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Loyalty Tax is costing you thousands each year · She's On The Money

0:00
Speaker 1: She's on the Money.
0:02
Speaker 2: She's on the Money. Hello, and welcome to She's on
0:14
Speaker 2: the Money, the podcast for millennials who want financial freedom.
0:17
Speaker 2: My name is Georgia King. I'm a copywriter and journalism student,
0:21
Speaker 2: and every Wednesday I sit down to chat finance with
0:23
Speaker 2: millennial money guru Victoria to Fine Hive.
0:26
Speaker 1: What a surprise, it's children, Victoria to Day.
0:30
Speaker 2: I wasn't here last week, so hey, maybe it is
0:33
Speaker 2: a surprise, okay, or it's not whatever.
0:36
Speaker 1: Books they had replaced her with Glenn James.
0:40
Speaker 2: Sorry, guys, I'm back now. Today on the show, we'll
0:43
Speaker 2: be talking about loyalty tax, exploring the dangers of staying
0:46
Speaker 2: loyal to a brand instead of seeking the best deals
0:48
Speaker 2: on the market. Then later on we'll be unpacking a
0:51
Speaker 2: money diarist who has home buyers regret, and we'll be
0:54
Speaker 2: addressing a money question from someone needing a little help
0:56
Speaker 2: on where to start when it comes to refinancing. But
1:00
Speaker 2: before we hop into that chat, though, Victoria Money wins
1:02
Speaker 2: and confessions from the week that was talk to me.
1:05
Speaker 1: I have a money win, all right. So this is
1:07
Speaker 1: actually from a couple of weeks ago, and I've only
1:10
Speaker 1: just thought about it and thought you know what. This
1:12
Speaker 1: is something I'm going to share because I feel like
1:14
Speaker 1: it's relevant to loyalty tax in a very roundabout way.
1:18
Speaker 1: So during the Black Friday sales, I went shopping with
1:20
Speaker 1: one of my girlfriends, Steph. If you're listening, which I
1:22
Speaker 1: know you don't often, hello, And I really wanted to
1:26
Speaker 1: pick up a new worktop. And every girl who works
1:29
Speaker 1: in corporate knows that Portman's is clearly where we go
1:33
Speaker 1: that's not sponsored because wait till the next bit of this.
1:36
Speaker 1: If this money win. So I went into Portman's, found
1:39
Speaker 1: acute top that I liked, perfectly worked with my outfit,
1:42
Speaker 1: decided I wanted to purchase it, but also wanted to
1:45
Speaker 1: look at the rest of the shops because it was
1:46
Speaker 1: the first shop I'd been into. So put it back
1:49
Speaker 1: on the rack, walked about all the other shops, completely
1:51
Speaker 1: forgot about the top, went home, decided, all right, well
1:54
Speaker 1: I tried it on, no my size, I'll just order
1:56
Speaker 1: it online. And when I jumped online, the website had
1:59
Speaker 1: forty percent off, but in store they only had twenty
2:02
Speaker 1: five percent off. So money win. I got my discount upgraded.
2:06
Speaker 1: But also I was slightly confused because I was like
2:08
Speaker 1: Why am I being penalized for in store shopping? Isn't
2:11
Speaker 1: that what we're trying to revive?
2:12
Speaker 2: Yeah, I feel like you should be rewarded for install shopping.
2:16
Speaker 2: It's so much more effort, you know.
2:17
Speaker 1: That's what I thought, Like, you guys don't have to
2:19
Speaker 1: go through the process of packing it up and posting
2:21
Speaker 1: it like it's already right there. Like I usually don't
2:23
Speaker 1: ask for a bag either, so I would. Yeah, made
2:25
Speaker 1: you give me one of those who knows. But I
2:27
Speaker 1: just found it very confusing.
2:29
Speaker 2: I wonder if they would have honored it still if
2:31
Speaker 2: you quoted the website price in store, surely they would have.
2:36
Speaker 1: Well, I don't know, and to be honest, I obviously
2:38
Speaker 1: didn't have the opportunity to try. I just was a
2:41
Speaker 1: little bit confused about it and found it to be
2:43
Speaker 1: slightly opportunistic of them, which I didn't love. But at
2:47
Speaker 1: the same time, like forty percent off for the top
2:49
Speaker 1: that I bought from my guys.
2:50
Speaker 2: It's cutes, so it's a win. Yeah, Whi's a win?
2:53
Speaker 1: Do you have a money win or confession this week?
2:54
Speaker 1: For us?
2:55
Speaker 2: I do harm mine is retail related. Also, I didn't
2:58
Speaker 2: go too wild in the black Friday, Cyber Monday at sales.
3:01
Speaker 2: I listened to your advice. Victoria's very disciplined. You don't
3:05
Speaker 2: usually so that's mazy. So basically, very long story short,
3:11
Speaker 2: I scored sunglasses that were originally three hundred and eighty
3:15
Speaker 2: five dollars. Oh, I know, it just shows how much
3:21
Speaker 2: retail is marked up, but also.
3:23
Speaker 1: It's really exciting for someone who loves a good pair
3:26
Speaker 1: of designer sunglasses.
3:28
Speaker 2: I eat me.
3:29
Speaker 1: I'm really sad to hear that they could be marked
3:31
Speaker 1: down as as twenty dollars.
3:32
Speaker 2: Yeah, I mean I was pretty pleased with it as well.
3:35
Speaker 2: It's got a nice sunglasses chain, which is good, full
3:37
Speaker 2: of pearls.
3:38
Speaker 1: I love that you.
3:39
Speaker 2: Parment around that one.
3:40
Speaker 1: I do love Grandma che Grandma chic. But also they
3:43
Speaker 1: are very beautiful sunglasses. They were actually the first thing
3:46
Speaker 1: I commented on when you walked in the pod studio today.
3:49
Speaker 1: I was like, oh, those are so beautiful.
3:51
Speaker 2: You did, and we generally have quite different style. Like
3:53
Speaker 2: I've never been into a portments.
3:55
Speaker 1: I can't imagine you no, if I'm brutally sitting here
3:59
Speaker 1: much so, I imagine we're in Gorman. So there's that.
4:03
Speaker 2: Yeah, that's true. Retail chats. Shall we move along to
4:06
Speaker 2: our Facebook group, Victoria, Yes, the wonderful Facebook group. Have
4:09
Speaker 2: you got a favorite proces this week?
4:11
Speaker 3: I do?
4:12
Speaker 1: And this way it's a little money win. But it's
4:15
Speaker 1: one of my favorite money wins because I think we
4:16
Speaker 1: can all do this and you know, uncover a little
4:19
Speaker 1: bit of a money win for ourselves. So this one's
4:21
Speaker 1: from my friend Abby, and she said money win. I
4:24
Speaker 1: bought a body Shop facial scrub and started quote running
4:27
Speaker 1: out of it. She then went to came up, bought
4:30
Speaker 1: some travel tubs and cut the container open and scooped
4:34
Speaker 1: everything out into a pot. Now she has heaps of
4:36
Speaker 1: leftover product and she doesn't have to go buy a
4:38
Speaker 1: whole new scrub, which she says would have cost me
4:40
Speaker 1: way more than the four dollars it cost me. It
4:42
Speaker 1: came up for some containers. And I just feel like
4:44
Speaker 1: that's an epic money win because so many of us
4:47
Speaker 1: don't cut it open our containers and get the remnants
4:51
Speaker 1: of our product down.
4:52
Speaker 2: Now you squeeze, and your squeeze and you can just never.
4:53
Speaker 1: Yeah, And I feel like I'm such a hacker when
4:56
Speaker 1: it comes to that, Like I will cut everything open
4:59
Speaker 1: and like break it or however you need to do
5:01
Speaker 1: it because some foundations, like you guys know what I'm
5:03
Speaker 1: talking about, and I know you do, you can't pull
5:05
Speaker 1: the lid off, so you have to get like a
5:07
Speaker 1: butter knife and like pop it off. And I am
5:09
Speaker 1: definitely that.
5:09
Speaker 2: Yes, I bet that's really satisfying as well.
5:11
Speaker 1: It totally is. But I've also found these really awesome
5:14
Speaker 1: little scoops, so you can buy them on eBay, and
5:18
Speaker 1: they're called I think makeups batchelors, and they are literally
5:21
Speaker 1: like mini versions as spatulors. They are made of stealer
5:24
Speaker 1: can and you kind of put them into your makeup
5:26
Speaker 1: container and it scoops out the bottom, so if it's
5:29
Speaker 1: like a really thin makeup bottle, you can get to
5:31
Speaker 1: the bottom of it.
5:32
Speaker 2: Cool anyway, I'm imagining like a whiz Fizz little Spade.
5:36
Speaker 1: It's kind of those like that, but like actually looks
5:38
Speaker 1: like a spachelor and actually looks like you're doing tiny
5:40
Speaker 1: baking for a mouse, but it's not. And I bought
5:43
Speaker 1: them from probably a seller on eBay for ninety nine
5:46
Speaker 1: cents and that's a money win from me again, stunning
5:49
Speaker 1: from you to You're welcome. Have you got a Facebook
5:51
Speaker 1: money win for us.
5:52
Speaker 2: So mine is from Jade, who has a Again, it's
5:55
Speaker 2: another small money win, but it's a money when we
5:57
Speaker 2: love so she loves entertaining, but platters can be super expensive,
6:01
Speaker 2: especially when you're buying nice crackers. So instead of buying
6:04
Speaker 2: a small box of crackers for six dollars, she bought
6:06
Speaker 2: some Lebonese bread and slapped a bit of oil and
6:09
Speaker 2: Moroccan seasoning on there, popped in the oven for fifteen minutes,
6:13
Speaker 2: and she has a big box of crackers five times
6:15
Speaker 2: a size and even taste here. Have you done this before?
6:18
Speaker 1: I haven't, But I actually really liked this money win,
6:20
Speaker 1: and I think I might seek some inspiration because as
6:24
Speaker 1: someone who buys gluten free crackers, often those are so
6:28
Speaker 1: expensive and like rice cakes, get boring. So I'm gonna
6:31
Speaker 1: give it a crack with some piter bread that I
6:34
Speaker 1: got that is gluten free.
6:35
Speaker 2: Dip it in some hummus. Love that they're also good
6:37
Speaker 2: pizza bases.
6:38
Speaker 1: They totally are. Piterbread actually makes the best type in
6:41
Speaker 1: my opinion of pizza bass and I think that's it.
6:44
Speaker 2: Yeah, I agree.
6:45
Speaker 1: Also, I was about to call this bougie. Yeah, but
6:48
Speaker 1: do you know what I learned this week from my
6:49
Speaker 1: friend Amy. What do you know what bougie actually means?
6:52
Speaker 2: Bourgeois?
6:53
Speaker 1: No, it actually means middle class. Turns out I've been
6:56
Speaker 1: calling everything middle class and don't know. I need to
6:58
Speaker 1: take this word out of my voe vocabulary. I actually
7:01
Speaker 1: thought it meant like luxurious lifestyle. But it turns out
7:05
Speaker 1: bougie is a French word, or it comes from a
7:07
Speaker 1: French word that means middle class.
7:09
Speaker 2: I thought it was higher than that. I remember in
7:11
Speaker 2: history class. This is going to be boring content for you, guys.
7:13
Speaker 2: I feel like the proletariat was like the middle rung,
7:18
Speaker 2: and then above that was the bourgeois, and then maybe
7:20
Speaker 2: it was it got into your royal You know what,
7:22
Speaker 2: I don't really know the answers I did well in history.
7:24
Speaker 1: It's actually the same. But it literally comes and I've
7:27
Speaker 1: just googled it right here, hot off the press comes
7:30
Speaker 1: from a French word that simply means of middle class status.
7:34
Speaker 2: Oh god, well, we've been saying it wrong this whole time.
7:36
Speaker 1: How am I going to call things bougie? Now? You
7:38
Speaker 1: have to cut it out of your vocap heart normal
7:40
Speaker 1: shots for you guys.
7:43
Speaker 2: Alrighty guys, let's head into the main chat of today's show.
7:47
Speaker 2: Recent RBA and APRO data revealed that owner occupy a
7:50
Speaker 2: home loan customers who have been with their bank for
7:53
Speaker 2: more than four years are paying on average, a variable
7:55
Speaker 2: rate of three point sixty four percent, while new customers
7:59
Speaker 2: are paying only three point two three percent. Now, this
8:02
Speaker 2: difference may not sound like much. I don't think it
8:04
Speaker 2: sounds like that much, but as we will learn in
8:06
Speaker 2: today's show, this gap is actually costing loyal ossies thousands
8:10
Speaker 2: of dollars per year. Now, VI, I'm not going to
8:13
Speaker 2: do my big preamble today, which I do. You're the expert,
8:17
Speaker 2: you know I try to be, but frankly, this topic
8:19
Speaker 2: does just confuses me a little bit. So to start
8:23
Speaker 2: us off, what actually is loyalty tax? And why should
8:26
Speaker 2: our listeners care?
8:27
Speaker 1: Because I said so very good, But also I can
8:30
Speaker 1: completely understand that this might be a confusing topic for
8:34
Speaker 1: a lot of you. But don't stress, because I want
8:36
Speaker 1: to make it really clear and I hope it's super
8:38
Speaker 1: easy to follow. To start with, loyalty tax is not
8:41
Speaker 1: real tax. I've just decided to call this episode loyalty tax,
8:45
Speaker 1: but it refers to the tax or the extra money
8:47
Speaker 1: that you pay when you stay with a company, whether
8:50
Speaker 1: that is a home loan provider, a bank, your gym,
8:53
Speaker 1: or even your energy company, instead of shopping around for
8:55
Speaker 1: a better deal at competing companies who could save you
8:58
Speaker 1: thousands of dollars over your life lifetime. Now usually banks
9:02
Speaker 1: offer more substantial discounts to newer customers, which kind of
9:05
Speaker 1: sucks to entice them to choose their business over any
9:08
Speaker 1: other business. This system makes sense and is great for
9:12
Speaker 1: newcomers at the very beginning of that relationship. However, for
9:15
Speaker 1: customers who have been loyal for years and years, they're
9:17
Speaker 1: missing out on the discount offered to newbies and are
9:20
Speaker 1: essentially not being rewarded for remaining loyal to lenders or companies. Now,
9:24
Speaker 1: because I like research, the Reserve Bank of Australia released
9:28
Speaker 1: some data quite recently which completely backs up all of this.
9:32
Speaker 1: Their data showed the home loans that commenced four or
9:34
Speaker 1: more years ago had interest rates forty basis points higher
9:38
Speaker 1: than new loans. FYI, basic point is like zero point four.
9:41
Speaker 1: Oh so, like that's a basis point and if you
9:44
Speaker 1: were to put that into a dollar figure for a
9:46
Speaker 1: home loan balance of two hundred and fifty thousand dollars.
9:49
Speaker 1: That would mean that people with those older loans would
9:52
Speaker 1: be paying an extra thousand dollars of interest repayments every
9:55
Speaker 1: single year. To be honest, I find that quite crazy.
9:58
Speaker 1: So basically, the banks are looking after their new customers
10:01
Speaker 1: while neglecting the old, and I would argue, quite loyal ones,
10:04
Speaker 1: they're kind of bang on ha ha, good joke, Victoria,
10:07
Speaker 1: older loyal customers not having the energy to switch or
10:10
Speaker 1: hunt for a competing offering at a lower price, and
10:13
Speaker 1: in most cases that call does pay off for them.
10:15
Speaker 1: But I don't believe it should.
10:17
Speaker 2: And why should our listeners care about this topic?
10:20
Speaker 1: Because I said so, but also because obviously our listeners
10:23
Speaker 1: who are looking at buying homes or changing their energy
10:26
Speaker 1: or phone company, or who have had their home loan
10:28
Speaker 1: for a really long time, you guys should care about
10:30
Speaker 1: this topic because it directly impacts your finances, and so
10:34
Speaker 1: many people are just ignorant to this and are losing
10:36
Speaker 1: out without even really knowing it. By having an understanding
10:40
Speaker 1: of how these things work, and how lenders work and
10:42
Speaker 1: how loyalty tax works, we're able to make sure that
10:46
Speaker 1: we are looking after ourselves and our finances and that
10:49
Speaker 1: we're not being taken for a ride or punished just
10:51
Speaker 1: for being loyal For those of you who aren't close
10:54
Speaker 1: to buying your first home yet, I do think it's
10:56
Speaker 1: also a really important conversation for us to have and
10:58
Speaker 1: for our community to listen in two so that they
11:01
Speaker 1: can be aware down the track should they choose to
11:03
Speaker 1: go into the housing market. But also, loyalty tax extends
11:06
Speaker 1: far out of just home loans into every other aspect
11:10
Speaker 1: of our life, which we're going to get to very soon.
11:12
Speaker 1: But I think it's great that we're doing this deep dive,
11:14
Speaker 1: and I'm actually really excited about it because so many
11:17
Speaker 1: of us could save so much money.
11:19
Speaker 2: M exactly right. So when I was reading for today's show,
11:22
Speaker 2: I found that, according to this ASSEIC report that has
11:25
Speaker 2: been widely written on as well, that the average difference
11:29
Speaker 2: in intrast rates paid by new and existing variable rate
11:32
Speaker 2: customers was zero point twenty six as of September twenty nineteen.
11:36
Speaker 2: So can you tell me what that actually looks like?
11:39
Speaker 2: Because that doesn't really sound too substantial to my tiny
11:42
Speaker 2: pea brain, But I'm assuming it is substantial, otherwise we
11:45
Speaker 2: wouldn't be doing a podcast on it.
11:46
Speaker 1: First thing, first, you don't have a pea brain, and
11:48
Speaker 1: they don't like self deprecating any kind of humor. Wasn't money,
11:52
Speaker 1: but I do get why it doesn't sound like much
11:54
Speaker 1: deep But we aren't actually talking about a loan of
11:57
Speaker 1: twenty bucks here. These loans are hundreds of thousands of dollars,
12:00
Speaker 1: so the stakes are way way higher, and that seemingly
12:03
Speaker 1: small percentage actually translates to a really massive difference in
12:07
Speaker 1: what customers will pay, and it usually turns out to
12:09
Speaker 1: be thousands of dollars a year that we're paying that
12:12
Speaker 1: we could instead be saving or paying in down our
12:15
Speaker 1: home loan. With the report you're talking about, their George
12:18
Speaker 1: actually also found that customers with existing owner occupyer loans
12:21
Speaker 1: with principal and interest repayments who had those loans for
12:24
Speaker 1: more than five years were paying zero point four zero
12:27
Speaker 1: percent more than new customers. So if you were to
12:31
Speaker 1: refinance and move your four hundred thousand dollars home loan
12:33
Speaker 1: across to a different lender, you could literally save more
12:36
Speaker 1: than fifteen hundred dollars in the first year and almost
12:39
Speaker 1: thirty one thousand dollars over the whole home loan period,
12:43
Speaker 1: which I'm probably going to get you to agree with
12:45
Speaker 1: me here just so I feel good. But I think
12:48
Speaker 1: we can all agree that that's a huge amount of
12:49
Speaker 1: money that we could be investing or putting towards another
12:52
Speaker 1: home loan. Like that's literally a family car. Like, that's
12:56
Speaker 1: a lot of money.
12:57
Speaker 2: That's a nice family car. That's a couple of Master twos,
13:00
Speaker 2: which is what I drive. Stunning stuff. Presumably, be it
13:03
Speaker 2: would get worse the longer you're with the same bank,
13:06
Speaker 2: for right, because you might be locked into those rates.
13:08
Speaker 1: Yeah, talk to me, correct, amuando. So the difference does
13:12
Speaker 1: widen the longer that you remain loyal to your lender,
13:14
Speaker 1: which again seems odd to me, as there should be
13:17
Speaker 1: some kind of reward for being loyal.
13:19
Speaker 2: And you said it before, B. But just to be
13:21
Speaker 2: really clear before we keep on unpacking this topic, loyalty
13:25
Speaker 2: tax isn't an actual tax, right.
13:27
Speaker 1: No, And as I said before, it's definitely not real tax.
13:30
Speaker 1: It's like how I jumped up and down about the
13:32
Speaker 1: pink tax a couple of episodes ago. It's not something
13:34
Speaker 1: that the ATO is going to make us pay, thankfully,
13:37
Speaker 1: but it is lenders and other brands and organizations placing
13:41
Speaker 1: a greater priority on their newer customers. Now I know
13:44
Speaker 1: that that's not what they are planning on doing, and
13:47
Speaker 1: they're essentially just trying to get more customers on board.
13:49
Speaker 1: But at the end of the day, that when we
13:52
Speaker 1: really condense it down and put it really simply means
13:55
Speaker 1: that you could be a new customer for someone else
13:57
Speaker 1: and get a better deal.
13:58
Speaker 2: Yeah, exactly right. So you did touch on this before,
14:02
Speaker 2: but when I was doing reading for this very podcast
14:06
Speaker 2: is very topic, it was mainly talking about home loans,
14:09
Speaker 2: and that's not going to be relatable for everyone in
14:11
Speaker 2: our community because not everyone has a home or even
14:14
Speaker 2: wants to buy one. Talk to me about why this
14:17
Speaker 2: is relevant for everyone, and how how it does kind
14:21
Speaker 2: of spread across different industries and service providers, and why
14:25
Speaker 2: we really need to be caring about this subject.
14:27
Speaker 1: I mean, I could personally attack you here, Georgia and
14:30
Speaker 1: ask you why I'm still paying eighty dollars for a
14:33
Speaker 1: phone plan when you could be paying forty five dollars,
14:36
Speaker 1: But I'm not going to do that because I'm a
14:38
Speaker 1: really good person and as I always say, the worst
14:41
Speaker 1: thing that anyone can say is no. So there is
14:43
Speaker 1: never any harm in asking your service providers, whether that
14:47
Speaker 1: is your bank or your gym, or your energy provider
14:49
Speaker 1: or your utilities or internet connection, for a better deal,
14:54
Speaker 1: as it will either go really well and you'll save
14:56
Speaker 1: some money, or it won't and nothing's going to change.
14:58
Speaker 1: But there's literally not thing to lose here. Loyalty is
15:02
Speaker 1: honestly such a great trait and in every aspect of life,
15:04
Speaker 1: I support it. But when it comes to your money
15:07
Speaker 1: being involved, you need to do what is right for
15:10
Speaker 1: you and your finances. And if these service providers or
15:12
Speaker 1: lenders aren't servicing you properly, then we really need to
15:15
Speaker 1: have our own backs and be willing to walk away
15:18
Speaker 1: and find a better deal.
15:19
Speaker 2: In terms of approaching your lender, your service provider, how
15:25
Speaker 2: do you go about that? You just talk to the
15:27
Speaker 2: customer service team and just stay cool, calm and collected.
15:31
Speaker 2: What's your advice there. I think it's just about jumping
15:33
Speaker 2: on the phone and asking for a good deal. At
15:36
Speaker 2: the end of the day, there's no harm in asking,
15:39
Speaker 2: and I think it's important here to do your own research,
15:43
Speaker 2: so tell them what the interest rate you're looking for is. Now,
15:46
Speaker 2: this is not good at all, but I do know
15:48
Speaker 2: that a number of banks cannot if you call them,
15:52
Speaker 2: refinance you unless you mention the better rate that actually exists,
15:57
Speaker 2: So they will literally make you verbally say hey, so
16:01
Speaker 2: I saw the deal on your website for two point
16:03
Speaker 2: five nine can I get that? And if you don't
16:06
Speaker 2: and you just say, hey, can I get a bitter deal,
16:08
Speaker 2: they aren't able to offer you that, which is insane
16:11
Speaker 2: to me. And I think that, you know, doing a
16:13
Speaker 2: little bit of research is going to put you in
16:15
Speaker 2: a better position. Also think it's really important to bring
16:18
Speaker 2: up their competitors and say, well, actually, your competitors are
16:21
Speaker 2: doing X, Y and z, because often they won't want
16:24
Speaker 2: to lose a consumer, so asking if they could price
16:26
Speaker 2: match is a really good idea. It's also really important
16:30
Speaker 2: to be on top of these things and find a
16:32
Speaker 2: way to keep track of them, because at the end
16:35
Speaker 2: of the day, it's like car insurance.
16:36
Speaker 1: Car insurance goes up every single year, and every single
16:39
Speaker 1: year I've had to call my car insurer say hey,
16:42
Speaker 1: I just re quoted myself on your website and I
16:45
Speaker 1: found that it was one hundred and fifty dollars cheaper.
16:48
Speaker 1: What's the go And they'll be like, oh, yeah, no,
16:50
Speaker 1: problems will honor that, and it seems crazy to me
16:53
Speaker 1: that I have to make that call. But at the
16:55
Speaker 1: end of the day, so many people don't know that
16:57
Speaker 1: they can make the call because when you get your
17:00
Speaker 1: car insurance in the mail, they issue it as an invoice.
17:03
Speaker 1: They don't issue it as a statement to let you
17:05
Speaker 1: know that it's, you know, a reoccurring subscription. They literally
17:09
Speaker 1: make it look like you have a call to action.
17:11
Speaker 1: You've got to pay this, and you'll be in a
17:12
Speaker 1: lot of trouble if you don't like. It's a mental
17:15
Speaker 1: thing as well, and I think it's really important to
17:17
Speaker 1: take that into consideration and always make sure you've got
17:20
Speaker 1: a better deal. But it's also off topic again but
17:24
Speaker 1: so relevant. It's also so easy to forget what you
17:26
Speaker 1: paid last year because they're smart. They don't put what
17:30
Speaker 1: you paid last year on and say, well, Georgia, you
17:33
Speaker 1: paid one thousand dollars in insurances with us last year.
17:36
Speaker 1: It's now twelve hundred dollars. They don't do that. They
17:38
Speaker 1: just issue you with a statement that looks like an
17:41
Speaker 1: invoice for twelve hundred dollars and you might go, ah,
17:44
Speaker 1: that feels expensive, but oh, maybe it's what I paid
17:46
Speaker 1: last year. You don't even think about it. So you
17:49
Speaker 1: need to find a way to track these things and
17:51
Speaker 1: make sure that you're on top of them.
17:53
Speaker 2: That's really interesting. I've got a lot of our listeners
17:55
Speaker 2: are having aha moments there because I just had one.
17:59
Speaker 1: The same again, Victoria Rant, I'm so sorry, but the
18:02
Speaker 1: same happens with energy providers. So often they'll give you
18:05
Speaker 1: a discount for the first twelve months, but if you
18:08
Speaker 1: don't call them and say, hey, I'm just wondering, can
18:12
Speaker 1: you re honor that, they will not give you the
18:14
Speaker 1: discount for the rest of your policy. They'll just give
18:17
Speaker 1: it for the twelve months. They don't even mention it.
18:19
Speaker 1: They just bump you back up to the original rate,
18:22
Speaker 1: and you might forget that you need to do it
18:23
Speaker 1: because twelve months is actually a really long period of
18:26
Speaker 1: time and you won't remember what it is. So if
18:28
Speaker 1: you're on a direct debit, your direct debit just might increase.
18:30
Speaker 1: You might not even notice it. So we actually need
18:33
Speaker 1: to be really vigilant when it comes to these things
18:35
Speaker 1: and actually look into them. Same thing happens with phone plans, Georgia,
18:39
Speaker 1: I have read too much in not attacking you. Sorry,
18:44
Speaker 1: but I've read too much into phone plans and there
18:47
Speaker 1: are a couple of phone plan providers that when you
18:50
Speaker 1: finished paying off your handset, you actually have to call
18:53
Speaker 1: them to stop paying for the handset, and if you don't,
18:57
Speaker 1: you continuously are charged for the hand set repayments.
19:00
Speaker 2: They would make so much money from that, wouldn't they Exactly?
19:03
Speaker 1: So many people would have changed it. Oh wow. I
19:05
Speaker 1: think it's really important to be on top of your
19:08
Speaker 1: finances in this way, and I know lots of you
19:11
Speaker 1: maybe haven't thought about it because you just see these
19:13
Speaker 1: things as set costs. But these aren't set costs. You
19:17
Speaker 1: can always shop around for a better deal. You can always,
19:19
Speaker 1: you know, jump into the Facebook group and go, hey,
19:21
Speaker 1: who are you with? Are they good? At the end
19:23
Speaker 1: of the day. I think there's this massive misconception around
19:26
Speaker 1: mobile phones as well, because ten to fifteen years ago,
19:29
Speaker 1: I'm from Tasmania, humble brag, but whenever i went home,
19:34
Speaker 1: my phone wouldn't work because it was only Telstra. But
19:37
Speaker 1: now it doesn't matter at all for me, And I'm
19:40
Speaker 1: sure this isn't true for everybody, because you know, regional
19:42
Speaker 1: areas are you know, functioning differently. But at the end
19:46
Speaker 1: of the day. My Vota phone plan works just as
19:48
Speaker 1: well in Tasmania, and so I think there's this misconception
19:51
Speaker 1: that not all phone providers are equal. And you know,
19:54
Speaker 1: if you travel home for the weekend, or you know
19:56
Speaker 1: you are from Regional Victoria or Regional Australia up in
20:00
Speaker 1: a position where you have to be with the best provider,
20:03
Speaker 1: maybe it's worthy of re reviewing that because I was
20:06
Speaker 1: so fifteen years ago. Friends, Yeah, that's true.
20:08
Speaker 2: That is still in my head that Telstra is the best.
20:10
Speaker 2: And I'm always scared that I'm really bad with directions,
20:13
Speaker 2: so I'm scared that my maps won't work. Wait, is
20:15
Speaker 2: that even Telstra? Is that like fact?
20:17
Speaker 1: Oh yeah, that would be your internet connection. But at
20:19
Speaker 1: the end of the day, I feel like, let's maybe
20:21
Speaker 1: have a thread in the Facebook group about what we
20:23
Speaker 1: could switch to. How good they are. Yeah, but also,
20:27
Speaker 1: if your phone plan doesn't work, you can actually ask
20:29
Speaker 1: for a refund because it's not a usable service.
20:31
Speaker 2: Yeah, every way, I friends, she's so smart. There probably
20:35
Speaker 2: is also a perception that the big businesses you just
20:38
Speaker 2: kind of and the big banks you can't question them.
20:40
Speaker 2: What they say goes. But that's not the case at all.
20:43
Speaker 2: And they're also never They're never going to call you
20:45
Speaker 2: and be like, George, how are you going? Haunh, We've
20:48
Speaker 2: actually got this sweet deal and we're going to save
20:50
Speaker 2: you hundreds of dollars on your bill. Never guess yeah,
20:55
Speaker 2: So we do really need to look look after ourselves.
20:58
Speaker 1: I'm stun for ourselves. And you know what I'm going
21:00
Speaker 1: to do for you guys, because this stuff is hard,
21:03
Speaker 1: like having our own backs. Like we listen to a podcast,
21:06
Speaker 1: we get really motivated, we turn off the podcast. Georgia
21:09
Speaker 1: isn't being motivating in your ears anymore, and you sit
21:11
Speaker 1: down and go, I really should call them? What do
21:14
Speaker 1: I say? So? I'm going to make you, guys a
21:16
Speaker 1: script of how to ask for a discount politely, because
21:20
Speaker 1: we don't need to be rude about these things. If
21:22
Speaker 1: you find yourself in a position we're like, my gosh,
21:24
Speaker 1: I didn't even think of that. I've been overcharged for years.
21:27
Speaker 1: Like that is not the girl who works in the
21:29
Speaker 1: call center's fault. You do not need to take it
21:31
Speaker 1: out on her. She is probably a lovely lady, a
21:34
Speaker 1: lovely person. I just think that we should just be polite,
21:38
Speaker 1: and you are more likely to get further with you know,
21:41
Speaker 1: being kind and being polite and just asking for a
21:43
Speaker 1: better deal. And I don't think it's a bad thing
21:45
Speaker 1: if someone says, oh, look, I can't do that for you.
21:48
Speaker 2: On loyalty tax how can we steer clear of it?
21:51
Speaker 2: How can we avoid paying these taxes?
21:53
Speaker 1: So we do as I said before, we do need
21:55
Speaker 1: to be vigilant. The more vigilant you are, the more
21:57
Speaker 1: across your finances you are, then naturally, the more in
22:00
Speaker 1: control you are going to be. A lot of us are,
22:03
Speaker 1: let's be brutally honest here, too lazy to want to
22:06
Speaker 1: think about shopping around or negotiating with our lender because
22:09
Speaker 1: it can seem like a lot of effort. But we
22:11
Speaker 1: need to remember that those lenders literally want our business,
22:15
Speaker 1: that they have a vested interest in keeping us on
22:17
Speaker 1: their side. So talking with them about how you can
22:20
Speaker 1: make a loan that works for both of you yourself
22:22
Speaker 1: and the lender isn't actually as scary or as tedious
22:25
Speaker 1: as it sounds. You also really need to remember that
22:27
Speaker 1: you're probably not the first person that they've spoken to
22:30
Speaker 1: that day about literally the same thing, So why not
22:33
Speaker 1: just give them a buzz have an interaction that they'll
22:36
Speaker 1: walk away from and be like, Wow, Georgia was so positive.
22:39
Speaker 1: That was a really nice call. I'm glad I could
22:40
Speaker 1: get her a better deal. So if you are listening
22:43
Speaker 1: to this episode and you're thinking, hmmm, I probably should
22:46
Speaker 1: be listening to this, my suggestions would be as follows
22:50
Speaker 1: my friend. First things first, request a lower rate. Negotiate
22:54
Speaker 1: with your lender and see what they're able to offer you,
22:57
Speaker 1: see what they are offering new customers and what those
22:59
Speaker 1: interests are, throwing a few competitive comparison rates, and just
23:03
Speaker 1: bluntly tell them that you're thinking of going elsewhere unless
23:05
Speaker 1: they can help you out. If they can't, then I
23:08
Speaker 1: think it's time to just see you later, boy.
23:10
Speaker 2: Bye.
23:11
Speaker 1: Next refinance. If your lender isn't on board, or your
23:15
Speaker 1: product provider isn't on board, and they don't really want
23:18
Speaker 1: to help you out, then refinance or for another lender
23:20
Speaker 1: or another company that you can work with who wants
23:23
Speaker 1: to help you out and who you value. It's also
23:26
Speaker 1: a really great time to do a little bit of research.
23:28
Speaker 1: If you're looking into a bank, why not have a
23:30
Speaker 1: look for a bank that actually works for you.
23:33
Speaker 2: Yep.
23:33
Speaker 1: So, for me, ethics are a really big part of
23:35
Speaker 1: my banking and my investment journey. So I'd be looking into, well, Okay,
23:41
Speaker 1: what bank can I change to that not only is
23:43
Speaker 1: going to give me a bang and rate, but it's
23:44
Speaker 1: also going to be even more aligned to my values, So.
23:47
Speaker 2: You would save a Categorically, if they're like, nah, girl,
23:51
Speaker 2: no discount for.
23:52
Speaker 1: You, say no, definitely don't do that. That would be
23:55
Speaker 1: incredibly rude. I think first things first, you need to
23:58
Speaker 1: put everything on the table for them. I don't think
24:00
Speaker 1: it's a bad thing to quote show your cards and say, hey,
24:03
Speaker 1: you know, I've been doing a little bit of research.
24:05
Speaker 1: I'm sure a lot of lenders are actually going to
24:07
Speaker 1: want to hurt me because a lot of you might
24:10
Speaker 1: be like, hey, I listened to a podcast like maybe
24:12
Speaker 1: don't throw me under a bus. But also at the
24:15
Speaker 1: same time, I wouldn't be sad if everybody knew more
24:18
Speaker 1: about Cheese on the Money and arguably the incredible refinancing
24:21
Speaker 1: work we're doing. But I would essentially just be getting
24:25
Speaker 1: on the phone and saying, hey, got this rate, just
24:28
Speaker 1: wondering if we could have a chat about negotiating it down.
24:31
Speaker 1: And if they say yeah, no problems, like what were
24:33
Speaker 1: you thinking? Have a couple of options that you can
24:36
Speaker 1: go to them and say, hey, well I was thinking
24:38
Speaker 1: X or I was thinking why now. I have seen
24:40
Speaker 1: people be successful doing this with bank lenders, with personal
24:45
Speaker 1: loans friends. I have seen people do this with their
24:47
Speaker 1: gym membership, where they go, hey, I noticed you had
24:50
Speaker 1: a new onboarding process, and I don't know why I
24:53
Speaker 1: can't just have that and actually being successful. Send people
24:57
Speaker 1: do it with their phone plans. I've seen people do
24:59
Speaker 1: it with their energy. There is not one thing that
25:02
Speaker 1: is not negotiable, and if they decide it is not,
25:05
Speaker 1: then that's okay and you can go on your merry way.
25:07
Speaker 1: Maybe it was worth a crack, or maybe you are
25:09
Speaker 1: going to change lenders. But I do think it is
25:12
Speaker 1: really important that you know that when you tell a
25:16
Speaker 1: lender on the phone, often for them in policy, they
25:20
Speaker 1: have to go into retention mode. So don't just say
25:24
Speaker 1: can I have a better deal? I would actually and
25:27
Speaker 1: I don't like the word threaten, but I would actually
25:29
Speaker 1: threaten that you are going to leave. So in that conversation,
25:32
Speaker 1: not just saying hey, I'd love a discount, It's like, hey,
25:35
Speaker 1: I've seen this other company that is going to give
25:38
Speaker 1: a better rage, and if you can't match it, I'm
25:40
Speaker 1: planning on leaving because they won't just go into let's
25:43
Speaker 1: give Geordie a better rate mode, They're going to go
25:45
Speaker 1: into client retention mode and sometimes you end up being
25:48
Speaker 1: transferred to a completely different segment of the business who
25:51
Speaker 1: can match that to make sure that you, as a
25:52
Speaker 1: client stay on board. Right, probably telling everybody too much.
25:55
Speaker 2: Hey, interesting, why do you think be that this isn't
26:00
Speaker 2: a conversation that we're having very commonly. We've never really
26:04
Speaker 2: had this conversation. I've had a lot of harm moments today.
26:08
Speaker 2: Why do you think that we're not talking about this?
26:10
Speaker 2: And why are people just choosing to stay with these
26:12
Speaker 2: businesses blindly.
26:13
Speaker 1: Because they don't know any better. At the end of
26:16
Speaker 1: the day, lots of you would have had no idea
26:19
Speaker 1: that loyalty tax was a thing, arguably because it's not.
26:22
Speaker 1: It's actually just a really nice name. I don't know
26:24
Speaker 1: if it's nice, but it's just a name that we've
26:27
Speaker 1: given to this concept of staying with someone and having
26:30
Speaker 1: to pay more increasingly over time. The end of the day,
26:34
Speaker 1: this kind of stuff does take effort. It does take
26:36
Speaker 1: a little bit of work to seek out comparisons, and
26:38
Speaker 1: for lots of us, we just don't have the energy
26:40
Speaker 1: or the passion for finance quote unlike me. So I
26:43
Speaker 1: get why lots of people just let it slide and
26:45
Speaker 1: they settle for paying more instead of going down there
26:47
Speaker 1: seemingly harder route of challenging their lender and of course refinancing.
26:52
Speaker 1: I do get it, but I do think it's a
26:53
Speaker 1: little bit of a cop out. So sorry, friends, as
26:55
Speaker 1: this is not just spare change we're talking about. It's
26:58
Speaker 1: potentially tens of thousands of dollars, maybe even more. And
27:01
Speaker 1: I want our community to be as educated and inspired
27:04
Speaker 1: enough to want to be proactively seeking out these things
27:07
Speaker 1: and making sure that they're getting the best deals possible
27:09
Speaker 1: so that they can use that saved money efficiently towards
27:12
Speaker 1: their path to financial freedom.
27:14
Speaker 2: Alrighty, well, you guys heard it here. First, take charge
27:17
Speaker 2: of your finances. See if you can get a better
27:19
Speaker 2: rate on your Homeland gym membership service provider, and if
27:21
Speaker 2: they're not cutting it, take your business elsewhere. What are
27:23
Speaker 2: we saying for you? Bye bye bye boy bye byeme.
27:31
Speaker 4: Hey, ladies, So I've had a mortgage for seven years now,
27:35
Speaker 4: but I feel like I'm seeing a lot of great
27:37
Speaker 4: deals around at the moment and feel like it could
27:38
Speaker 4: be time to refinance. My question is, though, how do
27:42
Speaker 4: I actually do this and how expensive is it?
27:44
Speaker 1: Usually?
27:45
Speaker 4: I really want this decision to be a money win
27:47
Speaker 4: and not a confession.
27:49
Speaker 2: Thanks all right, Vicki D. This is actually a question
27:52
Speaker 2: that I was going to ask you in the show,
27:54
Speaker 2: so lucky I didn't. Who's Vicky D? Who are you with?
27:57
Speaker 1: Directory? I'm really okay with it, but that it's okay
28:00
Speaker 1: because do you know what I do like helping people
28:02
Speaker 1: with their mortgages. I think this is really important And
28:05
Speaker 1: the best suggestion I've actually got is go and see
28:08
Speaker 1: a mortgage broker. At the end of the day, they
28:11
Speaker 1: are going to be able to compare all of these
28:13
Speaker 1: deals for you and refinance for you so you're in
28:16
Speaker 1: a better position, or tell you that you're not able
28:18
Speaker 1: to refinance. If you're in a financial situation, you've just
28:21
Speaker 1: started a new job, even if you're earning a little
28:23
Speaker 1: bit more money, sometimes they won't refinance you because you're
28:26
Speaker 1: still in improbation. So there's lots of things to take
28:28
Speaker 1: into consideration when planning a refinance, but I think it's
28:32
Speaker 1: really important to understand that a broker gets paid by
28:35
Speaker 1: the bank, they don't get paid by you. So the
28:38
Speaker 1: way it works is the new bank will pay your
28:40
Speaker 1: broker a commission for bringing them new business. It is
28:43
Speaker 1: not additional money that you pay as a consumer. Using
28:47
Speaker 1: a broker doesn't increase the expense of your mortgage. It
28:50
Speaker 1: actually just means that your broker will get a percentage
28:53
Speaker 1: of the mortgage that's written because it is not a
28:56
Speaker 1: lead that that bank needed to go out and get themselves.
28:59
Speaker 1: It was a lead brought to them by that broker,
29:01
Speaker 1: So that broker should be remunerated for bringing the bank
29:04
Speaker 1: new clients without them having to advertise. So they see
29:07
Speaker 1: it as kind of like they're advertising, right. So for me,
29:10
Speaker 1: I think the best thing you could do is actually
29:12
Speaker 1: go and have a chat with a mortgage broker. Say look,
29:15
Speaker 1: I've got a five hundred thousand dollars home loan at
29:17
Speaker 1: four percent, and the broker will say, cool, fill in
29:20
Speaker 1: this fact fined, give me all your personal details and
29:22
Speaker 1: I'll let you know what your options are. The important
29:25
Speaker 1: thing here is to go to an independent broker. Though
29:28
Speaker 1: you don't want to go and see a bank's broker
29:30
Speaker 1: because at the end of the day doesn't mean they're
29:33
Speaker 1: not intelligent. It just means they will only put in
29:35
Speaker 1: front of you that bank's product. So say you went
29:38
Speaker 1: to Bank A, they're only going to give you mortgage
29:41
Speaker 1: options that are available at Bank A, whereas for example,
29:44
Speaker 1: without being self promotional. But it makes sense because if
29:46
Speaker 1: you want a recommendation for a mortgage broker, hit me up. Friends.
29:50
Speaker 1: At the end of the day, we have access to
29:53
Speaker 1: pretty much everybody under the sun, including credit unions and
29:56
Speaker 1: you know, non bank lenders. So you end up in
29:59
Speaker 1: a b position where literally every option is evaluated for you,
30:04
Speaker 1: heaps are wiped off the table, and then you'll get
30:06
Speaker 1: presented with the top three. So someone else is literally
30:09
Speaker 1: going to do all the hard work for you without
30:12
Speaker 1: you having to pay a cent. And I think that's
30:13
Speaker 1: an epic money.
30:14
Speaker 2: Within and there's no bias in there because they're not
30:16
Speaker 2: acting on behalf of a bank.
30:17
Speaker 1: Right, absolutely not, And I think that that's something that
30:20
Speaker 1: people think is true. But every single home loan that
30:23
Speaker 1: a broker would refer you to would pay them the
30:25
Speaker 1: same amount because it's the same amount of loan. So
30:28
Speaker 1: there's no value for bank to be chosen over bank
30:31
Speaker 1: b by a broker. They just want the best deal
30:33
Speaker 1: for you, because at the end of the day, if
30:35
Speaker 1: you refinance away from that broker's deal and go and
30:38
Speaker 1: get another one, they will lose money. So it's in
30:41
Speaker 1: the broker's best interest to make sure that they are
30:44
Speaker 1: putting you in the right deal the first time and
30:46
Speaker 1: then essentially nurturing your relationship. And I would fully expect
30:50
Speaker 1: that if you had a broker that wrote your deal
30:52
Speaker 1: and then a couple of years later there was a
30:53
Speaker 1: better one, I would expect them to come to you
30:55
Speaker 1: and say, hey, Georgia, I know that there's a better
30:57
Speaker 1: deal for you. Do you want to go through this?
31:00
Speaker 1: And you go, yeah, sure mate, I'll just give you
31:02
Speaker 1: updated information. You're going to save me thousands of dollars, fantastic.
31:06
Speaker 1: The important thing to make sure that a refinance remains
31:10
Speaker 1: a money win for you, though, is to make sure
31:13
Speaker 1: that your loan terms remain the same. So say you
31:17
Speaker 1: put yourself in a position where ten years ago you
31:20
Speaker 1: got a mortgage and that mortgage was thirty years that's
31:23
Speaker 1: pretty standard. You go to a new brocaut and they say, George,
31:26
Speaker 1: I can refinance you to a new deal, and you
31:29
Speaker 1: go fantastic broker. Thank you. You might be saving two percent,
31:33
Speaker 1: but at the end of the day, you're starting your
31:34
Speaker 1: thirty year period again and therefore you're going to be
31:36
Speaker 1: paying interest for longer. That's actually not a better deal.
31:39
Speaker 1: It might sound like a better deal because your monthly
31:41
Speaker 1: your payments are less, but you're paying more for that
31:43
Speaker 1: property over the long term. Terrible plan. So what you
31:46
Speaker 1: want to do is go to that broker and say,
31:48
Speaker 1: I actually want a twenty year plan, so you will
31:51
Speaker 1: pay that home off in the same amount of time
31:53
Speaker 1: that you were going to pay it off in the
31:54
Speaker 1: first place, but you get a better interest rate for it.
31:57
Speaker 1: So for me, that's a really really important point to
32:01
Speaker 1: make sure that it is a money win and not
32:02
Speaker 1: a confession.
32:03
Speaker 2: And can you refinance more than once in your lifetime.
32:07
Speaker 1: You can refinance as many times as you want, but
32:09
Speaker 1: at the end of the day, it is paperwork and
32:12
Speaker 1: stuff that you want to go through. So I'd probably
32:14
Speaker 1: not recommend it any any more than every two years
32:17
Speaker 1: or so. But at the moment, obviously the market has
32:20
Speaker 1: dropped significantly, so noils in time. If you haven't refinanced
32:24
Speaker 1: in a.
32:24
Speaker 2: While, to probably hit up your local broker, Yeah, brilliant.
32:28
Speaker 2: So how long does it actually take them? Like months?
32:32
Speaker 1: It could take a week to refinance. At the end
32:35
Speaker 1: of the day, it's really dependent on how quickly your
32:38
Speaker 1: broker can find a deal get the submissions in. At
32:41
Speaker 1: the moment, I know that these things are taking a while.
32:43
Speaker 1: I talk to brokers literally every single day because I
32:46
Speaker 1: obviously work with them, and at the moment, because COVID
32:49
Speaker 1: happened and now heaps of people are wanting to refinance,
32:52
Speaker 1: there's really long wait times and it can take up
32:54
Speaker 1: to two weeks for your deal to be looked at.
32:56
Speaker 1: But at the end of the day, I've had people
32:58
Speaker 1: refinance in a week, and I've also seeing clients that
33:01
Speaker 1: have taken three months to refinance because they're sole traders
33:04
Speaker 1: or small businesses and the amount of information that their
33:06
Speaker 1: bank just takes forever to get through. So that's why
33:10
Speaker 1: we want a broker on our team because they do
33:12
Speaker 1: all the hard work and they'll just ask you, hey, Georgia,
33:14
Speaker 1: can you shoot through another copy of your ID or
33:16
Speaker 1: whatever it is, and you don't have to follow up
33:18
Speaker 1: with the bank all the time because they'll do it for.
33:20
Speaker 2: You perfect all right, Well, that sounds like the perfect solution.
33:22
Speaker 2: Definitely refinance, and definitely chat to a mortgage broker to.
33:25
Speaker 1: Do so if it's right for your situation. And make
33:28
Speaker 1: sure that you talk to a broker that you trust
33:29
Speaker 1: as well, because not all brokers have been created equally.
33:32
Speaker 2: And you'll have you got recommendations. You said that before
33:35
Speaker 2: that you've got some I do.
33:37
Speaker 3: I do.
33:37
Speaker 1: If that's something that you would like, to hit up
33:39
Speaker 1: our website for a weekend mat shoot with a broke
33:41
Speaker 1: out that will make sense for you in your life.
33:46
Speaker 5: Hi, I'm the twenty six year old regretful home buyer
33:50
Speaker 5: and this is my money diary.
33:52
Speaker 2: What good would a money podcast be without the perfect bits.
33:55
Speaker 2: It's time for money diary. Let's get into it.
33:57
Speaker 5: So I bought my first house when I was twenty one.
34:01
Speaker 5: It was a unit and it was in an area
34:04
Speaker 5: that it was kind of a bad area, so no
34:06
Speaker 5: one was really looking there, but they tried to build
34:08
Speaker 5: a new subdivision.
34:09
Speaker 3: On the border.
34:10
Speaker 5: So I bought there was extremely cheap for what it was,
34:14
Speaker 5: and yeah, I was really lucky.
34:15
Speaker 3: A few years later, I decided I.
34:18
Speaker 5: Wanted something me more, newer, closer to the city, and
34:24
Speaker 5: I sold my unit and I got a really good profit,
34:28
Speaker 5: and instead of probably doing the smart thing and buying
34:30
Speaker 5: something probably more within my means, I bought something which
34:35
Speaker 5: was extremely expensive.
34:37
Speaker 3: And pretty much max me out in my borrowing capacity.
34:40
Speaker 5: So my repayments are around forty percent of my income
34:44
Speaker 5: of fortnite. I have to budget really hard with everything
34:47
Speaker 5: I do. I can't just go out for dinner spontaneously.
34:50
Speaker 5: I can't just buy top spontaneously. I have to really
34:54
Speaker 5: think about everything. And most people I know that get
34:57
Speaker 5: a mortgage, it's with a partner so everything, and that's
35:01
Speaker 5: not the case with me. Everything I have to foot
35:03
Speaker 5: So I'm just really regretting buying something even though I
35:08
Speaker 5: love it.
35:09
Speaker 3: But that is really pushing me.
35:12
Speaker 2: What does she do to earn money? How much does
35:14
Speaker 2: she earn and how much is sitting in her bank
35:16
Speaker 2: account right now?
35:17
Speaker 5: I work in human resources in the government. I am
35:21
Speaker 5: between that sixty five thousand and seventy thousand a year
35:26
Speaker 5: and at the moment, I have a few different accounts,
35:29
Speaker 5: So I have around six five hundred in an emergency account,
35:34
Speaker 5: about twelve hundred in a bill's account, and around six
35:37
Speaker 5: hundred dollars in a spending account, which is like you know,
35:40
Speaker 5: my food and petrol and fun stuff that I'm trying
35:42
Speaker 5: to do.
35:43
Speaker 2: And what exactly happens to that money after it's deposited
35:46
Speaker 2: into her account.
35:47
Speaker 5: Instead of going into one bank account, it goes into
35:49
Speaker 5: three different bank accounts straight away. So twelve hundred goes
35:54
Speaker 5: into my bill's account around sort of like six hundred
35:57
Speaker 5: dollars goes into my spending account, and I think like
36:01
Speaker 5: two hundred dollars goes into a savings account which I
36:04
Speaker 5: use my investments, and one hundred and thirty go into
36:08
Speaker 5: like my emergency fund because I want that to go
36:10
Speaker 5: up to ten thousand dollars. So yeah, I'm trying to
36:13
Speaker 5: keep plotting away and putting money in that.
36:15
Speaker 2: Okay, then, so how does twenty eight and getting better
36:18
Speaker 2: feel about investing?
36:19
Speaker 1: Does she invest?
36:20
Speaker 2: And if so, how well.
36:21
Speaker 5: I've only really started investing in the last month, just
36:24
Speaker 5: from listening to this podcast and a really nice guy
36:27
Speaker 5: at my work who's kind of tried directing me in
36:30
Speaker 5: the right direction. So I opened up an account with
36:33
Speaker 5: an online brokerage.
36:34
Speaker 3: So I've got around fourteen hundred in that at the moment.
36:38
Speaker 5: So I'm trying to contribute to that every fortnight and
36:41
Speaker 5: then I also set up a raise account, which I've
36:43
Speaker 5: got the roundups organized through my bank accounts to go
36:47
Speaker 5: into there, and I'm hoping to have a thousand in
36:49
Speaker 5: there in a year's time. So yeah, I'm really trying
36:53
Speaker 5: to learn what I'm supposed to be doing. I don't
36:55
Speaker 5: want to go too fast, too soon and get overwhelmed,
36:58
Speaker 5: so yeah, slow and steady.
37:00
Speaker 2: What about debts like credit cards or personal loans.
37:03
Speaker 5: My only debt that I have is my mortgage, and
37:06
Speaker 5: it's really big for one person, well for where I live,
37:10
Speaker 5: it's big, so that's three hundred and seventy thousand, so yeah,
37:16
Speaker 5: that's kind of a big chunk of my money. I
37:18
Speaker 5: did finish praying off a car loans, so two years ago,
37:21
Speaker 5: I bought a brand new car. Probably shouldn't have because
37:25
Speaker 5: from listening to this podcast, so I mean I probably
37:27
Speaker 5: should have looked at something secondhand and not so expensive,
37:30
Speaker 5: but when you're young, you just want the.
37:32
Speaker 3: Flashy new car.
37:34
Speaker 5: So I paid off that in two years and I
37:35
Speaker 5: was really happy with that. So yeah, really, just my
37:38
Speaker 5: mortgage at the moment.
37:39
Speaker 2: What is her best money habit?
37:42
Speaker 5: I've been shopping a lot, so I had like in
37:45
Speaker 5: my mind why do I want to be spending money
37:48
Speaker 5: on work clothes when I'm going to work to make
37:50
Speaker 5: the money, Like, it just didn't.
37:51
Speaker 3: Seem right to me.
37:52
Speaker 5: So about a third of my wardrobe is now thrifted stuff.
37:57
Speaker 5: So for example, I went down today and I got
37:59
Speaker 5: a new drest tags on it and a you work
38:02
Speaker 5: top for fifteen dollars, and whereas the tag on that
38:06
Speaker 5: dress was seventy dollars, and if I'd bought the top,
38:08
Speaker 5: which was a portman's top, it might have been about
38:10
Speaker 5: thirty forty dollars. So I'm trying to really do that,
38:14
Speaker 5: and I mean it's good for the environment as well.
38:16
Speaker 3: I'm trying not to give into.
38:17
Speaker 5: Fast fashion and all the different trends that keep coming out.
38:20
Speaker 5: I'm just trying to go in there and buy basic
38:23
Speaker 5: sort of things that I know I'll love, and if
38:24
Speaker 5: I get ten straight down the middle of it, it's
38:27
Speaker 5: not the end of the world.
38:28
Speaker 2: And what about her worst money habit?
38:30
Speaker 5: This is probably something I actually enjoy though. I like food,
38:32
Speaker 5: So like today I went and bought a seven dollar
38:35
Speaker 5: loaf of rye bread when I could have just gotten
38:37
Speaker 5: a two of three dollar loaf of rye bread. But
38:38
Speaker 5: when you see the fancy stuff, even though it's double
38:41
Speaker 5: the price, it just looks so nice, like the fancy honey,
38:45
Speaker 5: the fancy jam, the fancy cheeses. So I like to
38:48
Speaker 5: buy that sort of stuff, like the gourmet sort of things.
38:51
Speaker 2: So what's today's money diarist actually saving for? What's her
38:54
Speaker 2: big money goal?
38:55
Speaker 5: Well, my big goal is in a few years where
38:57
Speaker 5: I'm in few I'm in like five to ten, I
38:59
Speaker 5: want to have a family, so I'd like to be
39:02
Speaker 5: around for my family. So that's why I'm starting to
39:04
Speaker 5: invest now and trying to get up like my emergency
39:07
Speaker 5: fund and my savings because when that happens, I don't
39:10
Speaker 5: want to have to go back to work in three
39:12
Speaker 5: to six months. I want to actually be able to
39:14
Speaker 5: have that time because I've generated a passive income, and
39:17
Speaker 5: maybe even go.
39:18
Speaker 3: Part time after that for a while and.
39:20
Speaker 5: Actually just enjoyed that part of my life not have
39:23
Speaker 5: to just go straight back into the workforce.
39:25
Speaker 2: And what grade would you give her money habits.
39:27
Speaker 5: I've achieved a lot in a short amount of time.
39:31
Speaker 5: Like I said, I bought my first house that I
39:33
Speaker 5: was twenty one, I sold it and bought my second
39:35
Speaker 5: house when I was twenty five, and that was with
39:37
Speaker 5: a twenty percent deposit. But given that I haven't found
39:42
Speaker 5: my happy medium, and I still check my bank account
39:45
Speaker 5: every day and stress over my spending and my saving,
39:49
Speaker 5: maybe a B plus just because I'd like to feel
39:52
Speaker 5: comfortable and not have to check my bank account all
39:55
Speaker 5: the time. And yeah, just be happy with what I'm
39:58
Speaker 5: spending and not have to overthink so much.
40:01
Speaker 1: Alrighty, Victoria Divine, thank you for using my crevect and
40:05
Speaker 1: full name.
40:07
Speaker 2: Ah now our twenty six year old regretful home buyer.
40:11
Speaker 2: I have lots of notes here. Once again, what did
40:14
Speaker 2: you What did you take away from her story?
40:16
Speaker 1: I took away from her story that not all the
40:19
Speaker 1: glitters is goal and I think it's a really great
40:22
Speaker 1: story to be sharing. I mean, not great for her.
40:24
Speaker 1: We'll sort her out. But at the end of the day,
40:27
Speaker 1: so many of us have this Australian dream in our
40:29
Speaker 1: heads that we want to purchase property, and we have
40:32
Speaker 1: our eyes set on the prize, and we've got our
40:33
Speaker 1: blinkers on, and we don't think about anything other than
40:36
Speaker 1: securing a mortgage. Like, we stick our heads down, we
40:39
Speaker 1: get our savings on, we've saved our you know, whatever
40:42
Speaker 1: it is for our home deposit could be fifty thousand dollars,
40:44
Speaker 1: could be one hundred thousand dollars. We're so excited to
40:47
Speaker 1: get that mortgage, and then we remember that it's a
40:50
Speaker 1: thirty year commitment, yes, and we've got to save that
40:53
Speaker 1: amount every month to pay off our mortgage, and we
40:56
Speaker 1: realize that maybe that wasn't actually the type of lifestyle
40:59
Speaker 1: wanted to live. So I know that it sounds silly,
41:03
Speaker 1: but the thing I would do before you even start
41:07
Speaker 1: saving for a home loan, I think it would be
41:08
Speaker 1: really important to research on average what a home loan
41:12
Speaker 1: would cost you every month and make sure you can
41:14
Speaker 1: meet that commitment before you even plan to buy. Because
41:18
Speaker 1: at the end of the day, if I said to you, Georgia, Okay, well,
41:21
Speaker 1: I know you've got this lump sum of money you
41:22
Speaker 1: could buy a house, but that's going to cost you
41:25
Speaker 1: five thousand dollars a month, you might go, oh, but
41:28
Speaker 1: I don't want that. But if you don't have that knowledge,
41:31
Speaker 1: you go, great, I'm going to buy a home. I
41:32
Speaker 1: don't want to rent anymore. So I think it's really
41:35
Speaker 1: important to take into consideration the implications of actually purchasing
41:39
Speaker 1: a home and the fact that it's not just mortgage repayments.
41:42
Speaker 1: You have to pay rates, you have to pay water,
41:44
Speaker 1: you have to pay stamp duty, and they've recently changed
41:46
Speaker 1: all of the rules around stamp duty. So we might
41:48
Speaker 1: do a cute little bonus episode soon around what that
41:50
Speaker 1: actually means for us when they release more information. But
41:53
Speaker 1: at the end of the day, there are so many
41:55
Speaker 1: additional costs that come with owning a property that we
41:58
Speaker 1: need to take into consideration. Not many people do, so
42:02
Speaker 1: that's again one of my rants on property ownership and
42:05
Speaker 1: just making sure you know what you're taking on. But
42:07
Speaker 1: it genuinely sounded like she was getting on track and
42:10
Speaker 1: knew what she was talking about, that this guy is
42:13
Speaker 1: helping her out with her finances. But at the end
42:16
Speaker 1: of the day, it sounded like she was tracking along.
42:18
Speaker 2: Well, yeah, I one hundred percent agree. It sounds like
42:21
Speaker 2: she was doing everything amazingly. And I mean, she bought
42:23
Speaker 2: her first home at twenty one, like she's clearly incredible savvy.
42:27
Speaker 1: Little save also something to say here around her other options.
42:30
Speaker 1: So she was saying that she regrets buying it, but
42:32
Speaker 1: I didn't have a lot of clarity around whether she
42:35
Speaker 1: lived in it or not. So maybe for her, the
42:37
Speaker 1: outcome could be that she rents out the house until
42:40
Speaker 1: she can afford to pay it off, because then she'll
42:42
Speaker 1: have somebody else paying her mortgage repayments or a portion
42:45
Speaker 1: of and she can put herself in a position where
42:48
Speaker 1: she just goes and lives in a sharehouse for a while.
42:50
Speaker 1: And I have lots of people and friends that are
42:52
Speaker 1: doing that because they genuinely couldn't afford the mortgage if
42:55
Speaker 1: they lived in the property. And I think that's a
42:57
Speaker 1: savvy way of maybe having your cake and eat it
43:00
Speaker 1: it too.
43:00
Speaker 2: Yeah. Smart, And we did that whole episode on rent
43:04
Speaker 2: Vesting season two.
43:06
Speaker 1: It was Yeah, so that go back investing episode. And also,
43:10
Speaker 1: just make sure you're across your budgeting cash flow. At
43:13
Speaker 1: the end of the day, if you're not across your
43:14
Speaker 1: budgeting and cash flow, you're not actually able to probably
43:17
Speaker 1: budget and you will always feel like you're treading water
43:20
Speaker 1: and not.
43:20
Speaker 2: Yeah. Two more things be what's your take? I don't
43:24
Speaker 2: think I've asked you this before your take on new cars?
43:27
Speaker 2: Have I asked you this question?
43:29
Speaker 1: I'm of two minds, right as somebody who currently drives
43:33
Speaker 1: a two thousand and six car that I bought in
43:35
Speaker 1: my graduate year with personal debt. Like, honestly, I can't talk.
43:40
Speaker 1: It was a secondhand car, but like, I went into
43:42
Speaker 1: personal debt for it, and we shouldn't do that. Friends,
43:44
Speaker 1: That was a dumb move, But that is okay. I
43:48
Speaker 1: genuinely don't believe in buying brand new cars purely because
43:51
Speaker 1: of how much value they lose the second they walk
43:54
Speaker 1: out the door, drive out the door, whatever you want
43:56
Speaker 1: to call it. But I think it's really important to
43:59
Speaker 1: take those things into consideration. Some people adore that. Some
44:02
Speaker 1: people that's their life goal and they just really want
44:05
Speaker 1: to buy a brand new car, and I can't talk
44:06
Speaker 1: them out of it. That's fine, But at the end
44:08
Speaker 1: of the day, so many people get really great deals
44:11
Speaker 1: either on demo vehicles, or they don't get a car
44:14
Speaker 1: that's maybe one year old and was a corporate vehicle,
44:17
Speaker 1: and then it's already depreciated the end of the day.
44:20
Speaker 1: I just I don't love the idea that our community
44:23
Speaker 1: would be investing their money in a depreciating asset. Yeah,
44:26
Speaker 1: if I said to you, Georgia, hey, great idea, why
44:30
Speaker 1: don't you buy this asset for thirty thousand dollars and
44:34
Speaker 1: great you're going to lose fifteen percent of that thirty
44:36
Speaker 1: thousand dollars every year. You'd be like, pit, sure, that's
44:38
Speaker 1: a terrible I think I would never do that, And
44:40
Speaker 1: he'll be like, but you did when you bought that car.
44:42
Speaker 5: Yeah.
44:42
Speaker 1: So I think it's really important to understand what that
44:45
Speaker 1: actually means and the power of our dollar and where
44:48
Speaker 1: else it could be used. But at the end of
44:49
Speaker 1: the day, if you dream of car, my friend, please
44:52
Speaker 1: share with me what you're buying. Like, I'm not judgmental
44:55
Speaker 1: about it. I just want you to be educated in
44:57
Speaker 1: the decisions that you are making.
45:01
Speaker 2: She also had a couple of good quotes in there.
45:03
Speaker 2: She said, why am I spending money on clothes to
45:06
Speaker 2: go to work when I go to work to make money.
45:09
Speaker 2: I thought that was quite I love that and it
45:11
Speaker 2: points me.
45:12
Speaker 1: Right in my soul as somebody who loves to buy
45:15
Speaker 1: corporate outfits. But it's so true. I think that, you know,
45:18
Speaker 1: something that's really important is a capsule wardrobe for me
45:22
Speaker 1: to make sure that they limit my workout fits, but
45:24
Speaker 1: then also just buying really good basics so they last.
45:27
Speaker 2: Yeah, and remind people what to capsule wardrobe is if
45:29
Speaker 2: they don't.
45:30
Speaker 1: Know way you keep a minimal wardrobe where everything in
45:33
Speaker 1: that wardrobe matches each other, so you don't just have
45:35
Speaker 1: one random skirt that doesn't go with any of your tops.
45:38
Speaker 1: You have one skirt that really would match all of
45:41
Speaker 1: your tops, so you can kind of mix and match.
45:43
Speaker 1: And often people will choose maybe like thirty items or
45:46
Speaker 1: fifty items or even one hundred items, which very quickly
45:50
Speaker 1: adds up, like by the time you add in you know,
45:53
Speaker 1: tops and bottoms and pants, like it actually adds up
45:56
Speaker 1: really quickly, which is crazy. But they have a really
45:59
Speaker 1: minimalist amount of clothes that just match everything, and to
46:01
Speaker 1: be honest, it kind of becomes like a work uniform.
46:04
Speaker 1: And that's what I do.
46:05
Speaker 2: Brilliant. She also loves food. She's a girl after my
46:07
Speaker 2: own heart. Seven dollars on rye bread. I support her
46:09
Speaker 2: and she loves fancy cheese. So you know what more.
46:12
Speaker 1: Could she If that's her downfall, I think that she
46:14
Speaker 1: can come over.
46:15
Speaker 2: When exactly right, I think that is all we have
46:18
Speaker 2: time for on today's show, Vicki.
46:20
Speaker 1: D just before we head off, we'd like to acknowledge
46:22
Speaker 1: and pay respects to Australia's Aboriginal and torrest rate islander peoples,
46:26
Speaker 1: the traditional custodians of the lands, the waterways and the
46:29
Speaker 1: skies all across Australia. We thank you for sharing and
46:32
Speaker 1: for caring on the land which we are able to learn.
46:35
Speaker 1: We pay our respects to elders past and present, and
46:37
Speaker 1: we share our friendship and our kindness.
46:40
Speaker 2: Now for the boring stuff. The advice shared on shoes
46:43
Speaker 2: on the money is general in nature and does not
46:45
Speaker 2: consider your individual circumstances. She's on the money exists purely
46:49
Speaker 2: for educational purposes and should not be relied upon to
46:51
Speaker 2: make an investment or financial decision. And we promise Victoria
46:55
Speaker 2: to find is legit. She's an authorized representative of Australia
46:59
Speaker 2: Pacific Funds Management propriet To Limited ABN three four one
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47:07
Speaker 2: to Ryan John, our producer dal for putting it all together.
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