Latest / The Curve / The holiday hangover nobody talks about: your bank account.

Transcript

The holiday hangover nobody talks about: your bank account. · The Curve

0:01
Welcome to IOU Some Money Education.
0:03
Today we have Hannah Hart back on the podcast.
0:05
You may
0:06
have known her as Hannah Kamakis.
0:07
She's recently got married, which is very exciting.
0:11
And she is
0:12
kind of the poster child for all things money, budgeting, personal finances.
0:16
On today's episode,
0:17
we are going to be talking about how you save towards short-term goals.
0:21
So that could be
0:22
anything from a house, maybe a holiday, a car, an engagement ring.
0:27
Something else that we're
0:28
going to be talking about is an emergency fund, which I would say is quite possibly one of the
0:31
most important short-term goals.
0:33
But not only that, we're also going to be looking at your
0:36
immediate short-term goals, maybe like mini goals, and then also your long-term as well,
0:40
and how they can be a little bit more easy to start saving for.
0:44
If you want to learn how to
0:45
implement everything that we're going to talk about in this episode, and you want it in more
0:48
granular detail in terms of from the beginning, how do you budget all the way through to investing
0:54
towards like long, long, long-term investments.
0:56
So how do you invest in the stock market?
0:59
We have the perfect beginner money course.
1:02
It's called IOU Some Money Education, The Practical.
1:06
And you can find all the details for that
1:07
in the podcast show notes.
1:09
We recorded this with Lucy Blackiston
1:11
from Shit You Should Care About.
1:13
It's practical, it's easy to follow, it's really fun,
1:17
and it's actually super affordable.
1:18
So for all of those details, look in the show notes.
1:22
This episode of IOU, Some Money Education, is proudly brought to you by the Bank of New Zealand.
1:26
When you're just starting out, managing your money should feel easy so that you can focus
1:30
on winning at whatever you're doing.
1:32
Whether you're flatting, saving to travel, or making
1:34
a career move, they have all the tools to help you master your money from the get-go.
1:38
Thanks so much to the Bank of New Zealand for making IOU, Some Money Education, possible.
1:42
Don't forget to check out IOU The Practical Lessons to put what you're learning into practice.
1:46
Find the details in the podcast show notes.
1:48
Hannah I don't know what we're going to do when we've got no more episodes to do with you I'm like
1:53
every time we record them I learn heaps our producer our whole team's like I love Hannah
1:59
she's so amazing anyone that didn't listen to our last episode on side hustles highly recommend
2:05
very good for getting more money in the bank account I also think you're probably the most
2:10
prepared passionate person I've ever had on this podcast in terms of like really wanting to make
2:15
sure your facts are right that you do a good research job i'm obsessed i love it so thank
2:20
you for coming on again oh it's been so fun i have been so looking forward to jumping on again
2:24
and talking about this next episode which should be good i know i think so just to set the scene
2:30
before we get into what we're actually going to be talking about today i don't know if you've
2:34
spoken about this publicly but can we mention the fact that you are officially married crazy
2:42
i know it's been a long time thank you so exciting um i it's actually funny i do have to tell the
2:48
story i think because it's quite yeah so basically hannah and i dm like we message i we probably
2:54
should take it to whatsapp because the whole curve team can see our dms anyway i was messaging hannah
2:59
about something and i can't even remember what and there was this flash of this diamond that
3:03
came across the screen and i thought that's a very nice ring and also that appears to be on
3:08
the engagement finger and I replied to her saying like excuse me are you engaged what's going on
3:14
she was like no no I was like I like to pretend sometimes this episode today we're going to be
3:22
talking about saving for short-term goals which I think is probably the most confusing overwhelming
3:29
part I actually it sounds weird because you would assume that it would be investing in the long-term
3:34
investing that gets people but I actually really think that it's short-term goals so today's
3:38
episode we are going to be really focusing on how you can save towards a specific goal
3:43
and I feel like the perfect person to speak to this as someone who has saved budgeted been aware
3:48
of what you're spending from such a young age you've gone through all different types of
3:55
savings goals you know when you're 10 you're saving for something that's very different to
3:59
what you're saving for at 20 and 25.
4:01
And so today we're really going to be drilling down on how you
4:06
actually, A, figure out what you want, B, how to get there, where the money goes, how you should
4:12
think about it.
4:13
We're going to go into quite granular detail.
4:15
But before we get into it,
4:16
I just wanted to mention for anyone that did listen to the last episode that we did with
4:20
Hannah when we spoke about side hustles, this was such a loved episode by the Curve team and by
4:26
so many people who listened if you did the extra credit which we set last month was just to
4:31
see you know could you bring more money in can you comment wherever you're listening or send us
4:37
a personal note to say what you tried if it worked if it didn't because I do think expanding your
4:43
mind to think about how can I bring more in rather than just how can I save and be really
4:48
clever with what I've got is such a powerful mindset whether it's you got a pay rise whether
4:53
it's you found something to earn a bit of extra money you know one day a week would love to hear
4:58
if anyone's actually gone in action to that but yeah before we get into it are you in the red or
5:01
the green this month never not in a million years absolutely not in the red green with envy or green
5:11
i'm imagining probably we're in the green i mean the red given what's happening in your life
5:16
i'm i'm very much in the red day like i think every single episode i've been on i've been in
5:21
the red because renovating a bit of wedding stuff as well and then yeah we're new now because we've
5:27
officially merged together and so that's really fascinating we've now got a joint bank account so
5:33
it's really interesting but we are unfortunately a little bit in the red but we are looking
5:37
looking up from here though so you've never had a combined financial like you know not an account
5:43
or anything until you were married yeah it's crazy it's so because you're so you're so you're
5:49
I think you're probably the most financially literate person of your age I've ever spoken to.
5:53
Was that a conscious decision in terms of let's just not combine this and let's have shared goals
5:59
and work towards things together, but let's not combine officially until we're married?
6:03
Was that
6:04
a really conscious decision?
6:05
Well, we actually had combined just before because we had switched
6:10
to BNZ.
6:11
So BNZ were our new banks when we then bought a house together and we bought a house
6:16
before we were actually married.
6:18
And so it was just so much easier.
6:19
I was like, look, we're
6:20
getting married in literally two or three months.
6:22
I know that we're going to get married and merge
6:24
our accounts.
6:24
We may as well merge our accounts now.
6:26
So technically we had merged earlier,
6:30
a few months earlier.
6:31
So now we're only kind of now getting to the stage of going, okay, cool.
6:33
We're merged.
6:34
How does it look like?
6:35
How does budgeting look like?
6:36
You know, tomorrow we're
6:37
actually going to sit down and work out how does our budget look together, which is going to be
6:41
really interesting and so I'm excited.
6:42
Wait so you've never done this before?
6:44
Not with him no no this is like
6:46
it's exciting stuff.
6:48
It's so funny the only person to ever be that excited about their shared budget.
6:52
Do you think you guys have similar approaches to savings goals?
6:56
Yeah.
6:57
I mean in the last however
6:58
long you guys have been together has that been something that you've seen in action because it
7:03
is you know a lot of people say your partner is the biggest financial decision you'll make how
7:08
and maybe because this episode is specifically about saving towards goals when it came to the
7:12
wedding or other things yeah how did you make sure you're on the same page with how you approach
7:17
stuff like that no so he is very good at saving as well um so we we both are very aligned with
7:23
our money kind of goals um i have obviously so many more bank accounts and i remember when i
7:29
first joined up to bnz and i to create all the accounts it was literally like the best day of
7:33
my life creating all the different accounts adding all the different photos it was literally it was
7:39
so good and it's funny because I had photos of all of me and my husband and then whenever I
7:43
screenshot and post it online to TikTok I had to edit all the images and take off all the photos
7:48
of me and my husband and then re-put them back on again so I just love it so much like it looks so
7:52
beautiful but you know we're fortunate that we're both very very similar very aligned um with our
7:57
goals and so now looking forward tomorrow is literally the day we're going to sit down and go
8:02
what holidays do we want to do?
8:03
We want to do Japan in 2028.
8:04
Okay.
8:06
How do we save for that?
8:07
So literally tomorrow is the day.
8:08
So I'm really excited to talk about this through the podcast,
8:11
because I'm also journeying with the audience as well.
8:14
This is so exciting.
8:15
I'm really looking
8:15
forward to this.
8:16
And actually, because I'm in a similar position where like, I don't know,
8:20
I think as someone that has, you know, learned about money and spoken about it for a really long
8:24
time on the podcast it's so interesting to watch myself in a relationship dynamic it's still super
8:32
early for us but like financially in terms of the idea of being on the same page it's really funny
8:38
how I I know things theoretically but putting it into practice with someone else is a whole
8:43
another thing and I think this will be super helpful for anyone whether you're single whether
8:48
you're in a relationship and you have been for a long time and maybe you're like we could probably
8:51
approach joint goals better you know there's so many different ways that you can interpret this
8:57
hopefully it'll be really helpful for a lot of people but I would just like to um before we get
9:02
into the goal part quickly touch on the emergency fund piece because I think that that really is the
9:08
first big goal that most people I mean obviously we're not telling people what to do but really a
9:15
financial buffer, some kind of FU fund, your emergency fund is so, so, so important.
9:21
If you
9:21
don't have that already, that should be what you focus on in terms of taking what we talk about
9:27
today and implementing it into that first big goal.
9:29
Maybe a fresh perspective from someone else
9:31
who's built one is quite helpful to hear.
9:33
But for me, it was like quite life changing.
9:36
Yeah, no, 100%.
9:37
I think when people first think of an emergency fund, they get really daunted
9:42
really quickly because they're like, oh my gosh, I need to have six months of my salary.
9:47
I just
9:47
don't have that.
9:48
I'm going to give up.
9:49
I'm not even going to bother to start.
9:51
And so I think
9:51
that's the danger is people think it needs to be this massive amount, which yes, theoretically,
9:56
that would be amazing, but you have to start from somewhere.
9:59
And I think that big figure scares a
10:02
lot of people.
10:03
And I did talk to my audience and I did ask them also, like, what do they think of
10:07
emergency funds how much do they have in there and it was really fascinating hearing from a
10:13
like a vast you know group of people of what they actually think you should have in your emergency
10:20
fund but I think the biggest misconception is needing to have a massive number in there but
10:25
honestly you just need to start small so what we talk about at the curve and I don't know if this
10:30
is different to what you teach but we say generally three to six months is optimum you know it's it's
10:38
completely different for everyone you know if you have 10 children and your base costs are enormous
10:44
the emergency fund you probably need is going to be bigger than someone that has no kids is not
10:48
married you know doesn't have a mortgage etc etc so it's completely personal but yeah I think your
10:55
point of saying a lot of people think they need their whole salary for three months or six months
10:58
it's not that it's just the things that you have to pay for before you know so for example if you
11:04
had no money coming in what are the things you absolutely need to pay for to be happy healthy
11:09
able to stay in your house etc no i 100 i do agree with you as well three to six months is
11:13
really important but i think what i was meaning before is that people seem to think they need
11:20
this big amount and they don't know how to get there it's this abyss of going like how am i
11:26
going to get there so I think what's really important is potentially we really quickly run
11:29
through how to work out that figure it's a short-term savings going away but it is probably
11:35
your most important one like yes going on a holiday to Italy or getting a beautiful engagement ring
11:41
all those things are really important but the psychological safety of knowing that you can get
11:45
yourself out of any situation is priceless and it's just I don't know it's it's revolutionary
11:52
having this money there that you're like oh I know I'm gonna be okay yeah and it's okay it's like
11:58
yeah if you go through something that you're like oh I did not budget for that but that's okay I've
12:02
got an emergency fund so I think what people do is they they think of this massive number they get
12:07
daunted they don't start so instead of doing that let's kind of reverse it and let's start by
12:12
start with a small number and let's start going backwards what we do need to to do is really work
12:16
out the three to six months um and it is really up to you personally if you want to choose three
12:22
months four months five months six months but that range three to six is a really good kind of buffer
12:27
to start with but what you need to do is you need to work backwards so you first of all need to work
12:31
out and think about your rent your all your mortgage your groceries your utilities insurance
12:36
transport debt repayments any other bills that you can think of um that if you were to lose your
12:42
income you can still cover that for three to six months would you also agree yeah yeah that's
12:47
exactly what we do it's basically yeah what are the necessities and for some people it's actually
12:53
exercising and paying for the gym some people they absolutely need therapy but yeah it's essentially
12:58
what are the things that you really feel like you need not that you want and what I would say is you
13:03
know Hannah saying you could do sort of three four five six whatever works for you for me coming from
13:08
a place of quite a lot of scarcity it's really easy for me to edge into thinking I need four
13:13
five six months sometimes zooming out from your situation and actually saying what is risky right
13:19
now for me you know if your job feels precarious maybe you do want to have a bigger emergency fund
13:25
maybe you want to leave your job having a larger emergency fund if your relationship's a bit shaky
13:30
and you're like actually do you know what I think I want more there's so many different reasons why
13:35
you might want to edge towards six but I do think don't get stuck on needing more and more and more
13:40
in cash because you're not going to be able to grow your wealth fast or even get onto other
13:47
short-term savings which we'll get to in a second if you're constantly focused on just having as
13:51
much money as possible in cash for an emergency but yeah i think like if we were to go back
13:56
to making sure that you've got all those amounts that we talked about and and like you said that
14:00
could be fitness and those things that you're like i do need this um you know what you need
14:05
to do and we talked about this on one of the podcasts as well was adding everything together
14:09
and so say if that for a month is $3,000 and you are going yeah okay I'm going to do three months
14:16
so $3,000 times three months that's $9,000 that you should ideally have so I think it's really
14:20
important when you're thinking of an emergency fund try and get that number and then try to
14:25
work backwards on how can I start to get that number how can I start to reach that so for me
14:29
I actually only put aside like $100 a month which wasn't amazing to my emergency fund and so I think
14:35
it doesn't need to be this crazily daunting amount.
14:40
It just needs to be something that can
14:41
be manageable as well.
14:43
Essentially, what I've just run you guys through is basically what I'm going
14:46
to do tomorrow and sit down and go, cool, this is the figure I need.
14:50
And then I'm going to divide
14:52
that and go, actually, how much is a reasonable amount to put aside every month?
14:56
It can literally
14:57
be, I know a few of my community members said to me, I don't have any spare money to put aside.
15:03
and I think you don't need to put aside a thousand dollars a month you don't need to put aside even a
15:08
hundred dollars a month just start something and it will accumulate do you think that you will have
15:14
your own separate emergency fund as well as your joint one with your husband I don't think we will
15:18
no I think the only two separate accounts we have is our like fun accounts that we've decided on
15:24
and so it's like you get a little bit of money that you can do whatever you want with it's a
15:27
little bit of fun we still got access to each other's um but yeah those are the only two
15:30
accounts that we will have separate you can take this with a grain of salt absolutely say not
15:35
interested i am very aware i'm not going to do it but something that has come up a lot with so many
15:41
different people that i've interviewed on this podcast yeah is the idea of having your joint
15:46
emergency fund for sure but also having your own one should shit absolutely hit the fan yeah
15:53
obviously you just got married obviously you're really happy obviously things are great um i don't
15:59
know if you've read that book strangers by bell burton no um it's you should definitely read it
16:03
it's kind of shook me a little bit but yeah basically she she had a she was married and it
16:09
really one day just turned to absolute shit um and i know that we don't want to be going into
16:15
relationships or marriage with that mindset i think that that's not the plan but it's more just
16:20
things happen and i think if you don't have money that you can access by yourself
16:25
should you need to get somewhere, whatever.
16:29
It's just interesting.
16:29
I remember speaking to Frances Cook,
16:31
who I know you've been on her podcast too.
16:33
And they've been together since they were like so, so young.
16:36
And they had their own separate emergency funds.
16:38
And I was like, that's so interesting to me
16:39
because often I see all the people we've interviewed
16:43
have emergency funds that are separate
16:44
when they've been together later in life.
16:46
A lot of them have joint finances and lots of other ways,
16:49
but I just thought it was interesting to share.
16:51
If at some stage, maybe in the next few years,
16:53
you're like, do you know what?
16:53
actually maybe I will build my own one up just so that I have that um it's just interesting because
16:59
you're like you don't go into marriage or relationships thinking that's going to happen but
17:03
often when something does go awry like all of your accounts are frozen so do people have that
17:08
in their like a different bank account with their own name yeah oh wow yeah people are like very
17:15
happy relationships not ones that they're like oh trying to you know siphon money off in a secret
17:21
way like they're really open about the fact that they both have their own money should they need it
17:26
um and I just thought that's really really interesting and it makes a lot of sense
17:31
so I don't know maybe something you want to think about at a later date yeah okay so now we've moved
17:35
on from the emergency fund yeah let's chat about short-term goals so I think that the timeline
17:42
piece is probably what trips a lot of people out how long do you need to get there how much do you
17:47
need and therefore how do you work backwards in terms of figuring out what you should be putting
17:50
in.
17:52
Ideally, having that target and breaking it down for me reduces overwhelm.
17:57
I think to your
17:58
point on emergency funds, sometimes if you think about, okay, we'd love to go on a holiday or I'd
18:02
love to go on a holiday, I think I need 10,000 to go and have a six week travel or whatever it
18:11
looks like for you.
18:12
That is a huge number when you look at it in one sort of lump, but when you
18:16
break it down it's it's a lot less scary but I think yeah what I'd love to talk about is like
18:21
real examples perhaps it's things that you and your partner partner husband we're gonna husband
18:27
so I'd love to give some tangible examples perhaps let's just talk about and maybe you
18:32
could give your own definition of how you think about short-term savings outside of your emergency
18:38
fund outside of things like your kiwi saver or long-term investments outside of your budget like
18:43
what is this for you what is a short-term savings goal in terms of savings I feel like travel is
18:49
something everyone can relate to everyone wants to go on holidays everyone wants to be able to
18:52
travel and so what I would do is that I would actually work out a budget like quite an accurate
18:56
budget and go great it's going to cost me ten thousand dollars to go and travel I think my
19:00
last Europe trip was just something astronomical um but working out how much it's going to cost
19:06
say ten thousand and actually divining it going okay I've got you know 15 months dividing that
19:11
by 15 months of working out, okay, how much should I be putting aside in order to make this trip
19:17
worth it and to actually end up going ahead with it.
19:19
So it's really important to plan ahead.
19:22
Hence
19:22
why me and my husband are talking about Japan 2028, because we're like, great, we have a good
19:27
amount of time to save for this and making it a much easier goal to save for rather than, oh my
19:33
gosh, I have to put aside $2,000 a month.
19:36
It's going, okay, I only need to put aside a few hundred.
19:39
funny you bring up the date like 2028 because when you said that earlier I thought oh my god
19:45
that's ages away but it's a really good example of it then makes the goal not that overwhelming
19:51
because you're spreading out the amount that you need but what about for people who are listening
19:56
who haven't planned very far in advance now all of a sudden they're realizing shit I do want to
20:00
go on holiday before two and a half years time do you recommend or do you talk about focusing on
20:07
what it is that you want and the amount and then working backwards or do you think the timeline is
20:11
more important because you know let's say for example someone does want to go on a trip and
20:16
they ideally want to go within a two-year period because it's just so far to wait for a holiday
20:21
let's just say this is their mindset it would be mine let's say then the ideal holiday would be
20:27
spending 10 but then when they work backwards in terms of that date they realize they have to put
20:32
way too much in to get there to that goal say it's 500 would you adjust the total in terms of
20:38
what it is that you're going for or would you extend your timeline I feel like it's a little
20:42
bit of both but I would say if you can't hit it it's reality you can't hit it like you can't go
20:47
into a store and and want to buy a Ferrari today it's like you don't have enough money so it's
20:52
going okay I'm just gonna adjust my expectations and maybe a Mazda is in my is in my budget or
20:57
you know going actually no I do want a Ferrari but let's just wait a few more years so I think
21:01
it's it's it is very much a mix of going um what is the most important to you if you say to me i
21:07
want to do a world cruise i can't really adjust that because it's set so okay i will need to
21:12
extend that but if you're like no i'm just gonna go on a cruise let's just do let's do a three
21:16
night let's do something a little bit more on a budget cruise line rather than the one that i
21:20
want to go on so i think um it really comes down to what do you truly want for yourself and then
21:26
And I guess how much are you wanting it and can you wait?
21:29
Okay, so let's just say then, because I think this is a really important point,
21:33
is that you actually, unless you have a lot of money,
21:37
you have to adjust your expectations or your timeline or your, you know,
21:41
there's going to be a bit of ebb and flow with what you want,
21:44
when you can do it, and if it's the total amount that you're talking about.
21:48
So let's use this travel example of $10,000.
21:51
If someone has, say, $300 a month that they can put towards, whether it be future investing money, so in the stock market, things that they, you know, for future, future you, which hopefully everyone listening is thinking in that way because really you don't want to be using 100% of your surplus money after your budget on just short-term stuff.
22:12
Otherwise, you're constantly only working towards these short-term goals and you'll have to work forever because the point of long-term investments is that if you invest, it then means there's a point in time you don't need to be working to have money coming in.
22:25
How would you then look at that surplus, say it's $300,000, say you have a goal of $10,000 that you need to get to to be able to do your European holiday?
22:33
How do you think about how much goes towards those short-term goals or that short-term goal versus then also your future investments?
22:40
oh i always err on the side of putting more aside to my long term but you know like for example i
22:47
pulled up just before this um before this podcast just to hear it was just to read over what are my
22:55
percentage splits of my old income this is this is important it's old because it is something before
23:02
i got married and it's quite interesting seeing that if out of my savings i actually have 15
23:08
percent going towards long term whereas my holiday is only 4.2 percent my short term is 4.5 percent
23:16
so you can see a big hefty chunk is towards long term but I am in a very different position to
23:22
other people so did you say 15 percent of your overarching salary or money coming in is going
23:28
towards your long term yes okay that's so interesting and then you said four percent is
23:34
going towards short-term goals ish yeah so total of 19 going towards my short-term long-term saving
23:40
then i've also got holiday on top of that emergency on top of that insurance on top of that and then
23:45
another short-term goal which is a piano that i want so your holiday is actually separate to that
23:49
as well it is separate to that so i think all up if i was to calculate how much i am saving you're
23:55
looking around about um 35 percent oh that's amazing about yeah about up to 30 percent and so
24:05
just to clarify when you're talking about savings you mean the money that's not going towards
24:09
the spending money whether it's the things that you need or want it's your short-term goals your
24:14
long-term goals it's anything that's going towards something yeah like holidays or or investing or
24:22
say a wedding or all those things it's around 30 that's so amazing so yeah so essentially what
24:27
we're saying is the money you have left over your surplus the rule of thumb is 20 but the reality is
24:34
you if you can do more for sure go for it like hannah's doing 30 of that you only have a certain
24:39
amount so if you are constantly putting that 300 every single month i.e your 20 surplus or whatever
24:47
it is for you towards your short-term goals you're never investing that's what the biggest thing to
24:51
remember here is that you could probably spend all of your surplus for the entirety of your life
24:59
on short-term goals but it's really not ideal to be doing that and so you kind of have to like have
25:05
a conversation with yourself and be like how much am I willing to put towards short term and maybe
25:09
it ebbs and flows if you have a holiday that you want to go on in six months maybe you do prioritize
25:14
100% of it towards that for six months you can get there and then you go you know it's it's
25:18
different for everyone um I think this is one of the hardest parts of it if I'm being honest because
25:24
I feel like if I look at what I could do with my surplus if I was splitting it between long
25:30
term and short term it's like five years before I can do any of the short-term goals which sucks
25:36
I know no it is it is really specific to each individual person and I think if you have a
25:43
general rule of, you know, say, start with 50, 30, 20 for your budgeting rule.
25:49
And then you work out,
25:50
okay, from there, how much is important for me to set aside.
25:53
But I really, it literally comes down
25:54
to work backwards on every single goal.
25:57
If you want to buy a house, work backwards.
26:00
Does that
26:00
mean you can afford a holiday?
26:02
No, you can't do both.
26:03
So then if you go, oh no, I need to get to
26:06
$500,000 by X amount of time, which means I have to do, you've only got so much income.
26:10
Hence why
26:10
go back to the previous episode and listen to our side hustles because you if you're capped you
26:16
literally can't do both you can't save for that mortgage at the same time to hit it at one you
26:20
know in five years time as well as a really big holiday sometimes things do need to shift and move
26:25
or you increase your income as well so it's it's really working backwards on every single goal
26:31
working it out and going exactly how much do I need to set aside and then actually do I have
26:36
enough money coming in cool I do then great I can do both but you you really need to just work
26:40
backwards that's like the only thing you can do because it is really goal specific we can't give
26:46
like a this is the amount that you need to set aside every single month for a holiday you need
26:51
to work out what do you want what specific holiday and goal do you want and work backwards okay so
26:56
let's then just pause and say right if a short-term goal is anything less than five years because
27:02
that's what we say when it comes to long-term investing anything that you don't need for five
27:07
years ideally should go in long-term investments like the stock market or property or other things
27:13
so if you were then looking at the next five years of your life maybe a really good exercise would be
27:17
to write down what are all of those things that you would like within a five-year timeline so is it
27:22
an engagement ring is it a wedding is it a holiday is what are they is it a new wardrobe like whatever
27:27
it doesn't matter but actually think of it in a five-year timeline not just the next year because
27:33
I think that that then when you look at what those totals are and then let's say you've got four
27:38
short-term goals within the next five years write down what you need for each of those you add those
27:43
up you're going to have to then work backwards and the reality is and what you're saying is
27:48
a lot of the time you can't do all the things you want to do in the timeline and you actually just
27:51
have to prioritize yeah so then it's probably about ordering it what are the most important
27:56
goals, one to five.
27:58
And if you're looking at that and thinking, if I have to do all these things,
28:02
it means I sacrifice long-term investing to hit all these goals.
28:06
You probably should pull out some
28:08
of those short-term goals because otherwise you're going to constantly be in this loop of saving for
28:13
things within a five-year period, not investing in the stock market, not growing your money as
28:16
fast as you could.
28:17
Okay.
28:17
Let's talk about your goals.
28:19
Have you saved for a big goal and not
28:22
priced it properly what did you learn from that oh the renovation really that was something i just
28:28
literally it's tripled it's tripled it's gone from like literally 100k um up to about 300
28:35
and more i can't even begin to talk about it it's a lot more so i think that is quite possibly
28:40
take it's the icing on top you know it's okay that the um wins um for how the most overblown
28:47
budget I could have ever yeah thank god what did you learn from that in terms of what you did do
28:54
to plan for that and what you probably could have done better I didn't plan enough like I didn't do
28:58
research enough I completely underestimated everything that needed to have happened I needed
29:04
to have literally gone in um and looked at every single cost and actually looked at heaps of
29:09
different companies as well and and hunted around don't just go with the first company that comes up
29:14
on Google, like actually do your research.
29:16
Yeah, we've been stung.
29:17
A lot's happened on the Reno
29:20
that I haven't actually talked about online, but it has been a very pricey, but it's been a really
29:25
good lesson to learn.
29:26
And so I think I do want to share some of the stuff on my accounts to
29:30
hopefully try and encourage people to be aware before they go into something like this.
29:35
So when it comes to a short-term goal, could be anything, whether it's property,
29:40
what are some other better examples of short-term goals?
29:42
So I asked some of my audience what they were also saving for.
29:46
Okay, great.
29:46
So quite a lot of them said a house, which isn't really a short-term goal, but quite
29:51
a few weddings, which is interesting, really cool.
29:54
Saving for kids, that could also be a short-term goal.
29:57
Like really, IVF, upgrading for their car, a Euro summer, a lot of new cars.
30:06
Oh, yeah.
30:07
Yeah, I know.
30:07
So those are some like short-term goals, which are also quite relevant for, I think, a few
30:12
people as well so if you were to look at those goals and you were to figure out how much you
30:16
think you need for them what would you add in terms of a percentage increase from what you
30:21
think you need based on past experiences of accidentally blowing out because I think that's
30:27
something that's worth talking about as a buffer it's quite like item specific I feel but I feel
30:32
like you do need a relatively good leeway if you were to look at say something like IVF and let's
30:39
say you were told you need 15,000 or 20,000, you then have to think about what if it doesn't work
30:45
first time round or say, you know, so there, and it's car, I guess it's kind of different,
30:49
right?
30:50
Like you, there's probably a set car you're trying to get to.
30:52
So there's not so much
30:53
of a buffer needed, but kids, there's probably a buffer needed.
30:57
Renovation, there's a buffer
30:58
needed.
30:58
So basically is what you're saying.
31:01
It probably depends on the type of goal,
31:03
how much buffer you need.
31:04
Yes.
31:04
But I think just having in mind to have a buffer and
31:09
what it is is like in terms of the actual percentage or the split it really does come
31:13
down to item specific but I think you know chuck on a bit of a buffer maybe 20 50 percent
31:18
um renovation times it by three okay let's talk about saving for goals that perhaps people are
31:27
feeling a little bit unenthused by or they lose motivation to keep going or I don't know I think
31:35
that if something is quite far away, I actually completely understand how people get bored,
31:40
lose interest, need a bit of a dopamine hit.
31:44
How do you stay focused on what that goal is?
31:47
And do you have any tips or tricks for people who are maybe needing that constant kind of like,
31:54
good job, you're doing well, to keep going?
31:57
Most banking apps do have a goal tracker,
31:59
which is so helpful, especially if you're a visual person like myself.
32:03
And it's got like
32:04
this bar at the top and it says you're saving for Japan which is 10k it will basically say look you
32:10
know well done you're halfway there you're 80% there and it will really help you visually see
32:14
how close you to achieving this goal and so that's a really easy way to just to jump into an app
32:20
and to also see oh cool like I'm actually quite close but there's so many other ways that you can
32:24
do as well and I think a few things that I do personally because again I'm a very visual person
32:29
is I love to make sure that my account doesn't just say savings.
32:32
It's actually got the name of
32:34
what I'm saving for.
32:35
So it's got Japan.
32:36
It's got a photo of Japan on it as well.
32:38
Sometimes I'll
32:39
change my screensaver on my phone or my laptop.
32:42
And every time I go to buy something and instead
32:44
of saying, oh no, I'm not going to buy that because I have to save money.
32:47
It's going, no,
32:48
I'm not going to buy that because I'm saving for Japan.
32:51
So it's just reminding yourself,
32:52
why are you saving for that?
32:54
And try and get yourself excited for the fact that you are
32:57
actually saving for an item or a thing or experience that you are truly looking forward to.
33:03
Yeah.
33:03
And I also think it could be kind of a good tactic if it's a big, big goal.
33:08
For example,
33:09
a holiday that's not for ages, you could also say get to $3,000 and then start booking some
33:15
accommodation or get to a certain point and then start spending a bit of it towards the goal.
33:20
Because I think the worst thing you could do when it comes to either short or long-term savings or
33:26
investing is feel like you're depriving yourself and then getting stressed out and then going and
33:31
splurging because it's the restrictive piece can make people almost rebel and like you know
33:37
I just I know myself and I'm quite similar in that way and then I go and completely unconsciously
33:42
spend on stuff that I really didn't need and kind of like slide myself back down the hill
33:46
yeah um so yeah I think that visual representation is good and also maybe just checking in emotionally
33:51
are you feeling like this actually sucks and I'm not enjoying my life maybe you need to move the
33:58
timeline and hopefully use more of that money to do things that in the moment bring you joy
34:03
because actually you're spending too much of that money putting it away and you're like losing the
34:09
motivation like you you do it there is a lot of emotional connections to how you spend your money
34:15
I think being able to check in with yourself is quite important.
34:18
Hard of a sec because we don't
34:19
want to be sitting here telling you to do something that's going to make you, you know,
34:22
sad and depressed.
34:24
Like we're not, we're not wanting that.
34:25
So it's like, okay, I would
34:27
budgeting.
34:27
And I say, this is budgeting shouldn't be about, you know, being cause you know,
34:31
stingy and constrained.
34:32
It should be about having this freedom and flexibility of your money and
34:36
being able to have visibility of your money as well.
34:38
So I think we're wanting you to also try
34:41
and sit there and work out, okay, what actually is important to me?
34:44
Is that thing bringing me joy?
34:45
is that saving for that?
34:47
Is that bringing me joy?
34:48
Actually, maybe I need to revisit the split
34:50
and actually give myself
34:51
a little bit more shopping money
34:52
because that's what gives me joy.
34:53
You know, it's like we're not trying
34:54
to make you live the sad life.
34:56
I will say short-term goals
34:57
that for me, I think make me feel,
35:00
you know, if I've got several short-term goals
35:02
and kind of what you talk about
35:03
with splitting your payoff.
35:04
So for example, for me,
35:05
if it's a short-term goal
35:06
of something to do with beauty,
35:07
like I really want to buy a new shampoo
35:09
and conditioner or whatever.
35:10
If I have that money going to my beauty account
35:12
and then I have enough to
35:14
and spend it on your shampoo and conditioner,
35:16
I get that hit of spending.
35:18
So I think there's also like you can kind of differentiate
35:21
between short-term goals, like stuff that is not such a big deal.
35:27
It might be a new top or it might be whatever.
35:30
And then you're more long-term short-term, like I say,
35:33
for a holiday.
35:33
And then you're long, long-term, like you're investing.
35:36
So I think it's just making sure that there's enough
35:38
of those shorter-term things that are bringing you joy
35:41
so that you're not sat and waiting to see everything.
35:43
yeah exactly because it is true you need everyone needs them let's do it let's call a new like a
35:48
new account any goals many yeah many goals we'll work on the creativity around that one
35:56
cash and burn
36:02
i would love to move to our cash and burn section which is basically you've asked your community a
36:07
bunch of questions let's walk through what questions you asked what what came in because i
36:12
yeah I don't know I love hearing what other people are doing saving for I think it's just
36:17
breaking the fourth wall a little bit when you're kind of for example you and your husband you're
36:20
going to go and do your planning and your goals and stuff it's so nice to hear what other people
36:25
are doing because it just gives you perspective um so yeah what were some of the questions you
36:30
asked what okay so I asked them did you have do you have an emergency fund the split was 65% yes
36:37
35% no.
36:38
Pretty good, honestly.
36:39
That was pretty good.
36:40
I was like,
36:41
okay, well done.
36:43
And then I
36:43
said, if yes, how much?
36:45
If no, why?
36:46
This was
36:47
fascinating.
36:48
Absolutely fascinating.
36:49
Because I know that we kind of wanted to
36:51
talk about how much
36:53
potentially should you have in your 20s?
36:55
And a lot of these people, a lot
36:57
of them are in their 20s.
36:58
And I'm
36:59
really impressed by a lot of
37:01
their answers.
37:01
We had, kind of
37:03
the average was around 10k.
37:05
Which is really epic.
37:07
I'm like well done you guys are actually amazing we had a few hundred k's and I was like you guys
37:13
are living my dream literally no they need to invest that though they must be not investing
37:19
it's crazy literally a few hundred k's and one of them was over 100k I'm like man you're like
37:23
that's insane um but then we also had yeah six and a half thousand goal is 10 but also quite a
37:29
few people that are just sitting at like around a thousand thousands their aim so I think the
37:34
important thing with knowing about emergency funds it's there's no set you have to hit this amount
37:39
it really does come down to what have you kind of worked out that you need um in your life but i
37:45
think really common is is around that 10k someone has 40 000 here um a lot of people are saying three
37:51
months three to six months three months salary ten thousand pounds four months of my net income
37:58
so thirty five thousand dollars really interesting hearing all of this and i was really surprised and
38:03
I was really like impressed I also asked people what was the most random craziest thing you've
38:08
had to dip into your savings or emergency fund for okay so my house flooding we had insurance
38:15
but we had to evacuate and buy an emergency place emergency house yeah well they had to buy like an
38:21
emergency place to go and stay oh that's an emergency that's an emergency 100% wood flying
38:28
off a big truck hitting my tires and ruining the metal frame while on a road trip definitely an
38:33
emergency 100% emergency unexpected health problems emergency that's emergency but I would
38:38
say definitely get insurance to not have to use your emergency fund on that 100% last minute trip
38:44
to India no unless you have some kind of emergency like spiritual experience that you must do or you
38:53
will not be like no I think that's never an emergency that's not 100% excess for insurance
38:59
I'd say that's an emergency yeah because it means you've had to use your insurance yeah
39:03
wisdom teeth removal see this is a hard one because I recently pulled money out of my
39:08
emergency fund for a new night guard because I grind like a crazy person in my face so I spent
39:13
like 600 it was a lot it was I think it was 300 pounds 350 pounds and I pulled out of my emergency
39:20
fund and I must say I did think at the time I think this needs to not be an emergency fund I
39:25
think I need to have like a dental fund or better insurance because I just like you can technically
39:31
planned for that i feel like i have used anything dental has come from my emergency though oh
39:36
interesting okay because i got my wisdom teeth taken out it did come from that um another one
39:40
car breaking down car battery i feel like those are like to be honest i do have a car account
39:46
though which i do think is important for like woff or rego however a car breaking down i feel like
39:52
that's nah emergency that's emergency someone did say a new car i would say i'm sorry that's not good
39:58
enough for an emergency unless so naughty what no one thinks that that is an emergency unless that
40:05
car's broken down and they're actually not able to get anywhere 100 100 but actually you need a
40:10
safer car a new computer also depends if it's an emergency from a work situation 100 to buy a dog
40:17
i would say i love dogs i love dogs too but not an emergency sorry no no to do a personal training
40:24
course unfortunately not eggs freezing oh that's a hard one that's that's a really hard i don't
40:31
think i have an answer for that oh man it's hard man there's yeah there's quite a few funerals
40:35
actually which is 100 in emergency concerts unfortunately i know how much you want to go see
40:40
jb but no it's not an emergency they know they know that's not a cheeky but no it was really
40:47
interesting oh this one dyson air wrap girl girl you can air dry serious did they actually say
40:52
they use their money.
40:53
Legit.
40:54
No, that's
40:54
so bad.
40:55
Groceries are speeding
40:56
fine.
40:57
Oh, speeding
40:58
fine.
40:59
I feel like that
41:00
should be a bit of a punishment.
41:01
It should come out of
41:02
your shopping account or something.
41:04
But you're a...
41:06
No, that's me.
41:07
That is a little bit me
41:08
because I have had a speed.
41:10
Maybe it's not the worst idea
41:12
though.
41:12
Yeah, especially if you're a chronic speeder.
41:14
Look, I think this has been a really
41:17
helpful, useful
41:18
episode.
41:19
I've really tried
41:20
to make it practical because I do
41:22
think right we talk about how to do it and the theory of it but maybe for some people they're
41:27
still like I still totally am confused if you're listening to this and for some reason you actually
41:32
are just like I really need practical advice or I want to do a workshop can you either like comment
41:38
where you're listening message Hannah or the curve I think that if people are still question
41:43
mark around this I'd honestly love to do a half an hour workshop with someone live with a bunch
41:48
of people to be like okay what are your goals let's work through this together and methodically
41:52
go through and help people do it because it shouldn't be that hard.
41:55
There is also the IOU
41:56
course.
41:56
So if you're listening to this and it's actually so affordable, we'll put the link to
42:01
that in the podcast show notes, but we go through this in detail around how to actually do everything
42:06
from your budgeting right through to short-term, long-term savings.
42:09
So that, yeah, we did that
42:11
with Lucy Blackiston from Shoot You Should Care About, and it's a really practical step-by-step,
42:16
But the whole point of the series, IOU in general, is to actually give you the tools to implement this and do it, not just listen and think you've learned something, but then not go and actually do it.
42:27
I figured out how you're going to earn that extra credit.
42:31
I think maybe extra credit for anyone listening is to actually just give it a go.
42:36
Give it a go.
42:37
Figure out what a savings goal is that you want to do in the next five years.
42:41
Figure out the total amount and then work backwards.
42:43
that sort of homework and isolation is actually not that helpful.
42:46
You do really need to do your
42:47
budgeting to know how much money you've got as your SIP plus or what your 20% is.
42:51
So you probably
42:52
do need to do the IOU course in all honesty, if that's kind of, if you don't know what that number
42:56
is.
42:56
But yeah, thank you so much, Hannah.
42:58
I always find these episodes so helpful and I just love
43:01
your approach to all things money.
43:04
It's yeah, it's really inspiring.
43:05
And I'm really looking
43:07
forward to hearing how it goes with your husband.
43:09
Like, I don't know if we'll have time for it,
43:11
But like, it would be kind of fun to do another one and to find out like how that went.
43:14
Because I think the difference in doing goals with a partner is so, so, so different to
43:19
doing it on your own.
43:20
No, a hundred percent.
43:21
No, I, yeah, I love, I love today as well.
43:23
And I think practical advice is just get started.
43:26
Like, honestly, that could be a takeaway that people, they sit, they come away from this
43:31
episode and just go and sit down and go, you know what, I'm just going to, I'm just going
43:34
to create that account.
43:35
Every time you get paid, just chuck in a little bit of money into that emergency account and
43:38
just get started because honestly you're going to thank yourself so much when something comes up
43:42
but I think also listen back to those previous episodes that we have talked about and do the
43:45
course because honestly financial literacy is worth so much in your life and you're going to
43:51
look back and a few years time ago man I wish that I just learned and invested in myself I think
43:55
investing in yourself is the most important thing and potentially is another account that you could
43:58
create is investing in myself because I think that's really really truly important financial
44:04
literacy is something that is worth so much more than we could ever ever think about so no thank
44:09
you so much for having me on the podcast I hope everyone learned something but no I yeah I'm so
44:14
honored to be here that is it for this month's episode of the IOU some money education if you
44:19
liked this episode and you would like to rate review perhaps share it with a friend we would
44:24
absolutely love that often beginner conversations about money are things that a lot of us avoid if
44:30
you've got a friend or family member that would benefit from listening to this podcast please
44:34
send it along.
44:35
Go share it, guys.
44:36
And if you would like to take IOU, Some Money Education,
44:39
The Practical, this is our seven-part installation that we did with Lucy Blackston from Shoot,
44:43
You Should Care About.
44:45
Find out everything you need to know about all things money,
44:47
budgeting, saving, investing.
44:49
Then you can find the details and the link for that in the podcast
44:52
show notes.
44:53
Thanks so much for joining us, Hannah.
44:55
We love you.
44:55
Thanks, guys.
44:58
Thank you so much, the Bank of New Zealand, for sponsoring this episode of IOU, Some Money
45:02
education?
45:02
There is an art to starting something new.
45:04
And just like any art form, you need the
45:06
right tools to make it work.
45:07
Whether you're flatting or you're saving to travel, maybe you
45:10
want to make a career move, the Bank of New Zealand has the tools to help you master your
45:14
money from the get-go.
45:15
And don't forget to check out IOU The Practical Lessons to put everything
45:18
that you've been learning into practice.
45:19
You can find the details in the podcast show notes.
45:22
Okay, quickly, the curve was created to empower and educate you about investing,
45:26
but we are not financial advisors.
45:28
Our platform exists for educational purposes only,
45:30
and it doesn't provide personalized investing advice
45:33
for your individual needs
45:34
and should not be relied upon
45:35
to make an investment or financial decision.
45:37
And always remember to do your own research
45:39
before making any investment or financial decision.
45:42
We're here for any knowledge and support you need,
45:44
but the final call is always yours.
45:46
And thanks for being here.
45:48
You got this.
45:48
Yeah, we know you got this.