Uncensored Money Season Five: "If Only I Earned Enough" – Mel and Lawsie Discuss Money Myths.

Melissa Browne: Ex-Accountant, Ex-Financial Advisor, Ex-Working Till I Drop, Now Serial Entrepreneur & Author, Financial Wellness Advocate, Living a Life by Design | 25/03/2024


Show Notes

On this episode of Uncensored Money, Mel and Lawsie talk about the money myth, “If only I earned more income, life would be so much easier”. And certainly, for some people, this might be entirely true, but they wonder if, for many others, it’s not necessarily what you’re earning that makes things difficult.

Books and resources mentioned in this episode

If you're on insta, come play over at @MelBrowne.Money and make sure you’re signed up to Mel's Money Musings 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.


Mel: Hey everyone. I'm Mel Brown. 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.

Mel: Lawsie. Today I wanna talk about a money myth that is, if only I earned more income, if only I made more money, life would be so much easier. And I'm sure for many of you listening along, you would've thought that at some point, particularly with the cost of living rising. And absolutely there is some truth to it. For some of you, particularly if you were to earn a bit more income, it might be easier. But I wanna suggest that for many people it's actually not the earning, it's the what are you doing with it and investing and more. I mean, I know I've thought this way before in my very first job, oh it's story time. Many years ago, <laugh> story time with Mel, I earned a massive $12,000.

Lawsie: Wow.

Mel: Full time. And at the time I also thought that was a huge amount of money until I realised that it absolutely wasn't our spending money. My first husband and I was $5 each. I earned that he was an apprentice mechanic. I mean, do the math, it's not a lot of cash. But when I divorced my first husband, I knew that I needed to earn more income. And at first I thought that would solve all my problems until I realised I couldn't just earn my way to financial freedom. That isn't enough. Lawsie, what about you? I know you went into a fairly good job straight from while at uni, but have you ever thought if I I earned more income or something similar?

Lawsie: No, once more I'm on my little pedestal <laugh> and I've never thought this though. I would be lying to say that. I think the interesting thing that I find with that comment is 'cause it's just not something that occurs to me. Now, of course back in the day when it was late teens, early twenties and stuff, and when you first start working, it's, I was the same as you. I'm like, oh wow, look at this money like this is amazing. But then naturally start to go, Ooh, I know when I finished my cadetship and when I've done this and that. Look at all of those dollars that are gonna be coming. So you naturally leaning into that. If only I earned more` income. I think the difference now is I'm so happy being an employee, unlike you. Once again, our difference shine forever strong. And so for me it's what you sort of said before where it's I look at it and go, I've made decisions around what I'm doing and what I'm earning because I'm really comfortable with that.

Lawsie: Then if I want to feel like I've got more income or got more choice, then that it's falls on the other side of the equation I guess to be like, well then I need to change what I'm doing with my money when it hits my bank account. Because I look at it and go, I don't want to necessarily have a second job and I don't want to do these things and I'm whatever. But I think even there's still that part of you. I know with there was a Powerball like I can't even remember what the numbers were earlier on in the year and it was, everyone was so excited about, it was the biggest Powerball thing ever. And I remember my husband and I were talking about it going, oh imagine if we won, what would you do? We don't even buy ticket, buy it. You didn't

Mel: Get a ticket <laugh>.

Lawsie: But if we won, what would we do with it? And I guess that's what is leading into that little bit of, if only I earned more income, I well actually if I receive this massive amount of cash, what would I do? So I think we lead into that when we are talking absolutely aspirational, almost mythical

Mel: Magical thinking. Yeah,

Lawsie: Yeah. And go, oh well if I had this, this is what I would do. Yeah. Abso like I don't think there'd be anyone that has never gone, you've earned more income and they've never thought of that. 'cause I know absolutely, but particularly when you're younger and you're looking at stepping into your workforce and seeing all these people earn all of this money, it's like, ooh, they what they earned. They

Mel: Must have it all together. Yeah, yeah. But the truth is, to that point, even people who are on what we would call a large salary and those people that you and I looking at when we were younger going, oh my gosh, imagine how easy it would be if you were on that salary. They feel this way. And there was a discussion on Reddit in January this year where a man posted to a finance forum that his family was living paycheck to paycheck and he earned $230,000 a year and props to him for putting out all of that, including the amount. And to put that into perspective, the average personal income according to the Australian Bureau of Statistics is $72,000 for that person to go. I'm earning 230 and I'm paycheck to paycheck. But a Perdue University study found that Australia was the second most expensive place to live on the happiness index and it's around 170 K that they say that you need to be happy in Australia, which is also wild and also such BS because there's so much assumptions that is being made because of that.

Mel: 'Cause The truth is laws are, you and I have met and worked with many people who are earning a whole lot less than that who have so much more choice because it's almost like they've gone, this is what I've got, so therefore, and I can't out earn my way to what I want. So I'm gonna have to be so smart when it comes to investing and spending so I can have choice. And they abso freaking do. But we've also worked with many people who are like that gentleman of 330 who have so much less choice. So Lawsie, can you think of people that we've worked with either as advisors or even in MFAP land who was earning the average income or less and doing really well?

Lawsie: Yeah, I think I can absolutely do both ends of the spectrum. It's making me laugh thinking about my one that's well and truly above the average income. But we can get to that in a sec. But I think so many people that we work with or have worked with have earned less than that. And to your point, they're savvy with their money and whether it's coming from that place of scarcity, they've never had more and therefore they haven't had that discretion to be able to spend it on more things or to do things like they're automatically just by nature of the limit of what's coming in have just been more savvy and making conscious decisions around where their money goes and they're not influenced by everything else going on around them and they're doing great. Like I think it's that whole, I know it's a bit of a the cliche line, but it's not how much you earn, it's what you actually do with it.

Lawsie: And I think for the people that are earning average income or less that are doing really well, a living proof of that, like it actually to an extent does it like yes, you need to make enough to cover your groceries and to have a roof over your head and there's obviously the basic needs but there's so much that you can do if you allow yourself to make the conscious decisions I think that are right by you and not be influenced, which is very easy for us to, to say on our little podcasting session here, but not to be influenced by the outside world and everything else that's getting thrown at you from every marketing, social media message, everything else that's then coming your way.

Mel: What we should have, it's interesting too if I think of those people that are on either a very average income or less, it was very standard occupations or it was one partner was working and one partner wasn't. So therefore they're on that average income. And if I think of them, what I really resonate and remember about them is that they didn't have that lack mindset. Like if you talk to them and said Would it be helpful to have more money? They would of course go, yeah, of course it would. But they didn't view it as that I've only got this much. Instead they used to view it as a, I've got this much, what can I do with it? They were super savvy, to your point, they all invested. Like if I'm thinking about every single one of them, they either had an investment property or shares or they were super savvy about how they're living, where they were living so they could have more.

Mel: But they just made really wise choices because they were so aware that this is what I have to work with. And they also quite creative around what they did and what they didn't do. So I think it was a mindset as much as it was an investing decision, but they all invested and I think think that's the thing that I remember about them and and I to walk away and go, and I even remember when we were accountants or advisors working with 'em going, wow, they're able to do that on that freaking hell. I wanna go and wheel them out to some of my other account, my clients that would be complaining who were earning three times as much and going, but this person's doing that. <Laugh>, come on <laugh>. And I think if we then talk about the other side of the ledger, we would have people on 300 k plus 250 K plus who would come in and cry poor and say we cannot afford to live or we cannot, we are really struggling. And I distinctly remember you coming into my office after a couple of them going, earning what you did, which would sometimes be a third of what these people were on and going Mel <laugh>, they're saying they're struggling on there on 300 K and it was choice and often it wasn't investments. A lot of those people in those high incomes didn't have investments.

Lawsie: Oh no. It was all, it's all going out on

Mel: Ridiculous mortgages, private school fees, massive car loans, stupid credit card debt. It was lifestyle because they said because I'm earning this much or because I'm in this position or because I'm in this occupation or live in this suburb, I have to look and be a particular way. And that was crippling them. So they had the mindset of I don't have enough. Versus the other people who were like, I've got this much, how can I be super smart with it?

Lawsie: Oh absolutely. I think, yeah, my favorite one was, and she was a single mom coming in and she was on 400 k plus and she was just like, I can't get things to meet. I can't get things to add up. Like it takes everything in you to go, but how <laugh> you, you gotta really practice that deadpan face and to really lean into it. But it was, it was exactly what you're saying where because of the role that she was in in terms of earning that salary, she absolutely felt that she had to look present and be a certain way and the cost of maintaining that was massive. Like I would look at that and go, wow, you are spending more on that alone than what I'm earning as a gross salary. Like this is. And of course you've, you're doing everything from your own personal lens and from your own filter.

Lawsie: So you kind of look in it going, huh, I don't relate to that in the same way that you don't relate to me camping. Like there's lots of things where have all of that Totally. But I remember just being blown away just going, hang on, you've got this amazing salary and this is no money. No money left. Like she couldn't save for house deposit, she couldn't save for these things and she was racking up the credit card debt. But at the other end of the spectrum, I'm working with people that have had amazing lives like and they've gone and traveled and done all of these things and then they reach a certain stage and they're just like, okay, party time's over, now I need to get into it. And they're actively looking at it with way lower salaries, like much closer to you know, the average salary and going, I know I've gotta clear my credit card debt.

Lawsie: I know I've gotta do. And they weren't doing it from a perspective. It was that thing of no let's, I knows that I've had a great time but now the next thing that's important to me is that security and getting a place that's mine and to start investing. And they knew they had to do the legwork to go righto, clear the decks of the bad debt, do all of these things. And because then they were genuinely excited about what they're doing. It was like, great, it's just changing what I'm doing. But most of us would look at it and go, well if you're earning $400,000, I'd love that to be my problem that I'm earning that and whatever. And you just, they can't relate to that. But when you've, you obviously believe that there's these certain things that you have to do and ways that you have to live. Like it's fascinating.

Mel: 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.

Mel: And it's not a judgment thing for us, it's a mindset thing and it's challenging the presumption around how you're viewing your finances and how you're viewing your particular circumstance. 'cause You can look at it and go with 400 K and go, I don't have enough. Or you can look at it with 70 K and go, what can I do with this? And there's so much you can do at either end of the spectrum. It's recognizing that. And it's one of the things, and I say it a lot 'cause I've got friends that are in the eastern suburbs of Sydney and one of them traveled to Europe once put it on credit and absolutely could not afford it 'cause he needed the Instagram pics to show that he was over there.

Mel: And I'm not freaking joking. Whereas personally I think one of the things I'm really grateful for that I never growing up at Western Sydney too, I used to think Oh my gosh, if only I'd been, this is a handicap for me. I now see it as a superpower 'cause I don't come with that baggage. If it needs to look a particular way, I like it it to look a particular way in that I like pretty things and I like to <laugh>. You like playing with your shirt. Yeah, <laugh>. Yeah. But I also don't need to go on a overseas holiday every year and I know 100% that I could sell up tomorrow and go live in in the little rental house that Tony and I did when we first got married because for me it's about the people and it's about that rather than what I am showing are the people that I have.

Mel: I think it's just really important to understand how are you behaving with your finances. What's your mindset when it comes to your finances? What do you think you should be having? And what we wanna do is, 'cause the truth is income does play a part but there are too many people who are opting out because they believe their income's too low to get ahead. And I want to give you hope through our chat that you still have choice. Or on the flip side of that, there are too many people who are procrastinating financially because they believe they're on a great income and it's time for you to get started. It's time for you as well as you said, to clear the decks a little bit to realise this is how you've been behaving. And to get started on both sides of the ledger, we wanna just quickly talk through three things or three parts of your finances.

Mel: And I wanna say there's gonna be no secrets here. You know this stuff if you've been listening to us for a while, but sometimes it's hearing it in context that can turn little light bulbs on three things. One for those people where it's the lowest side of the ledger is it might be thinking up or coming up with ideas to increase your income. Because if you need to clear some debt, if you are genuinely at a place where like $10,000 extra would be life changing for me. So let's create that. Let's figure out how to do that. That might be asking for a pay rise and we can support you with that in a download we have around how to ask for a pay rise. 'cause The stats are that women are less likely to ask for it and they're less likely to receive it.

Mel: So we want to make sure that you have success with that. So please, if you haven't ask for a pay rise in the last 12 months, go download that and don't just ask for a pay rise 'cause it's your anniversary. It's about putting a case study together and being able to say compellingly this is what I bring to the table. And can we have a conversation around compensation? It might be getting a second job for a period of time. It might be starting a business or a side hustle or I'm gonna put another download in the show notes. 50 plus ways to find 10 K in 12 months. This is a free download and it may not be free forever. So this is your opportunity to grab it free where we've given you so many ideas that if you stitch them all a few of those together, you can absolutely find 10 K in 12 months.

Mel: So if you are someone where you're like, yeah but Mel you don't understand and someone dmd me recently, they said I'm on Centrelink, which is benefits if you're in another country and don't understand that word. So if you're receiving government benefits, I have no way of increasing my income. And I said I DMed her the 50 plus ways and I said there's always agency, we just don't realise it. Like here's a free guide where you can go and what would 10 K do to your life? She goes, it would be life changing. Great. That's the difference that you can make tomorrow. There's different ideas to reduce your income. That's number one. Increase income, increase your income. Thank you Lawdog <laugh>. What's number two? Because we can't talk about one without talking about the other. And this is for everyone. Doesn't matter if you're high income or low income.

Lawsie: Yeah. So our next one is reduce expenses. But what I would also add to that is to prioritise expenses. 'cause For some people it they're gonna, you know, my $400,000 lady, she's gonna be going, I go, she wasn't, I can't, I can't reduce my expenses And my challenge to that would be, well yes I think you can, but also it's about putting priority around it as well. So there's obviously like we are facing things of lifestyle creep. Like we are all familiar with this. I know we've done podcast episodes on it before where it's when you're earning your $12,000 salary when you're first start at the workforce, you're like oh wow, this is amazing.

Mel: Somehow live with that

Lawsie: somehow you manage to make it stretcher. When you're at uni and you are working your part-time job and you're living outta home and everything else, you still make it stretched fast forward, 5, 10, 15, 20 years salaries have all increased everything else and guaranteed so too has your expenses. And it's not to say that you have to keep living like a poor uni student eating rice and beans, but there is acknowledging that with more income. So often people attempted to be like, oh great, like I've got that pay rise now so I'm now gonna be spending more on the day to day things or more on my holidays and stuff rather than being able to go cool, I've got this extra income and how can I be strategic with it to get it working for me? So it is just being mindful of that. Of course we've got ways of where you can reduce your expenses by trying to cut back your cost of living.

Lawsie: And I know for some people they're already like, well I've already pulled that belt in as tight as possible. But for others it's still just being aware of making sure that you are meal prepping if you can rather than buying your lunch at work every day. If coffees do your thing, we are never gonna say don't go and buy your daily coffee. But it might be that you buy it once and not twice or that you make advantage of the coffee machine that's in the office or making a copy at home. Like there's just different ways that

Mel: One after school activity for your kids instead of five.

Lawsie: Yeah, you don't have to have everything.

Mel: Everything.

Lawsie: And then I think where the whole prioritizing your expenses really plays into we don't have to have all of the things. And that comparison culture that we've spoken about a bit earlier on is so rife with everything and it's about being able to step back from that and then really prioritizing what it is that you want to spend money on and need to spend money on for whatever reason. And that doesn't matter if that's different to what I spend money on and what you spend money on, but doing it in a way that's really conscious. Like I guess we all know I'm the dirty outdoor girl that likes to go camping. Like my priority on where I'm going to be spending money is going to be on our dog gear and camping stuff. Which for someone else is like, oh God, that's horrific. I'd easily save money there.

Lawsie: But the thing for me is that means that I get to do more holidays, more adventures and doing all those things which I love, but I'm also then not spending money on getting my hair done and doing my nails 'cause I don't personally value that. Whereas I know others would be horrified by that. Like that's the top of their list of their non-negotiables, which is where it comes down to really that priority. And that's okay of, yeah, where do you wanna spend money or for others it's gonna be dining out and having an amazing experience is absolutely the top thing for them. So it might be their prioritisation around it. We're gonna do that once a month, but what we are gonna stop then is the Uber Eats and Uber Eats on a Friday and the extra, oh we'll just go to the pub and spend a hundred bucks for dinner.

Lawsie: Like that might go because you value this other thing so much more. So I know that people can be a bit, oh reducing my expenses is just so boring and it's not exciting. But if you can find ways to save money there, like it's one less than of reliance on having to increase your income but also just helps mean that you take stock of where your money is actually going and you're much more conscious around what you're doing. And if you're still not sure, if you're still looking at it going, but I can't reduce my expenses and all of those things. And a different way to look at it's, if you've listed out like people in the My financial adulting plan are doing it at the moment to all levels of horror going through and going, yes, this is my income, this is my expenses.

Lawsie: And looking at that and going, wow, I just didn't realise I'm spending so much on groceries. I didn't realise I'm spending so much. Mm-Hmm <affirmative> on those things. And a different way to be able to look at it is convert it to a percentage. I know where spreadsheet geeks but convert things to a percentage and go wow if my annual income, I'm spending X percentage on after school activities or I'm spending X amount on groceries or going out and whatever. And when you see that as a percentage, like if that sits at 20% of your income, you might be horrified by that and gone, okay that's clearly where I need to cut back. Because if my reaction is oh my God I can't believe that 20% of my take home pay is being spent on going out. If you don't value that, then that's a different way of being able to sort of get that priority and stuff happening for you to really just think around what is it that I wanna spend money and be much more conscious around we spending it. And

Mel: I remember when I was on that $12,000 I was going to uni at the same time and I wouldn't catch the bus to and from work even though it was probably a three or 4K walk from CBD to Sydney Uni 'cause I saved a few few bucks there and that few bucks was massive if you did that three times a week. But that's not worth, it's such a small amount. But if it all adds up, and I know today, recently, probably about five years ago I made the decision not to be blonde anymore 'cause the cost was prohibitive and I was like, I really wanna get weekly blowdries because that's just something I value. I've got really thick hair, takes me an hour to do it myself and still looks like a red hot mess. I can have a weekly blow dry. I don't have to touch it or worry about it.

Mel: I'd rather that than have blonde hair. And that might sound like a ridiculous example, but it's something that we still do to go, actually we can have it all just not all at once. So where could I cut back And if that's important, what other lever can I pull to move the spending to that? We play the game with subscription services all the time we're turning that one on off for a month. We're turning that one on. We just leave them all running otherwise. And it's so wasteful. I want you to think of it like a leaky bucket. Your expenses and so many of you have got so many holes in the bottom of your bucket that it is it any wonder that you're not able to do more with it the end. But the third thing Lawsie that I want people to really hear you can't earn your way to financial freedom.

Mel: What we wanna do, whichever camp we're in, is to start investing and you can invest with as little as 20 bucks. You can invest with Roundup 5 cents. So if you did downloaded that 10 K in 12 months, which is $27 40 a day and that's all you had to invest because you didn't have any money of your own, you could put towards it invested that in the share market with an 8% return, which the average return over 30 years is 9.8. But even if I went, you know what? I can't even invest all of that. I can only invest 20 bucks of that and I'm keeping this seven 40 after 30 years, I'm gonna have almost a million bucks. Small amounts make a big difference. It's just choosing to do that. Most of us won't be able to earn or reduce expenses enough to enjoy today and have choice. We've gotta think about investing. So one is am I investing and if not, how can I start investing? And I wanna challenge everyone, whatever income you're on to decide this year, how am I going to be able to start investing? 'cause I can't earn my way to financial freedom. What else do we need to say about investing Lawdog?

Lawsie: I think it's understanding too, like what investing is and what investing isn't. Because I know people go, oh, but I've got my own home. And it's like excellent. That's

Mel: Not investing. We

Lawsie: Love it, but that's not investing. It's a personal use asset. How are you gonna make money from that? And for most people they're not. Unless you could be making money from it by having a border or a tenant living in there and doing those things. Rent,

Mel: Rent out Granny flat. The most

Lawsie: People, they're not. Yeah, I mean look at your reaction. Of course <laugh>,

Mel: No one's living with me. I can barely tolerate my husband <laugh> space. I don't want a third party <laugh>, come

Lawsie: On. I feel like I'm, I'm not having a problem hanging in <laugh> living in your apartment half the time. Yeah. So it is just being aware that investing is looking at investing in shares, investing in property other than your own home in other assets like gold, Bonds. Like there's so many different ways that you can invest. I think people also put it off and go, oh, I'm not gonna be investing until I've bought my own home. But they're looking at it going, I'm never gonna be able to save a deposit. So ultimately they're doing nothing. And it's like, well you can do things at the same time. You could be saving for a deposit for a home if that's what you want. But also still investing. Like we said, you can invest with such little amounts now thanks to all of the huge range of apps that are out there.

Lawsie: So it's about building that habit, it's ripping the bandaid off and doing that thing that you may not have done if you've never done it. There's definitely that trepidation around what is it like, yes, you might need to educate yourself and do all those things, but you can absolutely start and start with small amounts. One, if that's all you can afford cashflow wise, but two so you feel comfortable with it and get started. 'cause If you can start today or in the next month or even this year rather than leaving it for another six months, 12 months, two years, five years, you're gonna be so much more ahead and really starting to set yourself up for the future. So it is just being aware that your home for most people is not an investment. It's a very expensive purchase that generally has a quite a large loan attached to it, but it is not an investment for most people. And so you need to be looking at things like shares or property or business or that type of thing.

Mel: Yeah, or bonds or yeah, gold or artwork or crypto or other. And I would finish by saying that the number one thing that people that from My Financial Adulting Plan community say is they wish they'd started earlier. Once you know this, once you've started it, they kick themselves and go, oh my gosh, I wish I'd done this earlier. I wish I'd started sorting this out earlier. Because look at the difference that it can make if you don't have much income or whether you've got stacks of income and think you can put it off our exhortation, our encouragement to you would just be to start in almost exactly a month. The presale for the My financial adulting plan starts this round. We're only letting 400 people in. So to put that into perspective, 'cause it sounds a lot, if we'd done this in 2023, more than 220 people would've missed out.

Mel: And it's not that we want people to miss out, it's that we wanna make sure that when we work with people, it is genuinely financially transformative. So we've identified that this year with the energy that I have. That's the sweet spot that I know that Lawsie and I are gonna make such a big difference to your finances. So you are going to wanna get in on the wait list for this round. 'cause Again, to put it in perspective, we have almost two and a half thousand people on the wait list for presale and 400 spots. And we will put a sold out sign up and say that's it. When those spots are gone, absolutely will not 'cause I won't risk the community and the results over having a few more people in the door. We'll give you other things that you can be doing, but you're gonna wanna be on that list.

Mel: So jump on that presale list so that you are ready to jump in and make the change that we've talked about today. If we've challenged you, whichever position you're in to either think about your money differently and take action, then jump on the list and we'll can't wait to get going with you in a month's time.

Mel: 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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