She's On The Money - Community Q&A Part Two!

Episode Date: October 12, 2021

Happy Hump Day Friends! You loved our first Q&A, so we're here with some more questions for you!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.

She'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. Back by popular demand, today we are jumping straight back into another Q&A episode, helping answer the questions we didn't have time for in our last Q&A show. Expect wedding chats, home loan tips and ideas for where best to funnel your extra cash plus plenty more. That is diverse, Georgia. I appreciate it. I know. Now, my name is Georgia King and joining me as always is financial advisor, Victoria Devine. V, we are back today

to answer more of our community's burning questions. How excited are you? I am stoked. No, genuinely, I'm really excited because these are really fun. They're like short, sharp, to the point things where I feel like you guys walk away with a whole understanding of like random topics.

Like, is that not fun? I think that's fun. Yeah, it's like a little taste of lots of different topics in one episode, right? So George, we probably should just jump into them, shouldn't we? Let's do it, Bea. Okay, so our first question here is from Bonnie.

What a legend. She has asked, if I'm in my early 20s, and I have a decent chunk of savings, how should I be investing slash growing this? She feels that it's being wasted in the bank where she's not getting much interest off her money at all, but she also doesn't want to invest a larger portion in shares as she might want it in a few years for a home loan. So, what do you do in that case fee? Oh, you got to go see a financial advisor, my friend, because that is asking for financial advice, and it would be very irresponsible of me as a financial advisor to provide you with direct advice. But here's some top tips. That's generally where you should be

looking. So first things first, there are different timeframes for investment. So you could invest for five years, you could invest for 10 years, the priority could be investing for the long term. And obviously, I talk a lot on this podcast about investing for the long term, because I want you guys to be creating financial freedom. But I know a lot of people who are saying, oh, cool, probably want to buy a house in like seven to 10 years, but I'm going to invest in the short term and sell down my asset once I'm there because I want exposure to those returns. So it's not to say you shouldn't invest. There's obviously just risk that comes along with that. When you talk about it being wasted in the bank, obviously we are really lucky here in Australia to have a really

safe banking system. And we also have access to interest rates on some of our banking products, which means you can make a return. But if you're wanting more of a return than that, I can't actually recommend a direct product because it would include more risk. And what you've just said is you're not willing to take more risk than that. So sometimes we really need to think like, what is the plan here? And it's actually a really common question where they're like, oh, I feel like my money's been wasted in the bank, but I don't want to invest. I'm like, there's actually no unicorn middle product where it's like, oh my gosh, great returns, absolutely no risk, can pull it out whenever you want so you can buy a house. It's not going to

happen. And if it was, I'd be recommending it because it would be safer and less risky than investing in shares. And it would also be better than the bank. So you would have heard this from me already, I promise. There are a couple of ways about going about it though. You could be looking at maybe less risky shares and having a more conservative portfolio so that you are exposed to a bit more risk, but you're also not, you know, in a super high growth portfolio that's arguably going to see more fluctuation. But I think it's really important to understand what your timeframes on different goals are. And if you're saying, should I be investing? I believe from my personal opinion, yes, at some point you need to start investing for our future. If you've

got superannuation, you are already an investor and we should be thinking about our financial future as a whole, not just prioritizing, I want a house, I don't want a car. And so every single dollar I earn goes into that. Again, bigger conversation. I can't give direct advice, but that's what I would say when we start thinking about that concept. Okay. So it's not then completely wasted in the bank. It's okay to leave it there. It's okay to just have savings, especially if you're saving for a home deposit or you are saving for your first car. In fact, something that I think is really important to talk about is your first home deposit or your first $100,000 worth of savings are going to be the hardest.

They're going to be the hardest because you don't see any compounding. You don't see any return on the money that you have saved or invested in the short term. Whereas after that, I promise everything is so much easier because a 5% return on five grand, not that much. But when we start looking at 5% return on $100,000, you're like, oh, that seems to be a fair bit. And it starts to compound over time. So what we want to do is if you're in your early twenties, it can feel like a long slog. It can feel like you want better returns, but it's about being consistent. And if the plan is to get into the property market, great. Go with that. Save for your first home, get there. That property is then going to hopefully, if you've bought a good property,

increase in value, or it might be an investment property that then generates you income. But if it increases in value, then we have what's called leverage. So we can start borrowing against an asset. So you don't have to start from scratch again. And the same thing can be said to be true in the share market where your first $100,000 is the hardest to earn and the hardest to actually get into the market. And once you have surpassed that, everything becomes a little bit easier because your shares start to compound and your dividends start to reinvest and you start to actually see growth. Whereas, you know, when we are dealing with, and I'm not calling them small by any stretch of the imagination, but in this day and age, I think it's really important for

me to be quite direct about this. It's going to be hard. And there are going to be decisions that you need to make along this journey where you go, Oh, I'd really like to invest and get some returns, but like it's actually not worth it in the short term because it's a car or it's a house deposit or it's actually allocated to something else. Yeah. So probably creating a three-year strategy is not going to be that beneficial. No, I don't think so. Especially if you're saying I would like to expose an asset to the share market for less than five years, I'd probably really shy away from that because I am really adverse to risk and I wouldn't want you taking unnecessary risk. But in saying that, if it was anything more than that, absolutely consider something that

could help you along that journey that's in line with your risk profile. Beautiful. All right. Good luck with the home ownership journey, Bonnie. We are rooting for you. Okay. Vanessa is our next question here, Vee Lord. She wants to know the pros and cons of renting specifically in retirement.

So we did a podcast on renting forever a few weeks ago now, Vee, a few months even. she she says she's always been taught that it's better to have a home of your own when you do retire so you're not paying rent out of either your investments or your pensions and so on so what are the pros and cons v of renting in retirement so there are a number and she's actually correct we did not talk about the benefits of renting or the cons of renting when you are retired because obviously that would mean that you had to have capital to pay for the rent, right? But if we're working towards a safe and comfortable retirement, we will always have funds available. That's the purpose of financial security and creating financial freedom. So if we

are talking about the pros of renting in retirement, obviously you're going to have the flexibility to move around and live a lifestyle you want. When you are younger, you don't have to save up for a house deposit and then pay back a mortgage. A lot of people will say, oh my gosh, but V, I want to own a house outright so that the pension is all mine or my super money is all mine and it's not being spent on accommodation. Like, okay, each to their own. I think that there are a number of benefits to just owning your own things, but let's be honest, that is a privilege that is denied to so many of us. And it's actually kind of cool that through to retirement, we can rent like at the end of the day, being able to rent just means that we need to allocate our budget consistently so that

we actually take into account that expense. And maybe once you become retired, if you are a homeowner, that expense drops off, but it doesn't mean you have no expenses. You're going to still need an income. Whereas if you are retiring and you haven't purchased a property that is your live-in forever property, you're going to need to budget for a home, right? You're going to need to budget for accommodation, but the idea that that can then be far more flexible is really appealing. so the idea that you could go okay cool like rent's a bit expensive and i want to change my lifestyle you can do that very easily you could scale up as well if you had more disposable income than you thought and maybe rent a bougie apartment in comparison to the house that you'd been renting

and then obviously the maintenance costs that come along with a home you wouldn't have to take into consideration because that would be the landlord's responsibility but when it comes to cons obviously a landlord could bump up the rent or sell your home which could be a massive headache especially as you're getting older. You might need a greater amount of superannuation to live off because you will be paying rent as well as compared to having a mortgage paid off. But again, maybe if you're a bit younger and you're in this situation where we are planning for retirement, the plan of purchasing a home, paying off a home might actually be far more financially than planning to rent in retirement. So that's where we need to, and in financial

advice land we actually project these things out and do analysis where we go okay cool what would that look like in the future if we sat Georgia down now and she invested xyz what would it mean if we changed this particular part of her circumstance what would it mean if she rented forever instead of making a family home purchase what would it mean if she made a family home purchase what would her cash flow look like what would her budgeting look like I think it's very important to take into consideration all the the options if that's in line with your values And also remembering that if we own a family home and we do need to claim Centrelink or a pension, that family home's value is not taken into consideration. So hypothetically, Georgia, if you have a lot of super and you're not able to claim the pension, but you actually need to because it's like a lot of super, but not enough super for you to pay for your retirement.

if you then purchased a house with that superannuation money you could potentially then claim the pension as well because that asset is not taken into consideration when working out whether you get the pension or not it's other assets outside of that so talking about that as obviously a benefit of owning instead of renting and then also afsa so the australian financial services authorities calculations say that if you're renting in sydney as a couple you would need a total of $1,166,000 to retire and singles would need $1,045,000 to retire which would then cover their rent to live a quote comfortable lifestyle and obviously Sydney is our most expensive city in the country but it's worth thinking about and maybe if you are renting and

those figures are out of reach then living regionally might be a smarter idea financially so I think when we start to break it down and talk about it like how much would it cost you to buy a house in the location that you live so example if you live regionally and houses cost 300 grand that's very different Georgia than saying okay the average house price in my area is a million dollars so I need to save a million dollars purchase property and then I'm also going to need a million dollars in super to live comfortably like which one is it what are we prioritizing how is that going to work because it's not one or the other it's which situation is going to work best for us gotcha our next question here v is from claire so she is at a

stage in life where she can start investing in shares and she is wondering if it's better to concentrate on building her super as it's pretty low at the moment or if she should buy shares outside of super Claire Claire Claire what is with you guys asking specific financial advice questions which I'm legally not allowed to answer like if it is about you my friends I cannot give you a direct answer and that's not a bad thing I'm not like coming at Claire or anything but I do want to point out I'm not trying to skirt around the issue guys I'm not trying to be like oh my gosh I'm not going to answer Claire's question directly legally I can't because I haven't looked at Claire's personal situation. I haven't done a fact find. I don't know what other assets Claire owns. I don't

know what her income looks like. I don't know even what superannuation fund she's in. So it would be incredibly irresponsible of me to be like, Claire, put more in super. Like, I don't know that. And the answer to that question, if I answer it directly, could be not in her best interests, which is really upsetting because I would love to be like, okay, George, this is what you do. this is how you create financial freedoms, follow step A, B, C, and D, and you are going to be golden. Like I wish I could answer it that way. Unfortunately, I can't. So this is the way we're going to do it today. So Claire, my friend, you are going to have a think about your future and what you want to achieve. Superannuation is a brilliant tax vehicle. Did you hear that Georgia?

I did not call superannuation an investment. I said it was a tax vehicle, which is essentially what it is. To me, superannuation is not an investment. It is a tax structure, which enables you to pay 15 cents on every dollar instead of your marginal tax rate on the money that you put into superannuation, which is then invested on your behalf by a superannuation fund that manages that money. So we need to look at super and go, okay, cool. This is a great tax structure. The moment if you're not paying any tax then it doesn't really matter too much where you're investing because you're already not paying much tax but it might be beneficial for you tax-wise to put some more money into super because the tax difference is obviously quite significant because you could

be earning more than 180 grand and paying the top marginal tax rate so it kind of makes sense to start considering that as an option but the other thing with superannuation is we need to remember that you cannot access that until you are 60 and properly at 65. So are you willing to wait that long for your future financial freedom? If the answer is no, that's okay. It's still a priority. It is still something that we are contributing to constantly. I mean, it's now 10% of our incomes that get put into superannuation, which is significant. I don't know anyone, Georgia, who can turn around and be like, oh my gosh, since I started working, I have been investing 10% of my income. That's what we're doing with super. Like we need to care about it

more. So from my perspective, we need to work out what that looks like and pick an investment strategy or pick a way of investing, whether that's more into super or going and getting a platform with shares or going and setting up six pack or going on superhero. It doesn't matter which one it is. You need to work out what is going to work best for you. So Claire, my friend, If you want to start investing in shares, that's super exciting, but have a think about where you want to see those returns. If you want to access that before retirement, then go and do that. There isn't a right or wrong. It is down to your values. I'm sorry, George. You need to pick questions where I don't have to be elusive. No, that was good. I feel like Claire would

have gotten a little bit out of that. So thank you, VD. Let's move on here to quite an interesting question that's come from sim she is after some finance tips for neurodivergent people um so she said for example people with asd or adhd so what are your tips here v because we haven't spoken about this before yeah okay so i think that this one is an interesting topic to cover because there are so many neurodivergent people in our community and often you don't know who they are neuro neurodivergence could be lots of different things so there are several types of recognized neurodivergence so there are things from autism and aspergers to dyslexia epilepsy you've got hyperlexia you've got things like Tourette's and obsessive compulsive disorder and then ADD and

ADHD which are two very different things that do different things if you look it up even left-handedness is considered being neurodivergent which is interesting but what I'm taking from that is me as a left-hander neurodivergent obviously i am perfect person to talk about this but more specifically i do actually have two degrees in psychology georgia and i've actually studied neurodivergence which is really interesting so from what i understand when we talk about neurodivergence it would be very hard for me to go okay cool if you're neurodivergent here's the answer because someone who has autism versus someone who has add or even adhd or dyslexia it's all very different. The advice is going to be very different, but I think what we are going

to discuss here is ADHD, because I feel like there's been a very big surge of diagnoses of ADHD recently, particularly for women, because we are learning more about what those markers or those indicators look like for them. So from what I understand about ADHD, people with this, they struggle when it comes to things like concentrating, impulsivity, and overactivity. And that means that money management can be super tough. It can mean that the concentration that is required to manage money is just not going to be able to be given. And impulsive spending for people with ADHD is a massive issue. I have spoken to so many people in our community who have ADHD and they're like, Victoria, I cannot get my impulsive spending under control. So it makes

sense that neurodivergent people do really struggle with money management and I hope that she's on the money can actually be a really safe space for you to learn about it but I also think that when it comes to money management one of the best ways to deal with this is automation we need to put a plan in place that actually works for us when we aren't able to work with it so that means setting up a banking structure that makes sense this is something that I have worked with for a number of years now it's actually one of the reasons I started building my budget and cashflow masterclass to actually get on top of these things because I have a number of clients that are neurodivergent and it's about automating things. So when it comes to bills,

putting them on direct debit for people who have ADHD is really helpful because even if they get the bill and it's front of mind, they'll just put off paying it and they just won't do it because it is not in their capacity to do so sometimes. And sometimes they get really motivated and do 6 million things all at one time. So one really quick win can be to automate your banking structure and set it up so that it works for you. And then setting aside a certain amount of money that you are allowed to spend, which is where my idea of a food, fuel and fun budget comes from so that we don't end up sacrificing our longer term goals, like maybe saving for a house or a holiday or a car. We don't sacrifice those because we are impulsive spenders. So we need to put a structure

in place that works really well for us. Another thing that I would say is really helpful when it comes to money management is starting out with as many money apps as possible. We talk about them in our community and they can be really helpful. We've obviously spoken about pocketbook and our friends get reminded they would be so helpful in this situation. Also, if you live in a share house and struggle remembering what you owe and who to set up the app split wise with your housemates or even just your partner to keep track of your budget and what people are spending on what. And when it comes to budgeting, there are a whole heap of apps out there that are really good. Obviously, we have worked historically with Pocketbook and we really like them as a budgeting

app. WeMoney is also another one that our community seems to get around and love. And then think about using roundup apps. So we've talked about UpBank before. They actually are able to round up your spending so that you can start investing without having to actually commit to transferring it each and every single month. I also know we're not just talking about bills when we say automate your spending. It's about automating your savings as well. And I think this is also, Georgia, a really good time to talk about our friends at the National Debt Helpline. So if you feel like you're in a pickle and you don't want to pay for advice and you just feel like you need a hand, reach out to them and they will tee you up with a financial counselor that I know will give you some tips

and tricks that will set you on the right path. You mentioned impulse buying there is a big problem for, why is that such an issue for neurodivergent people and how, like what solutions are there to help bring that under control? Yeah. So impulsivity is actually one of the major symptoms of ADHD. So it's not actually uncommon for people with ADHD to buy first and think later. So things like afterpay are slippery slopes for these friends. So yes, impulse spending is something that we need to get a hold of, but it's actually not just the purchasing. It's the impulsive behavior. They are far more likely than, you know, people who aren't near eye divergent to actually do first and think later. So I think it's important to just understand

that that would then stretch into spending and they'll go, Oh, I really like that top. I'll have that top. And then they just didn't think about the thing that they were saving for down the track or the other goal that they had. It can actually be a little bit like having blinkers on and you're not able to consider the bigger picture because you just didn't take the time out to think about that at that point in time. So it's something that if you're in that situation, it makes sense as to why you are being impulsive or why you're maybe not so good at money management. That's where it's just important to have the right people on your team, the right podcast in your ears. Absolutely. Okay. Very good. Thanks for that, VD. Let's have a little break here,

but on the other side, guys, we will be answering the rest of your incredible questions, including wedding chats very excited for that not my wedding not george's wedding so not as exciting to be clear um so we'll see you on the other side guys vicky d we are back hope you had a wonderful break there so excited do you want to talk about atfs and uh managed funds is that a question funny you ask mate our next question here is from susan she has asked what is the difference between managed funds and ETFs. Are you ready for this? Lay it on me. According to the ASX and your friendly neighborhood financial advisor, Victoria Devine, ETFs are managed funds. That's what I

thought. But traditional managed funds are sometimes less transparent and potentially are a lot more of an expensive approach to investing. So both, however, are open-ended funds that have co-mingling assets and seek to achieve a stated investment objective to be more specific. So at the end of the day, an ETF is a managed fund, but a managed fund, not an ETF. So very similar. So when we look at ETFs, both ETFs and managed funds can track an index or they can be managed by a professional investor. Look, there are a number of similarities. So let's run through the top two because everybody loves an educated queen. So sit down, Georgia King, are you ready? So legal ownership is number one. Legally, both ETFs and managed funds are trust

structures. The units of these funds, they're combined and owned by unit holders. So what that means is it's kind of like a giant bucket and all of the assets that that trust owns sit in the bucket. And as an investor, you purchase units in that bucket, not necessarily units in those individual shares. So if you are buying an ETF and that ETF holds Facebook, you are not buying Facebook, but that Facebook share that you have a share in is owned by that ETF. And you've just purchased into that ETF, if that makes sense. Whereas if you were a direct owner, you would have a little certificate that says G King on tour is the owner of this Facebook share. Whereas that certificate actually says ETF XYZ is the owner of that share. So you're just purchasing

into what I like to call a bucket because from my perspective, that's the easiest way to think about these things. Okay. The second is diversification. So they're very similar. Both funds can be a blend of underlying shares or other assets like bonds or cash and a pool that defines the fundamental premise of the fund. So when we're talking about an investment pool, it's essentially an investment bucket. I like to think about ETFs as buckets and those buckets are full of different shares and assets like cash or bonds or stocks. And it doesn't matter. It's all put into the bucket and you go, Hey, nice bucket. Can I buy some of that bucket? And then you buy shares in that bucket. And that's essentially an ETF in a really, really simplified way,

which obviously gives you more exposure to diversification because instead of going and purchasing one individual share in one individual company, you're purchasing into a pooled investment, which is essentially a bucket full of a whole heap of shares that then put you in a position where you automatically have exposure to all of those assets or all of those shares, which is, to me, a very sexy outcome. Georgia, and then when it comes to the differences between ETFs and managed funds, when it comes to adding new funds, managed funds actually allow investors to cost to effectively add or remove money through regular contributions or deductions, making them really suitable for dollar cost averaging. So dollar cost averaging is where

you consistently invest into the market to make use of the highs and the lows of the market. So on average, you have an average purchase price instead of trying to time the market because no one can do that. And I've said before, if I could time the market, I would be an incredibly wealthy human being. But in comparison with ETFs, investors are free to buy additional units at any time during the trading day. But usually when you're purchasing an ETF, brokerage is payable on every single transaction and brokerage is typically a fixed dollar amount. So you might go to your trading platform and they might say, okay, each trade is $15 or $40, depending on where you're investing. So ETFs might suit investors who are either making large or irregular investments. So

for example, you might go, oh, I'm only going to invest every time I get to a thousand dollars to make sure that I'm not paying ridiculous brokerage. Whereas if you were investing pretty consistently, you might go, I don't really want to put money into an ETF every month because I only have $50 to put in and brokerage is 15. And that's a really large percentage that I don't really want to lose just to brokerage because that's a fee to get into the fund. So it's important to consider that. So I mentioned it before, Georgia, they do differ when it comes to transparency, and this might not be true across the board. There might be some managed funds that are super transparent, but compared to many active managed funds, they are less transparent than ETFs

because ETFs are extremely transparent and it is very easy to find information about an ETF's underlying holdings because they're usually just available on that website, on the ETF's website. So you might go to Vanguard and it will tell you exactly what that ETF holds. Whereas in comparison, managed funds are actually not required to disclose their portfolio holdings. And more often than not, they only list their top 10 investments, which as somebody who likes to be in control, I don't really like that. Interesting. Okay. I mean, that's not true across the board, there are a lot of managed funds that work really well. And for full transparency, as you guys know, I am a legit financial advisor. I use managed funds a lot

in my business, Zella, and I talk to clients about them because they can be really powerful, but you have to make sure that you're picking the right one and you fully understand the company and their ethics and what they are actually holding. This is just general. yeah when it comes to ethical investing v is it better to go like with an ethical managed fund or like etfs like what's the best way of doing that look we've covered that in our ethical investing podcast but when it comes to investing ethically we just need to understand exactly what that means so unlike going to the supermarket georgia and heading on over to the organic section where you know all of that food sitting in the organic section has passed Australian

standards to get their organic sticker, there's no such thing in the investment world for ethical investing. In fact, I could start an investment fund tomorrow and call it green and you might automatically assume because it's called green, it is actually ethical. So we need to understand first what our own values are and what we would like to see reflected in the share market. Because from my perspective ethical means something different to everybody like you might go oh Victoria ethical just means that they're good companies treating their staff well I go oh great and that's actually what a lot of companies do they'll be like oh this is the sustainable portfolio and go oh that means ethical that is not the case by any stretch of the imagination

whereas on the flip side you might go oh actually Victoria I'm a vegan I'm really into animal rights I'm really into the environment. And for me, an ethical portfolio wouldn't have anything that impacts A, B, C, D, E, F, G, and also doesn't invest in gambling. It doesn't invest in alcohol and it doesn't invest in anything that would impact this thing that I love. So that's why it's so important to understand your own values and then be able to see those values reflected in the asset that you are going to pick or you are going to purchase. So from my perspective, ethical investing is great there are so many options i only invest 100 ethically in my business as zella because that is really important to me and the values that my company holds so i'm

really lucky that i work in a business where i just get to call shots and i've made that decision but not many advisors are in that position where they get to make that decision because they're usually adhering to investment mandates of their companies that they work for but when it comes to ethical investing. Yes, there are so many great options. There are ethical ETFs. In fact, there are so many ETFs out there. You could literally go, I want to only invest in businesses that have women on their boards. There's an ETF for that. So I just think it is very cool. And ETFs are limitless when it comes to what their values are and what they hold. Fabulous. Okay. Let's move on now, V. I'm very excited for the next question.

oh it has come from the new she and she wants to know how much you should responsibly spend on a wedding oh the new she we wouldn't know would we be no we're not married can't help sorry i'm saying that like i'm sad i'm not actually sad v's a little bit sad i'm i'm not sad i'm not oh my gosh i would never want my partner to feel pressured to marry me but also where the hell is my ring no i kid i kid but at the end of the day like my friend that's a question for your own values and your own ethics like it's not a question that I could be like the answer is twelve thousand dollars like obviously that is responsible because if I said gee twelve grand on a wedding you might go Victoria that's so much money I can't afford that that is absolutely not

something that I could reasonably and responsibly spend I've got you know two kids that I need to send to school or my car needs fixing or I don't even value weddings I don't want to get married and then on the flip side someone could turn around and say 12 grand the average australian wedding costs 36 000 that's nothing so i think it's really important to remember our own values and put a number on that ourselves again what your friends did is not a reflection of what you should do and if your friends have gone and spent a hundred thousand dollars on their weddings that does not mean that you need to do that and to be honest from my perspective there's no such thing as how much should you responsibly spend on a wedding because furthering that according to a

survey they did 82 of couples dipped into their savings to pay for their wedding another 60 of couples got a loan and 18 of couples used their credit card to pay for their wedding which when we're talking about responsibility i don't know i don't want to tut tut them but at the end of the day i would hate to think that you are starting your married life in debt we want to start on the best possible footing and put ourselves in the best possible position. So if that was putting you in the best possible position from your perspective, then I'm all for it. But we need to consider this as not just a financial decision, but like a setting ourselves up for a good future decision. And yeah, I live in a world where I have a very diverse range of clients, Georgia.

I have had clients spend half a million dollars on weddings. I have had clients elope and spend two grand on a wedding. I think I have a client actually who eloped and spent just like a hundred bucks on the certificate and then at the wedding registry. So that's a money win. Yeah. Massive money win. But is it my place to judge them for how much they're spending? No. Is it my place to make sure that that amount is in line with their goals and values? Absolutely. And that half a million dollar wedding? Great. I'm so happy for them. It was absolutely in line with their budget and what they could afford. From my perspective though, like personally, would I ever spend that much i'm doing oh my god i would simply pass away is it right for you that the average amount

aussies spend though is about 36 000 it is 36 grand is apparently what the average australian is spending on a wedding that's so much money half of your average earners income yearly it is insane to think that that's it because also that's after tax money and what you're talking about is the pre-tax income like oh that makes me feel kind of sick but only because that average means that a lot of people are spending a lot of money on weddings but furthering that a lot of people we know are going into debt for weddings and a lot of people are putting themselves in positions where they're not coming out of the other side of their wedding in the most financially successful position and they might not know that they can actually completely control that decision there's

no have to when it comes to getting married. And remember that one in two marriages end in divorce anyway. So just don't invest. I'm joking. Way to bring the conversation down, Georgia. I'm like pretty sure that's the stat, but let's all. It is. Let's move on. We've got to be realistic. In terms of keeping the costs down, if you are into a big wedding. Yes. Do you have any tips there? Yes. Budget, budget, budget, my friends. So you need to decide what you can comfortably afford to spend and then you need to stick to it. We need to create a proper budget that includes everything. I think most people end up going over budget because they forget all the little things and how much they are going to add up. So potentially talking to friends or family

who have gotten married before and ask them, what did you pay for in your wedding that you forgot to budget for? Maybe Georgia this week, we can put a thread in the Facebook group and ask what money did you spend on your wedding that you didn't budget for or completely forgot about? Because this could be anything from, oh my gosh, Victoria, we forgot to book a car and we had to spend money on an Uber getting to our own wedding all the way through to, oh, actually when we did our spreadsheet, we thought we were real smart, but we forgot to put in a videographer. And that was one of the things that my partner really wanted. So it could be like a $60 Uber ride, or it could be a six thousand dollar videographer it could be so many different things but add up

all the little things and break down the costs and work out what you are potentially going to need to spend on each item and be realistic not what you would like to spend on each item what you actually genuinely think you will spend because it's very nice to say oh i would love to think that I would only spend $200 on my wedding dress, but then deep down know that even the shops you're looking at, dresses start at $600. So it's just important to really think about not what would I like to spend. I know a lot of brides say that flowers were more expensive than they had considered. So we're not talking what you want to spend, but realistically what you are going to need to spend to get the outcome that you are looking for so break down those costs ask yourself what

you could do yourself do research shop around to get a better deal always always always negotiate and then also have a think about those things that you could just chuck out as in things you don't need to include in your budget at all that you might not want to do it's funny i went to a wedding a couple of years ago georgia um one of my best friends got married um and she made the conscious decision to not have a wedding cake she was like i don't even like cake i don't want to have a cake and nobody noticed it was even missing because we were having too much of a good time so i think it's really important to remember that guests aren't going to remember all of the nitty-gritty and did they do this and did they do those fancy bombonieres they don't care they

just care how they felt on the day and usually if the food was any good um but they just care about that. No one missed the wedding cake. And with wedding cakes often being more than $500, maybe that's an easy way to save. But again, it's going to be based on your values. So are there some things and some traditions that you could easily skip without feeling like you are missing out? And then the next one is check online and compare prices to make sure you're getting the best deal. And probably like, don't tell anyone that you're getting married. Like, i need five bouquets on saturday it's just for lunch i'm having you know because there is there's like that wedding tax that people speak about it's like you can't if you it's just a cake from

the cheesecake shop that'll cost you 40 bucks still overpriced i would say um but say it's for your wedding and yeah as you said 500 no thanks yeah and that's where we potentially want to look at maybe non-wedding things to purchase for our wedding so do you need to google bridesmaids dresses or could you go to one of your favorite stores and look for some beautiful dresses that might not be called bridesmaids dresses that would actually look the same yeah so i think it's all about being a little bit savvy and maybe one day georgia one day if if i am lucky enough to ever be planning a wedding i could share that budget with you guys in the same way i'm sharing my house reno budgets love all right v it is time

for our final question of the day and it comes from the lovely Shelly so she has asked what kinds of assets do you need to be approved for a loan is there a general amount of savings that increases your chances of being approved I assume she's speaking about a home loan I would assume she's speaking about a home loan as well but my friend Shelly you don't need to have assets to be approved for a loan you will need to have some savings behind you if you're going for a home loan For some lenders, that could be a full 20%. For some other lenders, you might get away with 5%. It's going to really depend. If you've been wondering what type of mortgage fits you, head on over to our sister podcast, The Property Playbook, to learn more about that,

which is where I break down literally everything to do with property with my buyer's advocate, best friend, Amy Lenardi. But when it comes to having assets, you don't necessarily need them, but you do usually need to show good savings habits. So the bank is going to ask, Hey G, can I see your bank statements? How much money are you actually saving? What are you spending your money on? Can you actually afford this loan? So that's where budgeting and cashflow is going to become really important, but no, you don't need any specific assets to be approved for a loan except for the deposit. And usually some proof that you are a financially savvy little human that they want to lend to. Would you say, V, that your salary is more important than your

deposit? No. No? Absolutely not. Because I've been doing some little thingies online. Some little like tests with NAB, you know, you can do like a mortgage calculator. Oh yeah. And this gal, I thought I was killing it. I can only afford a tent. So at the end of the day, it's not actually what you earn, George King. It's what you can save. It is the difference between the money coming into your account and what is going out that is going to have the most power. If you put in front of me, somebody who earned 60 grand a year is so frugal, saves so much money, is a sassy little human who does such a good job at saving. I know a bank would look at them very favorably in comparison to someone who had a half a million

dollar income and is spending every single cent of that half a million dollars they are going to look at that person and be like no like they could they don't have the capacity to pay back a loan they don't have the ability to service that mortgage they don't even have any ability to service the loans they've already got because they're not very financially savvy It is about the difference between what you are earning and what you are spending that carries the most power. There you go. I didn't know that. After this, I'm going to go buy a little housey house. That is all we have time for today in our second Q&A episode. It is. Oh my gosh, we have spoken for ages. I have loved this chat, but as always, we need to wrap it up.

So just before we head off, we'd like to acknowledge and pay respect to Australia's Aboriginal and Torres Strait Islander peoples. They're the traditional custodians of the lands, the waterways and the skies all across Australia. We thank you for sharing and for caring for the land on which we are able to learn. We pay our respects to elders past and present and we share our friendship and our kindness. And remember, guys, that 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 a financial decision. And we promise Victoria Devine is an authorized representative of Australia Pacific Funds Management Proprietary Limited ABN 34132463257

AFSL 339151. See you next week, guys. Bye. you