She's On The Money - Girl Math Your Way To Wealth

Episode Date: October 31, 2023

Girl math, it's doing the rounds on social media, and sure it's seems like a bit of fun, justifying our purchases through a convoluted story, and math they wouldn't teach you at school... but is there something inherently sexist about it? V and Bec dig in to the topic of girl math, which will ensure you never use the phrase in the same way again. 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. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs.  Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708,  AFSL - 451289.See omnystudio.com/listener for privacy information.

Hello, my name is Natasha Nabanunga-Bamblett. I'm a proud Yorta Yorta, Kernai, Wolperi and Awadjeri woman. And before we get started on She's on the Money podcast, I would like to acknowledge the traditional custodians of the land of which this podcast is recorded on Awadjeri country, acknowledging the elders, the ancestors and the next generation coming through. As this podcast is about connecting, empowering, knowledge sharing and the storytelling of you to make a difference for today and lasting impact for tomorrow. Let's get into it. 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 and who love girl math. No, we do not. I personally... You love girl math. Love girl math. We're cancelling girl math.

Carry on. Okay, well, we'll see by the end of the episode. My name, of course, is Bec Syed and with me is Victoria Devine. Yes, I guess that's as a spoiler of the show. Today we are talking about girl math, but in a different way, my friend. And obviously, after the break, we will tell you about how to flip the script and make GirlMath work for you and your investment goals. But let's start at the start, Bec. Let's do it. So for the uninitiated, what is GirlMath?

GirlMath. It started as a TikTok trend, actually, and it is a little strategy for justifying your larger or unnecessary purchases, Bec. Love it. So at its core, from my perspective, because we all have opinions, doesn't mean I need to see them but at its core girl math is a send up of the patriarchal stereotype that women don't understand how money works and can't be trusted with it Beck which obviously is going to rub me the absolute wrong way from the get go but sometimes jokes can work to reinforce stereotypes and I guess that's why it rubs me the wrong way because at its core

Beck girl math is sexist as all get out boy math doesn't exist because it's not actually funny That's true. You know, I said, ha, ha, ha, my husband justifies his golf habit by boy-mouthing it away. You'd be like, what? That doesn't make sense. But girl-mouth, it's funny because women, we're useless at money, right? We're dum-dums. Obviously, as a culture, we just accept that men's decisions are inherently valid and reasonable.

So therefore, boy-mouth, it just isn't funny. It's not comedy, Vic. But the phenomenon of girl-mouth really does tell you a lot about the interplay between gender money and emotions. And I think that that is a really good episode for a podcast. So I took the girl math trend off TikTok and I popped it into your ears, my friends. And I thank you for it personally. And I'm sure everyone else does as well. I think it'll be fun because we've got opinions, Bec. Give us some examples of girl math. Okay. So if you got cash back for something, Bec, so you broke a crisp $50 pineapple and they gave you a $20 note back, that cash back,

Free money. Lots of people see it that way. If I paid with my credit card and then someone gave me cash for their share, I basically made money. If my favorite stores got a 20% discount, Lululemon, cough it up. I'm losing money, Bec, if I don't buy what I want because like that's an opportunity. Makes sense to me. Checks out. If something costs $345, Bec, we round it down to $300 when telling our partners. Currently all sounds right up my alley. That's girl math. Yes. That's the crux of it, my friend.

I really, really enjoy this. I think I'm going to really enjoy this episode. It's a bit spicy. It is. It's not even spicy. It's me just being mad because I'm like, this is sexist. Sit down. Yeah, that's fair.

So how does the patriarchy play out when it comes to what women earn and how we spend in our perceptions around managing money? All right. So let's start off with the cold hard facts. Australia's national gender pay gap right now as of today is 13%. That's steep. As of May 2023, the full-time adult weekly ordinary time earnings across all industries and all occupations was $1,938.30 spec for men and $1,686 for women.

So for every dollar on average that a man earns, a woman earns 87 cents. That is equivalent to $252.30 less each and every single week that women earn in comparison and to men. Over the course of the year, that adds up to $13,119.60. And if I extrapolate that out and let's pretend hypothetically, if you had an additional $252.30 each and every single week back to invest, you'd be more than a million dollars better off in retirement. Wow, wow, wow, wow, wow. Okay. When you put it like that. Exactly. And if I really wanted to extrapolate it out over the course of your lifetime, it's more than $6 million. So that's $6 million reasons why we need to care a lot more about the gender pay gap because that's cooked. You know

what you can do with six million dollars? What can you do? I can't even tell you because there's just endless amounts of things that you could do with that level of freedom. Absolutely. Exactly. So we know from our community that women have lower financial self-efficacy, so the belief in their own abilities compared to men. And that's why She's All The Money exists. And yet women, you know what we do? We control 80% of the consumer spend globally. Wow. So we control the money, but we don't get to make it. What the heckin'? True. That seems very interesting. What the heckin'? I hate it. I do hate that, actually. I see what you're saying. I can see where the outrage is coming from now. V, let's go for a really quick break. Already? Oh my gosh.

I know, I know. But on the other side, we will have a look at how to flip the script and make girl math work for your investment goals. I'm ready. Let's go. Let's go. okay v we are back and i'm very excited about this because it's now time to flip the script it is if it even is possible how can we make girl math work for us all right so obviously i'm a bit salty because i feel like all these videos i just i don't know you see it and they're like oh i girl math my way into this expensive bikini for this holiday that i'm going on and if i buy it now like i'm not spending the money on my holiday and like i could wear it after my holiday and you just go, I know that you will have a better time, you know, feeling good about yourself on the holiday,

but we don't need to actually flush the idea of making sound financial decisions down the toilet. Like Beck, let's just say you're going on a holiday and you really want to buy a bikini, it's 200 bucks. Why don't you just make that decision in a financially responsible way? Like, let's have a look at your budget. Can you afford it? And you might go, yeah, it can be. They go, great. Well, you don't need to justify it. You don't need to actually go, oh well actually a b c and d adds up so therefore this bikini technically only costs me a dollar like there's a lot to it and obviously girl math is a combination of three different principles so the first is cost per wear which we've talked about before because i think that everybody in

general should be more conscious about what they're purchasing like you're wearing a real cool brown t-shirt today but like i'm sure when you bought it you were like oh i'm probably going to get a heap of wear out of this like it's the same as the dress i'm wearing today i'm like great like it's stretchy, it works, it's comfortable. I'm going to purchase these because it's going to get a lot of wear. I think we should all have that cap on when making purchases because it's just the financially responsible way to do it. But this concept of cost per wear, that is the cost of an item divided by how many times you use it, obviously lowers the cost of wear, but girl math kind of takes it to the next level. So like, you know, if you're buying a tote bag, obviously

you can use it for lots of different things but I think that it justifies unnecessary purchases when we put it into the girl math I guess phrase right or into the girl math realm because you go okay well maybe you did need a tote bag and if that's the case well let's justify it and buy one that aligns to your budget and your needs and how often you're going to use it and maybe back you don't buy the bright red one because you're going to get less wear out of it like you might not take it to work as often because it doesn't match your outfit so maybe a more neutral option would work yeah but like if you need to buy the tote it should be in your budget like it shouldn't be like justified as basically being free because I'm going to use it so often do you know what I mean

like yeah I see we are smarter than this the second of the three economic principles that I guess make up girl math is sunk cost so sunk cost fallacy it means that the money that's been spent can't ever be recovered. So basically if it's left my account, I've spent it, it's gone. So like if you've got a refund back on the brown top because you decided you'd no longer liked it and they paid it out in cash, you're like, that's free money. Free money. Like that's a really bad terminology. So obviously if you get that money back, it probably should just go back into your bank account. But instead you'll go, oh my gosh, I'm going to use this for drinks on Friday night because it's free money and I've got it in cash and I've already spent it. Does that make sense?

That makes sense. That sounds very close to home. That sounds like me. Third concept is prospective costs. So that basically translates to future costs that might be avoided if you take action today. So the girl math example there is if a coat I want is 65% off over summer, because that sometimes happens, buying it means that I avoid the future cost of waiting until winter when it's back to full price. So that's quite smart. Yes. But people are justifying purchasing things just because they're cheap. hey oh my gosh I'll wear this in winter but then when winter rolls around you're like that's not

in fashion I'm not gonna wear that I just picked that up because it was a good brand and because it was cheap and full stop end of story that's it but like you're not actually saving yourself any money yes it might even be spending more because by the time winter comes around again you've got a whole different set of little exactly like you might not be into brown t-shirts anymore back like I don't know so I think it's again going back to this idea that women aren't smart at money when we are at the end of the day yes everyone can understand money it's literally just a language you haven't learned yet if you don't get it like you speak perfectly fluent English Bec but do you know what there are millions of people around the world who can't speak English who are learning

English currently and you wouldn't expect them to pick up my she's on the money book yesterday and go, oh, I totally am able to read this. Yes. They would start with the basics of, hi, my name's Bec. How are you? Like, do you know what I mean? When you're learning a new language, where do you start? From the top, baby.

Yeah, but you like start with how to count from one to ten. Yes. You start with hello. You start with basic phrases. You start with how to order a coffee in a different language. You don't start with fully understanding what an ETF is and the difference between an ETF and a managed fund, do you? Because that would be overwhelming and ridiculous.

But somehow we put this pressure on ourselves to fully understand that when you don't even know how to run a banking and cash flow system for yourself. So like, push all of that off the table. Women are not done with money. We just haven't been taught. Exactly right, Fi. I love that. That makes me so angry.

Yeah, that was a real mic drop moment. Oh, thanks. So pick up the mic again. We're not done this podcast. That's true. Actually, let's pick that back up. Don't drop that. How can we flip the script on GirlMath and make it genuinely work for us to support our

investment goals? Genius. or I think it's genius but if you can budget for a latte you best believe that the entire time I was in the US I was drinking my iced oat milk pumpkin spice latte every single day and I basically girl mathed my way there I'm like it's a little treaty treat because I deserve it right totally yes it's a thing in Australia I knew you were gonna ask because Starbucks is here and they do do the pumpkin spice range I don't know if it's stopped now it's November because it only was like kind of fall, kind of Halloween-y vibes, but it's really good. But if you can girl math your way

and you can budget for a latte, you can budget to invest. If you can afford to buy a takeaway coffee, I promise you can afford to invest and you can become a passive investor. You don't have to be super active. You don't have to be a share trader at your computer till all hours of the night, my friend. That's good to know, actually. So explain this to me. What is passive investing? It's really sexy. Sit down. Are you ready? I'm ready. It's this concept where you invest consistently, but you don't have to actively manage your investments.

That sounds like heaven. I know. It's mainly how I invest when I'm not being a little bit spicy. But it's picking an investment that might be an ETF or a managed fund or something that you don't have to actively manage because someone else is doing it on your behalf. Great. 10 out of 10. But the idea would be that each and every single month, you would just dump a certain amount into an investment and it just goes straight in there and does its thing and creates you wealth. And if you have decided to reinvest your dividends, you would have ticked

a box to say, dividend reinvestment plan, please tick, which is coming on shares actually, which is very, very exciting. But you would tick that box. The money that your money makes would then be reinvested to make more money. And you don't have to do anything. You just get sent a little report come accounting time, come, you know, end of financial year. And your accountant's like, oh, can I have that report that your share trading platform gave you? And you're like, yeah, no worries. It was just in my emails. Wow. I'm an investor now. There you go. I'm a big dog. Can we learn anything from cost per wear calculation? I mean, yeah, you could calculate the cost per wear and then you could calculate compound interest. So like if you invested a

dollar today, obviously it's not that sexy to think about because you're like, meh, tomorrow I'll check but what would that look like if you invested a dollar today and then when you retire how much is that dollar going to be worth because we know and I've said this example a million times on the podcast and I keep reiterating it because I actually want just one example to stick in people's heads where they go oh that one makes sense as opposed to giving six million others where in the moment you go that makes sense but you can't tell your friend at brunch and look smarter so if you started at the age of 21 which none of us are anymore and to be honest we're in a cost of living crisis, so this is all aspirational. So, Bec, I'm not putting pressure

on you to find 500 bucks each and every single month because that's cooked, right? But it's a good example to help you understand how to create wealth, right? So, if you took $500 each and every single month from the time that you were 21 years old and you invested that in the share market, if you have invested it with an average rate of return of 7.5%, by the time you retire, you'll have an additional $1.2 million in your investment portfolio. That's very sexy. It could be completely passive. Like you could just transfer it out and not think about it for a really long time. But when it comes to cost per wear, look how much additional money you're getting. Because if you'd saved that money, like if you'd saved $500 each and every single month instead of

investing it back, you'd only have $240,000 over the same period of time. That's a million dollars worth of free money. That's some girl math. That's some girl math. That's the girl math we're talking about. Okay. Free money is girl math. I love that. Like if you think that the money in your wallet is free money because it's not in your bank account. Yeah. My friend, let me show you real free money. Not just the money that you earned and then you spent. Right. Legitimate free money. Put your money over here. You will end up with a million dollars more than what you would have if you hadn't done it. Wow. I kind of want a piece of that, I've got to say. I'm going to get you investing, honestly. I'm going to give it another six months and then

you'll have an investment portfolio and it's going to be the sexiest thing in the entire world. Thank you, V. I'm really excited for that. I'm very excited about it. Okay. So here's one that resonates with me. You did speak before about prospective costs and the idea of hitting up sales now to save money in the future for things you want. It's not the worst idea, is it? Yeah. That's kind of like what I do. I think we need to just keep our heads screwed on when it comes to spending, right? So all of that wheeling, dealing and hunting for a bargain has some similarities to, I guess, portfolio theory. Like how many times, I don't know if you've done this, but like, let's pretend

there's a dress I want to buy. It's really expensive. It's a $500 dress. You best believe I am going to try the dress on, be like, yep, okay, I really, really want this, but I'm not spending $500 on it. I'm going to go home. I'm going to Google it. I'm going to see when it came out. Do I reckon it's going to go on sale soon? I'm not sure. I'm going to see what other retailers have it? Do they have like a price match or a guarantee or something? Are they cheaper? Once I found it at a price point that I want to buy it at, you best believe I'm going to be going on shop back and I'm going to be making sure I get my cash back. You best believe that I'm going to make sure that I have purchased it with my flybys if I can to get some extra points, right? Like

how smart are we when it comes to purchasing dresses, but then we're like, oh, I don't even know what to do when it comes to an investment portfolio. Sure. Like it's because you've never done it. Do you know it's just as easy? Like it is just as easy to go online and understand what an ETF gets up to and how it works and go, oh, how am I going to get the best return for my money? It's all there in plain English. I promise you just have to start looking for it, but you're going to think it's overwhelming because you've never looked for it, right? Like, do you remember the day you discovered the iconic.com.au? You were like, what the heck? I didn't even know this website existed. And now it's like the mecca for clothes. Yes, very true. I remember the days when

I had to like look for clothes individually on individual retailers websites like the world is changing my friends and I guess there is a method of choosing investments to maximize expected returns and minimize risk without it being overwhelming I promise it's not too hard but you can evaluate every single purchase and how it contributes to like your shopping portfolio you could say so if you're a girl math shopper you could essentially become like a shopping portfolio manager wow I just don't see why you couldn't because you've already got those skills of analysing it and going, all right, well, if I plug this shop back thing in here and do this, and if I wait for this particular day, there's going to be a sale or there's going to be an

increased amount of shop back cash rewards. Like we're smart. You are so savvy. If you can do that, my friend, you can pick an ETF. Totally. That is a transferable skill. A hundred percent. But we've talked about before the ways that micro-investing platforms make it easier to invest, what are some things that platforms are currently doing? Honestly, there's 6 million things that different investing portfolios are doing. I've said before that I like micro-investing platforms because they're kind of like the gateway drug of the investing world, right? Like they're the one that you feel most comfortable taking for the first time and you go, all right, well, that's not too bad. All my friends are doing it. It's all managed

for you. Like you can see the ebbs and the flows of the market. Like you don't have to put up a massive amount of money to begin with. I obviously think that micro-investing, and I've said this before, it's not for long-term. Like from my perspective, micro-investing is to get your foot in the water and see what's going on and get comfortable with it and start to understand the market. But my understanding would be that you would then graduate to a larger platform because it's going to be the platform that you ultimately create wealth on. And up until this point, there hasn't been many share trading platforms that have enabled you to like use small amounts of money to invest for the first time. It's kind of like they were like the gateway

because you could invest with like five or ten dollars, whereas bigger platforms would go, oh, we'll back the minimum investment amounts 500. And you'd be like, well, I don't want to put my life savings on a platform when I haven't even dipped my toe in the water in this investing world. Like, what the heck? So micro investing platforms kind of were that bridging the gap. But now other share trading platforms are kind of catching up going, hey, our consumers really want that micro investing platform experience without having to change platforms later. And that's where a platform like Sharesies is coming because they do all of that. And I'm not just plugging Sharesies because I work with them. I'm literally looking at it going, hey, here's a really great option if this is what you're looking for.

So there's lots of different things. Obviously, Sharesies enable you to invest with a really low amount of money. they want to give the same opportunity that someone with $5 million has to someone with $5 to create wealth. And I think that that is a beautiful strategy. They're implementing things like automatic dividend reinvestment plans, which we think is really sexy. They have roundups, which a lot of micro-investing platforms do. The two most popular micro-investing platforms in our community are Raise and Spaceship. We have done episodes on this, so please go back and listen to that because I'm not going to get into the semantics of the two different investing platforms,

but essentially Raise invests in different risk profiles and aligns an ETF to you, whereas Spaceship is more of a managed fund. If that's not making any sense, I did a whole episode on what micro-investing platforms do, how they work and how they're structured. But there's just lots of different options. And I think that if you can start investing with a small amount of money, you can use something like a roundup. So Beck, every time you buy a coffee, it might be like, let's pretend you're not buying it in Glenair, so it's not $6.50, $7, right? Let's pretend your coffee was $6.50 this morning. Every time your bank saw that transaction of $6.50 on your phone, it would automatically round that purchase up to

$7 and invest 50 cents for you. So you're consistently investing with your everyday purchases, but you don't really feel it because like what's 50 cents when you're already spending $6.50? That's a good idea. So like is coincidental investing also automating? So if you can automate to your investments and go, all right, well, I can't be trusted. Let's be honest. I'm Victoria. Like I have to have everything automated, otherwise it doesn't work. So I have to make sure that each and every single month when I'm investing, it's just direct debited from my account. I've set up an auto transfer that my investment amount goes straight into my investment account, but it's every single month. And if that feels like a little bit too much, then go, all

right, well, I don't want to do it every month. I want to do it every week or maybe do a lower amount than what you can and top it up every month. But I think everyone can actually go math their way to wealth and, you know, micro-investing platforms and share trading investing platforms are actually really helpful nowadays and not nearly as terrifying as they used to be. I promise like their user interfaces just make sense. You don't even need a computer anymore. You can do it all via your phone with a beautiful app. Like I just think that if my friends, you can strategize to justify a dress that you're going to wear once. You can absolutely strategize to be an investor. Amen, sis. I love that. I want a great place to leave it for today.

I think that's a good place to leave it because otherwise I'm going to start another feminist rant and you don't want that from me today. I kind of want that, but we will save that for off mic. We will. All right. Have the most beautiful week, my friends. We will see you on Friday. Bye, guys. 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. If you do choose to buy a financial product, read the PDS, TMD

and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's On The Money are authorised representatives of MoneySherpa PTY LTD ABN 321 649 27708 AFSL 451 289.