She's On The Money - Budget like a BOSS

Episode Date: August 18, 2020

If the word budgeting makes you feel blergh then this sweet friend is the episode for you. Today on the show we discuss why managing our budget and cash flow is essential to attaining financial freedom and we also talk through the practicalities of how we can utilise these systems to help us get out or avoid getting into unwanted debt. It’s a cracker of a show packed to the gills with the good bits (including peanut butter and pancake chats) and we implore you to press play pronto. Liked the sound of Victoria's Budget and Cash Flow Masterclass and want to stay in the loop? No problemo friend - sign up here and we will send you the info you need the second it becomes available! Do you love the podcast sick and want more SOTM? We get it. Join our Facebook page to share your money wins and money confessions, follow us on Insta for daily inspo to keep you on track and DEFINITELY subscribe to our newsletter, the written recap of the pod’s key takeaways, including some bonus bits you won’t want to miss. Finally, if you’re in a money mess and need help untangling the muddle - we’ve got you sorted – simply record your question and send it through to us at [e-mail] and you may just end up on the podcast!  Your hosts are Georgia King and Victoria Devine. The advice shared on She’s on The Money is general in nature and does not consider your individual circumstances. She’s on The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. Victoria Devine is an Authorised Representative of Australia Pacific Funds Management Proprietary Limited ABN 34 132 463 257 - AFSL 339151.  See omnystudio.com/listener for privacy information.

Hello and welcome to She's on the Money, the podcast for millennials who want financial freedom. My name is Georgia King. I'm a copywriter and journalism student with lots left to learn when it comes to money. Fortunately, here to help me out, as always, is Melbourne-based financial advisor, Victoria Devine. Good morning, Georgia King. Hello, Victoria Devine. Now, today on the show, we are going to be talking all things budgeting and cash flow, so we can make sure that the money coming into our accounts is being allocated wisely and that our spending not only aligns to our values, but that it won't compromise our end

goal of achieving financial freedom. We are also going to be focusing on how staying on top of our budgeting and cash flow can help us stay out or get out of debt, which we know, given today's climate, is something we are all really wanting some guidance on. But before we get into the nitty-gritty, Victoria. Let's start off the way we always do, even though things are a little different and we're chatting to each other via Zoom today. We are. Tell me about your week, money wins, confessions, what's been going on? All right, so as you were saying last week, our money wins and confessions are getting a little bit bottom of the barrel, but that is okay because I bring to you one of the lowest money wins ever. This week, I found in my cupboard,

in my kitchen, a ancient pancake maker, and I have started to make use of it. The reason I think that this is an absolute money win for me is that pancake mix really cheap. I mean, I've got some fancy gluten-free buckwheat flour thingy thing. I don't know what you would call it. It's delicious though. And it is much cheaper than having very fancy breakfast, but I feel like I'm having a fancy breakfast at home because I'm putting like frozen berries and stuff that is really fun into my pancake mix before I make it so money win for me is cheap breakfasts at home that feel fancy especially on the weekend while you know we're not actually legally allowed to go out for breakfast but also that they're so quick and easy and I genuinely love them and I feel like I've been

able to mix it up love that this week on the menu maybe I'm going to put some zucchini in it and make some savory pancakes watch out I have not had pancakes for a very long time I didn't think I liked pancakes until I found the maker and just thought well we're in ISO what else have I got to do I'm going to give this a hot crack Georgia King have you got a better money win or confession to share with the community this week look I don't know if it's better but it's a win so this week I've been making homemade peanut butter oh um so I've been churning through the peanut butter I think it's craft or is it bigger now I actually think it might be bigger it's bigger yeah but that delicious creamy stuff that's gonna set you back like six bucks which is actually not that

expensive but still making your own is about two dollars because you just you literally buy a packet of salted peanuts slap them in the blender for like a minute and then you've got your own peanut butter oh yum I do like bigger but I feel like that Maeve's peanut butter which is even more expensive and a little bit fancy yeah is so good only because I feel like it's better for me it's probably neither are probably better for me let's be honest they're probably both just as bad as each other I know it's healthy but like in comparison like I was trying to buy the healthy version but I feel like I should just buy my bigger I love bigger yeah or make your own like me I don't know if I've got that skill I'm not gonna lie we could chat about peanut butter all

day long but we might be boring our listeners now so if you want to move along V you interested in chatting about the Facebook group this week yes absolutely I have one from Lauren who made a very short but very sweet post that said winning $10 for the August edition of Vogue love reading Vogue and a free Max Factor mascara worth $27 that's a money win in my eyes yeah free mascara I feel like I've been asking a lot about mascaras um I'm in another Facebook group called You Beauty and I absolutely adore it but I was reading lots about mascaras recently because Georgia I think you know that I am an absolute tragic for a set of false eyelashes and obviously during COVID that's not possible to go and get my extensions put on so I've been looking for the OG mascara

and a Max Factor false lash effect mascara actually came up as a suggestion and from the look of the photo it looks like that's one of the ones they recommended so to me that looks like a money win that's a steal exactly and also awesome that she's supporting magazines who are obviously going through a really tough time right now yeah I'm on board for that for sure 100% Georgia do you have a post that stood out to you this week absolutely i do we've had so many amazing ones lately as always but my favorite was from kelly who runs a group on the gold coast called the surf witches so it's a girls group on the gold coast um they had their surf in the morning and then they came back to one of the girls houses afterwards and had a chat about the she's on the

money podcast and about investing yeah did you see this they were all talking about their stories and their relationship no I haven't seen it I'm gonna go look now well after the show obviously you might kill me if I just bail to go read posts yeah see ya so I think that's such a beautiful idea like in a few months time especially in Melbourne where we can't really hang out right now but to gather with your best friends and all chat about your money stories and goals and values I think it's an awesome thing to do a hundred percent imagine if we could have she's on the money morning teats where we all just eat really cute snacks and talk about money like that's my dream I think that would be huge and yeah that was on the post as well she's got the most gorgeous

snacks there I'm looking at the picture now because you sent it it's also beautifully laid out as well are those scones with jam and cream my gosh all right here for this let's move on before I go and get a snack all righty so now it's on to the main topic of today's show where do we start when it comes to budgeting and cash flow and how can it help us with our debt recent research from you bank revealed a whopping 86 percent of Australians don't know how much money they're spending every month and 82% don't know their mortgage rate either. Now, the majority of participants in this study also cited that the reason that they weren't across their spending was that it was just too hard to calculate, which I empathize with as confession, guys. I don't have

a budget. Don't really know how much I'm spending each month, even though I do co-host a finance podcast. Please don't fire me, Victoria. I knew this already. So the research also found that 59% of Australians say their current financial situation causes them stress or loss of sleep and that nearly half of millennials, 44% to be exact, constantly worry about their financial future. So Victoria, to kick us off today, let's start with the basics. Can you please talk us through what budgeting and what cash flow are, including the differences between the two, because I didn't know before we kind of started chatting about this show today. Absolutely, I can. And for those of you who have done an hour of power with me or someone from my

team you know that I am obsessed with budgeting cash flow because they are essentially the bread and butter of creating financial freedom if we have a budget and we have a cash flow we're actually able to create wealth and without having that in place it's kind of like having a plan without a map and without knowing where your final destination is or where you're actually heading so you could be heading towards Canberra instead of heading towards you know Adelaide where you wanted to be for me this is the thing that I want you guys to understand the most like yes investing is important. Yes, saving is important, but without understanding what your budget is and what your cash flow looks like, you don't know how much you're allocating each and every single week or

month towards those goals. A cash flow and a budget are two different things as well, which I think people get a little bit confused about. So let's start with budget. I've spoken about it on the pod before, but this episode, I am honestly so excited to talk about budgeting because budgeting is absolutely not what a lot of people think it is so often people say oh I'm sorry Victoria I can't do it I'm on a budget like they treat a budget like a restrictive thing it is not a restrictive thing at all it's actually a document that helps you understand your money what's coming in what's going out where it's going how it works what you actually spend your money on so that you have a tool to identify your income and expenses it's not to say okay Victoria I've done a budget and

I'm only going to be spending $50 on groceries moving forward. That feels restrictive. How about we actually put in place a budget that's actually reflective of your spending so that you can live the life you want while also being really reasonable about how much money you have coming in. So Georgia, a budget is going to really help to show you if you are spending more or less than you can actually afford, and it can help to determine your capacity to save for future goals, which obviously I am a massive fan of. When you have a budget, and I'm going to rant about this so much this episode, so I do apologize, buckle in. But when you have a budget, you can see where you're spending your money and create goals in line with your spending and your cash flow.

It is so easy to get disheartened if you set a goal for yourself that is actually completely unachievable. And an example of this is when I hear people saying, oh my gosh, Victoria, this year I am going to save $10,000 and I say fantastic that's so exciting really proud of you do you have $833 per month to save and they go no okay no problems so how are you planning on achieving that goal if you don't have the money to actually achieve that goal they're like oh I'll work it out later I've been saving as much as I possibly can like it is good to save as much as you possibly can but if you don't have an outcome that you're working towards with a tangible plan that you've worked backwards from you're not actually going to be able to achieve that goal

and what happens when we don't achieve goals we feel upset we feel flat we feel as though we aren't achieving things and we get this mentality which is oh I couldn't do it it's not that you can't do it it's that the goal you set yourself was unrealistic for your cash flow and your personal situation and what we actually have to do is create goals that are in line with your personal situation you can save ten thousand dollars I promise you it just might be on a larger time frame and we need to account for that so that we feel like we are actually achieving things um I was going to ask you then about how it's kind of like a diet like if it's unsustainable then you're not exactly keep up with it is it worth saying that it's exactly like a budget

it's exactly like saying one day you wake up and you're like I'm going vegan like cool I'm really excited for you, but is it sustainable to go cold turkey on something? Is it sustainable to commit to a crash diet? Absolutely not. There is a reason people fall off the bandwagon. What we need to do is actually create goals in line with your lifestyle, create a budget that is actually reflective of what you're spending. Don't judge yourself. Just put it all down on a piece of paper and go, awesome. This is what I am spending. End of story. It's just what I'm spending. and it gives you then ability to reflect and say well is that actually what I want to spend like it puts the numbers in front of you so that you can take time to consider each of them

maybe you are spending $200 a week on groceries but you're actually single and live alone well in that case maybe you want to be spending less so you need to have a think about it instead of just cutting that number in half maybe have a think of the strategy behind that why are you spending $200 a week on groceries? Is it because you love really fancy food and that's aligned to your values? Well, maybe we look to save in other places so you can continue the things that you love. Or maybe you are just being a little bit lazy, let's be honest, and buying takeaway all the time. And that's where your cash flow is going and you don't actually want to do that. So we have to make a little change. But small changes and small steps are still steps in the

right direction. And I think that when it comes to budgeting, it's just so we know where we stand. I feel like we'll talk about how to actually create a budget in a little while. Absolutely. Amazing. Before we get there, can you talk to me a little bit about what cash flow means? Okay. So cash flow is essentially the next step in budgeting. So if we write down how much we are spending and how much we are saving and how much we have coming in and out of our account. And if you guys have listened to the first episode ever of the She's On The Money podcast, I talk about these four figures, which is earn, spend, own and owe. And those are the four figures that I always,

always, always want you to be in control of. Because if you know how much you earn, you know how much you spend, you're going to know if you are actually spending in line with your income or if you're spending more or if you're spending less, and that will tell you how much power you have to save and invest. And then your own and your owe, these figures, obviously, we just want to keep track of at different periods in your life you're going to owe different amounts like you might get a mortgage so you owe a heap but I think it's important to work out when it comes to that like is that actually productive debt or is it personal debt that you need to get out of ASAP so for me cash flow is how your money flows through your bank accounts so where does it come

into where does it go how does it work and how much money do you have each and every single month leftover to create wealth with or to save or to put towards debt reduction. So this is going to be your power and this is going to be the thing that tells you how you can create wealth and how you can get out of debt. But if you don't know your cash flow and you don't know how much you have leftover, it's really hard because it will always feel overwhelming. Because too many times do I see people who come to me and they're like, Victoria, I'm trying really hard to save and I put, you know, $500 every single month into my savings account but then at the end of the month or when the end of the month is coming I go back into my savings and I pull some money out because I've got extra

expenses well that's obviously not sustainable you're not actually saving $500 a month you've allocated $500 to your savings but you actually have expenses that outweigh that so we actually need to work out what is reasonable to save and cash flow is going to tell us that and I feel like you've kind of gone over it, but why is it so important that we stay on top of our budget and our cashflow? Because if we are all creating budgets, we are all putting ourselves in a position where we are making our money work for us and we can feel in control. We can be on top of our money story. We can be on top of what's going to happen moving forward. And it will help us avoid going into bad debt. Or if we are already in bad debt, it will help us understand our power

to get out of that bad debt, when we can do it, how we can do it, and what that actually looks like. So how do we actually set up a budget and a cash flow system? So there are so many different ways. I obviously have my own way, Georgia, and I'm pretty passionate about it in the She's on the Money Facebook group, and I'll probably link it below too. We actually have a budget that you guys can use to fill in so that you understand your spending.

But also excitingly, obviously to plug my own product, Georgia, at the start of October, we have a budgeting and cashflow. She's on the money course coming out, which honestly, I can see you dancing on the screen. Like you could maybe vocalize this. This is a podcast. I don't want to interrupt. We've got a course coming out, which I'm so excited for. I did two full days of filming videos for this. I've tried to absolutely jam pack it full of value so that when you watch it and when you go through it, it's me holding your hand throughout the entire thing to get your budget done, then get your cash flow done, then go through your goals and then set all of those

up so that you can achieve success. And honestly, I couldn't be more excited about that. But in saying that, a budget is what you want to make it. So it could be on the back of an envelope. I really don't mind. It is whatever works for you. Some people use apps. Some people like to sit down and write it in a notebook. Some people like to use a spreadsheet. There are so many different ways, but essentially a budget is going to include a list of all of your expenses broken down, all of your income broken down, and then how that weighs out at the end of the year. Now I work in my budgets to a final average annual goal because I feel like that's more motivating knowing entirely what you can save in a 12-month period as opposed to, oh you can save $833 a

month, you'll go, oh, okay, like that's not enough to achieve my goal. Whereas if I say, Georgia, $833 a month is $10,000 in your savings. You are more likely to commit to that when you can see the bigger goal. So it like creates short-term motivation and long-term commitment for me. Sorry Bea, so you said your course is coming out in October, just to recap on that. It is. I mean, we're not meant to be plugging this, but I'm actually so excited about it. I have spent honestly probably 30 hours over the last three days trying to make the online course system work, I promise you, it is now stunning. And that is what matters. I'm not biased though. Not at all. How would you say we can use a budgeting and cash flow system to help get us

out of debt, which we know is a huge issue right now, obviously. Look, it's a massive issue now, but it's been a massive issue for years and years and years. And essentially, if you are in debt, stop judging yourself. I know that that sounds really flippant, but I know that debt can carry a lot of stigma and it can carry a lot of guilt and you feel bad and you maybe don't want to tell your friends or family about it. You don't have to do that. But the one thing I want you to do if you are in debt is stop feeling bad about it because it doesn't help you at all. It does not help you in the slightest to feel guilty about this. And Georgia, I work literally every week with people in large amounts of debt. And we do these cash flow systems and we talk about budgeting

and it is honestly the same thing every single time. We sit down and I say, why haven't you done this before? Like, you know, why now? And they just say, I feel really overwhelmed. I've never wanted to tackle it head on. And now I am. And I say, okay, no problems. And by the end of the session, and we have a clear budget and we have a clear cashflow and we have a plan and we can articulate, okay, Georgia, by the end of 2021, that person is going to be out of debt. She'll make her final payment at the start of November 2021 and that will be it. That is so motivating and that clarity is going to help you immensely, both obviously in getting out of debt, but also mentally. And to me, that is so, so important. So for me, budgeting in cashflow one helps you get

out of debt because we can work out your power and we can actually go, all right, cool. If you pulled the reins in a little bit on this spending for the next six months, we'll be out of debt quicker and the same goes for every type of debt right Georgia like it could be your mortgage and working out how to get out of debt with that because you know obviously a mortgage is often a 30-year plan but working out what your repayments look like and maybe working out how much additional you can contribute to that each month to maybe wipe literally years off your mortgage so that you're out of debt sooner and that money can be used to create wealth and I think I said this to Georgia when we're planning the episode and talking about the things that I really wanted

to share on this ep, I really wanted to point out that if you're in debt and you're paying off that debt, that is so exciting. One, because you're getting out of debt, but two, because you're creating these positive habits for yourself. You are putting yourself in a position where you are proving to yourself that each and every single month you can contribute a certain amount to that debt. And you know what? When it's done and when the debt is over, you then have that amount of money to create wealth. So back to our $10,000 example, if you're in $10,000 worth of debt and you're paying it off at $833 a month, continue that the year after and you now have $10,000 worth of savings or $10,000 in an investment. And to me, that's so exciting. So for me, look at

your getting out of debt process as a process that you are proving to yourself that you can create wealth. It's like the trial run. It's like the practice. It's saying, okay, well, I did that. why can't I create wealth after this? I don't have to be in debt anymore. This doesn't have to be a cycle for me. And it's an active choice to essentially not put your heads in the sand about it and instead feel really empowered about it. As you said, there's a lot of shame that comes with having debt, I think. And we just need to get rid of that shame so you can face it head on, right? Absolutely, Georgia. And there's only one thing that personal debt means. And that just means that you've spent more than you've earned. That's it. It doesn't make you a bad person. It

doesn't make you silly. It doesn't make you dumb. It doesn't mean that you are less than, which I hear all the time. It literally just means you have spent more than you have earned. And now we just need to rectify that. We need to pay back that surplus that you've overspent by, and then we can create wealth and we can actually have a budget and cashflow system that puts us in a place of power so that we feel like we can achieve everything because we actually are able to achieve everything we set our minds to. 100%. And just because you're in 20K of debt now doesn't mean you will be forever like there's so many things we can do to get you out of that debt which leads me to my next question victoria yes um we know we know the snowball and the

avalanche theories from old mate dave ramsey yes what other methods are there that we can use to get out of debt what little hacks so there are a fair few other little hacks obviously making sure that you're looking at your debt having a look at whether your interest rate is too high if you're in a massive amount of credit card debt, I would genuinely be having a look at whether you need to consolidate your debt into a personal loan because it could take you a really long time to get out of that. And if you're going to be in debt for a couple of more years, getting out of a credit card debt, then I would be looking at consolidating it into a personal loan, which will most likely have a lower interest rate. But that's not available for everybody because some debts

can't be consolidated because they just are simply too much and you just need to buckle down and get it done. Something that I do see a lot of people doing is getting a side hustle or earning a little more to supplement your primary income. It could be an extra shift at work. It could be, you know, an online survey that you're doing. It could be, you know, obviously during COVID, this isn't as good. I've got clients who went and got Uber and started being Uber drivers so that they could smash down their debt because any additional income that you are bringing in can go straight to debt because it's not your primary income, which is super exciting. So if you know you're bringing in extra $100 each time you do something, awesome, that's $100 off your debt and that's

really exciting. I think that spending less and making compromises in another way is also a really good but really obvious one. These could be temporary changes so that you can get out of debt quicker. If you've got a $65 a week gym membership, but you're trying to get out of debt, maybe you could suspend it until you're out of debt so that you can really make the most of your cash flow and really allocate it towards that and then once you're out of debt go back to the things that you love I think that it's important to remember that you know compromise doesn't have to be forever it can be for a short period of time we can compromise something for the short term like not having Netflix and Stan so that we can allocate those funds to something different

and I think that that's a really good point for this point in time as well Georgia so it's more about saying okay cool we're all going through this absolute mess of COVID and we're not sure what's going on with our finances what can we compromise in the short term so that we can be successful in the long term and maybe breathe a little bit easier maybe you don't need Netflix and Stan maybe you don't need your Spotify account maybe you've got some subscriptions that you can just suspend temporarily so that you can increase your cash flow during a time where money is tight and we can go back to it later so it's not saying get rid of it you don't need it saying okay well maybe not right now and another good one is to make the most of amazing apps out there

and I know that this is a sponsored episode but I kid you not when I say that my favorite app at the moment is an app called wiser and I know that not a heap of people are going to have heard of this before but I do know that there are a fair few people in our community using it and if you guys love roundup apps like I obviously do I use raise I also use shop back and you've heard me talk about these guys before wiser is exactly like those it is a roundup app that takes your spare change and actually puts it towards paying off your debt like how good is that I can't think of a better use for a roundup app for people in debt like every single transaction that you have is contributing to you paying down there now I don't mean to say go and transact more so that

you can put more money towards your debt. But I just think it's cool that your everyday expenses and your roundups and buying dinner will mean that you actually save money. But we're obviously going to have a plug about them later. But honestly, there are apps out there. You can use budgeting apps, you can use cashflow apps, and then apps like Wiser. Honestly, if you start looking, you'll find things that actually help you in a really constructive, but really motivating way. Okay. Well, obviously you're a fan of Wiser. But if our listeners had to take just one thing away from today's show, what do you think it would be? Obviously, budgeting and cashflow is really important. I want every single one of you to have a budget and have a

cashflow plan. But I think the one thing that I want people to get out of this episode is that if you're in debt, stop beating yourself up about it and work out what you can do about it. There are so many resources and plans and budgets and apps and things out there and people that actually help you and that are there and that are on your team that are going to get you out of this position. You don't actually have to do it alone. So for me, it would be one, have a budget and actually take charge of that. You'll feel incredibly empowered, I promise. But then two, know that if you are in a situation where you are in debt, there are people that can help you. And there are people that are genuinely so excited about doing that. And they're not there to judge

you. They're just there to get you in a better position because they get a whole heap of gratification out of it, I promise. Hi there, you've reached the Shears on the Money mailbox. Do you have a money problem you want help solving? Do you have a money dilemma you just want to chat about? Victoria is here to help. Every week, we'll be playing your questions to help make sense of a money mess you may have found yourself in. Make a quick recording on your phone and send it through to podcast at shearsonthemoney.com.au and you might even find yourself on the show. But for now, here's today's listener question. Hello, lovely ladies. I just have a quick one for you. So I've been lucky enough to get a promotion at work and will be

earning $25,000 more than I was in my previous role, which is pretty exciting, but I'm actually pretty conscious of not falling into the habits of lifestyle creep. Because since listening to the podcast and joining the She's On The Money Facebook group. I've become really conscious of my spending and I've been getting my savings together and taking control of my finances. So I'm just wondering if you have any, I don't know, budgeting tips or even words of wisdom to kind of help me make the most of this extra money and manage it because I definitely don't want to be wasting it. Thanks. Bye. Okay, Victoria, so how does she avoid falling victim to lifestyle creep I really like this question because I get so excited obviously that's a massive increase in

her salary like congratulations that's honestly so incredible exactly like actually amazing but I feel like this is such a common one and it's so easy to see that $25,000 as all right cool I can get a new car I can do this I can do that for me the important thing is before you even get a promotion before you even increase the amount of money that you have is to have a reasonable budget and cashflow plan in place. And I know that I jump up and down about this all the time, but that is your power because if you've got your cashflow plan

and you know that your expenses are, you know, maybe $16,000 a year and in your personal spending, you're spending, you know, maybe like $250 a week, I think it's really important to then say, okay, no problems. Now I have an additional $25,000 coming in. well, maybe not obviously tax super, whatever else, but let's just say it's $25,000 coming in.

Awesome. How am I going to allocate that to my pre-existing goals to turbocharge them, if that makes sense? So instead of achieving that goal in three years, maybe you'll achieve it in one because you've obviously got so much more to save. So for me, it's important to have a list of goals. It's important to have a cashflow and budgeting system that works for you. As I said, I don't care how you do it as long as you are doing it so that when a new amount of money actually comes into your account you've already got goals that can be allocated to and all you do is update how much you're allocating towards that goal each month or week or fortnight or however often you're contributing so for me my biggest tip would actually be sit down and make a budget make a

plan work out how much you want to save because otherwise it does get wasted because it is so easy with lifestyle creep to just see that money come straight in and go straight back out. Because often you'll have a mentality of, okay, well, I'm going to treat myself. I'm going to, you know, buy those new shoes. I'm going to go out for lunch more often. I can afford it. I earn more money now. Like to me, that's a detrimental mindset when in reality, what we want them to be doing is actually allocating those funds towards goals and towards creating wealth. And whether that's savings or investments, or, you know, maybe you've got a trip that you've been planning for that you can now save more to so that when you come home, you've got a surplus. Like to me,

what can you actually contribute that to? And divide that 25 grand by 12 months. Work out how much that is per month so that you're not missing any of it. And then make sure that amount is going into an account that helps you build wealth instead of losing it. Do you think a financial advisor is necessary for this situation or just kind of depends on how she's feeling? Absolutely not. I think that budgeting and cash flow is something that you guys can take control of yourself. You don't need a financial advisor to do that for you. Obviously, there are financial advisors that will do it.

Obviously, I work with my clients to do that and there are money coaches out there. But I genuinely feel like if you have the tools in front of you and you have been given the guidance to do that, and Georgia, that's actually why I've created the course that I've created. it's purely because you can actually go and do it yourself and go through the framework and go through a pdf and go through you know just different tools that you can do to one work out your goals work out your cash flow work out your savings work out what that actually means and go from there so for me no you don't need a financial advisor for spending you don't need a

financial advisor to tell you what your budgeting and cash flow should be because you are smart like you're an intelligent human being and we can all work that out ourselves it might just be a little bit sticky at the very start because it can feel overwhelming but hopefully you can sit down and go you know what I'm just going to do it small steps are still steps in the right direction and I'm just going to work it out it's trial and error at the start I promise you hi I'm 35 I'm on a journey from impulsive to informed money management and this is my money Diary. As you guys would know, we've been partnering with Wiser. So for today's Money Diary, we have someone who's used the app to start their journey to becoming debt-free.

But first, let's learn a little more about what she does, how much she earns, and how much she currently has in her bank account. Typically, I'm in sales and marketing in the specification building industry. My typical income prior to being made redundant was roughly $90,000 a year plus commission and potentially other allowances. I'm pretty sure the spending account is at zero. So what's her story with debt? It's a story that starts 15 years ago when I was about 20, 21. I moved to Sydney and at that time I was trying to survive in the big smoke and rent even when you're sharing in the city even 15 years ago was a lot of money. Unfortunately at that time it was very easy for a young person with a

moderately steady income to get a credit card or a personal loan and I found myself caught in the trap of having living expenses to pay but also being in my 20s and not being in a position to earn a fantastic amount of money and also wanting to have a social life. When you're in your 20s you're usually not in an environment where staying home and occupying yourself is appealing in comparison to going out with your friends and seeing the latest movie and hitting nightclubs and wearing flashy clothes because there's still that teenage element of needing to sort of validate one status with things and when your living environment is the bare minimum one can afford it's probably not the most pleasant space for your mental health so I found personally there

was a bit of that that fear of missing out that wanting to socialize with friends and have the latest and greatest and not miss out on experiences anyway that was a a repeat situation for me for many many years and I found as I was becoming more valuable in the workplace and earning more as I put studies on hold and moved into full-time work, I was still never quite able to get ahead of the debt payments and the rent payments and the living expenses in order to take down my debt and add some savings. So fast forward 10 years ahead and I am still in debt. I have on multiple occasions consolidated credit cards into personal loans, then not closed those cards just in case and of course just in case became somebody's 25th birthday and let's go out and I'll just buy this

bottle of wine and oh well now I've now I've started spending money on the credit card so I'll just get this uber home or and suddenly you're using the card again and it's easy to continue clocking up additional debt. The most debt I was in was probably still $20,000 on the car, $15,000 in credit cards and a consolidated loan for almost the same amount. And when did you decide something had to change? I can't say there was just one day where I changed my mind, there was no specific moment but the constant need to prioritise debt payments and then say no to friends and say no to events and strip back on grocery bills in order to pay the electricity bill became something that really bothered me. I got to a point where I was like, I'm in my 30s

now. I should not be eating baked beans because I had a particularly large electricity bill. So how did she use Wiser to consolidate and help get on top of her debts? There was a really easy online application process. It took less than five minutes. I was approved within 24 hours and the money was in my bank 24 hours later. Everything is now consolidated. I have one debt, which is with Wiser, and it is so much easier to manage. The Roundup app is fantastic. You install it on your phone and over the course of a month, it tracks your spending across whichever bank accounts you nominate. I still have a sizable debt to pay, but it could, presuming I'm employed again, it could be paid off by the end of the

year. What is her big money goal? The big goal is home ownership, but I want a home where I can pay the mortgage, but also travel every year and go out and see the friends and go to the theater, that sort of thing. So the home ownership, but also a nice lifestyle. And what's her best money habit? Now it's budgeting. I have a spreadsheet that I write out all incoming and all outgoing expenses per month. And I follow that quite religiously. And what's her worst money habit? There's still an element of impulse buying, particularly if I'm out with friends. So the, you know, the $20 budget on dinner could become very quickly become $100 without me intending to. And finally, what grade would you give her relationship with money?

Okay. So I'd say that, let's say 12 months ago, I was probably a C minus and now I'm seeing myself as a B plus working towards an A. Alrighty, Victoria, kick us off. What did you think of Impulsive to Informed? Love that name. Just side note. Yeah. I feel like that had a fair bit of thought put into it as well. You can tell, but I really liked her journey. I really liked learning about it. It sounds like she's feeling more empowered than ever now, but also at the same time, she seems quite positive for such a negative situation that she's gone through like she mentioned that she's been made redundant and she doesn't currently have a role which must be such a significant lifestyle shift because she

said that she previously if my memory serves me correctly she was on ninety thousand dollars a year plus comms maybe plus some other stuff that she said she got and I just feel like going from that to being made redundant if she's hopefully on like job seeker or something she's got some income coming in but that's still not heaps of money each month and I know that lots and lots of us are struggling with that so look I get it and I know that lots of us are going through that but I think that's where you know we can feel a little bit grateful that we still have some level of support to come in so that she can you know continue to pay off debt and continue to fund her lifestyle essentially even if it is a little bit restricted at the moment. I also liked keeping in

line with today's episode that she's got a budget going so she's on top of it in that aspect right yeah absolutely and I feel like that's the key to success here like yes there are so many different things that we can do to get ourselves out of debt but the one thing that is going to help you here is having a budget and understanding your income and your expenses like what's coming in and what's going out because when you put a budget together understanding all your regular repayments lets you know one how much you can save in an entire year but two how much you can attribute to debt repayments and how much you actually have to be able to contribute and I think that that's really powerful and that's really important and once you understand your budget you're able to reflect on

that a little bit more holistically and understand where you maybe need to make some change and Georgia I know that you and I were like nodding along when she said yeah and I have FOMO and I still have FOMO it's something I struggle with because as much as I am definitely someone who's like no let's budget and cash flow I don't want it to impact your lifestyle and that's why I always recommend having some money set aside that you actually do have entertainment and recreation in your budget so that you know you don't completely restrict yourself and go no I can't go out no I can't do this so that then you blow out it's all about balance and making sure that yes, I'm paying down my debt and yes, I'm trying really hard to get rid of it.

But also we need to live life along the way as well. Like I'm not naive to the fact that, you know, if you've got mass amounts of debt, that life goes on around you and that can be really hard. 100%. I think it would be a good idea for today's Money Diarist as well to go back and listen to last week's episode because we did do a deep dive on FOMO, why we're feeling it and how we can battle it. So definitely have a listen to that one and to anyone else interested, go back and listen to that one. Yes, absolutely. That was actually a really popular one. I got so many messages about people saying, that's me. I totally get that. Like that resonated so much. And I love feedback like that because if you guys, yeah, exactly. And if you guys are listening and feeling

like we're talking directly to you, well, Georgia King, we are on the right track. We are. I also, last little point, I loved that she spoke about Wiser, which again, terribly convenient because they're on the show today. Yeah exactly and I feel like we did line this up pretty well let's be honest but at the end of the day like I looked into Wiser when I first started speaking to them and I'd seen them around before to be honest I was mind blown I just felt like they've got the same heart that we do and I know that sounds really lame but talking to them and their team like they are just as passionate about money and cash flow and budgeting as I am and the amount of hours honestly I don't know if I should even say this that I've wasted after hours talking to

their team on just Zoom because they're based in Sydney. Amazing. Like, I really like them. And I think we're actually friends. Just as people. Yeah, totally. And I feel like we're friends now. So hopefully they feel the same way. I'm sure the people at Wiser love you too, Victoria. Was there anything else you wanted to add about today's money diarist? I don't think so. To be honest, I was just really impressed with her ability to reflect on her journey, where it came from. And I think that she's clearly got a deep understanding of her money story, which you guys know, I think is really, really important. I loved that she was budgeting and then that she was really aware of FOMO and that still being a sticking point for

her. But I think that she should absolutely give herself a massive pat on the back because she's doing amazingly. And I just think that there are so many people in similar situations to her that hopefully will be inspired by this story to get out of debt and to, you know, just kind of put your hand up and go hey i might need a hand great points there victoria as always but it is time to now wrap the show but just before we head off we'd like to acknowledge and pay respect to australia's aboriginal and torres strait islander peoples the traditional custodians of the lands waterways and skies across australia we thank you for sharing and caring for the land on which we are able to learn we pay our respects to elders past and present and share our friendship and

kindness. Now let's quickly wrap the boring but important stuff. The advice shared on Cheers on the Money is general in nature and does not consider your individual circumstances. Cheers on the Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. And stress less, we promise Victoria Devine is an authorised representative of Australia Pacific Funds Management, Proprietary Limited, ABN 34132 463 257 AFSL 339 151 as always a big old shout out to ryan john for putting together today's podcast we would love it if you joined our facebook group where our community shares money tips and tricks every single day without judgment search she's on the money on facebook and join us

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