She's On The Money - The price of comparison

Episode Date: September 3, 2019

Why does it feel like our friends and the people we follow on Instagram have more money than we do? And, in the chance we inherit some money in our teens or twenties, how should we approach that? Today on the show, we're talking all about hidden money and the price of comparison Do you love the podcast SICK and want more SOTM? Of course you do! Join our Facebook page to share your money wins and money confessions, follow us on Insta for daily inspo to keep you on track and DEFINITELY subscribe to our newsletter, the written recap of the pod's key takeaways, including some bonus bits you won't want to miss... In a money mess and need help untangling the muddle? We've got you sorted - simply record your qualm and send it through to us at [e-mail] and you may end up on the podcast! 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 only and should not be relied upon to make an investment or financial decision. Victoria Devine is an Authorised Representative of Consultum Financial Advisers Proprietary Limited ABN 65 006 373 995 I AFSL 230323.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. I'm one of your co-hosts, Annabelle Lee. As you know, I'm a law student and a millennial and a bit of a rookie when it comes to money. But to change that, every week I pick the brains of my friend and money expert, Victoria Devine. Hi, Victoria.

Hi, friends. Now, our She's On The Money Facebook group has been super active this week, as always, and you and I have seen so many impressive money wins, haven't we? We have, so many. So I think we should share our favourites from the week. What have you got for me, Victoria? Alright, so this one I really like because it's about a little bit of hustle. so we have one from megan and she posted that nine years ago i reported my then employer to

the ato for not paying my super at the time my employer didn't understand why i was making such a fuss as i was 18 and wouldn't be able to access the funds until i was over the age of 65 today i received a message from the ato letting me know that i had won my case and the money should arrive soon into my super account i'd totally forgotten about the case as it had taken so long how good is that that also is very dodgy on the employee's behalf right but it's so common it is so common especially for people who are working in part-time casual roles companies who maybe don't pay their super or don't keep up with what they're meant to be paying so it really pays to check your pay slips yeah actually i'm pretty sure that might have happened to me in the past double check my

super is looking really grim right now double check i've got one from maddie she said money win. Got my hair done at my local tape yesterday for a sweet $40. She's looking fresh for her holiday next week at less than a quarter of the price she would have paid at most salons in her area. How good is that? I love that. It reminds me a lot of Groupon. Yeah. Not sponsored by Groupon by the way. I mentioned them way too much. Yeah I feel like they should like backtrack our sponsorship but I think that was really impressive because she said she got a half head of foils and from my experience not personal experience but talking to friends blonde is really expensive. Yes a lot of upkeep. So $40 is impressive. Very, very nice, Maddie. Go you. Now, Victoria, today on the show,

we're talking about hidden money. Why does it feel like our friends and the people we follow on Instagram have more money than we do? And in the chance we inherit some money in our teens or twenties, how should we approach that? But before we get there, as always, it's time to share a money win or a money confession from the week. How did you go this week, Victoria? I went really well, actually. I had a pretty quiet week. I spent the week last week at a conference, which was fun, but that means not much spending from my end because everything's so internal but my money win this week is actually that I went out for dinner with a girlfriend and she paid yay winning thanks friend definitely a win I think I've got a money confession oh no come on Annabelle so I

went shopping and I always gravitate towards like the discount racks so I went to like the below $20 rack and I picked up this shirt that I really liked I went and tried it on loved it I'm very picky like when I try a shirt on it needs to look like I need to be really really confident in it otherwise I'm like no and I weigh up like the price and if it's a good price and I look I think I look good I'm like okay I'll get it so I felt all of those things I went to the cash register and it was actually full price admin it was like oh no I hate when that happens and I didn't want to seem like a sting so I was just like yeah okay and I bought it and now did you return it no I was because I was like I like the top and I need to treat myself sometimes yeah I think that that's

a good treat but also if it's not in line with what you wanted to buy perhaps it's worth a reconsider. I know and I totally should have been like why was this in the discount rack but I just bought it anyway because I didn't want to seem like a cheapskate. I think we've all been there. Yeah totally. Now no matter what your bank account looks like we bet you've had a relationship with money envy before. How do all your friends afford their luxurious lifestyles and how on earth are they affording to buy houses so young? Today we're covering it all. Victoria the first place I want to start is here. Do you think there's an inverse correlation between looking like you have money on Instagram and actually having money? Absolutely. I think it's a really interesting

concept actually, because there's a number of articles flying around the internet at the moment about Instagram influencers going into debt to keep up with the lifestyle they think their followers expect of them. And it's actually more popular these days to be more transparent on Instagram. Like you were saying last week with travel, how Olivia Molly Rogers was talking about like how much work it took for her to save for that trip she went on I would agree but also disagree with that because I think while some influences and some people in that sphere are being transparent and we're really celebrating that I think there is a massive lack of transparency in that area as well and I can see it from the way that people are just presenting themselves

Instagram is such a platform where it's about putting your best life forward you're not going to post the bad times and that's actually not what the platform is for but it means that we only ever see the best part of other people's lives. And I don't think everybody has caught up to being transparent about their financial situations. Yeah, definitely. Do you think we confuse money with materialism then? Because in most cases, the people who are financially secure are probably not spending all their money on fancy bags and shoes, right? I think we do. I think it goes back to that quote I said a couple of podcasts ago, if you live fake rich now, you'll live real poor later. I love that quote. I know. And I've seen it pop up a heap of times

on Instagram. We keep getting tagged in it. I love it. But I think that we keep seeing people purchase things so that they look wealthy and real wealth doesn't actually look like that. So I think, you know, even if you have designer bags, designer shoes, and you look all decked out in the latest gear, that actually could mean that you are in a massive amount of debt and not potentially actually investing and saving. Like you and I are both in a situation where, you know, we go into a shop and we gravitate towards the discount rack because we know that we'd prefer our money sitting in a bank account whereas not everybody is like that I have friends and I have people that I know that will save up incredibly aggressively to afford a designer item that is

actually outside their salary bracket but that comes back to their values okay so what does real wealth look like to you then if you had to paint a picture for us so real wealth is actually hidden. So, you know, this episode is on hidden money, but real wealth is hidden. You don't see it. You don't buy glittery things. You don't buy things that are show offy. You could be still driving a Camry that you bought as your first car when you turned 17. I think that real wealth is something that people don't flaunt. And I think that's the difference to me between being rich and being wealthy. She's on the money sets out to hopefully help people create wealth. And that wealth is actually financial stability. Rich is something different. Rich is being really

obvious about your wealth. Rich is putting it out there that you have a whole heap of materialistic items that reflect your financial income or the way that you spend money. So I think that it's really important to realize that there's a massive difference and these things aren't as transparent as we would like them to be. So rich is kind of like not long-term, it's in the now, it's a bit frivolous. Yeah, it's that friend who's always spending heaps of money on espresso so martinis and always has a new dress every single weekend, whereas wealthy and creating wealth is a friend who is going out, budgeting their money

and wearing the same dress often because one, they love that dress, but two, they know that their money is better spent or saved in a different place. Money company Credit Karma has found nearly 40% of young adults said they've spent money they didn't have to keep up with their friends' lifestyles.

Are you surprised by that? I wish I was surprised by that. Unfortunately, I'm not. I see it all the time. I see it in our Facebook group, people saying that they've gotten into debt buying materialistic things. You see it in the reflection of how much Australians spend on credit. Having a credit card is spending money that you do not have. And most people can't turn around and say, hey, Victoria, I've got a credit card and I bought things that were really good for creating wealth.

I've never heard that. I've also never heard someone tell me that they've gotten rich off credit card points. Interesting. yeah no but I definitely I think I experienced that a bit in high school going to a private school when everyone else I think their parents were a bit wealthier than mine feeling like I needed to keep up with the things that my friends were doing it's really common with kids especially yeah I felt exactly the same thing so I went to a school that had a number of people who were far more affluent than the family I grew up in whilst that's not a negative thing it does taint the way

you view the world when for your 17th birthday you're asking for something that's relatively small and then you see your friends getting BMW users gifts. I think that paints the world in a little bit of a different light or it definitely did for me. It's tricky because maybe your friends really are just more wealthy than you. Maybe they can afford experiences in a lifestyle beyond your own. Have you ever felt a sense of money tension in your own life and relationship or have you seen it with your clients maybe? I think this is a really interesting question and money tension is something that I have not struggled with but I've been in a situation where I've had a personal loan before I wouldn't say that I was silly or frivolous by getting it the personal loan that I

took out was so I could study overseas at a point in time where I definitely couldn't have afforded that option so as much as I don't agree with personal debt I have been in that situation and that's why I'm so passionate about advocating to not be in that personal debt because I know how long it took me to get out of that position but it was also a little bit about trying to keep up with a lifestyle like I had my friends going on that trip and I didn't want to miss out and it felt like something that could potentially you know be a life-changing event and whilst it was a really great experience it was something that I didn't regret when I came home but the debt set me back into a place where I wasn't able to achieve the goals that I wanted to achieve

once I got back because my priority was paying off that debt. So you would have done it a little bit differently now in hindsight? Oh absolutely if I had the financial education and literacy that I had now I would have been in such a better position now whilst I'm not saying I'm in a negative one at all I just now look back on things probably with a different view purely because I know I should never have been in that position and I wish that someone had told me Victoria don't do that just wait a year you can do it later just save for it we also had in our Facebook group someone with a similar situation listener Michelle wrote I don't want to come across as though I'm not happy with other people's money wins however due to my current circumstances I have no income

I just feel really down reading about how great other people are doing because I feel so far behind and so stuck. I'm thinking of temporarily leaving the group. Oh, no, I hope she's still here. She is still here for the record. But I love the supportive atmosphere and it's inspiring to read people's money stories of how they pull themselves or are pulling themselves out of debt and financial difficulty. I just don't really know a way forward.

Victoria, do you think that's a common feeling? How can people move past that aspect of competitiveness that comes with money? when I saw that pop up it actually really upset me it was something that I pondered on before letting it go through to the group because I felt like I'd potentially let some people down by having people in the group that felt like that and then on further reflection I realized it was probably a really common feeling comparison is the worst thing we can do to each other and do to ourselves and I think that to have a group where Michelle has felt comfortable enough to post and share that with us is such a powerful thing so one I'm super proud of our community super proud

of all of the comments that were on that they were so supportive and everyone was so welcoming but our brains are programmed in a pattern that actually compares us all the time and it's a super hard cycle to break especially if you're constantly feeling like the people that are surrounding you are always better off it often can feel like it's a little bit unfair so I think it's really important to go back to maybe our first episode of the podcast and talk about our money stories and realize we are all on different journeys. There is actually no right and no wrong way to go through these things. It's something that is incredibly unconstructive. So if we are holding ourselves back by comparing our journey to the journey of others, we aren't able to move forward

on our own. So I think it's something that we actually need to acknowledge, pick up and put to the side so that we can move forward positively and actually create progress in our own situation, whatever that looks like. And I think having conversations like this and by Michelle posting in the Facebook group is super productive. If we talk about it, people will feel less competitive and will feel more like we can share our own money stories. Absolutely. And the journey of someone else's shouldn't impact your journey at all. As much as we like to look at other people's journeys, I think it's really important to also look at it and go, all right, that's their journey. I don't actually see all the negatives in their lives. Like I know that that happens in the

Facebook group a lot where people are posting their money wins. People aren't posting their money wins and their money confessions or the journey that they've been on. We get to see such a small window of their experience and for that I'm incredibly grateful but I also think we need to reflect on that and remember that everybody has been through so much that we are unaware of and it's not our place to judge them based on one comment or one post. Definitely. So do you think we could all be a little more transparent with each other about our privilege? For example if If your rent of a really nice apartment is being paid for you by your parents, do you owe it to your friends to tell them that?

You don't owe anybody anything. And I believe that quite passionately. If that is something you're uncomfortable sharing, I don't think you should have to. I think we actually need to be a little bit kinder on ourselves and realise that sometimes we don't know every part of someone else's story. But if you're in a situation where sharing that is going to be productive for the community around you or your friends or your family, and you're comfortable enough sharing that why not so while I totally think you're right there's

a part of me that that kind of still wants to know as like a self-awareness thing I want to know where everyone started and how everyone's traveling how they're getting there even though I know I'm doing fine and I'm paying my rent and paying my bills and whatever it would be nice to know I agree and I think it's something that we all go through right like yeah even as a financial advisor sometimes I see women posting in the group and I go oh I wonder how they did that especially when people are saying they saved really large lumps of money in short periods of time I go I couldn't do that how have you done that like what have you compromised what have you sacrificed so I get that nobody owes us anything but at the same time I think the

conversation around money should open up and we should feel comfortable but I think there's a barrier currently because if people admit that they've had help they might feel judged and I think that that's then on us and that's then on the people who are asking those questions like if we knew that someone had got a home deposit from their family or their mum pays their rent or you know they're getting financial help in somewhere else what's our answer to that what are we responding with are we responding with oh that's great I'm on my own journey or are you responding with a little bit more envy than you had before so I think it's about checking ourselves as well and realising that, yes, people have privilege,

but how do we get through that on our own and how do we constructively take that on board while not impacting our own journey or our own egos? Yeah, you're definitely right. Now, according to The Guardian, if Australian parents were a bank, they would be the ninth largest home loan lender in the country, bigger than the Bank of Queensland and knocking on the door of Macquarie. The truth is the Bank of Mum and Dad are funding lots of our lifestyles.

Do you think enough people are talking about that? no they are not the bank of mom and dad the bank of mom and dad is something i talk about all the time um as you guys know i also have as a part of my business a mortgage broking sector so we talk about home loans all the time how to get them where to go how to get them and what your journey looks like in that space so i often see people coming along with parents who are saying yeah we'll guarantee your loan or here we're going to give you a lump sum so that you can use that as your deposit and a lot of these people don't actually want to share that journey with their friends I think the same is for weddings for lifestyle for things that are really big financial

expenses in life I think often parents are chipping in it does not mean in any way or shape or form that parents should be chipping in I think it's incredibly lucky if you're in a position where that's true for you but I think that we should be also acknowledging yeah it's happening but what does that mean for me and you don't have to feel ashamed about it if you're given the opportunity to have help from your parents why not take it absolutely and I'm incredibly lucky that my parents helped me while I was going through university there's absolutely no way that I could have afforded the start of my journey had they not you know helped me organize an apartment in the city and set me up with some basics as much as I then went on to have three jobs and work

full-time hours while at uni I also did have that kickstart and I would not be where I was had they not helped me yeah I'm just a part of your journey exactly and I'm quite transparent and thankful for that but I also think not a lot of people talk about that because I remember being quite open about that at university like oh mom and dad helped me do xyz and I had a couple of friends that I knew their parents were paying their rent while they were yeah you're like it's your turn now. Yeah but they were they were low-key not joining in on the conversation. Let's talk about inheritance for a second. Do you think we feel as a generation entitled to an inheritance? Do you think we expect to fall into money that isn't ours as we get older or

is that an unfair assessment? I think that's a pretty unfair statement on millennials because I don't actually know anyone and haven't had any experience where people are relying on an inheritance. But we also need to be aware that millennials are actually going to be inheriting $30 trillion from our previous generations. That's massive, right? So $30 trillion is going to be inherited from the baby boomer generation into millennial and Gen Z. So it's not as though it's not there, but I'm not sure if the statement that we are entitled about it is true. Hi there. You've called the She's on the Money hotline.

Do you have a money problem you want help solving? Do you have a money dilemma you just want to chat about? Victoria is here to help. Each week, we'll be playing your hotline questions to help make sense of the money mess you may have found yourself in. Give us a call on 0435 293 886 and you might find yourself on the show. So, I'm sitting on some inheritance in the form of mainly property and some other things.

And I know that the privilege of inheriting property can provide a lot of financial freedom if it's responsibly dealt with. However, I was hoping for some advice on how best to handle it, as well as a little information on what inheriting property can actually help with financially. Thanks. Interesting, Victoria. So, what do you think she should do? Should she do something with it right away?

I think it's a really interesting concept because when people inherit money, it's often the largest asset they'll ever have in their lives. So I think it's really important to actually take your time and have a think about something like this. If you've inherited property, fantastic. Property is an asset that is going to hopefully help you create wealth and generate an income. But what you need to do right now is nothing at all. I think it's sit back, work out what you really want, have a think about your goals for your life, put the property to the side and have a think about, you know what do you actually want out of life what do you want out of your career where are you going how are you going and then have a think about how that property or how that asset that

you've inherited potentially plays into that I think one of the best things you can do is have a chat to a financial advisor and see you know what you should be doing in that situation maybe you want to keep owning that property and you just want to rent it out and take the rental income and invest that or spend that or do whatever you would like or potentially you don't want to own a property and that might be a responsibility that you don't want right now or that you don't want on your plate. So selling it could be on the cards for you. I think the most important thing about getting an inheritance or coming into any large sum of money is not making a decision in the moment. I think it's sitting back, having a think about how that impacts you and getting some

advice, but making sure that you're getting advice from someone who cares about you and cares about your situation. Because I know that there are a lot of financial advisors that if you say, hey, I've come into a house, not sure if I really want to sell it, that financial advisor might jump on the idea that you want to sell it so that you can invest with them and hurry you up through the process. So I think if anyone at any point during this journey of yours is speeding you up, let them know to slow down because there will always be another opportunity. Whether one's being put on your plate today that, you know, you can't miss, that's not actually the case. There will always be another opportunity for you to invest in or save in or you know share in in the future we just

need to make sure that that's the right one for you. So do you think when people inherit things then they feel like a rush to do something with it right away? Yes I think that that's the case there are a heap of articles you guys can look up on what people do with money when they inherit it and when they win it so there are a whole heap of stats that say people who win money are usually broke or bankrupt five years into their journey because they haven't managed it effectively and the same thing often happens with inheritance people are very likely to go and blow it on things that they think that they deserve so if you inherit a large sum of money and I know we're talking about property here but it's often easier to talk about cash because it's easier to blow

people will inherit the money and go all right well that's awesome I need a new car my daughter needs a new car or I want to buy a house and I'm going to use that for a deposit what people don't think is how much debt am I taking on when I am getting this house so as much as you've got the deposit can you actually afford the rest of the loan are you actually ready to commit to a 30-year repayment scheme is that something that you're well placed for are you even ready for it so I think that people do definitely run into it they go on holidays they buy cars they buy shoes I see it all the time I think we need to just slow down and look at it with a little bit more logic than hey I've come into this large sum of money that's wonderful

and now for my favorite segment our money diaries let's do this today's money diary is from 22 and proud a woman whose money story might make you feel more than just a little envious uh well at the age of 21 my partner and i we bought our first house together and it was many years of saving and sacrificing and just working really hard in order to do that and save up that deposit and it's something that people don't think is very achievable for young people now so we kind of feel like we've kind of proven that wrong that you can actually buy a house at a young age and that not all young people are very frivolous with their money and just throwing it away and buying smashed avo my parents are on a decent wage and they're very comfortable

but they taught me that just because you have money you shouldn't just spend it um however you like you should put it towards things you really want and that money is freedom so when you have money you have you're able to do things you want but that doesn't necessarily mean just going out and spending it on things that you'll take for granted and won't even appreciate. I think a lot of people thought we were crazy buying a house so young and choosing to like save all our money rather than spend it on like a holiday or that kind of thing but for us it felt like the right decision because we wanted to set ourselves up. Okay so how much does 22 and Proud earn and how much has she got saved? I earn around $45,000. Well my savings account is a joint savings account

with my partner and we have about $15,000 in there now. To be honest we had our settlement was four months so we had all this time to save up and we've just we could be putting it towards the mortgage but we just kind of like it to have it there so yeah. So we know what 22 and Proud gets paid but what exactly happens to that money after it's deposited into her account? Well when I get paid every week I put majority towards the joint savings account so I get about $740 a week I save about $200 of that in my own personal account and I use that things like petrol buying things for just myself and the rest gets transferred to a joint account which my partner does pretty much the exact same keeps a little bit for himself and then the rest goes into our

joint account. How does 22 and Proud go with investing though? No I don't invest. To be honest after listening to this podcast I really wanted to get into it but I've kind of weighed up whether I would rather put that extra money into investments or put that extra money towards mortgage repayments and I think at this stage I would rather put the extra money towards the mortgage so I could pay that off quicker. And what about her debts? So although I did a university degree I don't have a hex debt because I paid it up front as the semester like every semester I'd pay the uni fees and my mortgage is $420,000. What are the good money habits that 22 and Proud recommends other women take on board? My best money habit would be being able to refrain from

making purchases on a whim really asking myself do I actually want this or and do I actually need this and just choosing to spend my money on things that will you know help me out and will make me happy not just things yeah at random what about her worst money habit my worst money habit to be honest since moving out I feel like I'm probably spending a little bit more because of things around the house I find myself at Bunnings every single weekend wanting to get more plants or wanting to do things around the house so that's probably my worst money habit at the moment but that's probably as far as it goes I don't really buy out much I pack my lunches for work and I bought a coffee machine which means I save money on coffees don't have to buy anything like

that so I think that's definitely helps as well if I was to spend my money on things I would probably rather spend it going to brunch with my partner or doing something nice on the weekend or a weekend away so what's 22 and proud actually saving for what's her big money goal my big savings goal is to go on a big holiday next year because we were saving so hard for a deposit in all the time that my partner and I have been together we haven't actually done any overseas trips or like real long holidays so next year we plan to go to Canada and America next year and yeah that should be quite expensive but fun. So how would today's money diarist rate her own relationship with money if we forced her to give herself a grade? I would probably give myself an

age just because of the position I'm in and for my age especially. I feel like not many people are at this age and have their own house and are paying off a mortgage and doing quite well for themselves. There's always room for improvements. All right, Victoria, 22 and proud. She's got a lot to be proud about, doesn't she? She absolutely does. Imagine being that young and having saved nearly $100,000 for a home deposit. She's my age. It makes me feel very guilty for what I'm doing. But honestly, Victoria, we have been crunching the numbers these past few minutes because we were like, surely that's impossible. And no, it's quite possible.

It is. So I think that it's important to be transparent when speaking about money. So we crunched the numbers and by saving $500 a week, that's saving about $26,000 a year times that by four, which is the timeframe she saved for the house in. And she could have saved or should have saved $104,000 in that period of time. Which is amazing. Incredible. so for her to be able to do that I think that that's incredible and it obviously is something

that she compromised a lot of other things to achieve so I think we need to recognize that as well she also was incredibly lucky to be able to live at home and probably have a lot less fixed costs than a lot of us who are not living at home yeah so as much as this story is absolutely fantastic I'd hate for other people to listen to this and feel a little bit flat that they're the same age and haven't achieved the same things because as much as this is an absolutely fantastic thing and honestly congratulations to her I'm so impressed it does take sacrifice and planning to save money like this and it also takes a lot of diligence over the long period of time so it's not something that we are you know all able to actually achieve it's incredible and for her to

have already paid off her hex as well like that's a lot of head down bum up but I think that it's also really really great that you know we are able to share stories like this and go wow great for her I'm so impressed I can't do it but that's okay yeah if you're not willing to sacrifice that's totally okay it just might take a little longer and that's fine too yeah and I don't even know if it's just about being willing to sacrifice some of us are just not in positions where that's not a not a thing we can do but it also might not be a priority to us like buying a house young fantastic it sounds really great but I would never have been in that position and to be honest if you'd said to me whilst I was still at uni like do you want to be saving this amount of money

it would mean forgoing all of your social interactions all of the things that you want to do I probably would have said no so I think it's worth having a look at and going all right that's fantastic for her what a gal but also that's probably not in line with my values and that's the most important thing to take away from this people spending money in relation to their values and beliefs but well done to her a plus i reckon i reckon a plus that's a plus plus for sure that's all we have time for today victoria just before we head off though as always let's quickly wrap the boring but important stuff the advice shared on cheese and the money is general in nature and does not consider your individual circumstances she's on the money exists purely

for educational purposes only and should not be relied upon to make an investment or financial decision and of course we promise victoria divine is an authorized representative of consultant financial advisors proprietary limited abn 65006 373 995 afsl 2303 23 woohoo you did it all right so join our facebook group where over 18 000 women share their money tips and tricks every single day free of judgment just search she's on the money on facebook and join us If Facebook is not your thing, you can also find us on Instagram. We're at She's On The Money AUS. This podcast is a production of Shameless Media on behalf of She's On The Money.

See you next week, everyone. See you.