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MONEY DIARIES: Growing up with privilege doesn't mean you'll always have wealth · She's On The Money

0:00
Speaker 1: She's on the Money. She's on the Money.
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Speaker 2: Hello, and welcome to She's on the Money, the podcast
0:26
Speaker 2: for millennials who want financial freedom. My name is Tony Lodge,
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Speaker 2: and joining me for another Shot Back Money Diary is
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Speaker 2: Victoria Divine.
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Speaker 3: Hello, Hello, and welcome to Money Diaries.
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Speaker 4: Is that what you say Diaries?
0:40
Speaker 3: Shot Back Money Diaries, which is really exciting. Before this
0:44
Speaker 3: episode started, you were telling me it's going to be
0:46
Speaker 3: a goodie, So why don't we as always just dive
0:49
Speaker 3: straight on in?
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Speaker 4: All right, here we go.
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Speaker 2: I grew up pretty privileged, often coming home to random
0:55
Speaker 2: gifts from my parents on my bed, and as a
0:57
Speaker 2: teenager being sent to do groceries, being told we have
1:00
Speaker 2: no budget. This did not set me up for success
1:02
Speaker 2: in the real world. While I've achieved some big goals,
1:05
Speaker 2: my husband and I have less than one thousand dollars
1:08
Speaker 2: in the bank and we need to get into better
1:09
Speaker 2: savings habits, and we have our Money Diarist on the
1:13
Speaker 2: line of course at we ways.
1:15
Speaker 3: Hello, Money Darist, Welcome, how are you Bie?
1:19
Speaker 4: Good? Thank you?
1:20
Speaker 2: And you were just telling us before we started recording
1:23
Speaker 2: that you've actually had a little bit of a shift
1:25
Speaker 2: in your Money Diary story.
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Speaker 5: Which we would love the update on. Yeah, so we.
1:31
Speaker 4: Thankfully now have more than one thousand dollars in the bank. Yay, congratulations,
1:37
Speaker 4: thank you. I'm very happy about it now, but it's
1:40
Speaker 4: not because we saved or learned any new habits. It's
1:44
Speaker 4: because I got a good tax return back and I
1:47
Speaker 4: also got a yearly bonus from work. So we now
1:50
Speaker 4: have just under thirteen thousand dollars in the bank. How nice?
1:55
Speaker 3: Does that feel good?
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Speaker 4: Yes? Yes, I was very very stressed before, but I
2:01
Speaker 4: think all the underlying issues are still there, and I'm
2:04
Speaker 4: very stressed about losing that money now as well. While
2:08
Speaker 4: there is a bit of ease when I'm swiping my
2:11
Speaker 4: card out, I'm still having that little bit of stress
2:14
Speaker 4: wanting to like hang on to every cent that we have.
2:16
Speaker 4: M h. Yeah.
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Speaker 2: Well, because it's that easy come, easy go thing, isn't it,
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Speaker 2: Like you think, Oh my gosh, all of a sudden,
2:23
Speaker 2: this feels so much simpler.
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Speaker 5: I really don't want it to be taken away from me.
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Speaker 4: Yeah. Yeah, I'm worried about getting too comfortable.
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Speaker 3: Which is completely understandable. So without further ado, let's jump
2:37
Speaker 3: straight into the money diary questions. Because I feel like
2:40
Speaker 3: I've got some chats I'd like to have about the
2:42
Speaker 3: emergency fund and how you're feeling about that and maybe
2:45
Speaker 3: what you structure yourself as now. But first, cab Off,
2:48
Speaker 3: the rank is what is your attitude towards money?
2:52
Speaker 4: I actually have stressed about this question.
2:54
Speaker 3: Oh no, I'm sorry.
2:56
Speaker 4: Oh it's fine. I just feel like it changes every day,
2:59
Speaker 4: depending what mood I wake up in. Its different, So
3:03
Speaker 4: that's probably why I'm also quite frazzled with our money
3:06
Speaker 4: as well. When I was growing up, my mom, she's
3:10
Speaker 4: I described her as missus Claws. As a person, she
3:13
Speaker 4: is cute, she's the best. She's like five foot and blonde,
3:17
Speaker 4: like the higher the hair, the closer to God type woman.
3:22
Speaker 4: So she really spoiled us growing up. Like she just
3:24
Speaker 4: loves to give people gifts and really, I don't know,
3:29
Speaker 4: make them feel loved, and she has done that through
3:32
Speaker 4: money and material possessions. So that's her attitude towards money.
3:37
Speaker 4: Whereas my dad, he's worked really hard his whole life.
3:40
Speaker 4: He was a GM for really big mining companies growing up,
3:44
Speaker 4: so he earned a lot of money, but he was
3:46
Speaker 4: working so much that he had no idea how much
3:49
Speaker 4: milk cost at the grocery store. Like, I never saw
3:52
Speaker 4: my dad growing up because he would come home and
3:54
Speaker 4: full asleep on the couch and be exhausted. So he's
3:58
Speaker 4: really frugal and would always get crankier my mom for
4:00
Speaker 4: spending so much money, So I was hiding credit card
4:03
Speaker 4: bills and things like that. So I'm always like on
4:07
Speaker 4: two ends of the spectrum. Like my dad really influenced
4:11
Speaker 4: me about being stressed about money and wanting to be frugal,
4:15
Speaker 4: but then I treat myself mentality from my mum is
4:18
Speaker 4: so strong.
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Speaker 3: So so they definitely had different money stories. I'm assuming
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Speaker 3: and that has shaped you into accommodation of both.
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Speaker 4: You could say, yeah, definitely.
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Speaker 3: Do you find that those two things are really conflicting
4:34
Speaker 3: in your life? Like you're just like this is the
4:36
Speaker 3: right way, No, this is the right way. Have you
4:39
Speaker 3: found what works for you personally?
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Speaker 4: Yet? I don't think we've found what works yet. I
4:44
Speaker 4: say we because my husband and I share every cent
4:47
Speaker 4: of our money. There's nothing that's separate, so we're trying
4:52
Speaker 4: to juggle that as well. But I definitely haven't found
4:55
Speaker 4: what works and what I feel good about. I'm all
4:59
Speaker 4: or not person so when I'm treating myself. I'm whatever
5:03
Speaker 4: makes me happy, let's spend it. The next hour wake
5:07
Speaker 4: up and be like, I can't spend five dollars on
5:09
Speaker 4: a coffee. That's insane. I have to not leave the
5:13
Speaker 4: house getting petrol sometimes, I feel is an unnecessary purchase.
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Speaker 3: So yeah, okay, so there's not really that level of
5:21
Speaker 3: balance there yet to have. All right, well, this money
5:25
Speaker 3: is actually set aside for stuff like coffees to look
5:27
Speaker 3: after myself and have balance in my life. And this
5:31
Speaker 3: is really common, by the way. This is not something
5:34
Speaker 3: money direst that you're alone on and I think a
5:36
Speaker 3: lot of people listening are going to be like, oh
5:38
Speaker 3: my gosh, that is me. And it's often because when
5:41
Speaker 3: we approach budgeting, we make the assumption that budgeting is
5:45
Speaker 3: about restriction and budgeting is about, you know, spending as
5:48
Speaker 3: little as possible and being really frugal and really smart
5:51
Speaker 3: with our money. We're in reality, budgeting is actually about
5:55
Speaker 3: understanding where your money flows in line with your values,
5:58
Speaker 3: like how many dollars are coming in, and then if
6:01
Speaker 3: we divvied them up based on what we're spending, not
6:03
Speaker 3: on what we hoped to we are spending, are we
6:06
Speaker 3: comfortable with that, and then if we're not, there are
6:08
Speaker 3: some tweaks that we can make. But if you're like, no,
6:12
Speaker 3: I'm money Dost, like I can have a coffee. I
6:16
Speaker 3: deserve a coffee, you know what, My limit's three a
6:18
Speaker 3: week or something along those lines, If you build that
6:21
Speaker 3: into your budget, there's no guilt because you know you're
6:24
Speaker 3: still achieving those bigger financial goals, Whereas I often find
6:28
Speaker 3: that when people say things like you've just said, it's
6:31
Speaker 3: because they don't have a strategic and super clarified goal
6:35
Speaker 3: outlined of what they're trying to achieve, so that then
6:38
Speaker 3: when they do spend that five dollars on coffee, they're like,
6:41
Speaker 3: oh my gosh, Like this is just reminding me that
6:43
Speaker 3: I haven't got that bigger goal solidified and I don't
6:45
Speaker 3: know what that really looks like. So this five dollars
6:48
Speaker 3: probably could go towards that, when in reality, you're probably fine,
6:52
Speaker 3: we just need to put a plan in place and
6:55
Speaker 3: I'll do that for you later, I promise, money Dost.
7:00
Speaker 3: So moving on to the next question, Money Diarist, what
7:03
Speaker 3: do you do for work and how much money do
7:06
Speaker 3: you earn.
7:07
Speaker 4: I'm a content manager for an insurance company and I'm
7:10
Speaker 4: on eighty nine thousand dollars.
7:12
Speaker 3: Cool, very nice, and to be a little bit pervy.
7:16
Speaker 3: You said you share all your money with your partner.
7:18
Speaker 3: What does he do? How much money does he earn?
7:21
Speaker 4: Interesting question? During COVID he started his own business, so
7:24
Speaker 4: he's a painter, so I'm sure exactly how much he earns,
7:29
Speaker 4: but he tries to pay himself about between one thousand
7:32
Speaker 4: and fifteen hundred a week. Oh cool, his business has
7:35
Speaker 4: done so well. I'm so proud. He's so busy and
7:37
Speaker 4: booked up, so it's good. It's just we don't actually
7:41
Speaker 4: know how much he's earning. So that's probably also why
7:44
Speaker 4: we're a bit confused about goals and budgeting as well.
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Speaker 3: Yeah, totally. And that's really common in the first year
7:52
Speaker 3: of a brand new business because money would be really sporadic,
7:56
Speaker 3: like one month he might have a killer month, and
7:58
Speaker 3: then the next month he might be, you know, a
8:00
Speaker 3: little bit sparser than he was. So you kind of
8:03
Speaker 3: live it up big in the first month and go,
8:05
Speaker 3: oh my gosh, like we're doing so well, and then
8:07
Speaker 3: the next month you're like, oh my gosh, we're not
8:09
Speaker 3: doing well at all. What if this is the norm?
8:12
Speaker 3: So I feel like their first twelve months in business,
8:14
Speaker 3: you've really just got to embrace the bear minimum, like
8:18
Speaker 3: what is your rent? What are your bills?
8:20
Speaker 4: Full stop?
8:20
Speaker 3: End of story. We're not trying to smash it out
8:23
Speaker 3: of the park. We're just trying to make sure our
8:25
Speaker 3: business exists in another twelve months.
8:28
Speaker 5: Yeah, and if.
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Speaker 2: You're also in that situation, anybody listening, You and Georgia
8:34
Speaker 2: recorded a great episode called budgeting for Variable Income. So
8:37
Speaker 2: for anybody that's listening and maybe is a sole trader
8:40
Speaker 2: or working for themselves and your income is a bit
8:42
Speaker 2: hard to predict, it's a really good episode.
8:44
Speaker 5: For anybody that is going through that as well. Just
8:47
Speaker 5: a little shameless plug.
8:48
Speaker 3: Shameless plug like on our own podcast makes just like
8:52
Speaker 3: selling tickets on ourselves. I like it selling tickets to
8:55
Speaker 3: the free content we produce. You're welcome. Next question, Diarist,
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Speaker 3: is what is currently your big money goal?
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Speaker 4: Again, I don't know. We built our house three years ago,
9:08
Speaker 4: so we've done that, paying our mortgage very comfortably. It's
9:13
Speaker 4: not something I stress over. There's nothing that we want
9:17
Speaker 4: to be honest, which is a nice position to be in,
9:20
Speaker 4: but I mean I don't feel like we have a
9:22
Speaker 4: safety net either. Yeah, Okay, my husband does want to
9:25
Speaker 4: get into investing in property in the future, and that's
9:29
Speaker 4: his big goal because being a trade that's really focused
9:33
Speaker 4: on manual labor, he can't do that forever. So he
9:36
Speaker 4: really liked to build a property of portfolio. So I
9:38
Speaker 4: know that needs a lot of money, but we just
9:40
Speaker 4: haven't because it seems so far off in the future.
9:43
Speaker 4: We haven't started putting anything aside for that at all.
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Speaker 4: So we've got big, lofty ideas and goals, but we
9:51
Speaker 4: just haven't put any of that into action yet.
9:54
Speaker 3: Yeah, and that can be really hard to plan for
9:56
Speaker 3: because what does that actually mean? And you say property,
9:59
Speaker 3: but are you talking apartments? Are you guys going to
10:01
Speaker 3: go and subdivide a block, Are you guys going to
10:03
Speaker 3: go buy a house and flip it, or are you
10:05
Speaker 3: going to move into.
10:06
Speaker 4: Another house and rent out this one?
10:08
Speaker 3: Like, there are so many variables when it comes to
10:10
Speaker 3: property investing that it can feel so far off at
10:14
Speaker 3: the same time as going I just want a strategy.
10:16
Speaker 3: I just want to know what we're doing and how
10:18
Speaker 3: it works. But that's a very exciting strategy and I
10:22
Speaker 3: want to know all about your home building process, but
10:24
Speaker 3: not yet Tony our products will get to it in
10:26
Speaker 3: a minute. Money Diarist, Do you currently have any investments?
10:32
Speaker 4: No, none, so apart from super we have nothing awesome.
10:37
Speaker 3: I mean we're learning, and you said before that your
10:40
Speaker 3: property portfolio of the future is one of your big goals.
10:44
Speaker 3: Next question is do you currently have any debts?
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Speaker 4: If you did this interview two weeks ago, I could
10:50
Speaker 4: have happily said only our mortgage. But two weeks ago
10:55
Speaker 4: we decided to buy a new car. So we have
11:00
Speaker 4: a loan now of fifty six thousand for that car.
11:03
Speaker 3: Oh fancy, what made you pick that particular car?
11:07
Speaker 4: We got a Tesla, so I really like the environmental
11:11
Speaker 4: side of that, not having to get petrol. I mean
11:14
Speaker 4: there are a lot of savings as well. We have
11:16
Speaker 4: solar on our house, so charging the car. We're currently
11:20
Speaker 4: in credit all the time for our electricity bill. Anyway. Oh,
11:25
Speaker 4: so we charged the car at home and it's we
11:28
Speaker 4: haven't got our first electricity bill since having it, but
11:31
Speaker 4: theoretically we will be paying maybe thirty dollars a quarter.
11:36
Speaker 2: Now, wow, that's a really So when you said that,
11:39
Speaker 2: I was like, Oh, that wouldn't work for me. And
11:41
Speaker 2: then I'm like, you had a whole plan. That's like
11:44
Speaker 2: an incredible plan that you guys sat down and went,
11:46
Speaker 2: hang on, we're always in credit with our power anyway,
11:49
Speaker 2: so this could be a huge money win. Like you
11:51
Speaker 2: said earlier, having to get petrol feels like such a
11:54
Speaker 2: burden because you're like, we're paying for something, and obviously
11:57
Speaker 2: the environmental factors as well.
11:58
Speaker 5: But I love this little When you started saying that,
12:01
Speaker 5: I was like, okay, and now I'm like, oh my gosh.
12:04
Speaker 4: I was so worried about it because I've actually never
12:07
Speaker 4: had a car loan before. I was very lucky. My
12:09
Speaker 4: parents brought my first car, and then at my second car,
12:13
Speaker 4: they took the money out of their mortgage and I
12:16
Speaker 4: was paying them back every fortnight. But once we decided
12:20
Speaker 4: to buy a house, they said, don't We've paid us half,
12:22
Speaker 4: don't worry about the rest, just focus on your savings.
12:25
Speaker 3: How nice.
12:26
Speaker 4: Yeah, it was. We're very lucky because we get a
12:30
Speaker 4: lot of support from them, and it's really helped us,
12:33
Speaker 4: I guess, get a leg up in other areas of
12:36
Speaker 4: our life. So I was hesitant to get this car
12:39
Speaker 4: because you had never had a car loan before. I
12:42
Speaker 4: just finished paying off my hex dead I was really
12:45
Speaker 4: liking not having debt at all.
12:47
Speaker 3: Any kind of day. Yeah, and it's nice to say
12:50
Speaker 3: you're debt free. But from my understanding, you've obviously thought
12:53
Speaker 3: about this. It wasn't like, oh, so we're walking down
12:56
Speaker 3: the street with the coffee and we saw this car.
12:59
Speaker 3: Just couldn't resist. Now I have a really big car loan.
13:01
Speaker 3: You were like, oh, actually, we've done the research. We
13:04
Speaker 3: have worked out that we're actually going to save a
13:06
Speaker 3: whole heap of money on petrol. Like, I don't think
13:08
Speaker 3: it's the worst idea. I've got some questions about that.
13:11
Speaker 3: I will leave it till we get to the second
13:13
Speaker 3: part of the show though. So next question is do
13:17
Speaker 3: you currently use shopback sporadically?
13:20
Speaker 4: I guess it goes along with my attitude towards money.
13:23
Speaker 4: When I want to treat myself, I'll use it. Otherwise
13:26
Speaker 4: I'll ignore it for months.
13:28
Speaker 5: So how do.
13:28
Speaker 4: You use it?
13:29
Speaker 3: Is it something that you're like, all right, well, it's
13:31
Speaker 3: just on my browser and if I am shopping online,
13:33
Speaker 3: I add it on. It's not something that you're you know,
13:35
Speaker 3: we had a money diarist recently. He was like, oh, no,
13:38
Speaker 3: I will buy absolutely. She probably would have tried to
13:40
Speaker 3: buy the Tesla on shop back. If we've given her
13:42
Speaker 3: the opportunity, I think.
13:44
Speaker 4: Yeah, it's just connected to my browser. If I'm shopping
13:47
Speaker 4: and it pops up, I'll use it. I've actually never
13:50
Speaker 4: withdrawn anything from it, so it's just sitting there, just
13:53
Speaker 4: bopping along. Yeah. Yeah, so there's no rhyme or reason,
13:56
Speaker 4: and probably not using it to its full advantage, to
13:59
Speaker 4: be honest, because yeah, very sporadic in what I do.
14:02
Speaker 3: Fair enough money, diros. The next question is what is
14:07
Speaker 3: your best money habit?
14:09
Speaker 4: I think about purchases that I make a lot, the
14:12
Speaker 4: big purchases, so like the car Loan, I really had
14:17
Speaker 4: to think it over. We've been talking about it for
14:20
Speaker 4: three plus months, maybe even longer than that. And I
14:25
Speaker 4: don't buy really expensive items like with clothes. I'm not
14:30
Speaker 4: out there buying designer things, even though a lot of
14:32
Speaker 4: my friends have the nice Louis Vuitton handbags and stuff.
14:36
Speaker 4: Happy to go to Collett or something like that, get
14:39
Speaker 4: a fifty dollars.
14:40
Speaker 3: Handbag, Yeah totally.
14:42
Speaker 4: Yeah, I'm spending I guess within the brands that are
14:46
Speaker 4: within our means. Yeah.
14:47
Speaker 3: Fair And in comparison to that, what is your worst
14:51
Speaker 3: money habit.
14:52
Speaker 4: We don't keep track of what we're spending, and we
14:55
Speaker 4: only have two well we have one bank account really,
14:59
Speaker 4: so everything just gets pulled. It's really hard to keep
15:03
Speaker 4: track of what you're saving, what you're spending. Yeah, what's
15:06
Speaker 4: going in and out? Don't really have an idea?
15:09
Speaker 3: Yeah yeah, and that's again so so common, Money Diarist.
15:14
Speaker 3: I will sort that out for you. We're gonna get
15:15
Speaker 3: you set up later on our Budgeting cash Flow Masterclass
15:18
Speaker 3: because I think that that is going to revolutionize the
15:21
Speaker 3: way that you do your budgeting. Obviously, I reckon it's
15:24
Speaker 3: pretty impressive. I've built it so like obviously I've got
15:27
Speaker 3: a few tickets on myself, but I've had literally thousands
15:30
Speaker 3: of people do it and go oh my gosh, like
15:32
Speaker 3: I only had one bank account and felt guilty about coffee,
15:35
Speaker 3: and I'm like, oh, money diarist is going to love this.
15:39
Speaker 3: And final question before we go to a quick break,
15:42
Speaker 3: if we asked you to give yourself a money grade,
15:45
Speaker 3: what would you give yourself?
15:47
Speaker 4: I think a C plus just because we've been able
15:51
Speaker 4: to do some really big things. But we're quite lucky
15:54
Speaker 4: in the way that we've come about those big things.
15:57
Speaker 4: It hasn't been rhyme or reason or determin nation on
16:01
Speaker 4: our part to get those things done.
16:03
Speaker 3: Yeah cool, All right, well let's have a chat about
16:06
Speaker 3: that after this quick break. All right, money diarrist we
16:09
Speaker 3: are straight back into it. And I've got questions, probably
16:14
Speaker 3: not in the realm that you think I do. And
16:17
Speaker 3: the reason is because I have had so many questions
16:20
Speaker 3: about this recently, and that's on car loans and you've
16:23
Speaker 3: said that you've recently taken one out. Can you tell
16:26
Speaker 3: us that process how it worked, but also how much
16:29
Speaker 3: are you paying each and every single month, because that
16:31
Speaker 3: sounds like a really big car loan to me.
16:34
Speaker 4: Yes, I found the process just as stressful as getting
16:37
Speaker 4: our mortgage, to be honest, Oh my gosh, felt like
16:41
Speaker 4: the same amount of paperwork and the same amount of
16:43
Speaker 4: phone calls. It was intense. And I'm the only one
16:46
Speaker 4: on the loon because my partner is a soul trader
16:49
Speaker 4: with just twelve months under his belts, so it was
16:53
Speaker 4: just on me a lot of paperwork asking about our expenses.
16:57
Speaker 4: Our expenses came under the average, so I had a
17:01
Speaker 4: lot of follow up phone calls as to why you
17:04
Speaker 4: were like uncroogle, it's not that weird. I just said, oh,
17:07
Speaker 4: we've got sol or we don't pay electricity bills. There
17:11
Speaker 4: were just a few things that were confronting. I guess
17:14
Speaker 4: because I asked what the average expense was and she
17:18
Speaker 4: was like, oh, we can't tell you what the average
17:20
Speaker 4: that we get.
17:21
Speaker 3: Yeah, no, they won't disclose that. No, they won't let
17:24
Speaker 3: you know what the average is because they want to
17:26
Speaker 3: know what yours is, not what the average is.
17:30
Speaker 4: So I actually thought we might have gone over because
17:33
Speaker 4: when I was writing all of our expenses down it
17:35
Speaker 4: seemed like a lot. But yeah, clearly not. So that
17:40
Speaker 4: was good. And then Tesla has a partnership with Macquarie
17:43
Speaker 4: and Peppers where the interest rate is two point nine
17:46
Speaker 4: to nine percent for their loans.
17:48
Speaker 3: Oh that's much lower than normal. I'm pretty sure a
17:52
Speaker 3: fixed rate average car loan starts at about six point
17:57
Speaker 3: four nine percent, so that's significantly below that.
18:00
Speaker 4: Yeah, we did a lot of research with our bank
18:03
Speaker 4: and called our bank manager and discussed our options with them,
18:06
Speaker 4: and then our mortgage as well, and we decided that
18:09
Speaker 4: option was better because of that interest rate. So our
18:14
Speaker 4: fortnightly repayments had three hundred and fifty dollars.
18:17
Speaker 5: Oh that's not as.
18:18
Speaker 3: Bad as I thought. I mean, I'm not here saying
18:21
Speaker 3: everybody it's not as bad, go get one. It's just
18:24
Speaker 3: I assumed for a car at that price that you'd
18:27
Speaker 3: have a higher fortnightly repayment. Does that loan have any
18:30
Speaker 3: kind of balloon on it?
18:32
Speaker 4: Yes, I forgot to mention that it has seventeen thousand
18:36
Speaker 4: dollars I think is the balloon.
18:38
Speaker 3: Yeah.
18:38
Speaker 4: And we did a bit of research about resell on
18:41
Speaker 4: Tesla's and what they're going for now and looked up
18:44
Speaker 4: a few old ones. So we're pretty confident if in
18:47
Speaker 4: five years when the loan ends it we would like
18:49
Speaker 4: to sell that we will get that much or more
18:52
Speaker 4: back for the car, as long as we take care
18:54
Speaker 4: of it. Of course.
18:55
Speaker 3: And if you're listening along and you're like, wait, what
18:57
Speaker 3: I thought we were talking about car loans, not balloon animals.
19:00
Speaker 3: A balloon is a payment that is held out till
19:04
Speaker 3: the end of the loan period so that you have
19:07
Speaker 3: lower fortnightly repayments fortnightly monthly, however you're paying it. So
19:12
Speaker 3: instead of say, you know, our money dires paying five
19:15
Speaker 3: or six hundred dollars a fortnight on her car loan,
19:18
Speaker 3: she would be paying the three fifty, But when that
19:21
Speaker 3: car loan term comes to the end, you've got to
19:24
Speaker 3: pay out a full seventeen thousand dollars. And it's really
19:28
Speaker 3: important to take that into consideration because the amount of
19:31
Speaker 3: people I have spoken to were like, oh, yeah, there
19:34
Speaker 3: was a balloon, like that's okay, And I'm like, do
19:36
Speaker 3: you know that to a lump some payment at the
19:38
Speaker 3: end of your loan term And They're like what, No,
19:41
Speaker 3: I just thought that a balloon was just like some
19:43
Speaker 3: technical term, and I'm like, no, it is a payment
19:46
Speaker 3: that you're going to have to come up with a
19:48
Speaker 3: money dires as you said, like, you're either going to
19:50
Speaker 3: have to sell the car. You might have to refinance.
19:52
Speaker 3: But in an ideal world, you'd have those savings to
19:56
Speaker 3: extinguish that loan completely. But if you've got a car loan,
20:00
Speaker 3: you probably don't have a seventeen and a half thousand
20:02
Speaker 3: dollars savings account that you want to drain to pay
20:05
Speaker 3: off the car in five years, right, Yeah, no way.
20:09
Speaker 3: So it's important when it comes to stuff like carloans
20:12
Speaker 3: that we do have a strategy in place. Now money
20:15
Speaker 3: dirist to completely pivot. You said that you share finances
20:19
Speaker 3: with your partner, which a lot of people do. And
20:22
Speaker 3: you said as well that you are married, which is
20:25
Speaker 3: very exciting. But how did you get to that point
20:29
Speaker 3: with your partner and at what point in your relationship
20:32
Speaker 3: were you like, you know what, let's share every single cent.
20:36
Speaker 4: It was when we decided to build a house together,
20:38
Speaker 4: so we had a joint bill's account before because we
20:42
Speaker 4: had lived together for three years prior to deciding to
20:47
Speaker 4: build a house. But yeah, it was only at the
20:51
Speaker 4: point of getting a mortgage that we thought, hey, let's
20:54
Speaker 4: join everything together. It was actually because we spoke it
20:58
Speaker 4: to my parents about how they've managed their mortgage before
21:02
Speaker 4: and learned about offset accounts and how they manage their spending.
21:07
Speaker 4: And that made sense for me because I'm actually the
21:09
Speaker 4: one that manages our money and bills, so that concept
21:14
Speaker 4: was the easiest for me to understand. So I thought, hey,
21:17
Speaker 4: let's just do the offset model and we'll join it
21:20
Speaker 4: all together.
21:21
Speaker 3: Yeah, awesome. And how have you found that? Like? Setting
21:24
Speaker 3: it up for some people can be really daunting, being like,
21:27
Speaker 3: oh my gosh, they're going to be able to see
21:29
Speaker 3: every single thing that I spend. Have there been any
21:32
Speaker 3: friction points or questions or queries about how each of
21:36
Speaker 3: you are spending money, not from my.
21:38
Speaker 4: Side, but it's probably because my partner doesn't. He doesn't
21:42
Speaker 4: look at our accounts.
21:43
Speaker 3: Really, it's not an issue because like when he can
21:47
Speaker 3: see it, he doesn't.
21:49
Speaker 4: Yeah, he just spends until it declines, and then I
21:51
Speaker 4: get a phone call even though he has full access,
21:53
Speaker 4: and he's like, hey, can you transfer some money?
21:56
Speaker 3: So gosh, what a naughty boy. I feel like that's
21:59
Speaker 3: such a man thing to do as well, like, oh,
22:01
Speaker 3: I don't work out, I'll just call my wife and
22:03
Speaker 3: she'll fix it up.
22:04
Speaker 4: Yeah, yeah, he's he's naughty, but he just doesn't. I
22:10
Speaker 4: guess he puts it on me because he knows that
22:12
Speaker 4: I get worried about how much we're spending and I'm
22:15
Speaker 4: really keeping track of bigger expenses. So yeah, to explain it,
22:21
Speaker 4: how we manage our money, I guess is we have
22:23
Speaker 4: the offset account. Then we have a credit card that
22:25
Speaker 4: we pay off in full every month straight from the
22:27
Speaker 4: offset account. Because all of our money pulls into the offset.
22:31
Speaker 4: He just knows that I pay off the credit card
22:33
Speaker 4: bill on the due date every month, so he knows
22:35
Speaker 4: that money is there for him to spend, and I
22:38
Speaker 4: will let him know if we're spending it looks like
22:41
Speaker 4: it's going to go down faster than the next bill
22:44
Speaker 4: payment comes around.
22:45
Speaker 3: Yeah, okay, And has that system been working for you guys?
22:49
Speaker 3: I know before you said that you feel a little
22:52
Speaker 3: bit anxious about money, but that seems like a pretty
22:54
Speaker 3: clear system. Like why do you think that you're still
22:58
Speaker 3: feeling anxious around money and you're not tracking what you're spending.
23:01
Speaker 3: If from my perspective in what you've just explained, you're
23:04
Speaker 3: pretty on top of it.
23:05
Speaker 4: It's because I can't see how much we're saving because
23:08
Speaker 4: when he does need money sometimes with friends, he'll go
23:11
Speaker 4: out and need some cash. He'll transfer it to an
23:15
Speaker 4: empty account to take it out of an ATM, or
23:18
Speaker 4: we will run down the credit card faster than the
23:21
Speaker 4: next bill payments due. So we'll just put a one
23:24
Speaker 4: thousand dollars on it and keep doing that out of
23:27
Speaker 4: this big sum of money. So I think that it
23:30
Speaker 4: doesn't give us any controls or it doesn't hold us accountable.
23:35
Speaker 4: You just see that big sum of money and you're like, cool,
23:38
Speaker 4: I'm fine, I know what bills are coming up. I've
23:42
Speaker 4: got the money for the bills. So the rest of.
23:44
Speaker 5: It is fair game game.
23:46
Speaker 3: Yeah, yeah, And that seems to be the problem that
23:48
Speaker 3: a lot of people run into because they're like Victoria,
23:50
Speaker 3: I don't need a budget and cash flow plan because
23:53
Speaker 3: I have one, Like I have cash in my account,
23:55
Speaker 3: Why would I make all these other accounts that you
23:58
Speaker 3: keep recommending because it just doesn't make sense, like I've
24:01
Speaker 3: got the money, And it's like, yeah, but you just
24:03
Speaker 3: told me that you don't feel comfortable with it. You
24:05
Speaker 3: just told me that you're not feeling empowered by that
24:08
Speaker 3: and that you don't know what you're saving. So something's
24:11
Speaker 3: got to give. And clearly regardless of how efficient that
24:14
Speaker 3: system sounds, because it is. And you know, we've spoken
24:17
Speaker 3: on the show before about credit cards, and I obviously
24:21
Speaker 3: don't love credit cards, and it's not because what you're
24:24
Speaker 3: doing money direst is a bad thing. If you're actually
24:26
Speaker 3: paying off your credit card each and every single month, great,
24:29
Speaker 3: there are so many people that they do do that,
24:32
Speaker 3: and they're building up, you know, nice amount of points
24:34
Speaker 3: and they're able to, you know, go on extra flights
24:37
Speaker 3: each year or like get some additional flybys, like our
24:39
Speaker 3: friend Jess, who is going to get a kitchen aid mixer.
24:42
Speaker 3: Very soon because she's just so good at scanning her flybys.
24:46
Speaker 3: But it's a really slippery slope for a lot of people,
24:49
Speaker 3: and I know personally, if I had a credit card,
24:52
Speaker 3: it would not be a very good idea. It doesn't
24:56
Speaker 3: mean that we don't have one, like my partner and
24:58
Speaker 3: I have one for a really big expense, but I
25:00
Speaker 3: choose not to keep a copy of it in my
25:03
Speaker 3: wallet because I know that I'll just be a bit
25:06
Speaker 3: cheeky and be like, oh, but I really like that skirt.
25:08
Speaker 3: I'll just pop it on there and we can work
25:10
Speaker 3: it out later and it'll be fine. And in reality,
25:13
Speaker 3: that's not how I want to manage my money. I
25:15
Speaker 3: want to be really in control of it, and if
25:17
Speaker 3: I want to purchase a skirt, I want to have
25:19
Speaker 3: a quick look at my spending account, like I go, oh,
25:21
Speaker 3: I can afford that, And then there's no repercussions of
25:24
Speaker 3: the decisions that I'm making because it was my spending money,
25:28
Speaker 3: Like that's okay. It didn't impact Steve, it didn't impact
25:31
Speaker 3: our saving or investment goals. It didn't impact us being
25:33
Speaker 3: able to pay our mortgage, and it meant that I
25:36
Speaker 3: feel pretty good because I got a new skirt. But
25:38
Speaker 3: it was all in the budget and that's very exciting.
25:41
Speaker 3: So I think that a lot of people really do
25:44
Speaker 3: underestimate the power of what a budget is. And earlier
25:48
Speaker 3: I said, the important thing when it comes to having
25:51
Speaker 3: a budget is actually not that you restrict yourself money dio.
25:55
Speaker 3: So I wouldn't want you to go, all right, Teresa,
25:57
Speaker 3: we need a budget. Let's write down what we're going
25:59
Speaker 3: to spend on groceries. We're going to spend fifty dollars
26:02
Speaker 3: this week on groceries when in reality you usually spend
26:05
Speaker 3: like one hundred and fifty dollars. It's not going to last,
26:08
Speaker 3: it's not going to be sustainable. You're going to be like,
26:10
Speaker 3: this is a terrible system because I really like buying
26:13
Speaker 3: those things at the supermarket and my lifestyle is not
26:16
Speaker 3: being maintained.
26:17
Speaker 4: So it was.
26:18
Speaker 3: Never going to work out that way. So I think
26:21
Speaker 3: it's really important to put ourselves back in the driver's
26:24
Speaker 3: seat and go what does that actually mean. Let's budget
26:27
Speaker 3: for the things that we actually want to spend on.
26:30
Speaker 3: So what money, diarist? What are you going to do
26:32
Speaker 3: about that? You've written in as a diarist, you've said, Hey,
26:36
Speaker 3: I'm not feeling very in control of this process. Have
26:39
Speaker 3: you tried other budgeting methods? Have you thought about what
26:43
Speaker 3: the next steps will do? Or are you just like,
26:44
Speaker 3: do you know what? Don't even want to think about it.
26:46
Speaker 3: I just know what underlyingly stresses me.
26:48
Speaker 4: I have tried in the past to set up spending
26:52
Speaker 4: accounts for just weekly stuff that I know my partner
26:56
Speaker 4: and I spend on ourselves. So I did pitch that idea, Hey,
27:00
Speaker 4: let's give ourselves one hundred and fifty dollars for the
27:02
Speaker 4: week so I can grab coffee and if I want
27:04
Speaker 4: an arm and croissant, I can get an arm and croissant,
27:07
Speaker 4: and he can stop it like the servo and get
27:10
Speaker 4: whatever gross energy drink that he wants in the morning.
27:15
Speaker 4: And none of us feel like that we shouldn't be
27:18
Speaker 4: doing that, but he was at the time. And I
27:22
Speaker 4: haven't spoken to him about it in about a year
27:24
Speaker 4: and a half, but at the time he was very
27:27
Speaker 4: much why would we take money out of the offset?
27:30
Speaker 4: It needs to be there to be pulling for that interest.
27:34
Speaker 4: And I disagree, but I kind of left it because
27:38
Speaker 4: I thought, let's leave it for now. I've broached the conversation.
27:43
Speaker 3: It's an argument I'm not willing to have right now.
27:45
Speaker 4: Yeah, so I guess me running in is probably because
27:49
Speaker 4: I want to do something similar again, and I'll probably
27:53
Speaker 4: get him to listen to this as well.
27:57
Speaker 3: I'm sorry.
27:58
Speaker 4: I think it's just with him, he's very much out
28:01
Speaker 4: of sight, out of mind. Since you've been together, he's
28:04
Speaker 4: gotten really good habits. But when we first got together,
28:07
Speaker 4: he hadn't done his tax in like six years. So
28:11
Speaker 4: it's just if it doesn't hurt him ignoring it, then
28:14
Speaker 4: he'll probably ignore it. Like he's fine at the moment,
28:17
Speaker 4: so he doesn't see a reason to change. But it's
28:19
Speaker 4: stressing me so that I'll probably need to bring it
28:22
Speaker 4: up again.
28:22
Speaker 3: Yeah, and that's absolutely fair. Did you know money, dirist,
28:26
Speaker 3: you can have more than one offset.
28:28
Speaker 4: I did not know that you can have as.
28:30
Speaker 3: Many offsets as you would like to have. And did
28:33
Speaker 3: you also know that you can attach debit cards to offsets?
28:36
Speaker 4: No, I had no idea about that.
28:38
Speaker 5: Boom.
28:39
Speaker 3: Imagine if that structure could be set up completely so
28:42
Speaker 3: your partner gets everything he wants. You're right, the money's
28:45
Speaker 3: always against the offset, but if you're going to spend it,
28:48
Speaker 3: you actually have a debit card with that amount. Of
28:50
Speaker 3: money on it. So that's not to say that every
28:53
Speaker 3: single mortgage product is going to enable you to do that,
28:57
Speaker 3: but there are heaps of mortgage products that if they
29:00
Speaker 3: allow an offset, it's very very likely that they're going
29:03
Speaker 3: to allow you to open multiple and have different debit
29:06
Speaker 3: cards associated with them so that you can use offset
29:09
Speaker 3: accounts as you would any other normal bank account. Because
29:13
Speaker 3: I think that when we first get our first mortgage,
29:16
Speaker 3: a lot of us just assume that the offset is
29:18
Speaker 3: this like holy Grail account that sits in the sky
29:22
Speaker 3: and you know you can't touch it, like you've got
29:24
Speaker 3: to actually go online to move money from that to
29:26
Speaker 3: your normal accounts, when in reality, you can actually have
29:29
Speaker 3: debit cards associated with that, spend directly from that, or
29:34
Speaker 3: create a number of them, so that all of your
29:36
Speaker 3: goals and all of your separate saving goals are still
29:40
Speaker 3: offsetting the mortgage. Because that makes sense, right, Like why
29:43
Speaker 3: would we take it out to save it when those
29:45
Speaker 3: savings are actually helping us create a better lifestyle outcome
29:49
Speaker 3: in the long term.
29:50
Speaker 4: It's so funny you say that because we have a
29:52
Speaker 4: meeting with our bank manager tomorrow and we might actually
29:55
Speaker 4: be getting rid of the offset because of the fixed
29:58
Speaker 4: interest rates so real, I might ask him about the
30:02
Speaker 4: numerous offset accounts, because yeah, it's something that my husband
30:06
Speaker 4: was like, oh, I don't know about this. I know
30:08
Speaker 4: we'll save money of our interest if we just fix
30:11
Speaker 4: the whole loan, but I really like the offset account.
30:14
Speaker 3: So yeah, and that's just it, Like, it's really important
30:18
Speaker 3: to work out what works for you. And I'm not
30:21
Speaker 3: going to be too pervy and ask which bank and
30:23
Speaker 3: when and where and how, but it's one of those
30:25
Speaker 3: things where that would just be that bank's rules. You
30:28
Speaker 3: need to Actually, my advice here would be have a
30:32
Speaker 3: conversation with a mortgage broker, not a mortgage broker who
30:35
Speaker 3: works for the bank, one that's completely independent and has
30:39
Speaker 3: access to a full suite of mortgage products. So they
30:41
Speaker 3: can sit down and say, money diarist, what are your goals?
30:44
Speaker 4: What do you want?
30:45
Speaker 3: And you'll go, okay, cool, I want a variable interest rate.
30:47
Speaker 3: Obviously interest rates right now are really low, so I
30:49
Speaker 3: want to make use of that. Also, I want a
30:51
Speaker 3: fair few offset accounts, so that would be a non
30:53
Speaker 3: negotiable and they will go and find the right mortgage
30:56
Speaker 3: product for you, because often when it comes to big
31:00
Speaker 3: four banks, they don't have as much flexibility as you
31:04
Speaker 3: would like them to have. And that's why I don't
31:07
Speaker 3: have my mortgage with one of the big four banks,
31:09
Speaker 3: because it just didn't work for me. I tried. I
31:12
Speaker 3: bank normally with one of the big four banks just
31:15
Speaker 3: because I'm lazy, and that's the bank that I've always
31:18
Speaker 3: banked with and I just haven't moved away from it.
31:20
Speaker 3: Don't have any fees on my account, so why fix
31:23
Speaker 3: something that's not broken. But I remember going through that
31:26
Speaker 3: entire process, and obviously I have deep relationships with mortgage brokers,
31:30
Speaker 3: so I fully comprehend all of this. But I remember
31:33
Speaker 3: going through that process and assuming that, do you know what,
31:36
Speaker 3: just out of ease, it would be best to have
31:38
Speaker 3: our mortgage with the bank that all our accounts are with.
31:41
Speaker 3: And that's not the case now, purely because it wasn't
31:44
Speaker 3: going to work for the things I wanted to get
31:46
Speaker 3: out of it. So Money Diarist, in addition to talking
31:48
Speaker 3: to your bank manager, have a chat with a good broker.
31:51
Speaker 4: That's I never even thought of doing that, So definitely
31:54
Speaker 4: we'll put that on the list.
31:55
Speaker 3: I will set you up, my friend. I will absolutely
31:58
Speaker 3: set you up.
31:59
Speaker 2: Awesome, Well, it feels like this has come with the
32:02
Speaker 2: perfect time for your Money Diarist.
32:04
Speaker 5: And again, I know that we've said this a.
32:06
Speaker 2: Few times recently, but this feels like one that we
32:09
Speaker 2: would love to check in with again in a couple
32:11
Speaker 2: of years, because it feels like you're right on the
32:13
Speaker 2: edge of change and that's so much exciting stuff's going
32:16
Speaker 2: to come for you guys that I feel like we
32:19
Speaker 2: should check in with our Money Diarist again.
32:23
Speaker 3: Keep in touch. I think we're best friends now. I'm convinced, of.
32:26
Speaker 5: Course, of course we are.
32:28
Speaker 2: But yeah, we should check in with you again because
32:30
Speaker 2: it sounds like only good things are going to happen
32:32
Speaker 2: and that you guys are like fully on the right track.
32:34
Speaker 5: Especially I can't believe you've got that meeting tomorrow. How exciting.
32:37
Speaker 3: I know, what a coincidence. The world works in very
32:40
Speaker 3: funny ways.
32:41
Speaker 4: I know it all came at the right time.
32:43
Speaker 3: Oh, I'm really excited for you, and I'm going to
32:46
Speaker 3: hook you up with one of my broker friends so
32:48
Speaker 3: that you can have a chat with them and make
32:50
Speaker 3: the right decision and get your structure done. But that's
32:53
Speaker 3: always That is all we have time for today.
32:55
Speaker 5: So just before we.
32:56
Speaker 3: Head off, we'd like to acknowledge and pay respect towards
33:00
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33:04
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33:18
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33:21
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33:46
Speaker 2: you next week, guys.
33:47
Speaker 3: Bye,