WEBVTT - Your money bounce-back plan 0:00:01.520 --> 0:00:03.800 Welcome to How Do They Afford That? A podcast that 0:00:03.840 --> 0:00:07.040 peaks into the financial lives of everyday Australians. 0:00:07.040 --> 0:00:07.920 I'm Michael Thompson. 0:00:08.080 --> 0:00:09.959 I'm an author and the co host of the business 0:00:10.000 --> 0:00:13.000 news podcast Fear and Greed. As always, I'm with Canna Campbell, 0:00:13.080 --> 0:00:16.240 financial planner and founder of Sugar Mama TV, the financial 0:00:16.280 --> 0:00:20.759 literacy platform that covers YouTube, podcast books, Instagram threads, TikTok 0:00:20.800 --> 0:00:21.120 and more. 0:00:21.640 --> 0:00:24.759 Hello, Canna, Hello, how are you? I am good and 0:00:24.800 --> 0:00:28.240 I'm looking forward to today because today we want to help. 0:00:28.800 --> 0:00:33.400 We're very selfless with today's episode. Christmas is behind us 0:00:33.800 --> 0:00:35.680 well and truly behind us, and hopefully you had a 0:00:35.680 --> 0:00:40.240 brilliant time, good presence, plenty of good food and drink, 0:00:41.000 --> 0:00:46.519 maybe even a little holiday away perhaps, bus all of 0:00:46.560 --> 0:00:50.199 that comes with the very very very real risk of 0:00:50.240 --> 0:00:53.040 a festive season financial blowout. 0:00:53.280 --> 0:00:55.000 Doesn't it hangover? 0:00:55.560 --> 0:00:57.440 Yeah, it's a good way to put it, isn't it? 0:00:57.440 --> 0:00:58.280 It is a hangover. 0:00:59.160 --> 0:01:02.680 So today we are going to put together your money 0:01:02.760 --> 0:01:06.920 bounce back plan. So if you maybe spent a little 0:01:06.920 --> 0:01:11.200 bit too much over Christmas and over that whole period, 0:01:11.520 --> 0:01:15.440 there's no judgment. It is just help getting back on track. 0:01:15.480 --> 0:01:20.800 This one is for you, it's fairly predictable and consistent, 0:01:21.120 --> 0:01:23.760 right that at this time of year there is going 0:01:23.840 --> 0:01:24.960 to be a little bit of a hangover. 0:01:25.160 --> 0:01:25.880 It's such an. 0:01:25.720 --> 0:01:30.319 Expensive time of year, right, Why why when we know 0:01:30.440 --> 0:01:33.480 it's coming, When we know that Christmas is going to 0:01:33.480 --> 0:01:35.399 be expensive, When we know it's going to be the 0:01:35.400 --> 0:01:37.160 time of year when you want to go away, or 0:01:37.200 --> 0:01:38.800 you want to spend a bit of time, you want 0:01:38.800 --> 0:01:41.120 to go out for meals and things like that, why 0:01:41.160 --> 0:01:44.960 then is it so hard to prepare for that and 0:01:45.000 --> 0:01:49.080 to why we left with the financial hangover every single year. 0:01:49.160 --> 0:01:55.480 I don't understand. I'm speaking from experience here, what you're 0:01:55.480 --> 0:01:57.400 feeling a bit financially dusty. 0:01:57.240 --> 0:01:58.800 Yeah, just a little bit, just a little bit. 0:01:58.960 --> 0:02:00.880 And I do find it for us that, even though 0:02:00.880 --> 0:02:02.960 we know it's coming, that the same result every year. 0:02:03.000 --> 0:02:03.920 Why is this happening? 0:02:04.160 --> 0:02:06.800 I think Christmas is a very emotional time of the year. 0:02:06.880 --> 0:02:10.240 You've got you know, families. It's also for some people 0:02:10.240 --> 0:02:12.239 it is a very lonely time of the year. I 0:02:12.320 --> 0:02:15.680 got traditions, you've got guilt, you know, the pressure to 0:02:15.720 --> 0:02:19.160 be generous, and of course it's an exciting time of 0:02:19.160 --> 0:02:21.440 the year, particularly if you've got young children, and then 0:02:21.560 --> 0:02:25.880 discovering you know, families, traditions and mix in all those 0:02:26.560 --> 0:02:30.560 feelings and they completely override any sort of logical way 0:02:30.560 --> 0:02:33.600 of thinking. And as a result, we over indulge, and 0:02:33.680 --> 0:02:36.239 we over indulge in gifts, We over indulge in food, 0:02:36.680 --> 0:02:39.639 We over indulge perhaps on holidays and catching up with 0:02:39.760 --> 0:02:43.800 friends and you know, all the kids' activities and travel 0:02:43.880 --> 0:02:47.239 and hosting everyone over and thinking, oh, just this once, 0:02:47.320 --> 0:02:49.040 you know, or you know it's only you know, this 0:02:49.120 --> 0:02:51.359 time of the year, and you know, before we know it, 0:02:51.440 --> 0:02:53.360 you know, the stress of the pressure, the so for 0:02:53.680 --> 0:02:59.040 social obligations, and then boxing day sales, fear missing out, 0:02:59.600 --> 0:03:04.000 boom like oh whoopsies, we blue out, a financial blowout 0:03:04.880 --> 0:03:08.000 and we are left holding the financial damage. 0:03:08.400 --> 0:03:11.959 Okay, if we are going to do a money bounce 0:03:12.040 --> 0:03:15.480 back plan, these kinds of things are best broken up 0:03:15.480 --> 0:03:18.000 into steps. I'm not going to call it a list today. 0:03:18.040 --> 0:03:21.760 It's going to be a step to program. How many 0:03:21.800 --> 0:03:24.080 steps would you like to put on this non list? 0:03:24.720 --> 0:03:28.560 I was I think instruction steps that we think maybe 0:03:29.880 --> 0:03:31.160 maybe do five five. 0:03:31.360 --> 0:03:34.080 Okay, this is the five step program, the money the 0:03:34.200 --> 0:03:35.800 five step money bounce back plan. 0:03:36.160 --> 0:03:38.280 We need a fast bounce back, So I would like 0:03:38.320 --> 0:03:39.760 to do ten just so you know, but we're going 0:03:39.840 --> 0:03:40.200 to do five. 0:03:40.200 --> 0:03:42.200 We're going to stick with five. Okay, Step number one. 0:03:42.240 --> 0:03:45.120 What's the very first thing that people should do if 0:03:45.120 --> 0:03:48.880 they've looked at the bank account after Christmas, after New 0:03:48.960 --> 0:03:51.480 Year's and just felt a little bit of panic? 0:03:53.000 --> 0:03:53.320 All right? 0:03:53.440 --> 0:03:57.560 First of all, guilt does not fix anything. Clarity does. 0:03:58.520 --> 0:04:00.440 Okay, all right, So we've. 0:04:00.280 --> 0:04:04.200 Got to get those numbers down pen to paper. You 0:04:04.320 --> 0:04:06.760 can't bounce back from something that you can't see, So 0:04:07.240 --> 0:04:10.720 let's first of all, like get really clear. Let's create 0:04:10.760 --> 0:04:13.680 the awareness so that we can start putting steps in 0:04:13.720 --> 0:04:17.120 place so that that bounce back happens quickly. So what 0:04:17.160 --> 0:04:18.960 does that mean, Well, it means we've got to log 0:04:18.960 --> 0:04:21.880 in and look at the numbers. As scary as they 0:04:21.920 --> 0:04:23.600 may be and as much as we really don't want it, 0:04:23.640 --> 0:04:26.240 but we need to know exactly how much money have 0:04:26.320 --> 0:04:29.760 we actually spent and where did it come from, Like 0:04:30.279 --> 0:04:32.679 did we take it out of a special savings account 0:04:32.680 --> 0:04:35.080 that we shouldn't of or did we blow all our 0:04:35.120 --> 0:04:39.599 money before payday? Or did we use our credit card 0:04:39.720 --> 0:04:41.640 or did we sign up to buy an hour pay later, 0:04:41.880 --> 0:04:46.440 Like what's left? Who do we owe? Like what are 0:04:46.440 --> 0:04:49.040 the balances, what are the interest rates? Everything's got to 0:04:49.040 --> 0:04:49.640 be written down. 0:04:50.040 --> 0:04:50.640 Is this. 0:04:52.120 --> 0:04:55.159 That makes complete sense to actually go in and look 0:04:55.200 --> 0:04:59.920 at it and see very basi really what's actually there? 0:05:00.480 --> 0:05:04.160 Is this how some people get themselves in real trouble 0:05:04.279 --> 0:05:07.040 because you just can't face it. Yes, they're the sand, 0:05:07.120 --> 0:05:08.880 bury your head in the sand. But because it's the 0:05:08.920 --> 0:05:11.200 start of the year, and because you're dealing with some 0:05:11.240 --> 0:05:14.120 debt leftover from last year, bury your head in the 0:05:14.160 --> 0:05:16.240 sand at the start of the year. Is this just 0:05:16.279 --> 0:05:18.400 going to set yourself up to fail because it's going 0:05:18.440 --> 0:05:21.279 to snowball and spiral and keep going through. 0:05:21.080 --> 0:05:23.400 The year compound and you'll be chasing your tail. And 0:05:23.440 --> 0:05:25.600 the longer this goes, the harder it is to get 0:05:25.600 --> 0:05:28.159 back on top of it. And you're wasting, wasting such 0:05:28.279 --> 0:05:31.760 precious time, time that can be used on building wealth 0:05:31.839 --> 0:05:36.000 rather than paying off regretfulness, not regretful, that's the wrong word. 0:05:36.040 --> 0:05:38.760 But you know the thing is, it's been done, done, 0:05:38.800 --> 0:05:40.919 it's in the past. There's nothing you can do to 0:05:41.000 --> 0:05:43.479 stop it from happening. It's now just about how do 0:05:43.560 --> 0:05:44.480 you recover from it? 0:05:44.520 --> 0:05:45.880 And it starts by getting clear. 0:05:46.080 --> 0:05:48.800 Okay, that's step number one. What's step number. 0:05:48.560 --> 0:05:50.120 Two, Let's stop the bleeding. 0:05:50.920 --> 0:05:51.640 Oh I like that. 0:05:51.720 --> 0:05:55.159 It's a first aid reference, so you're applying pressure to 0:05:55.279 --> 0:05:55.760 the wound. 0:05:55.960 --> 0:05:59.120 So this is where we stabilize your finances. So we 0:05:59.440 --> 0:06:03.120 have basically like I'd say, if you can do this, 0:06:03.760 --> 0:06:06.560 make it a fun and financial challenge. So we hit 0:06:06.680 --> 0:06:09.360 pause on all the discretionary spending for the next day 0:06:09.440 --> 0:06:14.320 two to four weeks, and we delay anything that's not urgent. 0:06:15.080 --> 0:06:19.240 So go aggressively through your budget, through your statements, and 0:06:19.279 --> 0:06:23.720 look whatever you can cancel or freeze, particularly if there 0:06:23.720 --> 0:06:26.640 are things that you're not using or don't need immediately. 0:06:27.240 --> 0:06:32.359 So it's all about spending only intentionally, not automatically. So 0:06:32.400 --> 0:06:34.520 if you used to maybe going out every weekend, you know, 0:06:34.600 --> 0:06:37.359 to the pub, you'd say, I'm not going to go 0:06:37.360 --> 0:06:38.880 to the pub this weekend. I'm just going to hang 0:06:38.880 --> 0:06:41.320 out at home and save my money. So it's about 0:06:41.360 --> 0:06:44.560 creating a bit of I guess, a financial respite to breathe, 0:06:45.000 --> 0:06:47.000 and any money that you're able to save up in 0:06:47.040 --> 0:06:50.839 the meantime, you can go towards putting like a band 0:06:50.839 --> 0:06:54.039 aid to stop the bleeding of your finances. 0:06:55.279 --> 0:06:57.960 It's a little bit of frugal February coming in there, 0:06:58.000 --> 0:06:58.320 isn't it. 0:06:58.480 --> 0:07:01.760 There is that very fam moss fun financial challenge that 0:07:02.600 --> 0:07:03.520 we might do together. 0:07:04.480 --> 0:07:07.680 Oh yes, yes, I know, just coming up in just 0:07:07.720 --> 0:07:10.920 a few weeks. That's exciting. That makes sense though, that 0:07:10.960 --> 0:07:14.360 you've got to stop the bleeding because it's going to 0:07:14.400 --> 0:07:17.200 be hard to make any headway if you're still spending. 0:07:17.320 --> 0:07:19.960 Yeah, you just literally got to stop spending. Leave your 0:07:19.960 --> 0:07:23.840 wallet at home, change your activities. You know, don't go 0:07:23.920 --> 0:07:25.800 wandering around the shops looking at shops because you'll just 0:07:25.840 --> 0:07:27.080 find things that you want to buy and it's going 0:07:27.080 --> 0:07:32.160 to deplete your energy. Just just change so only for 0:07:32.200 --> 0:07:33.040 the short term. 0:07:33.400 --> 0:07:35.920 And it's the time of year as well, to embrace 0:07:35.960 --> 0:07:39.400 free activities as well, because it's warm. It's nice to 0:07:39.440 --> 0:07:41.640 go out to the to the beach or to the 0:07:41.680 --> 0:07:44.480 park or something, or go to the library where there's 0:07:44.480 --> 0:07:46.280 aircon and you just you don't have to spend any 0:07:46.320 --> 0:07:49.080 money there things right, Yeah. 0:07:48.720 --> 0:07:50.160 Okay, that's number two. 0:07:50.280 --> 0:07:52.280 And I realized I've just made myself sound like a 0:07:52.320 --> 0:07:55.440 massive nerd because that would be high my priority list. 0:07:55.440 --> 0:07:57.440 I'll just go and live in the library for library. 0:07:57.480 --> 0:08:00.920 I absolutely do step number three. 0:08:01.480 --> 0:08:04.760 And that is to create im perfect timing of frugal February, 0:08:04.800 --> 0:08:09.600 a thirty day money reset for yourself, so you would 0:08:10.000 --> 0:08:13.040 track every single dollars. You've done the pause, you've stopped spending, 0:08:13.080 --> 0:08:16.600 but now it's about changing things going forward, So tracking 0:08:16.600 --> 0:08:20.440 the dollar only spending with physical cash or your direct 0:08:20.520 --> 0:08:22.680 debit cards. You're not creating any new debt in your 0:08:22.720 --> 0:08:27.560 life and doing things reverting back to a very simple life, 0:08:28.600 --> 0:08:32.480 richly simple life. So looking at simple meals, you know, 0:08:33.120 --> 0:08:37.240 not creating this expensive gourmet meals. Just something very easy, 0:08:37.280 --> 0:08:40.520 simple and cost effective, even entertaining. As I said, you know, 0:08:40.559 --> 0:08:42.560 not going to the pub. Maybe have a friend over 0:08:42.640 --> 0:08:44.640 for a drink, or don't go out for lunch, go 0:08:44.679 --> 0:08:46.800 for a walk with your friend. Like really changing up 0:08:46.840 --> 0:08:50.600 your lifestyle and learning to use what you've already got. 0:08:50.800 --> 0:08:53.640 Go through the pantry, go through the freezer. You know, 0:08:53.640 --> 0:08:55.280 if you do have to go to something, you know, 0:08:55.360 --> 0:08:58.319 shop your own wardrobe is what my girlfriend says, and 0:08:58.760 --> 0:09:02.880 stick to a set budget so that you don't go crazy. 0:09:02.920 --> 0:09:05.679 You've got some stanity money, but you can oh go 0:09:05.720 --> 0:09:08.280 to the library, yes, yes, Oh my gosh, a couple 0:09:08.320 --> 0:09:12.800 of first a paper, go to the library. Yes, for 0:09:12.880 --> 0:09:16.240 everybody listening, Michael likes to go to the library, and 0:09:16.280 --> 0:09:19.319 he highly recommends everybody else to save money goes to 0:09:19.400 --> 0:09:21.200 the library. I go to the library too, and I 0:09:21.240 --> 0:09:21.640 love it. 0:09:21.880 --> 0:09:24.280 I was trying to get you just to seamlessly work 0:09:24.320 --> 0:09:27.920 it in that way, work one of your own financial tips. 0:09:28.240 --> 0:09:30.160 I love going to the library too. But one of 0:09:30.240 --> 0:09:36.120 my problems is is there is a Calipress cafe right 0:09:36.240 --> 0:09:40.079 underneath my local library, so and I always associate cali 0:09:40.080 --> 0:09:42.679 Press with getting a not very healthy assy ball. So 0:09:42.679 --> 0:09:44.400 it ends up costing me sixteen dollars to go to 0:09:44.440 --> 0:09:46.080 the library because I can't go to the library without this. 0:09:46.600 --> 0:09:49.880 All right, So, really it's about hitting doing things, really 0:09:49.880 --> 0:09:54.560 going aggressively and doing a complete financial reset just to 0:09:54.559 --> 0:09:57.000 stop the spending and to help free up the cash 0:09:57.040 --> 0:09:58.720 flow so you can just clear the debt. 0:09:58.880 --> 0:10:01.599 Do you do them at the same time or is 0:10:01.640 --> 0:10:04.080 it one after the other, because I'm thinking that if 0:10:04.160 --> 0:10:08.320 you were to do a two week pause on discretionary spending, right, 0:10:08.320 --> 0:10:10.920 that will take you through to the start of February, 0:10:10.960 --> 0:10:13.800 for instance, and then you can just do frugal February 0:10:14.120 --> 0:10:16.880 as you're a thirty day or in this case, twenty 0:10:16.920 --> 0:10:20.040 eight day money reset where you are monitoring all of 0:10:20.080 --> 0:10:22.720 your money and you are living that more frugal life. 0:10:22.920 --> 0:10:25.520 Yeah. So the first step is more about going aggressively, 0:10:26.040 --> 0:10:29.000 and then the second step also is more about building 0:10:29.240 --> 0:10:32.559 sustainable habits that will also benefit you and also give 0:10:32.600 --> 0:10:35.640 you a great insight as to what actually does fill 0:10:35.640 --> 0:10:37.720 your cup. You know, for example, catching up with a 0:10:37.720 --> 0:10:40.200 friend for a walk. Is that Did you get more 0:10:40.280 --> 0:10:42.240 enjoyment doing that than say, sitting in front of it 0:10:42.440 --> 0:10:45.640 at a table at a restaurant, you know, an expensive lunch? 0:10:45.720 --> 0:10:49.320 Yeah, or just chatting over some books at the library. 0:10:49.760 --> 0:10:51.880 There we go, All right, very quick break. We are 0:10:51.920 --> 0:10:55.360 coming back then with steps four and five. Are you 0:10:55.360 --> 0:10:57.920 really going to be able to polish this one off 0:10:58.000 --> 0:10:59.480 in just five steps? 0:11:00.160 --> 0:11:02.160 Little faith, I've got. 0:11:02.040 --> 0:11:04.680 Lots of faith, but I've also seen you time and 0:11:04.720 --> 0:11:07.040 time again just squeeze an extra step in there at 0:11:07.040 --> 0:11:09.840 the end. Better not do that this time? Are you 0:11:09.840 --> 0:11:11.360 going to you better believe. 0:11:11.120 --> 0:11:12.760 This is the most important step coming up? 0:11:12.960 --> 0:11:16.160 Okay, all right, okay, great tease. We will come back 0:11:16.200 --> 0:11:18.080 for the most important step into a moment. 0:11:24.280 --> 0:11:24.600 Cana. 0:11:24.640 --> 0:11:27.200 We are putting together a five step money bounce back 0:11:27.280 --> 0:11:28.160 planned so far. 0:11:28.400 --> 0:11:29.120 Step one is. 0:11:29.160 --> 0:11:32.120 Expose it, get it out there, actually look at it 0:11:32.160 --> 0:11:35.880 and see exactly what damage has been done, understand it, 0:11:36.080 --> 0:11:39.320 understand it. Then stop the bleeding. A two to four 0:11:39.360 --> 0:11:43.560 week pause on discretionary spending, then a thirty day money 0:11:43.559 --> 0:11:46.120 reset where you're tracking every dollar and just kind of 0:11:46.200 --> 0:11:48.400 getting back to basics really. 0:11:48.120 --> 0:11:51.000 And understanding what is sustainable, what new habits you can 0:11:51.040 --> 0:11:53.199 form that you actually don't mind and actually aren't a 0:11:53.280 --> 0:11:55.280 sacrifice at all because they can serve you for the 0:11:55.280 --> 0:11:55.880 rest of the year. 0:11:56.160 --> 0:11:58.560 Step number four before the break, you said that this 0:11:58.760 --> 0:12:00.800 was the most important step. 0:12:01.040 --> 0:12:02.920 Yeah, and that is to pay off the debt. 0:12:03.920 --> 0:12:05.040 That's a very good point. 0:12:05.080 --> 0:12:08.040 Assuming you've pay off the debt or actually replenished those 0:12:08.080 --> 0:12:10.120 savings accounts. If you didn't get into debt, it actually 0:12:10.160 --> 0:12:12.280 tapped into savings that you shouldn't have actually used. 0:12:13.120 --> 0:12:13.959 So you do that. 0:12:14.280 --> 0:12:16.880 If you are in debt, you need to use something 0:12:16.920 --> 0:12:21.040 called my hitless strategy. Now, this is an aggressive strategy 0:12:21.160 --> 0:12:23.880 that taps into the psychology of money. Is not necessarily 0:12:23.920 --> 0:12:27.480 the most not necessarily the most financially savvy way of 0:12:27.480 --> 0:12:30.840 doing it, but it is where you focus on the 0:12:30.960 --> 0:12:36.160 smallest debt first rather than the most expensive debt first, 0:12:36.520 --> 0:12:39.720 not necessarily ranking it in order of the highest interest 0:12:40.160 --> 0:12:42.280 to the lowest interest, but the smallest deebt to the 0:12:42.320 --> 0:12:45.280 biggest debt. And the reason why it works, and I've 0:12:45.720 --> 0:12:49.040 coached and counseled thousands of people out of huge amounts 0:12:49.040 --> 0:12:51.319 of debt, is because it taps into the psychology of 0:12:51.360 --> 0:12:54.240 money in that each debt or each person that you 0:12:54.280 --> 0:12:58.040 owe money to is like juggling balls. If you're juggling, 0:12:58.120 --> 0:13:00.240 say seven balls, if I take one ball out of 0:13:00.240 --> 0:13:02.960 the air, it just becomes that little bit easier. So 0:13:03.080 --> 0:13:05.280 how do we get a ball out of the air quickest, Well, 0:13:05.320 --> 0:13:07.040 we get rid of one of the debts, So we'll 0:13:07.080 --> 0:13:09.000 go for the smallest one first because that's quickly and 0:13:09.080 --> 0:13:12.440 easy to hit. So you're literally punching your way through. 0:13:12.480 --> 0:13:15.400 So what that involves is obviously looking at the cash 0:13:15.400 --> 0:13:17.880 flow that you've been able to free up from doing 0:13:18.200 --> 0:13:22.400 steps one, two, and three, and then directing it towards 0:13:22.440 --> 0:13:25.320 the smallest debt first, and you make a list and 0:13:25.360 --> 0:13:27.920 you cross it off. Of course, you must honor those 0:13:27.960 --> 0:13:31.640 responsibilities or your financial responsibilities of each debts. You have 0:13:31.640 --> 0:13:34.480 a minimum payment plan for every single debt, so you're 0:13:34.480 --> 0:13:37.440 not getting calls by debt collectors and potentially damaging your 0:13:37.440 --> 0:13:39.640 credit score because if there is a repayment plan in place, 0:13:40.080 --> 0:13:42.600 but you work through the list and you will find 0:13:42.640 --> 0:13:45.040 that you're What happens is it taps into the psychology 0:13:45.040 --> 0:13:47.520 of money and you're building momentum. You can actually go, Okay, 0:13:47.520 --> 0:13:49.640 I don't owe seven people money. I now owe six 0:13:49.679 --> 0:13:52.200 people money. I now owe five people my money, and 0:13:52.240 --> 0:13:55.440 you just flow that through because it creates a routine, 0:13:55.640 --> 0:13:58.439 a rhythm of momentum. The habit system you can then 0:13:58.520 --> 0:14:01.800 use is to then start building up savings and emergency money, 0:14:01.800 --> 0:14:04.439 so you never rely on debt. Now, for the people 0:14:04.440 --> 0:14:06.640 who did not get into debt, they just have used 0:14:06.720 --> 0:14:10.439 money savings that they shouldn't have used. You do need 0:14:10.480 --> 0:14:12.200 to do pretty much the same sort of thing. You 0:14:12.200 --> 0:14:15.199 need to replenish that money. So what you would do 0:14:15.280 --> 0:14:17.440 is go back to the budget and look at what 0:14:17.600 --> 0:14:20.560 repayment plans like it is if it was a debt, 0:14:20.960 --> 0:14:24.040 and have that payment plan go back into those savings 0:14:24.120 --> 0:14:26.720 accounts so you can rebuild those savings as quickly as 0:14:26.720 --> 0:14:27.560 you possibly can. 0:14:28.600 --> 0:14:31.200 Okay, that makes you are right. That is the most 0:14:31.200 --> 0:14:33.840 important step, and you wouldn't be able to do any 0:14:33.840 --> 0:14:36.880 of that without step one of knowing exactly what you 0:14:36.920 --> 0:14:39.280 have spent. Because you are trying to particularly if you've 0:14:39.560 --> 0:14:42.280 used your own money rather than debt, right, you are 0:14:42.280 --> 0:14:44.120 going to need to know exactly what you've spent so 0:14:44.160 --> 0:14:45.560 that you can replenish it. 0:14:46.000 --> 0:14:48.760 You can't bounce back from something you can't see. You 0:14:48.800 --> 0:14:51.200 can't hit a target that you can't see. 0:14:51.360 --> 0:14:54.840 Yes, yeah, I like that. That's step number four. Step 0:14:54.920 --> 0:14:59.880 number five bring it home strong, okay. 0:15:00.040 --> 0:15:03.760 That is to build your buffer. Use this as an 0:15:03.800 --> 0:15:10.160 opportunity to be smarter with money. For example, take a hangover. Yeah, 0:15:10.200 --> 0:15:11.960 I don't know whether you've ever been hungover or not, 0:15:12.000 --> 0:15:14.440 but you know you think, Okay, where did I go wrong? Well? 0:15:14.480 --> 0:15:16.720 I was drinking in the sun, or okay I didn't 0:15:16.800 --> 0:15:18.400 you know, I drank too much too quickly, or I 0:15:18.400 --> 0:15:20.960 didn't have enough water in between. Like, think about where 0:15:21.000 --> 0:15:23.040 you went wrong so that if you do have another drink, 0:15:23.120 --> 0:15:26.960 you know how to actually drink responsibly. Exactly the same 0:15:27.000 --> 0:15:28.640 with money. Where did I go wrong? 0:15:28.680 --> 0:15:28.880 Well? 0:15:28.920 --> 0:15:31.760 I underestimated how much money I actually needed for Christmas, 0:15:32.000 --> 0:15:35.240 or I got carried away with all the amazing sales 0:15:35.240 --> 0:15:37.800 are on, or I didn't write a proper Christmas list 0:15:37.800 --> 0:15:39.280 of people I need to buy for, or I didn't 0:15:39.280 --> 0:15:43.320 account for the cost of traveling, you know, or hosting people, 0:15:43.600 --> 0:15:47.280 or the cost of alcohol in my you know, Christmas expenses. 0:15:47.280 --> 0:15:50.480 So look to the lesson and then look at that 0:15:50.560 --> 0:15:52.280 lesson and what that cost is, and make sure that 0:15:52.320 --> 0:15:53.920 you have a buffer going forward. And this is where 0:15:53.960 --> 0:15:55.920 you can look to set up like a regular savings 0:15:55.920 --> 0:15:58.680 plan the moment you've cleared that dead and replenished those savings, 0:15:59.200 --> 0:16:01.760 so that you don't repeat history, you don't make the 0:16:01.760 --> 0:16:02.600 same mistake again. 0:16:02.800 --> 0:16:06.680 Okay, so you're actually, even though it's January, you're already 0:16:06.760 --> 0:16:07.840 planning ahead for. 0:16:08.040 --> 0:16:10.640 December, knowing that there is a chance you could make 0:16:10.640 --> 0:16:11.960 the same mistake, but it's not going to come at 0:16:12.000 --> 0:16:14.160 a financial cost this time because you're ahead of it. 0:16:14.200 --> 0:16:16.640 And it's not about where you got wrong. It's about 0:16:16.640 --> 0:16:18.160 doing things wiser and smarter. 0:16:19.120 --> 0:16:22.880 It's a great motivator, isn't it. Yeah, except for the 0:16:22.920 --> 0:16:25.360 fact that for a lot of people it just happens 0:16:25.400 --> 0:16:28.400 each year anyway. But that's why if you do it 0:16:28.480 --> 0:16:32.080 now while those feelings are still fresh, and put those 0:16:32.320 --> 0:16:34.400 systems in place so that by the time you get 0:16:34.440 --> 0:16:36.920 round to December, it's you're fine and automated. 0:16:37.240 --> 0:16:39.840 Do you know twenty dollars a week, I mean there's 0:16:39.840 --> 0:16:40.960 an extra thousand dollars. 0:16:41.080 --> 0:16:42.640 Yea makes a massive difference. 0:16:43.240 --> 0:16:47.400 One final question, and this is the thing that always 0:16:47.440 --> 0:16:50.760 gets me, is the fact that right after Christmas you've 0:16:50.760 --> 0:16:54.280 got back to school and with that comes kind of uniforms, 0:16:54.360 --> 0:16:58.120 the various kind of tech requirements, all of those extracurricular 0:16:58.160 --> 0:17:03.200 activities starting up again are all expensive. Right if you 0:17:03.280 --> 0:17:07.120 are dealing with trying to bounce back from the Christmas hangover, 0:17:07.440 --> 0:17:09.960 how on earth then do you deal with this next 0:17:10.160 --> 0:17:15.439 big financial hit, which is potentially the return to school 0:17:15.480 --> 0:17:17.280 or the return to work or anything like that, where 0:17:17.280 --> 0:17:19.119 you're suddenly going to have to start spending money again. 0:17:19.480 --> 0:17:22.000 Well, this is exactly where I am because my son 0:17:22.640 --> 0:17:25.800 is going into year seven, he's changing schools and oh 0:17:25.840 --> 0:17:29.280 my goodness, the list of items that he needs. It 0:17:29.359 --> 0:17:33.320 is frightening and it's come a bit of a shock 0:17:33.440 --> 0:17:35.840 to me, I will admit. So what I've done is 0:17:35.920 --> 0:17:39.280 made a full list of absolutely everything that he needs 0:17:39.960 --> 0:17:43.280 and I've got a list of what he needs immediately 0:17:43.359 --> 0:17:45.920 to start the year off, but there's also a list 0:17:46.000 --> 0:17:48.480 of what can wait until, like the weather changes or 0:17:49.000 --> 0:17:51.639 the particular sport uniform that he needs, he won't be 0:17:51.640 --> 0:17:54.439 starting that until the cooler months. So I've got the 0:17:54.480 --> 0:17:57.560 two different lists, and then also going through and checking 0:17:57.640 --> 0:18:01.600 everything that we've already got at home. You know, for example, 0:18:01.680 --> 0:18:03.720 some of the last year's supplies that he's used at 0:18:03.760 --> 0:18:07.359 school he can reuse. And you know, most schools do 0:18:07.440 --> 0:18:11.080 have a secondhand uniform shop where and you can also 0:18:11.160 --> 0:18:14.080 swap with other parents, you know, if you've got I 0:18:14.160 --> 0:18:16.359 know some friends of mine who've got younger kids, I 0:18:16.400 --> 0:18:19.160 can actually give some of Roco's uniforms to them. And 0:18:19.240 --> 0:18:22.320 there are people above Rocko who wrote need their uniforms. 0:18:22.400 --> 0:18:23.680 We can do a bit of a swap and pass 0:18:23.720 --> 0:18:28.239 things around. And you know, the mistake I've made is 0:18:28.359 --> 0:18:31.800 when my kids have started school, I bought them brand new, 0:18:31.920 --> 0:18:33.399 just one of brand new, thinking a lot of at 0:18:33.440 --> 0:18:35.399 least they had their one brand new T shirt and 0:18:35.440 --> 0:18:38.399 the rest will be secondhands. They ruin them within a 0:18:38.400 --> 0:18:40.880 couple of minutes. They get stains, you know, they get 0:18:41.280 --> 0:18:44.760 jump in the mud, there's paint like it. I'm no 0:18:44.800 --> 0:18:48.680 longer buying brand new anything like the blazer that's something 0:18:48.720 --> 0:18:50.879 he'll wear for you know, a couple of years different. 0:18:50.880 --> 0:18:52.840 But everything else is going to be secondhand. 0:18:53.000 --> 0:18:53.760 That is it. 0:18:54.240 --> 0:18:56.160 And it is a fraction of the price, like I'm 0:18:56.160 --> 0:19:00.280 talking ninety percent cheaper. And you know, try and you know, 0:19:00.400 --> 0:19:02.640 spread those purchases out as much as you think, oh God, 0:19:02.680 --> 0:19:06.199 I've gotta buy everything on this list, you don't have to, 0:19:06.359 --> 0:19:08.680 you know, spread out as much as you possibly can 0:19:08.760 --> 0:19:12.480 and stick to a limited shop around. You know, don't 0:19:12.640 --> 0:19:14.800 buy it all from one store. You know, Office Works 0:19:14.880 --> 0:19:18.600 is brilliant. They'll often beat the competitor's price, you know, 0:19:18.760 --> 0:19:22.240 using apps like Ziffed or using Amazon's great as well, 0:19:22.280 --> 0:19:24.359