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If you like piña coladas (and being fiscally conservative) · She's On The Money

0:00
Speaker 1: She's on the Money.
0:02
Speaker 2: She's on the Money.
0:20
Speaker 3: Hello, and welcome to She's on the Money, the podcast
0:22
Speaker 3: for millennials who want to financial freedom.
0:25
Speaker 1: I'm anab Elie, one of your co hosts.
0:26
Speaker 3: If you've tuned in before, you might already know that
0:28
Speaker 3: I'm a law student and a millennial and I so
0:30
Speaker 3: desperately want to lift my money game. To do that,
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Speaker 3: Every week I pick the brains of my friend and
0:35
Speaker 3: money expert Victoria Devine.
0:36
Speaker 1: Welcome Victoria. Hello. It has been a great week for so.
0:40
Speaker 3: Many of our shoes and the Money community members. I've
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Speaker 3: seen so many money wins and I am continuously impressed and.
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Speaker 1: Proud and motivated. So as always, let's share our favorites
0:49
Speaker 1: from the week. What have you got for me?
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Speaker 4: I love that I get to go first in here
0:52
Speaker 4: because I get first choice. Yes, sorry, This week, I've
0:55
Speaker 4: got Holly, and Holly says I'm officially debt free, and
1:00
Speaker 4: you know I love this because she says that she
1:02
Speaker 4: just sold her car for the amount she owned to
1:04
Speaker 4: her personal loan, which was fourteen thousand dollars, and she
1:07
Speaker 4: was gonna buy another car for about six thousand dollars
1:09
Speaker 4: so she could pay off her loan in half the time,
1:11
Speaker 4: as her partner and her were saving for her first house.
1:14
Speaker 4: But she thought about it a lot, had to chat
1:16
Speaker 4: with her dad and decided to buy his car, which
1:19
Speaker 4: was her first car ever from him, so he agreed
1:23
Speaker 4: and she paid it off in full, and she doesn't
1:26
Speaker 4: have any loan money now and she's completely debt free,
1:29
Speaker 4: and she attributes that to this podcast and the group
1:32
Speaker 4: of women, and she's on the money. So I could
1:34
Speaker 4: not be prouder of her, and I love that story.
1:37
Speaker 3: There's nothing we love more than debt free one hundred
1:40
Speaker 3: percent years. I've got one from Belle this week, who says,
1:43
Speaker 3: this week I achieved a number of money wins. She says,
1:46
Speaker 3: I'm thirty four, a single mom to a teenager in
1:48
Speaker 3: private school, and this is the first week of my life.
1:50
Speaker 3: I feel like I've got control of this money thing.
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Speaker 3: She's hit the one hundred thousand dollar mark on a
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Speaker 3: super and she's proud of her credit card in foot
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Speaker 3: which was three thousand dollars. She ended up by saying
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Speaker 3: a year ago this all fell impossible. So tonight I
2:01
Speaker 3: will celebrate my achievements.
2:03
Speaker 4: And we are celebrating with her. That's amazing.
2:05
Speaker 1: From one bell to the other. She's smashing it. Yay Victoria.
2:10
Speaker 1: Today on the show, we're talking about trouble.
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Speaker 3: How does FOMO contribute to tens of thousands of millennials
2:14
Speaker 3: accumulating bad debt? How do you see the world without
2:17
Speaker 3: landing yourself in a terrible money situation for years to come?
2:20
Speaker 3: But before we get there, as always, it's time to
2:22
Speaker 3: share a money win or a money confession from the week.
2:24
Speaker 1: How'd you go this week? Victoria?
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Speaker 4: I have a money winy. This fune's been a long
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Speaker 4: time coming, though, and I think that it's probably one
2:31
Speaker 4: of my proudest moments. So I love my wardrobe. I
2:35
Speaker 4: try really hard to keep a capsule wardrobe, but I
2:37
Speaker 4: think it's often really hard to really pick the pieces
2:40
Speaker 4: that you don't wear but still love and then give
2:42
Speaker 4: them away.
2:43
Speaker 1: Right.
2:43
Speaker 4: So, at Christmas time, which as I said, long time coming,
2:46
Speaker 4: at Christmas time, I actually turned all of the coat
2:49
Speaker 4: hangers in my wardrobe around to face backwards.
2:51
Speaker 1: That's so smart.
2:53
Speaker 4: And this past weekend I decided that all of those
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Speaker 4: clothes either needed to be donated to charity, sold online,
2:59
Speaker 4: or you know, maybe be given up completely because they're
3:03
Speaker 4: a bit sad But what happened was I pulled them
3:06
Speaker 4: all out, and even though there are a few things
3:07
Speaker 4: that I absolutely loved on the hangar, I realized I
3:10
Speaker 4: hadn't worn at all, and so I popped them on
3:13
Speaker 4: eBay And I am three hundred dollars better off now,
3:16
Speaker 4: and I think my wardrobe is far cleaner and easier
3:19
Speaker 4: because I'm not feeling it full of stuff that I
3:21
Speaker 4: don't wear.
3:22
Speaker 3: That's something I really need to do. And I find
3:24
Speaker 3: so hard giving up items that I even.
3:25
Speaker 1: Though I don't wear, I still love them.
3:27
Speaker 4: They're like my children, I know, and I felt really
3:29
Speaker 4: bad giving up some of them. But when I realized
3:31
Speaker 4: the coat hanger hadn't been turned around in literally eight months,
3:35
Speaker 4: I think that was when I was like, look, if
3:36
Speaker 4: I haven't worn it in eight months, when am I
3:38
Speaker 4: gonna wear it. There are a couple of things I
3:40
Speaker 4: did keep because I couldn't part with them, but there
3:42
Speaker 4: are a number of things I was like, this dress
3:44
Speaker 4: is really great, but I don't wear it.
3:46
Speaker 1: No, that's a great way. That's a great way to force.
3:47
Speaker 4: Its Yeah, so what did you do?
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Speaker 1: I have a money confession this week?
3:52
Speaker 3: No, come on, Annabel, You've been so good so it
3:55
Speaker 3: kind of aligns with last week. I talked about my
3:58
Speaker 3: eyebrow tint before I got the new ones in the mail.
4:01
Speaker 3: I went on Groupon, and I think I have a
4:03
Speaker 3: bit of a group on addiction.
4:05
Speaker 4: I feel like they need to sponsor us because you
4:06
Speaker 4: use them so often.
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Speaker 1: We do and like the idea.
4:09
Speaker 3: The concept of groupon is good things for cheaper, but
4:12
Speaker 3: I'm definitely over using it. I bought like a voucher
4:16
Speaker 3: for my eyebrows, no wonder, they look so good, Thank you,
4:19
Speaker 3: thank you, like massages, nails.
4:22
Speaker 1: It's no, it's an issue.
4:23
Speaker 4: So this week you've gone and what bought? How many vouchers?
4:26
Speaker 1: I don't even know the number. You need to help
4:30
Speaker 1: me because.
4:30
Speaker 4: That is so naughty. But also I hope you really
4:32
Speaker 4: enjoy them.
4:33
Speaker 3: Oh I will, so, Victoria. We want to see the world.
4:36
Speaker 3: But according to a twenty nineteen survey in Travel Pulse,
4:39
Speaker 3: fifty six percent of millennials go into debt for travel.
4:42
Speaker 3: That's more than half six percent, more than half of us.
4:45
Speaker 1: So let's start there.
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Speaker 3: Is this something you've seen anecdotically amongst your own friends,
4:49
Speaker 3: Because I have quite a lot of friends who go
4:51
Speaker 3: overseas without any sort of money plan, which stresses me
4:54
Speaker 3: out a little, But that means that they end up spending.
4:57
Speaker 1: All that they have far too quickly.
4:59
Speaker 3: They either or to getting personal loans in the end,
5:02
Speaker 3: or they spend the rest of their trip overly stressed
5:04
Speaker 3: about money.
5:05
Speaker 4: Or they call their mom and their mom transfers. But
5:08
Speaker 4: that know that happens so often. So I think this
5:11
Speaker 4: is a really interesting topic to bring up, actually because
5:14
Speaker 4: I think that we justify travel so easily because we
5:17
Speaker 4: say it's for the experience, like I don't want to
5:19
Speaker 4: miss out, and you know, you've got fomo a little bit.
5:22
Speaker 4: But also I can completely understand people saying, well, I
5:26
Speaker 4: don't want to miss out, like two of my girlfriends
5:27
Speaker 4: are going to Europe and I don't want to miss out,
5:30
Speaker 4: Like that's the experience of a lifetime like fair call, right.
5:33
Speaker 4: So I think that this is something we really need
5:36
Speaker 4: to take a step back and really think about, Like
5:38
Speaker 4: why are we traveling? Is it because it's really easy
5:40
Speaker 4: to access, Like we now have all of these travel
5:44
Speaker 4: websites offering after pay and offering you know, loan schemes
5:47
Speaker 4: that you're able to you know, pay off the trip
5:49
Speaker 4: once you return. And I think that that is actually
5:52
Speaker 4: putting us in a position where we think that debt
5:54
Speaker 4: for travel is an okay debt to have, when in reality,
5:57
Speaker 4: it is absolutely not. Debt is a debt you come
6:00
Speaker 4: home with nothing except something that you need to pay off,
6:04
Speaker 4: and you need to pay it off in a way
6:05
Speaker 4: that incurs a lot more interest than a home loan,
6:08
Speaker 4: a lot more interest than any kind of loan, because
6:10
Speaker 4: it's an unsecured personal loan. So you're looking at either
6:13
Speaker 4: having it on a credit card, and credit cards are
6:15
Speaker 4: between you know, sixteen and twenty two percent more if
6:19
Speaker 4: you're a little bit unlucky and have a really high
6:20
Speaker 4: interest credit card or a personal loan which is fourteen
6:23
Speaker 4: to like nineteen percent interest, That's a lot of money
6:26
Speaker 4: to be paying for an experience you already had.
6:29
Speaker 3: Do you think it's maybe a generational thing? Because our
6:32
Speaker 3: generation seems to be borderline obsessed with travel. Fifty five
6:35
Speaker 3: percent of millennials are looking to increase their financial plans
6:38
Speaker 3: the next year, are compared to thirty one percent of
6:40
Speaker 3: Gen X and twenty percent of Baby boomers. Is this
6:43
Speaker 3: a generational thing or are there cultural factors at play
6:45
Speaker 3: here that make us extravagant travelers?
6:48
Speaker 4: Can we just talk about Instagram culture right here, right now. Yes,
6:51
Speaker 4: I think that we see so many people living their
6:54
Speaker 4: best lives overseas and we get a little bit jealous. Yeah,
6:57
Speaker 4: so I see it all the time, like it is
6:59
Speaker 4: what it's all guests now, which is prime Europe season.
7:03
Speaker 1: They're all living it up in summer, they are.
7:05
Speaker 4: So I think that we're in a position where we
7:08
Speaker 4: feel as though we deserve something that we haven't worked for.
7:11
Speaker 4: If we've had a really big year at work, or
7:13
Speaker 4: we've had, you know, something significant happen. Often we go, look,
7:16
Speaker 4: I really need a holiday, and the easiest way to
7:19
Speaker 4: access that is to put it on credit card.
7:21
Speaker 3: Why do you think people automatically want to put it
7:24
Speaker 3: on their credit card or a personal loan instead of saving.
7:27
Speaker 4: Ease of access. You can choose to do it and
7:30
Speaker 4: you know, make the most of those travel deals or
7:32
Speaker 4: make the most of the cheap flights. So often you
7:35
Speaker 4: see people, you know, get their emails in the morning
7:38
Speaker 4: and it's from Webjet, and Webjet says, oh, Hawaii, he's
7:41
Speaker 4: got five hundred dollars return flights, and you go, all,
7:43
Speaker 4: I kind of feel that now, but you know, I'll
7:45
Speaker 4: pop it on my credit card and we'll do it later.
7:47
Speaker 4: And I don't think they think about the real cost
7:49
Speaker 4: of that. So cheap flights are great, but how much
7:51
Speaker 4: interest are you paying on that? How much are you
7:53
Speaker 4: then going to have to spend on accommodation and all
7:56
Speaker 4: of the expenses that are associated with traveling. So those
7:59
Speaker 4: five one hundred dollar flights that you thought were fantastic
8:02
Speaker 4: and now going to cost you three or four thousand
8:04
Speaker 4: dollars in a trip that maybe you couldn't afford because
8:06
Speaker 4: you already put the five hundred dollars on your credit card.
8:09
Speaker 4: And so many people justify this and go, oh, but
8:11
Speaker 4: the flights were so cheap. I got them to Bali,
8:14
Speaker 4: And a little while ago we had someone on the
8:16
Speaker 4: podcast who said, look, I just wrote off the flights
8:19
Speaker 4: completely because it would have cost me more to go
8:21
Speaker 4: than what I would have lost by giving the flights up.
8:24
Speaker 4: And I think we really need to have a good
8:26
Speaker 4: look at ourselves and go, why are we choosing to
8:28
Speaker 4: do this? If you want to go on a holiday,
8:30
Speaker 4: save for it.
8:31
Speaker 3: Yeah, it's that whole like you only live once attitude,
8:34
Speaker 3: and it seems to pop up a lot in these surveys.
8:37
Speaker 3: Do you think that's a fair enough reason to put
8:39
Speaker 3: yourself into debt for holiday. For example, what would you
8:41
Speaker 3: say to a client who explained she's in five thousand
8:44
Speaker 3: dollars worth of debt because you only live once you're low.
8:47
Speaker 4: I just think it's unacceptable to be honest, And I
8:49
Speaker 4: think I'm quite harsh on this, because it's putting you
8:52
Speaker 4: in a financial position where you're not able to achieve
8:54
Speaker 4: your goals, You're not able to work towards wealth, you're
8:56
Speaker 4: not able to do things that you need to do.
8:58
Speaker 4: A holiday, to me, be a reward for doing something
9:01
Speaker 4: really good, and that's something really good should be the savings. Yeah,
9:04
Speaker 4: it shouldn't be you going overseas and spending your rainy
9:07
Speaker 4: day fund. It shouldn't be you going overseas and going
9:10
Speaker 4: into debt. It should be you going overseas and feeling
9:13
Speaker 4: incredible because you've already paid fruit ball.
9:16
Speaker 3: And then coming home and feeling like fresh and rejuvenated
9:18
Speaker 3: instead of having to like pay back all those debts.
9:20
Speaker 4: Exactly. And like, I'm the first to admit that I'm
9:23
Speaker 4: probably a lot more organized than a lot of my friends.
9:26
Speaker 4: But the first thing I do when I want to
9:27
Speaker 4: go on a holiday is create a spreadsheet, and that
9:29
Speaker 4: spreadsheet outlines how much my flights are going to cost,
9:32
Speaker 4: how much my accommodation is going to cost, you know,
9:34
Speaker 4: what I think I'll be spending each day, and I'm
9:37
Speaker 4: pretty generous with that budget. But working out exactly what
9:40
Speaker 4: that holiday is going to cost me and then how
9:42
Speaker 4: much I'm going to have to set aside in addition
9:44
Speaker 4: to my savings and investment goals to achieve that holiday,
9:48
Speaker 4: And sometimes that means me looking at it and going, wow,
9:50
Speaker 4: I'd really like to go because at the moment, I'm
9:52
Speaker 4: thinking of going to Europe in the next two years ish,
9:55
Speaker 4: which will be fantastic. But I look at that and
9:58
Speaker 4: I go, wow, that's you know, five thousand holiday. At
10:01
Speaker 4: least I don't have the surplus, you know, cash at
10:04
Speaker 4: the moment, because I don't want to be impacting my
10:06
Speaker 4: investing or my savings planned to go on this. I
10:08
Speaker 4: don't want to be putting myself backwards. But it's literally
10:11
Speaker 4: going to take me another two years to save up
10:14
Speaker 4: another five thousand dollars by putting money aside each month
10:18
Speaker 4: instead of taking it from what I already have.
10:20
Speaker 3: Yeah, the fact that you're thinking about it now is
10:22
Speaker 3: what maybe more people should be doing thinking about it
10:24
Speaker 3: a bit more in advance so that you can enjoy.
10:26
Speaker 4: That holiday absolutely. And one thing that they always say
10:29
Speaker 4: about travel is the anticipation is half of it. So like,
10:32
Speaker 4: how often do we talk about the travel that we're
10:34
Speaker 4: going to go on, and how often do we have
10:37
Speaker 4: conversations with friends about, you know, what we're going to
10:39
Speaker 4: do when we travel. So I think that travel is
10:42
Speaker 4: fantastic to go on, but it's also something that's really
10:45
Speaker 4: gratifying to look forward to, because having things that we
10:48
Speaker 4: are looking forward to makes us get through the hard
10:50
Speaker 4: days a little bit easier.
10:52
Speaker 3: So, according to Travel Pulse, on average, it takes a
10:54
Speaker 3: year for the average millennial to pay off three thousand
10:57
Speaker 3: dollars of travel debt. Are you at all surprised by that?
11:00
Speaker 3: Do you think we're maybe too flippant with how we
11:02
Speaker 3: spend money on holidays?
11:03
Speaker 4: So it actually all comes back to how much you
11:06
Speaker 4: earn versus how much you spend. I never say to
11:08
Speaker 4: someone that they can't actually travel or that they shouldn't
11:11
Speaker 4: be spending their money on experiences that are really really
11:14
Speaker 4: meaningful to them. I am the first person to say
11:17
Speaker 4: you need to live within your values. So if travel
11:19
Speaker 4: is something that you value the most, contribute a lot
11:22
Speaker 4: of your income to that goal. Put money aside to
11:25
Speaker 4: make sure that that's happening. Don't live your best life
11:28
Speaker 4: here at home, and then also expect to be able
11:30
Speaker 4: to travel as well just because you enjoy it. Savings
11:34
Speaker 4: and investments are something that require a significant amount of compromise.
11:39
Speaker 4: We don't all have unlimited funds, so we need to
11:41
Speaker 4: work out how to use our funds most appropriately. I'd
11:44
Speaker 4: probably be encouraging people to just really take control of
11:47
Speaker 4: their finances. Do a cash flow course, do a budgeting session,
11:51
Speaker 4: organize something so that you are saving every cent and
11:54
Speaker 4: making the most of the money that you earn. But
11:56
Speaker 4: the fact that fifty six percent of millennials are going
11:59
Speaker 4: into debt for travel is actually pretty scary because that's
12:02
Speaker 4: fifty six percent of millennials that aren't working towards their
12:05
Speaker 4: bigger goals.
12:05
Speaker 3: Do you think that that fifty per cent of people
12:08
Speaker 3: have travel in their money values or do you think
12:10
Speaker 3: that maybe they're feeling the pressure from social media on Instagram.
12:13
Speaker 4: I think that it's a bit of both, right, Like
12:15
Speaker 4: I think that if you value going overseas, you're going
12:18
Speaker 4: to spend money on it. I don't think it's just
12:21
Speaker 4: societal pressures. I don't think it's just Instagram, because I
12:24
Speaker 4: think a level headed person will look at Instagram and go, Wow,
12:28
Speaker 4: that Italian holiday that my friend is on. Who knows
12:30
Speaker 4: how much debt she's in or who knows how long
12:33
Speaker 4: she had to save up for that? And we see
12:34
Speaker 4: it all the time, but we don't actually often see
12:37
Speaker 4: people celebrating that they worked really hard for it. Someone
12:40
Speaker 4: that I actually follow on Instagram is Olivia Molly Rodgers,
12:44
Speaker 4: and she recently got back from a holiday and a
12:47
Speaker 4: couple of her posts were really around how hard she'd
12:49
Speaker 4: worked to go on that holiday. And I really appreciated that,
12:53
Speaker 4: Like I could see that she'd worked really hard over
12:54
Speaker 4: a really long period of time to afford that holiday,
12:57
Speaker 4: and you know, her and her partner had saved up
12:59
Speaker 4: for it, made a number of compromises along the way.
13:02
Speaker 4: It's not often that we see people being transparent about
13:05
Speaker 4: how they got to where they're going. I think a
13:07
Speaker 4: lot of people just think it's a given.
13:08
Speaker 1: I would love to see more of that on social media.
13:10
Speaker 4: Absolutely.
13:10
Speaker 1: I saw that they used a spreadsheet as well, which
13:12
Speaker 1: is your.
13:13
Speaker 4: Thing, Oh my gosh, my favorite thing.
13:16
Speaker 1: So Victoria, as someone.
13:17
Speaker 3: Who studied psychology like yourself, why do you think millennials
13:20
Speaker 3: are willing to splash so much spending money on a
13:23
Speaker 3: holiday when they potentially wouldn't do that back home.
13:25
Speaker 4: I think it's really easy to justify spending that you're
13:29
Speaker 4: doing on holiday because you wouldn't do it at home.
13:31
Speaker 4: And you know, you only come here once and this
13:34
Speaker 4: is the only time I'm in Europe, and you know
13:36
Speaker 4: I'm in France, so I probably should just make the.
13:38
Speaker 1: Most of it.
13:39
Speaker 4: I think that we just spend more because we want
13:41
Speaker 4: to make the most of things, but we're not pre
13:43
Speaker 4: planning that spending. More So, as I mentioned before, when
13:46
Speaker 4: I budget for a holiday, I'm pretty lenient on how
13:50
Speaker 4: much e'lse spend each day. Like there have been a
13:52
Speaker 4: couple of times where I've gone overseas and you know,
13:54
Speaker 4: recently we're talking about my New Zealand trip and it
13:56
Speaker 4: wasn't in budget to go to a couple of restaurants,
13:58
Speaker 4: but we did have the cash, and that okay, it
14:01
Speaker 4: just wasn't a part of the plan. I think over
14:03
Speaker 4: budgeting is fantastic because that'll mean one of two things.
14:07
Speaker 4: Either you get to have the best time on your
14:09
Speaker 4: holiday that you didn't realize. You know, there are a
14:11
Speaker 4: couple of things that you planned for, or you come
14:13
Speaker 4: home with extra cash. That's a fantastic position to be in.
14:17
Speaker 3: And I don't think the pre planning necessarily means that
14:19
Speaker 3: we're being the fun police here. I think it means
14:21
Speaker 3: that you can just travel without the stress.
14:24
Speaker 4: Absolutely, And I think by pre planning it puts us
14:27
Speaker 4: in a position where we are leading up to these
14:29
Speaker 4: holidays excited instead of worrying how we're going to pay
14:32
Speaker 4: for them. So, for example, if you're wanting to go
14:35
Speaker 4: on a five thousand dollars holiday in two years, starting
14:39
Speaker 4: now means you only have to put around two hundred
14:41
Speaker 4: dollars away per month. Like that is pretty durable for everybody.
14:45
Speaker 4: It just means starting early and being consistent with your savings.
14:49
Speaker 4: If you really want to go, you'll put that money aside.
14:51
Speaker 1: Exactly.
14:52
Speaker 3: There's this really widespread attitude between millennials that an overseas
14:56
Speaker 3: holiday every year is normal.
14:57
Speaker 1: Do you agree with that?
14:58
Speaker 4: I think I think you have absolutely correct. Is it normal?
15:02
Speaker 4: Absolutely not. I think that it is something that is
15:06
Speaker 4: portrayed in social media as the norm. It is something
15:08
Speaker 4: that our friends talk about. But what we don't talk
15:11
Speaker 4: about is that we're not achieving bigger financial goals. Too
15:14
Speaker 4: often do I talk to people who are telling me
15:17
Speaker 4: that they will never be able to afford a home
15:19
Speaker 4: or you know, it's too hard to save for home deposit.
15:21
Speaker 4: But you look at their history and they've had an
15:24
Speaker 4: overseas holiday every single year.
15:25
Speaker 1: Yeah, I think we.
15:26
Speaker 4: Really need to reevaluate what our values are and how
15:29
Speaker 4: we're prioritizing them. If travel is important to you, fantastic,
15:32
Speaker 4: but how is that impacting your other goals? Should you
15:36
Speaker 4: be going on a trip every year? Or can we
15:38
Speaker 4: stretch it to every two or three years and just
15:40
Speaker 4: really put a focus on really enjoying that holiday and
15:44
Speaker 4: really looking forward to it.
15:45
Speaker 3: I also think we can't forget that a lot of
15:46
Speaker 3: the people we see on social media are influences and
15:49
Speaker 3: they maybe get paid to go overseas and it's easier
15:52
Speaker 3: for them to.
15:52
Speaker 4: Do so one hundred percent, And I think that that's
15:55
Speaker 4: something that we also don't talk about enough. We're introducing
15:58
Speaker 4: all of this, you know, hash tag sponsored content, which
16:01
Speaker 4: I think is really important, but also those people often
16:05
Speaker 4: have higher salaries than the average person. It is really
16:08
Speaker 4: unrealistic for a couple who have a combined income of
16:11
Speaker 4: one hundred thousand dollars to be able to go on
16:13
Speaker 4: an overseas holiday each year. If you're in a position
16:16
Speaker 4: where you earn sixty thousand dollars a year, five thousand
16:19
Speaker 4: dollars holiday each year is a lot of money. That
16:22
Speaker 4: is not something to kind of blink at and just go, well,
16:24
Speaker 4: it's related to my values. That's fantastic. But what are
16:28
Speaker 4: you compromising in the long term, and are you actually
16:31
Speaker 4: happy to compromise that in the long term or are
16:33
Speaker 4: you going to get to a point ten years from
16:35
Speaker 4: now and say, I haven't purchased a home. I wish
16:38
Speaker 4: i'd known earlier that I needed to save or that
16:40
Speaker 4: I needed to make some different decisions.
16:43
Speaker 3: So, with all we've said in mind, what are some
16:45
Speaker 3: tips you'd give to someone who's about to book holiday.
16:47
Speaker 3: Is it a case of picking our travel buddies wisely
16:49
Speaker 3: and knowing our limits.
16:50
Speaker 4: I think that's really valuable. I think being open and
16:53
Speaker 4: honest with your friends about your budget is really important too.
16:56
Speaker 4: If you're going overseas and you have a budget of
16:58
Speaker 4: fifty dollars a day, but your friends have allocated one
17:01
Speaker 4: hundred dollars a day, you are quickly going to run
17:04
Speaker 4: out of money because their expectations of the activities you
17:07
Speaker 4: do on your holiday are going to be different. So
17:09
Speaker 4: I think being really upfront with your friends about how
17:11
Speaker 4: much you're planning on spending and how much you're planning
17:14
Speaker 4: on taking is really important. And if they're taking more,
17:17
Speaker 4: maybe you need to be aware of that and ramp
17:19
Speaker 4: your savings up, or vice versa, maybe they need to
17:22
Speaker 4: realign their goals to a hostel instead of a hotel
17:24
Speaker 4: and make sure that everybody can enjoy that trip. I
17:27
Speaker 4: think also back to what I've been preaching and talking
17:29
Speaker 4: about pre planning your trip, so not just seeing cheap
17:33
Speaker 4: flights and going fantastic, I really want to jump on these.
17:36
Speaker 4: You know, let's go to Bali. You know, the flight
17:38
Speaker 4: and accommodation package cost me less than a thousand dollars.
17:40
Speaker 4: That's fantastic. Do you actually have that one thousand dollars?
17:43
Speaker 4: Like Bali is going to be there next year? Maybe
17:45
Speaker 4: we spend one hundred or two hundred dollars more on flights,
17:48
Speaker 4: but we don't go into debt for that. I don't
17:50
Speaker 4: think cheap flights is ever an excuse for someone to
17:53
Speaker 4: book a holiday, And I think we really need to
17:56
Speaker 4: have a look at the way we're spending because that's
17:58
Speaker 4: quite impulsive.
17:59
Speaker 3: Those places will always be there, those cheap flights will
18:01
Speaker 3: always be there. I think that's something people forget absolutely.
18:04
Speaker 3: And those cheap flights aren't that cheap when they're on credit. Hi, there,
18:12
Speaker 3: you've called the Shoes on the Money Hotline. Do you
18:14
Speaker 3: have a money problem you want help solving. Do you
18:17
Speaker 3: have a money dilemma you just want to chat about.
18:19
Speaker 3: Victoria is here to help. Each week we'll be playing
18:22
Speaker 3: your hotline questions to help make sense of the money
18:24
Speaker 3: mess you may have found yourself in. Give us a
18:26
Speaker 3: call on four three five two nine to three double
18:28
Speaker 3: eighty six and you might find yourself on the show.
18:40
Speaker 5: Hi, guys, I'm a big fan of the show.
18:42
Speaker 6: I love traveling and I want to be able to
18:44
Speaker 6: go on yearly overseas trips whilst I'm in my twenties.
18:46
Speaker 6: So my question is, if I'm earning sixty five thousand
18:49
Speaker 6: a year before tax, what percentage of my income do.
18:52
Speaker 5: You think should be put towards travel?
18:54
Speaker 6: I really want to make the most of my twenties
18:55
Speaker 6: and travel as much as I can, but I also
18:57
Speaker 6: don't want to be living above my means.
19:00
Speaker 5: Wait, thanks so.
19:00
Speaker 1: Much, guys. Thoughts Victoria.
19:03
Speaker 4: So, while she's saying that she has a sixty five
19:06
Speaker 4: thousand dollar income before tax, any budget she puts together
19:10
Speaker 4: needs to be net income. So that's actually what's going
19:12
Speaker 4: into her bank account each and every single month. Her
19:15
Speaker 4: net nearly income is about fifty two thousand dollars, so
19:18
Speaker 4: that's what she's earning. I think that there's never actually
19:21
Speaker 4: an appropriate amount to put towards travel. Again, it goes
19:24
Speaker 4: back to your values. If five thousand dollars holidays each
19:27
Speaker 4: year are aligned to your values, that's fantastic. As long
19:31
Speaker 4: as you're not working towards a bigger goal, that's suffering.
19:34
Speaker 4: So if you're saving for home, or you're putting money
19:36
Speaker 4: into an investment, or you are in a position where
19:39
Speaker 4: you just want to be saving for life, is a
19:42
Speaker 4: five thousand dollar holiday every single year going to align
19:45
Speaker 4: to your goals? Or should you take a step back
19:47
Speaker 4: and say, you know what, whilst I earn sixty five
19:50
Speaker 4: thousand dollars a year, maybe I should be in a
19:52
Speaker 4: position where I'm taking a holiday every second year and
19:54
Speaker 4: maybe saving two and a half thousand dollars a year,
19:57
Speaker 4: or potentially choosing locations that are a lot cheap. So
20:00
Speaker 4: we all know European vacations are so expensive, but Bali's
20:04
Speaker 4: a little bit more reasonable. So maybe having a think
20:07
Speaker 4: about the style of holiday that you're taking and not
20:10
Speaker 4: assuming you can go to Europe every single year, maybe
20:13
Speaker 4: it includes some closer Asian countries that are a lot cheaper,
20:16
Speaker 4: and maybe once every five or six years you do
20:19
Speaker 4: the big European holiday.
20:21
Speaker 1: You don't have to regret anything, No, absolutely not.
20:24
Speaker 4: But I think that that comes back to your values.
20:27
Speaker 4: And I sound so preachy when I talk about this,
20:30
Speaker 4: but everybody's money story is different. Everybody has a different
20:33
Speaker 4: set of values and a different set of beliefs around money.
20:36
Speaker 4: And if travel is something that you want to do
20:38
Speaker 4: and you think that that is absolutely appropriate, go for it.
20:42
Speaker 4: But I think that we should also be looking at
20:44
Speaker 4: our bigger long term goals because often travel is a
20:47
Speaker 4: really short term goal that could impact our long term goals.
20:56
Speaker 1: Now let's jump into our money diary segment. Let's go.
21:06
Speaker 3: Today's money dary is from twenty one and methodical a
21:08
Speaker 3: woman who takes a relationship with money very seriously.
21:11
Speaker 7: I have a lot of bank accounts, but there's structure
21:16
Speaker 7: to how all of my accounts are set up. I
21:18
Speaker 7: have direct transfers, direct debits, all set up so that
21:21
Speaker 7: I don't have to think about it too much and
21:23
Speaker 7: I can't be tempted to spend too much.
21:25
Speaker 1: Yeah.
21:26
Speaker 7: I was always a savor as a kid, but I
21:28
Speaker 7: think as I've grown up more and seeing how money
21:32
Speaker 7: has affected the lives of family and friends quite a
21:34
Speaker 7: bit in negative ways, I just really keen on making
21:38
Speaker 7: sure that I have myself set up financially so I
21:40
Speaker 7: won't ever have to depend on anyone else.
21:42
Speaker 6: We know.
21:43
Speaker 3: Twenty one and methodical is the kind of empowered woman
21:45
Speaker 3: who knows where she wants to go. So how much
21:47
Speaker 3: does she earn and how much has she got saved?
21:50
Speaker 7: So, because I'm a full time student, I work three
21:53
Speaker 7: days a week at a supermarket, I earn about four
21:56
Speaker 7: hundred and fifty dollars a week and I have currently
21:59
Speaker 7: about five and a half thousand in savings. Yeah, so
22:02
Speaker 7: I have twenty five percent of my wage gets transferred
22:05
Speaker 7: across directly to some of my savings accounts every week.
22:09
Speaker 3: So we know how twenty one and methodical gets paid,
22:11
Speaker 3: but what exactly happens to that money after it's deposited
22:14
Speaker 3: into her account?
22:15
Speaker 7: A portion gets transferred into an account for investing, and
22:19
Speaker 7: then another portion goes into an emergency fund, and then
22:22
Speaker 7: another portion of that twenty five percent goes into saving
22:25
Speaker 7: for trips.
22:26
Speaker 1: How does twenty one methodical go with investing?
22:28
Speaker 7: Though?
22:29
Speaker 5: Yes, so I do invest.
22:30
Speaker 7: I've been investing for about three years now. Yeah, So
22:34
Speaker 7: when I was in year twelve, a few months before
22:37
Speaker 7: I turned eighteen, I started doing a lot of research
22:39
Speaker 7: into investing because I knew it was something that I
22:40
Speaker 7: wanted to get into, so that I had sort of
22:43
Speaker 7: the research treaty to go for when I turn eighteen
22:44
Speaker 7: and I could legally invest. So over the past three years,
22:47
Speaker 7: I think I've invested about six thousand dollars. That's a
22:50
Speaker 7: combination of investing in individual shares through Comsec. I've had
22:57
Speaker 7: a raise account for maybe two two and a half years,
23:00
Speaker 7: an employee share plan, and recently I've started adding some
23:04
Speaker 7: ETFs as well.
23:05
Speaker 1: And what about her debts?
23:07
Speaker 7: So currently my hex stet is sitting at about thirty
23:09
Speaker 7: thousand dollars just over. By the time I finish my
23:13
Speaker 7: undergrad degrees, I'll probably be sitting at about fifty thousand
23:16
Speaker 7: in a couple of years time, and I currently have
23:18
Speaker 7: about three hundred and fifty dollars sitting in my after
23:22
Speaker 7: pay account. Obviously, I'd prefer to not have any at
23:26
Speaker 7: all on after pay, but as Victoria said in the
23:30
Speaker 7: after Bay episode, I believe it was I kind of
23:32
Speaker 7: use it if i'm buying. If I have to buy
23:34
Speaker 7: something specific, like an outfit for an event, and I
23:37
Speaker 7: buy a few options, that's pretty much.
23:39
Speaker 5: The only time I use it.
23:40
Speaker 7: The reason it's sitting at three fifty at the moment
23:43
Speaker 7: is because I've put a couple of my boyfriend's birth
23:45
Speaker 7: their presents on it because I'm not sure that I'll
23:47
Speaker 7: keep them, like they might be returned. So when I
23:49
Speaker 7: think there's a good chance of I only use after
23:52
Speaker 7: Bay when I think there's a pretty high chance of
23:54
Speaker 7: that I'll be returning stuff, just so that my money
23:56
Speaker 7: doesn't get caught up in limbo. Yeah, hextet wise, I mean,
23:58
Speaker 7: it's not really anything I can do about it. I'm
24:00
Speaker 7: not too worried about it because I don't know it's.
24:03
Speaker 5: The one dead that dies with you, So it's the
24:05
Speaker 5: one I'm the least worried about.
24:06
Speaker 3: So does twenty one and Methodical have any good money
24:09
Speaker 3: habits that she's especially proud of.
24:10
Speaker 7: I think how I have my bank accounts structured is
24:13
Speaker 7: pretty good. Because I have accounts with multiple different institutions.
24:17
Speaker 7: It's all quite separated, so I can't dip into save
24:20
Speaker 7: these accounts too easily.
24:21
Speaker 5: Yeah, I think, yeah, that's probably my best. I don't
24:23
Speaker 5: spend too much.
24:24
Speaker 7: I'm not in an impulse shop or anything, so I
24:26
Speaker 7: always sleep on a purchase, like a significant purchase, before
24:29
Speaker 7: I make it. And yeah, I'm really good at prepping
24:32
Speaker 7: lunches and things like that for work in UNI, I
24:34
Speaker 7: kind of let myself buy a lunch out at Union
24:36
Speaker 7: once a week. And I don't let myself buy a
24:38
Speaker 7: coffee unless I've got a keep cup. That's my and
24:40
Speaker 7: I'm notoriously about it, remembering you bringwa keep cup, so
24:42
Speaker 7: it stops me from wasting money on coffee.
24:44
Speaker 1: So what about her worst money habits?
24:46
Speaker 7: Up until this year, since I finished school, I've normally
24:50
Speaker 7: save up really hard throughout the year and then blow
24:52
Speaker 7: it all on an overseas trip. So This year is
24:54
Speaker 7: actually the first year that I don't have an overseas
24:56
Speaker 7: trip planned.
24:57
Speaker 5: And I won't be going overseas, which is not.
24:59
Speaker 7: Too I guess because it's an experience, it's not wasting
25:02
Speaker 7: money on material things. But I'm by the point now
25:04
Speaker 7: where I want to start knuckling down and saving rather
25:07
Speaker 7: than coming back from a trip to a very low
25:10
Speaker 7: balance in my savings account. And I also spend a
25:14
Speaker 7: lot of money on gifts. That's probably I waste a
25:17
Speaker 7: lot of money on gifts. I kind of have a
25:19
Speaker 7: money is no object or when it comes to presence,
25:21
Speaker 7: which I mean it's good for other people's benefit, but
25:24
Speaker 7: I mean, yeah, I kind of need to start rating
25:27
Speaker 7: that in a bit because I'm not an impulse shoper
25:29
Speaker 7: for myself.
25:30
Speaker 5: But when it comes to presence, if I see something
25:31
Speaker 5: that I think someone.
25:32
Speaker 7: Will like, I'll just buy it and stop pilot for
25:34
Speaker 7: when it is their birthday of Christmas.
25:36
Speaker 5: So that's where quite a bit of my money goes.
25:38
Speaker 3: So what's twenty one and methodical actually saving for what's
25:42
Speaker 3: her big money goal?
25:43
Speaker 7: So my biggest at the moment now that I've not
25:47
Speaker 7: planning on doing many more overseas trips for the time
25:50
Speaker 7: being is saving towards the house, so I mean, I'm
25:52
Speaker 7: not that's not going to be anytime soon, and I'm
25:54
Speaker 7: still studying. But ideally, if I could have my half
25:58
Speaker 7: of the deposit per a house in about five years time.
26:01
Speaker 5: That's the goal at this point. So we'll see how
26:03
Speaker 5: that goes.
26:04
Speaker 3: So how about today's money? Diaristorrate her own relationship with
26:06
Speaker 3: money if we forced her to give herself a grade.
26:09
Speaker 5: I was not looking forward to this question.
26:11
Speaker 7: Maybe in a yeah, I'd say about an A because yeah,
26:16
Speaker 7: I think now I'm really starting to get my act
26:19
Speaker 7: together with money, but there's always been for improvement.
26:22
Speaker 1: So I love her. I do too.
26:25
Speaker 3: I think she's doing incredible stuff researching about investing in
26:28
Speaker 3: chairs before eighteen.
26:29
Speaker 1: She's so cool. That is amazing.
26:32
Speaker 4: I think she's fantastic. I thought that she had a
26:34
Speaker 4: really great little money story, and I really like that
26:36
Speaker 4: she'd planned so much of it to be twenty one
26:40
Speaker 4: and have a six thousand dollars share portfolio that is
26:42
Speaker 4: going to compound over time. That is incredible. Also, having
26:46
Speaker 4: a good savings buffer fantastic. And I loved that she
26:50
Speaker 4: talked about after pay. So I think that we throw
26:52
Speaker 4: that under the bus so often, But it sounds like
26:55
Speaker 4: she's using it really constructively. So I think that if
26:58
Speaker 4: she's putting a lot of thought in to it, like
27:00
Speaker 4: and you're using it in a way that is constructive
27:03
Speaker 4: for you and it's not putting you into debt and
27:04
Speaker 4: you're not purchasing things that you wouldn't otherwise purchase, like,
27:08
Speaker 4: go for it. But at the same time, it sounds
27:10
Speaker 4: like maybe she needs to put a little bit of
27:13
Speaker 4: a budget in place around gifts. So I'm a massive
27:16
Speaker 4: spender on gifts as well.
27:18
Speaker 1: That's why we're friends.
27:19
Speaker 4: Yeah, So I feel like gifts are something that make
27:22
Speaker 4: me feel really good about, you know, our friendship or
27:25
Speaker 4: you know what I want to give other people. I
27:27
Speaker 4: think it to me makes me feel really gratified. But
27:31
Speaker 4: I think making sure it's in the budget is really important.
27:33
Speaker 4: So as a part of my budget that I keep
27:36
Speaker 4: and guys that template is actually in the She's on
27:39
Speaker 4: the money group if you want to copy it. It
27:41
Speaker 4: includes gifts. So I include gifts of Christmas and for birthdays,
27:44
Speaker 4: and I try to be quite generous with that amount
27:47
Speaker 4: so that I don't end up overspending and not meeting
27:50
Speaker 4: my goals. In other areas. So potentially having a sit
27:53
Speaker 4: down writing down the names of people that you purchase
27:55
Speaker 4: gifts for each year and allocating a specific budget to
27:58
Speaker 4: them is important. I really like that she said that
28:01
Speaker 4: she plans for it sometimes and really stockpiles gifts for Christmas.
28:05
Speaker 4: I think if that's the case, potentially don't purchase it yet.
28:08
Speaker 4: Maybe if you're already stockpiling things, have a bit of
28:10
Speaker 4: a shop around online and see if you can get
28:13
Speaker 4: it cheaper, or there's an alternative that you could present
28:16
Speaker 4: that maybe doesn't cost you.
28:17
Speaker 1: As much, should go on sale.
28:18
Speaker 4: Yeah, exactly. So maybe having a list like I do
28:21
Speaker 4: in your phone of all of the present ideas that
28:23
Speaker 4: you've got could help. But I loved her. I thought
28:26
Speaker 4: that she was doing really well and she's absolutely on
28:28
Speaker 4: the right track. And I'm so excited that we've finally
28:30
Speaker 4: got someone on the podcast who rates themselves as an
28:33
Speaker 4: a because I think that that's really important. I think
28:36
Speaker 4: she's quite inspirational, very self.
28:38
Speaker 1: Aware, and she sounds like a planner, which we know
28:39
Speaker 1: you love.
28:40
Speaker 4: I do love that. I'm sure her spreadsheets are really
28:42
Speaker 4: pretty as well.
28:44
Speaker 3: That's all we have time for today. Unfortunately, just before
28:46
Speaker 3: we head off. As always, let's quickly wrap the boring
28:49
Speaker 3: but important stuff. The advice shared on She's on the
28:51
Speaker 3: Money is general in nature and doesn't consider your individual circumstances.
28:55
Speaker 3: She's on the Money exists purely for educational purposes only
28:57
Speaker 3: and shouldn't be relied upon to make an investment or
29:00
Speaker 3: a financial decision.
29:01
Speaker 1: And of course we promise.
29:02
Speaker 3: Victoria Divine is an authorized representative of Consulting Financial Advisors
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Speaker 3: double nine to five AFSL two three.
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Speaker 1: Oh three two three.
29:14
Speaker 4: I bet you know my AFSL and ABN more than
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Speaker 4: you know your parents' mobile.
29:18
Speaker 3: Like, I'm pretty sure I don't know those numbers by way,
29:20
Speaker 3: but I'm pretty sure I rememberized it.
29:21
Speaker 4: Yeah, I'm impressed to I'm gonna try going offscript next time,
29:24
Speaker 4: all right, I'll wait for it, all right. So Facebook group, guys,
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Speaker 3: of She's on the Money. See you next week, guys.
29:47
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