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Let's buy a home · She's On The Money

• 0:00
  Speaker 1: She's on the Money.
• 0:02
  Speaker 2: She's on the Money.
• 0:19
  Speaker 3: Hello, and welcome to She's on the Money, the podcast
• 0:22
  Speaker 3: for millennials who want to financial freedom.
• 0:24
  Speaker 1: I'm one of your co hosts, Anna Barley.
• 0:26
  Speaker 3: As you might know, I'm a law student and a
• 0:28
  Speaker 3: millennial who's on a mission to be better.
• 0:30
  Speaker 1: At every big money and I'm probably not alone.
• 0:33
  Speaker 3: Luckily, each week I get to pick the brains of
• 0:35
  Speaker 3: my friend, slash money expert Victoria Vivinehi Victoria, good morning.
• 0:40
  Speaker 4: Now.
• 0:40
  Speaker 3: I have to say it makes me so happy to
• 0:42
  Speaker 3: see all these amazing money wins in our Facebook group
• 0:45
  Speaker 3: every single day, which by the way, is growing incredibly fast.
• 0:48
  Speaker 1: What are we out right now?
• 0:49
  Speaker 5: Like fourteen thousand? That is crazy? But the money wins
• 0:53
  Speaker 5: are my favorite part of She's on the Money.
• 0:55
  Speaker 1: So, as always, let's share a couple from the week.
• 0:58
  Speaker 1: Do you have one?
• 0:58
  Speaker 5: So I do? This one's from Mary, she said, Hi, girls,
• 1:01
  Speaker 5: here's a small money win from me. I usually get
• 1:04
  Speaker 5: my nails done every three to four weeks, and they
• 1:07
  Speaker 5: cost me anywhere between sixty to one hundred dollars every time. Expensive,
• 1:11
  Speaker 5: I know, so I decided to just cut them short
• 1:14
  Speaker 5: and do them myself. This will save me almost one
• 1:16
  Speaker 5: thousand dollars every year. Whoa, And I don't think they
• 1:19
  Speaker 5: look amazing, but with a little practice, I think I'll
• 1:22
  Speaker 5: get there. So I really love this one because I
• 1:24
  Speaker 5: think nails is something that we as women often justify,
• 1:27
  Speaker 5: and it's actually a really big cost. So the fact
• 1:29
  Speaker 5: that Mary stepped back and had to think about whether
• 1:31
  Speaker 5: it actually is aligning to her goals and decided maybe
• 1:34
  Speaker 5: it's not and wanted to save a thousand dollars more
• 1:37
  Speaker 5: a year, Like that's incredible and I think that she
• 1:39
  Speaker 5: should be really proud of that.
• 1:40
  Speaker 1: I really like that she actually did the math and
• 1:42
  Speaker 1: calculated the one.
• 1:43
  Speaker 3: Thousand dollars because it's nice to find the sum that
• 1:45
  Speaker 3: you're saving so you can be like, yes, yeah, have
• 1:48
  Speaker 3: that in.
• 1:48
  Speaker 1: My bank account exactly.
• 1:49
  Speaker 5: And maybe she could take up one step further and
• 1:51
  Speaker 5: make sure that that sixty to one hundred dollars she's
• 1:54
  Speaker 5: paying every three to four weeks actually gets transferred into
• 1:56
  Speaker 5: her savings instead of being, you know, just left in
• 1:59
  Speaker 5: your bank account to be spent on something else. Maybe
• 2:01
  Speaker 5: automate that so that you are actually saving the additional
• 2:04
  Speaker 5: one thousand dollars a year instead of hypothetically so you
• 2:06
  Speaker 5: feel really good about it, but it actually happens great.
• 2:09
  Speaker 3: I've got one from Millie who said, cleared out a
• 2:11
  Speaker 3: heap of textbooks that have been sitting on my bookshelf
• 2:14
  Speaker 3: gathering dust and traded them into my UNI's co op bookshop,
• 2:16
  Speaker 3: which buys back your old textbooks, and got just over
• 2:19
  Speaker 3: two hundred dollars for them, which went straight to the
• 2:21
  Speaker 3: savings account.
• 2:22
  Speaker 1: This is something that I need to do, so I
• 2:25
  Speaker 1: feel like this is great motivation for myself.
• 2:27
  Speaker 5: I can't begin to tell you how many textbooks I
• 2:29
  Speaker 5: have at home, and I didn't even know you could
• 2:31
  Speaker 5: do this, so I feel like that's something I'm actually
• 2:33
  Speaker 5: going to try and do maybe next weekend. I also
• 2:35
  Speaker 5: googled this and it turns out their own websites so
• 2:38
  Speaker 5: you can sell your textbooks on as well. I actually
• 2:40
  Speaker 5: didn't know.
• 2:41
  Speaker 1: And UNI textbooks are really expensive, so you'd get a
• 2:43
  Speaker 1: fair chunk back.
• 2:44
  Speaker 5: Yes, I remember doing business a little while ago and
• 2:47
  Speaker 5: some of my textbooks were more than two hundred dollars each.
• 2:50
  Speaker 5: That was insane, and.
• 2:51
  Speaker 1: Especially I don't really use my textbook very much, so
• 2:53
  Speaker 1: I hope no, none of my tutors or lectures are listening.
• 2:55
  Speaker 5: Neither I often a PDF and control f like that's
• 3:00
  Speaker 5: kind of how I.
• 3:00
  Speaker 1: Work, exactly, Victoria.
• 3:02
  Speaker 3: Today on the show, we're talking all things first home
• 3:04
  Speaker 3: buying and mortgages for one, how in the world do
• 3:07
  Speaker 3: I get one? Who can I trust? And how much
• 3:09
  Speaker 3: money do I actually need? But before we get there,
• 3:12
  Speaker 3: as always, it's.
• 3:13
  Speaker 1: Time to share a money win or a money confession
• 3:15
  Speaker 1: from the week. How'd you go this week? Victoria?
• 3:17
  Speaker 5: All right, so I have another confession, Annabel tell me
• 3:21
  Speaker 5: so the look on your faces like, oh, I feel
• 3:24
  Speaker 5: a little bit bad about this because this is incredibly
• 3:26
  Speaker 5: self indulgent. I love going to the snow, which is
• 3:30
  Speaker 5: something that you know, I prioritize. It's a value to me.
• 3:33
  Speaker 5: But this weekend I went on another snow trip just
• 3:36
  Speaker 5: to hof them, this time not international way, just a
• 3:39
  Speaker 5: weekend away. But I think, backing up from a previous
• 3:44
  Speaker 5: trip to the snow less than two weeks before that,
• 3:47
  Speaker 5: I feel like I probably shouldn't have, but I had
• 3:49
  Speaker 5: a really good time with friends. We've been planning it
• 3:51
  Speaker 5: for more than a year actually, because there's a snow
• 3:53
  Speaker 5: group that we have that we go to the snow
• 3:55
  Speaker 5: with every single year. So I'm not sad about it.
• 3:58
  Speaker 5: But it's a bit of a money confession from me because.
• 4:00
  Speaker 1: It's the winter. Yeah.
• 4:02
  Speaker 5: True, but over the last month I have spent a
• 4:04
  Speaker 5: small fortune on snow related expenses. So that's that's a
• 4:08
  Speaker 5: confession from me this week. And it also means I'm
• 4:11
  Speaker 5: packing my lunch every day for the next month. Great,
• 4:14
  Speaker 5: what about you.
• 4:15
  Speaker 1: I have a money win to counterbalance that.
• 4:18
  Speaker 5: Thank you.
• 4:18
  Speaker 4: Hi.
• 4:19
  Speaker 3: For the first time ever, I sent a complaint to
• 4:23
  Speaker 3: a company. I bought eyebrow tint.
• 4:25
  Speaker 5: Oh yeah, no.
• 4:26
  Speaker 3: I bought it in woolies or coals on one of
• 4:29
  Speaker 3: those and I opened it and it was not eyebrow tint.
• 4:32
  Speaker 3: It was some weird like orange concoction and it was
• 4:35
  Speaker 3: not what I was supposed to get.
• 4:36
  Speaker 5: You don't want orange eye brown no, I know, right.
• 4:39
  Speaker 3: And so I sent an email to the company and
• 4:41
  Speaker 3: they sent me two new packets.
• 4:44
  Speaker 5: Oh, check that out, and then they refunded me.
• 4:47
  Speaker 1: Check that out. So I thin I'm gonna be complaining
• 4:49
  Speaker 1: more often.
• 4:50
  Speaker 5: I feel like complaining where its valid is fair. But
• 4:52
  Speaker 5: I really dislike it when people complain just to get
• 4:55
  Speaker 5: things free. That that kind of ticks me off because
• 4:58
  Speaker 5: I've seen it a couple of times where people have
• 5:00
  Speaker 5: been like, oh, well, if you just complain, they'll give
• 5:02
  Speaker 5: you something for free. I think if you actually had
• 5:05
  Speaker 5: a faulty product, absolutely deserved. But if not, I'm not
• 5:08
  Speaker 5: one for confrontation as well.
• 5:10
  Speaker 1: No, like should I email them? And my sister was like, yes,
• 5:12
  Speaker 1: you need to email them, this is not right now.
• 5:14
  Speaker 5: The type of email I would have sat on for
• 5:16
  Speaker 5: a really long time too, because I would have felt
• 5:17
  Speaker 5: bad about it.
• 5:18
  Speaker 1: Yeah, for sure.
• 5:20
  Speaker 3: Okay, so Victoria, Buying a house is a big thing
• 5:22
  Speaker 3: for all of us. It's a huge financial hurdle, but
• 5:25
  Speaker 3: more than that, it's a huge mental one too. The
• 5:27
  Speaker 3: first place I want to start is with dollars in
• 5:29
  Speaker 3: our bank account. How much of a deposit should you save?
• 5:32
  Speaker 3: And what are the downsides to not putting away twenty percent?
• 5:35
  Speaker 5: So we've all heard twenty percent be thrown around, and
• 5:38
  Speaker 5: that's because twenty percent is ideal. But I'm going to
• 5:42
  Speaker 5: be a little bit of a downer here and say
• 5:44
  Speaker 5: what people don't realize is that in an ideal situation,
• 5:48
  Speaker 5: you have twenty percent plus costs if your first home buyer,
• 5:52
  Speaker 5: those costs are a lot less if you're purchasing under
• 5:54
  Speaker 5: six hundred thousand dollars, you're going to get a stamp
• 5:56
  Speaker 5: duty concession and that's a massive saving of approximately thirty
• 5:59
  Speaker 5: five thousan If you are a homeowner already, though, you're
• 6:02
  Speaker 5: going to have to cough up all of those costs.
• 6:05
  Speaker 1: So what are those extra costs?
• 6:06
  Speaker 5: So those costs are stamp duty, legal fees, You've got
• 6:10
  Speaker 5: application fees and stuff like that, and usually that ends
• 6:13
  Speaker 5: up being between five and ten percent of the purchase
• 6:15
  Speaker 5: price all up. And that is if you want to
• 6:18
  Speaker 5: avoid l am I so lender's mortgage insurance and or
• 6:22
  Speaker 5: you don't have a guarranteur.
• 6:24
  Speaker 3: Yeah, so you'd say about thirty percent then saved.
• 6:27
  Speaker 5: In a perfect world, you'd have thirty percent saved, because
• 6:30
  Speaker 5: then you're going to have some surplus at the end
• 6:32
  Speaker 5: of your mortgage and you're not going to be left
• 6:34
  Speaker 5: with absolutely no money in your account once you have
• 6:36
  Speaker 5: a home.
• 6:37
  Speaker 1: So you mentioned mortgage lenders insurance. What is that?
• 6:41
  Speaker 5: So LMI is an insurance that you need to pay
• 6:45
  Speaker 5: if you have less than twenty percent deposits. So it's
• 6:48
  Speaker 5: called lenders mortgage insurance. And you need to be really
• 6:51
  Speaker 5: aware that that's not an insurance to protect you. It's
• 6:54
  Speaker 5: actually an insurance to protect the bank. So because you're
• 6:58
  Speaker 5: purchasing a home for less than twenty percent deposit, it
• 7:01
  Speaker 5: actually means that you're a riskier lender or you're a
• 7:04
  Speaker 5: riskier person to lend to. So the bank wants you
• 7:07
  Speaker 5: to cough up some extra money so that they can
• 7:09
  Speaker 5: pay for insurance in case you're not able to fulfill
• 7:12
  Speaker 5: your commitment.
• 7:13
  Speaker 3: Right, So is it true that you'll be able to
• 7:15
  Speaker 3: buy property with a five percent deposit from next year?
• 7:18
  Speaker 5: You can actually already do this, So you can purchase
• 7:20
  Speaker 5: a home with a five percent deposit, but all you
• 7:22
  Speaker 5: need to do is pay el am I. It doesn't
• 7:25
  Speaker 5: mean you have access to all of the lenders though.
• 7:27
  Speaker 5: You're still going to need to come up with costs
• 7:29
  Speaker 5: and stuff, so it's never going to be a straight
• 7:31
  Speaker 5: five percent. I'm ready to go. I'm purchasing a home
• 7:33
  Speaker 5: because bottom line, five percent is not enough. I'd be
• 7:36
  Speaker 5: looking at least ten percent total to secure a mortgage.
• 7:40
  Speaker 5: As I mentioned, five percent home loans already exist, and
• 7:43
  Speaker 5: you do need to pay el am I when borrowing
• 7:46
  Speaker 5: more than eighty percent of a property's value. So that's
• 7:49
  Speaker 5: the kind of rule around el am I, and it
• 7:51
  Speaker 5: can be expensive. So if you purchased a home that
• 7:53
  Speaker 5: was four hundred thousand dollars with a five percent deposit,
• 7:55
  Speaker 5: so that would be twenty thousand dollars, you'd be looking
• 7:58
  Speaker 5: at about twelve thousand, seven hundred dollars as an LMI premium.
• 8:02
  Speaker 5: And that's an estimate that I've used with a calculator
• 8:05
  Speaker 5: that I can link into the group this week so
• 8:06
  Speaker 5: people can have a bit of a play around with it.
• 8:08
  Speaker 1: Thank you, Victoria.
• 8:09
  Speaker 3: So if we can purchase a home with a five
• 8:11
  Speaker 3: percent deposit, what is the first home buying scheme?
• 8:14
  Speaker 5: Then it's something that's being brought in by the government
• 8:17
  Speaker 5: so that people who are purchasing properties can access property
• 8:22
  Speaker 5: for five percent. And I've mentioned you can already do this.
• 8:24
  Speaker 5: It just has a number of other things that go
• 8:26
  Speaker 5: into it. And the scheme essentially makes low deposit home
• 8:29
  Speaker 5: loans cheaper. So at the moment, if you are taking
• 8:32
  Speaker 5: a loan and you only have five percent of a deposit,
• 8:35
  Speaker 5: you're actually not able to access a lot of the
• 8:37
  Speaker 5: low interest rate loans out there. You're going to end
• 8:40
  Speaker 5: up with a higher interest rate loan because you're a
• 8:42
  Speaker 5: riskier lender. So the scheme makes low deposit home loans cheaper,
• 8:47
  Speaker 5: and it's administered through a thing called the National Housing
• 8:50
  Speaker 5: Finance and Investment Corporation, and it partners with lenders. The
• 8:54
  Speaker 5: important thing to remember here, though, is it's actually only
• 8:57
  Speaker 5: accessible by ten thousand people each year, so it's not
• 9:00
  Speaker 5: a massive thing, and I know that in our Facebook
• 9:02
  Speaker 5: group we have a lot of conversations about this and
• 9:05
  Speaker 5: a lot of people who have asked about how they
• 9:06
  Speaker 5: can utilize it. But there are a number of things
• 9:08
  Speaker 5: you need to hurtle over I suppose to be able
• 9:11
  Speaker 5: to access it. And so the first thing is if
• 9:13
  Speaker 5: you earn more than one hundred and twenty five thousand
• 9:15
  Speaker 5: dollars a year as an individual, you can't access it,
• 9:17
  Speaker 5: and that's two hundred thousand dollars as a couple. The
• 9:20
  Speaker 5: access to the scheme is capped at ten thousand borrowers,
• 9:22
  Speaker 5: and there's obviously a lot more people, a lot of
• 9:24
  Speaker 5: people at all, No, not in the grand scheme of things,
• 9:26
  Speaker 5: because it's Australia wide and the value of eligible homes
• 9:30
  Speaker 5: under the scheme varies by region, So if you're purchasing
• 9:32
  Speaker 5: in Melbourne versus regional Victoria or even Queensland, the amount
• 9:36
  Speaker 5: that you can borrow is different, and often it might
• 9:39
  Speaker 5: not be reflective of the type of home you want
• 9:42
  Speaker 5: to purchase. So if you've been saving for a really
• 9:44
  Speaker 5: long time and you have twenty percent and you think
• 9:46
  Speaker 5: that this scheme is going to allow you to get
• 9:48
  Speaker 5: a better home, it might not actually put you in
• 9:51
  Speaker 5: that bucket, and you still need to apply for it.
• 9:54
  Speaker 5: So if you want to talk to a broker about it,
• 9:56
  Speaker 5: you absolutely can. Maybe you can access it, But at
• 9:59
  Speaker 5: the same time, I'd probably just be talking to a
• 10:01
  Speaker 5: broker upfront to begin with about what your options are,
• 10:04
  Speaker 5: because you don't just need this scheme to be able
• 10:06
  Speaker 5: to borrow money at five percent, Right.
• 10:09
  Speaker 3: What kinds of things should you be wary of before
• 10:12
  Speaker 3: meeting with a broker? Inn Are there any tips and
• 10:14
  Speaker 3: tricks you'd recommend for success?
• 10:15
  Speaker 5: I think this is such an important one, And the
• 10:17
  Speaker 5: first thing I'll say is referrals are golden. So if
• 10:20
  Speaker 5: you've had a friend or a family member that's borrowed
• 10:22
  Speaker 5: before and had a really great experience with a broker,
• 10:25
  Speaker 5: have a conversation with them because often if they've had
• 10:28
  Speaker 5: a great experience, they're probably going to provide that to
• 10:31
  Speaker 5: you as well. You need to keep in mind as well, though,
• 10:33
  Speaker 5: that if you get recommended someone, it doesn't mean that
• 10:36
  Speaker 5: they're a perfect fit for you. Go and meet someone.
• 10:39
  Speaker 5: I say this about financial advisors as well. It's kind
• 10:41
  Speaker 5: of like a GP. If you're not comfortable having a
• 10:43
  Speaker 5: chat with them and you're not comfortable divulging all of
• 10:46
  Speaker 5: your personal financial information, they can't actually help you to
• 10:49
  Speaker 5: their full potential. A broker should actually have your best
• 10:52
  Speaker 5: interests at heart, So you should walk in and walk
• 10:54
  Speaker 5: out feeling really excited about the process and like you
• 10:57
  Speaker 5: have a lot of clarity on what's going on. You
• 11:00
  Speaker 5: shouldn't walk out wondering, you know, oh, I'm still not
• 11:02
  Speaker 5: sure about the process, or I don't know what my
• 11:04
  Speaker 5: expectations are. A good broker, in a first meeting, we'll
• 11:08
  Speaker 5: be able to tell you exactly what's expected of you
• 11:10
  Speaker 5: and be able to give you an estimate of what
• 11:12
  Speaker 5: they're looking at. Be really wary of brokers who work
• 11:15
  Speaker 5: directly with banks, because they're not taking into consideration all
• 11:18
  Speaker 5: of your options. They're just taking into consideration options that
• 11:22
  Speaker 5: are from one place, and that's potentially not putting you
• 11:25
  Speaker 5: in the best possible position. And if you want some
• 11:28
  Speaker 5: rules around what to ask brokers for us them for
• 11:31
  Speaker 5: at least three options. So a good broker will put
• 11:33
  Speaker 5: three different options on the table from three different brokers,
• 11:36
  Speaker 5: and if they're not doing that, it's a bit of
• 11:38
  Speaker 5: a red flag. So legally they only have to show
• 11:41
  Speaker 5: you one option, but that's not putting you in the
• 11:44
  Speaker 5: best possible position and it's not giving you the option
• 11:46
  Speaker 5: of choice. Also on that making sure they're independent. I
• 11:50
  Speaker 5: mentioned before that brokers who are aligned to banks are
• 11:53
  Speaker 5: potentially not putting you in the best possible position. So
• 11:56
  Speaker 5: find someone who has a license and has access to
• 11:58
  Speaker 5: a number of different products. So not to plug my
• 12:02
  Speaker 5: own business, but the brokers within Zella have access to
• 12:05
  Speaker 5: more than forty five different lenders, so it's not like
• 12:08
  Speaker 5: they only have access to CBA or aan Z or
• 12:11
  Speaker 5: just the big four banks. There are so many different
• 12:13
  Speaker 5: options that we have access to that you know, if
• 12:16
  Speaker 5: you can't access a home loan straight through a bank
• 12:18
  Speaker 5: because maybe you have not a great credit history, or
• 12:21
  Speaker 5: you have something that's maybe not as complimentary as you'd
• 12:24
  Speaker 5: like it to be, or your savings history isn't as
• 12:26
  Speaker 5: clear as you know what they need for a really
• 12:29
  Speaker 5: clean loan. We have access to a whole heap of
• 12:31
  Speaker 5: other things. And if you're looking for a broker, that's
• 12:33
  Speaker 5: really important because it puts you first. I think it's
• 12:35
  Speaker 5: also really important to make sure that you're not just
• 12:38
  Speaker 5: being loyal to a bank because you feel like you've
• 12:41
  Speaker 5: been with them for a really long time. So for example,
• 12:44
  Speaker 5: and I really like CBA, but if you've been a
• 12:46
  Speaker 5: Dolomite kid, you might want to just go get your
• 12:48
  Speaker 5: home loan through CBA. But that's potentially not the best
• 12:52
  Speaker 5: option for you. So I'm still with c Yeah, like
• 12:56
  Speaker 5: I'm still with the bank that I set up with originally.
• 12:58
  Speaker 5: I do have a couple of other external accounts, but
• 13:02
  Speaker 5: I feel like I'm still with the bank that I
• 13:04
  Speaker 5: started with purely out of loyalty and maybe a little
• 13:07
  Speaker 5: bit of laziness if I'm honest, because I haven't changed.
• 13:10
  Speaker 5: But if you're getting a home loan, you need to
• 13:11
  Speaker 5: ensure that you've checked all of your options and you
• 13:13
  Speaker 5: are absolutely in the best possible position.
• 13:16
  Speaker 1: So how do I know if my broker is any good?
• 13:17
  Speaker 4: Then?
• 13:18
  Speaker 1: Do they just need to give me those three options
• 13:20
  Speaker 1: or no?
• 13:20
  Speaker 5: I think that you need to walk away from the
• 13:22
  Speaker 5: conversation feeling educated and empowered. So each of those three options,
• 13:27
  Speaker 5: they give you an explanation for why they gave you
• 13:29
  Speaker 5: those three options and the different I guess situations that
• 13:33
  Speaker 5: will occur because of those loans. So have they actually
• 13:36
  Speaker 5: made sure that that puts you in the best possible position?
• 13:39
  Speaker 5: Did they explain every single option to you? Did they
• 13:42
  Speaker 5: talk to you about the different options like an offset
• 13:44
  Speaker 5: or a redraw facility? Did they explain to you the
• 13:46
  Speaker 5: difference between a fixed loan and a variable loan and
• 13:49
  Speaker 5: why each might work for you for different reasons? I
• 13:52
  Speaker 5: think when you.
• 13:53
  Speaker 1: Know, you know, I know that's a feeling.
• 13:55
  Speaker 5: Yeah, it's a feeling. But a good broker is going
• 13:58
  Speaker 5: to put you in the best possible position because they
• 14:00
  Speaker 5: want you to refer other clients and other work to them.
• 14:04
  Speaker 5: So for them to do a bad job is a
• 14:06
  Speaker 5: really bad thing. So when you know, you know, But
• 14:09
  Speaker 5: also just make sure that they've got their credit license
• 14:11
  Speaker 5: and that they are a registered broker and not just
• 14:14
  Speaker 5: someone working to plug things in.
• 14:16
  Speaker 3: Right, And once you have your deposit, how much would
• 14:19
  Speaker 3: you recommend someone keeps in their bank account, because that's
• 14:22
  Speaker 3: the thing we probably forget. You can't just put every
• 14:24
  Speaker 3: dollar you have into a house, you need like an
• 14:27
  Speaker 3: emergency fund, a safety net. How much would you recommend
• 14:29
  Speaker 3: that should be.
• 14:30
  Speaker 5: So that's completely dependent upon who you are as a
• 14:32
  Speaker 5: person and what you value. So some people might want
• 14:35
  Speaker 5: a two thousand dollar emergency fund, whereas other people might
• 14:38
  Speaker 5: want another ten thousand dollars sitting in their account to
• 14:40
  Speaker 5: make them feel secure. So that's really personal, but it's
• 14:43
  Speaker 5: also a part of the broker's role. So their job
• 14:46
  Speaker 5: is to ensure that you have a surplus at the
• 14:48
  Speaker 5: end of the transaction, and that your loan is covered
• 14:51
  Speaker 5: and all fees are paid for, and that you don't
• 14:54
  Speaker 5: come up short. So a good broker will make sure
• 14:56
  Speaker 5: that that doesn't become an issue for you. But also
• 14:59
  Speaker 5: you need to be really stick with yourself. If you
• 15:01
  Speaker 5: are moving house and you're purchasing a brand new home,
• 15:04
  Speaker 5: are you going to be purchasing seeing furniture? Are there
• 15:07
  Speaker 5: any other expenses that you would consider to be additional
• 15:10
  Speaker 5: to the cost of moving and purchasing a home that
• 15:13
  Speaker 5: you want to do. Do you want to put in
• 15:15
  Speaker 5: a new sink in the kitchen? Where is that cash
• 15:17
  Speaker 5: going to come from? And should it happen now or
• 15:19
  Speaker 5: should you maybe move in wait a year and see
• 15:21
  Speaker 5: what happens exactly.
• 15:22
  Speaker 1: There are so many other costs that come with moving,
• 15:24
  Speaker 1: even like the moving van, so that.
• 15:26
  Speaker 5: Is something that I don't think a lot of people
• 15:28
  Speaker 5: take into consideration. There was actually a post this week
• 15:31
  Speaker 5: in the Facebook group about how much moving costs, and
• 15:34
  Speaker 5: one of the girls were saying that she had hired
• 15:36
  Speaker 5: a van and it cost him nearly two thousand dollars
• 15:39
  Speaker 5: to move house. So I think you probably should have
• 15:41
  Speaker 5: a look at how much that's going to cost you
• 15:43
  Speaker 5: and even getting some quotes from removalists so you can
• 15:47
  Speaker 5: factor that into your budget in as clean a way
• 15:49
  Speaker 5: as possible.
• 15:50
  Speaker 3: Exactly, So you're a financial advisor, if listeners, I am.
• 15:55
  Speaker 3: What's your take on buying apartments off the plan lifestyle
• 15:58
  Speaker 3: preferences aside? Do you think it's a as a financial
• 16:00
  Speaker 3: decision to look for something older that can be renovated
• 16:03
  Speaker 3: the block style.
• 16:04
  Speaker 5: I feel really bad because I want to laugh at
• 16:06
  Speaker 5: this because maybe I have a really harsh opinion of it.
• 16:10
  Speaker 5: But my opinion is apartments of the plan are never
• 16:13
  Speaker 5: a good idea.
• 16:15
  Speaker 1: Strap them off the plan.
• 16:17
  Speaker 5: Yeah, put them off your plan. They're just too risky.
• 16:19
  Speaker 5: You have no history, there's often a lot of complaints
• 16:22
  Speaker 5: about off the plan apartments not being finished up to
• 16:25
  Speaker 5: the standard that you would have expected in the first year.
• 16:27
  Speaker 5: There's often a lot of repairs that need to be made.
• 16:30
  Speaker 5: There's currently an oversupply in the big cities at the
• 16:34
  Speaker 5: moment of apartments, and your apartment is only ever going
• 16:37
  Speaker 5: to be worth what next door's apartment is. There's no
• 16:40
  Speaker 5: room for growth in an apartment. You can't just tack
• 16:42
  Speaker 5: on another bedroom or you know, renovate and create another
• 16:45
  Speaker 5: bathroom to add value. So it kind of is what
• 16:47
  Speaker 5: it is. And developers build on huge commissions, so they
• 16:51
  Speaker 5: are in this game to make money. So often the
• 16:54
  Speaker 5: value that you paid upfront is not reflected for a
• 16:58
  Speaker 5: really long time in the purchase price or in the
• 17:00
  Speaker 5: sale price. So it's not great. I mean, there are
• 17:03
  Speaker 5: probably a lot of women who are listening to this,
• 17:05
  Speaker 5: or people in general who are listening to this, and
• 17:07
  Speaker 5: they have purchased off the plan. They're really happy with
• 17:09
  Speaker 5: their they're purchase and they're really happy with the apartment
• 17:12
  Speaker 5: they've got. But I think as a general rule, that's
• 17:15
  Speaker 5: not where we should be looking. So yes, looking at
• 17:18
  Speaker 5: something older that could potentially be renovated is great, but
• 17:20
  Speaker 5: looking for properties in smaller blocks. So if your budget
• 17:24
  Speaker 5: allows for an apartment, maybe find an apartment block that
• 17:27
  Speaker 5: has six to ten apartments in it, not one hundred
• 17:29
  Speaker 5: and fifty. Yeah, and look at things that you know
• 17:32
  Speaker 5: are the room size is bigger. I think as apartments
• 17:34
  Speaker 5: are becoming more and more popular, the square meters of
• 17:38
  Speaker 5: the house or the square meters of the apartment are
• 17:40
  Speaker 5: getting much smaller, and you end up living in shoe boxes.
• 17:43
  Speaker 5: So looking at older apartments, not necessarily that you can renovate,
• 17:47
  Speaker 5: but have a lot of space and you know are
• 17:49
  Speaker 5: going to work for you is probably the right decision.
• 17:51
  Speaker 1: And they probably make for a better investment as well.
• 17:54
  Speaker 5: Right, absolutely, And I think that that's one of the
• 17:56
  Speaker 5: things you really need to take into consideration. Why are
• 17:58
  Speaker 5: you purchasing this apart Is it to live in for
• 18:01
  Speaker 5: the rest of your life or are you purchasing a
• 18:03
  Speaker 5: two bedroom apartment to potentially sell in ten or fifteen
• 18:06
  Speaker 5: years to upgrade the home that you want. So, you know,
• 18:09
  Speaker 5: a lot of people think, oh, I can't get into
• 18:11
  Speaker 5: the property market, I'm never going to afford the house
• 18:13
  Speaker 5: of my dreams, And often it takes a number of steps.
• 18:16
  Speaker 5: Often It takes purchasing your first two bedroom apartment, then
• 18:18
  Speaker 5: maybe a three bedroom apartment, then a small house, and
• 18:21
  Speaker 5: then upgrading to the house you want. It is not linear.
• 18:24
  Speaker 5: It is not something where you go straight to being
• 18:26
  Speaker 5: able to afford the one point five million dollar home
• 18:28
  Speaker 5: in the area you want. It's about, you know, progressing
• 18:31
  Speaker 5: and buying small and making money in that way as
• 18:34
  Speaker 5: opposed to just purchasing your house of your dreams upfront.
• 18:38
  Speaker 1: So is property the best investment, if at all? Do
• 18:41
  Speaker 1: you think?
• 18:41
  Speaker 5: I dislike that question so much because there you're not
• 18:46
  Speaker 5: that sorry. I think the property is technically not the
• 18:50
  Speaker 5: best investment of all. Property over the last thirty forty
• 18:53
  Speaker 5: years has been fantastic, and so many people have made
• 18:56
  Speaker 5: a lot of money because of how much property has
• 18:58
  Speaker 5: increased in value. We aren't looking for property in the
• 19:02
  Speaker 5: next ten to twenty thirty years to increase in the
• 19:04
  Speaker 5: same way that it has before. We've all had our
• 19:06
  Speaker 5: parents say, oh, why haven't you purchased property yet? I
• 19:09
  Speaker 5: bought my first home for twenty two thousand dollars and
• 19:12
  Speaker 5: sold it for thirty and you go, yeah, a property
• 19:15
  Speaker 5: isn't going to cost me that much in comparison, to
• 19:17
  Speaker 5: what they earned. Back then, houses were costing maybe three
• 19:21
  Speaker 5: times an annual salary, whereas now that's absolutely not the
• 19:24
  Speaker 5: case and it's becoming far less accessible. And if we
• 19:27
  Speaker 5: had the same amount of growth in the property market
• 19:30
  Speaker 5: that we've had over the last thirty years, apartments are
• 19:33
  Speaker 5: going to be worth millions of dollars and it's not
• 19:35
  Speaker 5: going to be it's not going to be sustainable because
• 19:38
  Speaker 5: our income growth is not going up at the same rate.
• 19:41
  Speaker 3: Yeah, So what are some of the danger zones when
• 19:44
  Speaker 3: it comes to applying for a mortgage? Then what are
• 19:46
  Speaker 3: some things that might jeopardize someone who's applying for a loan.
• 19:49
  Speaker 5: So if you're in a position where you've saved up
• 19:51
  Speaker 5: enough money for a deposit and you're having chats with
• 19:53
  Speaker 5: a broker, some things that can get in your way
• 19:56
  Speaker 5: is undisclosed debt. So we talked about this in the
• 19:59
  Speaker 5: after Pay episode. So you need to be incredibly upfront
• 20:02
  Speaker 5: with your broker and disclose any debts that you have
• 20:05
  Speaker 5: and any lines of credit you have access to. So
• 20:08
  Speaker 5: even if your credit card is sitting at zero dollars,
• 20:12
  Speaker 5: but you've got a ten thousand dollars limit on that
• 20:14
  Speaker 5: credit card, that's ten thousand dollars that you're not going
• 20:17
  Speaker 5: to be able to borrow on your mortgage. So a
• 20:20
  Speaker 5: lot of our clients end up reducing their credit card
• 20:24
  Speaker 5: limits or potentially closing credit cards that they don't need
• 20:27
  Speaker 5: to really mitigate that. So undisclosed debt is massive overspending.
• 20:32
  Speaker 5: And lifestyle is another one. So if you've saved up
• 20:35
  Speaker 5: a deposit, that's honestly not enough. You need to have
• 20:38
  Speaker 5: a really good savings pattern and you need to have
• 20:41
  Speaker 5: a really good track record essentially, So if you're living
• 20:44
  Speaker 5: within your means and you are able to save, and
• 20:46
  Speaker 5: you are obviously able to pay off a mortgage, fantastic.
• 20:50
  Speaker 5: But if you have saved all of your money and
• 20:52
  Speaker 5: you have a house deposit, but you're still living in
• 20:54
  Speaker 5: your best life and you're getting Uber eats every night
• 20:56
  Speaker 5: and your lifestyle is matched to your income, is going
• 21:00
  Speaker 5: to look at you and say, hey, you're not actually
• 21:02
  Speaker 5: going to be able to afford a mortgage because you're
• 21:04
  Speaker 5: spending all of your free cash flow even though you've
• 21:07
  Speaker 5: got the deposit. So that's not enough. And also changes
• 21:10
  Speaker 5: in employment, so that's a massive one that I don't
• 21:13
  Speaker 5: think a lot of people know about. So if you're
• 21:15
  Speaker 5: within probation, A lot of lenders aren't going to be
• 21:18
  Speaker 5: willing to lend to you because you're in a really
• 21:22
  Speaker 5: risky period of your employment and you could have your
• 21:24
  Speaker 5: employment terminated without any real cause or any real notice.
• 21:30
  Speaker 5: So that's still a lot of lenders really risky. Some
• 21:33
  Speaker 5: still consider it, especially if you've got a really good
• 21:36
  Speaker 5: history of employment, so like you're in your last role
• 21:38
  Speaker 5: for a very few years and you can prove that
• 21:41
  Speaker 5: this role was the right move for you. But changes
• 21:43
  Speaker 5: during the loan process can often make things messy, and
• 21:46
  Speaker 5: I would definitely recommend having a chat to your brokeroof
• 21:49
  Speaker 5: that's something you're considering doing.
• 21:51
  Speaker 3: Okay, So do you think there's too much pressure on
• 21:54
  Speaker 3: young people to buy these days? Do I need to
• 21:56
  Speaker 3: buy in order to set myself up for financial freedom,
• 21:58
  Speaker 3: because I definitely want to buy a hair but I'm
• 22:00
  Speaker 3: not sure if I made that decision on my own
• 22:02
  Speaker 3: or whether that's something that I've just thought that I
• 22:04
  Speaker 3: should be doing since I.
• 22:05
  Speaker 1: Was a young kid.
• 22:06
  Speaker 5: That's such a good question, and I think there's a
• 22:09
  Speaker 5: mass amount of pressure on us to purchase homes. If
• 22:12
  Speaker 5: you look at what our parents did and our grandparents did. Historically,
• 22:16
  Speaker 5: living the Great Autralian Dream included purchasing a home, paying
• 22:20
  Speaker 5: it off, and then saving for retirement. Unfortunately, that's not
• 22:24
  Speaker 5: going to be the case for many people. So there
• 22:26
  Speaker 5: are people listening to this that property isn't going to
• 22:28
  Speaker 5: be the best investment for them at all because their
• 22:30
  Speaker 5: income isn't going to support what they need to purchase
• 22:33
  Speaker 5: or what they would like to purchase. There are so
• 22:35
  Speaker 5: many asset classes that can help you invest, and property
• 22:39
  Speaker 5: isn't the only one. So I think the pressure on
• 22:42
  Speaker 5: us to purchase homes is a little bit unnecessary, but
• 22:45
  Speaker 5: I think we do need the pressure on us to
• 22:47
  Speaker 5: be investing for our futures. So it depends on what
• 22:50
  Speaker 5: vehicle we choose to do that. If that's property, fantastic.
• 22:53
  Speaker 5: Investment is all about choosing the asset that you're most
• 22:55
  Speaker 5: comfortable with. If that shares fantastic, if it's property, great,
• 23:00
  Speaker 5: All we need to do is make sure that it's
• 23:01
  Speaker 5: actually aligned to you achieving your goals.
• 23:03
  Speaker 3: Do you think that people like go more towards buying
• 23:07
  Speaker 3: a property because it's like a tangible asset that you can.
• 23:09
  Speaker 1: See if you want to do.
• 23:11
  Speaker 5: Yeah, So the share market, you can't touch, you can't
• 23:14
  Speaker 5: taste like. It's not something that you can look at
• 23:16
  Speaker 5: and go, oh, that's my house. I feel really proud
• 23:18
  Speaker 5: of that. It's often really internalized because you're not going
• 23:21
  Speaker 5: to post on the street a picture of your share
• 23:23
  Speaker 5: portfolio and you're like, oh, check this asset out.
• 23:26
  Speaker 4: Yeah.
• 23:26
  Speaker 5: I mean, I can make a post for you if
• 23:28
  Speaker 5: you would lie. But I think that people feel really
• 23:31
  Speaker 5: safe with property because it's an asset that even if
• 23:35
  Speaker 5: the market completely crashed in your house was worth nothing,
• 23:38
  Speaker 5: you still have a house. Yeah, And I think that's
• 23:40
  Speaker 5: something that a lot of people value, and a lot
• 23:42
  Speaker 5: of people say, well, I really want a house anyway.
• 23:45
  Speaker 5: I don't care if it means that the property market
• 23:48
  Speaker 5: is going down, because I'm going to hold onto it
• 23:50
  Speaker 5: for a really long time. I think that there's a
• 23:52
  Speaker 5: really big misconception that shares can completely lose their value.
• 23:56
  Speaker 5: Absolutely they can, but something in our economy has to
• 23:58
  Speaker 5: go absolutely dressed, clear wrong. And if our shares are
• 24:01
  Speaker 5: losing value to the extent that people are worried about,
• 24:04
  Speaker 5: our property market is also going to suffer significantly.
• 24:14
  Speaker 4: Hi.
• 24:14
  Speaker 3: There, you've called the Shees on the money hotline. Do
• 24:16
  Speaker 3: you have a money problem? You want help solving. Do
• 24:18
  Speaker 3: you have a money dilemma you just.
• 24:20
  Speaker 1: Want to chat about. Victoria is here to help.
• 24:22
  Speaker 3: Each week we'll be playing your hotline questions to help
• 24:25
  Speaker 3: make sense of the money mess you may have found
• 24:27
  Speaker 3: yourself in. Give us a call on four three five,
• 24:29
  Speaker 3: two nine three double eighty six and you might find
• 24:32
  Speaker 3: yourself on the show.
• 24:42
  Speaker 4: Hello friends, is miss here from your sister podcast Shameless
• 24:46
  Speaker 4: As you both know, I am self employed. I've never
• 24:49
  Speaker 4: been self employed for about oh a year now, and
• 24:52
  Speaker 4: I really want to buy an apartment with my partner
• 24:55
  Speaker 4: in the next twelve months. Mitch is in sable employment
• 24:58
  Speaker 4: that I've only been so employed for a short amount
• 25:01
  Speaker 4: of time, and I've heard so many rumors that you
• 25:03
  Speaker 4: have to be self employed for two years before you
• 25:05
  Speaker 4: can look at getting alone. Is that true? Because if
• 25:08
  Speaker 4: it isn't kind of screwed? Or is there anything I
• 25:11
  Speaker 4: can do to maximize my chances of getting a loan
• 25:13
  Speaker 4: while I am self employed? Thanks guys, Shell Andrews.
• 25:18
  Speaker 3: Welcome to the Shoes and the Money Podcast audio space.
• 25:22
  Speaker 1: What do you think she should do?
• 25:24
  Speaker 5: I think that that's a really good question, and it's
• 25:26
  Speaker 5: something we get asked a lot so yes, you technically
• 25:30
  Speaker 5: need to have at least two years of saving pattern
• 25:34
  Speaker 5: or of proof of employment for a bank to want
• 25:37
  Speaker 5: to lend to someone who's self employed. So we always
• 25:39
  Speaker 5: talk about how much harder it is when you're self
• 25:41
  Speaker 5: employed to get a loan, and that's often because income
• 25:44
  Speaker 5: during that period of time or when you're self employed
• 25:47
  Speaker 5: is really variable. So like one month he could earn
• 25:49
  Speaker 5: a thousand dollars, the next month he could be ten
• 25:51
  Speaker 5: thousand dollars, and we don't know actually what that looks like,
• 25:54
  Speaker 5: but we also don't know what the future looks like,
• 25:56
  Speaker 5: and that's what the bank's worried about. So if you're
• 25:58
  Speaker 5: employed and you have you know, so it pay as
• 26:00
  Speaker 5: you go salary, and someone is depositing a set amount
• 26:03
  Speaker 5: of money each month into your account, that's scene as
• 26:05
  Speaker 5: a lot more stable than it being all on someone
• 26:08
  Speaker 5: who's self employed to derive their income. So if Mish
• 26:11
  Speaker 5: wants to purchase a home, I think the most important
• 26:13
  Speaker 5: thing to do is actually talk to a broker and
• 26:16
  Speaker 5: work out how to show that her income is consistent
• 26:19
  Speaker 5: and it's got a good trajectory. So obviously we love shameless,
• 26:24
  Speaker 5: so if we can all support them, obviously Mitchell Byhouse sooner,
• 26:28
  Speaker 5: but I think it's also really important to be in
• 26:31
  Speaker 5: a position where you can prove that your income is reliable.
• 26:35
  Speaker 5: You can prove that your income is stable and it's
• 26:38
  Speaker 5: going to continue on. So that could be anything from
• 26:40
  Speaker 5: providing copies of your last tax returns to even including
• 26:44
  Speaker 5: business schedules or proposals, or your workflow or copies of
• 26:48
  Speaker 5: documentation that prove that not only are you working now,
• 26:51
  Speaker 5: but work is going to continue into the future. And
• 26:54
  Speaker 5: when people are able to do that, banks are often
• 26:57
  Speaker 5: far more likely to lend to you. The problem people
• 26:59
  Speaker 5: have when they're self employed is that they often don't
• 27:02
  Speaker 5: keep good records, and they're not good at bookkeeping, and
• 27:04
  Speaker 5: they're not good at proving their income because it's kind
• 27:07
  Speaker 5: of sporadic. And they also often match their income and
• 27:11
  Speaker 5: their lifestyle together. So if one month they earn ten
• 27:14
  Speaker 5: thousand dollars, they're often really likely to get into a
• 27:17
  Speaker 5: treat yourself kind of mentality in comparison to the month
• 27:20
  Speaker 5: where they had one thousand dollars coming in. So I
• 27:23
  Speaker 5: think it's important to not only show that your income
• 27:25
  Speaker 5: is consistent, but your lifestyle remains consistent. When you earn
• 27:29
  Speaker 5: more money and you can show a really good savings pattern.
• 27:32
  Speaker 3: Right, So it's possible for self employed people to secure alone,
• 27:36
  Speaker 3: but it's just maybe a little bit hard.
• 27:37
  Speaker 5: Yeah, there are just a fair few more hurdles that
• 27:39
  Speaker 5: you need to jump over. But if you're good at
• 27:41
  Speaker 5: keeping records and your business is going well, I don't
• 27:44
  Speaker 5: think it should be an issue at all. And if
• 27:46
  Speaker 5: you're a bit confused about that, have a chat with
• 27:48
  Speaker 5: a broker. They'll be able to outline everything that you
• 27:50
  Speaker 5: need and you can even say, hey, here's an additional thing.
• 27:53
  Speaker 5: Does this help? Does it not? Like your broker is
• 27:55
  Speaker 5: your best friend in this situation? There you go me,
• 27:58
  Speaker 5: She hope that helped. Now let's jump into our money
• 28:06
  Speaker 5: diary segment.
• 28:07
  Speaker 1: Let's go.
• 28:14
  Speaker 3: Today's money diary is from twenty eight and Learning, a
• 28:16
  Speaker 3: woman whose relationship with money has changed drastically since her
• 28:20
  Speaker 3: early twenties.
• 28:20
  Speaker 6: I've had, like, I've had a really tumultuous past with finances.
• 28:26
  Speaker 6: So growing up, my dad was very like he just
• 28:31
  Speaker 6: had this real mindset that we're never going to have money,
• 28:33
  Speaker 6: So don't even try, don't you know, don't imagine any
• 28:37
  Speaker 6: life better than this. It is just we just don't
• 28:39
  Speaker 6: have money, and that's just how it is. And then
• 28:40
  Speaker 6: my mum was the complete oppice. They went together and
• 28:44
  Speaker 6: she was like, let's not you know, let's not worry
• 28:47
  Speaker 6: about what's in the bank, let's just spend it all
• 28:48
  Speaker 6: and let's just get credit cards if we don't.
• 28:50
  Speaker 7: Have any, and just spends spenspens men.
• 28:53
  Speaker 6: So I had, you know, this half life where I
• 28:55
  Speaker 6: was in this like real poverty mindset, then another life
• 28:58
  Speaker 6: where it was like there was just no respect for money.
• 29:01
  Speaker 6: So when I got a job and so finish, UNI
• 29:05
  Speaker 6: got a job, got out on my own, moved out
• 29:08
  Speaker 6: of home, I just had no understanding. I had no
• 29:11
  Speaker 6: financial literacy and got myself into a lot of debt.
• 29:16
  Speaker 6: So about four years ago, I was like twenty seven
• 29:20
  Speaker 6: thousand dollars into the credit card debt and personal loans,
• 29:23
  Speaker 6: couldn't pay my rent like it was borrowing money from
• 29:26
  Speaker 6: my little brothers to pay my rent every week, and
• 29:29
  Speaker 6: would make just enough money to get by. Like I
• 29:32
  Speaker 6: remember one day I worked out a hospital and I
• 29:35
  Speaker 6: accidentally rocked up to the wrong shift and payday was
• 29:38
  Speaker 6: the next day, and so rocked up to the wrong
• 29:40
  Speaker 6: shift and they said no, no, not on until this afternoon,
• 29:42
  Speaker 6: You'll have to go home and come back. And I
• 29:44
  Speaker 6: burst into tears and I was like, I literally only
• 29:47
  Speaker 6: have enough petrol to get home one more time.
• 29:50
  Speaker 7: So I sat in the Oh my god, I'm getting emotional.
• 29:53
  Speaker 6: I sat in the work card back for nearly eight
• 29:55
  Speaker 6: hours until the next shift because I wouldn't have been
• 29:57
  Speaker 6: able to afford to drive back because I didn't have
• 29:59
  Speaker 6: that that sort of money. So that was like, that
• 30:03
  Speaker 6: was horrible, and that was like so low, and I
• 30:05
  Speaker 6: wasn't I just couldn't do anything with my life.
• 30:08
  Speaker 7: I was really trapped financially.
• 30:09
  Speaker 6: So I eventually I wanted to change what I just
• 30:14
  Speaker 6: didn't know how. And I started dating somebody and he
• 30:18
  Speaker 6: was a little bit older than me, about three years older,
• 30:20
  Speaker 6: and just had always lived at home and was really
• 30:22
  Speaker 6: financially literate, and I was very private and secretive about
• 30:26
  Speaker 6: my finances with him. And then one day I kind
• 30:29
  Speaker 6: of opened up and said he wanted to go on
• 30:31
  Speaker 6: a holiday, and I was like, just so you know,
• 30:34
  Speaker 6: I can't do that. I don't have any money. I
• 30:36
  Speaker 6: have this much debt, and he was like, we need
• 30:39
  Speaker 6: to figure this out, and so kind of taught me
• 30:41
  Speaker 6: quite a few things.
• 30:43
  Speaker 7: I ended up moving back in with family.
• 30:45
  Speaker 6: And over eighteen months paid off all my debts and
• 30:48
  Speaker 6: then eighteen months later we had saved up enough money to.
• 30:51
  Speaker 7: Buy a house, so totally turned it around.
• 30:54
  Speaker 3: Okay, so we know twenty eight in learning has a
• 30:56
  Speaker 3: complicated money story, but let's talk specifics. How much does
• 30:59
  Speaker 3: she earn and how much has she got saved.
• 31:02
  Speaker 6: So I work as a midwife and I also teach
• 31:05
  Speaker 6: midwi free at university. So I've been doing that, been
• 31:08
  Speaker 6: a midwife for seven years and teaching for four years.
• 31:11
  Speaker 6: This past year, I've worked on a casual basis across
• 31:14
  Speaker 6: four different facilities, so I've made about seventy six K,
• 31:19
  Speaker 6: but that's not including any paid sick leave or annual leave,
• 31:23
  Speaker 6: so it's a little bit less than I would have
• 31:25
  Speaker 6: made if I was on a contract. In my bank
• 31:29
  Speaker 6: account at the moment, I have about two and a
• 31:33
  Speaker 6: half thousand in savings. I have this little like a
• 31:38
  Speaker 6: five hundred dollar buffer account where if I need extra
• 31:41
  Speaker 6: money that I don't have, I can pull it out
• 31:43
  Speaker 6: of that and I'll just hop it back up next
• 31:44
  Speaker 6: pay and then my partner and I have like a
• 31:48
  Speaker 6: joint savings account. That's pretty empty at the moment, but
• 31:51
  Speaker 6: we're about to start adding to it.
• 31:53
  Speaker 3: Now we know how twenty eight in learning gets paid,
• 31:55
  Speaker 3: but what exactly happens to that money after it's deposited
• 31:58
  Speaker 3: into her account.
• 31:59
  Speaker 6: That is something that has changed recently as well. So
• 32:02
  Speaker 6: I used to not I honestly used to not look
• 32:05
  Speaker 6: like money would come in and I would just ask
• 32:08
  Speaker 6: my partner, like how much do we over this?
• 32:10
  Speaker 7: I'ld just transfer it to you.
• 32:11
  Speaker 6: I was like afraid to check my bank balance, and
• 32:13
  Speaker 6: I would just like spend until my car got declined.
• 32:16
  Speaker 7: So I've really worked on that. Now I have a really.
• 32:20
  Speaker 6: It's like a half baked plan, Like half of it.
• 32:23
  Speaker 6: I know what I'm doing and the rest is a
• 32:25
  Speaker 6: little bit touch and go. So what I try to do.
• 32:28
  Speaker 6: Money comes in about maybe two K minimum a fortnight.
• 32:33
  Speaker 6: I put eight seventy into like a joint expenses account,
• 32:37
  Speaker 6: so that's mortgage, groceries, bills for the house.
• 32:40
  Speaker 7: I put three fifty into a joint savings.
• 32:43
  Speaker 6: I pay off my I've got a tax debt which
• 32:47
  Speaker 6: I can talk about, so I pay that off one
• 32:49
  Speaker 6: hundred backs of pay of hundred backs a fortnight, I
• 32:52
  Speaker 6: put one into my own personal savings which is a
• 32:55
  Speaker 6: long term savings and then I put whatever else I
• 32:59
  Speaker 6: can spare to my more short term savings account. To me,
• 33:03
  Speaker 6: it feels so comforting, and it's really important to me
• 33:07
  Speaker 6: that I've got just extra money sitting there, even if
• 33:09
  Speaker 6: it's not earning interest or anything, just that I know
• 33:12
  Speaker 6: I'm not broke. I'm never going to be stuck in
• 33:14
  Speaker 6: a cup or I'm able to drive home.
• 33:16
  Speaker 1: Ever, again, how does she go with investing?
• 33:18
  Speaker 6: Though I do want to invest, I'm very interested in investing,
• 33:22
  Speaker 6: and I've actually been reading a lot about it this
• 33:24
  Speaker 6: last year. What I'm trying to figure out is where
• 33:29
  Speaker 6: should I be investing my money. Should I save up
• 33:32
  Speaker 6: and aim to get another property for investment purposes or
• 33:36
  Speaker 6: is it better to put it into stocks and shares.
• 33:38
  Speaker 6: So I'm absolutely interested in it, and I'm saving for
• 33:41
  Speaker 6: the purpose of investing.
• 33:43
  Speaker 7: But I just don't know where exactly that's going yet.
• 33:46
  Speaker 1: And what about her debts?
• 33:47
  Speaker 6: So I have X I have seventeen and a half
• 33:50
  Speaker 6: K left there, so I have been paying that off
• 33:53
  Speaker 6: on my mortgage. I've got three hundred and twenty K outstanding.
• 33:58
  Speaker 6: I only have six hundred dollars left on a tax debt,
• 34:01
  Speaker 6: So I salary packaged for about four years at work
• 34:05
  Speaker 6: because I got more money in my account on a
• 34:08
  Speaker 6: fortnightly basis, which I was loving, but wasn't acknowledging that
• 34:12
  Speaker 6: I wasn't paying enough tax to pay hex.
• 34:14
  Speaker 7: So every year for the last four years I've had
• 34:16
  Speaker 7: a tax debt.
• 34:17
  Speaker 6: But this week I've got actually tax coming back to me,
• 34:21
  Speaker 6: so that'll be awesome. So yeah, that's nearly completely done.
• 34:23
  Speaker 6: That'll be paid off with the tax refund this week.
• 34:26
  Speaker 6: I've got a Lombard's Finance card, so it's like this
• 34:30
  Speaker 6: five year interest free card, and that's how we bought
• 34:33
  Speaker 6: a bit of furniture for our house and also put
• 34:37
  Speaker 6: a bit of money from it. I got married in February,
• 34:40
  Speaker 6: so bit of money from the wedding went into that.
• 34:42
  Speaker 6: So three k on that which will be paid off
• 34:44
  Speaker 6: this week with the tax. And that's actually it for debts.
• 34:49
  Speaker 6: I own my card. I don't have any credit cards.
• 34:51
  Speaker 6: They don't have any personal loans.
• 34:53
  Speaker 3: That's not what it was always like though. Just six
• 34:55
  Speaker 3: years ago, Today's Money Diarist was in a very die situation.
• 35:00
  Speaker 6: Thousand dollars of debt to the bank. I had about
• 35:04
  Speaker 6: four grand to my brother, about one thousand to my mom.
• 35:08
  Speaker 6: So it was well over thirty k twenty two years old.
• 35:12
  Speaker 6: So I bought a car that was fifteen thousand dollars
• 35:16
  Speaker 6: just because I could. I didn't really need to spend fifteen.
• 35:19
  Speaker 6: I could have spent five. I was frivolous, like I
• 35:21
  Speaker 6: just I remember getting a credit card because I had
• 35:25
  Speaker 6: my red Jo coming up, and I thought to myself,
• 35:27
  Speaker 6: I can't be well saving for that.
• 35:29
  Speaker 7: I'll just put it on credit. And then I just kind.
• 35:31
  Speaker 6: Of got this like buzz from spending money that wasn't
• 35:34
  Speaker 6: really mine, and I just shopped, like my wardrobe was ridiculous.
• 35:38
  Speaker 6: I went to like mister Zimmy every weekend. Every time
• 35:42
  Speaker 6: they released a new piece. I was buying a new piece,
• 35:44
  Speaker 6: and it was just ridiculous. I was like, I was
• 35:47
  Speaker 6: leaving this lifestyle that I absolutely couldn't afford. And then
• 35:50
  Speaker 6: I would get a credit card to pay off my
• 35:52
  Speaker 6: credit card, and then if I wanted to go on
• 35:54
  Speaker 6: a holiday, I would, you know, email the bank and say, look,
• 35:58
  Speaker 6: can I get a consolid a loan to pay off
• 36:01
  Speaker 6: my credit cards? And then I wouldn't pay off my
• 36:03
  Speaker 6: credit cards and I would go on a holiday, and
• 36:05
  Speaker 6: it was just a horrendous cycle. And eventually I was
• 36:08
  Speaker 6: borrowing money to pay rent and then borrowing money to
• 36:10
  Speaker 6: pay back the landlord, and.
• 36:13
  Speaker 7: It was just it was horrible. It was really really depressing.
• 36:16
  Speaker 6: I'm so passionate now about educating, particularly women from an
• 36:20
  Speaker 6: early age about their finances and about like these little
• 36:23
  Speaker 6: choices that you make. A one thousand dollar credit card
• 36:25
  Speaker 6: doesn't sound like much, but it can ruin your twenties
• 36:28
  Speaker 6: and that might put you back for.
• 36:30
  Speaker 7: A really long time. For me, it also really ruined
• 36:33
  Speaker 7: my self esteem.
• 36:34
  Speaker 6: Like I was so embarrassed about who I was in
• 36:39
  Speaker 6: it from a financial perspective, and it was such a secret,
• 36:41
  Speaker 6: lonely thing, and it just made me not feel confident
• 36:44
  Speaker 6: in myself. So now I just feel on the other
• 36:46
  Speaker 6: side of that, I've got so much more self esteem.
• 36:48
  Speaker 6: I'm so proud of who I am and where I've
• 36:50
  Speaker 6: come from and where I'm at right now, and I
• 36:52
  Speaker 6: won't go back there.
• 36:53
  Speaker 3: So does twenty eight and learning have any good money habits,
• 36:56
  Speaker 3: she's especially proud of.
• 36:57
  Speaker 6: So I've started this there where I save ten dollars
• 37:02
  Speaker 6: a day, every single day. So I've set it up
• 37:04
  Speaker 6: with my bank account that it gets automatically deposited, so
• 37:08
  Speaker 6: whatever I'm saving.
• 37:09
  Speaker 7: On top of that is separate.
• 37:11
  Speaker 6: But this ten dollars a day is kind of like
• 37:13
  Speaker 6: my It's not so much like it's a big amount
• 37:17
  Speaker 6: of money, but it's like the mindset behind it. So
• 37:20
  Speaker 6: it's like investing in me every single.
• 37:23
  Speaker 7: Day in some way, shape or form.
• 37:25
  Speaker 6: I'm investing in growing my wealth as a person and
• 37:28
  Speaker 6: also my money literacy every day. So that's something that's
• 37:32
  Speaker 6: like an absolute, non negotiable ten dollars a day until
• 37:35
  Speaker 6: the day I die is going away for savings.
• 37:38
  Speaker 1: What about her worst money habit?
• 37:39
  Speaker 6: It's probably that, which I'm getting so much better at,
• 37:43
  Speaker 6: But it was it was just ignoring everything, so refusing
• 37:46
  Speaker 6: to check bank accounts, and if someone would say, you know,
• 37:50
  Speaker 6: let's go out for dinner this weekend, I wouldn't actually
• 37:53
  Speaker 6: check if I had the money, I would just do it,
• 37:55
  Speaker 6: and if I didn't have the money there, I would
• 37:57
  Speaker 6: transfer it across from an account that I really shouldn't
• 37:59
  Speaker 6: being it from. So I think just being closing my
• 38:03
  Speaker 6: mind to things or actively being oblivious to my financial circumstances.
• 38:08
  Speaker 7: But I'm getting a lot better at that.
• 38:10
  Speaker 3: What's twenty eight in learning actually saving for what's her
• 38:12
  Speaker 3: big money goal.
• 38:14
  Speaker 7: At the moment.
• 38:15
  Speaker 6: So I'm pert like my personal savings account. That is,
• 38:18
  Speaker 6: so I can do some travel next year and that
• 38:21
  Speaker 6: is probably only need like five grand for that one,
• 38:24
  Speaker 6: and then longer term just saving. Like I said, I
• 38:28
  Speaker 6: don't know if it's going to be for another property
• 38:30
  Speaker 6: or for an investment, but I just want to have
• 38:33
  Speaker 6: like a portfolio somehow. That makes me feel like I've
• 38:37
  Speaker 6: got wealth, you know, I have some sort of an
• 38:39
  Speaker 6: abundance that gives me the freedom the ability to feel like,
• 38:43
  Speaker 6: you know, I'm not trapped in any way. I'm able
• 38:45
  Speaker 6: to be generous. I'm able to travel and do the
• 38:48
  Speaker 6: things that I want to do. So I don't have
• 38:51
  Speaker 6: like a particular number or exactly know what that looks
• 38:54
  Speaker 6: like yet, but I just know I want to put
• 38:56
  Speaker 6: money away so I can do something amazing with it.
• 38:57
  Speaker 3: So how would today's money die restorate her own relationship
• 39:00
  Speaker 3: with money if we force her to give herself a grade.
• 39:03
  Speaker 7: Honestly, I probably would still give myself like a sea.
• 39:06
  Speaker 6: I feel like I have so much to learn and
• 39:09
  Speaker 6: I don't have heaps in my account right now. So yeah,
• 39:12
  Speaker 6: like I said, Tony eighten learning. I have only come
• 39:16
  Speaker 6: I think what, in my opinion, is halfway. I've got
• 39:19
  Speaker 6: that next little bit to go.
• 39:21
  Speaker 1: Still, I am so proud of her. What do you reckon? Victoria?
• 39:25
  Speaker 5: Me too. I'm so impressed to hear that she has
• 39:28
  Speaker 5: not only changed her money habits, but she's changed her mindset.
• 39:31
  Speaker 5: So I think it's one thing to really just start
• 39:33
  Speaker 5: saving and knuckle down. But you can tell she's now
• 39:37
  Speaker 5: prioritizing things. She's set some short term goals, she's set
• 39:40
  Speaker 5: some long term goals. She's gone from this really toxic
• 39:43
  Speaker 5: mentality of saying that she was actively being oblivious, which
• 39:47
  Speaker 5: I know for sure so many people listening to this
• 39:50
  Speaker 5: can relate to because I think it's something that we
• 39:52
  Speaker 5: are really good at. You know, if it's something that
• 39:55
  Speaker 5: we don't feel empowered by, it's really easy to just
• 39:57
  Speaker 5: sweep it under the table and say I'm not even
• 39:59
  Speaker 5: getting considered. I'm not going to think about it. I'm
• 40:01
  Speaker 5: not going to check my bank balance, I'm not going
• 40:02
  Speaker 5: to check my credit card statements. And I think it's
• 40:05
  Speaker 5: really easy to put yourself in that bucket, but you
• 40:08
  Speaker 5: know what's really hard pulling yourself out of that and saying,
• 40:11
  Speaker 5: this isn't what I want my future to look like,
• 40:13
  Speaker 5: this isn't who I want to be in ten, fifteen,
• 40:15
  Speaker 5: twenty years. And she, honestly, I'm just so proud of her.
• 40:18
  Speaker 3: She's so aware of what went wrong, which I think
• 40:21
  Speaker 3: is really rare.
• 40:23
  Speaker 1: People just kind of choose not to think about it.
• 40:26
  Speaker 5: Yeah, and I think people don't really want to understand
• 40:29
  Speaker 5: their own money stories because that's so confronting. So when
• 40:32
  Speaker 5: someone sits you down and says, hey, like, let's understand
• 40:35
  Speaker 5: where you're coming from and where you want to go
• 40:37
  Speaker 5: and maybe why these things are as such, it's really challenging,
• 40:41
  Speaker 5: Like it puts you in a position that makes you
• 40:43
  Speaker 5: feel really uncomfortable. And I think it's fantastic that she's
• 40:45
  Speaker 5: pushed through that and she's now, you know, she said
• 40:48
  Speaker 5: she's still got so much to learn. She said that
• 40:50
  Speaker 5: she doesn't have heaps of money in her account, but
• 40:52
  Speaker 5: I don't think that that's what matters. I think her
• 40:54
  Speaker 5: grade of C is maybe a little bit harsh because
• 40:57
  Speaker 5: she's absolutely on the right track. She's not in a
• 41:00
  Speaker 5: position that she's in mass amounts of consumer debt. Like
• 41:04
  Speaker 5: listening to her story and seeing how in debt. She
• 41:07
  Speaker 5: was and now where she is is nothing short of inspirational.
• 41:11
  Speaker 1: That's all we have time for today.
• 41:12
  Speaker 3: On that wonderful note, just before we head off, as always,
• 41:15
  Speaker 3: let's quickly wrap the boring, bart important stuff. The advice
• 41:18
  Speaker 3: shared on She's on the Money is general in nature
• 41:20
  Speaker 3: and doesn't consider your individual circumstances. She's on the Money
• 41:23
  Speaker 3: exists purely for educational purposes only and should not be
• 41:26
  Speaker 3: relied upon to make an investment or a financial decision.
• 41:29
  Speaker 3: And of course we promise Victoria Devine is an authorized
• 41:32
  Speaker 3: representative of Consultant Financial Addison's Proprietary Limited ABN six' five
• 41:37
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• 41:40
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• 41:42
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• 41:45
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• 42:00
  Speaker 5: the way throughout, that BUT i meant.
• 42:02
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• 42:05
  Speaker 3: behalf Of she's and The. Money see you, guys next
• 42:08
  Speaker 3: week bye