Uncensored Money Season Five: Are You Getting Enough Financial Hydration.
Melissa Browne: Ex-Accountant, Ex-Financial Advisor, Ex-Working Till I Drop, Now Serial Entrepreneur & Author, Financial Wellness Advocate, Living a Life by Design | 18/03/2024
Show Notes
In this solo episode, Mel talks about how we’re often looking for a magic pill to speed up our financial success while leaving the basics behind. Using an analogy brought on by a trip to the dermatologist, Mel discusses the concept of financial hydration, giving you three simple basics that you can implement to look after your financial wellbeing.
Books and resources mentioned in this episode
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Transcript
Hey everyone. I'm Mel Browne. I'm an ex-accountant and ex-financial advisor, so I have the theory, but I also have the life experience. I'm now financially independent in my own right after coming back from less than nothing in my early thirties. I want this podcast to be like a chat with your girlfriends about money. My aim is to help you discover why you're behaving the way you are with money, to suggest new ways you might behave that are a better fit for you, and to increase your financial literacy and financial confidence. I hope it inspires challenges, educates and empowers you with how you do money. So let's get into it. Welcome to Uncensored Money.
Last week I went to my skin doctor. Now I'm really fortunate to have had pale freckly skin now as a teenager and even in my twenties, I did not think that was fortunate, but what it meant that I did is I wore a hat, I stayed out of the sun. And now as an adult, it means that
I've got great skin because I don't have the fine lines and the damage that maybe some of my peers that were blessed with beautiful skin that tanned and that lathered themselves up in oil and ended up in the sun. But what I make sure that I do is I look after it. So I invest in skincare. I've found products that I love. I regularly look after my skin and get treatments and more. So I saw my skin doctor last week and we're discussing, you know, what I'm going to be doing this year to look after it. And as he was looking at my skin, he said to me, of course, you are not doing the thing that I think you really should be doing. And I went, oh, okay. What's that? And he said, well, how much water do you drink? And I went, oh, I must admit that's something that has really dropped off for me, is my hydration.
And he said to me, I can see that on your skin. He said, I can see the, the lack of hydration on your skin. And I walked out of there a little bit shocked going, oh my God, I'm spending all this money and all these resources and I'm skipping the thing that's free. I'm skipping the thing that's so easy that I don't do regularly, and that is to drink enough water. And he said to me, I want you to go away and drink three litres of water a day. And he goes, I promise you, within two weeks you are gonna see a remarkably different skin that you are now simply by doing that. Now, it's not to say I'm still gonna do all of the other things that I've been doing and the plan to come, but it was that reminder to me that we could be doing these advanced things.
But if we are missing the basics, then really we are layering things on not a great foundation. And the same is true for your finances. I see this happen all the time where people are looking for a magic bullet or a, or a magic pill or something that will quicken their financial success. But they are ignoring the basics. They're ignoring those things that if they do those well, yes, they'll still need to layer more things on. Yes, they will get benefit from doing extras and and adding the more complex in, but without doing those basics, well, you are not setting up a beautiful foundation.
And I'm gonna pick three things that I'm gonna call the equivalent of your financial hydration. So these three things, I want you to think of them as three litres a day of water. Now, is this a pain to drink three litres of water?
Of course it is. Like for me, I'm like, Ugh, I'm already staring at this one litre at on my desk and it's 11 o'clock here. And I have not, I've had two sips out of it. Like it's ridiculous that I think this is hard when really it's so freaking easy and I think your financial hydration's the same. It's often ridiculous that we think these basics are so hard. Yet by doing them, it really helps set up our finances in such a way that they will look beautiful. They will be, they will be plump and juicy and lovely. So these are the three litre a day equivalent for your finances.
I don't know about you, but sometimes I wish there was an easy way, a silver bullet, a magical unicorn, a fairy godmother ready to grant me three wishes. I mean, think of all the miracle diets, fitness fads, promising a six pack in six weeks, or finance bros promising riches by following this easy formula. Do you believe a word of it?Well, the part that longs for a quick fix might be taken in, but you are smarter than that. Personally, what I believe in is consistency, educating myself, finding an expert to help me, surrounding myself with a community who are going to motivate me to keep going and make me feel like I can do it because they're doing it too or are further down the road than I am. That's exactly what we've created inside the My Financial Adulting Plan. If you feel like you're on top of your finances, you have a plan for this year that you're super comfortable with and have everything you need to make that happen, then just ignore this ad. But for the rest of you, make sure you check out my life-changing 12 week course or for less than the price of a cup of coffee a day. Head to the show notes to join the wait list for the next round. Or you might be lucky enough to find that the doors are open and you can join now.
And the first is multiple bank accounts and automating. Now this I think is Financial 101, and yet so few people are doing it. So many people are still trying to just eat from the one account and then it's having to be reliant on their willpower or it's having to be reliant on them going, Ugh, have I got enough money in there for my rent or my mortgage and my car insurance that's due out in six months time? And that, and I'm also saving for a holiday. But ugh, like it means that we are layering guilt. It means that we are relying on our willpower and having to stick to a strict budget. And you know, I believe that budgets don't work. So multiple bank accounts are simply a way of setting up your finances so that your bills automatically, your yearly bills are sent to another account.
The minute your pay hits your event, your bank account, so these would be all of your regular bills, your mobile, your insurance, your internet, your rent or mortgage, your car payment. So all of those regular bills and payments get sent. You'll figure out what they are in a year, you split, you work them out, what your fortnightly or monthly or however, and often you get paid is and you automate that payment to your bills account. You do the same for your buffer account. So that's three months worth of whatever is in your bills account. And then it's doing the same for your investing or your saving. So these are amounts that are automatically sent out of your everyday account and then you eat with what's left, meaning that whatever in your everyday account that's yours to spend. However, when it's gone, that's it.
So grocery money comes out of there, haircuts, clothes, kids' sport, like it all comes out of that. But the discipline is when it's gone. That's it. So if it's gone and you're invited out on a Friday night for bougie drinks and you've got $2 in it, you've gotta say, really, sorry, I can't. Or you've got to say, Hey, I'd love to do that. How about we grab or grab a bottle of wine and we head to someone's house? It's eating the food in your cupboard, not going out for dinner if you've got nothing left in that everyday account, which is what we used to do, but now we go, oh, I don't have enough money. I don't wanna miss out. I'll just put it on credit.
Which leads me to your financial hydration point number two, which is bad debt. Having great financial hydration means not having bad debt.
Now bad debt is credit cards after pay and other buy now pay later and personal loans for assets that are going to go down in value. For most of us, you know that I believe we shouldn't have any form of credit card or buy now, pay later. So for 90% of us, we can't handle it. And if you're going, but yes Mel, I love credit cards for points or I've never spent a dollar in buy now pay later fines or I've never spent a dollar in interest, you simply having these forms of payments means you are overspending. Now, if I look at different research, whether that's Citibank or whether that's other research that's independent, or whether it's, there's so much research when it comes to credit cards that will say that you are spending between 15% and a hundred percent more simply by using credits and other digitised payments.
If I go to buy now, pay later on Afterpay's own website, the Australian site says you'll spend 18% more. The US site says you'll spend 40% more and you'll shop 50% more often. I mean, this is a form of interest. This, the points that you are earning is you are overspending for that points when you may as well just save up for them. So having multiple bank accounts and then choosing not to have any bad debt are two forms of financial hydration. And your third is to clean up your money environment. Such a simple hack. One I've talked about a lot here, but that's simply unsubscribing from emails that hit your inbox that are causing you to spend, you know, when the sales time hits, it's such a beautiful time just to hit unsubscribe to all those sales emails. But it might also be unfollowing from anyone that is causing you to overspend online.
That might be a brand, an influencer, and even if it's a girlfriend, it might be muting their stories or posts so that they're not in your face so that you are not comparing and you are not, it's not forcing you to overspend. Too many of us have set up online mobile at malls that are massive malls that are shopping and serving ads at us 24/7. And then we are reliant on our willpower when we've got easy access to credit and Afterpay that can cause us to do untold damage to our finances.
So setting up financial hydration. My three litres of water equivalent are multiple bank accounts, and automating, not having bad debt and cleaning up your money environment. What about you? Just like it was a reminder to me to start drinking more water so that I'm not wasting all of this time and resources and complexity on my skin and not having the effects of really simple, basic, what are you gonna do this week to create some beautiful financial hydration? Why don't you come and let me know at on Insta, @melbrowne.money I'd love to hear from you.
If you enjoyed this episode, we would love it if you subscribed and give us a review, then make sure you come and play with me on Insta. I'm at @melbrowne.money Remember there's an E on the end of Browne. I'm one of those fancy Browne's, and don't forget to check out the show notes for even more ways you can work with me to transform your finances.
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