Speaker 1: Welcome to How Do They Afford That, The podcast that
Speaker 1: peaks into the financial lives of everyday Australians. I'm Michael Thompson.
Speaker 1: I'm an author and the co host of the business
Speaker 1: news podcast Fear and Greed. As always, I'm in the
Speaker 1: studio with Canna Campbell, financial planner and founder of Sugar
Speaker 1: Mama TV, the financial literacy platform covering YouTube, podcast, books, Instagram, threads,
Speaker 1: TikTok and more. Hello, Canna, how are you? I'm excited.
Speaker 2: I'm glad you're excited.
Speaker 1: And you look excited too, because we.
Speaker 2: Have very intuit of you to pick that up.
Speaker 1: We have some exciting news.
Speaker 2: Very exciting news.
Speaker 1: Shold we start with our exciting news?
Speaker 2: Yes, that's share it.
Speaker 1: Okay. We have written a book.
Speaker 2: It's really good, it's really helpful, and it's really practical exactly.
Speaker 1: It is called twelve Months to Financial Freedom and it
Speaker 1: is basically about taking control of your money one month
Speaker 1: at a time.
Speaker 2: We share with you everything you need to know and understand,
Speaker 2: but more importantly do to get started. And it's actually
Speaker 2: a bit of a good laugh along the way.
Speaker 1: I like to think so kind of like this podcast, right,
Speaker 1: it's usually just you and me kind of making fun
Speaker 1: of each But the book is coming out on September one.
Speaker 1: You'll be able to see it in bookshops and pick
Speaker 1: up a copy all over the place from September one,
Speaker 1: but you can pre order it from now.
Speaker 2: And we really think you should invest in this book
Speaker 2: right now.
Speaker 1: Yeah. I mean, we don't do investment advice, but we
Speaker 1: can certainly do.
Speaker 2: Call this investment advice. You will not regret this, and.
Speaker 1: So we'll put a link in the show notes. The
Speaker 1: book is called twelve Months to Financial Freedom. It is
Speaker 1: coming out from Alan and Unwen and September one is
Speaker 1: the day, but it is available for pre order from now.
Speaker 1: And look, pre orders really really matter. They are very
Speaker 1: very important for a publisher and for us. So if
Speaker 1: you are thinking about getting on board with us with
Speaker 1: this book, just do it. I like that you might
Speaker 1: have pinched that from Nike. I suspect, but we'll make
Speaker 1: a work anyway. On with the show. Today's episode, Canna
Speaker 1: is about something that kind of creeps up on a
Speaker 1: lot of people where you start with good intentions. You've
Speaker 1: got kind of a plan for bardgeting and saving and
Speaker 1: investing and all of that, and before you know it,
Speaker 1: you've got too many accounts, you've got too many apps,
Speaker 1: you've got too many systems in place. So today are
Speaker 1: we making money to complicate it?
Speaker 2: Yes, we just go straight to it. Yes, I see
Speaker 2: this all the time. And this then naturally leads to overwhelm,
Speaker 2: complete inconsistency, throwing the towel and giving up entirely, and
Speaker 2: losing a complete sense of clarity and direction, and a
Speaker 2: complete inability to actually see what progress you actually did
Speaker 2: make from getting started in the first place, and a
Speaker 2: complete lack and loss of motivation. It's the biggest block
Speaker 2: for so many people when it comes to fixing their
Speaker 2: money getting better with their money.
Speaker 1: Really, so why does it happen in the first place?
Speaker 1: Is it? Like I suggested at the start, that it
Speaker 1: is basically an attempt to optimize everything and try and
Speaker 1: take advantage of everything that's out there, and it's just overwhelming.
Speaker 2: It's trying to do everything at the same time and
Speaker 2: too many things at the same time. So, for example,
Speaker 2: trying to fix your budget and cash flow, try to
Speaker 2: optimize your super try to kick start your share portfolio
Speaker 2: and your online trading account, but also at the same
Speaker 2: time trying to say, for a deposit and get out
Speaker 2: of that old pesky credit card dead or buy now,
Speaker 2: pay later. You know, you've got so many different things
Speaker 2: going on and there is no ability to just focus.
Speaker 2: There is unrealistic expectations with the timeframe that you've got,
Speaker 2: and so the results are flaky and you feel really disencouraged.
Speaker 2: And we're forgetting that. Our brains really are wired to
Speaker 2: create something that is really simple and clear to follow.
Speaker 2: So when we've now made a rod for our own
Speaker 2: back by creating something far too complex, we avoid it
Speaker 2: and nothing actually ever happens.
Speaker 1: What's the point which it gets overwhelming? Is there a trigger?
Speaker 1: Is there a point where kind of more accounts and
Speaker 1: more systems and things, I actually start working against studios?
Speaker 1: And I'm asking this knowing that I have experienced this
Speaker 1: and we've talked about this in the past, where by
Speaker 1: in an attempt to implement what look, honestly, it worked
Speaker 1: so well to begin with. It was a budgeting system
Speaker 1: where I had a whole stack of different accounts and
Speaker 1: it was based on quarantining your money. How you're justifying it, well,
Speaker 1: it did work for a little.
Speaker 2: While until I showed you the light.
Speaker 1: Yeah, But in the end, there was. I think at
Speaker 1: its peak there was twenty six different bank accounts across
Speaker 1: four different banks, and it was so inefficient. Well yeah,
Speaker 1: I know, but at its heart it was a budgeting
Speaker 1: system that was I thought was going to work for
Speaker 1: me because it was moving like small amounts of money
Speaker 1: into these accounts every month or whenever I was being paid,
Speaker 1: so that all of a sudden that every single expense,
Speaker 1: all of the different issues, Lawrence's the car redgo all
Speaker 1: of these things were all being saved for.
Speaker 2: You had the right intention, Okay, I get it.
Speaker 1: It got overwhelming. Yes, it was too much to manage,
Speaker 1: and all of a sudden, one little thing would bring
Speaker 1: it all undone that there was something I hadn't budgeted for,
Speaker 1: and so you had to take money from one account
Speaker 1: to pay for that, which meant then that you had
Speaker 1: to take money from the next account to top that
Speaker 1: one back up. And it was just a complete and
Speaker 1: utter disaster. That was the point at which it all
Speaker 1: fell over, where I realized I've over complicated this. I'm
Speaker 1: assuming the threshold for over complicated is actually far below
Speaker 1: where I hit.
Speaker 2: Look like, my hat goes off to you for the
Speaker 2: perseverance in sticking to a very overwhelming complicated system that
Speaker 2: you build for yourself.
Speaker 1: But thank you.
Speaker 2: I what I would remind people do is come back
Speaker 2: to the simple philosophy of keep it simple. Stupid no,
Speaker 2: have simple systems in place, because when you have a
Speaker 2: simple system in place, it is easy to stick to
Speaker 2: over the long run, and you can not get started.
Speaker 2: You can stay on that path and start to actually
Speaker 2: see the results that you're looking for. You will have
Speaker 2: that sense of faith and confidence to actually see what's
Speaker 2: working and what's not and where you can tweak and change.
Speaker 2: So you know, we are making things so much harder
Speaker 2: than we actually really need. And money, really the end
Speaker 2: of the day, is just energy. It is not rocket science.
Speaker 2: It is really subtraction and addition. So as long as
Speaker 2: you can add up and subtract, that's the most complicated
Speaker 2: element of managing your money and your cash flow. So
Speaker 2: we do not need you know, multiple different apps logging
Speaker 2: in and out of screens. And that's where and this
Speaker 2: is what I flagged with you when we had had
Speaker 2: this conversation initially, you know, a couple of years ago.
Speaker 2: Is this is where the ball gets dropped very easily.
Speaker 2: You miss second account. You know, you don't have you
Speaker 2: can't keep track of it. A bill then gets paid laid,
Speaker 2: it can damage your credit rating or you know, or default.
Speaker 2: It's you want to have it so you can all
Speaker 2: eyes on. It's very clear, it's very simple and easy
Speaker 2: to follow.
Speaker 1: Those are the main impacts, right. The potential impact of
Speaker 1: complexity is that things conspiral, they can just get out
Speaker 1: of control. It is avoidance you start to don't you
Speaker 1: don't want to pay any attention to you your money
Speaker 1: because it's become too complicated for you. But you can
Speaker 1: also miss opportunities right.
Speaker 2: Exactly, and as I said, do damage and also not
Speaker 2: feel good about yourself. You don't. You know, we've got
Speaker 2: so many stresses and pressures on right now. The last
Speaker 2: thing you want to do is add something to our
Speaker 2: shoulders that we don't necessarily need to do because we
Speaker 2: always need to do. Is just strip it right back
Speaker 2: to the basics.
Speaker 1: Okay, if someone is listening to this right now and going,
Speaker 1: they might be describing me and my circumstances. What are
Speaker 1: the signs that someone's financial setup is too complex? I mean,
Speaker 1: there's obviously the big kind of the big redcounts flag
Speaker 1: of two dozen or more accounts.
Speaker 2: Look, there are lots of different signs, so too many apps,
Speaker 2: too many online share trading accounts. In particular, I see
Speaker 2: this with people who have, like, you know, three or
Speaker 2: four different micro investing accounts, too many budgeting systems, too
Speaker 2: many goals as well as another big one too.
Speaker 1: Before you go past that one, that's a really interesting
Speaker 1: one where you actually have too many financial goals because
Speaker 1: you think that that kind of the more goals the better,
Speaker 1: because it's all very positive, But you can actually dilute
Speaker 1: your focus exactly.
Speaker 2: You're spreading yourself far too thinly, and the results, you know,
Speaker 2: will demonstrate that and be reflected straight back to you.
Speaker 2: And you know, what I often coach people around their
Speaker 2: financial goals is to try and actually be really clever
Speaker 2: with their goals and make them goals that are quite
Speaker 2: concise and consolidated in a you know, sort of quite
Speaker 2: an artful way. But yes, if you have too many
Speaker 2: things going and there there isn't an order of priorities
Speaker 2: where you go, look, I want to have all these goals,
Speaker 2: and that's fine. I would never take that away from someone,
Speaker 2: but I'll say, look, why don't we just focus on
Speaker 2: the top three first and the decks there and get
Speaker 2: those out of the way and then move on to
Speaker 2: the next ones, rather than having this frantic scattergun approach
Speaker 2: where there isn't actually any meaningful impact or improvement in
Speaker 2: your finances.
Speaker 1: Okay, so we're looking at too many apps, too many accounts,
Speaker 1: too many share trading accounts.
Speaker 2: Even too many superinnuation accounts as well.
Speaker 1: That's a good point because I kind of feel like
Speaker 1: the consolidation campaign has been going for so long now
Speaker 1: that there's been so many, so many efforts by everyone
Speaker 1: really to tell people to look for your superannuation. You
Speaker 1: might have had an account started for you when you
Speaker 1: were eighteen, working kind of in a supermarket as a
Speaker 1: part time job, and now you're kind of forty and
Speaker 1: you're doing something else altogether, that superannuation account might still
Speaker 1: be sitting there. It feels like everyone knows now to
Speaker 1: go and check for lost super and to investigate whether
Speaker 1: it can solidating into one is right for you. But
Speaker 1: not everyone's done.
Speaker 2: It, I know, because they feel overwhelmed because they don't
Speaker 2: know how to necessarily or they think they've build it
Speaker 2: up into their head to be so much more complicated
Speaker 2: than what it really is, and literally you can jump online.
Speaker 2: You know, there's there's various government websites to help you
Speaker 2: do this very quickly by using your tax file number.
Speaker 2: And you know, to add to that other you know,
Speaker 2: I guess negative impact of having things over complicated is
Speaker 2: you're wasting money. Yeah, you know, you're wasting money on
Speaker 2: fees of those superannuation accounts. They're not you know, also
Speaker 2: the opportunity, like for having that money properly invested, because
Speaker 2: your money, your superannuation money, is an investment portfolio.
Speaker 1: All right, we are going to take a quick break
Speaker 1: on the other side. I want you to tell us
Speaker 1: what we actually need, the things that we can ignore,
Speaker 1: so that if you're listening and you go, okay, I've
Speaker 1: got this and this and this, what can I let
Speaker 1: go of? What do I need to keep in order
Speaker 1: to have a more simple, clean, efficient financial system Back
Speaker 1: in a moment Canada today, we are talking about over
Speaker 1: complicating money. And I suspect most of us will have
Speaker 1: done this at some point where you've got too many accounts,
Speaker 1: too many apps, too many systems, a budget that just
Speaker 1: is too complicated, too tricky, requiring a spreadsheet every time
Speaker 1: you need to update something. What are the core elements
Speaker 1: that we actually need. That if you're trying to simplify
Speaker 1: your finances, at the heart of it, what do you
Speaker 1: need and what can you just ignore all together? Doing
Speaker 1: very big, kind of flourishing, sweeping hand jess is just
Speaker 1: to say, get out of here. We don't need you anymore.
Speaker 2: So what I recommend you do is strip everything right
Speaker 2: back to the basics, but just try and think short term.
Speaker 2: When we start getting you know, thinking about well, what
Speaker 2: about how am I going to pay for this for
Speaker 2: the kids, or how am I going to you know,
Speaker 2: be able to help my family out with this, that
Speaker 2: you just think too long term, I think that's when
Speaker 2: we can also start to panic and get overwhelmed and
Speaker 2: you know, lose a sense of focus. So I would
Speaker 2: actually recommend you really just think about the short term stuff,
Speaker 2: So thinking about what you can do today, what you
Speaker 2: can do next week, and next month, and maybe even
Speaker 2: just think about the next three months. Then come back
Speaker 2: to just some simple goals as to where you feel
Speaker 2: most overwhelmed and what needs to be fixed as an
Speaker 2: immediate priority that's actually going to help you feel better.
Speaker 2: Now for most people, that's normally around the goal of
Speaker 2: Goby getting rid of some debt and sorting out their
Speaker 2: budget and cash flow systems. So sitting down and actually
Speaker 2: doing the work. They're looking at your transactions. We're not
Speaker 2: looking at completely fixing our finances for the rest of
Speaker 2: the year. We're actually just learning about how to actually
Speaker 2: fix our finances, perhaps for the short term, to get
Speaker 2: us through the next couple of weeks or the next
Speaker 2: couple of months. That is perfectly fine because you are
Speaker 2: getting started, and you can get so much clarity from
Speaker 2: just focusing on the short term stuff that then allows
Speaker 2: you to start to see more into the medium term
Speaker 2: and even long term as to how you need to
Speaker 2: tweak and change to manage your budget to obviously stay afloat,
Speaker 2: also strip it back and consult it. You've got to
Speaker 2: be very careful with consolidation. I don't want to just
Speaker 2: rush out everyone rushing out and consolidating everything, because there
Speaker 2: are consequences, Like with superannuation. You know there are expenses,
Speaker 2: there are fees. You might trigger capital gains tax or
Speaker 2: even crystallize losses. But start to get some clarity about
Speaker 2: what you actually want want your financial system, your financial
Speaker 2: machine to look like, so that you can actually understand
Speaker 2: where your money is, but also you're building the system
Speaker 2: behind it to actually be able to check in and
Speaker 2: on a regular basis. And that's where you know, I say, like,
Speaker 2: you don't need three different superannuation accounts. You really just
Speaker 2: need one so you can focus all your energy on that.
Speaker 2: So that's where you would go and get advice obviously
Speaker 2: from a financial planner and look at getting some strategic
Speaker 2: advice around the best way to consolidate it. But also
Speaker 2: which is going to be your main superannuation account, which
Speaker 2: of the three is the best one for you, that's
Speaker 2: most cost effective, that suits your needs, and you know
Speaker 2: your investing risk profile as well, and then don't have
Speaker 2: too many accounts. You want to be able to manage
Speaker 2: this on an ongoing basis. Yes, you know you should
Speaker 2: be able to, Like by gold rules, you've got to
Speaker 2: be able to look at it all within one screen.
Speaker 2: The moment you are logging in and out, that's where
Speaker 2: I get worried because that's where things get missed. Now,
Speaker 2: there are certain apps which we've spoken about before, that
Speaker 2: actually allow you to put it all on one screen.
Speaker 2: They sort of pull all the information from your bank
Speaker 2: accounts so you don't have to necessarily change banks. You
Speaker 2: can keep the different institutions, but you can see it
Speaker 2: on the one screen. That also can be very helpful
Speaker 2: because it obviously keeps a sense of clarity and then
Speaker 2: allows you to remain focused. But you've really got to
Speaker 2: have this this like cleanliness and this almost detox of
Speaker 2: the stuff that is distracting and getting in your way
Speaker 2: from progressing forward. And it does involve sort of sitting
Speaker 2: down and being honest with yourself and going where do
Speaker 2: I feel the biggest block in and what is actually
Speaker 2: going to make me feel so much better? You know?
Speaker 2: Is what do if I be in procrastinating for far
Speaker 2: too long? And the thing is, you know, this is
Speaker 2: the long DOPA main hit. When we finally do it,
Speaker 2: you actually feel really good about yourself and you do
Speaker 2: feel inspired to actually work on another area that you've
Speaker 2: been putting off, and you take greater care and pride
Speaker 2: in managing it going forward.
Speaker 1: Okay, if I was to summarize these, so we're looking
Speaker 1: at simple goals, A smaller number of simple short term
Speaker 1: achievable goals, A perhaps a more simple budget that looks
Speaker 1: directly at what you are actually spending rather than hypotheticals. Yes,
Speaker 1: one ideally super account, but get some advice from a
Speaker 1: financial planner on consolidating your accounts a smaller number of
Speaker 1: bank accounts, preferably just with one financial institution.
Speaker 2: Yes, and nicknamed as well, I should mention.
Speaker 1: Yeah, and so one might be the main account that
Speaker 1: your pay comes into, and then one for your longer term.
Speaker 1: I think we should do another reps on how to
Speaker 1: structure your bank accounts. It's going to make a quick
Speaker 1: note as we're talking. And so then you've got a
Speaker 1: small number of bank accounts attached to one bank and
Speaker 1: all of a sudden, and one share trading account potentially.
Speaker 2: One micro investing or not both one online share trading.
Speaker 1: Okay, And all of a sudden, you have got you
Speaker 1: removed the duplication.
Speaker 2: You've removed the noise, the distractions, the overwhelm. You know,
Speaker 2: we've brought it down to that principle of keep it
Speaker 2: simple stupid.
Speaker 1: Does it still feel like you have control? Though? This
Speaker 1: is the thing that I worry even more.
Speaker 2: So because you can actually see what's going on, You
Speaker 2: feel far more empowered. You have a great understanding of
Speaker 2: what you're actually achieving. You can actually finally see the
Speaker 2: progress because you're not adding up, looking at your savings,
Speaker 2: going on, barely making any progress. And it's because you've
Speaker 2: got twenty six different savings account. You've got it in
Speaker 2: one savings account. And you go, well, I went from
Speaker 2: being eighteen thousand dollars in savings, I've now got twenty
Speaker 2: three thousand dollars in savings. How does that make you
Speaker 2: feel pretty good? I want to keep this feeling. I'm
Speaker 2: getting a dopamine hit from it. I want to keep
Speaker 2: going and watch this build up. I will be more engaged.
Speaker 2: And because it's simpler now, you're going to stick to
Speaker 2: it in the long run. And you know, budgeting I
Speaker 2: always say, I'm going to sound like I'm contradicting myself
Speaker 2: a little bit here in this episode, but you know,
Speaker 2: budgeting does need to take consideration, you know, the next
Speaker 2: three hundred and sixty five days of your year. But
Speaker 2: this is how you get started. If you are stuck,
Speaker 2: you've got a block. You know, you are completely paralyzed
Speaker 2: by knowing what to do next or how to actually
Speaker 2: fix the overwhelm and the sheer volume of noise and
Speaker 2: fear and anxiety that just tends to build and grow
Speaker 2: with the more we procrastinate.
Speaker 1: Okay, if you've now got a more simple setup, simple
Speaker 1: bank account, simple superannuation, how often then should you be
Speaker 1: reviewing and restructuring if needed the setup, which I imagine
Speaker 1: is going to be easier to do when you don't
Speaker 1: have four thousand different accounts to be checking.
Speaker 2: So obviously, the moment your situation changes, you know, you
Speaker 2: get a new job, or you're moving, or you know,
Speaker 2: your like lifestyles change, you're perhaps partner, or you're having
Speaker 2: a baby, something like.
Speaker 1: That expense kind of exactly.
Speaker 2: But also the moment you feel like you might be
Speaker 2: maybe playing it low and you think, you know what,
Speaker 2: I actually probably could save a little bit more, or
Speaker 2: I can actually play off a bit more depth fast,
Speaker 2: or you know what, actually I'm feeling really motivated, or
Speaker 2: I'm curious even to look into investing. Capitalize on those moments,
Speaker 2: you know, because if you don't, they will pass and
Speaker 2: they don't necessarily come back as often or as quickly
Speaker 2: when we don't jump on those.
Speaker 1: Okay, we are nearly out of time, got about a
Speaker 1: minute left. Is there anything else that we can be
Speaker 1: doing to add a touch of minimalism to our money here?
Speaker 1: So I know that you are a big fan of minimalism,
Speaker 1: and it is, of course may minimalism.
Speaker 2: May.
Speaker 1: This is a little bit of a minimalism sneak attack
Speaker 1: that we've launched with this particular episode. Perhaps the idea
Speaker 1: of a digital de clutter.
Speaker 2: Oh I love a good declutter. Look. Obviously, going through
Speaker 2: your phone is the first place to do this. Going
Speaker 2: through your desktop computer, or your laptop even any sort
Speaker 2: of you've got piles of notebooks everywhere, consolidate everything back
Speaker 2: to one. But you know they're the practical side. But
Speaker 2: what I like is a good test to see whether
Speaker 2: you are guilty of this, you know, over complicating things,
Speaker 2: making a rod for your own back. And that is
Speaker 2: this thing that I teach in my mentorship program, and
Speaker 2: it's an elevator pitch. If I was to get into
Speaker 2: the elevator with you, you should be able to tell
Speaker 2: me your ballpark, big picture financial strategy whilst getting in
Speaker 2: from the ground level, say going to level ten. Want
Speaker 2: to hear that. If you can't actually articulate and explain
Speaker 2: it back to me in a very simple, easy concise way,
Speaker 2: you have most likely over complicated. You know, your financial
Speaker 2: strategy and game plan.
Speaker 1: I'm looking at you with a sense of panic.
Speaker 2: I can see the panic in your eye. You can
Speaker 2: actually technically smell it.
Speaker 1: Yeah, I'm sorry about that, but this is I've.
Speaker 2: Been a financial plan for far too long.
Speaker 1: I think you can sense these things. I don't know
Speaker 1: whether I could do that.
Speaker 2: We have some we're going to have to just don't
Speaker 2: have another chat.
Speaker 1: How long have we been doing this podcast for years now?
Speaker 2: Such an insult?
Speaker 1: So no, it's it's I'm I'm you are helping me along.
Speaker 1: That is my next goal.
Speaker 2: One of the biggest things in being financial planner and
Speaker 2: working with so many amazing, beautiful people and families is
Speaker 2: getting to simplify everything for them and just seeing their
Speaker 2: weight come off their shoulders and in seeing it in
Speaker 2: their eyes and smelling and if you like like just
Speaker 2: that are hard going Oh wow, okay, I get it.
Speaker 2: This is actually not as hard as I thought it was.
Speaker 2: Or why do I make it so much more complicated
Speaker 2: than it really needed to be.
Speaker 1: It's the financial pheromones. That's what just said. That's what
Speaker 1: you're sensing. Oh, it's a weird place to finish it.
Speaker 1: But where can we find you if we need more information?
Speaker 2: If you want to give me your elevator pitch and
Speaker 2: I can check and run that test for you. Please
Speaker 2: feel free to reach out to me on Instagram at
Speaker 2: sugar Moment tv.
Speaker 1: And you can hear me every day with Sean Aylmer
Speaker 1: on Fear and Greed business news that you can use,
Speaker 1: which is a financial Pheromone free zone. I've got to
Speaker 1: declare that right now. Thank you for listening to How
Speaker 1: Today Afford that. Remember to hit follow on the podcast,
Speaker 1: and the very best thing that you can do is
Speaker 1: tell somebody else about the podcast. Send them a link
Speaker 1: to this episode. If you have personally witnessed that they
Speaker 1: have dozens of bank accounts and deal with a good
Speaker 1: bit of simplifying of their financial setup. Thank you for
Speaker 1: your company. Join us in next week. Mm hmm