She's On The Money - Financial Perfectionism

Episode Date: December 15, 2020

Perfectionism is often something we celebrate in Aussie culture, however when it comes to finance, we think too much perfectionism spoils the soup. Today, we talk about how our obsession with perfection is holding us back, and why it’s time we took it a little easier on ourselves for the benefit of our bank accounts. Love the podcast sick and want more SOTM? We had a feeling that was the case. 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 absolutely 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.

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. My name is Georgia King. I'm a copywriter and journalism student and every Wednesday I sit down to talk money with financial advisor Victoria Devine. Victoria, hello. Hello, Jordan. You usually compliment me but thanks. I know it's just straight up financial advisor. It's fine, move on. I'm not hurt. Now on this show today we're talking about perfectionism and how taking finance a little too

seriously can actually be detrimental to our bank accounts. Plus we'll be hearing from a listener who is in a bit of a tangle about starting her own business and we break down the money diary from a gal who has a big thing for credit card rewards. Before we do jump into that chat though, Vicky D, money wins and confessions from the week that was. What's that? How'd you go? Are we still talking? Are we even still friends if you don't compliment me excessively in the intro of our own podcast? It was getting old a little bit. Yeah, it was. But I mean, that intro is probably old to a number of people. Moving on, I actually have a money win for you. It's a very adult money win I've recently been clearing out my garden shed exciting right and I've been popping a heap

of stuff that I haven't used in a really long time online to sell and making some extra cash and I actually feel really savvy doing that and wish I'd thought about it earlier like when I actually had heaps of time during COVID except on the weekends when now I could be socializing with friends and now I'm choosing to clear out my shed but that's a different story how satisfying is that though it is actually really satisfying because there are a whole heap of appliances like an old vacuum cleaner a jet water pressure thing that we never used and just like stuff that we do not need that you know we can pop online and make some extra cash for especially coming into Christmas which I think is really good love it do you have a money win or confession for us

this week Georgia I have a money win as well oh it's a week of wins it is a week of wins and it's also an adult win oh I like these so everyone knows that framing is quite expensive actually expensive do you know guys guys if you're not a proper adult who's had to go and get something framed which obviously georgia king and i are um you'll find it's incredibly expensive but you know how expensive mat boards are as well like what's a mat board the really like thick paper that goes around the edge of the photo i thought that was just like cardboard yeah it is it's really really expensive cardboard really anyway moving on so tell me about your friends to avoid the expense of getting it framed because that can set you back like a couple hundo minimum really which

is like more than the print that I'm framing so I went to Ikea uh busy hours on a weekend but that's okay they have a frame called the ribba frame r-i-b-b-a and I mean I'm no artist I'm no framist is that a thing I'm not sure but they look pro to my humble do they look familiar to you by chance are they what you have oh my gosh yes I feel like men these though yeah I did though oh did you I feel like every single time it's like having a little sister that you're like hey here's a really great idea and then they ignore you and then they come to you and think it's their own idea they're like oh look at this awesome thing that I did yeah and that's not the first time you've done that with a money win that is that's beside the point if they're really good friends congrats on

your new artwork in your new home Georgia thanks hun um Facebook group Vicky D let's move on favorite post from the week thought we've moved on from that nickname but that's okay so I have favorite post and it is from our friend Monique and I actually loved this one I think I squealed when I saw the photos she said money win this is my son my nieces and my nephews she said that every year she spends between 120 and 200 on Santa photos side note I did not know Santa photos were that expensive I don't have kids so I don't know why I would have known that but she said this year due to COVID and having to socially distance from Santa they made their decision to do their own santa photos she said it was less stressful than trying to get three kids to smile at once in a

five minute time frame and they absolutely loved that their poppy was santa and georgia i know you've seen the photos because i've shown you before they are stunning these photos are i would say professional quality yeah and if i tried to recreate santa photos at home it would not look the same well that's the thing this isn't going to work for everyone monique i absolutely love your money win it's kind of rude and a bit of a flex to show us how good you are at photography though no that's a great idea um given the fact that there is no Santa this year I love that yeah but also they're socially distanced photos they're really cute but at the same time if you've just had a baby or you've got young kids like you kind of want the photo of them sitting on Santa's

knee not them sitting on a stool 2.5 meters away from Santa which is what's happening at the moment yeah I think this was genius and I reckon anyone at home should be giving DIY Santa photos a crack yeah send them send them through to us oh my gosh with a newsletter something yes can we put your Santa photos in the newsletter please send them to us we are so here for this Georgia have you got a favorite post from the week I do so mine is from Brie it's also Christmas related you know what else is expensive at Christmas apart from everything Christmas trees again I can't say I've bought one but they're about 100 bucks plus have you got one in the house I do and it definitely it was $100 plus but that was a money win from a really long time ago that I bought my Christmas

tree on a Boxing Day sale a few years ago I'm probably due for a new one but it's a plastic tree I got it David Jones for like 70% off just a small flex from me at Christmas time guys all right so she pulled a tree off the side of the road it doesn't admittedly it doesn't really look too much like an actual Christmas tree but to make it a little more authentic she's got the the air freshener that smells like yeah i really like so this is actually brilliant like brie i'm impressed i i actually am impressed and it's very well decorated and to be honest i definitely would be very happy with that christmas bush in my house stunning for me victoria and you know she's going on a road trip she said so there's no point investing in a proper tree i love that

i'm gonna put my christmas tree up soon g and i'm very excited about that probably instagram it i'm surprised you haven't done that already you strike me as like a november 15 let's get the tree up kind of vibe. Now, my friends, there's a very good reason for that, but I will tell you all why I haven't put my tree up later. Oh, mysterious. All right, let's move across to the main topic of today's show, financial perfectionism. Now, perfectionism is generally something that I would say is considered to be quite a positive attribute. You know, it's what you say, it's what you say in the job interviews when you're like, they're like, what is your biggest flaw? And you're like, well, I am a perfectionist. It's a humble brag. Yeah, but it's also like wildly

inaccurate. No one is actually a perfectionist when they say that in a job interview, because if you're going to say a flaw, you're not actually going to say your real flaw. You're clearly going to say something that's kind of like, oh, stumble over this. I don't really want to tell you what I'm bad at because I actually want the job. Moving on. Perfectionists do have incredibly high standards. They're extremely dependable. And, you know, you would think that being a financial perfectionist would actually be a good thing. But as we'll learn in today's show, having impossibly high standards for ourselves isn't always a good thing. So Vy, you're the finance guru, the finance genius, the finance aficionado.

You're really making up for the lack of compliments that I didn't get at the start of the show. You're welcome. Thank you. Talk to me about what financial perfectionism actually means and why it is holding a lot of us back. Now, I love this topic. When we started talking about what we were going to do this week, I just felt like it was really fitting, especially before Christmas, because so many of us are feeling a little

bit flat about our spending habits, or we're feeling a little bit overwhelmed by it all. I find this literally so interesting. And it's also a topic that I don't think is being widely discussed. Let's just say that She's On The Money has coined the term financial perfectionism. Let that go viral, my friends. So perfectionism, as we know, it refers to people completing tasks to that perfect standard, completely free of any flaws. But usually along with that level of perfectionism comes a lot of hard work and usually my friends some angst. Perfectionism is definitely something to be admired to a point my friends and as an employer I love employees who want to get the job done so it's of a really high quality but it's definitely not always a positive

thing and it can totally be detrimental for a lot of people when you're super obsessed with making things perfect. It means the project or plans can often go unfinished because you quite literally never get them to that point where you deem that to be perfect right and at the end of the day sometimes just getting the job done is much better than getting every single aspect of it absolutely perfect. From a financial perspective though the main areas I'm seeing perfectionism let people down is in property where lots of people are waiting to find that perfect dream house on the perfect street for that perfect price or a price that's actually out of their reach. Then also I see this in investing so delaying the decision to invest because you don't have the perfect

amount of money in your bank account yet or you don't have the perfect understanding of how investing actually works and the other way I'm seeing perfectionism let us down is in the crazy unsustainable budgets that so many of us are putting in place to try and achieve our goals which often leads us to failure instead of towards financial freedom which is where we all want to go so it's a massive really broad topic huge absolutely huge george king but it's one thing that our listeners can really relate to and as I said it's not really something that's been discussed before, and there isn't actually that much written about it when we looked into it. And I just think that fleshing this all out in a podcast today is going to be really interesting, not only for you

and I, Georgia, but for everybody listening, because I think it's something super relatable. For sure. And I think we hear a lot about perfectionism in the entrepreneurial space, which I feel like is at an all-time high. Like we're seeing it in our Facebook group a lot with all the side hustles going on. It's just all over Instagram as well. It's very much a thing right now. But I wanted to really break down the three major themes you spoke of there, V. So we had perfectionism in property, in investing and in budgeting. So can you talk us through those in a little more depth? I'm so very glad you asked and that definitely wasn't planned at all. But that was definitely well wrapped and I just feel like too often we are trying to be too

perfect and too many times do I see, you know, people in our community saying like, oh, I'm just going to get my business plan perfect the marketing isn't perfect for my business and I can't remember who it was but there was a really great quote that says if you're not embarrassed of the first product you put to market then you launched too late and I think it's really important to remember that everybody in business is usually embarrassed of their first product you best believe I am not embarrassed in the way that I would hate for anyone to see it but I look at it now and I'll be like oh my gosh the graphic design on that was horrible the first iterations of she's on the money's Facebook group and website. I did it myself, but I just wanted to get it up there and out and it

did the job it needed to do. It doesn't have to be perfect because you can fix anything at a later date. So I think that's worth saying because I know I literally get that in my inbox every single day from small business owners. But back to the actual question you asked me, I find that perfectionism is essentially a form of procrastination in another area of life. So I really want our listeners to fight against this perfectionistic urge and start really trying to embrace living a little bit messier, like not literally, but let's just metaphorically live a little bit messier because I think it not only makes for a more interesting life, but usually you will be more successful. Like at the end of the day, I've said this a million times. I'm not

sure if I've said it a million times on the podcast, but given you're in my team, you know, I say this at work, done is often better than perfect. And I live by that mantra. It is on my desk on a post-it note because I am a self-confessed perfectionist. But sometimes I even need to remind myself that stuff just needs to get out the door. Sometimes you need to get the proposal to the client. You need to get the piece of work to the client. You need to get, you know, an email back to someone. And sometimes just touching base is better than not doing anything at all because it wasn't a hundred percent there. Back to property for a second. As I said before, property perfectionism is detrimental when our standards are just too high and we procrastinate our decision to buy

because we just can't find the right home. Now obviously a home is a massive purchase and it's not one I'd ever advise rushing into but the main point here is I would rather our community if buying property aligns to their goals and values get into the property market sooner settling for something more affordable and more achievable instead of waiting to buy in 30 years time when you might have a massive killer deposit and some killer income but at the end of the day inflation's happened and you still can't afford to get in. Obviously property is not for everyone but if you are thinking of buying a home then I really really want you to remember this. It's also really important to understand that just because the property is more expensive and

you can afford it doesn't mean you should be affording it because at the end of the day property is going to impact your cash flow for the next minimum of 30 years. So I think it's really important to understand what that mortgage repayment will look like to your cash flow because the first hurdle is getting into the home and the second is actually being able to make the mortgage repayments. Remember last week we had that money diarist who had, she was the regretful home buyer. Yeah. Yeah. And that's exactly it. So she'd obviously dived in, but not really comprehended what for, I think it was $4,000 a month or something, what that had meant for her cashflow and what that had meant in terms of impacting her life. And the other part of this,

as it relates to property as well, is inboxing yourself in to only buying in your dream suburb instead of reaching out or branching out to different more affordable areas where you can actually just sit for a little while because not many of us can actually buy homes in Portsea as our first step into the housing market. So, widening the scope of where you want to live and what you can actually afford and getting rid of that perfect ideal in your head, opting instead for something more achievable and actually realistic for you is probably what I would advise in this situation. Fee investing, how does it work in that sense? Okay, now this is obviously the point I am most passionate about because as you guys know surprise surprise I adore investing

but the sooner we start investing the better off we are going to be in the long run and that's because of compound interest my friends which we have covered on a number of other podcasts if you don't know what I'm talking about go back to our investing 101 series in season one and also I think we covered investing again in season two with you Georgia because at the end of the day it's your money making money for you and that can never start too soon in my opinion now I know that investing is a super daunting concept for a lot of people. And if you're not completely financially literate, it can be super overwhelming. And it's what our investing episodes are for. And it's also why I am so big on things like micro-investing platforms, which we also did

two whole episodes on recently, so that you actually get to start learning sooner while being in the market. Now, too often, Georgia, I hear young and smart women who are amazing at saving and smashing their goals saying, nah, I don't get it and I'm not going to do it. and they scare themselves off investing because they like the security and they like the ease of just having their money tucked away in a savings account with little reward. Now, I'm not looking across the table because I know Georgia King is kind of like wincing away because my friend, are you one of those people? I am a young, smart woman. How good are you at investing? I'm learning every day.

You are? I love that for you. No, I'm exactly that example. I'm still a bit afraid. which is totally okay. Am I allowed to admit that? You're allowed to admit finance. No you're allowed that's fair do you want to admit that? Yeah I'll admit it. I'll be vulnerable with the girls. Micro-investing as well is a great place to start. Yeah it can be a really great place to start for lots of people. Yeah the last part of this topic that you mentioned Bea was over budgeting to the point where you're either unable to stick to a budget much in the same way that diets work so tell us more about that. Now this is something that I say time and time again and something that so many people come to me and they say Victoria I have such a good budgeting system, I'm such

a good budgeter, I have a spreadsheet and I fill it out every single day but it's not working for me. At the end of the day budgeting too hard can actually be a massive recipe for disaster. It's not sustainable at all, it is not fun and often we do fall off the wagon and end up spending more than we would have had we not had a restrictive budget in the first place. Now, the big trick to budgeting effectively is actually establishing a really good understanding of your own relationship with money, which you probably expected me to say. So really understanding your money story through and through and working out how you can make your cashflow work for you. Now, obviously our budgeting and cashflow course is a very biased way and a very good course to get you started and

give you the tools that you need to help nail this. But we've done episodes on budgeting and cash flow too so definitely have a listen to those episodes for a more detailed look at setting up a sustainable and workable budget for you. The other part that I say all the time is that you budget so hard that you actually miss out on life and living and having fun with your friends. Now we've spoken at length about the sacrifice people who follow the fire money management method make when it comes to enjoying life now and I think some people do become quite obsessive about their savings account climbing and climbing and climbing and that they don't let themselves enjoy any of the fun things that money can actually afford you. Now, don't get me wrong. I love that people are

feeling super inspired and really excited to crush goals and build up those savings. But to be honest, it's really important to enjoy yourself along the way and make sure that there is room in your budget for the occasional splurge. Otherwise, kind of what's the point? I know I'm a financial advisor and I'm meant to be like, save, invest and do this. But also like let's overlay real life for a second. I don't want you to miss out on really important formative memories that you're creating with your friends and your family just because you're really trying to budget and save and you listen to a finance podcast once at the end of the day life is definitely for living but at the same time we want to make sure that future us is okay too yeah and it's about striking that balance

absolutely and it's all about balance it's definitely not about you know just going oh well Victoria said you should still treat yourself if you genuinely do not have the budget or the cash flow to do that and you're you know forgoing paying bills to do that absolutely do not do that at all. I'm talking about where people allocate 100% of their additional funds towards savings and don't, you know, pop the $20 in there to go to the movies with their friends once a month or something. And we do definitely hear that as well, that people do start to feel a little bit guilty about spending when they are on that really good pattern of saving and investing and they can find it hard to part with their money. Totally. And I find that that is something that is really

overwhelming for a lot of people who have been in debt so often it is people who have been in significant amounts of debt who are now out of it and they're on to really positive savings habits but they're now in a position where they feel super guilty about spending any money and so that's why I always suggest having kind of like a fund where it's for you and you can give yourself permission to spend that on whatever you want because it's not for saving it's not for investing because those things have already been allocated for. So for me, it's really important to structure yourself so that you have that freedom.

But if you're not giving yourself that freedom, spending can make you feel really guilty and it can feel really overwhelming. And I don't want anyone to experience that. When it comes to the perfectionism thing again, V, I'm going to sound like a broken record because spoilers, Georgia doesn't love Instagram. But how much would you say Instagram plays

into this whole perfectionism obsession? Look, it plays a massive part in this idea of perfectionism, and I would say that all types of social media do. It's definitely not just Instagram, but I think Instagram definitely distracts us from what we really want, and it deceives us into wanting things that, in all honesty, don't actually align with our true goals and values. I think that we see these perfect lives of influencers and even just other people who aren't necessarily influencers but are really good at posting great highlight reels of their

lives online and seeing people live these amazing lives in their amazing houses with the car they've just bought or their brand new home but you actually don't get to see the flip side of things you actually only see the shiny side of their lives so I think it's really important that we understand that what you want even though it's not what you can afford may not even be what you want in a roundabout way I think it's really important to point out again because we will do this time and time again that we don't see people struggling on Instagram not many people you know share that type of journey we don't see the work it takes to buy a house we don't see the work it takes to buy a car or the debt that they've taken on or the monthly repayments that exist around those things

or like how they're funding their fancy dinners we just see the end product which is a really beautiful flat lay of a dining table with a really delicious looking April spritz and so I think that we tend to set these really unrealistic expectations of what our lives should be like when life is not just sunshine and roses all the time. And it's actually really unrealistic to think that we could go out for dinner three or four times a week and have a really expensive meal because that's just honestly ridiculous. Yeah, I think it's easier to figure out what you actually want in life when you're not just scrolling the gram all day and feeling distracted. I find that some of my most productive times have been when I've deleted the app from my phone. Now I know that's

probably very counterproductive for someone whose business is literally run on the internet and I'm not saying delete your accounts but I find that deleting the app from my phone so I can only access it during work hours when I'm actually interacting for work and I just kind of like tap out of my personal life online for a little bit they've been really good they provide a lot of clarity that you know I didn't even know I needed my next question for you here V is what advice you would have for people who do have those perfectionist tendencies? As if I haven't given you enough advice already, Georgia, but that's okay. I think I'm going to be, again, a broken record, which is a very common quote on this podcast. But at the end of the day, it does come

back to a number of things. First things first, go easy on yourself. It has been a ridiculously hard year financially, also in pretty much every other way imaginable as well, like let's be honest. And for perfectionists who thrive off nailing goals and achieving things, I think it would have been particularly hard. Let's be honest even I've struggled with this because I would say that I am definitely a type A. I love lists. I love being perfect in the work that I do and the things that I put online and how we create and craft our work and I just think that the end of the day it is so much more important to just be kind to yourself and not take those things on board too much. I've had to really step back and go cool well I'm not actually going to be able to do this

this year. It's actually not your fault that you're not achieving things this year. It's the fact that there's a global pandemic going on, not sure if you've noticed, but it's literally unprecedented, dumpster fire, whatever we're going to call it, and it is in the way. So take a massive deep breath and just be super kind to yourself. The next thing is focus on slow and steady progress instead of perfection. At the end of the day, a small step is still a step in the right direction. And to me, that is the most important thing here. I don't want you guys to fall off the wagon because you are setting ridiculously impossible goals take it slow be smart be strategic instead of being restrictive and just really define your goals and work towards them bit by bit and what do you say

george i think it was on a previous episode it was uh eat the elephant bite by bite instead of taking one mouthful mate that is a phrase throwback i can promise you google it it's not a phrase but anyway moving on lastly i would say my friend stay in your own lane everybody else's lane is too crowded. Focus on your goals and your goals only and stop comparing yourself to what other people around you are doing or achieving. You're your own person and it's honestly too distracting and exhausting to be looking left at what Sally's doing from high school who's, you know, what she's up to financially or, you know, how often she's working out and checking in at the gym, which I still think is a bit weird, but that's okay. Just do you and everything will

honestly be a little bit easier. Your lane is your lane for a reason. Make it your own and follow your own journey and stop looking at what other people are doing inspirational words from you thank you i mean unless you have a like very clean clear their copy of their budget their financial statements before the listener question today v as a small you're not really a small business i'm a small business owner i'm a big business owner i don't know oh medium i'm a small i'm a small business owner so as i think you've got to be making millions before you can call yourself a big business owner. Aren't you making millions? Sadly not. Sadly not. But that is another story. I'm trying. Yeah, you got to start. Start somewhere. Start small. Be strong. So as a business

owner who is a huge perfectionist, as you admitted before, what would you say the biggest lessons that you've learned along the way have been? I think first things first is just having a plan and making sure that you're doing things before you are ready. As I said before, like having a website up is better than having a perfect website up because your consumers and the people that you want to connect with can better find you. Having a logo that maybe isn't your favorite logo, but is one that will do the job until you find your dream logo is better than spending hours and weeks mulling things over when you should be working on product design. At the end of the day, done is better than perfect in a lot of ways. But as you start to grow, I'm going to pump your tires up

here, Georgia, hiring good people like Georgia King, very important. Having a team that surrounds you that is on the same team as you and understands and has the same passion and goals and motivation that you do is really important. And I'm really lucky that my She's On The Money team is exactly that. And I also think this has been the hardest thing for me. And I think you'll like smirk a little bit because I totally don't do this well, but stop trying to be in control and let people do their jobs and let them be good at what they are good at. So if you hire a co-host let her be the co-host. If you hire an audio engineer let them be the audio engineer and stop telling them how to do their job. I'm not saying I do that all the time but I definitely do stick my nose into a

lot of things but I think that done is better than perfect is probably my motto for this episode love it hi there you've reached the she's on the money mailbox do you have a money problem you want help solving do you have a money dilemma that 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 she's on the money.com.au and you might even find yourself on the show. But for now, here's today's listener question. Hey ladies, I've been feeling really inspired by the She's on the money Facebook group lately. And I think I'm ready to turn my hobby of jewelry making into a bit of a side hustle

slash business. I already have quite a bit of the product and I studied marketing. So I know how to handle that side of things. But when it comes to running the business side and the financial side of things, I'm feeling a little overwhelmed. I guess my question is, where do you think I should start so that the business can be as successful as possible. Thanks. Now, Victoria, you've just said done is better than perfect. That I have. Is that what you would then relay to this lovely listeners question? I absolutely would. But when it comes to finance, I do think that, you know, just done and filling out a form. Finance does sometimes have to be perfect, obviously, when it comes to ordering stock and kind of guesstimating how much you will need.

that's a bit harder but at the end of the day if you're a small business owner I want you to have your head around your cash flow and this advice is probably only going to be relevant to small business owners but if you're a small anything if you walk dogs on the side if you're a cat sitter if your job is getting someone's mail and you get paid for this at the end of the day I think it's really important to take this advice and take it on even in your own lives if you're an individual who works for someone you are kind of running a small business because you are the small business and your income is your PAYG income and then it's your job to divvy it up. The end of the day if you're a small business owner and want you to know how much money is coming in each and every single

month that you are able to allocate to your expenses I need you to tell me exactly what your expenses are what bills come into that business that need to be paid on a monthly basis a good business owner will always know those two figures because they'll know what their responsibility is financially and they'll also know what amount is coming in that they can service their responsibilities with. The next thing I would want them to know is their balance sheet and their profit and loss statement. Those two things are the most important things that a business owner can understand. So a balance sheet will have all of their stock and what's coming in and what's gone out and it'll show the overall balance and then a profit and loss is going to

tell you whether you're profitable or not and being able to understand that and understand the intricacies of where maybe am I not being profitable or where am I spending too much money or where am I really profitable how could I you know turbocharge that is going to be really important for you that all probably sounds super overwhelming but at the end of the day it's about just understanding the basics and she said that she just feels a little bit overwhelmed by the financial side of things so just start with what does your product cost how much are you going to charge for your product and a good way to understand that is how much do you want to make per year so at the end of the day if you say look I'm a small business owner and I really want to

make $80,000 a year fantastic how much is that per month how much is that per week okay well if you can make you know $1,500 per week let's divide that by how many products you're making and work out how many you're selling so it can become bite-sized pieces and we can really scale it back so that the bigger picture makes sense because if I said to you hey you need to make 80 grand this you'd be like oh my gosh I don't know how but if we start making the goals smaller the end of the day you're going to feel so much more empowered because you'll work out what to cost your product at and often people forget to take into consideration their time when they're a small business owner they'll go oh all right well let's say that she makes bracelets and her biggest

competitor sells bracelets for $80. She says, you know what? I'm new to the market. I'm going to sell bracelets for $70. What she's forgetting maybe is that that person sells bracelets for $80 because they are able to order them in bulk and have them made overseas with really low labor costs. And she's selling them for $70. They might be cheaper, but she's making every single one by hand in her bedroom in Melbourne and using all of her time personally to do that. So I think it's really important to factor in what is your hourly rate because too often do I talk to small business owners who say oh Victoria like my product might be beautiful but I'm making two dollars an hour because of how long this is taking me and in that case that business is a really it's not a bad

business because there are things that we need to be fixed and your product is probably beautiful but I'm guessing that's not the lifestyle you're going for when you wanted to create a small business to have freedom and flexibility in your life. Exactly. And if you did sell those bracelets for $50 or something, and then you realized halfway through doing it that, oh God, I'm never going to make money from this. It's hard to then be like, oh, actually it's $300 now. That kind of ruins the brand perception, right? Exactly. And you've just got to start understanding what is your time worth. And if you say, look, my time's worth $20 an hour. Fantastic. Factor that into the production, factor that into the way that you're costing up this product. I think it is

really important to make use of free budgeting tools. If you go to the myGov website, they'll have a business plan that you can download and do for free. And as you guys already know, I love the myGov smart money website because I just feel like it's such great content and it is free and consumable and it's coming from a non-biased source. So it is literally perfect. And there are so many small business hacks on there so if you need to understand your small business cash flow go there first but the first thing I would say to small business owners is your time is worth a lot and you need to make sure that that's factored into your production regardless of whether you're a freelance writer creating copy or you are a you know small business owner making

jewelry or you're a web designer at the end of the day if you quote a thousand dollars and you say wow that's epic I'm gonna make a thousand dollars for this project but it takes you 10 weeks of your life and you spend 40 hours a week doing that, that is a bad deal, my friends. Even if on face value, a thousand dollars sounded like a really good deal. How long generally, V, would you say it takes for a small business to kind of find its feet? Everybody is different. And I think in the age of social media, people can go viral overnight. I've got small business owners who have started small businesses in COVID that I'm working with currently, and they're amazing. And they're already turning millions in profit just because they went viral on TikTok and that is crazy but

then I also have small business owners who have been doing something on the side for the last five years and they're breaking even but they are not super profitable but they're still really passionate about what they're doing so I think you need to remember that profitability is important but you need to understand why you're doing your business if it's just because you're super passionate about the job that you're doing and the thing you get to do as a hobby and you're making some cash on the side then my friend maybe you're not chasing profitability maybe you're just trying to cover the costs so you can do a hobby that you love I just think it's really different for every single person and there's no one cookie cut away but at the end of the day you should know

when your business is meant to be profitable whether that is you need to sell x amount of units per month or work so many hours per month you need to understand what that point is not just go, oh, one day I'll be profitable. Like, no, I want you to be able to tell me I will be profitable when I sell 15 bracelets every single month. And that's my goal. Yep. So have those really clear cut goals. Love it. I reckon it's time for Money Diaries now. Hi, I'm a 28 year old credit card rewards junkie, and this is my Money Diary. I signed up to my first credit card after I got a full time job and I knew I could pay it off because I thought this seems like an interesting cash flow tool

and getting some of those bonus points seems like a good idea because I want to do some traveling and it worked out great for me. I managed to always pay it off and therefore I decided to get more credit cards. They're only dangerous if you are someone who is tempted to spend money you don't have. So I've always viewed putting expenses on a credit card as just sort of one side of a balance sheet. if you've got the money to pay it, why not use the cash flow to earn yourself some points and push that debt out for another month and then just pay it off as you get paid.

What does our 28-year-old credit card junkie do? How much does she earn? And how much is in her account right now? I'm a full-time engineer. I'm 28 and I've been working in my field for five years and I earn $100,000 a year. I currently have a few thousand dollars in my transaction account and a shared account with my partner, $50,000 in savings, and I'm a credit card rewards junkie with a Qantas account of about 100,000 points or about $700 worth of flights. What happens to her money once it hits her account? Currently, I immediately put my half of the mortgage payments into our shared account. I set some aside for savings, and then I leave about $1,000 to $2,000 for spending over the

month, and I might toss that up from savings if I need it. I used to pay the balance on my credit cards for the month immediately as well so that I never got charged interest but I gave those up to get a mortgage. And what was it like getting a house and a mortgage during the pandemic? We decided well all this savings that we're doing is probably not going to go towards any holidays anytime soon and I got sick of paying rent on a four-bedroom house so decided we should buy one instead. What are our 28-year-old credit card junkies thoughts on investing and does she invest in herself? I wish I'd started sooner. I was advised by my dad to buy Tesla a few years ago and I got lucky with that. I think of those shares as like a

lottery ticket that I might one day cash in or I might lose entirely. But I realized I need a diverse portfolio as well and I should invest outside my savings account. And that's why I started listening to the podcast. Within the next two years, I'd like to set up an investment portfolio that's going to work for the long term, but also offset the risks involved with having a mortgage that's currently at a really low rate and I definitely need to learn more about investing and I'll probably talk to a financial planner at some point. What debts does she have? So we do have a mortgage but other than that I've never been in debt although I've had about a dozen credit cards over the last five years and I'm really conscious about getting the cards just for either cash back

travel vouchers or bonus rewards points and then using them for my everyday spend. Sometimes I even time the cards to match up with big expenses like car insurance so that I reach the minimum spend and then I cancel the card after paying the full balance. But yeah, I've never been in debt because I'm very careful to always pay them off. What is her best money habit? I'm good at spending within my means. I use a prepaid old iPhone and a boring, reliable secondhand car and I avoid buying stuff full price unless I really need it. I also love spreadsheets and planning out holiday budgets. And as I've said, I collect rewards points for fun. We actually used them to fly to and around Europe in 2019

and some of the flights were even in business class and all we paid was tax. We've also done multiple domestic trips over the years. You have to be a bit flexible on when you fly if you're going to use points. I love spending rewards points on holiday because it means you don't break the bank when you're going, taking time off work. And what's our 28-year-old credit card junkie's worst money habit? Well, I have realized looking back at the credit cards that I did used to justify some unnecessary purchases to make the minimum spend. I also forgot to update my recurring payment details occasionally. So if you're using and cancelling cards all the time, then you need to update your payment details. Otherwise, you can get charged late payment

fees on recurring payments. And my credit rating was pretty bad for a while when I kept applying for cards with more rewards points because they have higher limits, especially when I missed a payment on one. What's her big money goal? To pay off the mortgage is the main goal, but that's a long way off. We're also thinking about doing some home renovations, which again, I would probably consider putting on a credit card. Unfortunately, can't pay tradies with rewards points. But yeah, I would carefully manage the cash flow on those big money goals because big cash flow means big points. What grade would she give her money habits? I'm going to go out on a limb and say an A-,

but I'd like to get it to an A-plus with some investments and forward planning. Okay, V. So the 28-year-old credit card rewards junkie. This is such an interesting one. It makes me uncomfortable because I've got things I love and things that I'm like, ah, I hope people don't start that. Let's talk through them.

So maybe do you want to start with the best things about this? Oh, how savvy she was. like traveling the entire world on points is kind of epic someone else is paying for your flights yes please I'm all about that I think that that is really savvy and really smart I loved that she was on top of her budgeting I loved that she was on top of arguably her cash flow she knew how much was coming in and what points were everywhere and just like how to get them it was actually super empowering because she was like yep I'm a spreadsheet junkie and I just know exactly where everything is and how to do it. But, and I'm sorry that there's such a big but, that's never

going to work for everybody. So I'm super excited that that works for her. I've got a friend that that works for. I also have a number of clients that that works for, but those people are few and far between because that type of discipline does not exist for everybody. And so many of you are going to hear that and be so motivated to kick that off and go, oh my gosh, totally. I'd love 100,000 Qantas points because everybody loves Qantas points, right? Like you can get into the lounge when you've got enough of them and you can get free flights, but we don't actually all have the discipline to sustain that for a long period of time because we'll get over it a month from now and we'll forget that there's money on our credit card and then we'll be paying interest

off it and then we'll pay it off and then we'll forget that there's a yearly fee to hold that credit card and that will pop up and we'll be like, oh yeah, that's $250. I should call them and then you don't call them. And it's just a never ending spiral. She'd said she'd had more than a dozen credit cards. To me, epic if she's managed to use them all. I'm concerned that a lot of people might see that as inspirational and try and copy that. And they just don't have, again, the discipline to actually follow that through and make it work for them because that is a money hack that is great, but is going to require a lot of time and energy and effort. And at the end of the day I've said this on the podcast before flyby's points are not worth very much money at all but

we all strive to collect them and at the end of the day they're only going to add up if you're really consistent about using them i.e putting every single purchase every single month on a credit card it's not going to happen if you just you know have a credit card and use it for overseas travel and hope that the points add up and I just think that that is a very slippery slope when it comes to finances so my recommendation would be don't try this at home but at the same time if you're doing this i'm so pervy please tell me what have you got on points that is really expensive that you got for free how do points even work excuse my ignorance so points work they're kind of like a reward for using that card so you might get one point for every three dollars you spend

sometimes it's point for point so if you spend a dollar you get a point and then those points are redeemable for other things so you might be able to get a new Dyson vacuum cleaner because that might be worth 57,000 points or you might be able to get upgraded flights for x amount of points or whatever it is every single rewards program is very different and the points are definitely not worth a dollar so if you spend a dollar and you get a point for one point it's not equal it's not worth that it might be worth like one cent or five cent you really have to accrue those points so 100,000 points does not mean you have $100,000 in credit. It might be $700 worth of credit. So you've got a flight to Bali. So for me, I think it's only worth it if you're super regimented

about these things, but at the same time, I'd much prefer you to put your time and energy and effort into something else that's really going to help you create wealth because I'm not trying to be negative. I really love this story, but I just think that she was so upbeat and so positive that I don't want you all walking away and doing this because I'd love you to put that time and energy and effort into your cash flow or your budget or investing or creating future wealth because as much as free flights sound pretty damn sexy, they're not going to create future wealth for future you.

I think it's probably also important to remember, and I could be wrong here, but credit card points are probably a marketing ploy by the credit card companies, right? Absolutely. That's why they have them. Absolutely. and they're often used as kind of like the carrot on the stick when you're signing up for a home

loan or a new personal loan or whatever it is to get you to stay in debt like at the end of the day they'll be like hey cool so did you just get your home loan fantastic here's this Qantas credit card with a hundred thousand free points please rack up more debt and you just go great hundred thousand points that's flights great and you kind of again go down a slippery slope of spending because you think it's really positive and they've created a positive experience for you. At the end of the day, if you can use those systems to your advantage, I am all for it. But not many of us have the ability to do that. And I think we need to be honest with ourselves about that.

There were also a few things in there worthy of celebrating as well. Oh, yes, there absolutely were. Engineer earning $100,000 a year. What a queen at 28. Yeah, exactly. Oh, my gosh, 100 grand before she's 30. That is epic. Yeah, that is huge.

she loves spreadsheets like you could sell them after my own heart absolutely and that's what i mean like i loved this money diary and she sounded like such a legend and maybe i've harped on about this too much but i don't think we can go on too much about slippery slopes that you could potentially go down because at the end of the day that was a super inspirational money diary yeah she knows what she's doing she's a woman empowered and educated i loved her and i loved her story and i love that we got to share it because i love the pervia money diary so i'm like oh what did you do with your points yeah had a very different 100 love it but also disclaimer yeah exactly right i think it is time to wrap the show there vicky d yes but just before we head off georgia we'd

like to acknowledge and pay respects to australia's aboriginal and torres strait islander peoples the traditional custodians of the lands the waterways and the skies all across australia we thank you for sharing and for caring on the land which we are able to learn we pay our respects to elders past and present and we share our friendship and our kindness The advice shared on She Is On The Money is general in nature and does not consider your individual circumstances. She Is 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 legit. She's an authorized representative of Australia Pacific Funds Management,

Proprietary Limited, ABN 34132463257, AFSL 339151. And thanks to Ryan and Beck, our producer angels for putting it all together guys beck is new we have she's in the room watching us and she edited last week's podcast which honestly was epic and we love her welcome to the team beck we are so grateful to have you here but we'd also love you know what else we love we love it when you join our facebook group nice segue exactly i'm so good at this where our community shares money tips and tricks every single day without judgment so she's on the money on facebook and join us if facebook's not your thing you can find us on instagram we're also on tiktok we're at she's on the money aus youtube literally everything guys we're done here george

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