Speaker 1: Welcome to How Do They Afford That? The podcast that
Speaker 1: peaks into the financial lives of everyday Australians. I'm Uncle Thompson.
Speaker 1: I'm an author and the co host of the business
Speaker 1: news podcast Fear and Greed and as always um with
Speaker 1: Canna Campbell, financial planner and founder of sugar Mumer TV,
Speaker 1: the financial literacy platform covering YouTube, podcast books, Instagram, threads,
Speaker 1: TikTok and a renowned paper rustler. Hello, Canna Boston. Sorry, indeed, indeed,
Speaker 1: look today's episodes about a I would like to say,
Speaker 1: it's a fairly simple idea. What happens if you change
Speaker 1: your finances by just one hundred dollars a week? And
Speaker 1: that might be saving, it might be investing, it might
Speaker 1: be cutting, it might be redirecting it. And it's based
Speaker 1: on this idea of that doesn't sound like a huge amount,
Speaker 1: but does it add up quickly and does it have
Speaker 1: a greater impact in certain areas than others? One hundred
Speaker 1: dollars a week? Is that realistic? I know it's a
Speaker 1: cost of living crisis. There is a lot of pressure,
Speaker 1: but we're not saying find a thousand dollars a week.
Speaker 1: It's one hundred.
Speaker 2: Look it's very subjective, and I think most people are
Speaker 2: already you know, would say that is very hard right now.
Speaker 2: But the truth is, it's actually not about one hundred dollars.
Speaker 2: It's about the consistency. It's about the intention, like having
Speaker 2: a go and trying to find you one hundred dollars
Speaker 2: whatever you can do, and getting started and building that momentum.
Speaker 2: So I don't think it really matters right now the amount,
Speaker 2: whether it's ten dollars a week, fifty dollars a week,
Speaker 2: or one hundred dolls a week, is about like having
Speaker 2: stepping up and having a crack at trying to find
Speaker 2: some extra money that you can then use intentionally and
Speaker 2: redirect to improve your financial wellbeing.
Speaker 1: Okay, if we were just in theory to use the
Speaker 1: one hundred dollars as our fine, as a just an experiment, Okay,
Speaker 1: for this episode cutting one hundred dollars, we're going to
Speaker 1: go through the options we're kind of mentioned, saving, investing, cutting, redirecting,
Speaker 1: earning and extra hundred dollars a week, all those things.
Speaker 1: Cutting one hundred dollars, how would you do it?
Speaker 2: Well, Like so many things in life, it starts with awareness,
Speaker 2: you know, going through your budget, but also going through
Speaker 2: your transactions, you know, making sure your budget actually matches
Speaker 2: how you really are spending, because the budget is an intention,
Speaker 2: the transactions is the truth and reality of where your
Speaker 2: money actually goes.
Speaker 1: Oh, that would be great on a T shirt. Don't
Speaker 1: need to be a very large trademark that a very
Speaker 1: large T shirt to fit all of that in because
Speaker 1: it's probably a bit longer.
Speaker 2: And look, when you look at the transactions, and you
Speaker 2: can sort of be a lot more accountable and honest.
Speaker 2: And you know, well, look, I say I only spend
Speaker 2: two hundred dollars on my paper budget over here, but
Speaker 2: look I'm actually spending three hundred dollars you know on grossriies.
Speaker 2: That's what you need to catch and that's where you
Speaker 2: need to get back in control and identify the wastage
Speaker 2: and the leakage. So and you've got a look at everything.
Speaker 2: You can't sort of pick and choose as to what
Speaker 2: expenses you know, the convenient to your brain to look at.
Speaker 2: You can look at the food, do a look at
Speaker 2: the subscriptions, and keeping in mind that you know subscriptions
Speaker 2: where they're coming out of may not necessarily be a
Speaker 2: different account or for a credit card or you know,
Speaker 2: you've gould to be keep an eye as to where
Speaker 2: all these things are being paid and checking all those things,
Speaker 2: looking at you know, your groceries, but you're also maybe
Speaker 2: eating out a lot. See might I think, oh, it's
Speaker 2: Fine'm actually sticking to my gross's budget, But really you're
Speaker 2: just spending less on the groceries because you're eating out
Speaker 2: more or getting say, you know, the home delivery or takeaway,
Speaker 2: and the impulse spending and of course all those utilities
Speaker 2: that we all have to pay for a part of
Speaker 2: adult life. And it's not about, you know, necessarily one
Speaker 2: big cut to find, for example, the one hundred dollars.
Speaker 2: Do understand that it might actually be a combination of
Speaker 2: different areas. It might even be ten different areas that
Speaker 2: each save you ten dollars a month. They help find
Speaker 2: you that one hundred dollars. You know, it's this is
Speaker 2: what we need to do if we really want to
Speaker 2: try and make a shift and improvement in our financial
Speaker 2: will being to find that extra extra money that we
Speaker 2: can actually do something with.
Speaker 1: Okay, instead of cutting, what about earning one hundred dollars
Speaker 1: a week? This is you either side hustle clean, right.
Speaker 2: Oh, we have so many episodes on this, but there
Speaker 2: are you know, and I really am big on trying
Speaker 2: to earn lots of money. Obviously keeping in mind, you know,
Speaker 2: you might have young children, you may have responsibilities. You
Speaker 2: may be also working really long hours and you're you know,
Speaker 2: completely brained at the end of the day. There are
Speaker 2: people in certain situations that can't actually do that. But yes,
Speaker 2: when you find ways to earn extra money, it's unlimited.
Speaker 2: You know, the sky's the limit. And you know we've
Speaker 2: spoken about, you know, doing market research, doing surveys online,
Speaker 2: you know, decluttering your home, getting rid of you know, unused,
Speaker 2: unwanted clothes, sporting equipment, furniture, you know, to help come
Speaker 2: up with some extra money, you know, becoming a delivery partner,
Speaker 2: an uber driver where you can clock on and clock off,
Speaker 2: you decide the hours that you want to work, you know,
Speaker 2: looking at your skills that you already have and how
Speaker 2: can you monetize them. For example, you might be fantastic
Speaker 2: with a camera, and perhaps you can start photographing events
Speaker 2: on the weekends, like, you know, looking at all the
Speaker 2: different things that you can do and obviously the resources
Speaker 2: and the time and the energy and obviously making it
Speaker 2: actually worthwhile. Your time is really important. But you know,
Speaker 2: income has no ceiling here, so that quite possibly, you know,
Speaker 2: this idea of one hundred dollars per week may not
Speaker 2: necessarily be about cutting the fat, because the fat may
Speaker 2: have already been cut most likely, but in fact, you know,
Speaker 2: earning some extra money instead, and earning even more than
Speaker 2: one hundred dollars per week.
Speaker 1: I like that. I like the idea that that once
Speaker 1: you have started, there is no limit on what you
Speaker 1: can do. Right. That's it's like.
Speaker 2: A very abundant statement from you.
Speaker 1: You really have had an effect on some time. The
Speaker 1: idea of redirecting one hundred dollars a week, and this
Speaker 1: probably goes slightly hand in hand with the cutting of
Speaker 1: one hundred dollars, but I suppose it's more about taking
Speaker 1: money that you're already spending and deciding whether or not
Speaker 1: it could be better spent elsewhere.
Speaker 2: It's about reassigning that money or redirecting it to a
Speaker 2: better purpose that's going to improve your well being and
Speaker 2: your well being today, but also more so very much
Speaker 2: into the long run, where you look back and go, gosh,
Speaker 2: I'm glad I did that for myself. Back then.
Speaker 1: Yeah, okay, and we actually we need to talk now
Speaker 1: about what to do with the money because this is
Speaker 1: then when we get into the investing one hundred dollars
Speaker 1: a week. So the big question here is where is
Speaker 1: one hundred dollars a week going to have the most impact?
Speaker 2: Well, that's answer to that question really lies in your
Speaker 2: financial situation. You know, if you're someone who's got credit
Speaker 2: card debt or buy now, pay later debt chasing them,
Speaker 2: you know that extra hundred dollars per week or per
Speaker 2: month can go or should go under the premise obviously
Speaker 2: of general guidance is directly to that debt, and that
Speaker 2: is going to You're going to clear the decks and
Speaker 2: then allow yourself to then move on to the next
Speaker 2: financial responsibilities and alreadies that aren't going to improve a
Speaker 2: French wellbeing even further, I've.
Speaker 1: Done it again, haven't I. I've just I have assumed
Speaker 1: that we were going to take this hundred dollars a
Speaker 1: week and just put it towards investing. But if I'm
Speaker 1: going to.
Speaker 2: I'm going to be kind to you. I just think
Speaker 2: I can see the motivation of watching that one hundred
Speaker 2: dollars grow. But you know, we need to say the obvious.
Speaker 2: You shouldn't be investing yet if you're still carrying toxic debt,
Speaker 2: because that toxic debt is a lot more expensive than
Speaker 2: the money you're going to earn from investing.
Speaker 1: Yeah, okay, what we're going to do now is we're
Speaker 1: going to take a very quick break and then we
Speaker 1: are going to talk investing, because apparently I went off
Speaker 1: way early just then and forgot to talk about kind
Speaker 1: of paying off debt and getting yourself out of trouble.
Speaker 1: We've established that that is a very important priority. Quick break,
Speaker 1: and we'll come back with investing your one hundred dollars
Speaker 1: a week. Cano this is our one hundred dollars a week.
Speaker 1: Barent we've talked about cutting one hundred dollars, earning one
Speaker 1: hundred dollars, redirecting one hundred dollars a week that you're
Speaker 1: already spending on something else, and putting it into something
Speaker 1: that's going to have a bigger impact for the future.
Speaker 1: We of course were united in talking about the importance
Speaker 1: of putting it towards debt first. That was not a
Speaker 1: suggestion just by one of us that the other had
Speaker 1: forgotten about. Let's now get to investing right, and I'm
Speaker 1: not just talking about kind of putting it into shares
Speaker 1: or anything, but maybe even superannuation.
Speaker 2: Superannuation is definitely for a lot of Australian's going to
Speaker 2: be a really viable strategy. You know, obviously it's concessionally taxed,
Speaker 2: which is huge because it obviously then helps remove the
Speaker 2: eroding effects of tax. And obviously you've got to think
Speaker 2: about how you're going to do that. Is it one
Speaker 2: hundred dollars per week going to go through salary sacrificing
Speaker 2: because sometimes that actually can be a really easy way
Speaker 2: of doing it because it takes away that self control
Speaker 2: or discipline because it's done obviously by HR your payroll team,
Speaker 2: and you're obviously letting more money go into superannuation that's
Speaker 2: already got you know, some money I would hope in super.
Speaker 2: So it's obviously going to have a bigger impact on
Speaker 2: the long term compounding effect. So yes, super is important.
Speaker 2: It's I don't imagine too much regret would come with
Speaker 2: it as long as you're taken into consideration the accessibility issue.
Speaker 2: You know, if you were twenty and you said I'm
Speaker 2: going to put one hundred dollars per week, I'd say
Speaker 2: we'll hang on. Just think that through and as to
Speaker 2: whether that's right for you, and for some people that
Speaker 2: is the perfect strategy, and it's about understanding your values
Speaker 2: and your goals of course here, but you know, you
Speaker 2: do need to keep that in mind. And sometimes if
Speaker 2: we're talking about one hundred dollars here, perhaps there's a balance.
Speaker 2: You know, it's one hundred dollars investing one hundred dollars.
Speaker 1: Into super okay in terms then of investing other forms
Speaker 1: of investing. Is that enough to get you started building
Speaker 1: a portfolio? Oh my god, you just the the energy
Speaker 1: just radiating off you. Just then it's as though you
Speaker 1: grew to twice your size in a heartbeat.
Speaker 2: Yes, to answer your question. So all right, this is
Speaker 2: where microinvesting does come because it's a great place to
Speaker 2: get started because you can start investing with small amounts
Speaker 2: of money like ten dollars. However, as I like to say,
Speaker 2: with micro investing, it's a great starting point, but it's
Speaker 2: not the finish line I would prefer for someone. And
Speaker 2: I'm going to get a little bit. I don't mean
Speaker 2: to be arrogant, but I'm coming from a place of
Speaker 2: love and care for someone to actually stretch themselves in
Speaker 2: a healthy, joyful way where they actually see a meaningful
Speaker 2: improvement and uplift in their financial wellbeing, but ideally investing
Speaker 2: in parcels of shares rather than going through micro investing,
Speaker 2: and you know, investing for example, in passes of say
Speaker 2: five hundred dollars or one thousand dollars. And I will admit, yes,
Speaker 2: of course there is I'm slowing people's momentum down because
Speaker 2: they're not investing one hundred dollars per week. They've got
Speaker 2: to wait until five weeks have passed and they've got
Speaker 2: their full five hundred dollars or ten weeks of pass
Speaker 2: and I've got their four thousand dollars ready to invest.
Speaker 2: But absolutely you can use that money to start investing.
Speaker 2: And I think, you know, it's such an important thing
Speaker 2: here as to what we're talking about here. It's about
Speaker 2: getting started because you can then level up from here.
Speaker 2: But you know, I ran some really very basic numbers here,
Speaker 2: and if we assumed a net return of seven percent
Speaker 2: per annum, and you were to start with a baseline
Speaker 2: of zero, so nothing is just starting with your one
Speaker 2: hundred dollars per week, that's it, and never increased it.
Speaker 2: You know, over the course of ten years, assuming set
Speaker 2: and forget and reinvest everything, you're going to have between
Speaker 2: seventy to eighty thousand dollars and ten years time, which
Speaker 2: is a lot of money. That is a lot of money,
Speaker 2: you know, from just trimming the fat from your budget
Speaker 2: or picking up a side hustle. And then of course
Speaker 2: we stretch that out further because compounding interests can work
Speaker 2: even harder with time. You're looking at two hundred and fifty.
Speaker 1: Thousand dollars over what period?
Speaker 2: They are? Twenty years?
Speaker 1: Oh really, yeah, this is what about that jumps up
Speaker 1: quickly for twenty years.
Speaker 2: I'm banging on about the importance of getting started because
Speaker 2: the earlier start you're giving yourself more time to allow
Speaker 2: this to work for you. And then stretch it to
Speaker 2: thirty years, five hundred thousand dollars.
Speaker 1: That's amazing. You should be a financial planner. That's great advice.
Speaker 1: That's amazing. That's that's one of those figures. For ten years.
Speaker 1: That sounded pretty good. I'm like, oh, yeah, seventy to
Speaker 1: eighty thousand, that's good. But then the twenty year figure,
Speaker 1: and this is.
Speaker 2: Why everyone needs to realize it's time that is doing
Speaker 2: all the heavy lifting for you and your money, not
Speaker 2: the amount. We're still stuck at one hundred dollars.
Speaker 1: Can I ask, and I want to come back to
Speaker 1: a couple of other things to do with one hundred
Speaker 1: dollars a week. One of those is kind of saving
Speaker 1: for a home or paying off the mortgage. But something
Speaker 1: that you said there just just reminded me of something.
Speaker 1: How much of this is about the hundred dollars, but
Speaker 1: how much of it is really about those good money
Speaker 1: habits making them a part of your your life now
Speaker 1: while you have time to allow them to work their magic.
Speaker 2: I'd say eighty twenty so Perrito, eighty percent is the
Speaker 2: habit is the amount. So and once you have that
Speaker 2: habit in place, leveling up on the amount is really
Speaker 2: very simple.
Speaker 1: Okay.
Speaker 2: If you have that awareness, you have that habit, you're
Speaker 2: paying attention, you're reviewing your checking and even if you're
Speaker 2: only increasing it from say one hundred dollars a week
Speaker 2: to one hundred and one dollars a week, do that
Speaker 2: over the course of the year. You know, before you
Speaker 2: know it, you've had a fifty percent uplift in what
Speaker 2: you're actually contributing. You're going from one hundred dollars per
Speaker 2: week to one hundred and fifty two dollars per week.
Speaker 2: If you like these numbers that I've just repeated, and
Speaker 2: so not repeated, I've just read out, well, skyrockard even further.
Speaker 2: And it's all because you created as a priority and
Speaker 2: made them non negotiable in your life, and you got
Speaker 2: started and stuck to it and didn't deviate from it.
Speaker 1: Okay, back to the investing and the things that you
Speaker 1: can do with one hundred dollars a week. We talked
Speaker 1: about super we talked about starting a portfolio, and you
Speaker 1: do not need to have a thought to do that.
Speaker 1: Just even a parcel of five hundred dollars that can
Speaker 1: get you going right, five hundred, one thousand dollars.
Speaker 2: Well, one thousand dollars project portfolio is started with one
Speaker 2: thousand dollars, and that's worth over three hundred and sixty
Speaker 2: five thousand dollars today.
Speaker 1: That is great emergency money. I feel like I need
Speaker 1: to redeem myself forgetting about the paying off debt earlier.
Speaker 1: But what about putting this hundred dollars a week into
Speaker 1: your emergency money to build up that safety net, that buffer.
Speaker 2: So that you sleep well at night. And I love
Speaker 2: the idea of emergency money. It's not just the money,
Speaker 2: it also is what it makes you feel. Ironically, this morning,
Speaker 2: I was looking at I was doing some internet banking,
Speaker 2: and I looked at our emergency money, and our emergency
Speaker 2: money sits in our offset account, and so it obviously
Speaker 2: helps save us time and interest in the meantime, but
Speaker 2: just that comfort and going I'm actually really proud to
Speaker 2: see that we have emergency money again, as pretty icularly
Speaker 2: as I was got completely wiped out a few years ago,
Speaker 2: but to see that we're actually back on track again.
Speaker 2: But it's that emotion, a sense of you know, stability,
Speaker 2: security and comfort seeing it there. It actually goes beyond
Speaker 2: the actual dollar amount of what's in that account.
Speaker 1: Saving for a home or paying off the mortgage.
Speaker 2: Is that, yeah, they're two great things to use, and
Speaker 2: you know, people like the sooner you can start even
Speaker 2: if you don't necessarily think you know, you're not necessarily
Speaker 2: one hund percent sure you want to go and buy
Speaker 2: a property, to have you just having that there as
Speaker 2: an option, so that should you choose to one day,
Speaker 2: you've actually got some a bit of a deposit already started.
Speaker 2: You know, the one big thing in financial planning is
Speaker 2: is not about necessarily the perfect, most efficient, and you know,
Speaker 2: powerful and effective strategy for clients, but it's more about
Speaker 2: one that gives them the most amount of choice and flexibility.
Speaker 2: So having that even if as I said, if you're
Speaker 2: not one hundred percent sure that you want to use
Speaker 2: that money for that goal necessarily or frieveing that goal's
Speaker 2: right for you, having it there as a backup, as
Speaker 2: an option to tap into further down the track when
Speaker 2: you have greater clarity is really powerful. And if you
Speaker 2: have a mortgage and you are able to find one
Speaker 2: hundred dollars per week, please like put it on the mortgage.
Speaker 2: Now you do need to think about the nuts and
Speaker 2: bolts behind your long term game plans, because for some
Speaker 2: people who are planning on moving out of their principal
Speaker 2: place of residence and turning it into an investment property,
Speaker 2: the advice is a little bit different. But making sure
Speaker 2: that you speak to a mortgage where I can get
Speaker 2: in a financial partner obviously get some advice around there,
Speaker 2: but you can save huge amounts of time and interest
Speaker 2: by increasing your contributions by that one hundred dollars. And
Speaker 2: you know what, I would recommend anyone who's got a
Speaker 2: mortgage right now and thinks, you know what, I'm going
Speaker 2: to go have a crack at finding maybe not necessarily
Speaker 2: one hundred dollars per week, because I think that's quite hard,
Speaker 2: but maybe one hundred dollars per month. Plug your mortgage
Speaker 2: details into any extra payment calculator and there are thousands
Speaker 2: of them online, including on the Sugar Mamba website, which
Speaker 2: is free. You will be gobsmacked as to how much
Speaker 2: time and interest you will save over the course of
Speaker 2: say a twenty five year loan or a thirty year loan.
Speaker 2: It gives you the biggest kickup the art motivation to
Speaker 2: actually go and find that one hundred dollars per week
Speaker 2: or per month.
Speaker 1: That probably leads me neatly into my last question, which
Speaker 1: is kind of how you do this long term without
Speaker 1: it feeling like a grind, like trying to find one
Speaker 1: hundred dollars a week or set up these habits that
Speaker 1: are going to last for a long time so that
Speaker 1: you can take advantage of the power of compound interest,
Speaker 1: that you can take advantage of the benefits of paying
Speaker 1: off your home loan kind of five years early and
Speaker 1: saving thousands of dollars in interest. How you do it
Speaker 1: without it feeling like it is just never ending? Is
Speaker 1: it about finding those goals and attaching that to it.
Speaker 2: Well, before I answer this question, I do want to
Speaker 2: also recommend that people automate this as well, because if
Speaker 2: you have to rely on your list of things to
Speaker 2: do for the day or a calendar note or alert
Speaker 2: on your phone, is you know, we get busy, we
Speaker 2: just get distracted. Temptation comes away, it won't actually happen,
Speaker 2: or it will happen, and you'll start, you know, forget
Speaker 2: about it, and you'll never see the fruits of your
Speaker 2: potent for the opportunity behind this. So automate as much
Speaker 2: as you can. A resalary, sacrificing and after tax contribution
Speaker 2: automation at a regular savings plan, a regular investment plan,
Speaker 2: an extra mortgage repayment plan. Automate absolutely everything. But then
Speaker 2: once you've done it, track your progress, you know, get
Speaker 2: to know your your numbers. You know, have a relationship
Speaker 2: with your financial journey where you can for example, and Michael,
Speaker 2: he's got his eyes raising me in the most peculiar way,
Speaker 2: Like I'm going to like start some sort of imaginary friend.
Speaker 1: As soon as you said to have a relationship with
Speaker 1: your numbers, I'm.
Speaker 2: Talking obviously like I'm being facetious. Here a connection where
Speaker 2: you go, you know what that impact of that extra
Speaker 2: one hundred dollars per week on our mortgage is actually
Speaker 2: meant we've saved fifty dollars per month in interest. And
Speaker 2: you know, looking regularly reconnecting with those calculators so you
Speaker 2: can actually see where is this hard work paying off
Speaker 2: and is it worth it? And of course you know
Speaker 2: the whole point of trimming the budget is to add
Speaker 2: value to your life, not to deprive yourself. But if
Speaker 2: you can actually see, all right, if we can stick
Speaker 2: to this, we don't necessarily have to increase it. But
Speaker 2: we can just stick to this, it's going to mean
Speaker 2: that we can retire one year earlier, which is huge.
Speaker 2: Or it means we can retire with an extra five
Speaker 2: thousand dollars per year, which will give us even greater
Speaker 2: financial stability and comfort. Or it means we're going to
Speaker 2: be in our home, first home or second home sooner fast,
Speaker 2: or we're going to be pay off the home loan
Speaker 2: eighteen months earlier. These are important things when you can
Speaker 2: see the potential payoff from this, it makes it so
Speaker 2: much easier to stick to and it actually doesn't become
Speaker 2: a bore or a frustration. It actually becomes a challenge
Speaker 2: and you almost gamified within yourself.
Speaker 1: I like the sound of that. That actually makes it
Speaker 1: sound very, very positive and achievable as well, hope. So
Speaker 1: all right, if we want more information, where do we
Speaker 1: find you?
Speaker 2: The best place that could reach out to me? Who
Speaker 2: is you know sugar Mom a TV on Instagram?
Speaker 1: Okay, and you can hear me every day with Sean
Speaker 1: Aylmore on Fear and Greed business news you can use.
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