Ahh, Afterpay
00:00She's on the money.She's on the money.Hello and welcome to She's on the Money,the podcast for millennials who want financial freedom.My name is Annabelle Lee.I'm a law student who wants to get better at all things money.And to do that, I've enlisted the help of my friend and money expert, Victoria Devine.Hello, Victoria.
00:34Hi, hi.First of all, we just want to say a huge thank you to everyone who listened to our first episode.That was so unexpected.Absolutely unexpected.Very overwhelmed, all the emotions.Honestly, I did not expect the reception that we had, but I think it really validates why we're here.We actually had a listener post something to her Instagram story and tag us.her name was shaylin shaylin i'm sorry if i'm butchering your name she gave herself a wax burn
01:02on her upper lip by deciding to do an at-home wax i think she was oh my gosh i saw that i saw that ifelt so awful i replied to her instagram story pretty quickly i i reposted it because it wasquite funny but at the same time have i started something you need to take responsibility forall the burns i'll take responsibility for my financial advice but i'm not sure about my beautyadvice. She's an all-round expert, guys, not just a money expert. No, don't take it.Okay, Victoria, today we're going to talk about all things afterpay. It's every millennial'sweakness and something that we all hate to love, or love to hate. But before we really dig in,let's kick things off by sharing a money win or money confession from the week.
01:42What do you have for me this week? All right. I feel like I have a very excitingmoney win this week that I only get to have once a year. So it was my birthday yesterday.Happy birthday!Thank you.But it meant I didn't pay for anything for the entire day.So I had a fantastic day of going out for brunch and then I went out for dinner withmy best friend and yeah.No complaints.
02:05No complaints.I had a wonderful day and it cost me nothing.How was your weekend?Do you have a money win?I, on the weekend, I went out for dinner with my friends and on my way there, this lastweek mine was vehicle related and this week it's also vehicle related.Oh, I see a theme.I was gonna catch a tram but the tram stopped running for some reason so I decided to catch
02:27an uber I usually catch the uber pool it's a lot cheaper than the other ones but for some reasonI was running late and I was in a rush and my finger slipped and I ended up taking the uberblack is that oh you're fancy one and I didn't realize until the car pulled up into my streetand there was this really fancy driver as well and he was being really weirdly niceand then I rocked up to dinner and my friends were waiting outside for me and they were likeI thought you just started a money podcast shouldn't you shouldn't you be trying to savemoney and I was like it was an accident but I hate being late so I it was the only way maybeyou could have said that you just got the free upgrade because sometimes on uber when I'm
03:05ordering uber x's I get upgraded to like uber select or uber black that has never that hasnever happened I feel like it's it's what playing a game of of bingo but sometimes I get upgradedand I feel a lot fancier than I am. I'll be going to a work meeting and I turn up in like a Chrysler300 and I feel like a little bit more gangster than I actually am. Hey, you're gangster, Victoria.So now that that's out of the way, let's jump into today's show. Today, it's all about Afterpay,that pesky buy now, pay later service that's been attacking the millennial bank balance since itlaunched in 2015. Victoria, let's start simply. What's the first thing that comes to mind whenyou hear the word afterpay? I feel like I have a pretty emotive response to this. Give it to me.
03:51What is it? Oh, it's a really negative feeling. Maybe not a series of words, but I just feel likewhen you talk about afterpay, I immediately think bad credit. I think bad debt. And I'm not sure ifthat's a product of my experiences or my perception of the product. I'm not saying it's right orwrong, but my immediate thoughts are negative. That's the really conflicting thing. A lot ofmy friends love using Afterpay. They use it all the time, but then there are these negativeconnotations that come with using it. Are those connotations fair, do you think?I'm not sure if my negative connotations come from a place of financial education because Iwork as a financial advisor, because I also have friends who use it all the time and absolutely
04:32love it. I've got one girlfriend who is consistently using Afterpay on the Iconicand loves the fact that she can get all these dresses, have them delivered to her house,try on the ones that she wants to keep, keep those and send the rest back. And she's neverhad to have the whole amount of the cost of all of those dresses come out of her account at anypoint in time. She's a really good saver. She's someone who is really good with her money. So forher, I don't think afterpay is a negative. I think it's something that she's using just because it'sconvenient for her at that point in time. On that note, let's start with the positives then.how can afterpay be used in a positive way for non-essential items? So I think my friend is a
05:11good example of someone who's using it, but is also in a positive financial position. She'sreally self-aware of when she's using afterpay, what for, why, what her payments are. I could askher in a split second, what's on your afterpay? How much do you owe? And she'd tell me what sheowes and why she owes it. Whereas I think a lot of people are actually getting a little bit outof control with Afterpay. So they are using it as a tool to potentially not take responsibilityfor their spending. So they're just not looking at the bigger picture. They're not going, all right,well, I still owe $200. They're saying, oh, that's easy. That's just $50 now. I've got $50 in myaccount. Where there are a lot of people who are in positions where they're using Afterpay because
05:54they don't have the money in their account and they're hoping that by next pay, they will havethe money. I think it's a different situation. So my friend is really good with using Afterpayand uses it in a way that benefits her financial position because she wants to not dip into hersavings to afford something that she knows next month she's going to have the money for. So I feellike some people are using it as a tool to budget their spending. So instead of spending $200 rightnow out of your pay cycle, you get to break it up. And if that's something that you're using as a wayof budgeting, then fantastic. But I also think there are a lot of people who are getting intoa lot of trouble because they're not budgeting around that. They're not taking responsibility
06:36for their financial position. And they're, for example, purchasing an item for $200and potentially only seeing it as $50. Now, I will worry about the rest later. And when latercomes, they've already made a number of other afterpay purchases and things kind of compoundout of control. Yeah. So it requires more effort, I guess, to use it responsibly, which a lot of us,I think maybe I'm too lazy to think so far ahead.I think it's, I don't know if it's lazy or if our generation have their heads in the sand or if it'sjust, or if we're being enabled to make financial decisions in the moment. So personally, I reallylike Afterpay as a company, as a business. It's revolutionized the way that purchasing online is
07:17happening. It's even revolutionized the way purchasing in-store is happening. However,I don't think people are taking responsibility for their financial position at all by using itso I think something else that we probably should touch on really early on in this conversationabout after pay is that it's about to be rolled out into GP clinics I didn't know that yeah it'sabout to be rolled out into situations where people who potentially don't have access toyou know two or three hundred dollars they need for a medical procedure or a scan or a specialistappointment that they need are going to be able to access Afterpay and I think it's pretty classistof us to think that Afterpay is only for buying retail items. So I'm actually reading now that
08:01Afterpay is expanding its footprints into GP clinics and radiology and pharmacies and all thatbut it's already been rolled out into over 1100 dentists and optometrists nationally. So what doesthis mean exactly? Does it leave people with more out-of-pocket expenses or is it better for them inlong term? I think it's a really interesting question because used appropriately, Afterpaycould be a tool that enables people to get access to medical procedures that they need in the hereand now, whereas I think it could potentially leave more vulnerable patients in a positionwhere they're paying for services they might not need or choose elective services that are notwithin their budgets. So, you know, you mentioned that Afterpay has rolled out in 1100 dentists.
08:44I think that's fantastic because dental hygiene is so important.You know, we had a big giraffe that used to come around to school.Harold.Yes, Harold.I forgot about Harold.So he used to come around to schools and talk about how important it was.But the one thing I think of when I think of dentists is how expensive it is.But how are people actually using it in dentists?
09:04Are they going and getting their cavities filled or are they going and getting some really nice veneers?What does that look like in terms of how people are using it?So I guess it really comes down to whether it's being used for GP clinics, your pharmacy or thedentist, it really comes down to how people are using it, whether they're using it responsiblyor maybe they need some more education around it. So yeah, so what I'm gauging here is you can'ttell someone not to use it at all. Absolutely not. And it's not a bad service. At the end of the day,it's a bit like getting your car fixed, right? Say I go in to get my car serviced and I wasexpecting it to be $150 checkup, but they tell me that my brake discs are gone. Is it a smart thing
09:42for me to leave the car service place without having paid for that? Am I putting myself atrisk or am I better off if I use a service like Afterpay where I can pay a lower upfront feefor a service that I'm going to need that puts my safety first and then pay it off over the longterm by factoring it into my budget? Is that where this should be at? Or am I using it because Iwanted new rims on my car? And that's maybe something that an individual has to assessfor themselves. But it is so popular. We do know that. We know that over 2 million Australianshave used Afterpay. Why do you think modern day lay-by companies are so popular, particularlyamongst women? I know a lot of my girlfriends use it, but I don't know if a lot of my guy friends do.
10:23I think it has a lot to do with impulse purchasing, but also kind of that keepingup with the Kardashian style. Well funny you mentioned the Kardashians. Kim Kardashian's brandKKW Beauty was one of the first adopters of Afterpay in the US which shows a lot about howsocial media plays a role and celebrity plays a role in this whole Afterpay thing. I think it'sreally interesting and I've been speaking a lot with clients recently about Instagram culture andwanting to keep up with friends and you know we see these memes floating around Instagram andFacebook which are along the lines of how do millennials afford their lifestyles and it beinga game of guessing how I think it's really interesting that we have all of this pressure
11:03on top of us to you know have that Gucci belt or have a pair of Gucci sneakers and keep up withthe trends that Instagram influencers are putting on the table for us when in reality that's notnormal it is not normal to walk around with a $700 belt around your waist when you're earning$50,000. But a service like Afterpay makes it a lot easier to justify it to yourself. I think it'sdangerous in that way because it's enabling people to make purchases that are outside of their meansand they are not giving it long-term thought because instant gratification is such a strongerfeeling than long-term savings. And I think people really need to step back and have a think about,is this a purchase that I would make in six weeks? You know, you see a really beautiful
11:49dress online and afterpay makes it really easy to purchase is it something that in six weeks youwould still purchase for yourself if not have a think about it and regardless of whether you canafterpay it now maybe sit on that decision for 24 hours have a think about it is it aligned to mygoals is it aligned to what I need to do do I really need a new dress for the weekend a lotof the time when I leave it I just forget about the product and I don't actually like I don'tactually need it I don't want it in a few days or weeks down the track yeah I posted something theother day on our Instagram actually about putting 24 hours between you and your spending. I sawthat. Yeah and making sure that you're asking yourself a couple of questions before purchasing
12:26it and I guess it's my way of trying to talk people out of purchases they don't need to makebut at the same time these are things that we all should be thinking about before purchasingsomething that is a non-essential. So do you think then that Afterpay would be thriving in a timewhere Instagram didn't exist or wasn't as popular? I think that it would be silly of me to say thatthis product wouldn't be something that people wanted to use regardless of the time that we'rein. Like think back to when I was, you know, five, six, and my mom used to put, you know,toys on lay-by at the Target toy sale so that she could line them up for Christmas. And I rememberthat being such an exciting thing to do where, you know, we'd get to go pick toys for our cousins
13:06and I'd get to pick a toy for my sister and we'd put it all on lay-by. Lay-by is when you get theproduct after you pay. Yeah. So after pay is essentially a reverse lay-by. So it's buy now,pay later. I think it does take the effort out of the transaction and it really goes back to thatinstant versus delayed gratification. So lay-by, you would think about what you were going topurchase. You would go, all right, I need this product. I can have it in eight weeks. I canhave it in 10 weeks with 10 payments or four payments or however many payments it was goingto take. But your gratification on that product was delayed because you didn't receive the productuntil you had fulfilled the goal of paying off that purchase. Whereas Afterpay works in reverse.
13:50You get the product upfront, you get to satisfy your instant gratification. However, you're stillstuck with a bill for something that maybe in three or four weeks you're not using or you didn't feellike you needed. And because it's already used, you can't return it. It's not worth the pain thatyou go through after. Exactly. Whereas a lay-by is kind of building up to a purchase and you're,you know, chipping away at a larger goal. And then that item is the reward for the goal thatyou've put in place for yourself. So I feel like it takes that away. But I think it would be naiveof me to say that afterpay wouldn't exist in a world where Instagram didn't because lay-by wasand used to be so popular. So what do you think young people aren't aware of then when it comes
14:33to using Afterpay because so many young people are using it, perhaps maybe irresponsibly at times.So we've touched on why it satisfies Insta gratification and how people aren't reallyconsidering the ongoing monthly payments. We've also talked about how people are using iteffectively, like my friend, how she's, you know, putting it into a budget and making sure thatone Afterpay debt is paid off before she even considers a new one. I don't think peopleunderstand how it impacts their credit rating. I don't think people understand how Afterpayaffects their goals, how it affects their future wealth, how it affects what they're planning todo for the rest of their lives. And that sounds quite dramatic. But at the same time, if you're
15:13living in a world where you are getting things immediately, you also adopt that feeling ontolarger goals. So I can buy a dress right now. This is really great. It's here if you've boughtit off the iconic. Sometimes within the day, I'm never going to afford a house because we don'thave the commitment to long-term goals and saving for five, six, seven years for your first home,even 10 years for your first home, then seems like a really ridiculous thing to do.You mentioned credit rating. We're going to talk about that right after we hear from you guys.Hi there. You've called the She's on the Money hotline. Do you have a money problem you wanthelp solving do you have a money dilemma you just want to chat about victoria is here to help every
16:03week we'll be playing your hotline questions to help make sense of the money mess you may havefound yourself in give us a call on 0435 293 886 and you might find yourself on the showbut for now here's a whole bunch of you with the same issuehi girls uh i'm 20 and i think i'm an after pay addict i currently owe around 780 dollarsin upcoming payments which is definitely more than i have to my name to this datei think it's difficult because i think for me it's a lot about keeping up and it's become abit of a coping mechanism to deal with the fact that i don't have the means to remain as you knowrelevant in terms of clothes and fashion. I've also been buying flights on a recently bit ad hoc.
16:51I'd love some advice on how to call it. I know it's, you know, can't really be as easy as justthe way it would be up in practice. And I think it would help me kind of get out of debt, whichwould be great considering I'm a student not earning a lot of money. Thanks so much. Lovethe first episode. So it sounds like this listener is aware of the fact she's in a bit of strife.Does this listener's story stack up with the worst you've ever heard? Like are there otherhorror stories you've come across? I think it's actually quite common to be in that position.Like I'm not going to say it's the worst, but it's also not the best. So I've come across peoplein the last year or so who have been paying back thousands of dollars on Afterpay because it's all
17:30added up. And I'm not saying that these people just go out and get an Afterpay account and thena week later they're able to access thousands of dollars worth of credit. These things creep up onyou over time. So, with Afterpay, I cannot say from experience because I haven't actually usedit. As far as I'm aware, each time you transact with Afterpay, your credit level increases. Yourcredit can essentially increase over time. So, this person would have, you know, started witha $300 limit and then it would have gone to four, five, six and now she's up to a point where sheis paying back $1,000 a month. So, this person's situation isn't completely out of, you know,out of line with what I've heard previously, but I do think it is time for her to potentially just
18:13close down her Afterpay account if you can't use it responsibly. If it is not contributing to youbettering your life in a non-possessional way, I think it needs to go. Okay, so there are rumoursfloating around that Afterpay debt can hurt your chances of getting a mortgage. Is that true? Whatdoes it do to your credit rating? I think it's really interesting because so many people aregoing to have an opinion on this because they are using Afterpay and they had no problem gettingtheir mortgage through or they had no problem refinancing. And you hear a lot of anecdotalstories, especially on threads in our Facebook group about people saying, oh, well, I had noproblem with it. Just tell your mortgage broker. And then other people saying, oh, my mortgage
18:55broker told me to close down the account. So when you're talking about credit and it potentiallyimpacting you being able to get a mortgage, they are saying that for a couple of reasons.So, Afterpay is a line of credit, regardless of what you would like to classify it as,regardless of what their website says, Afterpay is a line of credit and it will impact whetheryou're able to finance something bigger. So, that means that if you're committed to a monthlyrepayment, it's going to need to be taken into consideration when working out how much you canafford on a mortgage each month and whether a bank is willing to lend to you. So, when we talkabout credit and what mortgage brokers look at and what the banks look at, they actually look
19:34at the three Cs of credit, which is potentially something that people haven't heard of before.So these include four factors, character, capacity, capital, and conditions. And I thinkafterpay also plays a lot to character. So character, meaning what type of person are you?Are you the type of person that does take up fast loans? Are you the type of person that is relyingon afterpay to service debts and immediate needs? Are you after instant gratification?If so, banks are judging on that. They are looking, especially in this time after a RoyalCommission, after things have been cracked down on, people are looking at your character andwhether you're someone that they do want to lend money to. So it's not just about whether you are
20:16good with your money and budgeting it. Afterpay is seen as a tool that is used by people who can'tbudget, then finances effectively. And if you're looking for a home loan, do you want to be put inthat bucket? No, that was a hypothetical question, but no, we don't. So you've actually mentionedthis to me before off mic, and I found it really interesting. What happens when you don't discloseyour afterpay debt to the bank? It's essentially undisclosed personal debt. If you don't tell abank about a debt that you have, they're not going to be very happy about it. I think there are somany different factors that come into this, but not disclosing debt is a massive red flag to abank. If you're not disclosing your afterpay, why didn't you disclose it? I think it's one thing to
20:57go, okay, I have afterpay and your mortgage broker might go, all right, Annabelle, if you're applyingfor this mortgage, you've got afterpay, let's put together a letter that says why you use afterpayand that you've closed the account and that account has been closed because you no longeruse it and you just used it to purchase a couple of things, but you're good otherwise financially.that's very different to you hiding something again that plays to character have you toldyeah no have you told them everything you needed to tell them so i have people in the she's on themoney community that i've had conversations with who have had their mortgages declined becausethey've forgotten to disclose that they have afterpaid debt because they didn't see it as debt
21:35they went through the application process they filled in how many credit cards they had theyfilled in whether they had a personal loan or not but these people genuinely did not considerAfterpay as a line of credit, therefore didn't disclose it. And unfortunately, had theirmortgages declined or their applications for loans declined because they didn't tell the bank aboutit. Of course, that wasn't the only call we got on today's topic. One in four millennials areusing Afterpay in 2019, meaning a whole lot of you are struggling in the same way.hi there um my name is sarah i was just interested in like if you could discuss some strategies touse services like after pay in a productive way because the way i've seen it before
22:22um it's kind of just an excuse to kind of binge spend and buy things on a whimso i was just wondering how you can use something like that in a productive way thank youhi i can't seem to get it into my head that just because i'm buying it on after pay doesn't meanit doesn't cost the same amount that it says on the screen i seem to think that because i'm afterpaying something for 13.95 a fortnight or a week it somehow isn't a hundred dollars or like fiftydollars and i don't know how to train myself to know this will still cost the same two hundredyou're just basically swindling myself and making myself pay it in the long termdo you know if that made much sense i love the podcast thanks guys
23:08hi ladies well my biggest issue is afterpay so afterpay is my weakness it turns into like mylittle treat I kind of justify making not ridiculous purchases but treating myself per seand I use afterpay and it ends up building up bigger and bigger and bigger and then it's almostnot treating myself and I'm not realizing exactly how much I'm spending so I'm wanting some adviceand try to stop that whole treat yourself situation but saving money at the same timeand not getting into that afterpay.Thanks, ladies.Bye.
23:53Based on how she's on the Money Hotline,it really does seem like many women are strugglingwith a kind of afterpay addiction.Do you think that's an accurate assessment, Victoria?I think it would be an accurate assessmentbecause if people are saying they feel addicted to something,they're saying that they're feeling a rush when they purchase things.So that plays then into the psychology of afterpay
24:13and whether there is a psychology of afterpayor whether there's a psychology of instant gratification. So Afterpay enables us to buythings on a whim. It enables us to not have to part with cash. And parting with cash is reallyhard. If someone took out of your bank account and gave you $200 for the week and said, this is allyou can spend on your groceries and your discretionary items, how would you feel havingto break a $50 note every time you wanted to purchase something? Most people would be a littlebit more reserved in their spending when they genuinely have to hand over cash, when they feelas though they are losing something, whereas afterpay makes you feel like you're gaining
24:51something and not losing a lot. So then let's talk about retraining our activity and habitswhen it comes to afterpay. If women are listening to this and are really struggling under a heapof afterpay debt, what would you recommend? I think if they're really struggling, the firstthing to do is actually go back to episode one, do your earn, spend, own and owe and have a reallygood think about the goals that you want to put in place for yourself. So let's forget for fiveminutes that you've got the after pay debt. Have a think about what you want to be achieving. Whatare you saving for? Are these materialistic things a part of your spending plan? Are they a part ofthe goals that you're setting yourself for the next 12 months? Once you've worked that out,
25:32then have a good think about, all right, is this debt in line with what I want to be achieving?Yes, it is.No, it's not.How does that work?And then work towards your goals as opposed to just seeing after pay in isolation.I think this comes back to what we were saying before about women having their heads in thesand and how we've gotten to this space financially as a collective.We're in a position where we want to empower ourselves financially.
25:58However, we are doing things that are working completely against our goals.if anyone could sit in front of me and say, Victoria, Afterpay has helped me achieve mygoals by A, B, C, and D, I would be shocked. Afterpay is such a frivolous thing to use.It enables us to purchase things that we don't necessarily need. I haven't seen anybody in ourFacebook group that tells me they're using Afterpay for things that are essential. I'veliterally not seen it. People aren't saying, look, Victoria, I'm struggling with my grocery bill andI afterpaid it. Some of their biggest clients include The Iconic and Kylie Jenner. Are wereally spending money on the things that we need or are we spending money on things we just want?
26:41I actually read somewhere that shoe brand Steve Madden said that not only have their salesincreased, so too have the average items and spend per transaction when shopping with Afterpay.So beforehand, purchasers were spending a certain amount and now that Afterpay has come in,it's noticeable that they've been spending more. I feel like I sound like a broken record,but instant gratification. Why would you want one pair of shoes when you could have two?I want two. I do too, because people's spending is increasing. I think the average transactionsize on Afterpay at the moment is $150. And that is actually quite high, or I think that's quitehigh. We don't just walk into a shop and accidentally purchase $150 dress or $150 pair
27:23of shoes. For me, that purchase is considered and I do go, all right, how many times am I going towear this, but maybe my take on things and maybe the way I approach finance is different to thenorm. Maybe people are spending $150 on things, but I think it's time to have a really good thinkabout that and potentially start a culture of change. Okay, now for the fun stuff. Each week,we're bringing you a money diary. Let's do this. Today's money diary is from a healthcareprofessional whose relationship with money might make you a little envious. So if I was tointroduce myself at a money masquerade party, I would say that I'm 28 and careful. I'm that waybecause I've always been very conscious of money growing up in a household which was very
28:11savings focused and there wasn't really a lot of money to go around. It was always something thatyeah, I grew up with a consciousness of and therefore when I started making my own money,I've just always been really careful with it.Okay, so down to the nitty gritty stuff.How much does 28 and Careful earn and how much has she saved?I take home approximately $90,000 a year.My savings account, I've got an offset account for my mortgage.So I count that as part of my savings account.
28:40So I've got $20,000 in that.And then I've got around about $1,500 saved for an emergencyand then maybe another two grand saved for bills.So we know how 28 and Careful gets paid.But what exactly happens to that money after it's deposited into her account every fortnight?So the day after I get paid, the money comes directly out of my bank account without me.I've just set up direct debits.So I have a set amount that comes into each of those different accounts every fortnight.
29:10So it's not really something that unless I check each fortnight, I don't really keep a track of it necessarily.It's just whatever I have left over from my pay, I use for everyday use.I save $650 every paycheck and I take home approximately $2,400. So it's around aboutyeah 25% that I'm saving. Now let's talk about investing. Does 28 and Careful invest and if notwhy? So I don't invest as much as I wish I did. I have had stocks in the past but I don't currentlyown any, but I do have a raise account, which has, that's got around about 1500 in it. Andother than that, I do really rely on my savings accounts in saying that though I do have amortgage. So my biggest asset is the house that I own. What about 28 and careful's debts?
30:05Yeah. So my mortgage is sitting around about 500,000, which I share a joint responsibilitywith my partner for. I don't have any credit card debt. My HECS debt is sitting around about15,000. I think it'll come down. It'll be more like 10 actually after this financial year, butyeah. So I do have a credit card, but I don't have any outstanding balance on that. And personalloans. I have a bit of a philosophy not to have a personal loan because I think to myself, well,if I can't afford it now, then I just shouldn't have it unless it's absolutely necessary and itnever been anything that's been dire or necessary. When we asked 28 and Careful what her best moneyhabit is, she didn't hesitate. I would say my best money habit was setting up the direct debit
30:51every fortnight. It's something which requires a little bit of effort for, took maybe 10 minutesto set up for all my accounts. I also have my main savings account is not linked with my everydaybanking. So I can't see it every day. So I find that that really works very well because it's nota visible thing unless I go out and try and get into that account. It's not something where I go,oh, I've got X amount of money where I can use it for whatever. Like it's just kind of absent.My big savings goal has changed a little bit since having the house. It's a really funny thingwhen you've worked really hard to save towards the house for such a long time. Like that wasmy main goal for between five to 10 years. So I would say that I'd be saving for a car now.
31:41I wouldn't get a loan because unless it was something that was absolutely needs to happenright now necessary, we're aiming to spend somewhere around about 20 to 25,000. And thatwill be like shared between my partner and I. And her worst money habit? My worst money habitit would have to be the money that I spend on food. This sounds so bad. Between five and tendollars a day, so across a five-day work week, that's 25 to 50 dollars. That feels like, it feelslike a lot to me. It feels like a lot. I'm getting better at it, but I don't do enough preparing orpre-preparing of food before work and therefore it's just too, it's too easy to go downstairs.even coffees, like that sort of thing. It's just, it's too easy to spend money unnecessarily.
32:35So how would today's money diarist rate her own relationship with money if we forced her to giveherself a grade? Probably an A, because I think that the fact that I don't invest is somethingwhich I am conscious of and I do want to change. I just feel like tying my money up in an investmentat the moment would be stressful as well, just in case something happened. And I've got a lotof things like a car and a few extra bits and pieces that I need to pay for in the foreseeablefuture. So I think that there's room for improvement. I also pay the minimum amount onour mortgage at the moment as well. So I wish that that was, I think that there's a few areaswhere I need to get a bit better, but I feel like I'm pretty comfortable. Victoria, what struck you
33:20most about 28 and Careful's money diary? I think she's amazing. So do I. I think she's incredible.look at what she's doing and what she's already achieved at only 28 to have a mortgage and alsobe so educated on how it works like she was saying she was using her offset and she's gonna save fora car and how she's not using any personal debt and doesn't think it aligns to her goals she isactually the person i want everybody listening to she's on the money to be and i hope that she'slike got this stupidly good grin while listening to this because honestly she's honestly she isgoals. I think she's a 10 out of 10, but much like last week's money diary, if she thinks she's aneight, I'm not going to argue with her if she feels like she's got a lot more to achieve.
34:05She mentioned she had $20,000 in an offset account for her mortgage and I had no idea what that was.What is it? So essentially an offset account is a bank account attached to your mortgage where youcan put additional funds that offsets the amount of interest you're paying on your mortgage. So sayyou've got a $300,000 mortgage and $20,000 worth of savings. By putting that $20,000 into youroffset account, you're essentially not having to pay interest on that $20,000 in your mortgage.That's smart.Yeah, it's quite intelligent. And I think that people who do have mortgages, if you've alsogot savings, put them in your offset account. And if you don't have an offset account attached to
34:47your mortgage, potentially go and talk to your banker or your mortgage broker about getting one.Right. So what's one thing she could improve on then? Because she's doing a lot well.I don't know if I have a lot of advice for this girl. I think that investing,she said that she wasn't investing because she didn't want to tie up a whole heap of money,but she's already using raise. She is already investing. Potentially once her raise gets tomaybe $5,000 or $6,000, transferring that into a different type of share portfolio might bean intelligent decision to make. Investing isn't something you have to have a lot of money to do.You don't need to tie all your capital up. You don't need to be, you know, investing tens of
35:25thousands of dollars. It can be small, but over the long term, it will have a really big impacton your wealth. So I think that that's the one thing that, you know, if I was sitting acrossfrom her, I'd want to have a proper conversation about and say, well, what do you think investingis versus what it actually is and how that actually looks for her? Can we also just talkabout she's spending $5 to $10 a day. I don't want to talk about that. That is, I'm sorry, $5 is whatI spend on my Uber. It's delivery charge. Yeah, on extra fees. That is incredible. I'm veryimpressed, but also slightly concerned that she thinks that's a lot. I know. I would hate for herto go through my finances and I'm probably not going to allow that. That's all we have time for
36:10today unfortunately just before we head off let's quickly wrap the boring but important stuff theadvice shared on she's on the money is general in nature and does not consider your individualcircumstances she's on the money exists purely for educational purposes only and should not berelied upon to make an investment or financial decision and yes don't worry we promise victoriadivine is an authorized representative of consultant financial advices proprietary limitedABN 65006 373 995AFSL 2303 23We did it.
36:42Victoria, also, we need to tell themwe're launching a newsletter.The first one will be landing in inboxes this week.How exciting.It will be dropping on Friday morning.So either sign up for that or keep your eyes peeledif you've already provided your email addressto She's On The Money
36:56and we will have that in your inbox ASAP.Excellent.This podcast is a production of Shameless Mediaon behalf of She's On The Money.Follow She's On The Money on Instagramat She's On The Money AUSor join the Facebook group at She's On The Money.See you guys next week.
37:11We love you.So weird, I love it.
There aren't comments yet for this episode. Click any sentence in the transcript to leave one.