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Transcript

How to Set Up Multiple Bank Accounts for Better Budgeting. · The Curve

0:01
Welcome to IOU Some Money Education.
0:03
So this is a brand new podcast series where you can learn everything that you need to
0:07
know to be better with your money.
0:09
We also have IOU The Practical.
0:11
This was filmed with Lucy Blackiston, who is the founder of She Should Care About, and
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she's kind of like the student that will be learning alongside you.
0:18
So she asks heaps of different questions and we go through everything from how to split
0:23
your pay, how to get out of debt, the whole shebang.
0:25
You can find all the details in the podcast show notes.
0:28
coming up on this episode i'm gonna be talking about how i split my money off into my 16
0:32
different bank accounts 16 is a lot but i will say you changed my mind by the end of it i think
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i'm gonna be re-assessing how i split my pay yes and also we're gonna be talking about how to create
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a budget and also like what categories you should also create for your budget and what i will say i
0:48
think this episode's really good you may have a budget you may already be doing this you may have
0:52
done iou the practical you can always learn something new and i loved the background that
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hannah gave she grew up pocket money system i mean she was seven when she learned about money
1:01
guys so like she knows what she's talking about um but yes enjoy this episode and if you would
1:06
like to find any more details about hannah or about iou the practical you can find those in
1:10
the podcast show notes this is an episode that you do not want to miss this episode of iou some
1:14
money education is proudly brought to you by the bank of new zealand when you're just starting out
1:18
managing your money should feel easy so that you can focus on winning at whatever you're doing.
1:23
Whether you're flatting, saving to travel or making a career move, they have all the tools
1:27
to help you master your money from the get-go.
1:29
Thanks so much to the Bank of New Zealand for
1:30
making IOU, some money education, possible.
1:33
Don't forget to check out IOU The Practical
1:35
Lessons to put what you're learning into practice.
1:37
Find the details in the podcast show notes.
1:40
Hannah, thank you so much for being here.
1:42
I feel slightly embarrassed at the state of the studio
1:44
given the one that we've both been on with our friend Francis Cook,
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who has the most gorgeous...
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This is stunning.
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I love it.
1:51
If people could see behind the scenes, there is cords everywhere.
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There's masking tape.
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It looks very chic and elegant on the camera.
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But behind the camera, there's a bedhead leaning up against the wall.
2:04
But so excited to have you here.
2:05
So IOU is our brand new podcast,
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which we're doing for beginners of all ages, really.
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I mean, honestly, mainly for people who have like left school and never been taught how to budget or think about money or investing, etc.
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Like all the things that I wish I learned at school.
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However, you have a really interesting story with money, which we're going to get to in a second.
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But for anyone that's new here, if you like what you hear and you would like to learn more, we have IOU The Practical and you can find all of the details in the podcast show notes.
2:37
So for the next three episodes, we have the lovely Hannah joining us.
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And it's quite funny because the whole point of bringing in a guest for IOU is for them to ask me or me and Vic questions.
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And the kind of tables are flipped a little bit here because Hannah is actually so amazing when it comes to money.
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And a lot of the content that she's done online is all about how to budget and has had the most interesting, unique.
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I'm honestly fascinated by your story.
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So I'm really excited to get into it.
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Can you just give a bit of an overview?
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So my name is Hannah Kamarcus.
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business I um I'm a busy gal so basically whenever I am telling people what do I do I just basically
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say look I'm I'm busy you know everyone's busy though but I do showcase it maybe a little bit
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more because I am online um but I run a few different businesses so um sometimes I forget
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them so I do have to just like count them on my head I actually launched uh a woman's charity
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called D Community which is something that I do pretty much full-time and it is my heart and soul
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it's I feel like the reason why I'm here on this earth is for D community and I love it so much
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but it's basically a space for women to come together and connect because I realized I was
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like it's so hard to make friends it's so interesting isn't it because I think the idea
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of making friends as an adult is so different I feel like there's not much of an emphasis on
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community when you're an adult and unless you are you're a part of a cool gym or you've got a cool
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workplace or a church or you know a group literally how do you make friends like seriously
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how do you make friends and so I had this realization one day back in 2022 and I was like
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oh my gosh I want to go play laser tag but I have no friends and so I was like why is there no groups
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out there that is all about like connecting people and so I wanted to create something like
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vibey and aesthetic going out to meet people's kind of seemed as like weird it's like oh it's
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like kind of strange to go and meet someone but I wanted to make it like socially accepted which
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I think is a new concept for New Zealanders because we're quite clicky yes in New Zealand
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There's a lot of cool clacking around.
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I must say, I do love that about London.
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I love the idea that you can be so anonymous.
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So this is one of your businesses, D Community.
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So D Community is a charity.
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So I'm the CEO of the charity, but it's not a business.
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It's not something that I personally make money from.
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But that is one of the things that takes up most of my time.
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And I love it.
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I'm so passionate about it.
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Another one is Dear the Series.
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And this is a series of guided journals
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because I realized that it's really important
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in terms of mental health
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to actually start writing down what's going on in your head
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because your head can be a really scary place
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and sometimes people don't know what is okay to share
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and they might be too scared to share.
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And so I found that I kept on going towards writing.
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So I wanted other people to also feel the release
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that you can get from writing.
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So powerful.
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I love journaling.
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I also launched New Zealand's very first
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wedding content creation service.
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In New Zealand, it's called Dear Brides.
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There's a theme there.
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It's dear the series, dear community, dear brides.
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I'm also an actor as well.
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And I love that.
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That's so much fun.
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What type of acting do you do?
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I did a bit of Shortland Street, like four days of Shortland Street.
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I'm on TikTok as well.
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And that's a lot of people know me as the budgeting girl.
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I'm on TikTok and Instagram.
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And I absolutely love sharing tips and tricks, anything about lifestyle, about purchasing
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your house, you know, side hustles, university tips, how to get a rental property as well.
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I have some really cool tips on that.
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So anything and everything.
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I try and have my platform as like a really educational space.
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And then finally, I created Seven Content Studio.
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and the reason why it's called Seven
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is because it's the seventh thing that I'm doing.
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What about dear camera, dear lens, dear content?
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No, I'm just kidding.
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Can I write this down?
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No, I like Seven.
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One of the things that you mentioned
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is the idea of journaling and finding an outlet.
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When talking about money, it's personal,
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it's sensitive, it's emotional.
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A lot of people either,
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when they're learning about it, feel triggered.
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Listening to other people talk about it, feel triggered.
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it's vulnerable to share your own journey and like the things that you've learned along the way
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I would love to do a little wind back scenario before we get into budgeting yeah I want to know
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a bit about your childhood because step into the therapist chair no but I do think I think when it
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comes to money we have no idea how linked our childhood our experiences what we've seen so far
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particularly when we're up to the age of seven impacts the way that we respond to work career
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finances as we're an adult yeah you've had the most interesting upbringing yeah talk to me about
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what or how money was introduced to you in your childhood I think it started when I um got taken
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out of school at the age of seven there was my parents decided to homeschool all of us which
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was such an incredible decision we didn't grow up um with a huge amount of money at all we're very
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much middle class there's a lot of things that we couldn't do due to finances but mum and dad
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were so good to us they were the most incredible parents and they really wanted to teach us
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financial education and literacy did they learn it when they were younger like I feel no I think
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they didn't have good like experiences growing up as well I think they read books and stuff like
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that on how to set us up for the future because they failed many times that they didn't want us
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to fail as well um I give so much of yeah so much kudos to them they're amazing but my dad at the
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age of seven so I was seven my eldest sister so seven nine and eleven and they decided to implement
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something called the pocket money system and this is what went viral and people all across the world
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are like what the heck daily mail did a um an article like it was all across the world in the
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middle east and um people were just baffled at this and what it is is it's a system where you
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give your child the ability to make decisions from a young age they have full control over
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their spending and their finances so we got given a certain amount of money which um back then it
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was 140 in 2007 per month per month i was about to say was that per week or per month you know
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equivalent to today's dollars is about 300 ish so they would give us that money per month we had to
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work for it we had to do a lot of chores and jobs but we had to use that money to buy pretty much
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everything and there was a few things that here and there mom and dad would pay for toothbrush
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and toothpaste mom and dad you know all of that but in terms of clothes and socks um any toys
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obviously gifts if we went out to mcdonald's for lunch we had to pay for that you know and we
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immediately mom and dad said it was interesting going from them buying it buying our stuff to us
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we would be like oh hey like i'd go to my sister hey christy do you want to like do you want to go
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in on a deal because if we get that one you could have that burger and we'd be saving this amount of
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money whereas your children don't actually know the value of every dollar they'll go mom I want
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that I want that happy meal happy meals are like $7.50 right now apparently like that's a lot but
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like you actually don't your child doesn't realize the value of how much like how many hours you
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actually had to work for that to pay for that and so mom and dad said they became the yes parents
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they went from being the no parents to the yes parents because we'd go up and be like I really
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want that barbie and mom and dad would be like of course you can buy it how much money do you have
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and that's when we had to check our accounts or check our like little envelopes and go oh we don't
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have enough money for that and so it really gave us the ability to feel empowered I think that was
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so like liberating we're like wow like I can make decisions of what I want but hang on if I really
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want that Barbie and it's a hundred dollars I have to save for three months for it rather than just
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nagging mum and dad and it also meant that by the time it came to Christmas and we got a pair of
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socks for example we were the most grateful children because we realized that we didn't
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have to go out and buy that.
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It's so interesting to hear it done completely differently.
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Do you
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think that doing that at a young age, what were the main things that it taught you other than
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it sounds like you started talking about it more with your siblings, which is only a good thing,
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right?
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Because you're starting to have conversations about money.
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I feel like in a way it kind of
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taught us to grow up a little, maybe a little bit too early.
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I'm not sure.
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Like I personally
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loved it my sister found it a little bit a little bit more difficult um but I think for me it really
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made me um like I said it made me so grateful for so many things as well and I really got to
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understand the value of every single dollar and it made me um yeah just made me a lot more aware
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of what was going on as well I was more fascinated economics I was more fascinated what's going on in
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the world property prices I remember at the age of 11 I was obsessed with looking at properties
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and seeing the value of properties and I started to understand like okay a Barbie's $50 and the
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property is $500 you know I started to understand things rather than just looking at it and having
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no idea or no concept of what these zeros mean.
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I feel as though if I'd had those conversations
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earlier or I had been involved in the spending, saving, dividing my money up, talking about it
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I think I would have made a lot less let's just call them financial blunders as an adult
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however I also love the concept of kids being able to live in this kind of middle world where
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things are fun and fantasy and not too heavy but I think that there's absolutely a middle ground
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between you know feeling like a kid no longer wants to play mum and dad if that's what they
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want to play or they have to worry about how to get 500 000 to buy a house one day you know i think
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exactly around i think the hard thing is is um one thing we didn't talk about with the pocket
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money system is this is quite important actually is that we didn't just get 140 dollars to spend
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on anything we wanted so at the age of seven when we got 140 dollars coming in 50 of that was going
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towards a house so literally at the age of seven i was being taught that i was saving for a house
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and it kind of instilled within me how hard you do need to save for something um so not only that
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50% is gone so it leaves us down to 70 then we had 10 of the 140 had to go to giving and i think
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that was so important at the age of seven we learned the power and the importance of giving
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that's the utmost importance it wasn't 10 on your spending money it was 10 of your overall how much
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you earn so 140 was 14 that had to go every single month towards someone um to a i think we did world
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vision and we'd give towards a child or you know an organization there's a lot of division between
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like ownership and money and i love the concept of from a really young age knowing that
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it's really normal and really important to put a portion of your money for other people yeah and
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also the concept of your money is not to all be spent immediately like the fact that so much of
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the money that was coming in was being held for other things you learned at seven potentially
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seven maybe too young I personally think it was great but I think there should be there is a
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middle ground definitely whether you kind of alter it slightly to your child depending on their
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personality but we'll go back to this split real quickly so we had 140 that came in every month 50
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percent went out to my savings my long-term savings that is not to be touched only for a
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house then we had short-term savings and we'll touch on this um another time but short-term
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saving is for something short-term like a car so again the age of seven I was saving for a car
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that I would literally not be able to get until I was 16 years old and the remainder
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was going towards um going towards basically just buying anything and everything I hate the
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word stingy but did it make you not want to spend money yeah we were all very different but yeah I
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feel like for me it definitely did and it wasn't up until I went over to London and became a nanny
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that I feel like my relationship with money changed it wasn't until I went to university
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and sat down and went I'm gonna split my money off into multiple accounts my world changed
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completely and I went from being and my friends say that's one of my good friends she goes Hannah
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you are so stingy and now I'm not because I have so much more freedom because I know that I've
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budgeted for it you mentioned you had a an experience in London that changed the way you
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thought about money and your relationship in general what happened and then how did it evolve
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right up until I went over to London I was like eternal vision focus on money like I want to be
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I want to be the biggest the best I want to have like the most money in New Zealand and it wasn't
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until I went over to London and became a nanny for some incredibly wealthy families one in particular
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was a billionaire family and they just had so much money that it honestly taught me so much about
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what money can potentially do to you in a negative light they got whatever they wanted and I remember
15:03
even taking them to you know in Hyde Park they've got the winter Christmas the winter one like
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almost chaotic I would not want to get that in there I know and I would have like my coins going
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oh what's the most cost effective way to get and the boy puts his hand on my shoulder and goes
15:17
Hannah like we can afford it like we can and like for me it was this is me at the age of 19 going
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like okay I don't want to spend too much money and the boy's like Hannah like we've got all the
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money we want which is kind of good but also not good isn't it you know on the one hand it's there's
15:32
a part of me that feels kind of almost like sad yeah money is stressful and so like kind of you
15:38
know to look at the little boy that's saying like don't worry about it yeah there's also kind of
15:42
like lightness to that I'm not saying it's the way to go about it totally totally but I think in
15:46
reality for a lot of people it is it is the counting the the pennies and the dollars and it
15:53
is sweet that you can be like you can be a child you can have whatever you want but also
15:57
I think you slightly lose a little bit of like gratitude because you're like you don't feel the
16:03
same amount of oh wow like this is this is worth nine dollars like we're going on a ride which
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costs nine dollars for me I'm like wait that could give me like a pasta rainbow you know like
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you know I mean I was always thinking of the most cost-effective way which potentially people could
16:16
be listening to us going that's that is sad but it was just how we grew up because we were always
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always focusing on the best way to make money kind of stretch I guess um but I think yeah in a way
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it's not necessarily a negative thing it's definitely taught me a lot and it's made me into
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the person I am today there's definitely things that I would change but I think my after working
16:37
with this billionaire family and just seeing what money can do for them I remember um I was trying
16:43
to take the nine-year-old boy out for to go to the movies and he didn't want to go he was throwing a
16:48
massive fit and I remember thinking like what the heck like I would just I would dream of having
16:51
your life as a child and then he turned to me and he just looks at me with like tears in his eyes
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and he's like Hannah I never asked for any of this I don't want any of it and that literally broke me
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I was like as a nine-year-old he was the saddest nine-year-old like I could have I've ever ever met
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and all he wants is his parents he doesn't want the materialistic things that they're just trying
17:12
to give to make up for the fact that they weren't there also I imagine what you would have seen
17:17
behind closed doors is the parents also not that happy it's not just the kids I think you assume
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that if I have this or when I've done this and actually the older you get the the more you
17:28
realize it doesn't matter like what you've achieved or how much money you have like yes
17:31
it's important to have stability and yes it's important to feel like you could support yourself
17:35
or if something that goes wrong you can pay for it yeah but like ultimately happiness is inside you
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and and I think that while we're having these conversations about money and trying to be better
17:44
with it it is really important to remember that because yeah billions of dollars does not equal
17:50
happy family happy life it's a part of it like happiness money is a part of happiness but it's
17:56
not the whole thing and I thought growing up that that was the whole thing um but actually it's also
18:01
like looking at your your family your relationship with your family your relationship with food and
18:07
your health like all of that equals happiness it's not necessarily money but I think money is still
18:11
really important part and it's really important that we are sitting here talking and you've got
18:15
this platform because i think that is it's so important that people do learn about it because
18:20
it is an element of it um but yeah billy and her family was crazy like they even had um one of
18:24
their holiday homes they had a pull-out freezer drawer of unlimited ben and jerry's ice cream
18:30
oh my god yeah i know we had we did like a we had a chef from italy that came over and just made us
18:37
like pasta every single day we had a dessert chef as well and I think just little things like that
18:41
like the Ben and Jerry's ice cream for example for me that was like a treat that I got once a summer
18:47
do you know what I mean so it was just a totally different world totally different world as soon
18:49
as I got back home to New Zealand within COVID hit and all that and I had to revisit my relationship
18:56
with money and I think from then I implemented the the system of spilling off my money and from
19:01
there my relationship has healed so much more for anyone listening that thinks a relationship with
19:05
money might be a bit woo woo or I'm not interested in looking at that do you have any good starting
19:10
points for people who haven't had or hopefully can avoid the billionaire experience I'm a real
19:16
big believer in finding out um potentially where issues have started from that's why like journaling
19:21
is really important but maybe like ask yourself does opening up my banking app like does that
19:27
give me anxiety or is it something is it something I dread because then is it something you dread
19:31
okay tick go down to the next line um then why like why is it something that i actually dread
19:36
so i would just sit back and reflect and go what does money mean to you when someone says
19:40
how much do you earn does that fill you with dread or are you excited to talk about why
19:45
and actually just ask yourself literally why you know little kids two-year-olds why why
19:48
my nephew always asks why it's like actually ask yourself why why do i have this feeling okay but
19:52
then why where did that stem from yeah it's actually really good advice and i feel like
19:57
i've looked at my relationship with money but even just hearing this i know at the moment for me
20:01
there are a few things that are bubbling away and I haven't asked the why question and I really
20:05
should.
20:06
Obviously it was really nice to get a bit of context because we're going to have a couple
20:09
of episodes with you and I yeah I can't wait to learn more and speak more about specific topics
20:13
but at the start of the episode we normally would do an in the red or in the green.
20:17
Okay.
20:17
So like
20:18
something that's happened either this week this month where you're tick tick tick in the green
20:23
or shit shit shit oh tick and shit that works.
20:25
Oh I love that.
20:26
In the red.
20:27
Never not in a million
20:28
years absolutely not in the red green with envy or green so what is going on for you at the moment
20:36
currently in the midst of a reno which is very very exciting um so there has been a few in the
20:42
red moments um actually quite a few in the red moments so look it's just a lot more than you
20:47
actually think i even went to the supermarket yesterday and i called my mom and i was like
20:51
it's so expensive to eat so i would say unfortunately this uh this week i am slightly
20:57
in the red yeah okay i am yeah i'm also in the red except for kind of a daft stupid annoying
21:05
reason so while i've been in new zealand have rented my flat out in the uk very clever wow so
21:11
so onto it sublinning amazing so stunning anyway so i have someone in the room thank goodness
21:16
because my rent is about 1300 pounds a month wow for a room wow just keep that in mind so
21:22
I have someone in the room great great great he overpaid me he as and he did it twice and I didn't
21:28
realize it and I thought oh I'm looking stunning my account's looking stunning at the moment so
21:33
healthy wow like go so and then I had to pay him back and I thought shit you didn't have that money
21:38
that was gone I I do have it okay it's just now looking a bit more sad yeah okay yeah I feel like
21:44
it's kind of like in the orange maybe true yeah orange I love that we can sit on that so the
21:49
general rule of thumb very general what we teach at the curb is 50 30 20 yeah love it 50 on essentials
21:56
30 on your needs and 20 on your sort of future savings the idea that by doing that frees up a
22:02
bit of brain space and you're kind of giving every dollar or every everything that comes into your
22:08
account has a job it's like the more that you can be strategic about where your money goes
22:14
hopefully the more that you can then grow towards savings and investing and you actually feel really
22:21
good about spending the money you're spending right so just like when you were younger and you
22:25
had your 10% on gifts every time you spend something on someone else you're not going to
22:28
sit there feeling guilty you've got money for it so you do things like a bit differently yeah well
22:34
first of all I want to preface that someone might be sitting here going no budgeting is not for me
22:38
I don't want to like budgeting is all about restraining like my spending.
22:43
I say to that is budgeting isn't about being stingy.
22:46
Budgeting is about having visibility of your money.
22:49
That is my favorite like point about budgeting.
22:51
It's all about seeing where your money is at any point in any moment of the time.
22:56
Now, I slid off my money into about 16 different accounts.
22:59
So I thought we can go over it.
23:01
I have my list because it's quite hard to remember.
23:03
I'm quite stoked that we're doing this quite specifically
23:07
because I actually think it's really helpful.
23:09
I know when I first started thinking about budgeting,
23:11
I needed someone to sit down with me
23:13
and actually explain what buckets things go into.
23:16
So I think someone having an example is great.
23:19
Okay, so account number one is giving,
23:21
which is really important.
23:22
I do 10% of my income towards giving.
23:24
And this is really cool
23:25
because it means that when you go out for coffee,
23:26
you can actually afford to pay for that person for a coffee.
23:30
You've budgeted for it.
23:31
And I think you also forget that when birthdays come up,
23:33
you're like, wait, what's your account?
23:36
Should I be using?
23:37
So this is why the giving account is just so important.
23:39
So I have giving.
23:40
I have rent and bills.
23:42
And the reason why I had this was because when I lived in a flat,
23:45
I moved out in March of this year and my rent was so cheap.
23:49
Now it's a lot more expensive being a homeowner.
23:52
But my rent was really, really cheap.
23:54
I was about $200 per week, New Zealand, which is crazy.
23:57
That's so outrageous.
23:58
Shopping.
23:59
Love a bit of shopping.
24:00
You have to.
24:01
You have to.
24:01
I know, but it's honestly the one that I think I blow out all the time on.
24:05
Oh, really?
24:06
Yeah.
24:06
and I feel I do the whole feast and famine.
24:08
I'm either haven't bought anything for nine months
24:11
or I've spent...
24:12
I find that as well.
24:13
It's honestly bizarre.
24:14
It's like the lemon detox diet,
24:15
but of shopping.
24:16
It's bad.
24:16
I love it.
24:17
So we have entertainment
24:19
because you want to go out
24:20
and life's about like living.
24:22
Yeah.
24:22
Literally, life is about living.
24:23
Let's go to some sushi.
24:24
Exactly.
24:24
Let's go to a movie.
24:25
Exactly.
24:25
If you hang out with friends,
24:27
you could be like,
24:27
you know what?
24:27
It's going to come out of my entertainment.
24:29
Yeah.
24:29
I want to go to the movies,
24:30
entertainment, golf.
24:31
I'm a golfer
24:32
and it's so unbelievably expensive.
24:34
Oh my gosh.
24:35
an old soul you know i kind of love that yeah i love it it's really good but so expensive my golf
24:39
coach is a hundred dollars for half an hour but like once a month maybe it's really all the budget
24:44
can afford at the moment um and then we have a food account food account we've also got a health
24:49
account we have a car account a car account's really important what happens when you're worn
24:53
to fitness um another thing can i give it like a real cool hack please insurance please pay your
24:58
insurance if you can yearly yeah work out how much money you're paying every year in insurance
25:03
divide it by 52 work out exactly how much money you would be paying a week and put it into an
25:08
account let that accumulate and then on the day that your insurance is due you have the money there
25:15
so clever so we have car we have other um other because there's just things that you just there's
25:20
random stuff that pops up i need a miscellaneous i need a misc folder i need something to put the
25:25
stuff i don't know where it goes there's always going to be an oopsie parking ticket yeah um phone
25:29
bill as well and then we go into our savings we've got a holiday account we've got long-term
25:34
savings short-term savings holy shit there's a few isn't an emergency i'm also saying for a piano as
25:39
well so i've got that there is a there's a hefty amount right there so do you automate all of the
25:44
amounts into all the different no no no this is ever so slightly tricky but let's let's come back
25:51
to that because i feel like that's that's like a that's really important super important so now
25:56
you've got multiple different accounts you're sitting there going holy what am I meant to do
26:00
how do I work out how to budget so we kind of need to break it down a little bit okay so
26:05
great if you listen just grab a piece of paper and a pen I want a snack while I'm listening
26:08
okay so you're going to have a look at your accounts and some of them may not relate to you
26:12
okay so what I'm going to ask you to do this is I feel like I'm a student I'm so here for it
26:17
this is so fun I feel like I'm a teaching okay so step number one you've got down your different
26:22
categories or an idea of the different categories you are going to download all of your bank
26:29
statements for the past three months stunning and you're going to go through line by line and
26:33
highlight every single item and work out which category does it fit into once you've worked out
26:38
all the different categories and you're happy with your 16 15 12 10 and then i want you to
26:43
in each category work out on average how much do you spend per month and you might be sitting here
26:48
going holy what are you talking about like what i left school like 10 years ago don't worry guys
26:53
i've got the maths covered one plus one plus one equals what divided by three boom you literally
26:59
just add them together and divide it by the amount of months which is three exactly exactly so what
27:04
you're going to do is you're going to total up your food so if you've got five hundred dollars
27:06
in one month three hundred dollars another month two hundred another month you're going to divide
27:10
because that's a thousand dollars all up divide by three is can't remember 333 that's how much
27:16
on average you spend in that category I need you to find out all the averages yeah just as like a
27:21
triple check you are going to add up all of these different um amounts the budget and actually make
27:26
sure that you are earning more than your budget oh yeah because do you know what this is so crucial
27:32
you can be really careful about where and how you split your money but if you're spending more than
27:37
you're earning you are never going to get ahead I don't know who needs to hear that in a different
27:41
way but basically if you want to have wealth or money or be able to have options if you are so
27:47
close to the amount that is coming in in terms of your spending you're going to be working till the
27:52
day you die like I know that's a really dire thing to say but I wish someone had told me that there's
27:58
only so much you can pull back on on your budgets before you start working out before you start
28:02
realizing that this is not what life should look like I think where the line comes in in terms of
28:07
you shouldn't pull back.
28:08
It's stuff you don't,
28:09
it's things like Netflix.
28:10
Totally.
28:10
It's things like,
28:12
I don't know,
28:13
buying an ice cream for dessert.
28:14
Do you need it?
28:15
Kind of no.
28:16
Totally.
28:16
You know,
28:16
it's,
28:17
there's a lot of things
28:18
that you may think
28:19
bring you joy
28:21
if you're not going to be able
28:21
to pay for everything you want.
28:23
You can't have everything.
28:23
That's the thing.
28:24
That is the reality.
28:24
It's kind of annoying,
28:25
but it's true.
28:26
Exactly.
28:26
Right now,
28:27
so you're sitting there,
28:27
what you've done is
28:28
you've worked out your categories,
28:29
you've worked out your budget now.
28:30
Then you can start to,
28:31
you know,
28:32
slowly kind of go,
28:33
actually,
28:33
maybe I shouldn't be spending $800 per month on shopping.
28:36
Maybe let's pull it back a little bit.
28:37
And that's how you're going to start as a really nice base for your budgeting.
28:41
And now you're
28:41
going to go and create your different suffixes.
28:43
And the great thing is, is that all the banking
28:45
apps, most of them that I know is that you can create all these different accounts for free.
28:49
What I would also recommend doing if you are doing this exercise at home is finding say green for
28:55
your essentials, pink for fun things that you perhaps don't need, but you want.
28:59
And then maybe,
29:00
I don't know yellow for your future savings and highlight all your categories add up the colors
29:05
and make sure that you've got roughly you're spending roughly no more than 50% on your
29:11
things you need like rent bills etc roughly 30% on things that you don't need but are fun
29:17
and then roughly 20% on hopefully saving for things or investing because I think that when
29:23
you're splitting them up into so many it could be easy to lose track of the percentages so I think
29:28
And that's probably a really important thing, just to make sure you're not spending 40% on
29:33
fund stuff.
29:33
That's so true.
29:34
I feel like that's a good step four.
29:35
Let's add that in.
29:36
Yeah.
29:36
Then from there, it's all about seeing if it actually works for you, because every budget
29:39
needs to be personalized to you.
29:42
So I'd hate for someone to look at my budget and go, oh, that's how much that I should
29:46
try and implement.
29:47
It's like, that's not how it works.
29:49
When you have money accumulating in accounts, that can be a really good thing.
29:53
If you're in high interest savings account, hot tip, if you've missed the emergency fund
29:56
episode school up you don't want a lot of money sitting in an account where inflation is chewing
30:01
away at it but there are instances for example gifts for example maybe clothes things like that
30:11
that if you don't spend one month what happens i mean you've got a choice right you can either
30:15
choose for it to accumulate and to then next month if you've not bought a new dress you have more
30:21
money to buy something else um or you could pull that out and put it into your investing savings
30:26
thinking yay go me I can now put more away what is your approach with this I have lots of accounts
30:31
for example a savings account a savings account has to be accumulated because that's how you save
30:35
it accumulates often people ask me what happens to the money when you have an account that is
30:39
non-accumulating they'll go well where do you put that money for example good point for example my
30:45
petrol it's capped at 300 when I went to Japan I only spent 100 for that month where does that
30:49
money go I think the best way to do this is to actually put it straight towards investments
30:53
so that goes towards shares or gold or my mortgage as well i love that and i think that's the sensible
30:58
clever absolutely the best thing to do however random idea maybe that goes into your fun
31:06
bucket or your do you know what i mean like i love it how fun to just have 70 dollars that you
31:11
you can choose whatever you want i think the thing with this and with budgeting is this is totally
31:17
personal and also the way that hannah does it really works for her amazing how lucky that we
31:22
are to learn how you do it but you can pluck bits of this that work for you this is important for a
31:27
lot of people to also make sure that they understand is that if there gets to a point
31:31
where you've hit your max you're sitting there you're at the petrol station you're like i actually
31:35
have no money in my oh what do you do okay what do you do you're not going to just walk home and
31:40
push your car home like you're not going to do that okay because life is about living but it's
31:44
also about being living within your means so what you're going to do is you're going to look at your
31:47
accounts and go okay where can i take some money from you're not going to take it from your savings
31:52
You're not going to take it from anywhere else.
31:53
You could, some people say to me,
31:55
well, this is where your emergency account could come in.
31:57
And I go, actually, that is literally for an emergency.
32:00
You should be touching your entertainment,
32:02
maybe your other account.
32:03
My other account comes to the rescue way too much.
32:07
Shopping account as well.
32:08
So that's where I will borrow.
32:09
I also think having a small buffer
32:12
in your transaction account,
32:14
even if it's $30 or, you know,
32:16
it doesn't have to be a lot in case of emergency
32:18
in that scenario is probably not the worst idea.
32:21
but I agree I think that's a really important point if you run out of money and you need to
32:25
pay for petrol if that's on an emergency actually it's really not an emergency is a root canal an
32:30
emergency is the car breaking down and one thing that I want to touch on before we move on from
32:34
this is that you may be sitting here going okay amazing I've split off all my money into the
32:38
different accounts but how can I get cards for every single account you stand there she goes
32:43
$21 please you have your banking app ready you have your money ready to go you've got it on the
32:48
transfer setting on your app and that's when you go transfer from the food to your fpods 21 next
32:54
done and then you pay a little bit annoying definitely takes like five seconds and the
32:58
checkout lady's doing you going like what this is a business opportunity by the way we need your ai
33:02
to be like paying for petrol take out of this account go i know there needs to be some sort of
33:07
innovation here this is really important don't have just zero dollars in your fpos account you
33:12
need to have a bit of a buffer in case something happens sometimes if i know there's a massive line
33:16
of people and I'm not going to stand there and change and you know switch the money over I'll
33:20
pay for it and as soon as I'm walking out of the store I'll jump on and move the money across don't
33:25
ever have any more than about $50 in that account it should always be an equal number 50 0 0 actually
33:30
that's quite a good one because then every time it's off you know you forgot it 100%
33:35
and burn
33:40
at this point in the podcast we would normally do a quick little community section called cash and
33:46
burn where we read out dms curveballs things that have happened to people that are not ideal when
33:53
it comes to budgeting or blowing up however hannah would like to take the cake here with a story that
33:59
happened to which i actually think is a really great idea really yeah i do this happened last
34:03
year it's a real fresh story the wound is still open um so we'll be gentle i went to a conference
34:10
and i went to a conference this is big conference in auckland and um this guy got up and he was um
34:16
he was promoting his course i already hate this story i know i know honestly i i have ptsd
34:21
sometimes i just stare at the ceiling in the middle of the night and think about this and
34:24
just not get shivers yeah this guy got up and he was talking about um how he is literally the top
34:31
business coach in the entire world like literally the entire world and he's coach xyz and i was like
34:35
wow this guy's good and he was like if you come with me if you get coaching from me then i will
34:40
x times your business and i was like bro i need some of those like this is good this is good stuff
34:45
and so you know which account can i transfer i know i know i was like you know what like i'm
34:49
gonna do it i'm gonna do it okay i am look it was four and a half thousand dollars for a two-day
34:54
course but honestly what were you that is so much money what did he promise oh my god okay sorry
35:01
i'm sorry i said no judgment here i am being a total and then oh yeah look the day was um an
35:07
interesting day i feel like i learned a little bit um which i'm now forgotten four and a half
35:11
thousand dollars four and a half thousand dollars he must have made bank k i was like holy how many
35:15
people there was like a hundred people no i'm like bro you're boring okay do you know what you
35:20
should have got from him sales tips that's what you needed salesman i know i know and then i spoke
35:25
to him for like five minutes he told me how like terrible my businesses are i'm like sweet like
35:30
incredible thank you so much so yeah that's basically what i got from it so that was really
35:33
traumatic look do i think about it often yes do i cry about it every night maybe so when i think
35:39
back to another story i back in 2011 when nike rochers were like a big thing um yeah i remember
35:46
of those.
35:46
They were like the speckled ones.
35:47
Yeah.
35:47
Oh, same actually.
35:48
And they had like the cloud font.
35:50
Love.
35:50
Yes, yes.
35:52
I thought it was a genius idea to buy some that were like replicas and then I would
35:56
like slay because they were going to be like a third of the price, you know, because, you know,
36:00
I had to pay for that, you know, out of my own money.
36:03
How old were you?
36:04
I was 11, you know,
36:06
and she was crafty.
36:08
She was finding a deal.
36:08
I was.
36:09
I was like, you know what, this is going to be a
36:10
good business deal.
36:11
Here I come.
36:11
Also, sorry, quite a stylish 11 year old, I will say.
36:13
Thank you.
36:14
thank you so much and so anyway i um put in my offer it was four hundred dollars and turns out
36:19
it was a big scam and i lost all that money and it would look it was a sad time but i think it's
36:22
really it's four hundred dollars at 11 it was no that's really heartbreaking it pretty much broke
36:27
broke the bank not good trying to think if i've had any recent blunders that i could bring to the
36:31
table just to make you feel a bit better yes please like i mean i've had so many it's not
36:36
even funny i'll just save it for next time i'll save it for next time there's so many i figured
36:40
out how you're going to earn that extra credit.
36:42
Normally when we do extra credit, which is the
36:45
way we finish these IOU episodes, is to give our guest, aka you, homework.
36:52
Maybe we do it the other
36:52
way around.
36:53
Maybe anyone listening, we could give one little piece of extra credit.
36:56
So next month
36:57
when we come back, we will expect every single person listening to this episode to have done
37:01
this.
37:01
One that's really easy you could start off with is literally just check your account often.
37:06
Move your little banking app to the front of the screen, put it at the bottom of your screen if
37:09
you're an apple girl then chuck it down there and actually start opening it up and start checking it
37:13
regularly and start having kind of building up your relationship with money again and go it's
37:18
okay to check it and it's okay to face it as well so that's my like one little i think that's a
37:23
really good little baby step cute it's good baby step when you go to spend money this month just
37:29
once don't do it oh so if you're going to buy it could be anything it could be expensive or not
37:35
just try not doing it because there's this really fun thing that Vic's done before and I've done
37:40
before too where every time you don't spend money you put that money into a separate account
37:46
and it's quite cool to see that accumulate it's motivating to start not spending and then thinking
37:51
about what you could do with it instead whether it's saving investing the f**k it whatever you
37:55
want to do um so even if it's literally just one time pull back on that apple pay I love it don't
38:01
do it another one that i always say the sleep on it i love that just sleep on it sometimes like
38:08
what i would do it's kind of bad but i'll buy something and just keep it in the bag with the
38:11
tags on just for three days and i'll try it on at home different lighting do i like it
38:17
just sleep on it and then sometimes i'm like actually i don't want it do you know what you
38:20
could also sleep on before purchasing that's actually a really good idea
38:27
sometimes i do that as well but you know like the pre-purchase snooze would probably be way less
38:34
yeah you know what don't listen to me don't listen to it it's so funny that's good otherwise there's
38:37
also the one-in-one-out policy so if you buy something you must go home and sell something
38:42
yeah that's quite that's really good that's revolutionary or if you're like you know what
38:45
hannah give me something that's like advanced 3.0 then have zero dollars in your shopping account
38:50
and you must sell clothes and that money that you sell that's your shopping money i did that for a
38:56
month it was brutal it was hard it was hard but if you're like yeah give me something advanced
39:00
boom there you go because do you know the problem with that one i've been recently getting into
39:03
vintage in the uk it's kind of like a designer wardrobe or whatever ebay i don't even know if
39:08
that exists anymore but yes basically i put all these things up and people just bargain down so
39:14
much so i'll be like oh this really cool bag that i bought for this and people i'll put it up for 25
39:20
and someone's like will you take two and I'm like no way damn it yeah and I just get desperate and
39:24
say yes so it's quite annoying yeah yeah I will say thank you so much Hannah if anyone wants to
39:29
find the work that you do we're going to put all of the links in the podcast show notes there's
39:33
so many oh god no we're not going to put all the links we cannot put all seven links sorry
39:38
but we will we will definitely put your name and if you were listening to this and you thought
39:43
stunning great I'm on track now I'd like to you know go and actually do this properly
39:48
we have iou the practical which has seven really brilliant easy lessons it's kind of like a pod
39:54
class so you can listen as you go and in that course is lucy blackston from she should care
40:00
about so you kind of learn alongside her but thank you so much hannah loves this and we'll be back
40:04
next month for episode five we'll see you then so that's it for this month's iou some money education
40:11
if you liked this episode learned a thing or two we would love it if you can send this to a friend
40:15
someone who may also benefit from learning a thing or two about money and how to be better with it.
40:20
And make sure that you don't miss next month's episode because we're actually going to be
40:23
talking about side hustles and how you can make a little bit more money.
40:26
Yes, because I do think you can budget, budget, budget, but there is also bringing in more money.
40:31
So we're going to be chatting about that.
40:33
And if you liked this episode and you want to do
40:35
the practical, IOU the practical is in the podcast show notes.
40:38
You can find out all the details there.
40:40
See you there.
40:41
Thank you so much, the Bank of New Zealand for sponsoring this episode of IOU Some Money
40:44
education?
40:45
There is an art to starting something new.
40:47
And just like any art form, you need the
40:49
right tools to make it work.
40:50
Whether you're flatting or you're saving to travel, maybe you
40:53
want to make a career move, the Bank of New Zealand has the tools to help you master your
40:56
money from the get-go.
40:58
And don't forget to check out IOU The Practical Lessons to put everything
41:01
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41:02
You can find the details in the podcast show notes.
41:05
Okay, quickly, the curve was created to empower and educate you about investing,
41:08
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41:11
Our platform exists for educational purposes only,
41:13
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41:15
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41:17
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41:18
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41:20
And always remember to do your own research
41:22
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41:25
We're here for any knowledge and support you need,
41:27
but the final call is always yours.
41:29
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41:30
You got this.
41:31
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