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Financial Perfectionism · She's On The Money

0:00
Speaker 1: She's on the Money. She's on the Money. Hello, and
0:19
Speaker 1: welcome to She Is on the Money, the podcast for
0:21
Speaker 1: millennials who want financial freedom. My name is Georgia King.
0:25
Speaker 1: I'm a copywriter and journalism student, and every Wednesday I
0:28
Speaker 1: sit down to talk money with financial advisor Victoria Divine Victoria.
0:32
Speaker 2: Hello, Hello, Georgia usually compliment me, but thanks.
0:35
Speaker 1: I know it's just so straight up financial advisine. Move on, Sorry,
0:38
Speaker 1: not hurt now. On this show today, we're talking about
0:41
Speaker 1: perfectionism and how taking a finance a little too seriously
0:45
Speaker 1: it can actually be detrimental to our bank accounts. Plus,
0:49
Speaker 1: we'll be hearing from a listener who is in a
0:50
Speaker 1: bit of a tangle about starting her own business, and
0:53
Speaker 1: we break down the money diary for Miguel, who has
0:55
Speaker 1: a big thing for credit card rewards. But before we
0:58
Speaker 1: do jump into that chat, though, Vicky dy wins and
1:00
Speaker 1: confessions from the week that was what's that? How do
1:03
Speaker 1: you get?
1:03
Speaker 2: Are we still talking? Are we even still friends? If
1:05
Speaker 2: you don't compliment me excessively? In the intro of our
1:08
Speaker 2: own podcast.
1:09
Speaker 1: It was getting old a little, Yeah it was.
1:11
Speaker 2: But I mean that intro was probably old to a
1:13
Speaker 2: number of people moving on, I actually have a money
1:16
Speaker 2: win for you. It's a very adult money win. I've
1:20
Speaker 2: recently been clearing out my garden shed exciting, right, and
1:24
Speaker 2: I've been popping a heap of stuff that I haven't
1:26
Speaker 2: used in a really long time online to sell and
1:29
Speaker 2: making some extra cash. And I actually feel really savvy
1:32
Speaker 2: doing that, and wish I'd thought about it earlier, like
1:35
Speaker 2: when I actually had heaps of time during COVID. Yeah,
1:37
Speaker 2: except on the weekends when now I could be socializing
1:40
Speaker 2: with friends and now I'm choosing to clear out my shed.
1:43
Speaker 2: But that's a different story.
1:44
Speaker 1: How satisfying is that though?
1:46
Speaker 2: It is actually really satisfying because there are a whole
1:48
Speaker 2: heap of appliance is like an old vacuum cleaner, a
1:51
Speaker 2: jet water pressure thing that we never used, and just
1:54
Speaker 2: like stuff that we do not need that you know,
1:57
Speaker 2: we can pop online and make some extra cash for
2:00
Speaker 2: sespecially coming into Christmas, which I think is really good.
2:03
Speaker 2: Do you have a money win or confession for us
2:04
Speaker 2: this week? Georgia, I have a money win as well.
2:07
Speaker 2: It's a week of win.
2:08
Speaker 1: It is a week of wins, and it's also an
2:10
Speaker 1: adult win. I like these so everyone knows that framing
2:15
Speaker 1: is quite expensive.
2:16
Speaker 2: Actually do that, guys. Guys, if you're not a proper
2:20
Speaker 2: adult who's had to go and get something framed, which
2:22
Speaker 2: obviously Georgia King and I are, you'll find it's incredibly expensive.
2:27
Speaker 2: Do you know how expensive mat boards are as well?
2:29
Speaker 2: Like what's at the really like thick paper that goes
2:32
Speaker 2: around the edge of photo.
2:34
Speaker 1: I thought that was just like cardboard.
2:36
Speaker 2: Yeah it is. It's really really expensive cardboard. Really anyway,
2:41
Speaker 2: moving on.
2:42
Speaker 1: So about your frame to avoid the expense of getting
2:45
Speaker 1: it framed, because that can set you back like a
2:46
Speaker 1: couple hondo minimum, which is like more than the print
2:49
Speaker 1: that I'm framing. So I went to Ikia busy as
2:53
Speaker 1: on a weekend. But that's okay. They have a frame
2:56
Speaker 1: called the River Frame ribb A And I mean, I'm
3:00
Speaker 1: no artist, I'm no frame us. Is that a thing?
3:02
Speaker 1: I'm not sure? But they look pro to my humble Do.
3:06
Speaker 2: They look familiar to you by cham?
3:08
Speaker 1: Are they what you have?
3:09
Speaker 3: Oh?
3:09
Speaker 1: My gosh, yes, I feel like amend these though?
3:12
Speaker 2: Yeah I did?
3:12
Speaker 1: Though, oh did you?
3:13
Speaker 2: I feel like every single time it's like having a
3:16
Speaker 2: little sister that you're like, hey, here's a really great idea,
3:19
Speaker 2: and then they ignore you, and then they come to
3:21
Speaker 2: you and think their own idea. They're like, oh, look
3:24
Speaker 2: at this awesome thing that I did. Yeah, and that's
3:27
Speaker 2: not the first time you've done that with the money win.
3:28
Speaker 2: But that's beside the point.
3:30
Speaker 1: They're really good friend. That's on your new artwork in
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Speaker 1: the new home George jacks Hunt Facebook group. VICKI d
3:36
Speaker 1: let's move on. Favorite post from the week.
3:38
Speaker 2: Thought we've moved on from that nickname, but that's okay.
3:41
Speaker 2: So I have a favorite post and it is from
3:43
Speaker 2: our friend Monique, and I actually loved this one. I
3:47
Speaker 2: think I squealed when I saw the photos. She said,
3:49
Speaker 2: money Win. This is my son, my nieces, and my nephews.
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Speaker 2: She said that every year she spends between one hundred
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Speaker 2: and twenty and two hundred dollars on Santa photos. Side note,
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Speaker 2: I did not know Santa photos but expensive. I don't
4:02
Speaker 2: have kids, so I don't know why I would have
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Speaker 2: known that. But she said this year, due to COVID
4:06
Speaker 2: and having to socially distance from Santa, they made their
4:08
Speaker 2: decision to do their own Santa photos. She said it
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Speaker 2: was less stressful then trying to get three kids to
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Speaker 2: smile at once in a five minute timeframe, and they
4:17
Speaker 2: absolutely loved that. They're poppy was Santa and Georgia. I
4:20
Speaker 2: know you've seen the photos because I've shown you before.
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Speaker 2: They are stunning. These photos are I would say, professional quality. Yeah,
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Speaker 2: and if I tried to recreate Santa photos at home,
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Speaker 2: it would not look the same.
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Speaker 1: Well, that's the thing. This isn't going to work for.
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Speaker 2: Everyone, Monique. I absolutely love your money when it's kind
4:37
Speaker 2: of rude and a bit of a flex.
4:38
Speaker 1: To show us how good you are at photography.
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Speaker 2: Though.
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Speaker 1: Now that's a great idea given the fact that there
4:44
Speaker 1: is no sounda this year. I love that.
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Speaker 3: Yeah.
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Speaker 2: But also they're socially distanced photos. They're really cute. But
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Speaker 2: at the same time, if you've just had a baby,
4:51
Speaker 2: or you've got young kids that you kind of want
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Speaker 2: the photo of them sitting on Santa's knee, not them
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Speaker 2: sitting on a stool two point five meters away from Santa,
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Speaker 2: which is what's happen at the moment.
5:00
Speaker 1: Yeah.
5:01
Speaker 2: I think this was genius, and I reckon anyone at
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Speaker 2: home should be giving DIY Santa photos a crap.
5:06
Speaker 1: Yeah, send them, send them through to us. Oh my gosh,
5:09
Speaker 1: the newsletter something.
5:10
Speaker 2: Yes, can we put your Santa photos in the newsletter?
5:12
Speaker 2: Please send them to us. We are so here for this, Georgia.
5:15
Speaker 2: Have you got a favorite post from the week? I
5:17
Speaker 2: do so.
5:17
Speaker 1: Mine is from Bree. It's also Christmas related. You know
5:21
Speaker 1: what else is expensive at Christmas apart from everything? Christmas trees. Again,
5:25
Speaker 1: I can't say I've bought one, but they're about one
5:27
Speaker 1: hundred bucks plus. Have you got one in the house?
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Speaker 2: I do, and it definitely was one hundred dollars plus.
5:31
Speaker 2: But that was a money win from a really long
5:33
Speaker 2: time ago that I bought my Christmas tree on a
5:36
Speaker 2: Boxing Day sale a fair few years ago. Probably do
5:40
Speaker 2: fair a new one, but it's a plastic tree. I
5:42
Speaker 2: got it David Jones for like seventy percent off. Just
5:44
Speaker 2: a small flex from me at Christmas time.
5:47
Speaker 1: Guys. All right, So she pulled a tree off the
5:51
Speaker 1: side of the road. It doesn't admittedly it doesn't really
5:54
Speaker 1: look too much like an actual Christmas tree, but to
5:57
Speaker 1: make it a little more authentic, she's got the the
6:00
Speaker 1: air freshener that smells like yeah, I really like so
6:03
Speaker 1: this is actually brilliant, Like Bri, I'm impressed I actually
6:07
Speaker 1: am impressed, and it's very well decorated.
6:09
Speaker 2: And to be honest, I definitely would be very happy
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Speaker 2: with that Christmas bush in my house.
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Speaker 1: Stunning from your Victoria and you know she's going on
6:15
Speaker 1: a road trip, she said, so there's no point investing
6:17
Speaker 1: in a proper tree. I love that.
6:19
Speaker 2: I'm gonna put my Christmas tree up so in g
6:21
Speaker 2: and I'm very excited about that. Probably Instagram, I'm surprised
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Speaker 2: you haven't done that already. You strike me as like
6:26
Speaker 2: a November fifteen, let's get the tree up kind of vibe. Now,
6:30
Speaker 2: my friends, there's a very good reason for that. But
6:32
Speaker 2: I will tell you all why I haven't put my
6:34
Speaker 2: tree up later.
6:35
Speaker 1: Ooh mysterious. All right, let's move across to the main
6:38
Speaker 1: topic of today's show, financial perfectionism. Now, perfectionism is generally
6:44
Speaker 1: something that I would say is considered to be quite
6:46
Speaker 1: a positive at tribute. You know, it's what you say.
6:48
Speaker 1: It's what you're saying the job interviews when you're like
6:50
Speaker 1: they're like, what is your biggest floor, and you're like, well,
6:52
Speaker 1: I am a perfectionist. It's a humble brat.
6:54
Speaker 2: Yeah, but it's also like wildly inaccurate. No one is
6:56
Speaker 2: actually a perfectionist when they say that in a job interview,
7:00
Speaker 2: because if you're going to say a flaw, you're not
7:02
Speaker 2: actually going to say you're real flaw. You're clearly going
7:04
Speaker 2: to say something that's kind of like, oh, stumble over this.
7:06
Speaker 2: I don't really want to tell you what I'm bad
7:07
Speaker 2: at because I actually want the job, moving on, moving on.
7:11
Speaker 1: Perfectionists do have incredibly high standards. They're extremely dependable, and
7:15
Speaker 1: you know, you would think that being a financial perfectionist
7:18
Speaker 1: would actually be a good thing. But as we'll learn
7:21
Speaker 1: in today's show, having impossibly high standards for ourselves isn't
7:25
Speaker 1: always a good thing. So V, you're the finance guru,
7:28
Speaker 1: the finance genius, the finance aficionado. You're really making up.
7:33
Speaker 1: They're the compliments. Yeah I didn't start up. You're welcome.
7:36
Speaker 2: Thank you.
7:36
Speaker 1: Talk to me about what financial perfectionism actually means and
7:40
Speaker 1: why it is holding a lot of us back. Now.
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Speaker 2: I love this topic. When we started talking about what
7:45
Speaker 2: we were going to do this week, I just felt
7:47
Speaker 2: like it was really fitting, especially before Christmas, because so
7:50
Speaker 2: many of us are feeling a little bit flat about
7:52
Speaker 2: our spending habits. Or we're feeling a little bit overwhelmed
7:55
Speaker 2: by it all. Find this literally so interesting, and it's
7:58
Speaker 2: also a topic that I don't I think it's being
8:00
Speaker 2: widely discussed. Let's just say that She's on the money
8:03
Speaker 2: has coined the term financial perfectionism. Let that go viral,
8:07
Speaker 2: my friends. So perfectionism, as we know it refers to
8:10
Speaker 2: people completing tasks to that perfect standard, completely free of
8:14
Speaker 2: any flaws. But usually along with that level of perfectionism
8:18
Speaker 2: comes a lot of hard work and usually, my friends,
8:21
Speaker 2: some angst. Perfectionism is definitely something to be admired to
8:25
Speaker 2: a point, my friends, and as an employer, I love
8:28
Speaker 2: employees who want to get the job done, so it's
8:31
Speaker 2: of a really high quality. But it's definitely not always
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Speaker 2: a positive thing, and it can totally be detrimental for
8:36
Speaker 2: a lot of people. When you're super obsessed with making
8:39
Speaker 2: things perfect, it means the project or plans can often
8:42
Speaker 2: go unfinished because you quite literally never get them to
8:45
Speaker 2: that point where you deem that to be perfect right,
8:48
Speaker 2: and at the end of the day, sometimes just getting
8:50
Speaker 2: the job done is much better than getting every single
8:53
Speaker 2: aspect of it absolutely perfect. From a financial perspective, though,
8:56
Speaker 2: the main areas I'm seeing perfectionism let people on his improperty,
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Speaker 2: where lots of people are waiting to find that perfect
9:03
Speaker 2: dream house on the perfect street, so that perfect price
9:06
Speaker 2: or a price that's actually out of their reach. Then
9:09
Speaker 2: also I see this in investing, so delaying the decision
9:12
Speaker 2: to invest because you don't have the perfect amount of
9:14
Speaker 2: money in your bank account yet, or you don't have
9:16
Speaker 2: the perfect understanding of how investing actually works. And the
9:19
Speaker 2: other way I'm seeing perfectionism let us down is in
9:22
Speaker 2: the crazy unsustainable budgets that so many of us are
9:24
Speaker 2: putting in place to try and achieve our goals, which
9:26
Speaker 2: often leads us to failure instead of towards financial freedom,
9:30
Speaker 2: which is where we all want to go. So it's
9:32
Speaker 2: a massive, really broad topic, huge, absolutely huge, George King,
9:36
Speaker 2: but it's one thing that our listeners can really relate to,
9:39
Speaker 2: and as I said, it's not really something that's been
9:41
Speaker 2: discussed before, and there isn't actually that much written about
9:43
Speaker 2: it when we looked into it. And I just think
9:45
Speaker 2: that flashing this all out in a podcast today is
9:47
Speaker 2: going to be really interesting not only for you and I, Georgia,
9:50
Speaker 2: but for everybody listening, because I think it's something super relatable.
9:54
Speaker 1: For sure, and I think we hear a lot about
9:56
Speaker 1: perfectionism in the entrepreneurial space, which I feel is at
10:00
Speaker 1: an all time high. Like we're seeing it in our
10:02
Speaker 1: Facebook group a lot, with all the side hustles going on.
10:05
Speaker 1: It's just all over Instagram as well. It's very much
10:09
Speaker 1: a thing right now. But I wanted to really break
10:12
Speaker 1: down the three major themes you spoke of their vas
10:15
Speaker 1: So we had perfectionism in property, in investing, and in budgeting.
10:19
Speaker 1: So can you talk us through those in a little
10:21
Speaker 1: more depth.
10:22
Speaker 2: I'm so very glad you asked, And that definitely wasn't
10:25
Speaker 2: planned at all, but that was definitely well wrapped. And
10:28
Speaker 2: I just feel like too often we are trying to
10:31
Speaker 2: be too perfect, and too many times do I see,
10:34
Speaker 2: you know, people in our community saying like, oh, I'm
10:36
Speaker 2: just going to get my business planned perfect. The marketing
10:39
Speaker 2: isn't perfect for my business. And I can't remember who
10:42
Speaker 2: it was, but there was a really great quote that says,
10:44
Speaker 2: if you're not embarrassed as the first product you put
10:46
Speaker 2: to market, then you launched too late. And I think
10:50
Speaker 2: it's really important to remember that everybody in business is
10:54
Speaker 2: usually embarrassed of their first product. You best believe I am.
10:57
Speaker 2: I'm not embarrassed in the way that I would hate
10:59
Speaker 2: for any one to see it, but I look at
11:01
Speaker 2: it now and I be like, oh my gosh, the
11:02
Speaker 2: graphic design on that was horrible. The first iterations of
11:05
Speaker 2: She's on the Money's Facebook group and website. I did
11:08
Speaker 2: it myself, but I just wanted to get it up
11:11
Speaker 2: there and out, and it did the job it needed
11:13
Speaker 2: to do. Doesn't have to be perfect because you can
11:15
Speaker 2: fix anything at a late date. So I think that's
11:18
Speaker 2: worth saying because I know I literally get that in
11:21
Speaker 2: my inbox every single day from small business owners. But
11:24
Speaker 2: back to the actual question you asked me, I find
11:27
Speaker 2: that perfectionism is essentially a form of procrastination in another
11:31
Speaker 2: area of life. So I really want our listeners to
11:33
Speaker 2: fight against this perfectionistic urge and start really trying to
11:37
Speaker 2: embrace living a little bit messier, Like, not literally, but
11:40
Speaker 2: let's metaphorically live a little bit messier, because I think
11:43
Speaker 2: it not only makes for a more interesting life, but
11:46
Speaker 2: usually you will be more successful. Like at the end
11:49
Speaker 2: of the day, I've said this a million times. I'm
11:50
Speaker 2: not sure if i've said it a million times on
11:52
Speaker 2: the podcast. But given you're in my team, you know
11:55
Speaker 2: I say this at work, done is often better than perfect,
11:58
Speaker 2: and I live by that. Man. It is on my
12:00
Speaker 2: desk on a post it note, because I am a
12:03
Speaker 2: self confessed perfectionist. But sometimes I even need to remind
12:06
Speaker 2: myself that stuff just needs to get out the door.
12:09
Speaker 2: Sometimes you need to get the proposal to the client,
12:12
Speaker 2: you need to get the piece of work to the client,
12:14
Speaker 2: you need to get an email back to someone, and
12:16
Speaker 2: sometimes just touching base is better than not doing anything
12:20
Speaker 2: at all because it wasn't one hundred percent there. Back
12:23
Speaker 2: to property for a second. As I said before, property
12:26
Speaker 2: perfectionism is detrimental when our standards are just too high,
12:29
Speaker 2: when we procrastinate our decision to buy because we just
12:32
Speaker 2: can't find the right home now. Obviously, a home is
12:35
Speaker 2: a massive purchase and it's not what I'd ever advise
12:38
Speaker 2: rushing into. But the main point here is I would
12:41
Speaker 2: rather our community, if buying property alignestair goals and values,
12:45
Speaker 2: get into the property market sooner, settling for something more
12:47
Speaker 2: affordable and more achievable, instead of waiting to buy in
12:51
Speaker 2: thirty years time when you might have a massive killer
12:53
Speaker 2: deposit and some killer income, but at the end of
12:56
Speaker 2: the day inflations happened and you still can't afford to
12:59
Speaker 2: get in. Property is not for everyone, but if you
13:02
Speaker 2: are thinking of buying a home, then I really really
13:04
Speaker 2: want you to remember this. It's also really important to
13:07
Speaker 2: understand that just because the property is more expensive and
13:10
Speaker 2: you can afford it, doesn't mean you should be affording it,
13:12
Speaker 2: because at the end of the day, property is going
13:15
Speaker 2: to impact your cash flow for the next minimum of
13:17
Speaker 2: thirty years. So I think it's really important to understand
13:21
Speaker 2: what that mortgage repayment will look like to your cash flow,
13:24
Speaker 2: because the first hurdle is getting into the home and
13:26
Speaker 2: the second is actually being able to make the mortgage repayments.
13:29
Speaker 1: Remember last week we had that money diarist who she
13:32
Speaker 1: was the regretful home buyer.
13:34
Speaker 2: Yeah, I think, yeah, that's exactly it. So she'd obviously
13:37
Speaker 2: dived in, but not really comprehended what for I think
13:40
Speaker 2: it was four thousand dollars a month or something, what
13:42
Speaker 2: that had meant for her cash flow, and what that
13:44
Speaker 2: had meant in terms of impacting her life. The other
13:48
Speaker 2: part of this, as it relates to property as well,
13:50
Speaker 2: is in boxing yourself in to only buying in your
13:53
Speaker 2: dream suburb instead of reaching out or branching out to different,
13:56
Speaker 2: more affordable areas where you can actually just sit for
13:59
Speaker 2: a little while. Because not many of us can actually
14:01
Speaker 2: buy homes. The importancy as our first step into the
14:04
Speaker 2: housing market, So widening the scope of where you want
14:07
Speaker 2: to live and what you can actually afford and getting
14:09
Speaker 2: rid of that perfect idea in your head opting instead
14:11
Speaker 2: for something more achievable and actually realistic for you is
14:14
Speaker 2: probably what I would advise in this situation.
14:17
Speaker 1: Be investing. How does it work in that sense?
14:20
Speaker 2: Okay, now, this is obviously the point I am most
14:22
Speaker 2: passionate about because as you guys, no surprise, surprise, I
14:25
Speaker 2: adore investing. But the sooner we start investing, the better
14:29
Speaker 2: off we are going to be in the long run.
14:31
Speaker 2: And that's because of compound interest, my friends, which we
14:33
Speaker 2: have covered on a number of other podcasts. If you
14:35
Speaker 2: don't know what I'm talking about, go back to our
14:37
Speaker 2: Investing one O one series in season one, and also
14:39
Speaker 2: I think we covered investing again in season two with
14:42
Speaker 2: you Georgia. Because at the end of the day, it's
14:44
Speaker 2: your money making money for you, and that can never
14:46
Speaker 2: start too soon, in my opinion. Now, I know that
14:49
Speaker 2: investing is a super daunting concept for a lot of people,
14:52
Speaker 2: and if you're not completely financially literate, it can be
14:55
Speaker 2: super overwhelming. And it's what our investing episodes are for,
14:58
Speaker 2: and it's also why I am so gone things like
15:00
Speaker 2: micro investing platforms, which we also did two whole episodes
15:04
Speaker 2: on recently, so that you actually get to start learning
15:08
Speaker 2: sooner while being in the market.
15:10
Speaker 1: Now.
15:10
Speaker 2: Too often, Georgia I hearp young and smart women who
15:14
Speaker 2: are amazing at saving and smashing their goals saying nah,
15:17
Speaker 2: I don't get it, and I'm not going to do it,
15:19
Speaker 2: and they scare themselves off investing because they like the
15:22
Speaker 2: security and they like the ears of just having the
15:24
Speaker 2: money tucked away in a savings account with little reward.
15:27
Speaker 2: Now I'm not looking across the table because I know,
15:30
Speaker 2: Georgia King is kind of like wincing away because my friend,
15:33
Speaker 2: are you one of those people?
15:35
Speaker 1: I am a young, smart woman.
15:36
Speaker 2: How good are you investing?
15:39
Speaker 1: I'm learning every day you are? I love for you. No,
15:43
Speaker 1: I'm exactly that example. I'm still a bit afraid, which
15:47
Speaker 1: is totally okay, allowed to admit that you're allowed to finance.
15:50
Speaker 2: No, you're allowed.
15:51
Speaker 3: That's it.
15:51
Speaker 1: Do you want to admit that, Yeah, I'll admit it.
15:54
Speaker 1: I'll take it on the tame with the girls. Micro
15:57
Speaker 1: investing as well is a great place to start.
15:59
Speaker 2: Yeah, it can be really great place to start for
16:01
Speaker 2: lots of people.
16:02
Speaker 1: Yeah. The last part of this topic that you mentioned
16:05
Speaker 1: to be was over budgeting to the point where you're
16:07
Speaker 1: either unable to stick to a budget much in the
16:10
Speaker 1: same way that diets work. So tell us more about that. Now.
16:14
Speaker 2: This is something that I see time and time again
16:16
Speaker 2: and something that so many people come to me and
16:19
Speaker 2: they say, Victoria, I have such a good budgeting system.
16:21
Speaker 2: I'm such a good budgeter. I have a spreadsheet and
16:24
Speaker 2: they fill it out every single day. But it's not
16:26
Speaker 2: working for me at the end of the day. Budgeting
16:29
Speaker 2: too hard can actually be a massive recipe for disaster.
16:32
Speaker 2: It's not sustainable at all. It is not fun, and
16:34
Speaker 2: often we do fall off the wagon and end up
16:36
Speaker 2: spending more than we would have had we not had
16:39
Speaker 2: a restrictive budget in the first place. Now, the big
16:42
Speaker 2: treat to budgeting effectively is actually establishing a really good
16:45
Speaker 2: understanding of your own relationship with money, which you probably
16:48
Speaker 2: expected me to say, so really understanding your money story
16:51
Speaker 2: through and through and working out how you can make
16:53
Speaker 2: your cash flow work for you now. Obviously, our Budgeting
16:56
Speaker 2: Cashlow course is a very biased way and a very
17:00
Speaker 2: good course to get you started and give you the
17:02
Speaker 2: tools that you need to help nail this, but we've
17:05
Speaker 2: done episodes on budgeting and cash flow too, so definitely
17:07
Speaker 2: have a listen to those episodes for a more detailed
17:09
Speaker 2: look as setting up a sustainable and workable budget for you.
17:13
Speaker 2: The other part that I see all the time is
17:14
Speaker 2: that you budget so hard that you actually miss out
17:17
Speaker 2: on life and living and having fun with your friends.
17:20
Speaker 3: Now.
17:20
Speaker 2: We've spoken at length about the sacrifice people who follow
17:23
Speaker 2: the fire money management method make when it comes to
17:25
Speaker 2: enjoying life now, and I think some people do become
17:28
Speaker 2: quite obsessive about their savings account climbing and climbing and climbing,
17:32
Speaker 2: and that they don't let themselves enjoy any of the
17:34
Speaker 2: fun things that money can actually afford you.
17:36
Speaker 3: Now.
17:37
Speaker 2: Don't get me wrong, I love that people are feeling
17:39
Speaker 2: super inspired and really excited to crush goals and build
17:42
Speaker 2: up those savings, but to be honest, it's really important
17:44
Speaker 2: to enjoy yourself along the way and make sure that
17:46
Speaker 2: there is room in your budget for the occasional splurge. Otherwise,
17:50
Speaker 2: kind of what's the point. I know, I'm a financial
17:52
Speaker 2: advisor and I'm meant to be like save, invest and
17:55
Speaker 2: do this, but also like, let's overlay real life for
17:58
Speaker 2: a second. I don't want you to miss out on
18:00
Speaker 2: really important formative memories that you're creating with your friends
18:03
Speaker 2: and your family just because you're really trying to budget
18:05
Speaker 2: and save and you listen to a finance podcast once.
18:08
Speaker 2: At the end of the day, life is definitely for living,
18:11
Speaker 2: but at the same time, we want to make sure
18:12
Speaker 2: that future us is okay too.
18:14
Speaker 1: Yeah, And it's about striking.
18:16
Speaker 2: That balance, absolutely, And it's all about balance. It's definitely
18:20
Speaker 2: not about you know, just going oh well, Victoria's And
18:22
Speaker 2: you should still treat yourself if you genuinely do not
18:25
Speaker 2: have the budget or the cash fload to do that
18:27
Speaker 2: and you're you know, forgoing paying bills to do that, absolutely,
18:30
Speaker 2: do not do that at all. On talking about where
18:33
Speaker 2: people allocate one hundred percent of their additional funds towards savings,
18:38
Speaker 2: and don't you know, pop the twenty dollars in there
18:40
Speaker 2: to go to the movies with their friends once a
18:41
Speaker 2: month or something.
18:42
Speaker 1: And we do definitely hear that as well, that people
18:44
Speaker 1: do start to feel a little bit guilty about spending
18:47
Speaker 1: when they are on that really good pattern of saving
18:49
Speaker 1: and investing, and they can find it hard to part
18:52
Speaker 1: with their money.
18:52
Speaker 2: So totally, and I find that that is something that
18:55
Speaker 2: is really overwhelming for a lot of people who have
18:58
Speaker 2: been in debt. So often it is people who have
19:01
Speaker 2: been in significant amounts of debt who are now out
19:04
Speaker 2: of it and they're onto really positive savings habits, but
19:07
Speaker 2: they're now in a position where they feel super guilty
19:10
Speaker 2: about spending any money. And so that's why I always
19:13
Speaker 2: suggest having kind of like a fund where it's for
19:15
Speaker 2: you and you can give yourself permission to spend that
19:18
Speaker 2: on whatever you want, because it's not for saving, it's
19:21
Speaker 2: not for investing, because those things have already been allocated
19:23
Speaker 2: for So for me, it's really important to structure yourself
19:26
Speaker 2: so that you have that freedom. But if you're not
19:29
Speaker 2: giving yourself that freedom, spending can make you feel really
19:32
Speaker 2: guilty and it can feel really overwhelming. And I don't
19:35
Speaker 2: want anyone to experience.
19:37
Speaker 1: When it comes to the perfectionism thing again, V I'm
19:40
Speaker 1: going to sound like a broken record because spoilers Georgia
19:43
Speaker 1: doesn't love Instagram. But how much would you say Instagram
19:47
Speaker 1: plays into this whole perfectionism obsession. Look, it plays a
19:52
Speaker 1: massive part in this idea of perfectionism, and I would
19:56
Speaker 1: say that all types of social media do. It's definitely
19:59
Speaker 1: not just in but I think Instagram definitely distracts us
20:03
Speaker 1: from what we really want, and it deceives us into
20:05
Speaker 1: wanting things that, in all honesty, don't actually align with our.
20:08
Speaker 2: True goals and values. I think that we see these
20:11
Speaker 2: perfect lives of influences and even just other people who
20:14
Speaker 2: aren't necessarily influencers but are really good at posting great
20:17
Speaker 2: highlight reels of their lives online and seeing people live
20:21
Speaker 2: these amazing lives in their amazing houses with the car
20:23
Speaker 2: they've just bought or their brand new home, But you
20:26
Speaker 2: actually don't get to see the flip side of things.
20:28
Speaker 2: You actually only see the shiny side of their lives.
20:31
Speaker 2: So I think it's really important that we understand that
20:34
Speaker 2: what you want, even though it's not what you can afford,
20:37
Speaker 2: may not even be what you want in a roundabout way.
20:40
Speaker 2: I think it's really important to point out again, because
20:42
Speaker 2: we will do this time and time again, that we
20:45
Speaker 2: don't see people struggling on Instagram. Not many people you
20:48
Speaker 2: know share that type of journey. We don't see the
20:50
Speaker 2: work it takes to buy a house. We don't see
20:52
Speaker 2: the work it takes to buy a car, or the
20:54
Speaker 2: debt that they've taken on, or the monthlier payments that
20:56
Speaker 2: exist around those things, or like how they're funding their
20:59
Speaker 2: fancy dinners. We just see the end product, which is
21:02
Speaker 2: a really beautiful flat lay of a dining table with
21:05
Speaker 2: a really delicious looking aver all spirits. And so I
21:07
Speaker 2: think that we tend to set these really unrealistic expectations
21:11
Speaker 2: of what our lives should be like when life is
21:14
Speaker 2: not just sunshine and roses all the time. And it's
21:16
Speaker 2: actually really unrealistic to think that we could go out
21:18
Speaker 2: for dinner three or four times a week and have
21:20
Speaker 2: a really expensive meal, because that's just honestly ridiculous.
21:24
Speaker 1: Yeah, I think it's easier to figure out what you
21:27
Speaker 1: actually want in life when you're not just scrolling the
21:30
Speaker 1: gram all day and feeling distracted.
21:33
Speaker 2: I find that some of my most productive times have
21:35
Speaker 2: been when I've deleted the app from my phone. Now,
21:37
Speaker 2: I know that's probably very counterproductive for someone who business
21:41
Speaker 2: is literally run on the internet, and I'm not saying
21:44
Speaker 2: delete your accounts, but I find that deleting the app
21:47
Speaker 2: from my phone so I can only access it during
21:49
Speaker 2: work hours when I'm actually interacting for work, and I
21:52
Speaker 2: just kind of like tap out of my personal life
21:54
Speaker 2: online for a little bit. They've been really good. They
21:57
Speaker 2: provide a lot of clarity that you know, I didn't
21:59
Speaker 2: even know I need it.
22:00
Speaker 1: My next question for you here, V is what advice
22:03
Speaker 1: you would have for people who do have those perfectionist tendencies.
22:07
Speaker 2: As if I haven't given you enough advice already, Georgia.
22:09
Speaker 1: But that's okay.
22:10
Speaker 2: I think I'm going to be again a broken record,
22:13
Speaker 2: which is a very common quote on this podcast. But
22:16
Speaker 2: at the end of the day, it does come back
22:18
Speaker 2: to a number of things. First things, first, go easy
22:20
Speaker 2: on yourself. It has been a ridiculously hard year financially,
22:24
Speaker 2: also in pretty much every other way imaginable as well,
22:27
Speaker 2: like let's be honest, and for perfectionists who thrive off
22:30
Speaker 2: now in goals and achieving things, I think it would
22:32
Speaker 2: have been particularly hard. Let's be honest. Even I've struggled
22:35
Speaker 2: with this because I would say that I am definitely
22:38
Speaker 2: a type A. I love lists, I love being perfect
22:40
Speaker 2: in the work that I do and the things that
22:42
Speaker 2: I put online and how we create and craft our work,
22:45
Speaker 2: and I just think that the end of the day,
22:47
Speaker 2: it is so much more important to just be kind
22:49
Speaker 2: to yourself and not take those things on board too much.
22:53
Speaker 2: I've had to really step back and go, cool, well,
22:55
Speaker 2: I'm not actually going to be able to do this
22:57
Speaker 2: this year. It's actually not your fault that you're not
23:00
Speaker 2: achieving things this year. It's the fact that there's a
23:02
Speaker 2: global pandemic going on. Not sure if you've noticed. That
23:06
Speaker 2: is literally unprecedented, dumpster fire, whatever we're going to call it,
23:10
Speaker 2: and it is in the way. So take a massive
23:12
Speaker 2: deep breath and just be super kind to yourself. The
23:15
Speaker 2: next thing is focus on slow and steady progress instead
23:18
Speaker 2: of perfection. At the end of the day, a small
23:20
Speaker 2: step is still a step in the right direction, and
23:23
Speaker 2: to me, that is the most important thing here. I
23:25
Speaker 2: don't want you guys to fall off the wagon because
23:27
Speaker 2: you are setting ridiculously impossible goals. Take it slow, be smart,
23:31
Speaker 2: be strategic instead of being restrictive, and just really define
23:34
Speaker 2: your goals and work towards them bit by bit. And
23:37
Speaker 2: what do you say, George. I think it was on
23:39
Speaker 2: a previous episode it was eat the elephant bite by
23:42
Speaker 2: bite instead of taking one mouthful.
23:44
Speaker 1: Wait, that is a phrase probat phase. I can promise
23:47
Speaker 1: you google it.
23:49
Speaker 2: It's not a phrase, but anyway, moving on, lastly, I
23:52
Speaker 2: would say, my friend, stay in your own lane. Everybody
23:55
Speaker 2: else's lane is too crowded. Focus on your goals and
23:58
Speaker 2: your goals only, and stop comparing yourself to what other
24:02
Speaker 2: people around you are doing or achieving. You're your own
24:05
Speaker 2: person and it's honestly too distracting and exhausting to be
24:08
Speaker 2: looking left at what Sally's doing from high school. Who's
24:12
Speaker 2: you know what she's up to financially, or you know
24:14
Speaker 2: how often she's working out and checking in at the gym,
24:16
Speaker 2: which I still think is a bit weird, But that's okay.
24:19
Speaker 2: Just do you and everything will honestly be a little
24:21
Speaker 2: bit easier. Your lane is your lane for a reason.
24:24
Speaker 2: Make it your own and follow your own journey and
24:26
Speaker 2: stop looking at what other people are doing.
24:28
Speaker 1: Inspirational words from you, Thank.
24:30
Speaker 2: You, I mean unless you have like very clean, clear
24:33
Speaker 2: their copy of their budget, their financial statements.
24:35
Speaker 1: Before the listener question today, v as all, you're not
24:40
Speaker 1: really a small business owner, a small business owner. I'm
24:42
Speaker 1: a big business owner.
24:43
Speaker 2: I don't know, oh I'm a small I'm a small
24:46
Speaker 2: business owner. So I think you've got to be making
24:49
Speaker 2: millions before you can call yourself a big business making
24:51
Speaker 2: millions sadly not, sadly not, but that is another story
24:55
Speaker 2: I'm trying. You got to start starts somewhere that starts
24:59
Speaker 2: balled extra.
25:01
Speaker 1: So, as a business owner who is a huge perfectionist,
25:05
Speaker 1: as you admitted before, what would you say the biggest
25:07
Speaker 1: lessons that you've learned along the way have been?
25:09
Speaker 2: I think first things first is just having a plan
25:12
Speaker 2: and making sure that you're doing things before you are ready.
25:15
Speaker 2: As I said before, like having a website up is
25:18
Speaker 2: better than having a perfect website up because your consumers
25:21
Speaker 2: and the people that you want to connect with can
25:22
Speaker 2: better find you. Having a logo that maybe isn't your
25:25
Speaker 2: favorite logo, but is one that will do the job
25:27
Speaker 2: until you find your dream logo is better than spending
25:31
Speaker 2: hours and weeks, you know, mulling things over when you
25:33
Speaker 2: should be working on product design the end of the day.
25:37
Speaker 2: Done is better than perfect in a lot of ways.
25:39
Speaker 2: But as you start to grow, I'm going to pump
25:42
Speaker 2: your ties up here, Georgia. Hiring good people like Georgia
25:45
Speaker 2: King very important. Having a team that surrounds you, that
25:48
Speaker 2: is on the same team as you and understands and
25:51
Speaker 2: has the same passion and goals and motivation that you
25:54
Speaker 2: do is really important. And I'm really lucky that my
25:56
Speaker 2: Shoes on the Money team is exactly that. And I
25:58
Speaker 2: also think since I've been the hard thing for me,
26:00
Speaker 2: and I think you will like smirk a little bit
26:02
Speaker 2: because I totally don't do this well. But stop trying
26:06
Speaker 2: to be in control and let people do their jobs
26:09
Speaker 2: and let them be good at what they are good at.
26:11
Speaker 2: So if you hire a co host, let her be
26:14
Speaker 2: the co host. If you hire an audio engineer, let
26:17
Speaker 2: them be the audio engineer, and stop telling them how
26:19
Speaker 2: to do their job.
26:20
Speaker 1: I'm not saying I do that all the.
26:21
Speaker 2: Time, but I definitely do stick my nose into a
26:24
Speaker 2: lot of things. But I think that done is better
26:25
Speaker 2: than perfect is probably my motto for this episode.
26:28
Speaker 1: Georgia King, love it. Hi, There You've reached the Shoes
26:38
Speaker 1: on the Money mailbox. Do you have a money problem
26:40
Speaker 1: you want help solving. Do you have a money dilemma
26:42
Speaker 1: that you just want to chat about. Victoria is here
26:45
Speaker 1: to help. Every week, we'll be playing your questions to
26:47
Speaker 1: help make sense of a money mess you may have
26:49
Speaker 1: found yourself in. Make a quick recording on your phone
26:51
Speaker 1: and send it through to podcast at sesothomoney dot com
26:54
Speaker 1: today you and you might even find yourself on the show.
26:57
Speaker 1: But for now, here's today's listener question.
27:00
Speaker 4: Hey ladies, I've been feeling really inspired by the Shees
27:03
Speaker 4: on the Money Facebook group lately, and I think I'm
27:06
Speaker 4: ready to turn my hobby of jewelry making into a
27:08
Speaker 4: bit of a side hustle slash business. I already have
27:10
Speaker 4: quite a bit of the product, and I studied marketing,
27:13
Speaker 4: so I know how to handle that side of things,
27:15
Speaker 4: but when it comes to running the business side and
27:17
Speaker 4: the financial side of things, I'm feeling a little overwhelmed.
27:20
Speaker 4: I guess my question is where do you think I
27:22
Speaker 4: should start so that the business can be as successful
27:25
Speaker 4: as possible.
27:26
Speaker 3: Thanks?
27:27
Speaker 1: Now, Victoria, you've just said done is better than perfect
27:32
Speaker 1: that I have. Is that what you would then?
27:34
Speaker 2: Relate to this lovely Listeners question, I absolutely would. But
27:37
Speaker 2: when it comes to finance, I do think that you
27:40
Speaker 2: know just done and filling out a form. Finance does
27:43
Speaker 2: sometimes have to be perfect. Obviously, when it comes to
27:46
Speaker 2: ordering stock and kind of guesstimating how much you will need,
27:50
Speaker 2: that's a bit harder. But at the end of the day,
27:52
Speaker 2: if you're a small business owner, I want you to
27:54
Speaker 2: have your head around your cash flow, and this advice
27:57
Speaker 2: is probably only going to be relevant into small business.
28:00
Speaker 2: But if you're a small anything, if you walk dogs
28:03
Speaker 2: on the side, if you're a cat sitter, if your
28:05
Speaker 2: job is getting someone's mail and you get paid for this,
28:08
Speaker 2: at the end of the day, I think it's really
28:10
Speaker 2: important to take this advice and take it on even
28:13
Speaker 2: in your own lives.
28:14
Speaker 1: If you're an.
28:14
Speaker 2: Individual who works for someone, you are kind of running
28:17
Speaker 2: a small business because you are the small business and
28:19
Speaker 2: your income is your payg income, and then it's your
28:23
Speaker 2: job to divvy it up the end of the day.
28:25
Speaker 2: If you're a small business owner and want you to
28:27
Speaker 2: know how much money is coming in each and every
28:29
Speaker 2: single month that you are able to allocate to your expenses,
28:32
Speaker 2: I need you to tell me exactly what your expenses are,
28:36
Speaker 2: what bills come into that business that need to be
28:38
Speaker 2: paid on a monthly basis. A good business owner will
28:42
Speaker 2: always know those two figures because they'll know what their
28:44
Speaker 2: responsibility is financially, and they'll also know what amount is
28:48
Speaker 2: coming in that they can service their responsibilities with. The
28:51
Speaker 2: next thing I would want them to know is their
28:54
Speaker 2: balance sheet and their profit and loss statement. Those two
28:57
Speaker 2: things are the most important things that are busyness ownA
29:00
Speaker 2: can understand it's a balance sheet will have all of
29:03
Speaker 2: their stock and what's coming in and what's gone out,
29:05
Speaker 2: and it'll show the overall balance. And then a profit
29:09
Speaker 2: and loss is going to tell you whether you're profitable
29:11
Speaker 2: or not. And being able to understand that and understand
29:13
Speaker 2: the intricacies of where maybe am I not being profitable
29:17
Speaker 2: or where am I spending too much money? Or where
29:19
Speaker 2: am I really profitable? How could I know turbocharge? That
29:22
Speaker 2: is going to be really important for you. That all
29:24
Speaker 2: probably sounds super overwhelming, but at the end of the day,
29:28
Speaker 2: it's about just understanding the basics. And she said that
29:31
Speaker 2: she just feels a little bit overwhelmed by the financial
29:34
Speaker 2: side of things, So just start with watches, your product cost?
29:38
Speaker 2: How much are you going to charge for your product?
29:41
Speaker 2: And a good way to understand that is how much
29:43
Speaker 2: do you want to make per year? So at the
29:45
Speaker 2: end of the day, if you say, look, I'm a
29:46
Speaker 2: small business owner, I really want to make eighty thousand
29:49
Speaker 2: dollars a year, fantastic. How much is that per month?
29:52
Speaker 2: How much is that per week? Okay, well, if you
29:55
Speaker 2: can make you know, fifteen hundred dollars per week, let's
29:58
Speaker 2: divide that by how many products you're making and work
30:01
Speaker 2: out how many you're selling, so it can become bite
30:04
Speaker 2: sized pieces and we can really scale it back so
30:07
Speaker 2: that the bigger picture makes sense. Because if I said
30:09
Speaker 2: to you, hey, you need to make eighty grand this
30:11
Speaker 2: year'd be like, oh my gosh, I don't know how.
30:13
Speaker 2: But if we start making the goals smaller the end
30:16
Speaker 2: of the day, you're going to feel so much more
30:18
Speaker 2: empowered because you'll work out what to cost your product at.
30:22
Speaker 2: And often people forget to take into consideration their time
30:26
Speaker 2: when they're a small business owner. They'll go, ah, all right, Well,
30:29
Speaker 2: let's say that she makes bracelets and her biggest competitor
30:33
Speaker 2: sells bracelets for eighty dollars.
30:34
Speaker 1: So she says, you know what, I'm new to the market.
30:36
Speaker 1: I'm going to sell.
30:37
Speaker 2: Bracelets for seventy dollars. What she's forgetting, maybe, is that
30:42
Speaker 2: that person sells bracelets for eighty dollars because they are
30:44
Speaker 2: able to order them in bulk and have them made
30:47
Speaker 2: overseas with really low labor costs, and she's selling them
30:51
Speaker 2: for seventy dollars. They might be cheaper, but she's making
30:54
Speaker 2: every single one by hand in her bedroom in Melbourne
30:57
Speaker 2: and using all of her time personally to do that.
31:00
Speaker 2: So I think it's really important to factor in what
31:03
Speaker 2: is your hourly rate, because too often do I talk
31:06
Speaker 2: to small business owners who say, oh, Viventoria, like, my
31:10
Speaker 2: product might be beautiful, but I'm making two dollars an hour
31:13
Speaker 2: because of how long this is taking me. And in
31:15
Speaker 2: that case, that business is a really it's not a
31:17
Speaker 2: bad business, because there are things that we need to
31:20
Speaker 2: be fixed and your product is probably beautiful, but I'm
31:23
Speaker 2: guessing that's not the lifestyle you're going for when you
31:25
Speaker 2: wanted to create a small business to have freedom and flexibility.
31:28
Speaker 1: In your life exactly. And if you if you did
31:32
Speaker 1: sell those bracelets for fifty dollars or something, and then
31:34
Speaker 1: you realized, you know, halfway through doing it, that oh god,
31:37
Speaker 1: I'm never going to make money from this. It's hard
31:39
Speaker 1: to then be like, oh, actually it's three hundred dollars now.
31:42
Speaker 1: That kind of ruins the brand perception exactly.
31:45
Speaker 2: And you've just got to start understanding what is your
31:48
Speaker 2: time worth. And if you say, look, my time's worth
31:50
Speaker 2: twenty dollars an hour, fantastic, factor that into the production, factor,
31:54
Speaker 2: that into the way that you're costing up this product.
31:57
Speaker 2: I think it is really important to make you of
32:00
Speaker 2: free budgeting tools. If you go to the MyGov website,
32:03
Speaker 2: they'll have a business plan that you can download and
32:05
Speaker 2: do for free. And as you guys already, no, I
32:07
Speaker 2: love the MyGov Smart Money website because I just feel
32:11
Speaker 2: like it's such great content and it is free and consumable,
32:15
Speaker 2: and it's coming from a non bias source, so it
32:17
Speaker 2: is literally perfect. And there are so many small business
32:20
Speaker 2: hacks on there. So if you need to understand your
32:23
Speaker 2: small business cashlow, go there first. But the first thing
32:25
Speaker 2: I would say to small business owners is your time
32:28
Speaker 2: is worth a lot, and you need to make sure
32:30
Speaker 2: that that's factored into your production, regardless of whether you're
32:33
Speaker 2: a freelance writer creating copy, or you are a small
32:37
Speaker 2: business owner making jewelry or you're a web designer. At
32:41
Speaker 2: the end of the day, if you quote one thousand
32:43
Speaker 2: dollars and you say, wow, that's epic. I'm going to
32:45
Speaker 2: make a thousand dollars for this project. But it takes
32:47
Speaker 2: you ten weeks of your life and you spend forty
32:50
Speaker 2: hours a week doing that, that is a bad deal,
32:52
Speaker 2: my friends, Even if on face value a thousand dollars
32:55
Speaker 2: sounded like a really good deal.
32:56
Speaker 1: How long generally, v would you say it takes for
32:59
Speaker 1: a small business to kind of find its feet.
33:03
Speaker 2: Everybody is different, and I think in the age of
33:05
Speaker 2: social media, people can go viral overnight. I've got small
33:09
Speaker 2: business owners who have started small businesses in COVID that
33:13
Speaker 2: I'm working with currently, and they're amazing, and they're already
33:16
Speaker 2: turning millions in profit just because they went viral on TikTok,
33:19
Speaker 2: and that is crazy. But then I also have small
33:22
Speaker 2: business owners who have been doing something on the side
33:24
Speaker 2: for the last five years and they're breaking even, but
33:28
Speaker 2: they are not super profitable, but they're still really passionate
33:31
Speaker 2: about what they're doing. So I think you need to
33:33
Speaker 2: remember that profitability is important, but you need to understand
33:37
Speaker 2: why you're doing your business. If it's just because you're
33:39
Speaker 2: super passionate about the job that you're doing and the
33:41
Speaker 2: thing you get to do as a hobby, and you're
33:42
Speaker 2: making some cash on the side, then my friend, maybe
33:45
Speaker 2: you're not chasing profitability. Maybe you're just trying to cover
33:48
Speaker 2: the costs so you can do a hobby that you love.
33:50
Speaker 2: I just think it's really different for every single person
33:53
Speaker 2: and there's no one cookie cut away. But at the
33:55
Speaker 2: end of the day, you should know when your business
33:58
Speaker 2: is meant to be profitable, whether that is you need
34:00
Speaker 2: to sell x amount of units per month or work
34:02
Speaker 2: so many hours per month. You need to understand what
34:05
Speaker 2: that point is. Not just go oh, one day I'll
34:09
Speaker 2: be profitable, Like No, I want you to be able
34:11
Speaker 2: to tell me I will be profitable when I sell
34:13
Speaker 2: fifteen bracelets every single month and that's my goal.
34:16
Speaker 1: Yep. So have those really clear cut goals.
34:18
Speaker 3: Love it.
34:18
Speaker 1: I reckon it's time for money diaries now.
34:24
Speaker 3: Hi, I'm a twenty eight year old credit card rewards
34:27
Speaker 3: junkie and this is my money diary. I signed up
34:32
Speaker 3: to my first credit card after I got a full
34:34
Speaker 3: time job, and I knew I could pay it off
34:36
Speaker 3: because I thought, this seems like an interesting cash flow tool,
34:40
Speaker 3: and getting some of those bonus points seems like a
34:43
Speaker 3: good idea because I want to do some traveling. And
34:46
Speaker 3: it worked out great for me. I managed to always
34:50
Speaker 3: pay it off, and therefore I decided to get more
34:53
Speaker 3: credit cards. They're only dangerous if you are someone who
34:58
Speaker 3: is tempted to spend money you don't have. So I've
35:00
Speaker 3: always viewed putting expenses on a credit card as just
35:03
Speaker 3: sort of one side of a balance sheet. If you've
35:06
Speaker 3: got the money to pay it, why not use the
35:08
Speaker 3: cash flow to earn yourself to the points and push
35:12
Speaker 3: that debt out for another month and then just pay
35:15
Speaker 3: it off as you get paid.
35:17
Speaker 1: What does our twenty eight year old credit card junkie do?
35:19
Speaker 1: How much does she earn and how much is in
35:21
Speaker 1: her account right now?
35:23
Speaker 3: I'm a full time engineer. I'm twenty eight, and I've
35:25
Speaker 3: been working in my field for five years, and I
35:27
Speaker 3: earn one hundred thousand dollars a year. I currently have
35:30
Speaker 3: a few thousand dollars in my transaction account and a
35:33
Speaker 3: shared account with my partner fifty thousand dollars in savings,
35:36
Speaker 3: and I'm a credit card rewards junkie with a quantits
35:38
Speaker 3: account of about one hundred thousand points or about seven
35:41
Speaker 3: hundred dollars worth of flight What.
35:43
Speaker 1: Happens to her money once it hits her account?
35:45
Speaker 3: Currently? I immediately put half my half of the mortgage
35:50
Speaker 3: payments into our shared account. I set some aside for savings,
35:53
Speaker 3: and then I leave about one to two thousand dollars
35:55
Speaker 3: for spending over the month, and I might top that
35:57
Speaker 3: up from savings if I need it. I used to
36:00
Speaker 3: pay the balance on my credit cards for the month
36:01
Speaker 3: immediately as well, so that I never got charged interest.
36:04
Speaker 3: But I gave those up to get a mortgage.
36:06
Speaker 1: And what was it like getting a house and a
36:08
Speaker 1: mortgage during the pandemic.
36:10
Speaker 3: We decided, well, all the savings that were doing is
36:14
Speaker 3: probably not going to go towards any holidays anytime soon.
36:19
Speaker 3: And I got sick of paying rent on a four
36:22
Speaker 3: bedroom house, so decided we should buy one instead.
36:25
Speaker 1: What are our twenty eight year old credit card junkie
36:27
Speaker 1: thoughts on investing and does she invest in herself?
36:30
Speaker 3: I wish i'd started sooner. I was advised by my
36:33
Speaker 3: dad to buy Tesla a few years ago, and I
36:35
Speaker 3: got lucky with that. I think of those shares as
36:37
Speaker 3: like a lottery tickets that I might one day cash
36:39
Speaker 3: in or I might lose entirely. But I realized I
36:43
Speaker 3: need a diverse portfolio as well, and I should invest
36:46
Speaker 3: outside my savings account, and that's why I started listening
36:48
Speaker 3: to the podcast. Within the next two years, I'd like
36:50
Speaker 3: to set up an investment portfolio that's going to work
36:53
Speaker 3: for the long term, but also offset the risks involved
36:56
Speaker 3: with having a mortgage that's currently at a really low rate.
36:59
Speaker 3: And I definitely need to learn more about investing, and
37:01
Speaker 3: I'll probably talk to a financial planner at some point.
37:04
Speaker 1: What debts does she have?
37:06
Speaker 3: So we do have a mortgage, but other than that,
37:08
Speaker 3: I've never been in debt, although I've had about a
37:10
Speaker 3: dozen credit cards over the last five years, and I'm
37:13
Speaker 3: really conscious about getting the cards just for ether cash
37:16
Speaker 3: back travel vouchers or bonus rewards points and then using
37:19
Speaker 3: them for my everyday spend. Sometimes I even time the
37:22
Speaker 3: cards to match up with big expenses like car insurance,
37:25
Speaker 3: so that I reached the minimum spend and then I
37:27
Speaker 3: cancel the card after paying the full balance. But yeah,
37:30
Speaker 3: I've never been in debt because I am very careful
37:33
Speaker 3: to always pay them off.
37:34
Speaker 1: What is her best money happen.
37:36
Speaker 3: I'm good at spending within my means. I use a
37:39
Speaker 3: prepaid old iPhone and a boring, reliable secondhand car, and
37:43
Speaker 3: I avoid buying stuff full price unless I really need it.
37:46
Speaker 3: I also love spreadsheets and planning out holiday budgets. And
37:49
Speaker 3: as I said, I collector rewards points for fun. We
37:52
Speaker 3: actually use them to fly to and around Europe in
37:54
Speaker 3: twenty nineteen and some of the flight three of an
37:56
Speaker 3: in business class and all we paid was tax. We've
37:59
Speaker 3: also done multiple domestic trips over the years. You have
38:01
Speaker 3: to be a bit flexible and when you fly if
38:03
Speaker 3: you're going to use points. I love spending reward points
38:05
Speaker 3: on holiday because it means you don't break the bank
38:09
Speaker 3: when you're going taking time off work.
38:12
Speaker 1: And what's our twenty eight year old credit card junkie's
38:15
Speaker 1: worst money habit?
38:16
Speaker 3: Well, I have realized looking back at the credit cards
38:18
Speaker 3: that I did use to justify some unnecessary purchases to
38:22
Speaker 3: make the minimum spend. I also forgot to update my
38:26
Speaker 3: recurring payment details occasionally, so if you're using and canceling
38:30
Speaker 3: cards all the time, then you need to update your
38:33
Speaker 3: payment details otherwise you can get charged late payment fees
38:37
Speaker 3: on recurring payments. And my credit rating was pretty bad
38:41
Speaker 3: for a while when I kept applying for the cards
38:42
Speaker 3: with more rewards points because they have higher limits, especially
38:45
Speaker 3: when I missed a payment on one.
38:47
Speaker 1: What's her big money goal?
38:48
Speaker 3: The payoff for mortgage is the main goal, but that's
38:51
Speaker 3: a long way off. We're also thinking about doing some
38:54
Speaker 3: home renovations, which again I would probably consider putting on
38:57
Speaker 3: a credit card. Unfortunately can't pay treaties with rewards points.
39:02
Speaker 3: But yeah, I would carefully manage the cash flow on
39:07
Speaker 3: those big money goals because big cash flow means big points.
39:11
Speaker 1: What grade would she give her money habits.
39:14
Speaker 3: I'm going to go out on a limit, say an
39:16
Speaker 3: A minus, but I'd like to get it to an
39:18
Speaker 3: aplus for some investments and forward planning.
39:21
Speaker 1: Okay, V So the twenty eight year old credit card
39:24
Speaker 1: rewards junkie, this is such an interesting one.
39:28
Speaker 2: Aye makes me uncomfortable because I've got things I love
39:31
Speaker 2: and things that I'm like. Ah, I hope people don't
39:33
Speaker 2: start that.
39:34
Speaker 1: Let's talk through them, So maybe do you want to
39:36
Speaker 1: start with the best things about this?
39:39
Speaker 2: How savvy she was, Like, traveling the entire world on
39:43
Speaker 2: points is kind of epic. Someone else is paying for
39:46
Speaker 2: your flights? Yes, please, I'm all about that. I think
39:49
Speaker 2: that that is really savvy and really smart. I loved
39:52
Speaker 2: that she was on top of her budgeting. I loved
39:54
Speaker 2: that she was on top of arguably her cash flow.
39:57
Speaker 2: She knew how much was coming in and what point
40:00
Speaker 2: we're everywhere, and just like how to get them. It
40:02
Speaker 2: was actually super empowering because she was like, yep, I'm
40:05
Speaker 2: a spreadsheet junkie and I just know exactly where everything
40:08
Speaker 2: is and how to do it. But but and I'm
40:11
Speaker 2: sorry that there's such a big butt. That's never going
40:13
Speaker 2: to work for everybody. So I'm super excited that that
40:16
Speaker 2: works for her. I've got a friend that that works for.
40:18
Speaker 2: I also have a number of clients that that works for,
40:21
Speaker 2: But those people are few and far between, because that
40:25
Speaker 2: type of discipline does not exist for everybody, And so
40:28
Speaker 2: many of you are going to hear that and be
40:30
Speaker 2: so motivated to kick that off and go, oh my gosh, totally.
40:33
Speaker 2: I'd love one hundred thousand quantus points, because everybody loves
40:37
Speaker 2: quantus points, right, Like you can get into the lounge
40:38
Speaker 2: when you've got enough of them, and you can get
40:40
Speaker 2: free flights. But we don't actually all have the discipline
40:43
Speaker 2: to sustain that for a long period of time, because
40:46
Speaker 2: we'll get over it a month from now, and we'll
40:48
Speaker 2: forget that there's money on a credit card, and then
40:50
Speaker 2: we'll be paying interest off it, and then we'll pay
40:52
Speaker 2: it off, and then we'll forget that there's a yearly
40:55
Speaker 2: fee to hold that credit card, and that will pop
40:57
Speaker 2: up and we'll be like, oh, yeah, that's two hundred
40:59
Speaker 2: and fifty dollars. I should call them, And then you
41:02
Speaker 2: don't call them, and it's just a never ending spiral.
41:05
Speaker 2: She'd said she'd had more than a dozen credit cards
41:08
Speaker 2: to me epic if she's managed to use them all.
41:11
Speaker 2: I'm concerned that a lot of people might see that
41:14
Speaker 2: as inspirational and try and copy that, and they just
41:17
Speaker 2: don't have again the discipline to actually follow that through
41:21
Speaker 2: and make it work for them, because that is a
41:23
Speaker 2: money hack that is great, but is going to require
41:27
Speaker 2: a lot of time and energy and effort. And at
41:30
Speaker 2: the end of the day, I've said this on the
41:32
Speaker 2: podcast before Flybys. Points are not worth very much money
41:36
Speaker 2: at all, but we all strive to collect them, and
41:39
Speaker 2: at the end of the day, they're only going to
41:40
Speaker 2: add up if you're really consistent about using them, i e.
41:44
Speaker 2: Putting every single purchase every single month on a credit card.
41:47
Speaker 2: It's not going to happen if you just you know,
41:49
Speaker 2: have a credit card and use it for overseas travel
41:52
Speaker 2: and hope that the points add up. And I just
41:54
Speaker 2: think that that is a very slippery slope when it
41:57
Speaker 2: comes to finances. Sodation would be don't try this at home.
42:02
Speaker 2: But at the same time, if you're doing this, I'm
42:04
Speaker 2: so pervy. Please tell me what have you got on
42:06
Speaker 2: points that is really expensive that you got for free?
42:10
Speaker 1: How do points even work? Excuse my ignorance.
42:13
Speaker 2: So points work. They're kind of like a reward for
42:16
Speaker 2: using that card. So you might get one point for
42:19
Speaker 2: every three dollars you spend. Sometimes it's point for points,
42:22
Speaker 2: so if you spend a dollar, you get a point,
42:24
Speaker 2: and then those points are redeemable for other things, so
42:26
Speaker 2: you might be able to get and you die, some
42:28
Speaker 2: vacuum cleaner because that might be worth fifty seven thousand points,
42:32
Speaker 2: or you might be able to get upgraded flights for
42:35
Speaker 2: X amount of points or whatever it is. Every single
42:37
Speaker 2: rewards program is very different, and the points are definitely
42:41
Speaker 2: not worth a dollar. So if you spend a dollar
42:43
Speaker 2: and you get a point for one point, it's not equal.
42:47
Speaker 2: It's not worth that. It might be worth like one
42:49
Speaker 2: cent or five cent, and you really have to accrue
42:52
Speaker 2: those points. Or one hundred thousand points does not mean
42:54
Speaker 2: you have one hundred thousand dollars in credit. It might
42:57
Speaker 2: be seven hundred dollars worth of credit, so you've got
42:59
Speaker 2: a flight to Bali. So for me, I think it's
43:02
Speaker 2: only worth it if you're super regimented about these things.
43:05
Speaker 2: But at the same time, I'd much prefer you to
43:08
Speaker 2: put your time and energy and effort into something else
43:10
Speaker 2: that's really going to help you create wealth. Because I'm
43:12
Speaker 2: not trying to be negative. I really love this story,
43:15
Speaker 2: but I just think that she was so upbeaten, so positive,
43:19
Speaker 2: that I don't want you all walking away and doing this,
43:22
Speaker 2: because I'd love you to put that time and energy
43:24
Speaker 2: and effort into your cash loow or your budget or
43:26
Speaker 2: investing or creating future wealth. Because as much as free
43:29
Speaker 2: flights sound pretty damn sexy. They're not going to create
43:33
Speaker 2: future wealth for future you.
43:34
Speaker 1: I think it's probably also important to remember, and I
43:38
Speaker 1: could be wrong here, but credit card points are probably
43:42
Speaker 1: a marketing ploy by the credit card companies, right, absolutely,
43:46
Speaker 1: and they have them, absolutely, and they're often used as
43:49
Speaker 1: kind of like their carrot on the stick when you're
43:50
Speaker 1: signing up for a home loan or a new personal
43:53
Speaker 1: loan or whatever it.
43:55
Speaker 2: Is to get you to stay in debt. Like the
43:58
Speaker 2: end of the day, they'll be like, hey, cool, did
44:00
Speaker 2: you just get your home loan. Fantastic, here's this count's
44:03
Speaker 2: credit card with one hundred thousand three points, Please rack
44:06
Speaker 2: up more debt, and you just go.
44:08
Speaker 1: Great, one hundred thousand points.
44:09
Speaker 2: That's flight's great, and you kind of again go down
44:13
Speaker 2: the slippery slope of spending because you think it's really
44:16
Speaker 2: positive and they've created a positive experience for you the
44:19
Speaker 2: end of the day, if you can use those systems
44:21
Speaker 2: to your advantage, I am all for it, but not
44:23
Speaker 2: many of us have the ability to do that, and
44:25
Speaker 2: I think we need to be honest with ourselves about that.
44:27
Speaker 2: There were also a few things in there worthy of
44:29
Speaker 2: celebrating as well. Yes, absolutely, engineer earning one hundred thousand
44:34
Speaker 2: dollars a year. What a queen at twenty eight Yeah exactly.
44:37
Speaker 2: Oh my gosh, one hundred grand before she's thirty.
44:39
Speaker 1: That is epic. Yeah, that is huge. She loves spreadsheets
44:43
Speaker 1: like you could mean too, so.
44:46
Speaker 2: Absolutely, and that's what I mean. Like, I loved this
44:48
Speaker 2: money diary and she sounded like such a legend. And
44:51
Speaker 2: maybe I've harped on about this too much, but I
44:54
Speaker 2: don't think we can go on too much about slippery
44:56
Speaker 2: slopes that you could potentially go down, because at the
44:58
Speaker 2: end of the day, that was super inspirational money diary.
45:01
Speaker 1: Yeah, she knows what She's a woman, empowered and educated.
45:04
Speaker 2: I loved her and I loved her story and I
45:07
Speaker 2: loved that we got to share it because I love
45:08
Speaker 2: the Pervia money diaries, so I'm like, oh, what did
45:10
Speaker 2: you do with your points? Yeah, had a very different
45:13
Speaker 2: one hundred percent love it, but also disclaimer.
45:16
Speaker 1: Yeah, exactly right. I think it is time to wrap
45:20
Speaker 1: the show there, VICKI.
45:21
Speaker 2: D yes, But just before we head off Georgia, we'd
45:24
Speaker 2: like to acknowledge and pay respects to Australia's Aboriginal and
45:26
Speaker 2: Torristrad islanda peoples the traditional custodians of the lands, the
45:30
Speaker 2: waterways and the skies all across Australia. We thank you
45:33
Speaker 2: for sharing. After carrying on the land which we are
45:35
Speaker 2: able to learn, we pay our respects to elders past
45:38
Speaker 2: and present, and we share our friendship and our kindness.
45:40
Speaker 1: The advice shared on she Is on the Money is
45:42
Speaker 1: general in nature and does not consider your individual circumstances.
45:46
Speaker 1: She is on the Money exists purely for educational purposes
45:49
Speaker 1: and should not be relied upon to make an investment
45:51
Speaker 1: or a financial decision. And we promise Victoria Devine is legit.
45:56
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46:09
Speaker 1: Angels for putting it all together.
46:11
Speaker 2: Guys, Beck is new, we have the she's in the
46:14
Speaker 2: room watching us and she edited last week's podcast, which
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Speaker 2: honestly was epic and we love her. Welcome to the team.
46:20
Speaker 1: Beck.
46:20
Speaker 2: We are so grateful to have you here, but we'd
46:23
Speaker 2: also love you know what else we love We love
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Speaker 2: it when you join our Facebook group. Nice segue, exactly.
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