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Speaker 1: She's on the Money.

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Speaker 2: She's on the Money.

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Speaker 1: Hello and welcome to She's on the Money, the podcast

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Speaker 1: for millennials who want financial freedom. I'm one of your

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Speaker 1: co hosts, Annabel Lee. I'm a law student, a millennial,

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Speaker 1: and someone who is on a desperate quest to get

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Speaker 1: better at all things money. To do that, each week,

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Speaker 1: I enlist the help of my friend and money expert

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Speaker 1: Victoria Divine. Welcome Victoria, Thank you as always, Victoria. Let's

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Speaker 1: share some of our favorite money wins from the week.

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Speaker 1: I'll go first with Jess. She said huge money win

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Speaker 1: with a little party emoji. I officially paid off my

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Speaker 1: personal loan today. My husband and I are about to

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Speaker 1: refinance our home loan to start building on our block

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Speaker 1: of land, so we've been budgeting hard to pay off

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Speaker 1: our existing debts. Two months ago, we paid off our

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Speaker 1: credit card debt, and today we've paid off my personal loan.

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Speaker 1: Managed to avoid any fees for paying it off early, too,

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Speaker 1: so I'm feeling pretty good. Now we can use the

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Speaker 1: money we've been using to clear these debts to save

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Speaker 1: the furniture for a new home.

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Speaker 3: How great is that.

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Speaker 1: I love a good furniture shop as well.

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Speaker 3: Oh same, but I do it often. I actually love

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Speaker 3: the part where she paid off her debt all that too, Yeah,

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Speaker 3: furniture good, paying off debt better. So I've got one

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Speaker 3: as well. Actually, this one's from Eleanor. She said, money win.

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Speaker 3: I recently learned that even if you only use your

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Speaker 3: my key Monday to Friday, a twenty eight day pass

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Speaker 3: brings down your daily spend from eight dollars eighty to

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Speaker 3: five dollars thirty a day. I used my tax return

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Speaker 3: to buy a twenty eight day my Key pass for

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Speaker 3: one hundred and forty eight dollars forty, which saves me

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Speaker 3: a total of twenty eight dollars eighty a month. I'm

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Speaker 3: now transferring seventy two dollars forty every fortnight when I

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Speaker 3: get paid into a savings account, so I can continue

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Speaker 3: to buy a twenty eight day pass every month. Twenty

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Speaker 3: eight dollars eighty savings for twelve months equals a total

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Speaker 3: of three hundred and forty five dollars sixty. Now that's

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Speaker 3: a nice little saving.

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Speaker 1: That's a big save.

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Speaker 3: That's a great saving.

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Speaker 1: Money is a bloody expensive.

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Speaker 3: They are really expensive. But I also think this is

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Speaker 3: really applicable to everybody. Whilst Mikey is Melbourne specific. I

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Speaker 3: think that's really applicable to everybody who catches public transport

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Speaker 3: in Australia because I'm sure that every other you know,

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Speaker 3: transportation option has an option to buy a pass and

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Speaker 3: I think that you know everyone should maybe have a

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Speaker 3: look at it.

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Speaker 1: And if you're a Uni student or like a full

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Speaker 1: time worker, this is like a really helpful tip. Yes.

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Speaker 3: And also to add to that, the comments in this

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Speaker 3: said that if you catch public transport and you touch

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Speaker 3: on and touch off before seven am, the trip is free.

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Speaker 1: What hells sad for these people that have to catch

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Speaker 1: public transport before seven am?

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Speaker 3: How good is that. I've got a girl in the

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Speaker 3: office and she comes in quite early because she's an

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Speaker 3: early bird, but she gets free Mikey in the morning

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Speaker 3: and then only pays for it at night. Wow.

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Speaker 1: Yeah, brilliant Victoria. Today on the show, we're going deep

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Speaker 1: on the thing that may strike the most dreading you,

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Speaker 1: personal loans.

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Speaker 3: Well it does.

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Speaker 1: But before we do that, it's time for us to

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Speaker 1: share money win or a money confession for the week.

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Speaker 2: What you got?

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Speaker 3: Here's me first again? All right, I have a money win,

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Speaker 3: which is good because I think I've had a series

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Speaker 3: of confessions. So my money win is that three days

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Speaker 3: this week I have brought my own lunch to work

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Speaker 3: and it's been delicious. And it's been the same thing.

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Speaker 3: But that's okay, what.

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Speaker 1: Has it been. I've actually I saw you in the

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Speaker 1: Facebook group post your like tupperware meals.

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Speaker 3: Oh yes, those were my breakfast.

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Speaker 1: I looked delicious.

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Speaker 3: Yeah, that's like a birch and musley with yogurt that

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Speaker 3: I really yeah. Look Sunday I've decided is my day

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Speaker 3: to start planning my meals, and so in the mornings

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Speaker 3: I've been making birch and musley with yoga and frozen berries,

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Speaker 3: which I really like. But this week I've been doing

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Speaker 3: like a little I guess you could say party platter

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Speaker 3: of like carrots and celery and some cucumber and some

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Speaker 3: dip and some cheese. I really liked having that at

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Speaker 3: work because it's really easy to prepare all at one

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Speaker 3: time and then just you know, grab a handful of

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Speaker 3: carrots and grab some biscuits and pop it on a

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Speaker 3: plate at work, so I don't actually have to make

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Speaker 3: lunch every day or every night after work.

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Speaker 1: I feel like it's good money saver, but it's also

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Speaker 1: a good way to keep healthy. You said celery, you

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Speaker 1: said carrots, that's all I need to be pay Yeah.

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Speaker 3: Look there's some cheese in there, some dip, and some biscuits,

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Speaker 3: so it's not all super healthy, but I think that

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Speaker 3: it's really good because it's saved a heap of time.

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Speaker 3: But it's also been really delicious. What have you done

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Speaker 3: this week?

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Speaker 1: I've got a money win. Yeah, also food related and

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Speaker 1: also brunch related. I promise this for the last time.

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Speaker 1: I'm gonna mention brunch.

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Speaker 3: No, I think I've done it too many times, brunch.

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Speaker 1: Every time I downloaded the app eat Club after so

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Speaker 1: many of my friends were saying, you need to download

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Speaker 1: because we always got for a brunch. And if you

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Speaker 1: go on the app, it tells you all of the

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Speaker 1: cafes in your area that will give you I think

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Speaker 1: thirty percent off.

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Speaker 3: You sent this to me.

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Speaker 1: It's awesome.

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Speaker 3: I think it's fifty percent off.

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Speaker 1: Sometimes it like it varies, but it's a really good deal.

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Speaker 3: Yeah, so what what's the deal? It's like you book

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Speaker 3: a table for ten dollars and then you get fifty

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Speaker 3: percent off your bill.

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Speaker 1: Yeah, so you've got to go and book within like

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Speaker 1: a within two hours, I think, or something like that. Yeah,

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Speaker 1: it's gonna be pretty last minute, but if you're planning

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Speaker 1: to go a brunch on a Sunday, you may as

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Speaker 1: well for the last minute and you know, headbare and okay, yeah,

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Speaker 1: very cool, Okay, Victoria. First things first, how do you

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Speaker 1: define a personal loan? We've already touched on other loans

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Speaker 1: in this podcast, like help debt, but how do personal

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Speaker 1: loans differ?

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Speaker 3: Can we just preface this by reminding everybody how I

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Speaker 3: said that I believe in the three different types of debts.

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Speaker 3: So there's good debt, there's okay debt, and there's bad debt. Yes,

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Speaker 3: and we said that help debt and mortgages were okay debt,

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Speaker 3: and good debt was investment debt and you know, things

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Speaker 3: that help build your wealth. But then we've got personal

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Speaker 3: loans and the big red flag is bad debt and

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Speaker 3: that's yeah, that's personal debt. So that's where we're at today. Essentially,

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Speaker 3: a personal loan allows you to borrow money, usually for

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Speaker 3: a particular purpose or need, and they are able to

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Speaker 3: be used to consolidate debt. So you could take a

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Speaker 3: number of different loans or credit cards and put it

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Speaker 3: into one, so your charged interest on the amount of

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Speaker 3: the loan, and then you repay the loan amount plus

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Speaker 3: the interest over the term of the loans. That could

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Speaker 3: be for a personal loan anywhere between five and ten issues.

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Speaker 1: In the last twelve months in Australia, six hundred and

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Speaker 1: nineteen thousand personal loans have been processed, advancing a total

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Speaker 1: of four hundred and seventy six million dollars, and they're

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Speaker 1: massive amongst people our own age. According to find a

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Speaker 1: forty six percent of millennials turned to personal loans, with

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Speaker 1: cars and holidays as the main reasons behind the splurging.

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Speaker 1: What's your take on so many young people turning to

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Speaker 1: personal loans to finance their lives.

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Speaker 3: Look at you and your statistics. I'm so impressed. Thank you,

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Speaker 3: no problem. So I think that it's a really interesting

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Speaker 3: space because it's one of the first times in history

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Speaker 3: where we've actually had such access to personal loans. Previously,

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Speaker 3: they've either been really hard to get or the criteria

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Speaker 3: of them maybe hasn't been as easy to meet. Please

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Speaker 3: don't get me wrong. Over the last ten to fifteen years,

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Speaker 3: they've been incredibly easy to get hold of because all

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Speaker 3: you have to do is put your hand up and

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Speaker 3: say I earn an income is a couple of statements

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Speaker 3: of my salary, and hego, well done. But I think

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Speaker 3: it's something that because it's more accessible, and because we

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Speaker 3: live in this world of instant gratification, and because we

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Speaker 3: often don't understand, you know, basic financial literacy, if I'm honest,

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Speaker 3: they're becoming a big issue.

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Speaker 1: So one term I came across in a lot of

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Speaker 1: my research is payday loans or small amount credit contracts.

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Speaker 1: Can you explore what these are and why they're so popular?

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Speaker 3: So a payday loan is actually a really high cost

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Speaker 3: short term loan. So payday loans include really small loans,

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Speaker 3: so they're usually up to two or three thousand dollars.

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Speaker 3: Often the catch there is they've got an interest rate.

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Speaker 3: It's usually pretty high. But if you do not pay

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Speaker 3: it back within you know, the sixteen days or twelve months,

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Speaker 3: the interest on that compound significantly, so it could cost

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Speaker 3: you four or six times more than.

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Speaker 1: What you borrowed.

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Speaker 3: So the most common is double So if you borrowed

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Speaker 3: two thousand dollars, you at the end of the day

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Speaker 3: could owe four thousand dollars, and that is honestly ridiculous,

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Speaker 3: and it's it's more likely if you're or going out

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Speaker 3: and getting these loans you need that financial help, that

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Speaker 3: you're not really going to be able to pay it

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Speaker 3: back within that time. Absolutely. So there are so many

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Speaker 3: stories of payday lenders abusing the system, and we've just

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Speaker 3: been through this Royal Commission which looked into banking, and

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Speaker 3: so many people have been reprimanded for bad behavior in

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Speaker 3: this area, and a number of payday loan companies have

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Speaker 3: actually taken themselves out of the market and decided that

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Speaker 3: that's not what they're going to do anymore. So an

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Speaker 3: example of that is Nimble, So Nimble loans have decided

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Speaker 3: that payday lending is not something they're willing to do anymore.

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Speaker 3: Payday lending is a really interesting space because often when

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Speaker 3: you are looking for a payday loan, it's because you

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Speaker 3: are feeling quite desperate. It is not because you've thought

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Speaker 3: about this over the long term and you're deciding to

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Speaker 3: go on a holiday. It's often in the moment spending

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Speaker 3: and you're borrowing a sum of money that you couldn't

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Speaker 3: otherwise afford to be spending, and it puts you in

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Speaker 3: a position of disadvantage. So I think the statistics say

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Speaker 3: that the number one user of payday loans a single mum,

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Speaker 3: and that's not great because often in that position they

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Speaker 3: don't have the income to support themselves. But then they're

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Speaker 3: also under financial stress already, so the probability of them

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Speaker 3: being in a position where they're unable to pay back

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Speaker 3: this payday loan is quite high, and then you know

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Speaker 3: you're in all sorts of trouble after that.

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Speaker 1: Yeah, because those fees don't really dissipate as a single.

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Speaker 3: Mum no, no, and then they're not reasonable or you know,

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Speaker 3: often not negotiable as well. They are very strict.

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Speaker 1: Are there any circumstances where people will get these loans

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Speaker 1: who aren't necessarily that desperate for money? Like, are there

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Speaker 1: any exceptions? Do you think?

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Speaker 3: I think so? But in saying that, I would never

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Speaker 3: be able to justify a payday loan, not just for

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Speaker 3: myself but anyone. Payday loans are something that you know,

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Speaker 3: it's quick cash and at the end of the day,

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Speaker 3: if you're in a position where you can pay that

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Speaker 3: back in one or two weeks, then okay. But at

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Speaker 3: the same time, you as an individual should have access

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Speaker 3: to things that enable you to purchase those things, or

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Speaker 3: why can't you wait two weeks?

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Speaker 1: So what is the difference between secure and unsecure credit?

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Speaker 3: So, and let's talk about this in loan terms. When

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Speaker 3: a loan is unsecured, it means the loan is not

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Speaker 3: secured against any of the borrower's assets. So you just

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Speaker 3: get given a loan and there's nothing I guess holding

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Speaker 3: it there for example, consolidation of previous credit card debts

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Speaker 3: or a holiday or something. Essentially, you have a debt

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Speaker 3: with no asset that that bank or that company that

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Speaker 3: you've lent money from can sell down to pay that

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Speaker 3: debt back. It usually has a higher interest rate on that.

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Speaker 3: So you know, a personal loan might be anywhere from

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Speaker 3: seven to ten percent, but an unsecured loan, an unsecured

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Speaker 3: personal loan will be anywhere between you know, fifteen to

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Speaker 3: twenty two percent. And then a secured loan is a

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Speaker 3: loan that is secured against an asset. So if you,

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Speaker 3: as the borrower, fail to make repayments, the lender then

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Speaker 3: gets some of those assets that you've used to secure

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Speaker 3: the loan to cover the outstanding loan amount. So an

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Speaker 3: example of that could be a car loan or a

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Speaker 3: home loan, where you know, if you're desperate and unable

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Speaker 3: to get out of the debt, the person who you

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Speaker 3: borrowed money from, or the bank you borrowed money from,

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Speaker 3: will take those assets and sell them on your behalf

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Speaker 3: to recoup some of their costs.

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Speaker 1: This might be a bit of a stupid question, but

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Speaker 1: what if you have unsecure credit and you're unable to

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Speaker 1: pay it back, Like, do you go to jail so

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Speaker 1: you could?

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Speaker 3: So that's essentially fraud. You're not paying back something that

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Speaker 3: you owe. I'm not saying that that happens in every situation,

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Speaker 3: but that's something you need to talk to the lender about.

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Speaker 3: You also need to probably talk about getting some financial

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Speaker 3: counseling and working with someone to work out what's going

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Speaker 3: on there. I would never recommend it, but in some situations,

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Speaker 3: filing for bankruptcy is something that helps people in that situation.

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Speaker 3: But bankruptcy stays on your record for a really long time.

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Speaker 3: It hinders you being able to invest, it hinders you

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Speaker 3: being able to buy home, start businesses, do a whole

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Speaker 3: heap of things, so it's really a last resort. But

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Speaker 3: at the end of the day, if someone is in

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Speaker 3: so much debt and they're unable to pay it back,

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Speaker 3: and it's hindering their mental health and their will being

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Speaker 3: and you know, their life in general. Filing for bankruptcy

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Speaker 3: can be a really good option in that situation. I'm

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Speaker 3: not saying getting a whole heap of debt and then

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Speaker 3: file for bankruptcy though, because it is a really big

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Speaker 3: step and it is something that really does have a

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Speaker 3: lot of negative consequences. But there is a way. It's

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Speaker 3: just not a good outcome and it's not a fun

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Speaker 3: one for anyone.

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Speaker 1: So you've got to be really careful with these personal

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Speaker 1: loans and stuff.

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Speaker 3: Absolutely, I don't think that, you know, I think it's

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Speaker 3: a really privileged thing for me to say that. I

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Speaker 3: don't think that personal loans are ever justified, but in

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Speaker 3: some circumstances they are. But at the end of the day,

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Speaker 3: if you're getting a personal loan for a holiday, like

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Speaker 3: you really need to rethink your goals and work out

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Speaker 3: why on earth you can't just wait to go on

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Speaker 3: that holiday.

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Speaker 1: So lots of payday lenders say they offer a quick

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Speaker 1: cash lifeline and are helpful to the average Australian. Do

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Speaker 1: you agree with that? Do you see quick same day

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Speaker 1: loans as a good thing.

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Speaker 3: Absolutely not. I think that they It's a really good

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Speaker 3: marketing strategy, though, isn't It sounds very Yeah, it sounds brilliant.

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Speaker 3: But I think that there are so many alternatives to

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Speaker 3: payday loans that you need to consider before going, oh,

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Speaker 3: my bills are due, I really need to get a

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Speaker 3: loan for this. So one of them is you could

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Speaker 3: be negotiating with your utility provider. So people are quite

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Speaker 3: flexible at the end of the day. They just want

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Speaker 3: you to be able to pay the money back. So

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Speaker 3: if you can call and have a really open, honest conversation,

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Speaker 3: you know, with your energy provider and say, look, I

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Speaker 3: don't have the money right now. Often they have programs

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Speaker 3: for people experiencing hardship and you're able to go through

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Speaker 3: those routes. You could also, if you're in that situation,

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Speaker 3: talk to Centlink about getting potentially a pay advancement. That's

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Speaker 3: something that's available in that situation, if that's something you're utilizing.

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Speaker 3: And then there are places like the Good Shepherd Microfinance

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Speaker 3: who have no income loan schemes. They are called NILS

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Speaker 3: loans and they are available for people within the community

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Speaker 3: who need access to fast cash and aren't able to

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Speaker 3: access it. So I think that there are so many

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Speaker 3: different options for people who need far cash that they

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Speaker 3: don't need to be relying on people who do same

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Speaker 3: day pay loans because there's only negative consequences and really

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Speaker 3: high interest rates associated with them.

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Speaker 1: So there are absolutely options for people who feel that

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Speaker 1: they need fast cash who don't want a personal loan.

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Speaker 3: Yes, and if you're in a situation where you feel

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Speaker 3: like that's something you need and you don't see another option,

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Speaker 3: type into Google Financial counseling and your area and something

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Speaker 3: will pop up and you'll be able to contact them

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Speaker 3: and they'll be able to direct you in the right place.

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Speaker 3: Places like Good Shepherd Microfinancing have partnerships with you know,

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Speaker 3: support agencies all across Australia and you'll be able to

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Speaker 3: be put in contact with the right place without getting

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Speaker 3: yourself in over your head.

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Speaker 1: We need to prioritize long term benefits rather than the

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Speaker 1: short term fast cash.

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Speaker 3: Yes, absolutely, I really.

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Speaker 1: Want to finish on a quote that I think is

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Speaker 1: a good way to wrap it all up. Speaking to

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Speaker 1: the Australian Financial Review Consumer Action Law Center, Policy of

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Speaker 1: Sir Patrick Sloyan said, If this is the only way

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Speaker 1: low income and vulnerable people can access funds and be

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Speaker 1: exploited in the pro that's a huge problem. Hi, there,

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Speaker 1: you've called the Shees on the Money Hotline. Do you

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Speaker 1: have a money problem you want help solving. Do you

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Speaker 1: have a money dilemma you just want to chat about?

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Speaker 1: Victoria is here to help. Each week we'll be playing

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Speaker 1: your hotline questions to help make sense of the money

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Speaker 1: mess you may have found yourself in. Give us a

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Speaker 1: call on four three five, two nine three double eighty

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Speaker 1: six and you might find yourself on the show. Hi,

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Speaker 1: Victorian Annabelle, I have a really silly question, but one

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Speaker 1: I don't know who else to ask. How do I

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Speaker 1: check my credit rating?

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Speaker 2: And what are the things I can do to make

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Speaker 2: sure I have a good one?

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Speaker 1: So Victoria, let's strip this back to the basics. What

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Speaker 1: is a credit rating?

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Speaker 3: So a credit rating is an estimate of the ability

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Speaker 3: of a person or a company to fulfill their financial

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Speaker 3: commitments based on previous dealings.

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Speaker 1: So how do I find mine? How do I check

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Speaker 1: what mine is?

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Speaker 3: So you can google what's my credit rating? And there

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Speaker 3: are a number of websites that will help you do

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Speaker 3: that personally, I've used Equifax in the past and I

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Speaker 3: find that quite reliable. You do pay for it. But

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Speaker 3: I also think it's really important to note that when

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Speaker 3: you are checking your credit score, it goes on your

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Speaker 3: credit score, so you know, you'll have a credit report

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Speaker 3: and it'll be put on that credit report that you've

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Speaker 3: checked it. So it's not something I think you should

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Speaker 3: be checking all the time.

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Speaker 1: So why is it important to have a good credit rating.

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Speaker 3: So it's a very American thing to say you need

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Speaker 3: a good credit rating. Here in Australia, a credit rating

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Speaker 3: or a credit score is you know, it exists. It's important.

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Speaker 3: I think that people should know what's on their credit

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Speaker 3: score because sometimes in you know, very dramatic cases where

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Speaker 3: identity fraud has has happened. It's a good way of checking,

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Speaker 3: you know, what debts you have, what's going on with

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Speaker 3: your financial world. Often, you know, if I look up

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Speaker 3: my credit score, it'll you know, talk about the businesses

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Speaker 3: that I have it or talk about you know, the

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Speaker 3: phone plans I'm on on and you know previous you know,

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Speaker 3: finance dealings I've had, and it all looks quite normal.

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Speaker 3: It's not something you should be checking all the time.

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Speaker 3: But I do think, you know, the occasional check once

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Speaker 3: every five years is fine. I don't think it's something

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Speaker 3: we need to obsess over though, because a credit score

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Speaker 3: is not what is used to determine your home loan.

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Speaker 3: So like people in the Facebook group recently have been

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Speaker 3: talking about getting credit cards to improve their credit score,

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Speaker 3: whereas that's not an Australian thing, that's an American thing.

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Speaker 3: You absolutely do not need to have a credit card

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Speaker 3: to increase your credit score. You just need to be

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Speaker 3: making good financial decisions, not defaulting on your bills, paying

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Speaker 3: your bills when they come in, and making sure that

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Speaker 3: you know you're not going into unnecessary debt. A credit

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Speaker 3: rating is something that a bank looks at to make

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Speaker 3: sure that you're someone that they want to lend money

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Speaker 3: to when it comes time to do that.

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Speaker 1: And what about a credit report? What is that? And

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Speaker 1: why does checking my credit rating play into that?

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Speaker 3: So it's much of a muchness. Your credit rating will

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Speaker 3: be on your credit report, but the credit report is

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Speaker 3: the long winded version of a credit rating. Credit rating

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Speaker 3: is a number, and the credit report will have all

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Speaker 3: of the information that got that number.

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Speaker 1: Okay, so how does someone improve on a bad credit.

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Speaker 3: Rating, then paying their bills on time, making sure that

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Speaker 3: they are not defaulting on anything. Those things stay on

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Speaker 3: your credit rating for five to seven years. So I

401
00:18:20,920 --> 00:18:22,760
Speaker 3: think it's really important to make sure that you're not

402
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Speaker 3: biting off more than you can chew. So don't take

403
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Speaker 3: on our necessary debt, don't take on personal loans. But

404
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Speaker 3: I really want to reiterate this point again. To improve

405
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Speaker 3: your credit score, you just need to clean up your act.

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Speaker 3: You don't need to go get a credit card, you

407
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Speaker 3: don't need to go get a loan, you don't need

408
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Speaker 3: to have a home loan. To prove that you're good

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Speaker 3: to lend to, you just need to be consistent with

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Speaker 3: what's going on. And if that means you're consistently paying

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Speaker 3: your phone bill and your electricity bill and everything that

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Speaker 3: you owe is always paid on time and the right amount,

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Speaker 3: we are good to go.

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Speaker 1: And that includes things like after pay, right, as we

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Speaker 1: mentioned in the last couple episodes.

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Speaker 3: Yeah, so we had an episode on after pay, and

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Speaker 3: that's one of those things that will come up on

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Speaker 3: your credit rating and will come up on your credit report,

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Speaker 3: and I think it's really important to note so because

420
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Speaker 3: it's on your credit report. People can see that. When

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Speaker 3: you are going for a home loan, the bank will

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Speaker 3: do a credit check on you and they will get

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Speaker 3: this report for themselves, and they often get a far

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Speaker 3: more detailed version of it than you will get personally

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Speaker 3: from you know, a credit check website. On that report,

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Speaker 3: if after pay is on there, I'm not saying it's negative,

427
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Speaker 3: it will just look like a debt and it will

428
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Speaker 3: show your borrowing capacity. On that platform, it will show

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Speaker 3: the bank what type of person you are. So a

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Speaker 3: bank will look at it, and it's not like they

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Speaker 3: will say, no, you've got after pay, We're not lending

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Speaker 3: to you, but they might reduce your capacity because of

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Speaker 3: the loans that you already have or the access to

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Speaker 3: credit that you have. So they will look at it

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Speaker 3: and say, look, Annabelle, you've got you've got after pay.

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Speaker 3: Maybe you are a bit more impulsive than we thought

437
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Speaker 3: you were.

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Speaker 1: Oh no, they're almost Yeah, they hold your secrets.

439
00:19:53,640 --> 00:19:56,760
Speaker 3: But that's what after pay looks like on a credit rating.

440
00:19:56,920 --> 00:19:59,720
Speaker 3: It is not, Hey, Annabelle's a bad person, We're not

441
00:20:00,040 --> 00:20:02,280
Speaker 3: lending to her. She has after pay. It will just

442
00:20:02,359 --> 00:20:05,679
Speaker 3: negatively impact the way that they measure it, and it

443
00:20:05,720 --> 00:20:08,320
Speaker 3: will look as though maybe you're a bit more impulsive

444
00:20:08,320 --> 00:20:09,000
Speaker 3: than you should be.

445
00:20:09,240 --> 00:20:11,600
Speaker 1: So personal loans will affect my credit rating to.

446
00:20:11,800 --> 00:20:14,719
Speaker 3: Yes, absolutely they will, because any personal loan that you have,

447
00:20:14,840 --> 00:20:17,560
Speaker 3: or any credit limit that you have will reduce the

448
00:20:17,600 --> 00:20:21,440
Speaker 3: ability to access money and access a home loan. So

449
00:20:21,480 --> 00:20:23,800
Speaker 3: that's I guess, you know, the most common area that

450
00:20:23,840 --> 00:20:26,520
Speaker 3: we talk about credit ratings in. And when we talk

451
00:20:26,560 --> 00:20:29,199
Speaker 3: about it, I'm not talking about, Hey, Annabelle, you've got

452
00:20:29,240 --> 00:20:31,320
Speaker 3: two thousand dollars on your credit card. I'm saying how

453
00:20:31,359 --> 00:20:34,760
Speaker 3: much is your credit card limit? Because that's the amount

454
00:20:34,800 --> 00:20:36,720
Speaker 3: that you won't be able to borrow money from the

455
00:20:36,760 --> 00:20:38,880
Speaker 3: bank in relation to a home loan. So I don't

456
00:20:38,920 --> 00:20:40,960
Speaker 3: care if you've got two thousand dollars or there's nothing

457
00:20:41,160 --> 00:20:43,240
Speaker 3: on the credit card. They care that there's a four

458
00:20:43,280 --> 00:20:46,800
Speaker 3: thousand dollar limit there because that's access to credit. So

459
00:20:46,960 --> 00:20:48,919
Speaker 3: often when people are going for home loans and they

460
00:20:48,920 --> 00:20:51,840
Speaker 3: want to increase their borrowing capacity, they will, you know,

461
00:20:51,880 --> 00:20:55,159
Speaker 3: shut down credit cards, shut down after pay because that

462
00:20:55,200 --> 00:20:57,280
Speaker 3: will increase the amount that the bank will lend to

463
00:20:57,359 --> 00:20:59,920
Speaker 3: them because they have less access to credit.

464
00:21:05,880 --> 00:21:08,800
Speaker 1: Now let's jump into our money dairy segment. Let's go

465
00:21:16,320 --> 00:21:18,439
Speaker 1: today's money dary is from a woman who says she

466
00:21:18,480 --> 00:21:19,959
Speaker 1: needs help when it comes to money.

467
00:21:20,160 --> 00:21:26,119
Speaker 4: I'm twenty eight and love instant gratification because I find

468
00:21:26,520 --> 00:21:28,920
Speaker 4: the reason why I'm so bad with money is because

469
00:21:28,920 --> 00:21:31,240
Speaker 4: I'm like, oh, I like that. I'll just get it

470
00:21:31,240 --> 00:21:33,840
Speaker 4: because the money's in my account, and then by the

471
00:21:33,920 --> 00:21:35,120
Speaker 4: end of the month there's.

472
00:21:34,880 --> 00:21:36,040
Speaker 1: No money left in my account.

473
00:21:36,280 --> 00:21:39,240
Speaker 4: And then it's not like expensive things, it's I mean,

474
00:21:39,280 --> 00:21:40,720
Speaker 4: it would be like a twenty dollar top and I'll

475
00:21:40,760 --> 00:21:42,919
Speaker 4: be like, oh, I love that top. It's only twenty dollars.

476
00:21:43,640 --> 00:21:46,119
Speaker 4: I'll get it because I can afford twenty bucks. But

477
00:21:46,160 --> 00:21:49,159
Speaker 4: all the twenty dollars is that up, So it's just

478
00:21:49,200 --> 00:21:51,080
Speaker 4: that and then I'll wear that top maybe twice, and

479
00:21:51,119 --> 00:21:52,280
Speaker 4: then it'll go in the back.

480
00:21:52,160 --> 00:21:54,639
Speaker 1: Of the wardrobe. Okay, so we know twenty eight and

481
00:21:54,680 --> 00:21:57,400
Speaker 1: loves instant gratification has made some mistakes in the past.

482
00:21:57,600 --> 00:21:59,959
Speaker 1: But let's hear the juicy stuff. How much does she

483
00:22:00,080 --> 00:22:01,960
Speaker 1: earn and how much you're sitting in her bank account

484
00:22:02,000 --> 00:22:02,560
Speaker 1: right now?

485
00:22:02,920 --> 00:22:05,879
Speaker 4: I own sixty thousand dollars a year. I probably have

486
00:22:05,960 --> 00:22:10,399
Speaker 4: about six hundred dollars in my savings account. I probably

487
00:22:10,400 --> 00:22:12,960
Speaker 4: had if you'd ask me three months ago, I would

488
00:22:13,000 --> 00:22:14,680
Speaker 4: have said, oh, I've got like three grand, but I've

489
00:22:14,720 --> 00:22:17,959
Speaker 4: just come back from holiday, so spend it all. I

490
00:22:18,000 --> 00:22:20,520
Speaker 4: don't mind that there's only five hundred dollars. I know

491
00:22:20,520 --> 00:22:23,560
Speaker 4: I've just come back from holidays. I would prefer seeing

492
00:22:23,560 --> 00:22:28,280
Speaker 4: like five six hundred dollars instead of zero. When I

493
00:22:28,320 --> 00:22:30,600
Speaker 4: came back from holidays, it was zero, and that stressed

494
00:22:30,640 --> 00:22:33,240
Speaker 4: me out because I don't have any emergency money. Then

495
00:22:33,520 --> 00:22:36,320
Speaker 4: that's sort of my emergency fund. My long term savings

496
00:22:36,359 --> 00:22:38,120
Speaker 4: does not exist, and.

497
00:22:38,080 --> 00:22:40,760
Speaker 1: What exactly happens to that money after it's deposited into

498
00:22:40,800 --> 00:22:41,360
Speaker 1: her account?

499
00:22:41,480 --> 00:22:45,159
Speaker 4: So I get paid monthly, and when I get my

500
00:22:45,280 --> 00:22:49,600
Speaker 4: pay it gets organized into three separate accounts. I have savings, spendings,

501
00:22:49,600 --> 00:22:52,080
Speaker 4: and bills, so I know exactly how much I have

502
00:22:52,080 --> 00:22:55,040
Speaker 4: to put away for bills, so that goes first. Then

503
00:22:55,160 --> 00:22:58,440
Speaker 4: I allocate myself a little bit for the month for spending,

504
00:22:59,359 --> 00:23:02,520
Speaker 4: and then the goes into savings. I pay fifteen hundred

505
00:23:02,560 --> 00:23:05,199
Speaker 4: dollars in rent every month, which is a lot, but

506
00:23:05,680 --> 00:23:09,320
Speaker 4: I live by myself, so you know, what can you do.

507
00:23:09,640 --> 00:23:12,239
Speaker 4: I've lived by myself for four years now. When I

508
00:23:12,400 --> 00:23:15,080
Speaker 4: first moved out of home, everyone was saying to me,

509
00:23:15,520 --> 00:23:17,480
Speaker 4: get a HOUSEMATEE And I know that would make things

510
00:23:17,480 --> 00:23:21,479
Speaker 4: a lot easier, but I mentally I lack my space.

511
00:23:21,520 --> 00:23:23,639
Speaker 4: I need to be alone. I can't have someone in

512
00:23:23,680 --> 00:23:25,480
Speaker 4: my space all the time. And I've seen friends go

513
00:23:25,560 --> 00:23:28,159
Speaker 4: through fights and never be friends again, and I was like,

514
00:23:28,200 --> 00:23:30,440
Speaker 4: I don't want that. I don't want someone impeding on

515
00:23:30,520 --> 00:23:32,840
Speaker 4: my space. I also have two dogs that are quite

516
00:23:33,400 --> 00:23:35,560
Speaker 4: boisterous with each other, so I don't want them to

517
00:23:35,560 --> 00:23:38,800
Speaker 4: be a responsibility of someone else. So mentally and just

518
00:23:39,680 --> 00:23:42,560
Speaker 4: for everything else, it was easier to be by myself,

519
00:23:42,600 --> 00:23:46,080
Speaker 4: and since then I love it. I don't know if

520
00:23:46,080 --> 00:23:47,879
Speaker 4: I could live with my partner he's so messy.

521
00:23:48,560 --> 00:23:50,960
Speaker 1: Okay, then, So how does twenty eight and Love's instant

522
00:23:50,960 --> 00:23:55,639
Speaker 1: gratification feel about investing? Does she invest? And if not, why.

523
00:23:55,440 --> 00:23:59,000
Speaker 4: I do not invest. I've never invested. I'm pretty sure

524
00:23:59,040 --> 00:24:01,640
Speaker 4: my dad wants in. Invested in on my behalf when

525
00:24:01,640 --> 00:24:05,120
Speaker 4: I was younger, but I got a like thousand dollar

526
00:24:05,160 --> 00:24:07,280
Speaker 4: phone bills, so we sold all my shares and paid

527
00:24:07,280 --> 00:24:09,280
Speaker 4: off this phone bill and that was the end of that.

528
00:24:09,440 --> 00:24:13,040
Speaker 4: So he managed that for me. I have not personally invested.

529
00:24:13,240 --> 00:24:15,800
Speaker 1: What about debts like credit cards? And personal loans.

530
00:24:16,320 --> 00:24:19,840
Speaker 4: This is where my life is very interesting. I have

531
00:24:20,400 --> 00:24:25,560
Speaker 4: a Carloon, I have three credit cards. I have a

532
00:24:25,600 --> 00:24:30,520
Speaker 4: small hex debt which I didn't even finish the course,

533
00:24:30,640 --> 00:24:35,320
Speaker 4: so it's nothing to me. So originally my car loan

534
00:24:35,480 --> 00:24:38,399
Speaker 4: was for forty thousand dollars because I had negative equity

535
00:24:38,440 --> 00:24:39,879
Speaker 4: that I had to roll into it because my car

536
00:24:40,000 --> 00:24:42,680
Speaker 4: broke down. I'm very lucky though, because I got a

537
00:24:42,720 --> 00:24:46,080
Speaker 4: one percent inches straight on my Carloon. So after two

538
00:24:46,119 --> 00:24:47,640
Speaker 4: and a half years, I've got it down to twenty

539
00:24:47,640 --> 00:24:52,520
Speaker 4: thousand dollars. So and then I've got probably three grand

540
00:24:52,600 --> 00:24:56,000
Speaker 4: owing on each of my three credit cards, and just

541
00:24:56,119 --> 00:24:59,200
Speaker 4: checking my mic of I think I owe about five

542
00:24:59,240 --> 00:25:02,280
Speaker 4: thousand dollars left on hextet or helped that. Credit cards

543
00:25:02,320 --> 00:25:05,680
Speaker 4: scare me. My partner tells me, you have to get

544
00:25:05,720 --> 00:25:08,200
Speaker 4: them under two grands so they're stop incurring so much interest.

545
00:25:08,680 --> 00:25:11,920
Speaker 4: At the moment, I can only afford to pay off

546
00:25:11,920 --> 00:25:16,600
Speaker 4: the minimum each month. So everyone always says, stop like

547
00:25:16,680 --> 00:25:19,239
Speaker 4: saving and just pay off the credit cards. But I

548
00:25:19,280 --> 00:25:21,919
Speaker 4: need to have that safety, and once I get that

549
00:25:21,960 --> 00:25:24,160
Speaker 4: back up to one thousand dollars, maybe I'll start paying

550
00:25:24,160 --> 00:25:27,760
Speaker 4: more off my credit cards. So I put my flights

551
00:25:27,840 --> 00:25:30,080
Speaker 4: my holiday on one of my credit cards, and then

552
00:25:30,720 --> 00:25:35,120
Speaker 4: the rest probably I think one of the credit cards

553
00:25:35,520 --> 00:25:39,640
Speaker 4: I would have used the money on moving out originally,

554
00:25:40,440 --> 00:25:44,040
Speaker 4: and that was four years ago and it's still only

555
00:25:44,200 --> 00:25:45,800
Speaker 4: probably five hundred.

556
00:25:45,560 --> 00:25:46,200
Speaker 1: Dollars paid off.

557
00:25:46,680 --> 00:25:48,840
Speaker 4: But that to me was like something I needed to spend.

558
00:25:49,200 --> 00:25:51,960
Speaker 4: That was buying all my furniture. So I spent about

559
00:25:52,000 --> 00:25:54,680
Speaker 4: three grand on all my furniture. I was three and

560
00:25:54,720 --> 00:25:56,880
Speaker 4: a half actually, and I thought, well, if I can

561
00:25:56,880 --> 00:25:58,920
Speaker 4: get everything for a house with three grand, I'm all right.

562
00:25:59,680 --> 00:26:03,080
Speaker 4: But the rest of it, probably over the years, has

563
00:26:03,160 --> 00:26:07,760
Speaker 4: just accumulated with bits and pieces. Dinners when I haven't

564
00:26:07,800 --> 00:26:11,399
Speaker 4: had any cash, just you know, or you go out

565
00:26:11,400 --> 00:26:13,119
Speaker 4: to dinner with a big group of people and that

566
00:26:13,560 --> 00:26:15,560
Speaker 4: no one's got cash, or some people got cash. I'll

567
00:26:15,600 --> 00:26:16,960
Speaker 4: just whack it on my credit card. You'll give me

568
00:26:17,000 --> 00:26:18,960
Speaker 4: a cash and then it doesn't get paid off the card.

569
00:26:19,000 --> 00:26:22,639
Speaker 4: I just use the cash. So now I don't use them.

570
00:26:22,720 --> 00:26:24,240
Speaker 4: So I only use one of them just to pay

571
00:26:24,240 --> 00:26:25,840
Speaker 4: for my flights, and then that was it.

572
00:26:26,119 --> 00:26:26,880
Speaker 3: They say at.

573
00:26:26,760 --> 00:26:29,480
Speaker 4: Home, they don't even come out with me anymore. It's

574
00:26:29,560 --> 00:26:33,359
Speaker 4: just so stressful as it is to have three credit cards.

575
00:26:33,760 --> 00:26:36,879
Speaker 4: I think probably two of them also started with balanced transfers,

576
00:26:36,920 --> 00:26:39,560
Speaker 4: you know, to get zero percent and paid off.

577
00:26:39,600 --> 00:26:41,400
Speaker 2: But you know, as time goes.

578
00:26:41,160 --> 00:26:45,040
Speaker 4: On, zero percent runs out and then you don't pay

579
00:26:45,080 --> 00:26:47,280
Speaker 4: it off, and then the interest comes in and then.

580
00:26:47,200 --> 00:26:47,960
Speaker 1: It just takes forever.

581
00:26:48,080 --> 00:26:51,360
Speaker 4: So I've probably had those three credit cards for ah

582
00:26:52,359 --> 00:26:53,479
Speaker 4: five six years.

583
00:26:53,760 --> 00:26:56,240
Speaker 1: Does twenty eight and Love's instant gratification have any good

584
00:26:56,320 --> 00:26:58,000
Speaker 1: money habits that she's especially proud of.

585
00:26:59,280 --> 00:27:02,720
Speaker 4: I I don't go out to eat a lot. I

586
00:27:02,760 --> 00:27:06,800
Speaker 4: don't buy coffee. I don't drink coffee. I take my

587
00:27:06,960 --> 00:27:11,160
Speaker 4: lunches to work. I don't I really just don't buy food.

588
00:27:11,200 --> 00:27:14,280
Speaker 4: I'll do one big weekly shot and that'll be my

589
00:27:14,359 --> 00:27:16,919
Speaker 4: food for the entire week for breakfast, lunch, and dinner.

590
00:27:17,119 --> 00:27:22,040
Speaker 4: If I go out for dinner, it's very rare. So

591
00:27:22,359 --> 00:27:24,360
Speaker 4: I would say that's a good thing, like I am

592
00:27:24,400 --> 00:27:27,479
Speaker 4: so sure, but in a way that I don't have

593
00:27:27,560 --> 00:27:29,520
Speaker 4: to spend too much money on like thirty dollars dinners

594
00:27:29,560 --> 00:27:31,760
Speaker 4: and things like that. I'll eat at home or something.

595
00:27:32,000 --> 00:27:35,320
Speaker 4: That's probably my best money habit. It's not like a

596
00:27:35,320 --> 00:27:36,760
Speaker 4: great one, but yeah, what.

597
00:27:36,760 --> 00:27:38,200
Speaker 1: About her worst money habits?

598
00:27:38,359 --> 00:27:40,160
Speaker 4: This is probably going to be a lot of people's

599
00:27:40,160 --> 00:27:44,240
Speaker 4: worst money habit, but it was after pay that was

600
00:27:44,359 --> 00:27:47,440
Speaker 4: my worst money habit. I've just shut down my after

601
00:27:47,480 --> 00:27:49,960
Speaker 4: pay account after that last week's episode of the week before,

602
00:27:50,680 --> 00:27:54,399
Speaker 4: because after pay was just like, oh, it's only I

603
00:27:54,440 --> 00:27:57,679
Speaker 4: would see the first payment as the only payment and

604
00:27:57,720 --> 00:27:59,880
Speaker 4: worry about the rest later. And that's again like a credit,

605
00:28:00,560 --> 00:28:03,640
Speaker 4: you worry about it later, except with after paid actually

606
00:28:03,640 --> 00:28:07,520
Speaker 4: comes out every fortnight or how many weeks, and again

607
00:28:07,560 --> 00:28:10,560
Speaker 4: it goes down to that instant gratification thing where I

608
00:28:10,560 --> 00:28:12,320
Speaker 4: can have it now and I don't have.

609
00:28:12,280 --> 00:28:13,600
Speaker 2: To worry about paying for it now.

610
00:28:14,119 --> 00:28:17,880
Speaker 1: So what's today's money diarist actually saving for? What's her

611
00:28:17,880 --> 00:28:18,760
Speaker 1: big money goal?

612
00:28:19,119 --> 00:28:22,000
Speaker 4: I mean, everyone says, oh, I'm saving for a house,

613
00:28:22,040 --> 00:28:25,639
Speaker 4: and I that is so far off for me. I

614
00:28:25,680 --> 00:28:27,760
Speaker 4: would say my big saving this goal is to save

615
00:28:27,840 --> 00:28:31,320
Speaker 4: for a house. But because I don't have anything close

616
00:28:31,359 --> 00:28:34,719
Speaker 4: to eighty thousand dollars to my name, that is a

617
00:28:35,320 --> 00:28:38,640
Speaker 4: probably a ten fifteen year goal, and that's sad. Like

618
00:28:38,720 --> 00:28:40,840
Speaker 4: I'm twenty eight and I probably won't own a home

619
00:28:40,920 --> 00:28:44,640
Speaker 4: until I'm almost forty. But eventually that's my goal. I

620
00:28:44,720 --> 00:28:47,360
Speaker 4: just don't put much pressure on myself for that. Because

621
00:28:47,360 --> 00:28:49,760
Speaker 4: it's just I rent by myself, you know I have.

622
00:28:50,440 --> 00:28:52,520
Speaker 4: If I could save that fifteen hundred dollars every month,

623
00:28:52,560 --> 00:28:55,280
Speaker 4: that'd be great, but you know, made the decision to

624
00:28:55,280 --> 00:28:55,959
Speaker 4: move out instead.

625
00:28:56,880 --> 00:28:59,480
Speaker 1: So howard today's money diarist to rate her own relationship

626
00:28:59,480 --> 00:29:01,640
Speaker 1: with money? If we force her to give herself.

627
00:29:01,320 --> 00:29:06,120
Speaker 4: A grade, I would give myself probably a C only

628
00:29:06,240 --> 00:29:10,080
Speaker 4: because I know that I'm good with budgeting, but when

629
00:29:10,120 --> 00:29:10,840
Speaker 4: it comes to.

630
00:29:12,400 --> 00:29:13,080
Speaker 1: Having something that.

631
00:29:13,040 --> 00:29:15,600
Speaker 2: I want, I don't really hold back.

632
00:29:15,720 --> 00:29:18,800
Speaker 4: I will find a way to get what I want,

633
00:29:18,840 --> 00:29:21,479
Speaker 4: I suppose, But at the same time, I always make

634
00:29:21,480 --> 00:29:25,000
Speaker 4: sure my bills are paid. Even though my bills take

635
00:29:25,080 --> 00:29:29,120
Speaker 4: up probably eighty five percent of my wage, I still

636
00:29:30,720 --> 00:29:32,160
Speaker 4: try and find that extra little bit.

637
00:29:32,200 --> 00:29:32,720
Speaker 1: If I just.

638
00:29:32,680 --> 00:29:36,000
Speaker 4: Didn't worry about that stuff, I reckon i'd be all right.

639
00:29:36,040 --> 00:29:38,360
Speaker 4: I could be a probably a B. But I am

640
00:29:38,480 --> 00:29:40,720
Speaker 4: sometimes just that little bit too silly with money.

641
00:29:41,880 --> 00:29:43,400
Speaker 1: So what's your first impression on that?

642
00:29:43,560 --> 00:29:46,200
Speaker 3: So the first thought I had was that she just

643
00:29:46,280 --> 00:29:49,800
Speaker 3: needs a total attitude overhaul, like some of the things

644
00:29:49,840 --> 00:29:51,640
Speaker 3: that she was saying. And I feel like this is

645
00:29:51,640 --> 00:29:53,960
Speaker 3: a really blunt one from me, and I'm usually quite

646
00:29:54,320 --> 00:29:58,240
Speaker 3: celebratory of everybody, you know, celebrating their money stories whilst

647
00:29:58,240 --> 00:29:59,960
Speaker 3: I am, and she sounded like, you know, she had

648
00:30:00,080 --> 00:30:02,240
Speaker 3: some really good goals and she had had a really

649
00:30:02,240 --> 00:30:06,320
Speaker 3: good understanding of her values. Eighteen thousand dollars a year

650
00:30:06,320 --> 00:30:09,120
Speaker 3: in rent, so fifteen hundred dollars a month is too

651
00:30:09,240 --> 00:30:12,400
Speaker 3: much for her, given she's in ten thousand dollars worth

652
00:30:12,440 --> 00:30:14,400
Speaker 3: of credit card debt and has a forty thousand dollar

653
00:30:14,480 --> 00:30:18,880
Speaker 3: car loan. The thing with money and saving and investing

654
00:30:19,000 --> 00:30:22,120
Speaker 3: is sometimes it takes sacrifice, and it doesn't sound like

655
00:30:22,240 --> 00:30:24,240
Speaker 3: she's doing any of this, and I think it's now

656
00:30:24,280 --> 00:30:26,720
Speaker 3: time to change. So this should be a little bit

657
00:30:26,720 --> 00:30:29,600
Speaker 3: of a wake up call to say, hey, maybe you

658
00:30:29,640 --> 00:30:32,000
Speaker 3: should be having a listen to your friends or to

659
00:30:32,040 --> 00:30:34,600
Speaker 3: your family. Maybe you should get a house mate. Maybe

660
00:30:34,600 --> 00:30:36,680
Speaker 3: you should work out a way to be paying less

661
00:30:36,680 --> 00:30:39,520
Speaker 3: in rent and more on your credit cards. I think

662
00:30:39,600 --> 00:30:42,200
Speaker 3: something for me that really jumped out was she's had

663
00:30:42,200 --> 00:30:46,080
Speaker 3: these credit cards for years, yet she's still justifying holidays

664
00:30:46,080 --> 00:30:49,000
Speaker 3: and spending three thousand dollars on flights. And you know,

665
00:30:49,080 --> 00:30:51,640
Speaker 3: she said she put that holiday on a credit card,

666
00:30:51,840 --> 00:30:53,959
Speaker 3: but she's still spent the three thousand dollars in her

667
00:30:54,000 --> 00:30:57,080
Speaker 3: savings account. So to me, that didn't make a lot

668
00:30:57,120 --> 00:30:59,400
Speaker 3: of sense. And at the end of the day, like

669
00:30:59,520 --> 00:31:02,360
Speaker 3: I'll say it again, saving money and being in a

670
00:31:02,400 --> 00:31:06,600
Speaker 3: good financial position takes sacrifice, and that sacrifice needs to

671
00:31:06,600 --> 00:31:08,520
Speaker 3: be made by you. You can't just sit around and

672
00:31:08,560 --> 00:31:11,360
Speaker 3: wait and have a credit card that you've had for

673
00:31:11,400 --> 00:31:15,800
Speaker 3: five years on balance transfer. Balance transfers, whilst fantastic if

674
00:31:15,800 --> 00:31:18,520
Speaker 3: you're going to smash that loan down and get rid

675
00:31:18,560 --> 00:31:21,720
Speaker 3: of it with no interest, fantastic, once you get past

676
00:31:21,720 --> 00:31:25,360
Speaker 3: that zero percent interest rate period, the interest rate is

677
00:31:25,400 --> 00:31:28,840
Speaker 3: often higher than on a normal credit card because people

678
00:31:28,960 --> 00:31:31,320
Speaker 3: know that you aren't going to meet those financial commitments.

679
00:31:31,480 --> 00:31:33,960
Speaker 3: So she's probably paying a lot more on those credit

680
00:31:34,000 --> 00:31:37,720
Speaker 3: cards than what is necessary. But then also, if she's

681
00:31:37,720 --> 00:31:39,640
Speaker 3: got ten thousand dollars in credit card debt, she's had

682
00:31:39,640 --> 00:31:41,760
Speaker 3: it for five years? How many thousands of dollars? So

683
00:31:41,840 --> 00:31:43,200
Speaker 3: she spent on interest already.

684
00:31:43,320 --> 00:31:46,080
Speaker 1: So would you recommend her payback the credit card debt

685
00:31:46,120 --> 00:31:47,720
Speaker 1: that she has instead of She said she wanted to

686
00:31:47,760 --> 00:31:49,800
Speaker 1: save up to like a thousand dollars first before she

687
00:31:49,840 --> 00:31:50,920
Speaker 1: thought about paying that back.

688
00:31:51,000 --> 00:31:53,880
Speaker 3: And if that's her goal and that's her value, then fine,

689
00:31:54,000 --> 00:31:56,160
Speaker 3: But I wouldn't want any more than one thousand dollars

690
00:31:56,240 --> 00:31:59,560
Speaker 3: in her savings account before paying back those credit cards.

691
00:31:59,600 --> 00:32:02,480
Speaker 3: In fact, paying back her credit cards should be being

692
00:32:02,520 --> 00:32:06,600
Speaker 3: prioritized over saving, Like, you don't need savings if you're

693
00:32:06,640 --> 00:32:07,920
Speaker 3: paying back credit card debt.

694
00:32:07,960 --> 00:32:10,239
Speaker 1: Okay, okay, So what I'm hearing from you Victoria is

695
00:32:10,400 --> 00:32:14,280
Speaker 1: reevaluating her living situation is probably a top priority for her.

696
00:32:14,560 --> 00:32:17,440
Speaker 3: Yes. Absolutely, If you can't afford to do things, don't.

697
00:32:17,680 --> 00:32:20,160
Speaker 3: And if you're affording to do things because they're being

698
00:32:20,160 --> 00:32:22,760
Speaker 3: put on credit, that is not affording to do things

699
00:32:22,840 --> 00:32:25,200
Speaker 3: like save up for them, earn the things that you

700
00:32:25,240 --> 00:32:27,280
Speaker 3: want to spend money on. And you know, at the

701
00:32:27,320 --> 00:32:29,520
Speaker 3: start of that episode, she mentioned that she's just spending

702
00:32:29,560 --> 00:32:31,479
Speaker 3: twenty dollars here or there on the top that she

703
00:32:31,520 --> 00:32:34,320
Speaker 3: never wears again, don't buy the top, put twenty dollars

704
00:32:34,360 --> 00:32:36,920
Speaker 3: on your credit card. It is not worth being in

705
00:32:36,920 --> 00:32:39,160
Speaker 3: debt for as long as she's been in debt because

706
00:32:39,200 --> 00:32:43,320
Speaker 3: over time, debt compounds in exactly the same way investment does.

707
00:32:43,320 --> 00:32:45,800
Speaker 3: And I get really excited about the power of investment,

708
00:32:45,960 --> 00:32:47,840
Speaker 3: but it is terrifying the power of debt.

709
00:32:48,360 --> 00:32:49,560
Speaker 1: She can do it, though. I think she can turn

710
00:32:49,560 --> 00:32:49,760
Speaker 1: it out.

711
00:32:49,760 --> 00:32:51,640
Speaker 3: Absolutely, she can do it, but she needs to do

712
00:32:51,680 --> 00:32:53,080
Speaker 3: it herself for sure.

713
00:32:53,320 --> 00:32:55,480
Speaker 1: That's all we have time for today. Just before we

714
00:32:55,520 --> 00:32:58,160
Speaker 1: head off, as always, let's quickly wrap the boring but

715
00:32:58,240 --> 00:33:00,880
Speaker 1: important stuff. The advice shared She's on the Money is

716
00:33:00,960 --> 00:33:04,480
Speaker 1: general in nature and doesn't consider your individual circumstances. She's

717
00:33:04,520 --> 00:33:07,120
Speaker 1: on the Money exists purely for educational purposes only and

718
00:33:07,160 --> 00:33:09,160
Speaker 1: should not be relied upon to make an investment or

719
00:33:09,200 --> 00:33:12,720
Speaker 1: financial decision. And of course we promise. Victoria Divine is

720
00:33:12,760 --> 00:33:17,160
Speaker 1: an authorized representative of Consultant Financial Advisors Proprietary Limited ABN

721
00:33:17,280 --> 00:33:20,200
Speaker 1: six five double six three seven three double nine five

722
00:33:20,440 --> 00:33:22,800
Speaker 1: AFSL two three O three two three.

723
00:33:23,040 --> 00:33:26,520
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724
00:33:26,560 --> 00:33:29,360
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725
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727
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729
00:33:39,280 --> 00:33:41,920
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730
00:33:41,960 --> 00:33:44,280
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