Uncensored Money Season Three: It's Halloween - Is Money Keeping You Awake at Night? 

Melissa Browne: Ex-Accountant, Ex-Financial Advisor, Ex-Working Till I Drop, Now Serial Entrepreneur & Author, Financial Wellness Advocate, Living a Life by Design | 28/10/2022

 

Show Notes

It’s Halloween and in this episode, Mel and Lawsie talk about some of the things that might be sending financial chills down your spine. Plus they share 4 things that should be keeping you awake at night. 

Resources mentioned in this episode: 

• 50+ Ways to Find $10k In 12 Months webinar
• Create a Plan for Debt (free download - coming soon)

If you know you need more help with your finances make sure you join the waitlist for the next round of the My Financial Adulting Plan. 

If you're not already, come play over at insta at MelBrowne.Money and make sure you are signed up to Mel's Money Musings and Monday Money Moments (yep, we love us some alliteration) for more tips, tricks and ideas on how to best work with your money.

Finally, if you love this episode please make sure you subscribe and leave us a review.

 

Transcript

Mel: Today is Halloween. And while that isn't something we celebrate in Australia, Lawsie and I thought it would be kind of fun to talk about some of the things that send chills down people's spines. And, no, I'm not talking Silence of the Lambs, which Lawsie watched for the first time this month.

Lawsie: I know, finally catching up.

Mel: Or Scream or any other scary movie. We're talking financial chills down your spine. What keeps you up at night with money? What gives you nightmares when it comes to your finances? That's what we wanna talk about today. Fun hey?

Lawsie: Oh yeah.

Mel: But the reason we wanna do this is we wanna talk about these things and hopefully by recognising and talking about them, we can help make them a little less scary for you. So this episode, hopefully can be a bit of the anti-Halloween edition.

Lawsie: Do we get candy?

Mel: Candy? No. It's the addition that won't rot your teeth.

Lawsie: Oh, well, yeah. Okay. I mean, it's a bit of a killjoy, but sure.

Mel: So, Lawsie, do you do Halloween at your place? Do you have anything to do with Halloween at all?

Lawsie: No, but I feel like my neighbours do it so well cause it is something that they are so into that I vicariously do it through them.

Mel: What do they do?

Lawsie: Oh, they decorate the house. They do all sorts. So they'll have “dead bodies hanging from their balcony, got all the spiderweb things out and all the pumpkins and some scary thing that screams at you when you touch the front door, like I discovered the other week.

But I love the fact that they get into it so much cause it's just something that they do. But as for me, no, I didn't grow up with it. It was something that the parentals were like no, that's American. but I also think it's become much more mainstream here since I was a kid a few years ago. But as for us, no. I still don't do it. I trust you do?

Mel: Oh no. We don't do it to the point where my husband would like I have to convince him not to be rude. So where we are our driveway's quite a long way from the road, so we generally don't have kids come up, but if ever there's a knock on the door on Halloween night, I have to say to him, do not yell at the children. Do not just open the door and say no. And then close it. He found a sign that he wanted to put up this time and again convinced him not to put that up either cause it was not PG.

Lawsie: I think a lot of them will do the whole thing around like, leave a pumpkin out or something.

Mel: There's candy in a bucket at the front door.

Lawsie: Yeah. Or some signal that it's a house that’s participating.

Mel: Yeah. No, my sister and her fam were overseas, as and they did Halloween last year for the first time. So this freaked me out. They went to a corn farm and people chased them around with chainsaws. I don't understand it. I genuinely don't understand it.

Lawsie: I'm sure.

Mel: Oh my God, the boys absolutely loved it.

Lawsie: But no.

Mel: But, and maybe I would've as a teenager. No, the OH&S alone, no running with a chainsaw. Again, my husband's not allowed a chainsaw.

Lawsie: No? Poor Tony.

Mel: Yes I'm so mean. No. Side note, we live next to someone where they were up a tree. This is not a Halloween story. They hit a knot in the tree with a chainsaw. It ricocheted back and took off half their face. Yeah, ever since Tone's not really handy, so I've always kiboshed any power tools in our house. He'll know when the relationship is on the rocks when he starts getting power tools.

Lawsie: Yeah. Here. Happy birthday honey.

Mel: That day has not come yet.

Now that we've put that intro together what we wanna do is talk about what we think is keeping many of you awake when it comes to your finances, and then we wanna talk about what we think should be keeping you awake.

So it's like the urgent and the important. We're gonna talk about the things that we think are on your radar, and we wanna just then throw cold water over it so that you're not scared by them anymore, so they're not keeping you awake. But then next we wanna talk about the things that we think should be keeping people awake and that they should be, if not scared by it, at least a little bit angry.

So the thing that we wanna start with is a recession. And I taped a podcast episode last week that was all about a recession and what it means and really just demystified a lot of it. So if you haven't listened to that, please go and listen to that, and that will hopefully help you sleep at night with it.

But I actually was really shocked, Lawsie. So I was at a planning day last week and had a conversation with someone where they said that their friends were talking about stockpiling cans, buying frozen goods, hoarding cash and real. She said, Is this something? Am I just unusual or should I be more scared? She said, this just seems really strange, Maybe I’m missing something?

And I was really shocked by that. But since then I've seen articles about how we're plunging into a recession. On the episode last week, I talked about over the weekend there was a post by Girls That Invest about two big companies that have had to lay off a lot of staff in the last week. This recession is really biting. And I just talked back to that and said, these are just factually not true. And why they're not true. And here are some ways to protect yourself.

But if you're in Australia, there's actually talk that we are going to have a soft landing, not a recession. So a recession, if you've missed the episode, is two quarters plus of negative growth. The expectation is we won't have that in Australia. But even if you are overseas and you are going to experience that like the US, then again, the economy works in cycles. Lawsie is a runner. She does trails. Like Lawsie, if you're out in the bush, you can't go up a hill forever. At some point, you gotta plateau out or you gotta come down the other side. And the economy is like that. There are feast and famine troughs and peaks, it's the nature of the economy, but it is about understanding what it means for me and what I can do about it. But certainly in Australia, we are looking at a soft landing. So a retraction, but not a recession.

Lawsie: And I think that's where it is hard because there is so many headlines and everything else out at the moment talking about it. So as much as you and I are probably looking at your friend's friend that's trying to save all of these resources, canned food and whatever else, and stockpiling everything. And it seems far-fetched to us. I think if you are constantly hearing these messages and if you are worried about what position you're in or not sure what that should be, or who you can talk to in order to actually balance that out, then it's probably little wonder that's what they're doing and at least they feel like they're being proactive and being prepared with regards to that. But yeah, there has definitely been so much talk about it.

Mel: Yeah, and I guess I see our job as, if you are around a campfire and people telling stories Lawsie's looking at me like...

Lawsie: I'm looking at going…

Mel: When are you ever around a campfire? Actually, back in May for Rod's birthday, we were around a campfire. Next to the very nice house, but still it was an outside fire.

If you round a campfire telling scary stories, I wanna be the person that kind of says, that's not real right? You know, I'm helping people sleep as they go to bed. Passing them hot chocolate and marshmallow.

Lawsie: Turning the lights on.

Mel: Turning the lights on. Exactly. I wanted you to understand that just because we haven't seen a recession for a long time in places like Australia doesn't mean there's something to be fearful of.

And all the things we talk about here are the things to do if we are not just to have a soft landing, but to have a recession. But as I mentioned last week, if banks are saying they don't see a recession coming for Australia, and they're super conservative, chances are it's not going to happen.

But things that you want to do are reduce your bad debt, have a buffer, build your multiple streams of income, have a plan, invest for the long term. All the things you should be doing anyway are all things you should be doing in a recession. And don't overborrow. So it's just being really wise.

And then be aware that the media are gonna have clickbait headlines and they're gonna scare you cause they want to sell advertising and you're just not gonna get sucked into that cause you know you're being smart. And if you've got a business, it's just about being wise in that as well. So it doesn't mean you won't take on debt.

But you might be smart about how you're gonna do it and make sure you have multiple income streams and more than one strategy to pay that debt back. It might be making sure you're as efficient as possible. It absolutely would be making sure you had buffers and you were talking to the bank regularly. But certainly a lot of businesses I see are actually doing really well. And if anything, the problem is finding staff, like that's the issue, not work.

Lawsie: Definitely. Well said.

Mel: Why thank you. Now number two is rising interest rates and rising cost of living. Now, Lawsie, we know from lots of conversations with people in our community, this is keeping people up awake at night.

Lawsie: Yeah, well and truly, and I mean, and to be fair, I guess rightly so, like we haven't seen those interest rates go up for so long now. And then when you look at actually the real cost, on the average size mortgage, in terms of how much more people are now paying on their mortgages compared to the beginning of the year, there is actually a real crunch factor there. It's not 50 bucks or a hundred bucks a month extra that people are needing to find. Plus then obviously the rising cost of living which I think everyone has been feeling in different capacities.

But I think what we see with our community is that they face this and go, they start pulling together their expenses and everything else, and they're horrified at the amount that they're spending on groceries and Uber Eats and whatever. If there is one thing, that is like the standout that they're horrified by, it is the actual cost of living and food.

And I think then by them actually becoming aware of that, they're then able to be much more proactive and look at ways to save money or to be more resourceful with things of what they're doing. So yes, undeniably interest rates have obviously gone up. And so has the cost of living. But I think, as we've spoken about before with interest rates, yes, interest rates might be going up, but you can still go and get a better deal. There are some caveats around it, but if you haven't asked for an interest rate reduction and stuff for a while, go to the bank, make sure you do that or go to the mortgage broker. And then the same with your food. If you don't even know what you're spending on that, then I would say absolutely that's gotta be your first place. Go face the reality of that. Try not to feel a little bit sick. I know we've had some people that work it out and they go, oh my God, I'm spending $40,000 a year on food for my family. This has gotta change. For other people, they might be quite content with that if they're making.... You know, if that's something that's really important to them, and that's where they decide to put their dollars. But for a lot of people, they'd be horrified to be spending that amount of money on food every year.

So I think it is just about facing the fact of that. And yes, there's a limit to how much you can tighten your belts. But I still think that for a lot of people, particularly if they're not conscious about what they are spending, there is room to be able to tighten that belt a little bit and help offset, the otherwise increasing cost of living.

Mel: And I think it's one thing that when times are good and when interest rates are low, it can be really easy just to say, I'm not gonna even worry about this. I can just have a good time and not even think about it. But as interest rates rise and the cost of living rise, that's when you really start to notice it, cause you either notice it when you go to pay, and I know you and I have talked about this before, we're like, what the hell? Or you notice it when you realise what's left in your bank account or how high your credit card is, and you think, oh, what's changed? I haven't done anything different and yet I don't have any money left over.

And I guess unlike a recession, If you are overseas or if you are not in Australia, if you're in the US potentially a recession's coming, and I talked about this in the podcast episode last week, if you're in the UK, potentially in a similar position, but regardless, interest rates are going to continue to go up. Energy is going to continue to go up. The cost of living when it comes to food is going to continue to go up. You know, in Australia, we're having flooding again. I read something today that said to expect another eight to 10% increase simply because of the Northern Rivers floods these things are all coming.

So we can be scared by this and we can wanna hide under the covers and pull the doers over our heads, or we can make a plan. And part of that plan, as you said, is facing the cost of it. And then the other part of the plan might be, looking at how can I bring in more income to actually do something about that?

And we've got a webinar that we ran called 50 Plus Ways to Find 10 K in 12 Months. So we'll put that in the show notes, go and have a watch of that. Go and get some practical ideas from that. And if you are someone that's going, yes, but Mel for me, the problem's rent and I'm not moving back in with my parents, in which case I can miss it. Can you hear me say one of the 50 plus suggestions will eliminate your housing cost without moving back in with parentals. So go and check that out.

Lawsie: Definitely.

Mel: Now another thing is, will I ever be able to buy a property? I think this is definitely keeping some people up at night, whether you are later in life and you've split with a partner and now you're looking at this as a possibility or you're younger and you're simply going, oh my God, I'm watching property prices inflate and interest rates go up and watch both my borrowing capability just reduce. And I don't think that's ever something that I can do.

I think this is another one where, yes, I understand the fear behind it, but also there are many ways to skin a cat, which sounds really horrible. As soon as I said that, I feel like that's a phrase that should only be used at Halloween. Cause we shouldn't be skinning cats. Sorry to all the cat lovers and vegans out there. Oh, what a horrible phrase.

Anyway. So it's actually looking at what's actually gonna be right for you. So I remember being in this position at age 20. People look at people my age especially if you're younger and go, Oh my gosh, but you had it so easy. Now I think interest rates were at 12%. There were no Aussie home loans or mortgage brokers, so the big four were absolutely smashing people with ridiculous interest rates. Where we chose to live was 40 minutes away from friends, family, etc, cause we simply couldn't afford where we wanted to live. Like we had to look that far away. And it took us about three to five years to no, maybe longer. Must have been five years to afford to be able to move closer. So I think there's this myth that ‘Oh yeah, back in your day, because property prices were so much cheaper, therefore, you were able to afford it’. I think my wage at the time was $12,000. It's all relative. And so what I would suggest is, yes, you potentially can buy a property, but you may not be able to buy it in the suburb that you want to. Or you might have to buy an apartment and not a house or a townhouse, not a house. Or you might wanna buy it a suburb or two away like I did.

Or maybe you rent where you wanna live and buy an investment property somewhere else cause there are lots of incredibly affordable investment properties. But it's understanding what's actually right for me.

Lawsie: Oh, definitely. And I think, to that point as well, for some people, they feel like they have to buy a property. I know we've discussed this before where either because of societal pressure or from family or just this outdated story that they have in their head, that they've gotta buy a house. And I think it's also challenging that as well, which is where I love your point around you could consider rentvesting, or there are other ways that you can invest in property without you actually having to buy said house or said apartment as well to still give you exposure to that.

But it comes back to knowing what it is that you really want? What do you value the most? What's most important to you? And then if property is still something that is super important to you, then it has to be how can I make it so it works for me and it is affordable?

And I really don't think that there are many people that their first home was the dream forever home, but I think so many people are wanting that beautiful, finished, glorious house as it looks on their Instagram feed. And I'm still waiting for my house to look beautiful and curated like an Instagram feed. We’ve been living in this house for 13 years. I just think people need to realise that it's the same thing. You can't have everything. So if that's a thing that is super important to you, yes you can do it. Yes, it might feel like it takes a long time, but for most of us, it took us a long time to get that deposit and it's just what are you willing to suffer for to achieve it? Cause there still is the possibility and opportunity for you to buy so.

Mel: Yeah, and I would add to that to speak to a mortgage broker now, so before you're ready. Because all of the times that we've spoken to mortgage brokers or had them on Masterclasses, they've all consistently said, even when you first go to start saving, go and speak to them then. Cause they'll give you tips, tricks. They'll say to you, this is what your borrowing capability is, and this is how much deposit you'll need.

These are also the grants that are available to you. This is the minimum deposit you could have. Is it 5%? Is it 10%, is it 20%? And yes, there may be other things you might pay with that, such as mortgage insurance. But if this is the way to get you into the property and you are going to hold that for the long term, you mightn't mind paying that.

So speaking to an expert as well. And if they said to you, you know what? You need a 50 grand deposit, then it's up to you to go. Great. What am I prepared to suffer for? How quickly can I do that?

You might dive into my free webinar, figure out how to get rid of your cost of housing now and say, you know what? I'm prepared to have 12 months of pain to get me to that. Which is similar to what you did when it was just, I am gonna basically stop my life for 12 months and then I'm gonna be in that house. Or you might say, You know what? I'm happy for this to take three years cause I just want that.

Lawsie: And doing other sorts of investing along the way.

Mel: Yeah. But it's aware that everything has an implication and we all have choice.

Number four, Lawsie. We hear a lot. Am I at the age and stage I should be?

Lawsie: Are you?

Mel: Me? No. Hell no. But you know what? it's that "should". That's the word. The "should be" is the one that trips everyone up cause who said what age and stage we should be.

Lawsie: Exactly right. Yeah. And I think, and it comes down exactly what we were just saying before around it's gotta come down to what you want, and it actually is irrelevant to what else is going on around you? For some people they might have thought, Yep, I'm well and truly set up and I've got the home and the investment property, and we've got some shares, and then suddenly they end up splitting with their partner and suddenly they're not at the age and stage that they thought they should be.

And they're now well and truly behind where they think they should be. But it's not to say that you can't change that and get yourself back to where you think you should be, or better still, want to be and I think that's the key thing. It's to stop comparing and you don't know what everyone else is doing and you know around you.

And is everyone just living on credit card debt and mortgages and everything right up to their eyeballs, rather than being really savvy and having all of these other investments and all you're seeing is the glitzy side. So I think people need to do the work for themselves and really focus on what is it that they want, or what is it that you actually want, and what can you do to make sure you get there?

And yes, you have to acknowledge where you are now and what your age is. There are certain facts that you're not going to be able to avoid, but you need to face them and then be able to plan and get excited about what it is and the direction that you want to go and then be able to put the plan in place to get there. It just has to be where you want to be, not where you should be.

Mel: That's totally the key. Cause comparison is totally the thief of joy. That quote absolutely rings true for me, but it is also realising now I don't think there's any stage we "should" be anymore. I'm in my late forties. I saw something recently where it was a stylist being asked a question from someone else that was in her late forties and was going to her son's wedding and she wanted a mother of the bride outfit and I was shookth because, no, that's not even in my realm of possibility. You know, I don't want kids, but I did the maths and went, woo, that's possible. But again, once upon a time, sure there was a path that by certain ages you would've ticked certain boxes, you would've done certain things, and therefore the expectation is you would be here.

That box has been blown up, so let's stop trying to put it back together and start figuring out what's actually right for me. And I might not have chosen where I am now, but how could I choose where I'm gonna be in the next 10 years? Cause can choose that. And what do I actually want that.

If no one got a peek into other people’s lives, if social media didn't exist and no one actually saw how I lived, how would I want to live? That's a curious question. Mine, it wouldn't change. But I know too many people that are living the lives that they think they should be living to impress people they don't even respect.

Lawsie: Which is crazy

Mel: So there are some things you can do for that. It starts with, where are you now? Where do you want to be? And then how can you make that happen rather than beating yourself up for where you think you should be.

Lawsie: Definitely.

Mel: And the last one that we think is keeping lots of people up at night is debt.

And Lawsie just said a lot of people, can't afford the lives that they're highlighting. It's potentially on credit card or Afterpay. And if that's you, then chances are that's what's keeping you awake. And it's that shame around, Oh my gosh, what if people find out?

You know that I'm a fraud, that the life that I'm trying and it's suffocating. I imagine it must feel like you've got water up to your neck and you're doing all you can to stay afloat. And there's a point where that has gotta catch up. And particularly during times of everything we've talked about, recession, rising interest rates, the rising cost of living, am I at the age and stage? If you add debt to that, that's a recipe for disaster. And I don't mean all debt. Bad debt. Credit card and Afterpay and other by now pay later, payday loans, but also over-borrowing for houses. If I've got a mortgage of one and a half mil and that's all I'm able to do is service that mortgage, I'm then robbing myself of investing and choice later on.

So I think debt is something that's keeping people awake. But for some of you, it is absolutely about making a plan to get rid of bad debt and maybe a decision around housing. And do we need to sell? Do we need to downsize? We've had people in our program that have chosen to sell where they live cause they've realised they've bought into the life, the dream home, and it's robbing them of the ability to do more. And there are other people that are like, No, we're happy with that. We'll get another job. Or we’ll find a way to subsidise this.

But it's also being okay with some debt. If you've got a mortgage that you're paying at one to 3% more into the offset and you are developing that equity, or you've got good debt meaning, debt for a business or an investment, then you might be really comfortable with that, that shouldn't be keeping you up at night.

That should be something that we wanna develop some comfortability and resilience with. We wanna realise that's not the boogie man. There's nothing in the cupboard that's gonna jump out and scare us with that. And how can we live with that? It might be I need to put the nightlight on with my mortgage for a while just so I feel comfortable with it again. How can we find our comfortability with that so that we can start investing and not just have this ad desire to pay off debt? And if you choose to pay down debt quickly, such as your mortgage and not invest, go crazy, but it's realising that I'm not doing that cause I'm fearful of it. I'm doing that cause I recognise that there are other options that are probably smarter, but I'm choosing to do this instead.

Lawsie: Definitely. And I think debt is a big one and absolutely has to be tied into that cost of living piece. Cause I think even we see people look at their income versus their expenses and they go, oh, there's a deficit there. Now I understand why I'm so stressed all the time.

But again, you've gotta be able to face. And then to be able to work that plan, work out a plan to get rid of the bad debt, and then you can start looking at the other types of debt, like you said.

Mel: And we're creating a debt download for you. So if you are someone that's Oh, I don't really understand what you're talking about, Mel, and I think I need a bit of a plan for debt, then make sure you take a look at that as well. We'll put it in the show notes as soon as that's available so that you can download that and look at it.

But all of these things we cover in the My Financial Adulting Plan in detail, and you make a plan for this cause they're important. And I think how you talk back to the boogeyman, how you talk back to that really frightened feeling is by acknowledging it and having knowledge. Knowledge is power and knowledge of these financial things that are keeping us awake and having a plan for it is powerful.

But onto what we think should keep you awake. Just to finish up. And this is very different from what's actually keeping you awake. And to me, they're things that I don't think you should be scared of them, but I think you should be aware that these things exist and be wise then about what you are doing and conscious of it.

The first two are combined. They're very similar. So women over 55 are the greatest at risk of homelessness, and there are 450,000 women in their forties at risk of homelessness currently. So for me, that's what should be keeping people up at night. That should make be making people angry cause that's not okay. And the reason for things like that is wage gap. It's DV, it's us not having the appropriate superannuation and retirement funds. There are so many reasons for that. But it's also women having the lowest financial literacy. So we just know less about money. We're doing less. We're the ones that are most likely to abdicate our finances to our partner.

So it's choosing not to do those things and say once I know I'm at risk of living in my car in my fifties, I have a choice today to make sure that doesn't happen through what I'm going to do. Through investing, through being smart about all these things. And if you are listening going, but Mel, I've got nothing to invest again. Go and watch that 50 plus ways to find 10 K and then invest that. So find income and invest it. If you invest $20 a week, that will over time, thanks to compound interest, create so much money. So that's why we wanna be really smart about investing.

Lawsie: Yeah, And I think it's also looking at it from your own perspective and obviously you don't wanna be at risk of homelessness. But also having those conversations with others around you. Having it with people that are older than you, that you might suddenly go, Oh, are you aware of this?

And what are you doing to look after your finances as you get older? And to be able to do that with your girlfriends as well because you don't want anyone around you. Like it's just a horrible thing for people to experience. So I think the more that you could be talking about it and, educating or encouraging others to become more educated about their finances as well is a good thing.

Mel: Yeah. 200 bucks a month gives you $270k in 30 years at 7%. I reckon that's worth caring about.

Something else that should keep us awake is the wage gap. The fact that it still exists in 2022 and we're still having to talk about it is ridiculous. 

But we also talked about power and control in a previous episode, Lawsie. DV and rising income, it's really important to understand. If your income passes your partners, you are 30% more at risk of DV. Like that for me is shocking. So it's being aware that part of domestic violence isn't just physical, it's financial. It's emotional and we need to be aware of this. If you have things to do with power and control in your relationship that you think, Oh, this doesn't feel right, that my partner just won't engage with me, that refuses to talk to me or gets angry or belittles me when it comes to money, that's not acceptable.

That's a version of domestic violence, and I really encourage you to either speak to a counsellor, talk to a girlfriend and say, is this what happens in your relationship? Cause I just need to understand if it's normal. And I want you to also have conversations with your girlfriends to say, hey, if you see something in their relationship say, hey, can you just tell me a bit more about that?

I'm curious as to how you guys are doing money there and if we are sharing experiences, we start to understand what's appropriate and not appropriate. Cause I'm concerned too many people think things are normal when actually they're far from it.

Lawsie: Yeah. Oh definitely. And those stats are horrifying when it comes to that. And I think, as we spoke about in that episode, our husband's are quite content for us to earn more money than them, and it's something that just doesn't even occur to us. We are fortunate enough to be in that position where we do have open conversations around all of that, but for so many people it's not like that. And I think that definitely needs to be something that's addressed.

Mel: Absolutely. So hopefully, you found this a little bit of a different podcast interesting. I hope that perhaps one of the things that is keeping you awake at night, you feel a little bit calmer about it and maybe a little bit angry about something that you didn't realise should be keeping you awake.

All of those things we talked about in the about debt about the 50 plus ways we'll put in the show notes. But if there's something that you want us to cover that's keeping you awake at night, make sure you DM at moremoneyforshoes on Insta, or send an email to [email protected] au and we will cover it in a future episode.

Get the podcast at all your favourite locations, or jump through here: