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Speaker 1: My name is Tatasha Bamblet. I'm a proud First Nations

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Speaker 1: woman and I'm here to acknowledge country t Glenn Young Ganya, Niana,

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Speaker 1: Kaka yah y and beIN Ahaka Nian Our gay In

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Speaker 1: Mbini yakarum Jar Dominyamiga Umagahawaka Woman Damon Imlan Mbaban Gadabomba

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Speaker 1: In and now in wakah ghan On yak rum Jar

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Speaker 1: water Nadaa. Hello, beautiful friends, we gather on the lands

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Speaker 1: of the Aboriginal people. We thank acknowledge and respect the

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Speaker 1: Aboriginal people's land that we're gathering on today. Take pleasure

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Speaker 1: in all the land and respect all that you see.

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Speaker 1: She's on the Money podcast acknowledges culture, country, community and connections,

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Speaker 1: bringing you the tools, knowledge and resources for you to thrive.

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Speaker 2: She's on the Money. She's on the Money.

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Speaker 3: Hello, and welcome to She's on the Money, the podcast

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Speaker 3: that's here to help you get your finances on track

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Speaker 3: this year. Welcome back to episode two of our summer series.

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Speaker 3: It has been so fun. This series exists for honestly

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Speaker 3: a very simple reason. This time of year, motivation is

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Speaker 3: really high and a lot of you are ready to

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Speaker 3: actually do something with your money. So instead of throwing

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Speaker 3: brand new concepts at you, we're going back to the foundations,

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Speaker 3: the episodes that help you get set up properly no

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Speaker 3: matter where you're starting from. I'm going to pull some

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Speaker 3: of the most important, most practical episodes from the vault

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Speaker 3: and put them right here on the feeds so that

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Speaker 3: you can move through them in order and build momentum

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Speaker 3: without feeling overwhelmed. Each episode in this series builds on

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Speaker 3: the last, so if this is the very first episode

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Speaker 3: you're joining us for, I would love it if you

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Speaker 3: could actually press stop right now, head to episode one

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Speaker 3: of the summer series, which I've linked in the show

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Speaker 3: notes for you, and start there. That episode is all

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Speaker 3: about getting your budgets ordered, and it really is the

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Speaker 3: foundation for everything we are going to be talking about today.

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Speaker 3: Once you know what's coming in, what's going out, what

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Speaker 3: you own, and what you owe, you're in a much

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Speaker 3: stronger position to actually make a plan, and today is

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Speaker 3: exactly about that turning that clarity into action. In this episode,

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Speaker 3: you and I we're diving into debt. How to decide

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Speaker 3: what to tackle first, how to choose a strategy that

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Speaker 3: actually works for your personality and how to get out

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Speaker 3: of that overwhelmed head in the sand feeling that debt

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Speaker 3: can absolutely create for us. This is another one from

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Speaker 3: the Vault, from the very early days of the podcast,

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Speaker 3: but the advice is just as relevant now as it

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Speaker 3: was then. My friend, debt unfortunately hasn't changed. The way

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Speaker 3: out hasn't changed either. What this will change, though, is

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Speaker 3: how confident you feel when you're tackling it. So if

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Speaker 3: you've ever looked at your debts and thought where do

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Speaker 3: I even begin, this episode is going to give you structure,

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Speaker 3: options and a whole lot of reassurance that you, my friend,

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Speaker 3: are not failing. Let's get into it.

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Speaker 2: So you've got a few bad debts and you're ready

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Speaker 2: to pay them off, But where the heck do you

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Speaker 2: start in terms of prioritizing your debts and what tricks

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Speaker 2: are there to actually start paying them off sooner? I know, gi,

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Speaker 2: I know she's got the answers. My name is Georgia King,

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Speaker 2: and joining me as always to answer these questions is

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Speaker 2: Financial Advice of Victoria Devine. Why is debt prioritization so

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Speaker 2: very important?

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Speaker 3: Because if we're in debt, we need to prioritize it.

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Speaker 3: Which is probably the wrong thing to say at the

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Speaker 3: start of an episode, but at the end of the day,

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Speaker 3: often when it comes to debt, and if we are

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Speaker 3: in debt and we are stressed about it, we stick

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Speaker 3: our heads in the sand and don't do what we should,

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Speaker 3: which is sit down and go, you know what, how

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Speaker 3: am I getting out of this place? What am I

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Speaker 3: going to be doing? And what am I going to prioritize? First,

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Speaker 3: Once you make a list of prioritizations, you'll find that

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Speaker 3: you are so much more motivated to actually kick them

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Speaker 3: down and get it done and start seeing progress. Whereas

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Speaker 3: if you haven't made a priorities list and you haven't

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Speaker 3: worked out how you're going to get out of that,

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Speaker 3: you are often more likely to feel just super overwhelmed

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Speaker 3: and like it's never going to happen. So we're doing

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Speaker 3: it one so we can get out of debt, but

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Speaker 3: two for our own mental health jobg a king beautiful.

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Speaker 2: So it's like a plan that'll make us pay down

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Speaker 2: our debts sooner we'll feel more motivated, And that's kind

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Speaker 2: of the gist.

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Speaker 3: Yet, Yeah, and it's all about just understanding as well,

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Speaker 3: like why are we here? How did we get here?

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Speaker 3: Are there some things we need to change, but also

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Speaker 3: what one are we going to pay first? Are we

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Speaker 3: going to pay credit card one or two or three?

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Speaker 3: Or you know, maybe you've got a personal loan, And

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Speaker 3: it's about working out what that looks like. Because often

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Speaker 3: when you have a lot of debts or you're in

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Speaker 3: a situation where there is a number of different ones

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Speaker 3: to prioritize, so often we can feel super overwhelmed, and

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Speaker 3: just putting ourselves in the best possible position is going

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Speaker 3: to mean that we are actually going to get out

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Speaker 3: of these instead of consistently putting it off or just

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Speaker 3: paying the minimum because you're just not sure what to do.

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Speaker 2: Yeah, okay, cool. So before we do get into it

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Speaker 2: V as well, I assume today we're going to be

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Speaker 2: talking about good debt and bad debt. Our OG is

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Speaker 2: going to know exactly what the difference is. But for

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Speaker 2: our newer listeners, can you clarify what it does?

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Speaker 3: Mat I can clarify that. And if you've read my book,

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Speaker 3: which arguably everybody should have, you know that I classified

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Speaker 3: debt in three ways. I classified as good debt, bad debt,

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Speaker 3: and okay debt. So good debts are things that actually

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Speaker 3: help contribute to your wealth creation. So that could be

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Speaker 3: something like a mortgage because over time you're actually creating

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Speaker 3: an asset for yourself. It could be an investment loan,

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Speaker 3: not as common, but definitely worthy of consideration, where you've

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Speaker 3: borrowed money and you've invested in something. It could be

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Speaker 3: a business loan as well. I don't want people to

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Speaker 3: think that any type of loan is negative, but if

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Speaker 3: it's creating your wealth, from my perspective, it's good. Debt

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Speaker 3: doesn't mean we don't prioritize it. We absolutely do, but

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Speaker 3: we don't see it as something that we have to

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Speaker 3: extinguish asap because it's meant to be helping us over

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Speaker 3: the long term. Okay, debt from my perspective is something

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Speaker 3: like a hex debt, So I wouldn't a good debt

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Speaker 3: because at the end of the day, yes, it is

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Speaker 3: helping your future wealth because you're getting an education, but

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Speaker 3: it's still something that is going to impact your cash

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Speaker 3: flow if you have those help repayments coming out of

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Speaker 3: your income each and every single week or month. So

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Speaker 3: with hex debt, yes, it's really important to prioritize and

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Speaker 3: make sure we're paying down, but it's something that a

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Speaker 3: lot of people make the decision to not add contributions

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Speaker 3: to so they might just be paying the minimum for

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Speaker 3: a long period of time, and that's totally okay. And

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Speaker 3: the reason they might not prioritize that is because hex

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Speaker 3: debt or help debt as it's called nowadays, it's just

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Speaker 3: showing my age DORX. That debt doesn't actually accrue any interest,

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Speaker 3: and there's no timeline on paying it, So if you

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Speaker 3: don't earn over a certain amount of money, you don't

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Speaker 3: have to start paying it back, and it only increases

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Speaker 3: in line with CPI or indexation, So that's how much

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Speaker 3: the cost of goods and services increase each and every

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Speaker 3: single year. So it's only accruing I think last you

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Speaker 3: was like one point eight percent, And that's an okay

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Speaker 3: thing to carry given the amount of flexibility that these

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Speaker 3: repayments carry. So if you lost your job, you're not

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Speaker 3: going to be in a position where the government's like,

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Speaker 3: oh my gosh, you have to pay back your hex

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Speaker 3: step what are you doing? Or is the same as

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Speaker 3: not true for a credit card, which I categorize as

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Speaker 3: bad debt. So bad debts are debts that actually stop

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Speaker 3: you from attaining any level of financial freedom. These are

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Speaker 3: things like credit cards, after pay, any type of buy now,

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Speaker 3: pay later scheme, and personal loans. So if you're a

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Speaker 3: bit confused and you're like yeah, but be like, I

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Speaker 3: don't know if it's good or a bad debt. The

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Speaker 3: question is what have you got to show for it?

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Speaker 3: Is it clothes, it's shoes, or is it future wealth.

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Speaker 3: If the answer is future wealth, it's probably good debt.

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Speaker 3: But if it's stopping you from creating your wealth, then

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Speaker 3: that's when we really need to be having a think

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Speaker 3: about prioritizing it and smashing it out asap. So when

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Speaker 3: we look at it, I'm not saying shun credit cards,

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Speaker 3: shun personal loans, like as you know, gee, I've had

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Speaker 3: a personal loan. I've had credit cards. I found myself

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Speaker 3: in a bit of a sticky situation with them. But

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Speaker 3: at the same time, would I change why I used them? No.

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Speaker 3: I used a personal loan so I could go overseas

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Speaker 3: and study because I couldn't afford it in that moment. Yes,

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Speaker 3: a lot of people would say, oh, you should have

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Speaker 3: saved for longer and just done it the year after,

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Speaker 3: but I wanted to do it then, and you know what,

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Speaker 3: it worked for me. So gee, I don't regret getting them.

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Speaker 3: I do regret the amount of stress and anxiety I

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Speaker 3: put myself through and the amount of sleepless nights. But

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Speaker 3: at the same time, I wouldn't change that because that

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Speaker 3: got me to where I am today. But it's one

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Speaker 3: of those things that I wish someone had sat me

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Speaker 3: down and said, Victoria, do you actually understand what this means? So, yes,

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Speaker 3: I was paying for an experience. I wouldn't change it.

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Speaker 3: I had a brilliant time, but I do wish I

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Speaker 3: had better savings habit, so I wasn't in that position

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Speaker 3: in the first place.

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Speaker 2: Yeah, but like, look how far it got you. You

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Speaker 2: learned so much from it, And I guess this episode

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Speaker 2: today it's like not about shame. There's none of that

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Speaker 2: in the Shoes on the Money community anyway. But yeah,

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Speaker 2: we're just going to talk through exactly how you can

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Speaker 2: get ahead sooner. Okay, So let's get into it then,

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Speaker 2: V What strategies are there for debt prioritization? Oh my god,

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Speaker 2: I need a sip of my tea. What is my

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Speaker 2: voice doing?

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Speaker 3: Well? You have a suplico teat while I explain what

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Speaker 3: these strategies are so strategies for debt prioritization there are millions,

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Speaker 3: but I talk about two key methods more often than

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Speaker 3: not because I feel like they actually help the most.

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Speaker 3: And these two strategies are not my own. I didn't

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Speaker 3: create these. I'm absolutely not taking credit for them. I

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Speaker 3: don't know who created them because I feel like they're

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Speaker 3: so universal when it comes to debt reduction, but they

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Speaker 3: work really well. And these two strategies are called the

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Speaker 3: Avalanche method and the Snowball method, and I mean sounds

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Speaker 3: very like ooh, it's a winter festive episode, but both

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Speaker 3: of them actually have nothing to do with the snow

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Speaker 3: or winter. But both of them do accelerate the debt

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Speaker 3: reduction process in their own ways and give you the

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Speaker 3: structure you might be craving to help you get out

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Speaker 3: of debt. So the first one is the Avalanche method.

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Speaker 3: Avalanche Avalanche unsure of which is right in Australia. I'm

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Speaker 3: sure not be corrected on that later G. But essentially,

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Speaker 3: this method of debt reduction sees you paying the highest

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Speaker 3: interest rate first, while still making minimum repayments on all

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Speaker 3: other debts. You're not paying them at all, but we

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Speaker 3: are aggressively trying to get rid of the debt that

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Speaker 3: has the highest interest rate first, and then once that's

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Speaker 3: paid off, you work your way down to end up

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Speaker 3: paying the debt with the lowest interest rate. So there

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Speaker 3: are a number of reasons why you do this. So

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Speaker 3: the goodbits using this method means that you will pay

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Speaker 3: less in the long run money in because you are

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Speaker 3: targeting the debt with the largest amount of interest first,

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Speaker 3: so that you're not accruing a lot of other debt

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Speaker 3: in the background. And it can also speed up the

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Speaker 3: debt repayment process. So by only paying minimum on your

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Speaker 3: other debts and aggressively paying one, you're saving the most

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Speaker 3: interest and that's putting you in the most preferable position.

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Speaker 3: A couple of downsides there always are. Requires a fair

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Speaker 3: bit of discipline, so it's not easy to do these things,

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Speaker 3: and that is okay, but it is about commitment, and

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Speaker 3: it can stay harder to stay motivated because sometimes the

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Speaker 3: debt with the highest interest rate is not necessarily the

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Speaker 3: biggest debt you have. So we need to make sure

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Speaker 3: that we understand why we're doing this and commit to

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Speaker 3: it so that over the long term we get rid

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Speaker 3: of it and stay motivated. In comparison, the snowball method

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Speaker 3: g is exact opposite. Oh that's a bit dramatic. It's

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Speaker 3: not the exact opposite, but the Snowball method is basically

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Speaker 3: the opposite of the Avalanche method, where you pay off

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Speaker 3: and target your smallest stet first, so you completely forget

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Speaker 3: about the interest rates on all of the debts and

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Speaker 3: you just plan on tackling the smallest step first and

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Speaker 3: then you work your way up to the largest set

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Speaker 3: without taking into consideration any of the interest rates. So

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Speaker 3: some people prefer this because there's a number of obviously

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Speaker 3: good bits, and I'll explain those in a second. But

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Speaker 3: some people don't like this because obviously interest rate isn't

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Speaker 3: taken into consideration, and that can make people feel a

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Speaker 3: bit angsty. So, as I said before, there are some

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Speaker 3: good bits. I love this Normall method because it helps

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Speaker 3: you nail smaller goals. Sooner you're going to feel more motivated.

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Speaker 3: You're going to feel more accomplished because you'd be like, heck, yes,

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Speaker 3: I got one debt smashdown and you can move on

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Speaker 3: to the next one. So it makes you feel like

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Speaker 3: you are making more progress than you are with the

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Speaker 3: Avalanche method. Doesn't mean you are or not. It's just

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Speaker 3: usually when you get to close a credit card or

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Speaker 3: get to shut your after pay like that's going to

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Speaker 3: feel really good and keep you on the right track.

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Speaker 3: One of our best mates Dave Ramsey. He's not my

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Speaker 3: best mate gee, but I would like to get him

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Speaker 3: on the show. You guys should do a collab, we should.

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Speaker 3: I think he's pretty picky with who he collabs with.

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Speaker 3: But did you know he collabed with our mate Glenn

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Speaker 3: James from My Millennial Mood on Andrew's podcast on My

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Speaker 3: Millennial Money. Really when he came to Australia, he hung

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Speaker 3: out with Glenn James, and I'm not gonna lie it

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Speaker 3: was a little bit envious because he's known as a

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Speaker 3: bit of a finance whiz in the US. In saying

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Speaker 3: that I do want to stipulate, I don't agree with

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Speaker 3: all of his advice, and there are some things he

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Speaker 3: says that I go, come on, Dave, mate, calm down.

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Speaker 3: But he is really inspirational in this area. So anyway

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Speaker 3: back to what I was trying to say about old

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Speaker 3: mate Dave. He basically says that even though the avalanche

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Speaker 3: method should technically see us paying less. The snowball method

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Speaker 3: is more effective because of personal finance is twenty percent

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Speaker 3: head knowledge, which knowledge knowledge that's not how I would

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Speaker 3: have explained it, but knowledge and eighty percent about behavior,

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Speaker 3: which we do at Cheese on the Money. Absolutely agree

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Speaker 3: with that, and you need some quick wins in order

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Speaker 3: to say super pumped enough to get out of debt completely,

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Speaker 3: So he's not wrong. The snowball method is also easy

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Speaker 3: because you don't have to do any maths. You don't

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Speaker 3: have to think about the interest straight, you don't have

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Speaker 3: to calculate anything. You just start with the smallest debt,

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Speaker 3: start smashing it off and making as many repayments as

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Speaker 3: you can to that small debt to get rid of it,

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Speaker 3: obviously while still making minimum repayments on your other debts

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Speaker 3: please don't neglect them. But it just is a little

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Speaker 3: bit simpler because there's no working things out or calculating

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Speaker 3: interest rate or how much you'll pay over the long

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Speaker 3: term versus how many years. So what are the negatives

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Speaker 3: then be So as I said before, gee, you're going

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Speaker 3: to end up paying more because of the interest factor.

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Speaker 3: But again it's about motivation and feeling like you're smashing

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Speaker 3: it out and it may be a longer journey to

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Speaker 3: becoming debt free, but it's more about what you're actually

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Speaker 3: going to be able to feasibly commit to. It's not

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Speaker 3: about which one's going to save us the most money,

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Speaker 3: because when it comes to debt, we actually just need

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Speaker 3: a plan that works for us personally, not necessarily works

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Speaker 3: best on paper.

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Speaker 2: Yeah, okay, so Avalanche is harder but more effective, not

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Speaker 2: necessarily more effective, but in on paper, more effective, more effective.

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Speaker 3: If we work out what that actually means on paper.

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Speaker 2: Yep. Snowball is potentially easier, but a slower and steadier

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Speaker 2: method of going about things. How do you decide which

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Speaker 2: one is right for you?

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Speaker 3: Well, I prefer doing it based on which name you

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Speaker 3: think is cuter. So like I think snowball Snoble's soft,

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Speaker 3: like Snowball's fun. It was the name of the cat

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Speaker 3: in the Simpsons, Like it just makes sense. Avalanche sounds aggressive,

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Speaker 3: so like, I don't go with it. But more seriously, Gee,

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Speaker 3: it comes down to your personality. It comes down to

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Speaker 3: whether you're someone who has strong discipline to be able

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Speaker 3: to put that extra cash towards debt repayments. So if

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Speaker 3: that's you, I'd probably choose the avalanche method because you're

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Speaker 3: on top of it and you're actually motivated by that.

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Speaker 3: But if you're someone who struggles with self motivation, which,

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Speaker 3: to be honest, I think I would be a snowballer,

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Speaker 3: not an avalancher, because even though it makes logical sense,

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Speaker 3: I just like progress. So sometimes if I see that

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Speaker 3: I owe thirty bucks or something, I'm far more likely

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Speaker 3: to just want it gone and then I feel accomplished.

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Speaker 3: I'm the type of person as well. G When I'm

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Speaker 3: writing a to do list, I write things I already

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Speaker 3: have done.

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Speaker 2: The same same then you highlight them so.

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Speaker 3: That down won you resonate with putting to do list

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Speaker 3: items on the to do list that you've already done,

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Speaker 3: I'd probably say you're a snowballer, okay, So completely up

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Speaker 3: to you. And just like sunscreen because we obviously are

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Speaker 3: very big advocates of sunscreen in this community, where they

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Speaker 3: say the best sunscreen is the one you use. The

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Speaker 3: same goes for debt reduction methods. The best one is

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Speaker 3: just the one that you're going to stick to.

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Speaker 2: I love that, okay. So that is the snowball and

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Speaker 2: the avalanche methods sorted fee. So they're the main methods

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Speaker 2: of debt prioritization and paying down our debts. But what

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Speaker 2: about debt consolidation Is that is that a method as well? Gee,

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Speaker 2: I guess it's not really prioritizing. It's really just prioritizing

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Speaker 2: all of them and making them one.

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Speaker 3: Yeah, cook an entire no, I love this. We did

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Speaker 3: an entire episode on debt consolidation. So do you should

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Speaker 3: be a wizard on this by now, like, come on,

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Speaker 3: Georgia King. But debt consolidation is essentially if you didn't

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Speaker 3: listen to that episode, please do. But if you didn't,

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Speaker 3: it's where you take out a loan to cover all

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Speaker 3: of our debts so that we're just working out paying

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Speaker 3: one debt instead of multiple. And there are a number

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Speaker 3: of reasons we would do this. So one because personal

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Speaker 3: loans and credit cards often carry higher interest rates, So

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Speaker 3: the average of a credit card usually sits between fourteen

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Speaker 3: and twenty two percent interest rate. A personal loan is

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Speaker 3: probably sitting around fourteen if it's unsecured, maybe a little

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Speaker 3: bit less if it is a secured personal loan. But essentially,

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Speaker 3: when you roll them all together, you take out what's

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Speaker 3: called a debt consolidation loan, and it's essentially a personal

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Speaker 3: loan that just covers all of those debts, pays them back,

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Speaker 3: and you just have one in one place. So a

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Speaker 3: good example is if let's say you have three different

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Speaker 3: credit cards, all with different levels of debt associated with

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Speaker 3: them and different interest rates, and they're being paid at

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Speaker 3: different times of the month. Debt consolidation would mean it

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Speaker 3: swips in, it pays off all of those for you,

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Speaker 3: gives you one single loan that you owe interest on.

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Speaker 3: It's often a lower rate of interest, and you just

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Speaker 3: pay that off once a month. The benefits of this

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Speaker 3: is it can feel so much more free, like if

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Speaker 3: you're someone who is in a bit of a pickle,

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Speaker 3: lots of debts can feel really overwhelming, and it does

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Speaker 3: feel like you're pulling them all together, taking control, and

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Speaker 3: you just have one repayment to make it's less overwhelming,

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Speaker 3: and it just puts you in a position where you

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Speaker 3: feel a little bit more empowered to get debt free.

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Speaker 3: You might be able to manage a lowered interest rate,

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Speaker 3: which is a bit of a money win. So that

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Speaker 3: means that you are going to be saving money over

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Speaker 3: the long term, and it's important to understand that it's

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Speaker 3: one less admin task as well. So at the end

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Speaker 3: of the day, if you're paying lots of different debts,

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Speaker 3: let's be honest, doing one thing instead of three or

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Speaker 3: four kind of just makes sense to gem.

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Speaker 2: Okay, so V that that actually does sound quite good,

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Speaker 2: But I remember from that episode that there were some downsides.

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Speaker 2: Can't remember what they are, so yeah, I'm.

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Speaker 3: Sorry, honestly, Jeking, you have been on this show long

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Speaker 3: enough to be a financial whiz yourself. But as you

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Speaker 3: were asking for when it's not a good idea, there

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Speaker 3: are a number of downfalls and we just need to

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Speaker 3: be aware of them. It doesn't mean we don't do it.

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Speaker 3: So it can take us longer to pay off one

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Speaker 3: large loan instead of you know, a multitude of little

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Speaker 3: debts which could ultimately cost us more. We just need

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Speaker 3: to take it into consideration. It can leave us a

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Speaker 3: bit tempted to spend more and leave you in a

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Speaker 3: deeper level of debt if you do go and get

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Speaker 3: another credit card. So if you don't have a lot

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Speaker 3: of self control, I would be really careful about this

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Speaker 3: because consolidating it makes it feel like it's going away

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Speaker 3: even though it's still there. It's just more manageable and

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Speaker 3: more palatable, so you might go, you know what I've

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Speaker 3: got that that's really manageable, I'm going to go get

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Speaker 3: another credit card.

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Speaker 2: Yeah not a good idea, Yeah, yeah right.

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Speaker 3: And there are a few scammers in this space, so

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Speaker 3: please be careful if you do go down this path,

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Speaker 3: please please please make sure you do so with a

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Speaker 3: legitimate mainstream lender, as there are a few scammers out

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Speaker 3: there that do make you pay upfront freeze to set

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Speaker 3: up loans and then they never follow you up and

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Speaker 3: give you the money that is required to pay off

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Speaker 3: all your spoiler debts, which means that you're in a

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Speaker 3: bigger people than you were before. And if you do

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Speaker 3: have a home loan, it could be impacted if things

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Speaker 3: go pair shaped with your debt consolidation loan. We have

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Speaker 3: spoken about this before, and it's a bit of a

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Speaker 3: shout out to an old show partner that you know,

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Speaker 3: I actually still keep in contact with and we haven't

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Speaker 3: worked with in a little while, but hopefully we will

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Speaker 3: soon because I love them. But our friends at wiser

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Speaker 3: so WISR they do a lot of debt consolidation and

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Speaker 3: also help advise on what the best outcome would be,

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Speaker 3: and I really like what they do. Obviously you can

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Speaker 3: also call the National Debt Helpline and all of that

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Speaker 3: because they are really helpful. But when it comes to

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Speaker 3: debt consolidation, Wiser do a really good job. Again, that's

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Speaker 3: not a sponsored mentioned. It's just good eggs doing good things,

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Speaker 3: and you guys deserve to know about it.

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Speaker 2: Brilliant. Are there any other methods that people use? Are

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Speaker 2: they the main.

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Speaker 3: They're pretty much the main methods. I mean, there's a

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Speaker 3: million different ways you could do it. You could put

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Speaker 3: a chart on your fridge, during app on your phone,

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Speaker 3: or you know, there's lots of different ways that you

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Speaker 3: could get rid of debt. But those are the two

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Speaker 3: main ways that I see people doing it and I

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Speaker 3: talk to clients about. And then obviously debt consolidation is

431
00:21:18,720 --> 00:21:21,520
Speaker 3: something on the top of that that you go, is

432
00:21:21,560 --> 00:21:24,520
Speaker 3: it actually better to do that? But with debt consolidation,

433
00:21:24,960 --> 00:21:26,679
Speaker 3: one thing to be aware of is if you are

434
00:21:26,840 --> 00:21:30,440
Speaker 3: up the river of debt pretty far, sometimes it won't

435
00:21:30,480 --> 00:21:33,840
Speaker 3: apply to you. Sometimes they'll say, look, we're not willing

436
00:21:33,920 --> 00:21:36,120
Speaker 3: to take on that level of risk. So if you've

437
00:21:36,119 --> 00:21:37,960
Speaker 3: got a few credit cards and you know you're in

438
00:21:38,040 --> 00:21:40,119
Speaker 3: a bit of a pickle. Yes, debt consolidation might be

439
00:21:40,160 --> 00:21:43,040
Speaker 3: an option, but I have worked with clients and people

440
00:21:43,160 --> 00:21:46,760
Speaker 3: before where we've gone to consolidate a debt and the

441
00:21:46,840 --> 00:21:49,160
Speaker 3: banks have said no, thank you, come back once you've

442
00:21:49,200 --> 00:21:51,399
Speaker 3: gotten a fair bit of debt down so that we

443
00:21:51,480 --> 00:21:53,520
Speaker 3: can do it then, because we're not willing to take

444
00:21:53,560 --> 00:21:55,800
Speaker 3: the risk right now. So don't feel bad if that

445
00:21:56,000 --> 00:21:57,720
Speaker 3: is you. And if it is you and you're feeling

446
00:21:57,840 --> 00:22:00,960
Speaker 3: super super super overwhelmed, I get it. Our friends at

447
00:22:00,960 --> 00:22:03,720
Speaker 3: the National Debt Helpline are going to be able to

448
00:22:03,800 --> 00:22:06,040
Speaker 3: tell you exactly what your next steps should be.

449
00:22:06,960 --> 00:22:09,879
Speaker 2: So, speaking of the National Debt Helpline, EE has that

450
00:22:10,000 --> 00:22:13,440
Speaker 2: for a transition. When I was doing some reading for today,

451
00:22:13,480 --> 00:22:17,360
Speaker 2: they mentioned high priority debts and they said that they

452
00:22:17,400 --> 00:22:19,880
Speaker 2: should be the ones that we focus our attention on first.

453
00:22:20,280 --> 00:22:20,679
Speaker 2: What are they?

454
00:22:21,320 --> 00:22:23,560
Speaker 3: Yeah, So I think that that's really important to point

455
00:22:23,560 --> 00:22:25,119
Speaker 3: out as well. So when you're in debt, it can

456
00:22:25,160 --> 00:22:29,400
Speaker 3: feel super overwhelming, but basically these are debts that impact

457
00:22:29,520 --> 00:22:33,359
Speaker 3: our lives directly the most. So we're talking things like

458
00:22:33,480 --> 00:22:36,760
Speaker 3: your rent or your mortgage, or counsel rates or body

459
00:22:36,840 --> 00:22:40,080
Speaker 3: corporate fees or a car repayment or things like energy

460
00:22:40,240 --> 00:22:43,399
Speaker 3: and water and food. We are not talking go and

461
00:22:43,480 --> 00:22:45,960
Speaker 3: pay off your credit card for the shoes that you bought.

462
00:22:46,320 --> 00:22:48,880
Speaker 3: If you can't put food on the table, we need

463
00:22:48,960 --> 00:22:52,600
Speaker 3: to negotiate that. So if you are struggling, then these

464
00:22:52,640 --> 00:22:55,000
Speaker 3: are the debts that you need to focus on first.

465
00:22:55,400 --> 00:22:57,920
Speaker 3: And often we feel really guilty because a credit card

466
00:22:58,000 --> 00:23:00,600
Speaker 3: company will call us and they make us awful for

467
00:23:00,760 --> 00:23:03,760
Speaker 3: not paying it, and we don't feel good about that situation.

468
00:23:03,920 --> 00:23:05,320
Speaker 3: So you're like, oh my gosh, maybe I should just

469
00:23:05,400 --> 00:23:07,400
Speaker 3: pay that off. But if you're not able to put

470
00:23:07,440 --> 00:23:09,800
Speaker 3: food on the table, that is not something you should

471
00:23:09,800 --> 00:23:12,000
Speaker 3: be paying. And I know that they're not going to

472
00:23:12,080 --> 00:23:14,320
Speaker 3: love me for saying that, but I would be saying

473
00:23:14,400 --> 00:23:16,520
Speaker 3: to them, look, really sorry, I don't have the funds

474
00:23:16,600 --> 00:23:18,680
Speaker 3: for that. Right now. I have to put food on

475
00:23:18,800 --> 00:23:20,960
Speaker 3: the table for my kids or for myself, or I

476
00:23:21,080 --> 00:23:22,639
Speaker 3: need to pay rent so that I can keep a

477
00:23:22,760 --> 00:23:26,199
Speaker 3: roof over my head, because nobody deserves to lose their

478
00:23:26,240 --> 00:23:30,399
Speaker 3: home over bad debt. If you're seriously struggling, please please

479
00:23:30,720 --> 00:23:33,400
Speaker 3: please reach out to our friends at the National Debt Helpline.

480
00:23:33,440 --> 00:23:35,800
Speaker 3: They are always so helpful. They are a wealth of

481
00:23:35,880 --> 00:23:38,440
Speaker 3: knowledge in this space. And they'll be able to help

482
00:23:38,480 --> 00:23:40,639
Speaker 3: you create a plan. I know some of you have

483
00:23:40,760 --> 00:23:43,200
Speaker 3: messaged me and you've said, look, I really want to

484
00:23:43,240 --> 00:23:44,960
Speaker 3: call them, but I feel really overwhelmed or I don't

485
00:23:45,000 --> 00:23:47,920
Speaker 3: think my situation is bad enough. No, there's no such thing.

486
00:23:48,280 --> 00:23:50,520
Speaker 3: When you call them, they'll work out what you need.

487
00:23:50,800 --> 00:23:52,520
Speaker 3: So they'll pick up the phone, they'll be like, hey, gee,

488
00:23:52,760 --> 00:23:55,880
Speaker 3: how are you hope you've been well? How can we help?

489
00:23:55,960 --> 00:23:57,920
Speaker 3: And you'll tell them a little bit about your situation

490
00:23:58,200 --> 00:24:00,119
Speaker 3: and they will match you with the right person and

491
00:24:00,359 --> 00:24:02,320
Speaker 3: if it's not the right service for you, they're just

492
00:24:02,440 --> 00:24:04,800
Speaker 3: going to tell you that they are very kind humans.

493
00:24:05,160 --> 00:24:07,800
Speaker 3: But usually they will match you up with a financial

494
00:24:07,880 --> 00:24:10,879
Speaker 3: counselor for free to help you get out of the

495
00:24:11,000 --> 00:24:13,159
Speaker 3: situation that you were in, which is why I am

496
00:24:13,400 --> 00:24:14,920
Speaker 3: such a big advocate of them.

497
00:24:15,480 --> 00:24:17,399
Speaker 2: Do you hear that a lot? I'm not sure, like

498
00:24:17,440 --> 00:24:19,000
Speaker 2: if you would hear it with clients or in our

499
00:24:19,040 --> 00:24:20,840
Speaker 2: community V But do you feel like a lot of

500
00:24:20,880 --> 00:24:23,320
Speaker 2: people don't reach out for help because they don't think

501
00:24:23,359 --> 00:24:25,320
Speaker 2: they're in a bad enough spot, or maybe they think

502
00:24:25,320 --> 00:24:27,480
Speaker 2: that they're taking that service from someone else who needs it.

503
00:24:27,560 --> 00:24:28,720
Speaker 2: More Like, is that a yes?

504
00:24:29,000 --> 00:24:32,879
Speaker 3: And it's not a thing and complete tangent. Have you

505
00:24:33,040 --> 00:24:34,159
Speaker 3: watched on Netflix?

506
00:24:34,359 --> 00:24:34,600
Speaker 1: Mate?

507
00:24:34,920 --> 00:24:36,600
Speaker 2: Oh my god, that's what I was thinking of when

508
00:24:36,640 --> 00:24:37,760
Speaker 2: you were saying all of this stuff.

509
00:24:37,840 --> 00:24:41,040
Speaker 3: Yes, so I watched that recently with Steve, and she

510
00:24:41,400 --> 00:24:44,159
Speaker 3: in that show does exactly that. She like goes to

511
00:24:44,240 --> 00:24:46,280
Speaker 3: get help and she's like, yeah, but like, I don't

512
00:24:46,359 --> 00:24:50,080
Speaker 3: have real abuse. And the woman at the shelters like,

513
00:24:50,560 --> 00:24:52,639
Speaker 3: what is real abuse? And she's like, oh, like, my

514
00:24:52,960 --> 00:24:56,639
Speaker 3: partner doesn't hit me. And it was emotional abuse and anyway,

515
00:24:56,680 --> 00:24:59,560
Speaker 3: financial abuse. Yeah, it was emotional abuse, financial abuse.

516
00:24:59,600 --> 00:24:59,760
Speaker 1: It was.

517
00:25:00,080 --> 00:25:02,320
Speaker 3: It was a lot. It's a really good show. It's

518
00:25:02,440 --> 00:25:04,520
Speaker 3: probably a bit triggering if you're going through it, So

519
00:25:04,680 --> 00:25:06,879
Speaker 3: just a bit of a content warning there for you guys.

520
00:25:07,280 --> 00:25:09,200
Speaker 3: But I really enjoyed it. But the thing that I

521
00:25:09,320 --> 00:25:13,160
Speaker 3: saw was, yes, we always think about other people being

522
00:25:13,200 --> 00:25:16,320
Speaker 3: in a worse off situation than us, when in reality,

523
00:25:16,720 --> 00:25:19,920
Speaker 3: if you're struggling with something, that doesn't mean that just

524
00:25:19,960 --> 00:25:22,440
Speaker 3: because someone else has that harder that your struggles aren't

525
00:25:22,480 --> 00:25:26,080
Speaker 3: worthy of consideration like you are worthy. And at the

526
00:25:26,200 --> 00:25:27,600
Speaker 3: end of the day, if it's something that you need

527
00:25:27,680 --> 00:25:29,800
Speaker 3: help with, please don't feel like you can't reach out

528
00:25:30,119 --> 00:25:32,199
Speaker 3: but yeah, George, I get a lot of messages from

529
00:25:32,240 --> 00:25:34,320
Speaker 3: people saying, hey, v I just don't know who to contact,

530
00:25:34,359 --> 00:25:36,960
Speaker 3: And I say National Debt Helpline. They're like, oh, yeah,

531
00:25:37,000 --> 00:25:40,119
Speaker 3: but I'm just not bad enough for that. Yeah, that's okay.

532
00:25:40,560 --> 00:25:42,720
Speaker 3: You can still call them. You don't need to be

533
00:25:42,920 --> 00:25:45,320
Speaker 3: the worst of the worst to call them. They're there

534
00:25:45,400 --> 00:25:47,960
Speaker 3: for everybody. They're there for help. Like, if I was

535
00:25:48,000 --> 00:25:50,000
Speaker 3: in a situation and I didn't know what to do

536
00:25:50,440 --> 00:25:52,320
Speaker 3: and I had a whole heave of debt, I'd call

537
00:25:52,400 --> 00:25:54,920
Speaker 3: them and feel really comfortable calling them because I know

538
00:25:55,080 --> 00:25:58,560
Speaker 3: they're the right people for those situations. So please don't

539
00:25:58,600 --> 00:26:01,199
Speaker 3: feel like you need to have a worse situation than

540
00:26:01,240 --> 00:26:03,240
Speaker 3: what you do to reach out for the help that

541
00:26:03,320 --> 00:26:03,800
Speaker 3: you deserve.

542
00:26:04,119 --> 00:26:07,040
Speaker 2: Yeah, really, well said, They're v all right. Guys, will

543
00:26:07,080 --> 00:26:09,240
Speaker 2: be back after a very short break to talk through

544
00:26:09,320 --> 00:26:12,480
Speaker 2: strategies of paying down our debts faster. Plus we'll be

545
00:26:12,560 --> 00:26:15,520
Speaker 2: answering a few debt inspired questions from the community, So

546
00:26:15,680 --> 00:26:23,960
Speaker 2: please don't go anywhere, all right, be Let's talk through

547
00:26:24,080 --> 00:26:27,639
Speaker 2: some strategies for actually paying down our debts faster. What

548
00:26:27,840 --> 00:26:30,240
Speaker 2: tricks of the trade do you have for us? Tricks

549
00:26:30,280 --> 00:26:30,760
Speaker 2: of the track.

550
00:26:31,320 --> 00:26:33,159
Speaker 3: Look, let's call them tricks of the trade. Do you

551
00:26:33,200 --> 00:26:34,920
Speaker 3: guys are going to be like, hey, it's be the

552
00:26:35,000 --> 00:26:37,480
Speaker 3: broken record again, because I'm going to be like, sort

553
00:26:37,560 --> 00:26:40,400
Speaker 3: out your budget, sort it out, just get it done.

554
00:26:40,560 --> 00:26:42,480
Speaker 3: Do you know what I'm so passionate about you guys

555
00:26:42,520 --> 00:26:44,200
Speaker 3: sorting out your budget? So that I put a free

556
00:26:44,240 --> 00:26:46,360
Speaker 3: one on my website that you can go and download.

557
00:26:46,520 --> 00:26:49,360
Speaker 3: It's literally the one I use with my clients. It's

558
00:26:49,440 --> 00:26:52,040
Speaker 3: not the fancy budget and cash Flow Masterclass one that

559
00:26:52,560 --> 00:26:55,200
Speaker 3: calculates your cash flow and tells you what bank accounts

560
00:26:55,240 --> 00:26:57,760
Speaker 3: to put it in. It's not that one because unfortunately

561
00:26:57,840 --> 00:27:00,520
Speaker 3: I can't give that one away for free. This one

562
00:27:00,640 --> 00:27:02,320
Speaker 3: is going to help you track what you earn, what

563
00:27:02,440 --> 00:27:04,399
Speaker 3: you spend, what you own, and what you owe. It

564
00:27:04,520 --> 00:27:08,399
Speaker 3: takes into consideration everything that you need to get a clean,

565
00:27:08,720 --> 00:27:12,000
Speaker 3: clear budget in order and work out if you are

566
00:27:12,119 --> 00:27:14,520
Speaker 3: spending more than you are earning, or you're earning more

567
00:27:14,560 --> 00:27:16,800
Speaker 3: than you are spending, which is a very good situation

568
00:27:16,960 --> 00:27:19,800
Speaker 3: to be in. So download that budget. If you haven't

569
00:27:19,840 --> 00:27:24,720
Speaker 3: done it yet, please do. It's literally free, and then

570
00:27:24,840 --> 00:27:26,760
Speaker 3: have a think about some things that you can do

571
00:27:26,960 --> 00:27:29,320
Speaker 3: in addition to that. So a budget is going to

572
00:27:29,400 --> 00:27:32,720
Speaker 3: be helpful, not because it's restrictive. So I'm not saying

573
00:27:33,160 --> 00:27:36,080
Speaker 3: go on a budget like cut back, but a budget

574
00:27:36,160 --> 00:27:38,000
Speaker 3: is going to tell you where you're spending your money

575
00:27:38,119 --> 00:27:41,280
Speaker 3: and where you're not. It's going to tell you what

576
00:27:41,480 --> 00:27:45,080
Speaker 3: you are prioritizing, and it might just highlight some things

577
00:27:45,119 --> 00:27:48,840
Speaker 3: that you go, oh, Victoria over eat three nights this

578
00:27:49,040 --> 00:27:52,760
Speaker 3: week is unacceptable. Whereas if I didn't have my budget,

579
00:27:52,800 --> 00:27:54,920
Speaker 3: maybe I wouldn't have been thinking about that because like,

580
00:27:55,000 --> 00:27:58,399
Speaker 3: the hard numbers aren't in my face. The next thing

581
00:27:58,480 --> 00:28:01,679
Speaker 3: is thinking about how can you get some additional funds

582
00:28:01,880 --> 00:28:04,359
Speaker 3: in the door? Can you get a side hustle? And

583
00:28:04,440 --> 00:28:06,840
Speaker 3: we're not saying go and start an entire business. Gee,

584
00:28:06,960 --> 00:28:09,800
Speaker 3: we recently did an entire episode on I think it

585
00:28:09,920 --> 00:28:12,239
Speaker 3: was like five ways to bring cash in the door

586
00:28:12,280 --> 00:28:15,639
Speaker 3: without leaving a couch yep, Like, go listen to that episode,

587
00:28:15,960 --> 00:28:19,720
Speaker 3: because it's side hustles that don't require any money to start.

588
00:28:20,119 --> 00:28:23,399
Speaker 3: It's surveys, it's online work. It is stuff that you

589
00:28:23,560 --> 00:28:27,920
Speaker 3: can do literally today without having to put another dollar aside,

590
00:28:28,240 --> 00:28:30,920
Speaker 3: which is the money when I reckon the next one.

591
00:28:31,440 --> 00:28:34,480
Speaker 3: Take a leaf out of Jessicriici's book, sell some stuff

592
00:28:34,520 --> 00:28:37,119
Speaker 3: you don't need. She's the biggest hustler I know, g

593
00:28:37,440 --> 00:28:40,360
Speaker 3: Like she is all across Facebook marketplace. She puts her

594
00:28:40,400 --> 00:28:44,520
Speaker 3: clothes on depop all the time, Sell stuff you don't need,

595
00:28:44,680 --> 00:28:48,240
Speaker 3: and chuck that cash towards debt repayments. Like even if

596
00:28:48,320 --> 00:28:50,440
Speaker 3: you're like Gina, what, I don't have enough to get

597
00:28:50,560 --> 00:28:53,080
Speaker 3: rid of the debt, but it feels so good to

598
00:28:53,160 --> 00:28:55,960
Speaker 3: have another month's worth of debt repayments just in the

599
00:28:56,160 --> 00:29:00,440
Speaker 3: rag or putting that cash into an emergency so you

600
00:29:00,560 --> 00:29:03,600
Speaker 3: feel a little bit more comfortable about your budget. So

601
00:29:03,720 --> 00:29:06,360
Speaker 3: it doesn't necessarily mean you need to go and sell

602
00:29:06,480 --> 00:29:08,880
Speaker 3: stuff to get rid of the debt completely, but you

603
00:29:09,000 --> 00:29:12,120
Speaker 3: might be feeling a bit uncomfortable about your financial situation.

604
00:29:12,680 --> 00:29:15,720
Speaker 3: So selling some stuff to create an emergency fund while

605
00:29:15,800 --> 00:29:18,920
Speaker 3: you have debt can be really empowering because you know,

606
00:29:19,200 --> 00:29:21,400
Speaker 3: you know what, if I don't have the funds this week,

607
00:29:21,640 --> 00:29:23,760
Speaker 3: I've got an emergency fund that I can dip into

608
00:29:24,160 --> 00:29:26,000
Speaker 3: pull it out, and I'm all good and I'm not

609
00:29:26,080 --> 00:29:28,480
Speaker 3: going to go into further debt because I don't have

610
00:29:28,680 --> 00:29:32,000
Speaker 3: cash available. So for my clients and I, that seems

611
00:29:32,040 --> 00:29:34,880
Speaker 3: to be a really empowering way of kind of getting

612
00:29:34,880 --> 00:29:37,320
Speaker 3: ahead even though we're not in the position to be

613
00:29:37,360 --> 00:29:40,280
Speaker 3: able to extinguish the debt completely right now, because we

614
00:29:40,400 --> 00:29:43,160
Speaker 3: feel a little bit more cushy, a little bit more comfortable,

615
00:29:43,280 --> 00:29:46,040
Speaker 3: and it makes you feel so much more secure on

616
00:29:46,120 --> 00:29:49,920
Speaker 3: that journey. But it's fun, stay motivated using visuals. Go

617
00:29:50,240 --> 00:29:53,200
Speaker 3: download the shoes on the Money, debt tracking charts and

618
00:29:53,320 --> 00:29:56,120
Speaker 3: our savings hacks. Put them on your fridge, keep them

619
00:29:56,160 --> 00:29:59,400
Speaker 3: front of mind, make a little mood board. Put pictures

620
00:29:59,400 --> 00:30:00,959
Speaker 3: on your fridge of what you're going to get up

621
00:30:01,040 --> 00:30:03,320
Speaker 3: to when you are out of debt, and hell you're

622
00:30:03,360 --> 00:30:05,960
Speaker 3: going to feel, so it is always front of mind.

623
00:30:06,680 --> 00:30:09,120
Speaker 3: And make sure that you are putting yourself in the

624
00:30:09,200 --> 00:30:12,600
Speaker 3: best position. If you can't pay down the debt, stop

625
00:30:12,680 --> 00:30:15,520
Speaker 3: putting so much more pressure on yourself to do it faster.

626
00:30:16,200 --> 00:30:18,680
Speaker 3: Just because we're talking about it does not mean it's

627
00:30:18,760 --> 00:30:21,160
Speaker 3: going to work for you. If it is the long

628
00:30:21,240 --> 00:30:23,520
Speaker 3: slog for you and you know that that's the case,

629
00:30:23,960 --> 00:30:26,280
Speaker 3: that's okay too, all right, v I thought it would be.

630
00:30:26,600 --> 00:30:30,040
Speaker 2: Fun to finish today's episode by answering some debt related

631
00:30:30,200 --> 00:30:35,240
Speaker 2: questions from our community. Genius you sucked, Okay, so the

632
00:30:35,320 --> 00:30:38,760
Speaker 2: first one here is from Danny. So she hates the

633
00:30:38,840 --> 00:30:41,720
Speaker 2: feeling of having a hex debt. She doesn't like the

634
00:30:41,720 --> 00:30:44,040
Speaker 2: feeling of debt at all, and knowing her goal one

635
00:30:44,120 --> 00:30:45,800
Speaker 2: day in the near future it will be to have

636
00:30:45,920 --> 00:30:48,720
Speaker 2: a house and then take on more debt. What is

637
00:30:48,920 --> 00:30:51,680
Speaker 2: your advice then for hex? Does she just leave it?

638
00:30:52,160 --> 00:30:55,200
Speaker 2: She's also added that it makes her so uncomfortable watching

639
00:30:55,240 --> 00:30:58,760
Speaker 2: the indexation get whacked on, which for her is over

640
00:30:58,840 --> 00:31:02,320
Speaker 2: five hundred dollars a year. Yea, et cetera, et cetera.

641
00:31:02,400 --> 00:31:04,920
Speaker 2: That's the essence of ze questions. So what do you

642
00:31:05,000 --> 00:31:05,280
Speaker 2: think me?

643
00:31:05,600 --> 00:31:08,360
Speaker 3: So obviously I can't tell you which debt to prioritize

644
00:31:08,400 --> 00:31:10,640
Speaker 3: because that would constitute personal advice. But do you know

645
00:31:10,680 --> 00:31:12,080
Speaker 3: what I can tell you, guys? I can tell you

646
00:31:12,160 --> 00:31:14,640
Speaker 3: what I do personally, and I pay my hex stet

647
00:31:14,680 --> 00:31:18,040
Speaker 3: off at the minimum. It is no secret that I

648
00:31:18,320 --> 00:31:21,840
Speaker 3: am one of those just like real nerdy people like gee,

649
00:31:21,920 --> 00:31:24,760
Speaker 3: you know my little sister we are chalk and cheese.

650
00:31:24,840 --> 00:31:27,760
Speaker 3: She's like the cool one that always has the fashionable wardrobe.

651
00:31:27,960 --> 00:31:29,720
Speaker 3: And I've been the one that's like, oh, but I

652
00:31:29,920 --> 00:31:31,840
Speaker 3: went to UNI, and then I went to UNI again

653
00:31:31,960 --> 00:31:34,560
Speaker 3: and Bam, I went to UNI again because like just

654
00:31:34,680 --> 00:31:37,320
Speaker 3: not cool. Like maybe cool kids do go to UNI.

655
00:31:37,440 --> 00:31:41,280
Speaker 3: I don't know. But anyway, to be brutally honest, my

656
00:31:41,480 --> 00:31:44,400
Speaker 3: hex stet is still Gee, put your coffee down because

657
00:31:44,400 --> 00:31:47,080
Speaker 3: you'll spit it out. Still over six figures.

658
00:31:47,320 --> 00:31:49,720
Speaker 2: And figures six figures wigs.

659
00:31:49,720 --> 00:31:53,920
Speaker 3: Because I have I have my undergraduates, I have my postgraduate,

660
00:31:53,960 --> 00:31:56,640
Speaker 3: and then i have a master's degree as well, and

661
00:31:56,720 --> 00:31:59,760
Speaker 3: then I've also paid for other education outside of that

662
00:32:00,000 --> 00:32:02,840
Speaker 3: because I couldn't put it on HEX, which is totally fine,

663
00:32:03,440 --> 00:32:07,960
Speaker 3: but I prioritized personally saving up for a mortgage over

664
00:32:08,080 --> 00:32:10,960
Speaker 3: paying off my hextet, and I did that because HEX

665
00:32:11,120 --> 00:32:14,760
Speaker 3: doesn't stop you from getting a mortgage, so unlike having

666
00:32:14,800 --> 00:32:18,320
Speaker 3: a credit card or a personal loan, which will potentially

667
00:32:18,600 --> 00:32:22,240
Speaker 3: stop you from getting a mortgage. Hextet it's just taken

668
00:32:22,280 --> 00:32:25,000
Speaker 3: into consideration as a part of your cash flow because

669
00:32:25,040 --> 00:32:27,720
Speaker 3: the bank knows if you don't have an income, that's

670
00:32:27,760 --> 00:32:29,959
Speaker 3: a debt that's not going to be chased. It can

671
00:32:30,080 --> 00:32:32,240
Speaker 3: just be put on the shelf and put to the side.

672
00:32:32,680 --> 00:32:35,400
Speaker 3: It does impact your cash flow, so each and every

673
00:32:35,480 --> 00:32:39,000
Speaker 3: single month, before you get your salary from your employer,

674
00:32:39,480 --> 00:32:41,640
Speaker 3: it will be taken out, which means, yes, if you

675
00:32:41,680 --> 00:32:44,840
Speaker 3: earn seventy thousand dollars, less money will go into your

676
00:32:44,920 --> 00:32:47,880
Speaker 3: account if you have a hextet than somebody who's hex

677
00:32:47,920 --> 00:32:51,680
Speaker 3: stet is gone. But from my perspective, I'd much prefer

678
00:32:51,840 --> 00:32:55,120
Speaker 3: that than to put off the goal of purchasing a house,

679
00:32:55,560 --> 00:32:58,960
Speaker 3: because gee, if I had prioritized paying off my hextet

680
00:32:59,160 --> 00:33:02,160
Speaker 3: instead of purchase to see a house with Steve, I

681
00:33:02,280 --> 00:33:05,640
Speaker 3: would still be paying off my hextep. Yeah, like I

682
00:33:05,720 --> 00:33:08,520
Speaker 3: wouldn't have a house. I wouldn't be creating wealth. I

683
00:33:08,600 --> 00:33:12,280
Speaker 3: wouldn't be in that situation. So I made the conscious

684
00:33:12,400 --> 00:33:17,280
Speaker 3: decision to not do additional hex debt repayments because releasing

685
00:33:17,360 --> 00:33:20,920
Speaker 3: that additional cash flow wasn't my priority. My priority was

686
00:33:20,960 --> 00:33:22,840
Speaker 3: getting in the market and actually.

687
00:33:22,680 --> 00:33:23,640
Speaker 2: Saving for a home.

688
00:33:24,040 --> 00:33:26,440
Speaker 3: And I knew that if I had to then pay

689
00:33:26,480 --> 00:33:29,440
Speaker 3: off another hundred grand plus, which is really scary and

690
00:33:29,640 --> 00:33:32,520
Speaker 3: probably not something I should literally admit on a podcast

691
00:33:32,720 --> 00:33:36,400
Speaker 3: this big, but I'm happy to share it, I would

692
00:33:36,520 --> 00:33:39,640
Speaker 3: be purchasing in another five years because of my savings capacity.

693
00:33:40,360 --> 00:33:42,920
Speaker 3: So I just don't want to put myself in that position.

694
00:33:43,360 --> 00:33:45,280
Speaker 3: In saying that, I think that a lot of people

695
00:33:45,360 --> 00:33:48,400
Speaker 3: do feel uncomfortable with it because we are geared to

696
00:33:48,520 --> 00:33:52,000
Speaker 3: feel relatively uncomfortable with debt, and that's how we see it.

697
00:33:52,480 --> 00:33:56,960
Speaker 3: But five hundred dollars a year indexation isn't additional debt, Like, yes,

698
00:33:57,000 --> 00:33:59,200
Speaker 3: it goes up, but it's just going up to make

699
00:33:59,240 --> 00:34:02,400
Speaker 3: sure that it maps the costs of goods and services

700
00:34:02,560 --> 00:34:06,560
Speaker 3: in that financial year, which from my perspective, I'd prefer

701
00:34:06,640 --> 00:34:09,279
Speaker 3: to be paying that five hundred dollars in additional debt

702
00:34:09,760 --> 00:34:12,120
Speaker 3: than I would to not be in the housing market

703
00:34:12,200 --> 00:34:15,680
Speaker 3: because I was saving. But again, that's me and it

704
00:34:15,800 --> 00:34:18,040
Speaker 3: might not work for you. And I just want to

705
00:34:18,080 --> 00:34:20,640
Speaker 3: share that because it's one of those things where people

706
00:34:20,640 --> 00:34:22,239
Speaker 3: are like, oh, what should I do, And I'm like, well,

707
00:34:22,400 --> 00:34:24,480
Speaker 3: I can't tell you, but I can share with you

708
00:34:24,600 --> 00:34:25,560
Speaker 3: what I do personally.

709
00:34:26,080 --> 00:34:28,960
Speaker 2: Yeah, for people like me who we listen but we

710
00:34:29,080 --> 00:34:33,360
Speaker 2: don't always absorb. What does What is indexation again? Right?

711
00:34:33,440 --> 00:34:36,840
Speaker 3: Indexation G or let's specifically reference what it means for

712
00:34:36,960 --> 00:34:40,440
Speaker 3: help debt. It means that it maintains the real value

713
00:34:40,520 --> 00:34:43,240
Speaker 3: of your debt by adjusting it in line with changes

714
00:34:43,280 --> 00:34:46,280
Speaker 3: of the cost of living, which is measured by CPI

715
00:34:46,800 --> 00:34:51,040
Speaker 3: and CPI is the consumer Price Index, and that is

716
00:34:51,160 --> 00:34:54,160
Speaker 3: calculated on the first of June each and every single year,

717
00:34:54,480 --> 00:34:58,280
Speaker 3: and indexation is applied to part of an accumulated study

718
00:34:58,360 --> 00:35:01,640
Speaker 3: and training debt that re names unpaid for more than

719
00:35:01,760 --> 00:35:06,800
Speaker 3: eleven months. So when it comes to CPI, the best

720
00:35:06,840 --> 00:35:10,960
Speaker 3: way to explain it is with a macas cone. So

721
00:35:11,320 --> 00:35:13,560
Speaker 3: remember when we were little g and macas cones were

722
00:35:13,600 --> 00:35:17,520
Speaker 3: like fifty cents, Yes, and they've increased in price. Why

723
00:35:17,600 --> 00:35:22,400
Speaker 3: have they increased in price? J don't say China scowl sofa,

724
00:35:22,920 --> 00:35:26,879
Speaker 3: because they absolutely are. But it's increased because the cost

725
00:35:26,960 --> 00:35:30,040
Speaker 3: to produce that item has increased. So it's not as

726
00:35:30,040 --> 00:35:31,640
Speaker 3: though they're like, oh my gosh, over time we can

727
00:35:31,760 --> 00:35:34,160
Speaker 3: just charge more and make the same profit. Like the

728
00:35:34,239 --> 00:35:37,120
Speaker 3: cost of all of those things and transport has all

729
00:35:37,239 --> 00:35:40,880
Speaker 3: increased over time, so the maca's cone has increased in price.

730
00:35:41,520 --> 00:35:45,680
Speaker 3: So inflation for indexation is essentially the method of linking

731
00:35:45,760 --> 00:35:48,520
Speaker 3: the price or value of an asset to a price

732
00:35:48,640 --> 00:35:51,880
Speaker 3: or price index of some type to adjust for inflation.

733
00:35:52,719 --> 00:35:53,319
Speaker 1: So it's all.

734
00:35:53,360 --> 00:35:56,520
Speaker 2: Linked, my friends, the name indexation name.

735
00:35:56,960 --> 00:35:59,440
Speaker 3: So it's one of those things where yes, things increase

736
00:35:59,520 --> 00:36:02,160
Speaker 3: in price over time, and to make sure that our

737
00:36:02,360 --> 00:36:05,040
Speaker 3: debt actually you know, gets paid off. But also the

738
00:36:05,120 --> 00:36:08,520
Speaker 3: government is in an okay position to continue to provide

739
00:36:08,600 --> 00:36:11,839
Speaker 3: this service to us because this isn't normal. So yes,

740
00:36:11,920 --> 00:36:14,799
Speaker 3: in Australia we are incredibly lucky. But in the US

741
00:36:14,920 --> 00:36:17,400
Speaker 3: they literally have to go get personal loans to be

742
00:36:17,480 --> 00:36:21,520
Speaker 3: able to pay their university fees and they are so expensive.

743
00:36:22,040 --> 00:36:24,640
Speaker 3: So yes, like five hundred bucks a year is it's

744
00:36:24,680 --> 00:36:27,919
Speaker 3: a fair whack of money, but oh my gosh, that's

745
00:36:28,000 --> 00:36:31,440
Speaker 3: the cost of education. Like that, that for US is

746
00:36:31,520 --> 00:36:33,719
Speaker 3: putting us in a position where we can go and

747
00:36:33,880 --> 00:36:37,120
Speaker 3: access education in the same way anybody else in this

748
00:36:37,280 --> 00:36:40,719
Speaker 3: country can, as opposed to in America, maybe you won't

749
00:36:40,760 --> 00:36:43,759
Speaker 3: get the loan so you can't go to university, or

750
00:36:43,840 --> 00:36:46,120
Speaker 3: you can't afford it because you don't have the job

751
00:36:46,200 --> 00:36:49,080
Speaker 3: that would support it, orreas in Australia, if you don't

752
00:36:49,120 --> 00:36:52,239
Speaker 3: have the job that supports it, then they're like, don't

753
00:36:52,280 --> 00:36:53,960
Speaker 3: pay it. That's great, no problems.

754
00:36:54,360 --> 00:36:57,360
Speaker 2: Yeah, yeah, that's interesting. So they've done they've done a

755
00:36:57,400 --> 00:36:58,000
Speaker 2: good job there.

756
00:36:58,600 --> 00:37:01,680
Speaker 3: Let you discov anyway, what other questions have you got?

757
00:37:01,840 --> 00:37:04,640
Speaker 2: So the next one here V is from Cassandra, so

758
00:37:04,920 --> 00:37:07,920
Speaker 2: she will be in a position where the ATO owes

759
00:37:08,000 --> 00:37:12,520
Speaker 2: her money roughly twelve hundred dollars. We love her question

760
00:37:12,840 --> 00:37:15,480
Speaker 2: is should she dump all of that on her credit card,

761
00:37:15,880 --> 00:37:18,799
Speaker 2: leaving about one thousand dollars to pay off then she's

762
00:37:18,840 --> 00:37:21,800
Speaker 2: cutting it up, or should she put it into savings

763
00:37:21,920 --> 00:37:25,640
Speaker 2: for our house deposit? So I guess the question here

764
00:37:26,040 --> 00:37:29,640
Speaker 2: is you got some bonus money, savings or debt?

765
00:37:30,719 --> 00:37:33,160
Speaker 3: Can you answer this? G do you reckon you have that?

766
00:37:33,320 --> 00:37:34,080
Speaker 3: I think I know?

767
00:37:34,680 --> 00:37:38,160
Speaker 2: What is that your debt? Right? Because if you have debt,

768
00:37:38,239 --> 00:37:39,400
Speaker 2: then you don't have savings?

769
00:37:39,840 --> 00:37:42,840
Speaker 3: Yes, And that's what I was hoping you would say, yeah, same.

770
00:37:43,320 --> 00:37:46,640
Speaker 3: So again not advice, but essentially we believe it. She's

771
00:37:46,680 --> 00:37:48,640
Speaker 3: on the money that if you are in personal debt,

772
00:37:48,880 --> 00:37:52,640
Speaker 3: not mortgage debt, personal debt, so credit cards after pay

773
00:37:53,040 --> 00:37:57,440
Speaker 3: or personal loans, you don't have savings because what are

774
00:37:57,440 --> 00:37:59,439
Speaker 3: your savings going to do if you have a credit

775
00:37:59,520 --> 00:38:01,840
Speaker 3: card that's cruing a whole heap of interest, especially a

776
00:38:01,920 --> 00:38:04,880
Speaker 3: credit card that has from all intents and purposes, like

777
00:38:04,960 --> 00:38:07,680
Speaker 3: two grand on it. Yeah, like another two grand in

778
00:38:07,760 --> 00:38:10,160
Speaker 3: your savings? Is that actually getting you towards a house

779
00:38:10,239 --> 00:38:12,640
Speaker 3: deposit faster? Or are you at some point just going

780
00:38:12,719 --> 00:38:14,319
Speaker 3: to have to pull it out and pay off that debt.

781
00:38:15,080 --> 00:38:16,359
Speaker 3: Riddle me that, Georgia King.

782
00:38:16,600 --> 00:38:19,399
Speaker 2: Yeah, yeah, okay, so that one's pretty straightforward. I guess.

783
00:38:19,600 --> 00:38:22,840
Speaker 3: Look, it's pretty straightforward. But again, if you feel like

784
00:38:23,000 --> 00:38:25,240
Speaker 3: you want to put it in savings, I can't argue

785
00:38:25,320 --> 00:38:27,440
Speaker 3: with you. You just need to be educated enough to

786
00:38:27,480 --> 00:38:29,480
Speaker 3: make the decision that it's right for you. Yeah.

787
00:38:29,560 --> 00:38:31,920
Speaker 2: Well, I think it's a good reminder and it's good

788
00:38:31,960 --> 00:38:34,480
Speaker 2: to make really clear because we are fed messages that

789
00:38:34,560 --> 00:38:36,480
Speaker 2: we should pay down our debt and that we should

790
00:38:36,520 --> 00:38:39,239
Speaker 2: be building our savings. So just to kind of clarify

791
00:38:39,360 --> 00:38:42,320
Speaker 2: that debt should be your priority is important.

792
00:38:42,360 --> 00:38:47,360
Speaker 3: I think, yes, but this question as well, Georgia stipulated

793
00:38:47,480 --> 00:38:50,680
Speaker 3: savings for a house deposit. And to jump on my

794
00:38:50,840 --> 00:38:54,360
Speaker 3: high horse for a second, I do believe in saving

795
00:38:54,440 --> 00:38:57,799
Speaker 3: while you have debt for an emergency fund, because an

796
00:38:57,840 --> 00:39:00,520
Speaker 3: emergency fund is going to afford you the freedom that

797
00:39:00,719 --> 00:39:04,000
Speaker 3: you need while paying off debt. Because often if we're

798
00:39:04,040 --> 00:39:06,200
Speaker 3: in debt, we don't have a lot of free cash flow,

799
00:39:06,680 --> 00:39:10,000
Speaker 3: and if another unexpected cost comes up, it's usually going

800
00:39:10,040 --> 00:39:11,640
Speaker 3: to be on debt again, and you're going to have

801
00:39:11,719 --> 00:39:14,680
Speaker 3: to go further into debt on that credit card, So

802
00:39:15,080 --> 00:39:19,360
Speaker 3: I would absolutely prioritize stocking up a little emergency fund

803
00:39:19,840 --> 00:39:22,239
Speaker 3: so that while you're paying off your credit card, if

804
00:39:22,280 --> 00:39:24,759
Speaker 3: another unexpected cost pops up, you can go, you know what,

805
00:39:24,920 --> 00:39:26,879
Speaker 3: I've got this, Or if you're not able to pay

806
00:39:26,960 --> 00:39:29,600
Speaker 3: the debt repayment that month, it's okay because you have

807
00:39:30,040 --> 00:39:33,560
Speaker 3: savings that can cover that. So I don't ever recommend

808
00:39:33,719 --> 00:39:36,600
Speaker 3: anybody to be in this situation where they have debt

809
00:39:36,719 --> 00:39:40,399
Speaker 3: and absolutely no savings, But for me, those savings would

810
00:39:40,440 --> 00:39:43,760
Speaker 3: be an emergency fund. And to stipulate, I don't believe

811
00:39:43,800 --> 00:39:47,080
Speaker 3: that they're savings. They're an emergency fund because savings are

812
00:39:47,120 --> 00:39:50,560
Speaker 3: put aside to buy something else in the future, Whereas

813
00:39:50,600 --> 00:39:53,400
Speaker 3: an emergency fund is a little pool of cash that

814
00:39:53,560 --> 00:39:56,440
Speaker 3: sits to the side and we have absolutely no intention

815
00:39:56,560 --> 00:39:59,520
Speaker 3: of drawing on it unless it's an emergency. It's not

816
00:39:59,640 --> 00:40:01,840
Speaker 3: for a few holiday, it's not for a pair of

817
00:40:01,920 --> 00:40:05,440
Speaker 3: shoes that feel like an emergency. It is not for

818
00:40:05,680 --> 00:40:09,080
Speaker 3: anything other than future use financial security.

819
00:40:09,719 --> 00:40:12,680
Speaker 2: Circling back to what we said earlier, V like, if

820
00:40:12,719 --> 00:40:16,319
Speaker 2: anyone does need more encouragement to kind of understand how

821
00:40:16,400 --> 00:40:19,760
Speaker 2: important having an emergency fund is, I feel like watching

822
00:40:19,840 --> 00:40:22,200
Speaker 2: Maide would be a really good idea because I wish

823
00:40:22,280 --> 00:40:23,839
Speaker 2: she makes a fund.

824
00:40:24,520 --> 00:40:26,880
Speaker 3: She was in such a pickle, and I mean she

825
00:40:27,120 --> 00:40:29,279
Speaker 3: ended up getting out and that is really good, and

826
00:40:29,440 --> 00:40:31,680
Speaker 3: she ended up, you know, living her best life and

827
00:40:31,760 --> 00:40:34,520
Speaker 3: being able to move. I won't ruin it for other people,

828
00:40:34,680 --> 00:40:37,960
Speaker 3: I guess, but if she'd had an emergency fund, she

829
00:40:38,080 --> 00:40:40,360
Speaker 3: would have been able to escape the situation she was

830
00:40:40,440 --> 00:40:43,319
Speaker 3: in in such a cleaner way. So that's what an

831
00:40:43,360 --> 00:40:46,279
Speaker 3: emergency fund affords us. It affords us the ability to

832
00:40:46,560 --> 00:40:50,640
Speaker 3: escape a job, a circumstance, a person, a home, anything

833
00:40:50,760 --> 00:40:53,279
Speaker 3: that we don't want to be in anymore, even if

834
00:40:53,320 --> 00:40:55,600
Speaker 3: it's just covering a taxi to leave a party you

835
00:40:55,680 --> 00:40:58,239
Speaker 3: don't want to be at anymore. An emergency fund is

836
00:40:58,320 --> 00:41:05,480
Speaker 3: there to protect you, not to pay off debt. The

837
00:41:05,560 --> 00:41:08,080
Speaker 3: advice shared on She's on the Money is general in

838
00:41:08,200 --> 00:41:11,960
Speaker 3: nature and does not consider your individual circumstances. She's on

839
00:41:12,040 --> 00:41:15,440
Speaker 3: the Money exists purely for educational purposes and should not

840
00:41:15,600 --> 00:41:18,560
Speaker 3: be relied upon to make an investment or financial decision.

841
00:41:18,960 --> 00:41:21,399
Speaker 3: If you do choose to buy a financial product, read

842
00:41:21,440 --> 00:41:25,520
Speaker 3: the PDS TMD and obtain appropriate financial advice tailored towards

843
00:41:25,600 --> 00:41:28,880
Speaker 3: your needs. Victoria divine and She's on the money are

844
00:41:28,960 --> 00:41:33,920
Speaker 3: authorized representatives of money. Sheper Pty Ltd ABN three two

845
00:41:34,000 --> 00:41:37,960
Speaker 3: one six four nine two seven seven zero eight AFSL

846
00:41:38,120 --> 00:41:39,839
Speaker 3: four five one two eight nine