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Summer Starter Series: Budgeting and Cash Flow · She's On The Money

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Speaker 1: My name is Tatasha Bamblet. I'm a proud First Nations
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Speaker 1: woman and I'm here to acknowledge country t Glenn Young Ganya, Niana,
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Speaker 1: Kaka yah y and beIN Ahaka Nian Our gay In Mbini,
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Speaker 1: yakarum Jar Dominyamiga Umagahawaka Woman damon Imlan Mbaban Gadabomba in
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Speaker 1: and now in wakah Ghana on yak rum Jar water Nadaa. Hello,
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Speaker 1: beautiful friends, we gather on the lands of the Aboriginal people.
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Speaker 1: We thank acknowledge and respect the Aboriginal people's land that
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Speaker 1: we're gathering on today. Take pleasure in all the land
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Speaker 1: and respect all that you see. She's on the Money
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Speaker 1: podcast acknowledges culture, country, community and connections, bringing you the tools,
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Speaker 1: knowledge and resources for you to thrive.
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Speaker 2: She's on the Money. She's on the Money.
1:04
Speaker 3: Hello and welcome to She's on the Money, the podcast
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Speaker 3: that's here to help you get your finances on track
1:10
Speaker 3: this year. This is something different we are doing this year,
1:13
Speaker 3: and I'm so excited about it because this time of
1:15
Speaker 3: year is when motivation is high, You're feeling pretty fresh,
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Speaker 3: and you're finally ready to get your finances on track.
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Speaker 3: If you listened to the episode yesterday, you'll know we
1:24
Speaker 3: are dangerously close to one thousand episodes, which to me
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Speaker 3: is absolutely wild, But it also means we've covered a lot,
1:33
Speaker 3: and instead of overwhelming you with everything all at once,
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Speaker 3: I wanted to put together the true foundations, the first steps,
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Speaker 3: the stuff that actually works no matter who you are,
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Speaker 3: how much you earn't, or where you're starting from. Because
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Speaker 3: here's the thing, the foundations of money, they actually don't
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Speaker 3: really change. Trends come and go, apps they come and go,
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Speaker 3: and the basics they always always always stay the same.
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Speaker 3: And if you get those right, my friend, everything else
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Speaker 3: gets easier. So every Saturday in January, I'm going to
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Speaker 3: be dropping these as bonus episodes. And I'm starting this
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Speaker 3: series with budgeting, not because it's the most exciting topic,
2:09
Speaker 3: I'm really sorry, but because to me it is the
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Speaker 3: most important. It is the foundation of getting your finances
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Speaker 3: in order. To me, getting your budget sorted is step one.
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Speaker 3: It's the thing that lets you clearly see your four
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Speaker 3: most important numbers, what you earn, what you spend, what
2:25
Speaker 3: you own, and what you owe. Without giving yourself that clarity,
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Speaker 3: it's very hard to make confident decisions about what am
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Speaker 3: I gonna do with savings, what am I gonna do
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Speaker 3: with debt? Or like how do we even start my
2:35
Speaker 3: investing journey. I also adore this episode because it's one
2:39
Speaker 3: from the vault. The ogs are gonna know Miss Georgia King.
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Speaker 3: She moved to London, we lost her from the show,
2:45
Speaker 3: but this episode is kind of reviving it. It's back
2:48
Speaker 3: from when she was on the show, and it's such
2:50
Speaker 3: a good reminder that all of this advice to my friends,
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Speaker 3: it still holds up. The lessons are timeless. Budgeting is
2:56
Speaker 3: not about restriction or punishment. It's about understanding your mind
3:00
Speaker 3: so that you can actually use it to build the
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Speaker 3: life that you deserve. I've also popped the link to
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Speaker 3: our budgeting and debt hub in the show notes, and
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Speaker 3: that page has a whole range of free resources we've built,
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Speaker 3: including a free budget template to help you take action
3:14
Speaker 3: right after listening. My friends, this one was pulled together
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Speaker 3: for you. Let's do the summer series and let's get
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Speaker 3: on track together. This episode is where that all begins.
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Speaker 3: So let's dive straight in.
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Speaker 4: So Victoria to kick us off today, let's start with
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Speaker 4: the basics. Can you please talk us through what budgeting
3:32
Speaker 4: and what cash flow are, including the differences between the two,
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Speaker 4: because I didn't know before we kind of started chatting
3:38
Speaker 4: about this show today.
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Speaker 3: Absolutely I can, and for those if you have done
3:41
Speaker 3: an hour of Power with me or someone from my team,
3:44
Speaker 3: you know that I am obsessed with budgeting cash flow
3:47
Speaker 3: because they are essentially the bread and butter of creating
3:50
Speaker 3: financial freedom. If we have a budget and we have
3:53
Speaker 3: a cash flow, we're actually able to create wealth. And
3:56
Speaker 3: without having that in place, it's kind of like having
3:59
Speaker 3: a plan with a map and without knowing where your
4:01
Speaker 3: final destination is or where you're actually heading, so you
4:04
Speaker 3: could be heading towards camera instead of heading towards you know, Adelaide,
4:08
Speaker 3: where you wanted to be. For me, this is the
4:10
Speaker 3: thing that I want you guys to understand the most. Like, yes,
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Speaker 3: investing is important, Yes saving is important, but without understanding
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Speaker 3: what your budget is and what your cash flow looks like,
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Speaker 3: you don't know how much you're allocating each and every
4:23
Speaker 3: single week or month towards those goals. A cash flow
4:27
Speaker 3: and a budget are two different things as well, which
4:29
Speaker 3: I think people get a little bit confused about. So
4:31
Speaker 3: let's start with budget. I've spoken about it on the
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Speaker 3: pod before, but this episode I am honestly so excited
4:37
Speaker 3: to talk about budgeting because budgeting is absolutely not what
4:40
Speaker 3: a lot of people think it is. So often people say, oh,
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Speaker 3: I'm sorry, Victoria, I can't do it. I'm on a budget.
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Speaker 3: Like they treat a budget like a restrictive thing. It
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Speaker 3: is not a restrictive thing at all. It's actually a
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Speaker 3: document that helps you understand your money, what's coming in,
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Speaker 3: what's going out, where it's going, how it works, what
5:00
Speaker 3: you actually spend your money on, so that you have
5:02
Speaker 3: a tool to identify your income and expenses. It's not
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Speaker 3: to say, okay, Victoria, I've done a budget and I'm
5:09
Speaker 3: only going to be spending fifty dollars on groceries moving forward,
5:12
Speaker 3: like that feels restrictive. How about we actually put in
5:15
Speaker 3: place a budget that's actually reflective of your spending so
5:18
Speaker 3: that you can live the life you want while also
5:21
Speaker 3: being really reasonable about how much money you have coming in.
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Speaker 3: So Georgia, a budget is going to really help to
5:27
Speaker 3: show you if you are spending more or less than
5:29
Speaker 3: you can actually afford, and it can help to determine
5:32
Speaker 3: your capacity to save for future goals, which obviously I
5:35
Speaker 3: am a massive fan of when you have a budget,
5:38
Speaker 3: and I'm going to rant about this so much this episode,
5:41
Speaker 3: so I do apologize buckling. But when you have a budget,
5:44
Speaker 3: you can see where you're spending your money and create
5:46
Speaker 3: goals in line with your spending and your cash flow.
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Speaker 3: It is so easy to get disheartened if you set
5:51
Speaker 3: a goal for yourself that is actually completely unachievable. And
5:55
Speaker 3: an example of this is when I hear people saying,
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Speaker 3: oh my gosh, Victoria, this year, I am going to
6:00
Speaker 3: save ten thousand dollars, and I say, fantastic, that's so exciting,
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Speaker 3: really proud of you. Do you have eight hundred and
6:07
Speaker 3: thirty three dollars per month to save? They go, no, okay,
6:11
Speaker 3: no problems. So how are you planning on achieving that goal?
6:14
Speaker 3: If you don't have the money to actually achieve that goal,
6:17
Speaker 3: They're like, oh, I'll work it out later. I've been
6:19
Speaker 3: saving as much as I possibly can. Like, it is
6:22
Speaker 3: good to save as much as you possibly can, but
6:25
Speaker 3: if you don't have an outcome that you're working towards,
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Speaker 3: with a tangible plan that you've worked backwards from, you're
6:32
Speaker 3: not actually going to be able to achieve that goal.
6:34
Speaker 3: And what happens when we don't achieve goals. We feel upset,
6:37
Speaker 3: we feel flat, we feel as though we aren't achieving things,
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Speaker 3: and we get this mentality, which is, oh, I couldn't
6:44
Speaker 3: do it. It's not that you can't do it, it's
6:46
Speaker 3: that the goal you set yourself was unrealistic for your
6:49
Speaker 3: cash flow and your personal situation. And what we actually
6:53
Speaker 3: have to do is create goals that are in line
6:55
Speaker 3: with your personal situation. You can save ten thousand dollars,
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Speaker 3: I promise you, It just might be on a larger timeframe,
7:02
Speaker 3: and we need to account for that so that we
7:04
Speaker 3: feel like we are actually achieving things.
7:06
Speaker 4: I was going to ask you then about how it's
7:09
Speaker 4: kind of like a diet, like if it's unsustainable, then
7:12
Speaker 4: you're not exactly But with it, is it worth saying.
7:14
Speaker 3: That it's exactly like a budget. It's exactly like saying
7:17
Speaker 3: one day you wake up and you're like, I'm going vegan.
7:19
Speaker 3: Like cool, I'm really excited for you. But is it
7:22
Speaker 3: sustainable to go cold turkey on something? Is it sustainable
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Speaker 3: to commit to a crash diet? Absolutely not. There is
7:28
Speaker 3: a reason people fall off the bandwagon what we need
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Speaker 3: to do is actually create goals in line with your lifestyle.
7:35
Speaker 3: Create a budget that is actually reflective of what you're spending.
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Speaker 3: Don't judge yourself, just put it all down on a
7:41
Speaker 3: piece of paper and go awesome, this is what I
7:43
Speaker 3: am spending. End of story. It's just what I'm spending.
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Speaker 3: And it gives you then ability to reflect and say, well,
7:49
Speaker 3: is that actually what I want to spend? Like it
7:52
Speaker 3: puts the numbers in front of you so that you
7:54
Speaker 3: can take time to consider each of them. Maybe you
7:57
Speaker 3: are spending two hundred dollars a week on groceries, but
7:59
Speaker 3: you're actually single and live alone. Well, in that case,
8:03
Speaker 3: maybe you want to be spending less, so you need
8:06
Speaker 3: to have a think about it. Instead of just cutting
8:08
Speaker 3: that number in half, maybe have a think of the
8:11
Speaker 3: strategy behind that. Why are you spending two hundred dollars
8:14
Speaker 3: a week on groceries? Is it because you love really
8:17
Speaker 3: fancy food and that's aligned to your values. Well, maybe
8:20
Speaker 3: we look to save in other places so you can
8:23
Speaker 3: continue the things that you love. Or maybe you are
8:26
Speaker 3: just being a little bit lazy. Let's be honest and
8:28
Speaker 3: buying takeaway all the time, and that's where your cash
8:30
Speaker 3: flow is going and you don't actually want to do that,
8:32
Speaker 3: so we have to make a little change. But small
8:35
Speaker 3: changes and small steps are still steps in the right direction.
8:38
Speaker 3: And I think that when it comes to budgeting, it's
8:41
Speaker 3: just so we know where we stand.
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Speaker 4: I feel like we'll talk about how to actually create
8:45
Speaker 4: a budget in a little while, absolutely amazing. Before we
8:50
Speaker 4: get there, can you talk to me a little bit
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Speaker 4: about what cash flow means?
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Speaker 3: Okay, So cash flow is essentially the next step in budgeting.
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Speaker 3: So if we write down how much we are spending
9:02
Speaker 3: and how much we are saving, and how much we
9:05
Speaker 3: have coming in and out of our account, and if
9:07
Speaker 3: you guys have listened to the first episode ever of
9:10
Speaker 3: the She's on the Money podcast, I talk about these
9:12
Speaker 3: four figures, which is earned, spend own and oh and
9:15
Speaker 3: those are the four figures that I always, always, always
9:17
Speaker 3: want you to be in control of because if you
9:19
Speaker 3: know how much you earn, you know how much you spend,
9:22
Speaker 3: you're going to know if you are actually spending in
9:24
Speaker 3: line with your income, or if you're spending more or
9:26
Speaker 3: if you're spending less, and that will tell you how
9:28
Speaker 3: much power you have to save and invest. And then
9:32
Speaker 3: your own and your oh these figures obviously, we just
9:35
Speaker 3: want to keep track of At different periods in your life,
9:38
Speaker 3: you're going to owe different amounts. Like you might get
9:40
Speaker 3: a mortgage, so you owe a heap. But I think
9:43
Speaker 3: it's important to work out when it comes to that,
9:45
Speaker 3: like is that actually productive debt or is it personal
9:49
Speaker 3: debt that you need to get out of asap? So
9:52
Speaker 3: for me, cash flow is how your money flows through
9:55
Speaker 3: your bank accounts. So where does it come into, where
9:58
Speaker 3: does it go, how does it work? And how much
10:01
Speaker 3: money do you have each and every single month left
10:04
Speaker 3: over to create wealth with or to save or to
10:07
Speaker 3: put towards debt reduction. So this is going to be
10:10
Speaker 3: your power, and this is going to be the thing
10:12
Speaker 3: that tells you how you can create wealth and how
10:16
Speaker 3: you can get out of debt. But if you don't
10:18
Speaker 3: know your cash flow and you don't know how much
10:20
Speaker 3: you have left over, it's really hard because it will
10:23
Speaker 3: always feel overwhelming. Because too many times do I see
10:26
Speaker 3: people who come to me and they're like, bitter out.
10:28
Speaker 3: I'm trying really hard to save and I put, you know,
10:30
Speaker 3: five hundred dollars every single month into my savings account.
10:34
Speaker 3: But then at the end of the month, or when
10:35
Speaker 3: the end of the month is coming, I go back
10:37
Speaker 3: into my savings and I pull some money out because
10:39
Speaker 3: I've got extra expenses. Well, that's obviously not sustainable. You're
10:43
Speaker 3: not actually saving five hundred dollars a month. You've allocated
10:47
Speaker 3: five hundred dollars to your savings, but you actually have
10:49
Speaker 3: expenses that outweigh that. So we actually need to work
10:52
Speaker 3: out what is reasonable to save, and cash flow is
10:54
Speaker 3: going to tell us that.
10:56
Speaker 4: And I feel like you've kind of gone over it.
10:58
Speaker 4: But why is it so important that we stay on
11:00
Speaker 4: top of our budget and our cash flow?
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Speaker 3: Because if we are all creating budgets, we are all
11:05
Speaker 3: putting ourselves in a position where we are making our
11:07
Speaker 3: money work for us and we can feel in control.
11:10
Speaker 3: We can be on top of our money story, we
11:12
Speaker 3: can be on top of what's going to happen moving forward,
11:15
Speaker 3: and it will help us avoid going into bad debt,
11:18
Speaker 3: or if we are already in bad debt, it will
11:20
Speaker 3: help us understand our power to get out of that
11:23
Speaker 3: bad debt when we can do it, how we can
11:25
Speaker 3: do it, and what that actually looks like.
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Speaker 4: So, how do we actually set up a budget and
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Speaker 4: a cash flow.
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Speaker 3: System, so there are so many different ways. I obviously
11:34
Speaker 3: have my own way, Georgia, and I'm pretty passionate about it.
11:38
Speaker 3: In the She's on the Money Facebook group and I'll
11:40
Speaker 3: probably link it below too. We actually have a budget
11:44
Speaker 3: that you guys can use to fill in so that
11:46
Speaker 3: you understand you're spending, but also excitingly, obviously to plug
11:50
Speaker 3: my own product, Georgia. The start of October, we have
11:53
Speaker 3: a budgeting and cash flow. She's on the Money course
11:55
Speaker 3: coming out, which honestly, I can see you dancing on
11:59
Speaker 3: the screen, maybe vocalize this. This is a podcast, no interrupt.
12:04
Speaker 3: We've got a course coming out which I'm so excited for.
12:08
Speaker 3: I did two full days of filming videos for this.
12:11
Speaker 3: I've tried to absolutely jam pack it full of value
12:14
Speaker 3: so that when you watch it and when you go
12:16
Speaker 3: through it, it's meat holding your hand throughout the entire thing.
12:20
Speaker 3: To get your budget done, then get your cash flow done,
12:23
Speaker 3: then go through your goals, and then set all of
12:25
Speaker 3: those up so that you can achieve success. And honestly,
12:27
Speaker 3: I couldn't be more excited about that. But in saying that,
12:31
Speaker 3: a budget is what you want to make it so
12:33
Speaker 3: it could be on the back of an envelope. I
12:36
Speaker 3: really don't mind. It is whatever works for you. Some
12:38
Speaker 3: people use apps, some people like to sit down and
12:41
Speaker 3: write it in a notebook, some people like to use
12:43
Speaker 3: a spreadsheet. There are so many different ways, but essentially,
12:47
Speaker 3: a budget is going to include a list of all
12:49
Speaker 3: of your expenses broken down, all of your income broken down,
12:54
Speaker 3: and then how that weighs out at the end of
12:57
Speaker 3: the year. Now I work in my budget to a
13:00
Speaker 3: final average annual goal because I feel like that's more
13:04
Speaker 3: motivating knowing entirely what you can save in a twelve
13:08
Speaker 3: month period, as opposed to, Oh, you can save eight
13:10
Speaker 3: hundred and thirty three dollars a month, you go, oh okay,
13:12
Speaker 3: like that's not enough to achieve my goal. Whereas if
13:15
Speaker 3: I say, Georgia eight hundred and thirty three dollars a
13:17
Speaker 3: month is ten thousand dollars in your savings, you are
13:20
Speaker 3: more likely to commit to that when you can see
13:22
Speaker 3: the bigger goal. So it creates short term motivation and
13:25
Speaker 3: long term commitment for me.
13:27
Speaker 4: Sorry, B, so you said your course is coming out
13:29
Speaker 4: in October.
13:30
Speaker 3: Just to recap it is, I mean, we're not meant
13:32
Speaker 3: to be plugging this, but I'm actually so excited about it.
13:34
Speaker 3: I have spent honestly, probably thirty hours over the last
13:38
Speaker 3: three days trying to make the online course system work.
13:41
Speaker 3: I promise you it is now stunning, and.
13:44
Speaker 4: That is what matters.
13:46
Speaker 3: I'm biased, though not at all.
13:48
Speaker 4: How would you say, we can use a budgeting and
13:50
Speaker 4: cash flow system to help get us out of debt,
13:53
Speaker 4: which we know is a huge issue right now.
13:54
Speaker 3: Obviously, look, it's a massive issue now, but it's been
13:57
Speaker 3: a massive issue for years and years and years. And essentially,
14:00
Speaker 3: if you are in debt, stop judging yourself. Like I
14:03
Speaker 3: know that that sounds really flippant, but I know that
14:05
Speaker 3: debt can carry a lot of stigma, and it can
14:07
Speaker 3: carry a lot of guilt, and you feel bad and
14:09
Speaker 3: you maybe don't want to tell your friends or a
14:11
Speaker 3: family about it. You don't have to do that. But
14:14
Speaker 3: the one thing I want you to do if you
14:15
Speaker 3: are in debt is stop feeling bad about it, because
14:18
Speaker 3: it doesn't help you at all. It does not help
14:21
Speaker 3: you in the slightest to feel guilty about this. And Georgia,
14:24
Speaker 3: I work literally every week with people in large amounts
14:28
Speaker 3: of debt, and we do these cash flow systems and
14:31
Speaker 3: we talk about budgeting, and it is honestly the same
14:33
Speaker 3: thing every single time we sit down and I say
14:36
Speaker 3: why haven't you done this before? Like you know, why now?
14:39
Speaker 3: And they just say, feel really overwhelmed. I've never wanted
14:41
Speaker 3: to tackle it head on, and now I am, and
14:44
Speaker 3: I say, Okay, no problems. And by the end of
14:46
Speaker 3: the session, and we have a clear budget and we
14:48
Speaker 3: have a clear cash flow, and we have a plan
14:50
Speaker 3: and we can articulate, Okay, Georgia, by the end of
14:53
Speaker 3: twenty twenty one, that person is going to be out
14:56
Speaker 3: of debt. She will make her final payment at the
14:58
Speaker 3: start of November twenty ti twenty one, and that will
15:01
Speaker 3: be it. That is so motivating, and that clarity is
15:04
Speaker 3: going to help you immensely, both obviously and getting out
15:07
Speaker 3: of debt, but also mentally, and to me that is
15:10
Speaker 3: so so important. So for me, budgeting in cashlow one
15:14
Speaker 3: helps you get out of debt because we can work
15:17
Speaker 3: out your power and we can actually go all right, cool,
15:19
Speaker 3: if you pulled the reins in a little bit on
15:21
Speaker 3: this spending for the next six months, will be out
15:24
Speaker 3: of debt quicker. And the same goes for every type
15:26
Speaker 3: of debt. Right Georgia, like it could be your mortgage
15:30
Speaker 3: and working out how to get out of debt with that,
15:33
Speaker 3: because you know, obviously your mortgage is often a thirty
15:36
Speaker 3: year plan, but working out what your repayments look like
15:39
Speaker 3: and maybe working out how much additional you can contribute
15:42
Speaker 3: to that each month, maybe wipe literally years off your
15:45
Speaker 3: mortgage though that you're out of debt sooner and that
15:48
Speaker 3: money can be used to create wealth. And I think
15:51
Speaker 3: I said this to you, Georgia, when we're planning the
15:53
Speaker 3: episode and talking about the things that I really wanted
15:55
Speaker 3: to share on this app. I really wanted to point
15:58
Speaker 3: out that if you're in debt and you're paying off
16:01
Speaker 3: that debt, that is so exciting, one because you're getting
16:04
Speaker 3: out of debt, but two because you're creating these positive
16:07
Speaker 3: habits for yourself. You are putting yourself in a position
16:11
Speaker 3: where you are proving to yourself that each and every
16:13
Speaker 3: single month you can contribute a certain amount to that
16:16
Speaker 3: debt and you know what, when it's done, and when
16:19
Speaker 3: the debt is over, you then have that amount of
16:21
Speaker 3: money to create wealth. So back to our ten thousand
16:24
Speaker 3: dollar example, if you're in ten thousand dollars worth of
16:27
Speaker 3: debt and you're paying it off at eight hundred and
16:29
Speaker 3: thirty three dollars a month, continue that the year after,
16:32
Speaker 3: and you now have ten thousand dollars worth of savings
16:35
Speaker 3: or ten thousand dollars in an investment. And to me,
16:38
Speaker 3: that's so exciting. So for me, look at your getting
16:40
Speaker 3: out of debt process as a process that you are
16:43
Speaker 3: proving to yourself that you can create wealth. It's like
16:46
Speaker 3: the trial run, it's like the practice. It's saying, Okay,
16:49
Speaker 3: well I did that, why can't I create wealth after this?
16:51
Speaker 3: I don't have to be in debt anymore. This doesn't
16:54
Speaker 3: have to be a cycle for me. And it's an
16:55
Speaker 3: active choice to essentially not put your heads in the
16:58
Speaker 3: sand about it instead feel really empowered about it.
17:02
Speaker 4: As you said, there's a lot of shame that comes
17:05
Speaker 4: with having debt, I think, and we just need to
17:07
Speaker 4: get rid of that shame so you can face it head.
17:09
Speaker 3: On, right, Absolutely, Georgia. And there's only one thing that
17:12
Speaker 3: personal debt means, and that just means that you've spent
17:14
Speaker 3: more than you've that's it. It doesn't make you a
17:16
Speaker 3: bad person, it doesn't make you silly, it doesn't make
17:18
Speaker 3: you dumb. It doesn't mean that you are less than
17:21
Speaker 3: and which I hear all the time, it literally just
17:23
Speaker 3: means you have spent more than you have earned, and
17:27
Speaker 3: now we just need to rectify that. We need to
17:29
Speaker 3: pay back that surplus that you've overspent by and then
17:32
Speaker 3: we can create wealth and we can actually have a
17:34
Speaker 3: budget and cash flow system that puts us in a
17:36
Speaker 3: place of power so that we feel like we can
17:38
Speaker 3: achieve everything because we actually are able to achieve everything
17:42
Speaker 3: we set our minds to.
17:44
Speaker 4: And just because you're in twenty K of debt now,
17:46
Speaker 4: it doesn't mean you will be forever. Like there's so
17:48
Speaker 4: many things we can do to get you out of
17:50
Speaker 4: that debt, which leads me to my next question, Victoria, Yes,
17:54
Speaker 4: we know the snowball and the avalanche theories from old
17:58
Speaker 4: Dave Ramsey. Yes, what the methods are there that we
18:01
Speaker 4: can use to get out of debt? What little hacks?
18:03
Speaker 3: So there are a fair few other little hacks. Obviously,
18:07
Speaker 3: making sure that you're looking at your debt, having a
18:09
Speaker 3: look at whether your interest rate is too high. If
18:12
Speaker 3: you're in a massive amount of credit card debt, I
18:14
Speaker 3: would genuinely be having a look at whether you need
18:17
Speaker 3: to consolidate your debt into a personal loan, because it
18:20
Speaker 3: could take you a really long time to get out
18:23
Speaker 3: of that. And if you're going to be in debt
18:25
Speaker 3: for a couple of more years getting out of, you know,
18:27
Speaker 3: a credit card debt, then I would be looking at
18:29
Speaker 3: consolidating it into a personal loan, which will most likely
18:33
Speaker 3: have a lower interest. Right, But that's not available for
18:36
Speaker 3: everybody because some debts can't be consolidated because they just
18:39
Speaker 3: are simply too much and you just need to buckle
18:41
Speaker 3: down and get it done. Something that I do see
18:44
Speaker 3: a lot of people doing is getting a side hustle
18:46
Speaker 3: or earning a little more to supplement your primary income.
18:50
Speaker 3: It could be an extra shift at work. It could be,
18:52
Speaker 3: you know, an online survey that you're doing. It could
18:55
Speaker 3: be you know, obviously during COVID, this isn't as good.
18:58
Speaker 3: I've got clients who went and got Uber and started
19:01
Speaker 3: being Uber drivers so that they could smash down their debt.
19:04
Speaker 3: Because any additional income that you are bringing in can
19:07
Speaker 3: go straight to debt because it's not your primary income,
19:10
Speaker 3: which is super exciting. So if you know you're bringing
19:12
Speaker 3: in extra one hundred dollars each time you do something Also,
19:16
Speaker 3: that's one hundred dollars off your debt, and that's really exciting.
19:19
Speaker 3: I think that spending less and making compromises in another
19:22
Speaker 3: way is also a really good but really obvious one.
19:25
Speaker 3: These could be temporary changes so that you can get
19:28
Speaker 3: out of debt quicker. If you've got a sixty five
19:30
Speaker 3: dollars a week gym membership but you're trying to get
19:33
Speaker 3: out of debt, maybe you could suspend it until you're
19:36
Speaker 3: out of debt so that you can really make the
19:38
Speaker 3: most of your cash flow and really allocate it towards that,
19:41
Speaker 3: and then once you're out of debt, go back to
19:43
Speaker 3: the things that you love. I think that it's important
19:46
Speaker 3: to remember that compromise doesn't have to be forever. It
19:49
Speaker 3: can be for a short period of time. We can
19:52
Speaker 3: compromise something for the short term, like not having Netflix
19:55
Speaker 3: and Stand so that we can allocate those funds to
19:58
Speaker 3: something different. And I think that that it's a really
20:00
Speaker 3: good point for this point in time as well, Georgia.
20:03
Speaker 3: So it's more about saying, Okay, cool, we're all going
20:06
Speaker 3: through this absolute mess of COVID and we're not sure
20:10
Speaker 3: what's going on with our finances. What can we compromise
20:14
Speaker 3: in the short term so that we can be successful
20:16
Speaker 3: in the long term and maybe breathe a little bit easier.
20:18
Speaker 3: Maybe you don't need Netflix and Stand. Maybe you don't
20:20
Speaker 3: need your Spotify account. Maybe you've got some subscriptions that
20:23
Speaker 3: you can just spend temporarily so that you can increase
20:26
Speaker 3: your cash flow during a time where money is tight,
20:29
Speaker 3: and we can go back to it later. So it's
20:31
Speaker 3: not saying get rid of it you don't need it,
20:33
Speaker 3: saying okay, well, maybe not right now. And another good
20:36
Speaker 3: one is to make the most of amazing apps out there.
20:39
Speaker 3: And I know that this is a sponsored episode, but
20:41
Speaker 3: I kid you not when I say that my favorite
20:44
Speaker 3: app at the moment is an app called Wiser. And
20:47
Speaker 3: I know that not a heap of people are going
20:49
Speaker 3: to have heard of this before, but I do know
20:51
Speaker 3: that there are a fair few people in our community
20:53
Speaker 3: using it. And if you guys love roundup apps like
20:56
Speaker 3: I obviously do. I use Raise, I also use shop back,
21:00
Speaker 3: and you've heard me talk about these guys before. Wiser
21:03
Speaker 3: is exactly like those. It is a roundup app that
21:06
Speaker 3: takes your spare change and actually puts it towards paying
21:09
Speaker 3: off your debt, Like, how good is that? I can't
21:12
Speaker 3: think of a better use for a roundup app for
21:14
Speaker 3: people in debt, Like every single transaction that you have
21:18
Speaker 3: is contributing to you paying down debt.
21:20
Speaker 4: Now.
21:20
Speaker 3: I don't mean to say go and transact more so
21:22
Speaker 3: that you can put more money towards your debt, but
21:24
Speaker 3: I just think it's cool that your everyday expenses and
21:27
Speaker 3: your roundups and buying dinner will mean that you actually
21:30
Speaker 3: save money. But we're obviously going to have a plug
21:33
Speaker 3: about them later. But honestly, there are apps out there.
21:37
Speaker 3: You can use budgeting apps, you can use cash flow apps,
21:40
Speaker 3: and then apps like Wiser. Honestly, if you start looking,
21:43
Speaker 3: you'll find things that actually help you in a really
21:45
Speaker 3: constructive but really motivating way.
21:47
Speaker 4: Okay, well, obviously you're a fan of Wiser. But if
21:50
Speaker 4: our listeners had to take it just one thing away
21:53
Speaker 4: from today's show, what do you think it would be.
21:55
Speaker 3: Obviously, budgeting in cash flow is really important. I want
21:58
Speaker 3: every single one of you to have a budget and
22:00
Speaker 3: have a cash flow plan. But I think the one
22:02
Speaker 3: thing that I want people to get out of this
22:04
Speaker 3: episode is that if you're in debt, stop beating yourself.
22:07
Speaker 3: Up about it and work out what you can do
22:10
Speaker 3: about it. There are so many resources and plans and
22:14
Speaker 3: budgets and apps and things out there, and people that
22:18
Speaker 3: actually help you and that are there and that are
22:20
Speaker 3: on your team, that are going to get you out
22:23
Speaker 3: of this position. You don't actually have to do it alone.
22:26
Speaker 3: So for me, it would be one have a budget
22:28
Speaker 3: and actually take charge of that. You'll feel incredibly empowered,
22:31
Speaker 3: I promise. But then too, know that if you are
22:34
Speaker 3: in a situation where you are in debt, there are
22:36
Speaker 3: people that can help you, and there are people that
22:38
Speaker 3: are genuinely so excited about doing that, and they're not
22:41
Speaker 3: there to judge you. They're just there to get you
22:43
Speaker 3: in a better position because they get a whole heap
22:46
Speaker 3: of gratification out of that, I promise.
22:52
Speaker 2: Hi.
22:52
Speaker 4: There, you've reached the years on the Money Mailbox. Do
22:55
Speaker 4: you have a money problem you want help solving. Do
22:57
Speaker 4: you have a money dilemma you just want to chat about?
23:00
Speaker 4: Vitoria is here to help. Every week we'll be playing
23:02
Speaker 4: your questions to help make sense of a money mess
23:05
Speaker 4: you may have found yourself in. Make a quick recording
23:07
Speaker 4: on your phone and send it through to podcasts and
23:09
Speaker 4: she is on the Money dot com dot au and
23:11
Speaker 4: you might even find yourself on the show. But for now,
23:13
Speaker 4: here's today's listener question.
23:15
Speaker 5: Hello, lovely ladies, I just have a quick one for you. So,
23:20
Speaker 5: I've been lucky enough to get a promotion at work
23:23
Speaker 5: and we'll be earning twenty five thousand dollars more than
23:26
Speaker 5: I was in my previous role, which is I pretty exciting.
23:30
Speaker 5: But I'm actually pretty conscious of not falling into the
23:34
Speaker 5: habits of lifestyle creep because since listening to the podcast
23:38
Speaker 5: and joining me she's on the Money Facebook group, I've
23:41
Speaker 5: become really conscious of my spending and I've been getting
23:44
Speaker 5: my savings together and taking control of my finances. So
23:48
Speaker 5: I'm just wondering if you have any i don't know,
23:51
Speaker 5: budgeting tips or even words of wisdom to kind of
23:54
Speaker 5: help me make the most of this extra money and
23:56
Speaker 5: manage it, because I definitely don't want to be wasting it.
24:00
Speaker 3: Thanks.
24:01
Speaker 4: Hey, Okay, Victoria, So how does she avoid falling victim
24:05
Speaker 4: to lifestyle group?
24:06
Speaker 3: I really like this question because I get so excited. Obviously,
24:10
Speaker 3: that's a massive increase in her salary, Like, congratulations, that's honestly,
24:14
Speaker 3: it's so incredible. Exactly like actually amazing. But I feel
24:19
Speaker 3: like this is such a common one and it's so
24:22
Speaker 3: easy to see that twenty five thousand dollars as all right, cool,
24:25
Speaker 3: I can get a new car, I can do this,
24:27
Speaker 3: I can do that for me. The important thing is
24:30
Speaker 3: before you even get a promotion, before you even increase
24:33
Speaker 3: the amount of money that you have, is to have
24:36
Speaker 3: a reasonable budget and cash flow planning place. And I
24:38
Speaker 3: know that I jump up and down about this all
24:40
Speaker 3: the time, but that is your power. Because if you've
24:43
Speaker 3: got your cash flow plan and you know that your
24:45
Speaker 3: expenses are you know, maybe sixteen thousand dollars a year,
24:49
Speaker 3: and in your personal spending, you're spending you know, maybe
24:51
Speaker 3: like two hundred and fifty dollars a week, I think
24:54
Speaker 3: it's really important to then say, okay, no problems. Now
24:57
Speaker 3: I have an additional twenty five thousand dollars coming in,
25:00
Speaker 3: maybe not obviously tax, super whatever else, but let's just
25:02
Speaker 3: say it's twenty five thousand coming in. Awesome. How am
25:06
Speaker 3: I going to allocate that to my pre existing goals?
25:09
Speaker 3: To turbocharge them? If that makes sense? So instead of
25:12
Speaker 3: you know, achieving that goal in three years, maybe you'll
25:15
Speaker 3: achieve it in one because you've obviously got so much
25:17
Speaker 3: more to save. So for me, it's important to have
25:21
Speaker 3: a list of goals. It's important to have a cash
25:23
Speaker 3: flow and budgeting system that works for you. As I said,
25:26
Speaker 3: I don't care how you do it, as long as
25:28
Speaker 3: you are doing it, so that when a new amount
25:31
Speaker 3: of money actually comes into your account, you've already got goals.
25:33
Speaker 3: It can be allocated too, and all you do is
25:35
Speaker 3: update how much you're allocating towards that goal each month,
25:38
Speaker 3: a week or fortnite or however often you're contributing. So
25:42
Speaker 3: for me, my biggest tip would actually be sit down
25:46
Speaker 3: and make a budget, make a plan, work out how
25:48
Speaker 3: much you want to save, because otherwise it does get
25:51
Speaker 3: wasted because it is so easy with lifestyle creep to
25:54
Speaker 3: just see that money come straight in and go straight
25:56
Speaker 3: back out, because often you'll have a mentality of Okay,
25:59
Speaker 3: well I'm going to treat my I'm going to you know,
26:01
Speaker 3: buy those new shoes. I'm going to go out for
26:03
Speaker 3: lunch more often I can afford it.
26:05
Speaker 2: I earn more money.
26:06
Speaker 3: Now. To me, that's a detrimental mindset when in reality,
26:10
Speaker 3: what we want them to be doing is actually allocating
26:12
Speaker 3: those funds towards goals and towards creating wealth, and whether
26:16
Speaker 3: that's savings or investments, or you know, maybe you've got
26:19
Speaker 3: a trip that you've been planning for that you can
26:22
Speaker 3: now save more too, so that when you come home,
26:24
Speaker 3: you've got a surplus. Like to me, what can you
26:27
Speaker 3: actually contribute that to and divide that twenty five grand
26:30
Speaker 3: by twelve months, work out how much that is per
26:33
Speaker 3: month so that you're not missing any of it, and
26:35
Speaker 3: then make sure that amount is going into an account
26:37
Speaker 3: that helps you build wealth instead of losing it.
26:41
Speaker 4: Do you think a financial advisor is necessary for this
26:44
Speaker 4: situation or just kind of depends on how she's feeling.
26:46
Speaker 3: Absolutely not. I think that budgeting in cashlow is something
26:50
Speaker 3: that you guys can take control of yourself. You don't
26:52
Speaker 3: need a financial advisor to do that for you. Obviously,
26:55
Speaker 3: there are financial advisors that will do it. Obviously I
26:58
Speaker 3: work with my clients to do that, and there are
27:00
Speaker 3: money coaches out there. But I genuinely feel like if
27:04
Speaker 3: you have the tools in front of you and you
27:06
Speaker 3: have been given the guidance to do that, and Georgia,
27:08
Speaker 3: that's actually why I've created the course that I've created.
27:12
Speaker 3: It's purely because you can actually go and do it
27:15
Speaker 3: yourself and go through the framework and go through a
27:17
Speaker 3: PDF and go through you know, just different tools that
27:20
Speaker 3: you can do to one work out your goals, work
27:22
Speaker 3: out your cash flow, work out your savings, work out
27:25
Speaker 3: what that actually means, and go from there. So for me, no,
27:28
Speaker 3: you don't need a financial advisor for spending. You don't
27:31
Speaker 3: need a financial advisor to tell you what your budgeting
27:34
Speaker 3: and cash flow should be because you are smart, like
27:36
Speaker 3: your own intelligent human being and we can all work
27:39
Speaker 3: that out ourselves. It might just be a little bit
27:42
Speaker 3: sticky at the very start because it can feel overwhelming,
27:45
Speaker 3: but hopefully you can sit down and go, you know what,
27:47
Speaker 3: I'm just going to do it. Small steps are still
27:49
Speaker 3: steps in the right direction, and I'm just going to
27:52
Speaker 3: work it out trial and error at the startoprops.
27:56
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27:58
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