She's On The Money - FRIDAY DRINKS: Interest Rates, Inflation &....Horses? Oh my!

Episode Date: May 5, 2022

Hey hey it's Friday! As per usual we celebrate you and your successes, recap the week AND answer a Money Dilemma all about how interest rates affect your bank account. By the way, you can reach out to us with your Money Dilemmas here!AND in the midst of this RBA rate hike, election countdown kerfuffle of a week, the ladies kick back for a chat about HELP debt, the CPI index, inflation and so much more!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 and She's On The Money are Authorised Representatives of Infocus Securities Australia Proprietary Limited ABN 47 097 797 049 AFSL - AFSL 236523.See omnystudio.com/listener for privacy information.

Just before we get started, 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. 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. Welcome back to another one of our Friday Drinks episodes where I'm getting really sick of doing this intro. So I'm going to make Georgia organize another one for next week.

But as you guys know, this episode is all about celebrating you and getting to reflect on the week that was talking about our community, sharing their money wins and sometimes a few of their confessions. And we adore it. Honestly, just George and I, even though George this week is remote because she forgot we're recording and now is in a wardrobe. We always talk about you guys and your successes and sometimes your little confessions, regardless of where we are. Let's start with you, Miss Jessica Ricci. How was your week? It was good. Just bopping along, living the dream. She brought a cricket into the She's On The Money office today. Yeah, we're making stickers. It's fun. Yeah, okay. Loving it. And Elisa, our producer, and I learned

what a cricket was. We also learned what a weeding tool was and what smart vinyl is. It's very cool. We will post a photo. But in more She's On The Money news, Jess, what happened this week on our money diaries. This week's diarist had three kids and three jobs just for that nice little bit of symmetry and is just working her little tush off. Oh, she was such a hustler. Yeah, trying to get towards the financial freedom she wants, which I think is incredible. She really wants to build up on her assets, which we love to see it. And yeah, it was just really interesting to talk to her about how she kind of balances, you know, the financial desires that she has and the goals that she has against the, I guess, challenges of working in so many different places and obviously

the time that that takes, along with having three kids who I believe were all under the age of three. Yeah, it was insane. I was like, excuse me, what, are you a super mum? Like, how? Absolutely wild. Here I am being like, oh my gosh, there's no way I'm ever going to find time to have a baby.

And she's like, what do you mean? There's heaps of time, heaps of time, heaps of jobs, heaps of everything. I was honestly in awe. But I think that money diary was really nice because I feel like we haven't had that many mums on the pod. I mean, we've had lots of young women who are doing really cool things, but hearing from a mum's perspective how she was balancing all of that and still putting herself first, I was very impressed.

But you know what else impresses me, Jess? Investing. Which is what we spoke about on this week's Wednesday episode. Georgia King, break it down for us. Hello. I thought you were going to segue that, V, by saying, you know what else impresses me? Georgia's set up this week. I'm coming at you from Ed's wardrobe down at Blair Gowrie.

So apologies for the audio quality. It is what it is. I'm a potato. Definitely check out our Instagram because we will put up a photo so you can see exactly what we see. The first option Georgia gave us was tuning in with a karaoke microphone. So it's only going up from here. It's still an option, ladies.

Still an option. So on Wednesday's show, guys, we discussed varying types of investing platforms. And we spoke about micro-investing platforms versus robo-advice versus share trading platforms. And it was a really interesting chat. I mean, it was between the two of you, but I loved listening because it was really interesting for anyone who's thinking about investing slash for anyone who has maybe started micro-investing, but they're thinking about taking that next step, if you will. So yeah, it was a really good, good listen.

And if you are on the fence about investing or you are thinking about graduating to something a little bit more serious, then I'd definitely give it a listen. I thought it was really interesting as well, because we kind of phrased it, Vee, in terms of primary school, high school and university and the idea that you can kind of graduate up if you want to. But also we chatted a lot about the fact that different platforms offer people different benefits. And, you know, depending on what you want, you might just stay with one platform forever. You don't necessarily have to graduate all the way through to the point where you have a financial advisor managing a multi-billion dollar portfolio for some people. I'd love to be in that position. Oh yeah, me too. Manifesting

that for all of us. But you know, if something really services your needs, it doesn't necessarily mean that just because it's not the furthest along or the most advanced that it's a bad thing. So I think it was really cool to chat about what these different platforms offer so people can make an informed decision about what might work for them and their wants and their needs. Yeah. And I find it really interesting as well, because obviously we get asked a lot of questions about this and we're not able to answer what is the best because that doesn't exist. There's no best one platform. There's just the best for your personal situation. And we don't know what your personal situation is, unfortunately, because that would make our lives much easier.

But we see all the time on Money Diaries, Money Diaries using a whole plethora of platforms, like they might be using Raise and Spaceship. And then recently, Jess, we interviewed a Money Diaries who was like, yeah, I've got Raise and I've got Spaceship and I'm currently on Sharesies and I also have self-wealth. And I was like, great, get it. Like we use them all in different ways. So I think understanding the difference between each level or, you know, the difference between micro-investing and share trading and what robo-advice actually is, is really powerful and helps you pick the right one for your situation. Because too often, we just don't know what we don't know. Like, how do you know what these platforms actually do? I'm going to

make a spreadsheet. We love a spreadsheet. Put it in a spreadsheet. It's a very common phrase now with us? I feel like it is because that's then what we do. And then we fawn over the spreadsheet instead of actually doing the work. We probably should work on that. But George, take us through what you think are the hottest takes from our money wins and confessions thread this week. We had some really good ones, guys. I think in last week's show, maybe we said we were going to do all confessions. Yeah, I said I wanted to hear confessions. So I threw that in the bin and I'm doing wins because there were honestly so many good ones. There weren't many confessions. wins. Okay. Well, I was like, I want to feel heard. I want some relatable content. I've been

a bit naughty with money recently. I want to hear some confessions and you're like straight in the bin with that. We'll make a confessions thread separately. Yeah. I don't need you. We're going to do it on our own. Tell us though, what were some of the wins this week? Alrighty guys. So the first win, it comes from Brianne. She said, I just moved to the sunny coast from Townsville. I'm four months pregnant and I've just landed a contract position, which will take me right up to when i need to stop working the new workplace knows i'm pregnant so everything is out in the open and it will qualify me for parental pay on your brianne very organized money win money win the next one comes from demira after reading the first three chapters of she's on the money i

realized i had no idea of the interest rates attached to my savers accounts i've called my bank to change my emergency fund and short-term savings from a flexi saver 0.45 percent per annum to a goal saver account. That's 1.15% per annum. And now I'm getting free money. I love this. Oh my gosh. And the fact that she's already doing stuff after only reading three chapters of my book. Guys, clearly the best book ever. Exactly. I thought you'd like that one. I've got a few tickets on myself. The next one comes from Chelsea. I became a single mum of three last year. I'd set a savings goal to reach by the end of the financial year to finally give me peace of mind for emergencies. And I finally reached it last week. Oh my gosh. Yes. How good is that? Also,

how good is it that that's so quick after becoming a single mom of three to be able to get to that goal? Like, yes, I love this. It was very good. And it was really cool to see everyone in the community getting around that post as well. It was one of the most popular in the thread. So well done to you, Chelsea, a massive achievement. The next one comes from Campbell. I was offered a new job with a $40,000 salary increase. And if I pass my probation, they will give me a company car and a fuel card. 40K. I'm in the market for a new job now. Campbell, pass on the deets of your employer because if your probation doesn't work out, maybe I've got a hot shot. Jokes. No one would hire me. I'd fire me. Ask Jess. Like if I was an employee here, I would have already

been fired. There's a reason she's the boss, not an employee. See you, bye. The next win comes from Charlotte. I went to an island, mysterious, with some friends for the weekend. I used public transport and paid $5 versus the $50 my friends spent on the taxi. I only turned up maybe 10 minutes later than they did and I'm so proud of myself. On your Charlotte. I'm impressed. I'm glad you had a money win. I don't understand any of that. How do you get to an island using a taxi? Um, I'm just, there's a lot of context missing here. Where's the island? It was probably the way that I read it.

You're fine, Charlotte. Don't let V get you down. Look, where's this island? I don't know. Did she go to Tassie for the weekend? Who knows? Phillip Island? Not sure.

Okay, guys, the final win of the day comes from Tammy. Money win. My partner and I bought a house at the beginning of this year. He earns about three times as much as what I do. So we've just recently rediscussed the split of our mortgage repayments than bills and expenses. My ex would have expected me to pay half, no matter the difference in our incomes. But my partner now is so open to discussing finances and working as a team so that I'm not struggling on my smaller wage. How beautiful is that?

And that's equity. We love equity. Yay. Oh my gosh. That's a very good place to leave it. I feel like those wins are very good. Let's go to a quick break. And when we get back, we've got a listener question. We've got some content to share with you. And Georgia's going to tell you a little bit more about her cupboard den. All right, girls, last week it was announced that Australia's inflation rate has risen to 5.1% over the past 12 months, which is well above the target. And people have probably already seen that at the petrol pump, at the grocery store. It basically just means it's more expensive to be alive right now, which sucks. But a lot of people are wondering what

this means specifically for their help debt, because help is obviously an indexed cost. But with the inflation rate rising so rapidly, there are concerns that HECS may not still be the cheapest debt you'll ever have. So there's been a lot of questions in the Facebook group saying, oh my gosh, should I pay off all of my help debt right now? Someone posted and said it was going to be more expensive than their mortgage interest rates. There seems to be a whole lot of kerfuffle there. So I thought I'd come straight to the horse's mouth. I love it. You think I'm the horse's mouth. One, I'm not a horse. Two, I have absolutely nothing to do with the RBA. I'm just a financial advisor who interprets things on the internet in her own very unique way.

There are other parts of a horse that I could arguably call you that are much less appealing. So rude. Have I done something this week? Do we need to talk? Is that not a saying? Would you like to go to like counselling? Like a horse's arse. That's a saying, is it not? Okay. Well, I didn't think that when you called me that. I was just trying to be fun and funny. We're trying to edit a show here and you're just calling me names. That's fine. Sorry. That's fine. That's fine.

We'll take it offline. All right. So it's definitely not straight from the horse's mouth. I actually identify as a unicorn, but if we want to talk about it, hex at the end of the day doesn't have an interest rate on it, but it is indexed by CPI each and every single year. So, CPI is a consumer price index and that's how much the cost of living increases each and every single year. And we know, if you've been listening to the news, it has been everywhere because people are honestly scared and they should be because it is really overwhelming and it can be really detrimental that we have had the highest increase in indexation since 2001. I was going to say in 10 years, but that's in 20

years. Oh my Lord. It is a long time, but since 2001, and that is 5.1% since January this year till March. So that is actually quite overwhelming. Hopefully it doesn't continue to increase, but economics professionals are saying that it is very set to increase because the cost of living is increasing and they're expecting you to be paying a dollar more for your coffees in the morning, which all makes sense. And it all comes back to everything we've been through over the last few years and distribution of product. And we could go on and on. But at the end of the day, help debt or hex debt, as somebody who's a little bit of an older millennial refers to it as, is indexed in that way. I'd be interested to see how the government actually applies this though,

because so many people are going to be bucking at the bit. Is that a good horse analogy? Love it. Great work. Thank you. Because I'd like to see how much they pass on of that. So a lot of the time, They just apply it automatically and you accept it because it might be like 1.9% or 2% and you just go, whatever, like that's fine, CPI, no worries. But now it's 5.1%. People are like, well, it makes no sense. My strategy was to not pay down HECS and now I'm going to have to because that 5.1% right now, if that gets applied to my help debt, Jess, that's going to be higher than my mortgage repayments in terms of like cost of how much it's costing me. And I know that we

say it has no interest, but at the end of the day, if that's how much my debt is going to increase, even though it is in line with CPI, that's still an increase I'm not willing to swallow. So I don't know how other people are feeling about it, but we will have to wait and see, because if we look at historicals, they have always increased it by CPI. However, I do feel as though the government, especially given it's in an election year and we're about to go into win election are going to announce something to say that potentially there'll be a cap on what gets passed on to HECS. Does that make sense? Yeah, it sure does. And so for a little bit of context, indexation for the 2021 year for HECS help loans annually was 0.6%, which was the lowest

it had been in a very long time. It looks like it's averaging, you know, kind of two and a half to 3% over the last couple of decades. Yep. Literally, it is Australia's worst inflation spike since 2001, Jess, which is when GST was introduced. That makes sense because obviously the costs of goods and services increased, albeit from my perspective, GST is a goods and services tax, which you guys would see. And if anybody has a business that earns over $75,000 per annum, that is applied to the product that they sell or the service that they render. So it makes sense because it's obviously costing more, but from B2B, so business to business, if I'm charging HEX, I'm also receiving HEX and you pay that and it's kind of like a left pocket, right pocket.

But if you're a general consumer and you're now paying GST on a product, you're not claiming GST each and every single year. You're not a business owner. So in that year, products basically cost you 10% more if the business didn't account for that increase in price. It's kind of like the same concept, right? Where we say, you know, if the cost of living is increasing and your salary isn't, you're losing money effectively. So it's the same kind of concept. So it'll be announced on the 1st of June, the indexation and the estimates or the calculations or the projections or whatever you want to call it that someone who is a lot smarter than me has put together are predicting that it will be at around 3.9%, which is obviously a huge jump. And I can totally

see why people are freaking out. If that's the case, and if it does jump so significantly, obviously we cannot provide advice, but would people need to be reconsidering their strategies when it comes to help debt if it does go up so high? I would be. I absolutely would be. And the reason I would be is because I just don't want more money looming over my head. In saying that, it would be individual to each and every single person. And obviously, like your situation, Jess, is very different to mine. And whether I pay more or you pay more, it's completely different. But I think the interesting thing there is how banks might account for it.

So, HECS and help debt is one of the only debts that banks look on and just go, okay, like Jess, it's not consumer debt. It's not bad debt. You're not going to be, you know, negatively impacted for this. but it will decrease your serviceability because what happens when you go to the bank is they go, okay, Jess, like, let's sit you down. And you've done this recently. We're obviously real creepy on your property journey, watching you from afar, but also like not that far. And what happens is you go to the bank and you go, okay, hey, here's my income and here are my

expenses. And one of the expenses they take into consideration is your help debt. And because you have to repay that on an annual basis, or you might be repaying it monthly out of your annual salary they just take that into consideration as a cost and obviously the more costs you have the less serviceable a loan is but they're not penalizing you for having that they're just taking it into consideration into your cash flow they're not going to go oh Jess you have help debt therefore you're less serviceable they actually look at it and go oh Jess you have help debt that means that you know maybe 200 bucks a month is going towards paying that off that means we're not going to consider that 200 bucks as money that could pay off your mortgage which makes sense when

you allocate it that way? And I think that in our community, a lot of people have said, oh my gosh, no, they penalise you and will lend you less. And it's like, well, yes, they will. But they're doing that because at the end of the day, you have a debt to repay and that's a pre-tax debt that has to be paid. It's not like a choice. But from my perspective, I'd be interested to see how that changes because if it increases in cost, i.e. it's going to cost me 5% or something ridiculous for having my help debt there and at the moment if I'm not paying off more of that help debt maybe in the future I'll prioritize that but at the same time I might not because it's not consumer debt and it doesn't have a timeline on how fast you have to pay it back and I have a whole heap

of assets that are performing above and beyond that three to five percent because we don't know in stone what they might increase it by but we know that the last quarter has basically been 5.1%. So let's like be super dramatic for a hot second. If it increases by that, a lot of other things are going to follow suit. So it won't just be your HECS debt. It will be your home loans. It will be your consumer debt loans. It will be borrowing. It will be so many other things. And I think that we would need to look at that in the grand scheme of things, as opposed to just looking at it once, right? Because if it's going to cost you more, but like you now have a higher a mortgage, it doesn't change your financial goals at all. You might go, well, I am paying

more for HECS, but if I pay that off now, I'm not paying off my mortgage or I'm not putting money aside for that home deposit I want to save for. And therefore I'm pushing that goal off into the future. And a lot of us just want to achieve things now. So I'd be interested to see how it falls. But the most important thing is that you understand how that might impact you and what that might mean for you and how that's going to basically impact your cashflow. Because at the end of the day, that's what it's going to do regardless of what your financial goal is. So off the back of that V, we know that the higher your salary, the more HECS you have to be paying back, right? Yep. So then from there V, if you do have that larger salary and your boss

is like, here's some extra for that cost of living increase, then your HECS repayments will go up further, right? Yes. But then if you're not receiving that and you are on that lower income, And then that's a complete headache as well. So how do you manage this? No matter your situation, like it's crazy. So first let's talk about the compulsory repayment threshold. So you only have to start paying back your HECS debt this year in 2022, if your income is more than $47,014. And next year between the 2022, 2023 financial year, that's going to increase to $48,361. dollars. So if you're below that threshold, you don't have to worry about HECS just yet because you won't be paying it back unless you're doing voluntary contributions. But at the moment,

the repayment rates are banded. So for example, if you're earning between $77,000 and $81,000-ish, you're paying back 5%. And if you're getting more income, you're going to pay back more. But if the inflation rates end up being applied directly to your help debt, but you don't get a salary increase, you won't be paying back more. It'll just mean that the money you do pay back is going less far. Does that make sense? So you'll be paying back, quote, less percentage of what you owe, but the same amount of money will be leaving your account each and every single month. Does that make sense? So it's going to mess a few people up, especially if they get increases, but it won't be as significant as I think a lot of people are making it out to be. I think we get

really stressed about it because a lot of us go oh my gosh there's a help debt lording over me but at the end of the day it is quite manageable and there are actually percentage repayment rates that exist for bans and you can look them up on the Australian Government Study Assist website and they outline it all so that there's complete clarity but I think it's more about understanding what your compulsory repayments are for your salary band and what that might mean if you increase because the problem I foresee is if you increase, say Jess, you were on $81,000 and you were like, great, well, I'm only paying 5%, but you now are earning $82,000, you're now paying 5.5%. I think understanding those bands is going to be much more powerful than worrying about how

much percentage the CPI is going to impact your actual HECS debt. Does that make sense? It's actually about what's going to leave your bank account. And so do people maybe need to be looking at their budgets now and going, okay, potentially I'm going to be taking home less because more is going to be allocated to my HECS repayment. So just being aware of maybe where that wiggle room is. And if there are things that should you need to cut back, you can. Don't panic. We obviously can't really do too much until those rates were officially announced. But I think it's really great to see that so many people in our community are aware of this change and how it's going to impact them and impact their HECS or their help. Sorry, I'm showing my age. And knowing that that

might have a flow on effect to other parts of their cash flow and their budget as well. Absolutely agreed. And I think the other thing to take into consideration is if you are struggling financially, you can actually contact the ATO and have your compulsory repayments deferred if you need that. So I don't want anyone to feel like they are, you know, up the proverbial creek without a paddle. But from my perspective, it's really important to just be super aware of your budget and what that means and how that works. Because talking to the ATO is going to be arguably a bit more powerful and potentially deferring a payment might actually take a little bit of pressure off. So I think it's important that you guys actually understand your rights and what you

can do. And if you're really stressed and overwhelmed, you can always reach out for help. Super convenient here, ladies, that this whole chat has been about inflation because that ties perfectly to this week's listener question. Don't spoil it. I'm going to intro it this week because, gee, you're in a cupboard and your audio quality is absolutely terrible. It's literally like she's in a cupboard or something, Jess. But it is Friday, guys, which means that it is time to answer your most burning finance career and life questions. If you need help untangling a knotty dilemma, no matter how big or small, you can send us a voice note directly through our website. We have a built-in voicemail on our website now, so you can literally leave voice

messages. You don't have to just leave, you know, money questions and dilemmas. You can always leave messages of encouragement. If you think we're having a bad week, you can also tell us how pretty Jess's hair is. Honestly, you can tell us whatever you want. So send us a voice note, jump on the She's On The Money website and click the button that says, ask us a question and we will help you find the answer that you have been searching for. Now let's press play on today's money dilemma. Hi girls. I was just wondering if the RBA increases the interest rate, does that mean that my bank account will automatically have a higher interest rate or is that not how it works? Thanks. Long story short to this, the answer is yes and no. So no, because when the RBA increases

its interest rate, the banks are actually under no obligation to immediately increase that. And that's what we saw quite recently when they didn't pass on the recent RBA increase to mortgages and stuff like that. They just left it at the status quo. So it's actually at the bank's discretion to make that decision and whether they increase it by the full amount or a percentage is completely up to them. And I'm sure they have all of these analysts working in the background, working out the impact of increasing the mortgage rates. And it's important for them to take that into consideration, regardless of what the cost of money is. So when the RBA increases the interest rate, it means they're increasing the amount it's going to cost the bank to borrow the money to lend

to you. So they usually would pass that on. But have a think about how many mortgages exist and how many people have been through hardship over the last two to three years given COVID and how many people might be still scraping through and only able to just make the bare minimum repayments on their mortgage. If their interest rate increases, they might end up in a bit of a pickle and have to sell. Therefore, the bank then loses the mortgage that they had. So they need to weigh up the pros and cons of whether they actually pass that percentage rate onto you or pass a little bit of it, not the whole amount, but they need to work it out. At the same time, as a business, if something is costing you more, you need to be able to pass that cost on to a consumer.

And I don't want to distill it down. It's quite complex, but say there's a cost of a cup of coffee, Jess, and I go out and I buy my oat latte and at my local cafe, I think it's like $4.80 for my local oat latte, which is great. But imagine if oat milk increased in price and it's now costing the cafe far more money to give me that and they're no longer breaking even when I pay $4.80 for my coffee. They genuinely need to pass that on to remain a stable and good and profitable business. So therefore, my coffee is now going to cost $5.50 instead of $4.80 and it costs me more, but it means that the cafe or in this instance, the bank can keep moving and grinding and keeping up with everybody else. So it makes sense that they would pass it on. From my predictions,

I would assume that they would actually have a bit more nous around passing on the full increase because it just doesn't make a lot of sense to throw a whole heap of people into financial hardship. In saying that, inflation has always increased around wars because of animosity and people not being sure of what's going on and the cost of general transport and everything increasing. So I wouldn't be surprised if it does increase, but I'm waiting to see what type of support the government's going to come out with. I genuinely cannot see how that much of an increase will be passed directly on to consumers. So if they're trying to keep mortgages low for people so that they can afford them, does that mean that they're also likely to keep

interest rates on savings accounts low? Because as you were saying, they've got a break even somehow. Yeah, absolutely. In fact, this increase means that savings is going to go even further backwards. So I wouldn't expect an increase in what you're going to be paid to have a savings account open to increase at all. I'm concerned about mortgages, but at the same time, I think we just have to wait and see what that actually means because this is the biggest annual inflation rate that we've had for 20 years since GST was introduced and it can be overwhelming and it can be really scary. But if you went through a mortgage broker or even if you just went to the bank directly to get a mortgage, they wouldn't have assessed your mortgage at 2% or whatever you're

paying right now. They would have actually assessed your cash flow at 5% or 7% if you recently had your mortgage refinanced, depending on how long ago that happened. And that means that you technically should be okay and not in any financial hardship to service that mortgage because we did the cash flows. We organized it. The bank was like, do you know what? What happens if the interest rate increases, will Jess still be able to pay her mortgage? Because they don't actually want to put themselves at risk that if the interest rate increases, then they lose you as a customer. They need to assess you as being able to pay the highest possible amount that they predict is going to happen. And then they take you back down to 2% and actually give you a mortgage

that you're able to comfortably service. So I'm hoping that that's the case for most people, but I would be really interested to see how this pans out because there's a lot going on in the world at the moment. Post COVID, we've got a war going on. We don't know what the future looks like, but this is all played into the increase in interest rate. So this is maybe a strange question, but from what I can garner, it seems like at the moment it is a really tough time to be, I mean, obviously we're extremely privileged, but it's a very expensive time to be living in Australia. What does it look like overseas at the moment in terms of costs of living? Have you guys got any numbers for me? So I've got inflation rates in a couple

of other countries. General consensus is we're kind of sitting in the middle. We're not the best, we're not the worst, you know, happy medium, maybe like fifth or sixth place if you're running a relay with 10 people. So a couple of other countries that you might want to compare us to. And if you are interested in seeing this in text form, check out our Instagram because we popped this up this week. Spain's current inflation rate is 9.8%. Wild. The US is 8.5. Oof. The UK is 7. Our friends across the ditch in New Zealand are at 6.9. Sweden, where everyone seems to want to be living, is 6. And then obviously we come in at 5.1. So we're not that badly off, especially when we compare ourselves to the US and to New Zealand. I feel like those are the two locations that I

would go, you know, pragmatically, oh, wow, it's worse off there. But it's interesting as well because we're coming into an election year and the RBA is kind of laying low because they don't want to scare us, but they have officially come out recently. And I think that that's why the media is picking up on it. So they've said that the COVID stimulus will be dialed back. So I think that that sent a few people into a spin because obviously we've had, you know, some smooth coasting when it comes to interest rates. But at the same time, we need to keep up with what's going on in the world and we can only live in a bubble of having very low inflation for a very long period of time because look at what's going on around the world. It's so much higher and that's just

the outcome of the world that we live in. And I know that that's not what people want to hear and they want to hear some hack to avoid it and what that means. But I think it's just about really understanding that. I think that a lot of us are going to have to have some hard conversations because, you know, as a small business, I'm going to have to review that and make sure that my employees are looked after in line with what the increased cost of living is. Because I don't think it's fair on you, Jess, that I pay you the same I did last year, but stuff's costing you more. Therefore, your lifestyle is suffering. It doesn't make any sense to me. But I mean, you work for She's On The Money, so you would expect me to be on top of that. But if you work for a small to

medium-sized business, it's very likely that they're not having these conversations because they're not increasing their revenue and they're going to have to increase salaries. So I think that a lot of us are going to have to say, all right, well, I need to talk to my boss because I do need a raise. I do need to have this conversation and I am worthy and I definitely deserve this. It's not a, I'm doing more work and I need to be remunerated. It's like, well, actually, can you at least do it in line with CPI? Cheers, mate. Like, yes, things are more expensive. Yes, it sucks. But what can we do personally to put ourselves in the driver's seat as opposed to sitting at the back of the bus? I love that. I know it's a tough conversation to

have, but you don't want to keep suffering at the hands of something that's really got nothing to do with you, right? Yeah, like how do we shift this mentality of like, oh my gosh, I can't believe this is happening to us, to how do we make the most of this situation? And if that means that you sit down with your boss and negotiate a higher salary to make sure that you are accounting for this, like we're not just negotiating a higher salary so that you've got more money to save, Jess. We're negotiating a higher salary so that you can keep up with the increase in lifestyle costs that you're going to experience without having any choice. Like this isn't asking for, you know, something above and beyond. You're asking for the bare minimum from your employer.

I would like to be able to maintain my lifestyle in the same way I have last year. Like that makes sense, right? It just seems fair. It just seems fair. So I think that we really need to take back the power in that way and go, you know what, what am I going to do to make sure this works? And we also need to have some level of sympathy if you are working for a really small business whose margins aren't increasing I think having those conversations around what you can do and how that might work for you is definitely worthy of having because I know that small business owners are going to be listening to this and they're like Victoria don't promote my staff to ask this like I can't afford it everything is the bare minimum at the moment like I have no

profit I have no this or that like I get it but at the same time what can you negotiate with your employees to make sure that they're in the best possible position because if it's not cash it could be time. It could be more holiday time. It could be, you know, other benefits and other things that come into play that mean that they feel valued. And I think that that's the most important thing here. Yeah. Can you work from home to save money on petrol? Because petrol's so expensive and paying for parking. Can your employer pay for some of your parking? Can your employer do something that takes the pressure off? Like if they have corporate spots, can you be allocated one of them? If, you know, again, you said it before, can you work from home more

regularly. That's basically what everybody wants coming out of the pandemic. But like, I mean, let's blame the interest rates for wanting to work from home as well. But I think it's about flexibility and what does that actually mean? Maybe, and I've got a girlfriend who did this recently where her employer said no to a raise and she clapped back and was like, no problems. I was just wondering, can I only work four days a week? Genius. And she did. And they approved it because they were like, well, we didn't have budget, but like, yeah, if you want to work four days a week. Like she's just gotten a whole day a week back. Yeah. That means that she can allocate it towards something else that's going to make her happy. And she's not going and doing

a side hustle or another job or anything in that time. She's literally just using it to have the lifestyle she wanted to achieve. So I think it's about being a bit creative. Like, do you talk to your employer about that? Or even if you don't want a whole day, do you just go, hey, you don't have to pay me more, but can I just not come in till 10 every day? Yeah. Like there's a whole range of options. I feel like there are so many things that you can do and you can, you know, have as a part of your contract that so many people aren't privy to. Yeah. And that will hopefully ease that financial burden that we're all kind of feeling a little bit right now. Exactly. All right. Well, I think that that is it from Victoria's Rants. And I just want to like

pick people up and be like, no, you can do it too. It's okay. But I think that is all we have time for today. So, all right, George, back over to you in your small Harry Potter cupboard. okay guys so 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 divine and she's on the money is an authorized representative of in focus securities australia Proprietary Limited, ABN 47097797049, AFSL 236523. See you next week, guys.

Bye. Bye, guys.