving program.

Can you imagine being financially prepared for the future, financially prepared for any unexpected life changes AND able to afford all of your big dreams?

Rachel wants to – and will – help you change your spending and transform your savings.

She is best-known for helping men and women break their shopping addictions/buying habits (changing their spending and transforming their savings) so that they are financially prepared and CAN afford their big dreams.

Rachel is passionate about financial security (having cash in the bank for a rainy day or unexpected life change) and Lifestyle/Experiences (being able to afford ‘big dreams’). Rachel believes that there has never been a better time to be Underspent not Overspent.

Rachel has spent the last 17 years developing and delivering Behaviour Change projects. She has two TEDx talks, was part of the BMW Guggenheim Lab (an international mobile laboratory about urban life) and has spoken in the Palace of Westminster’s House of Lords. She has won numerous international awards, spoken at more than 300 events/conferences around the world, has a magazine column and is a regular media commentator (Rachel has featured on Sunrise, Today Show, BBC News, DW-TV, Disney Channel, Channel 7, Channel 9, in ELLE magazine, The Economist and is a regular on international TV, radio and print media). She has interviewed thousands of men and women in Australia, UK and USA about their spending and saving habits and is the Author of 4 books including Underspent – how I broke my shopping addiction & buying habit without dramatically changing my life.

Rachel has identified 3 key problems:

  1. We’re Overspent – We’re spending more than we earn. We’re living off credit cards and spending money we don’t have on stuff we don’t want or need. We’re ‘Status shopping’ and buying to ‘keep up with the Joneses’ because we’re never satisfied with the things and the ‘stuff’ that we already have and own. Our self-worth is based on what we buy, own and want to own.
  2. Our overspending is out of control – 8 out of 10 people don’t know how much money they spend. 81% of people don’t know what they spend each day, week or month. Office workers tell Rachel that they can easily spend $25 a day on take-away coffees, food and snacks, that’s $7,200 a year!
  3. We’re financially unprepared – 65% of men and 85% of women have no money – they don’t have cash in the bank. They are not financially prepared and they don’t have any money saved for ‘Unexpected Life Events’ e.g. a job loss, their work hours being reduced, a relationship break-up or divorce, a medical emergency, a health issue or sick child, a car breakdown or a natural disaster (a cyclone or flood). Millions of us are living pay-cheque to pay-cheque. Our lives can change from ‘doing ok’ to ‘disastrous nightmare’ in a heartbeat if we aren’t financially prepared. Data suggests many of us are 2-6 pay-cheques away from being homeless.

The solution is to implement 7 steps in the book Underspent. These are the 7 steps that worked for Rachel:

  • Step 1. I identified my passions and priorities
  • Step 2. I made a budget and sorted out my banking
  • Step 3. I got people in place to help
  • Step 4. I inspected, assessed and organised my stuff
  • Step 5. I got into swapping, sharing and selling
  • Step 6. I used everything that I already had
  • Step 7. I got out and had fun

In 2014 Rachel didn’t buy anything new or 2nd hand and she didn’t dramatically change her life to do it. She bought food, essential toiletries (tampax& loo roll) and ‘experiences’ -coffee’s, going to the movies, horse riding, massages, yoga and dinners out were fine. That wasn’t ‘stuff’.

Why did Rachel quit shopping and spending? Rachel first observed redundancies (or retrenchments) in late 2008. She remembers that Monday as though it were yesterday. She watched men and women pack their things into cardboard boxes and saw adult professional men sit and cry. She heard stories about colleagues who’d lost everything and she witnessed leaders admit to suicidal feelings. If Rachel hadn’t of been so scared about the future, she would never have embarked on her year of buying nothing – something that has literally changed her life. And when Rachel took a redundancy in December 2015, she had more than two years’ worth of salary in a long-term savings account. It had been hard work saving so much money, completing an entrepreneur course, writing books, creating a portfolio of assets and developing her own ‘gig economy’ but she was financially well prepared.

“You are an inspiration, Rachel” said Kochie, Australia’s No. 1 breakfast TV show host.

Rachel wasn’t a shopaholic and she didn’t have huge credit card debts, but she had a few impulse shopping addictions. Before 2014 she found it very difficult to walk past a bookshop without being sucked in by yet another ‘Buy three books for the price of two’ offer. If she was at the airport or train station she’d always buy a magazine, whether she needed one or not. She also had a habit of buying stuff for the house that she didn’t really need. If she saw ‘the most beautiful cushion in the world’ in a shop window, she’d want to buy it. Rachel’s mum, sister and friends say that she was also addicted to buying bags!

During 2014 Rachel discovered her ‘pain’ points, the reasons why she went shopping and bought stuff. The first was Boredom. It was easy to go to the shops when she had nothing better to do. The second was rewarding herself. She’d always treat herself with new clothes after a sixty-hour week. Third was peer pressure. Lots of Rachel’s friends loved shopping, and she’d been easily influenced into buying too.

For Rachel the benefits of quitting overspending were…

  • she had cash in the bank
  • she got rid of her impulse shopping addiction
  • she broke her habit of buying ‘stuff’
  • and she became a happier more content person.

For you, the ultimate result of being Underspent is:

  • You can afford your big dreams
  • You have cash in the bank
  • You get rid of any impulse shopping addictions
  • You break the habit of buying ‘stuff’
  • You don’t spend money you don’t have, on stuff you don’t need
  • You’re a happier more content person
  • You’re financially prepared for unexpected events – You’ve future proofed yourself! 

Underspent benefits of being Underspent  Underspent I quit overspending (3)