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Lynda Moore: Money Mentalist on spiralling debt and avoidance of money problems · The SME Stream

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  Speaker 1: As I said before the news, there's a piece in
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  Speaker 1: the spin off about a forty eight year old woman
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  Speaker 1: who was still paying off a huge student loan she
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  Speaker 1: first took out when she was seventeen. It ended up
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  Speaker 1: because she went to live overseas, blowing out to almost
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  Speaker 1: one hundred thousand dollars. It seemed to beg at the time,
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  Speaker 1: she said she didn't even think about money. She wasn't
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  Speaker 1: earning enough. She thought while she was away she wouldn't
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  Speaker 1: have to worry about it. It was only when she
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  Speaker 1: came home she was confronted with the reality of what
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  Speaker 1: she had done. How can people get themselves into situations
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  Speaker 1: like that where you just don't think about it? Or
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  Speaker 1: how do people think it is impossible to save for
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  Speaker 1: a deposit on a house given what I own when
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  Speaker 1: there are stories every day of people who can and
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  Speaker 1: who do, who are in similar situations who don't have
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  Speaker 1: parental help. How is that some people's approach to money
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  Speaker 1: is so much more sensible than others. Linda Moore is
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  Speaker 1: the moneymenttalist Moneymentalist dot Com, and she joins me, now,
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  Speaker 1: very good morning to you.
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  Speaker 2: Good morning.
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  Speaker 1: Is this a fairly common story that a debt gets
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  Speaker 1: so big that people think I'm not going to deal
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  Speaker 1: with it. It's beyond my understanding, so I'm just going
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  Speaker 1: to bury my head in the sand.
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  Speaker 2: Yes, it does. It happens quite a bit. And to
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  Speaker 2: be perfectly honest, it happened to me. I did exactly
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  Speaker 2: the same thing many years ago before I became the moneymentalist.
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  Speaker 2: I ended up six hundred thousand dollars in yet and
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  Speaker 2: I'm an and bear in mind, I'm an accountant, so
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  Speaker 2: I'm supposed to be the expert.
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  Speaker 1: How did that? Heaven?
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  Speaker 2: Well, it happens because life happens. So in my kind
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  Speaker 2: of scenario, I had my wonderful husband lost his job.
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  Speaker 2: I was looking after the finance as he was stressed.
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  Speaker 2: I was stressed. Just life got on top of us
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  Speaker 2: all and you're so busy figuring out which fire am
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  Speaker 2: I going to find today? And money typically tends to
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  Speaker 2: be one of the hardest because, believe it or not,
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  Speaker 2: although it's the most common thing we have, it's probably
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  Speaker 2: the least understood thing we have in our life. And
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  Speaker 2: how we relate to it.
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  Speaker 1: Yeah, I can well imagine that. Like when I was,
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  Speaker 1: you know, in my twenties, in a single mother, I
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  Speaker 1: never imagined I would own a home. I never imagined
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  Speaker 1: I'd be able to save enough because it just seemed
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  Speaker 1: like a monumental amount. And if I had six hundred
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  Speaker 1: thousand in debt, I would just I can't. I would
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  Speaker 1: just be you know, paralyzed by the thought of trying
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  Speaker 1: to pay that back.
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  Speaker 2: Yes, because and even like, for example, your lady with
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  Speaker 2: one hundred thousand, you've got to look at it and say, well,
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  Speaker 2: how am I going to pay it back? Because it
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  Speaker 2: takes some tough decisions. You know, I couldn't work myself
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  Speaker 2: out of six hundred thousand more than debt, So there
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  Speaker 2: was some major decisions that you need to make, and
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  Speaker 2: then that becomes really hard because how do you find
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  Speaker 2: people to help you make those decisions? And that's also
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  Speaker 2: part of it. But it is quite easy to forget
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  Speaker 2: about debt now because we don't get stuff in the
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  Speaker 2: mail with bits of paper on it telling us we're
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  Speaker 2: in debt. So it's very easy, very easy to ignore it.
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  Speaker 1: I suppose if you've got you know, like if you
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  Speaker 1: haven't paid your power bill, you'd get something, wouldn't you
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  Speaker 1: in the mail?
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  Speaker 2: Yes, you would, you would, and you might get text
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  Speaker 2: messages and things like that. But you know, there's not
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  Speaker 2: that the pain associated so much with it because particularly
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  Speaker 2: for example, with the ideas one of them, where you're
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  Speaker 2: kind of expected to go on to your my ir
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  Speaker 2: and look at the stuff yourself. Well, if you're a
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  Speaker 2: bit of a money avoider, best the last thing you're
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  Speaker 2: going to do. So I can underst and how she
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  Speaker 2: got into that situation by not wanting to look or
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  Speaker 2: not thinking about looking.
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  Speaker 1: And possibly if she's got the sort of personality that's
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  Speaker 1: drawn to art into doing an elum finance degree in
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  Speaker 1: taking six years to do it, yes, she's going to
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  Speaker 1: think more about abstract concepts than paying.
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  Speaker 2: Bills potentially, because all the first thing we all have
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  Speaker 2: is we all have a money personality, which is how
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  Speaker 2: we behave with money and so on that you've got.
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  Speaker 2: You know, people who are really really good with money.
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  Speaker 2: They're naturally good. They're naturally going to look and they're
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  Speaker 2: going to check and they're going to find things out.
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  Speaker 2: And there is one of the personalities which is the
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  Speaker 2: money avoider, which I always call my problem child, because
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  Speaker 2: they're the ones that almost have a fear and they
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  Speaker 2: don't want to look. They're happy to let everyone else
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  Speaker 2: help and support them. But if you haven't got that
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  Speaker 2: help and support, you can get very, very lost, and
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  Speaker 2: you can get yourself into debt, or you can trust
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  Speaker 2: the wrong people and you can get bo that way.
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  Speaker 2: So it just sounds from what you've said that and
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  Speaker 2: that creative personality as well. I mean, they do have
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  Speaker 2: a bit of a stereotype of not being good with money.
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  Speaker 2: Some of them really are, but as a generalization, you're right,
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  Speaker 2: they're into that creative mode. I have an amazing musician
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  Speaker 2: who's a really good friend of mine, and I have
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  Speaker 2: to be her accountability buddy because otherwise she doesn't charge
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  Speaker 2: in us for gigs because she's doing what she loves
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  Speaker 2: and what she's passionate about.
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  Speaker 1: Well, like Gutier who we were talking about before, he's
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  Speaker 1: made no money out of somebody I used to know,
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  Speaker 1: because he doesn't care that's right, doesn't get.
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  Speaker 2: That's right, that's exactly right. And so that's kind of
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  Speaker 2: part of that avoid of personality as well. You know,
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  Speaker 2: you've got to put your own oxygen rask on first
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  Speaker 2: and look after yourself, so you know, it's your personality.
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  Speaker 2: Some people will monitor their debt, they will have spreadsheets
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  Speaker 2: for Africa and others will go, Actually it's fine because
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  Speaker 2: we also have a risk profile as well, and some
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  Speaker 2: people are comfortable with debt, which comes back to your
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  Speaker 2: other points as to, you know, around people's saving and
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  Speaker 2: things like that, because sometimes the fear of having a
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  Speaker 2: mortgage and what's an acceptable mortgage is just so far
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  Speaker 2: out of their risk profile as well that they really,
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  Speaker 2: you know, they can't ever see themselves doing it. So
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  Speaker 2: there's lots of things going on around this whole concept
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  Speaker 2: of what's your relationship with money like? And so a
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  Speaker 2: fun question I always like to ask people is if
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  Speaker 2: you were dating money, what would it say about you?
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  Speaker 2: Because that gives you a really good starting point for
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  Speaker 2: what your relationship with money is. And do you need
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  Speaker 2: to do a bit of work because if money wouldn't
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  Speaker 2: give you a second date, you probably need to do
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  Speaker 2: a bit of work.
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  Speaker 1: How do you mean about dating money? What would my
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  Speaker 1: money look?
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  Speaker 2: Well? Yeah, so if you were dating money, So if
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  Speaker 2: you are you a good date? So do you nurture it,
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  Speaker 2: do you take care of it? Are you aware of it?
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  Speaker 2: Or do you have a bit of a throwaway aspect
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  Speaker 2: of it? Where Oh, there's plenty more out there so
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  Speaker 2: if this date doesn't work, I'll just go and find
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  Speaker 2: someone else. Yes, that's a fun question.
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  Speaker 1: I see what you mean, But I mean there's a
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  Speaker 1: I was. I read us story the other day about
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  Speaker 1: a very successful businessman who actually advertises on our show.
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  Speaker 1: He's only young, but during the financial crisis, he went
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  Speaker 1: from buying his wife a baby grand piano the previous
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  Speaker 1: year to selling everything, including the two year old's unused
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  Speaker 1: ballet shoes, everything. And he said, we can sit on
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  Speaker 1: the floor. I don't care. I can buy another couch,
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  Speaker 1: but I've got to save the business. The business is
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  Speaker 1: everything we can. I can't build that up again, and
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  Speaker 1: I can't build the good will. So he wanted to
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  Speaker 1: pay all the bills even though he wasn't getting paid.
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  Speaker 1: He was just the last in the long line of
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  Speaker 1: dominoes to fall, and they were ruthless. They sold off everything.
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  Speaker 1: And if clearly you know from the financial crisis, have
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  Speaker 1: come back and because they kept the company and are
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  Speaker 1: bigger and better than ever, does it sometimes take the courage.
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  Speaker 2: To do that? Yes, it does, because once you face
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  Speaker 2: the situation that you're in, whether it's fifty thousand, one
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  Speaker 2: hundred thousand, or my case, six hundred thousand. Once you know,
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  Speaker 2: then you have to take some action and you have
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  Speaker 2: to make some decisions, and those decisions are not going
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  Speaker 2: to be easy decisions. But the whole thing is the varying.
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  Speaker 2: Is The other thing, of course we do, is we
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  Speaker 2: ca testriphy things. So if we actually don't look at
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  Speaker 2: the numbers in front of it, we can make up
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  Speaker 2: a whole heapers stories in our head about how terrible
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  Speaker 2: it is and how we can't do this and we
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  Speaker 2: can't do that. But once you actually quantify it and
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  Speaker 2: you go, this is a position that I'm in, the
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  Speaker 2: next question is well what can I do? And instinctively
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  Speaker 2: we tend to go to, well, there's nothing I can do,
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  Speaker 2: because that's just the panic. But once you step back
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  Speaker 2: from the panic and you get.
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  Speaker 1: Oh, oh, we'll take a break and come back, because
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  Speaker 1: this is the important bit too. Linda's back. Something weird
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  Speaker 1: is happening in water Waker. Yes, somebody has said about
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  Speaker 1: bankruptcy to clear all debt.
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  Speaker 2: Yes, I mean that's that's certainly an option. But again
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  Speaker 2: there are some people who go, there's no way that
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  Speaker 2: I can do that, and that comes down to values.
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  Speaker 2: I mean, I have had to advise people and go
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  Speaker 2: you know, that's really the only option, but quite often,
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  Speaker 2: particularly for business people, having to go down that route,
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  Speaker 2: your business is your identity, and so you're not only
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  Speaker 2: having to go bankrupt, but it's also well, that's my life,
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  Speaker 2: that's my business. You know the example you had before
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  Speaker 2: where he sold everything obviously or that business was his identity.
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  Speaker 2: So again it comes down to there's no one solution
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  Speaker 2: for everybody. It's you know, it's what is that money relationship?
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  Speaker 2: What is your values? And what are your options? But
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  Speaker 2: the firson is quantify it because you don't know what
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  Speaker 2: you can do until you have that number in front
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  Speaker 2: of you.
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  Speaker 1: How on earth did you pay back six hundred thousand
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  Speaker 1: when you're you know, you could not work to pay
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  Speaker 1: it back?
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  Speaker 2: Yeah, basically, I pretty much sold. So I sold the house,
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  Speaker 2: sold a big chunk of the business, and whatever was
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  Speaker 2: left over. I worked my butt off because I got
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  Speaker 2: it down to a manageable level that I could work
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  Speaker 2: my way out of it. But yeah, but I mean
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  Speaker 2: those decisions were an instant and I went through an
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  Speaker 2: awful lot of heartache and stress and everything, you know,
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  Speaker 2: to kind of to get to that point, because you know, again,
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  Speaker 2: being an accountant finding yourself in that such situation. It
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  Speaker 2: was my identity here. It was the most embarrassing and
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  Speaker 2: shameful thing to actually have happened.
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  Speaker 1: Sometimes that that stress and that shame can be fatal,
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  Speaker 1: it can be I know.
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  Speaker 2: And again I've worked with business owners where that's actually happened,
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  Speaker 2: and that's that is so so tragic. And that's why
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  Speaker 2: it comes back to as soon as you start waking
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  Speaker 2: up in the night feeling sick, worrying about money, that's
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  Speaker 2: the time to take action. At that first nudge that
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  Speaker 2: your subconscious is giving you something's not right here, I'm
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  Speaker 2: feeling unsettled, that's the time to reach out and get
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  Speaker 2: some help and some support. And there are amazing resources
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  Speaker 2: out there. You know. There's incredible budget advisors and community
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  Speaker 2: support groups that can start you on that process that
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  Speaker 2: can really help you know. I mean, obviously I do
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  Speaker 2: mental coaching as well, but there's certainly a lot of
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  Speaker 2: resources there that aren't TikTok and Google that are real
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  Speaker 2: people that have empathy and are not going to be
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  Speaker 2: shocked or embarrassed or find anything because they're dealing with
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  Speaker 2: us all the time. So that's what I say the
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  Speaker 2: best advice. Just please go and get some help. Don't
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  Speaker 2: bury your hidden sand, don't be the ostrich, because that's
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  Speaker 2: when it does start to get out of control and
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  Speaker 2: affect every other area of your life.
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  Speaker 1: Yeah. Yeah, So if you've got that big student loan,
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  Speaker 1: if your business is struggling, and god knows how well
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  Speaker 1: how business many businesses have survived after these last five years,
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  Speaker 1: the first thing to do is look at how much
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  Speaker 1: you owe, yes, and then get expert advice.
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  Speaker 2: Basically, I mean, if you're a business owner, you should
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  Speaker 2: have an accountant, so you know that's obviously going to
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  Speaker 2: be your first port of call. But remember there's not
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  Speaker 2: only business debt, there's also personal debt as well, so
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  Speaker 2: it may be that you you know, you do need
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  Speaker 2: to go further than that. But the first thing is
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  Speaker 2: to actually, oh, hang on, we've just had a GST.
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  Speaker 2: I wasn't able to pay my GST. Why what do
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  Speaker 2: I need to do? So it's just being being brave
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  Speaker 2: to actually go I don't know, I don't understand this
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  Speaker 2: money stuff very well. Who around me can actually help
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  Speaker 2: me with this? Who can answer? Who can I ask?
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  Speaker 2: Because as I say to clients, I don't need to
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  Speaker 2: know exactly about your business. You all have the answers,
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  Speaker 2: you just don't know what the questions are.
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  Speaker 1: Yeah, excellent advice, Linda, Thank you so much. Linda Moore
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  Speaker 1: moneymentalist dot com very interesting and people's attitude towards debt