December 31, 2024 • 21 mins
Looking for a New Year's resolution? Look no further. Join Canna Campbell - a financial planner for 20 years - and Fear & Greed's Michael Thompson as they put together 12 financial goals for 2025 to help you take charge of your money.
The information in this podcast is general in nature and does not take into account your personal circumstances, financial needs or objectives. Before acting on any information, you should consider the appropriateness of it and the relevant product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant Product Disclosure Statement or other offer document prior to acquiring any financial product.
Canna Campbell is a Corporate Authorised Representative and Corporate Credit Representative of Wealthstream Financial Group Pty Ltd ABN 35 152 803 113 Australian Financial Services Licensee AFSL 412079.
See omnystudio.com/listener for privacy information.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Welcome to How Do They Afford That, The podcast that
peaks into the financial lives of everyday Australians. I'm Michael Thompson.
I'm a writer and the co host of the podcast
Fear and Greed business news. As always, I am with
Canna Campbell, financial planner, founder of sugar Mama TV, the
financial literacy platform covering YouTube and podcasts and books and
Instagram threads, TikTok and more. Hello, can a happy New Year.
Speaker 2 (00:26):
I am so motivated. I have had a break, I've
recharged my batteries. I am ready to relaunch.
Speaker 1 (00:33):
You look motivated. There is a buzz about you if
you are casting around right because it is the new year,
It's twenty twenty five. If you are not yet sure
what to do for your new year's resolution, we are
here to help because you what I would really like
(00:53):
would be to make this year the year that you
kind of take control of your money. Because we've covered
so much stuff, haven't we We've covered so many different things,
and there's never better time to start things than right away.
But if you want a milestone, if you want a
time to do it at the start of the new year,
perfect exactly so today we are putting together twelve goals
for twenty twenty five. Shall we jump into it?
Speaker 2 (01:15):
I love that kindograumd money all right?
Speaker 1 (01:18):
Number one, And look, these don't have to be your goals.
You can take and leave any of them depending on
what suits your own personal circumstances. But number one, make
a budget.
Speaker 2 (01:30):
Make a budget, or if you already have a budget,
review your budget, which I should add you should be
doing every single month, reviewing it. But it is so
important that you have a budget and that it is
written down and you can easily access it to update it,
to check it, to see what other new expenses have
slipped on.
Speaker 1 (01:46):
In New Year's is typically when I know I should
be doing it more regularly. But New Years is typically
when I'm kind of looking at my budget and because
there's a little bit more downtime and you can sit
down and do it. For those who haven't got a
budget and who perhaps hearing this podcast for the first time,
in thirty seconds or less, can you tell us how
to actually sit down and do it. Is it about
just assessing what you're already spending and just writing it
(02:08):
down on paper.
Speaker 2 (02:09):
Oh my gosh, no, you can't do that. In thirty seconds.
We need to do it. I think we need to
do a whole new session maybe on budgeting and cash flow.
But you need to go through your transactions. So look
print off if you need to, or have on a
separate screen your bank statements so you can actually see
the reality of what your life costs. You need a calculator,
you need a piece of pen and paper. I actually
(02:31):
recommend writing it down on paper before you go and
plug it into an Excel spreadsheet or a budget ten plate.
But you can pretend that you spend this much on takeaways,
but your bank account and those transactions will tell you
the truth and reality.
Speaker 1 (02:44):
Okay. Goal number two is to make twenty twenty five
the year that you actually create a buffer in your budget. Right,
and that's kind of tied into what you just said
there about kind of almost stop lying to yourself and
stop kind of deceiving yourself more so so about what
you're actually spending. Be realistic and go one step further
and build a buffer in.
Speaker 2 (03:06):
Also, with the rise and cost of living, expenses are
going up all the time, you know, particularly around for
example insurances, So round everything up so you've got a
margin of error and what I say to people through
the Sugar Mama Budget and cash Flow Academy program is
round it up to the nearest five, ten, one hundred dollars.
So if it's eighty dollars, quarter one hundred dollars, if
(03:28):
it's seven dollars, caught ten dollars. But once you go
to one hundred dollars and more, add ten percent on there.
So it just keeps you in a very safe playground
when it comes to managing your cash flow and you're
not caught short.
Speaker 1 (03:39):
Okay, nearest five dollars, ten dollars, hundred dollars or above
that ten percent okay, Because a lot of people would
just look at the budget and just go, okay, this
is exactly what we've spent in the past, this is
exactly what we will allow for in the future. But
the cost of everything just keeps going up, and also
things can catch you out, and it's better to have
that little buffer there exactly for peace of mind. Number
(04:00):
three speaking a peace of mind emergency money.
Speaker 2 (04:05):
So your emergency money should be in a separate account,
and I recommend you nickname it our emergency money. But
it's not about just having emergency money, about having the
right amount of emergency money, I will say when it
comes to your separate account, it is potentially and speak
to your bank or mortgage work before you go and
do this, But have a look at having a redoor
(04:27):
facility or an offset account, so at least while that
emergency money is building up, it's helping you to save
on your interest. And this is so important. And when
I say to people when they say, well, how much
emergency money is the right amount, look at the reality
of your life and things that could happen and what
they would cost, and then pick three things that could
happen simultaneously that will impact your situation. So and I
(04:50):
say that because things often sometimes things happen in threes.
And you know, only back in early December, we had
a electrical fire, our power for the day and so
I lost all day's worth of works. I couldn't do
any work. And then my car broke down and it
broke down as I was driving trying to cross intersections,
(05:10):
so it had to be towed a long way away
and then huge expense to fix it. So that happened.
Then also washing machine broke and the air conditioning went,
so it was you know, things happened, it's not. Don't
think I will. Only one thing could happen at a time.
You never know, so be smart. You never regret having
(05:32):
too much emergency money and then having that offset account
orriginal facility can actually work to your financial advantages and
saving money in the main tab. But it means you
sleep well at night.
Speaker 1 (05:41):
I always struggle with the idea of what constitutes an emergency.
Speaker 2 (05:45):
I did get a message this week from you about
a certain situation. Whether it was classified as coming out
of the emergency money.
Speaker 1 (05:53):
Yes, and it was. We established that I was expecting
a much more negative response than the one that I
got because our coffee machine diet and it's hardly kind
of a it's a very very first world problem.
Speaker 2 (06:05):
And still it's part of your.
Speaker 1 (06:06):
Ritual and it's actually really really important, and you are right.
We did the sums. Then again, shann and I did
the sums, and she was like, hey, you do realize
that if we were to buy kind of these coffees
every day out, we would be spending X amount And
it was a staggering sum compared to what it costs
to do it at home. Once you've done the initial
outlayer of the machine. And so my message to you was, hey, Cana,
(06:28):
do you reckon a new coffee machine? That count as
an emergency for the emergency fund. And I was expecting
this all caps response, no, that's not an emergency something,
and the response came back, if you really love your coffee,
then yeah, it probably is.
Speaker 2 (06:43):
It's helping you said money. It's also a very beautiful ritual,
I think having a coffee at home.
Speaker 1 (06:47):
Yeah, yeah, no, absolutely, Okay, So make twenty twenty five
of the year set up your emergency fund because you
will sleep better at night having that there.
Speaker 2 (06:57):
And also when things do go wrong, you don't fall
into a mess and a panic like, yes, a crappy week,
but you know I was able to have a moment
go thank goodness we have submergency money there.
Speaker 1 (07:09):
Yeah. Number four, what have we got?
Speaker 2 (07:12):
Pay down debt? So draw a line in the sand.
No more toxic debt. If you're relying on credit cards,
you're a lying on buy an how pay later to survive.
That is your red flag that you need to get
the monkey off your back. Pay those debts down and
take a break from using them, or don't use them
at all. And you you know when it comes to debt.
The rules are under the general advice only is you know,
(07:36):
credit card debt, buy now, pay later, the ones that
have that toxic impact on your financial situation, and just
work through your list. And I have a strategy called
the hitless strategy where you it's not it could mean
that you pay a little bit more money in interest,
but it's more about the mindset and shooting into the
psychology of money.
Speaker 1 (07:55):
What's it called.
Speaker 2 (07:56):
It's called the hit list.
Speaker 1 (07:57):
Hit list.
Speaker 2 (07:58):
We can do an episode if you're like, really only.
Speaker 1 (07:59):
Hit I would be open to this.
Speaker 2 (08:01):
But you go through the smallest step first, and you
build up momentum and work through. And yes it means
ignoring which interest rates have the highest interest rate, but
it's about building a sense of progress with it then
fuels you and motivates you to keep going. And I've
approached so many people out of huge amounts of debt.
But you know, review it and then tracking it so
you can see it's actually working. But twenty twenty five,
(08:22):
say goodbye to toxic debt in your life. It is
financially and emotionally draining.
Speaker 1 (08:28):
Number five on the list is to start paying attention
to your superannuation now. I know this is one that
you are very very passionate about, and just start today,
because the earlier you can start paying attention to your superannuation,
the longer you have to build up the benefits.
Speaker 2 (08:47):
Well gets monitored, gets made. So find out where your
superannuation is. Do a search just if you've got any
old missing superannuation accounts, which is very easily done online,
and then look at where it is invested. But don't
just look where it's invested. Make sure it's right for you.
So go once you've seen where it is. And a
lot of people in this default balance fund or I
actually had someone message me to say that they did
(09:08):
a search and found had been sitting in cash for
the last fifteen years. What horrified than they were so
upset of themselves. They listened to your advice through your podcast.
I went, did this and now fixed it and I
feel so much better. But obviously she was this person
was kicking themselves. So make sure it's right for you.
So once you find out where it is, then go
into a risk profile and you know if you need
(09:30):
to make some changes, get advice because obviously there are
consequences like capital gains tax and by cell cost brokerage
and so forth, So that's really important. And also whilst
you're there, check that your contributions have been going in
and they've been going on on time. In a previous episode,
I shared about a friend of mine that discovered her
employee UH had never been paying SUPER and she missed
(09:52):
out on about thirty five thousand dollars with SUPER contributions,
which was devastating ouch.
Speaker 1 (09:57):
And that's just in the contributions. That's not adding up
up what that would have cost at retirement time, when
all of a sudden, the power of compound interests and
the power of having those investments working for you would
have seen it worth a lot a lot more. Yeah,
And it's worth also mentioning the fact that everything that
we're talking about here we have done episodes on these
ones individually in the past. So if you're a new
(10:18):
listener to the podcast, welcome first, but also have a
bit of a scroll back through the past catalog, because
we have taken a deep dive in the past into say,
doing your risk profile and deciding where you should have
your money within your superannuation, what type of assets and
kind of what the appropriate level of risk is for you.
So We've got more information on all of these in
(10:40):
previous episodes. Today's really just this is putting together the
ultimate list of goals to make this year the year
that you take back control of your money. One more
before we take a quick break though. Number six. Start
an investment portfolio. This is filled countless episodes on its own.
Speaker 2 (10:58):
Now's the time to invest. I don't believe superannuation on
its own is going to be able to fund our
retirement or the retirement that we actually want. It is
important that you're investing as well. And obviously, you know
some people in certain age groups may actually want to
have a bias towards super or bias towards investing. But
you know, this is the year to start investing. If
you've been thinking about it and wanting to do it's
(11:20):
been on your list but never actually done it, or
you started it and just kind of drop the ball
on it, reconnect with it, get it going again. And
that's why I love the thousand Dollars project because you know,
you can start with a thousand dollars and it's exciting.
You can watch it grow and you can think outside
of the square to how you're going to get more
money and you start tracking that passive income and thinking about, Okay,
well I now make two thousand dollars a year of
(11:41):
my portfolio. That's going to contribute towards my retirement goals.
You know, the sooner you can start investing, the better.
Speaker 1 (11:47):
I love that like it is. That is one of
those ones that gets people genuinely excited because it is
working towards a different future, better future. Yeah, indeed, all right,
So that's the first six about twelve goals for twenty
twenty five. Let's take a quick break and come back
and get the next six. Cana, we are setting twelve
(12:12):
goals for twenty twenty five where you're just coming up
with ideas really here, and you can pick and choose
the ones that suit you and the ones that are
appropriate for you. Number seven, improve your financial literacy. Make
twenty twenty five the year that you do that. And hey,
if you're listening to this podcast, it's probably already a
good start.
Speaker 2 (12:31):
Right, you know. Create a habit system. You have a
simple goal. You listen to one podcast a week like
this one or Sugarmumas Fireplay, or you read one book
per month, or you watch a video on YouTube about investing,
or you spend half an hour every Monday morning going
through the money Smart website, which is created by Ask.
There is so much free information out there to help you,
(12:54):
and great quality information to allow you to make far
better decisions with your money. And I prove your financial
wellbeing in seeing it in your bank balance, but also
internally as well.
Speaker 1 (13:06):
That's a good one, isn't it because it is something
that you can do at your own pace too, and
you can do it in a way that works for you.
If you are a podcast listener, there are a great
podcast out there to listen to. If you like reading
books and kind of taking a deeper dive into things,
then go for that. And the money Smart website that
you mentioned is a fantastic resource for explaining terms in
(13:27):
really simple language and kind of helping to educate you.
And no one needs to know what you were researching.
It's a great way of kind of filling some knowledge
gaps that you might not be comfortable admitting that you have.
And I've done it. I've jumped on there and looked
up stuff. Oh okay, all right, that wasn't so hard
at all. Now that's number seven. Number eight vitally important.
Speaker 2 (13:49):
I will admit I need to do this. I have
a will, but it needs to be updated and I
need to make some changes. So you know, you've got
to have a will in place. You may think, well,
I've got nothing, you know, no assets, but that's not
the issue. Issues. You do have assets, you have superinnovation,
but also you may have some debts as well. You
need to be thinking about this, and you know, thinking
about what is the best for your family, for your
(14:11):
loved ones, and where do you want the wealth that
you've established so far. You've got items, You've got your
belongings that are valuable. So you have a will if
you don't, or make sure it's updated.
Speaker 1 (14:22):
Yeah, and it's just one of those things that it's
an uncomfortable thing to do. But once you've done it, okay,
you're good for a bit. And you do need to
kind of keep reviewing it and keep checking it every
now and then to make sure that.
Speaker 2 (14:34):
It is current, especially if your situation changes.
Speaker 1 (14:36):
Yeah. Absolutely, but just get it done in the first place.
Speaker 2 (14:39):
And include a charity in there as well.
Speaker 1 (14:41):
Yeah, great idea, thank you. I like that. While we
are reviewing things, Number nine is review your insurances.
Speaker 2 (14:49):
Yes, not just your general insurances, but your personal insurances
as well, so you know income protection, life and TBD,
trauma cover home and contents. You know, maybe if you
have an investment, probably might have landlord insurance. Go far
and wide with this, and also I recommend when you
do that search for your superannuation accounts, which I believe
was number five, is to have a look at what
(15:12):
insurances might be attached to those old superinhnuation accounts. I
know when I was running my financial planning practice, I'd
always come across an old superhneration account for a client
and have like a five hundred thousand of a life policy.
They had no idea existed. So do your research, you know,
see what insurance policies attached to superinnuation accounts. Also might
add accidental cover. I had completely forgotten that when Rocker
(15:36):
was a baby, I took out accidental cover on him,
and it wasn't until I got something in the mail
saying that actually hit default because I changed bank accounts
and not updated it. I was like, oh my goodness,
I completely forgot about that. So make sure you take
stock of what you have in place and what you
need and what you potentially don't need, because you're doubling.
Speaker 1 (15:55):
Up somewhere else at number ten, there's one that you
are very past because you have talked about it a
number of times, calling up your utilities provider and asking
for a better deal.
Speaker 2 (16:07):
Oh, I do this every free will February.
Speaker 1 (16:09):
I know you're and you're very satisfied when you do
it well.
Speaker 2 (16:12):
I've shared previously, I have the numbers in my phone,
and in my phone, I will have also my account number,
so it's very easy to access the information to make
sure my phone call is very efficient, and I can
do it literally in the car obviously with two hands,
using bluetooth, responsible driving at all times, but asking for
a better deal. I do this with Foxtel. I do
this with our energy and gas bill, everything. I leave
(16:35):
no stone unturned in It's amazing. If they think they
can lose you, we'll pull a rabbit out of my hat.
Speaker 1 (16:41):
Isn't that great? And there is nothing more satisfying than
feeling like, Hey, I've just saved money that I would
not have saved if I hadn't taken that step.
Speaker 2 (16:50):
And I know this sounds really weird and odd coming
from a financial planner, but sometimes the smallest savings are
actually more satisfying than the big savings.
Speaker 1 (16:59):
Yes, I know exactly what you mean. It's also then
leads us very neatly into number eleven on our list.
Because we talk about kind of small savings. This is
at the other end, this can lead to some big, big,
big savings. We are calling up your bank, yes, and.
Speaker 2 (17:15):
Asking for a better deal with your home loan. Now,
I will say be careful with this because if you
call your bank, they're obviously only going to talk about
their bank products and you know, try and get you
on one of their products, which is obviously their work
for the bank. That's their job. So if you get
a no from your bank or you're not happy with
the answer, reach out to a mortgage broker and experienced
(17:36):
mortgage broker that can actually go and look far and
wide for you with other financial institutions that maybe have
an even better interest rate for you. And Adam McCabe
we've had on the show here from blue Land and
you're brilliant hack. It's like, what you can do is
look at what your current bank is offering new customers,
(17:57):
and if that new rate for new customers is lower
than what you're playing, that is often a sign that
they will go and reduce your rate to at least
match that.
Speaker 1 (18:05):
If you're not better, It shows they have the capacity
to do that.
Speaker 2 (18:08):
Don't exactly, but it is going to depend on how
long you've been with the mank what the size of
your loan is, what you've paid off so far, value
of your property. There are a lot of obviously variables.
Speaker 1 (18:18):
And if you're not a confrontational person, if you're a
bit of an introvert. Honestly, this is a fairly easy
call to make. To talk to someone at your bank
about this. I've done this before. Talk to them and
they did reduce the rate fairly significantly. But if you
are not comfortable doing that yourself, then talk to a
mortgage broker and get them to do it for you.
And will they will do that.
Speaker 2 (18:38):
It is no skin off their nose, and a good
more would wreck will happily do.
Speaker 1 (18:41):
It for you. And they've already got that. They know
where to go, they know which banks are the ones
that are more aggressively chasing customers and things, and they
are the ones that typically will actually move the greatest.
Speaker 2 (18:52):
Exactly, but obviously use those savings, don't spend it, don't
put that new found savings back into your budget. If
you can afford to increase your more payments by that,
you found savings. Last savings can expand massively.
Speaker 1 (19:05):
The last one, number twelve. What do you think about
this one? It's kind of fun. Actually, they've got a
fun one for number twelve. Learn your credit score? Do
you reckon? I reckon? Most Australians probably would have no
idea what their credit score is.
Speaker 2 (19:19):
I know I agree with you on this one. A
lot of people think, oh, learning need to worry about
that when I go borrow money. But we've mentioned this
in the past identity theft. You can see what's going
on who's potentially taken a credit card out in your name,
And obviously if you're preparing to borrow some money, they'll
be buying a home or boring to renovate, or maybe
looking at borrowing money to do a debt recycling strategy.
(19:41):
Jump online. It takes five minutes if that, and it's free.
It's free.
Speaker 1 (19:45):
Yeah, and it's quite satisfying. Again, I know this is
this sounds like all I'm looking for is satisfaction from
all of these resolutions, But it is quite satisfying to
go in there and to check it, and you can
check it again, lady, you can check it in six months,
you can check it in a year and see where
your credit score is in fact improving or whether it's
not backwards going backwards. There we go, because it is
(20:06):
something that you do need to keep an eye on because,
as you say, just that red flag of identity theft
for one thing.
Speaker 2 (20:12):
And also, don't people don't realize if you have a
good credit score, you're in a better bargaining position when
it comes to negotiating a better for your homelan.
Speaker 1 (20:19):
That's a good point. So you can actually say, hey,
I know my credit score is X. I am a
good candidate for this, I'm a good customer exactly. Okay,
all right, that's a good list.
Speaker 2 (20:31):
We have delivered. I feel like this morning.
Speaker 1 (20:33):
Yeah. Twelve solid goals for twenty twenty five. Make a budget,
create a buffer in your budget, set up an emergency fund,
pay down debt, pay attention to your super start an
investment portfolio. Improve your financial literacy. Set up or update
your will, review your insurances. Call up your utilities provider
(20:54):
and ask for a better deal. Call up your bank
or mortgage broker and ask for a better deal. On
your home loan and learn your credit score. It's going
to be a very busy January.
Speaker 2 (21:04):
Bring on twenty twenty five.
Speaker 1 (21:05):
It's very exciting, isn't it? All right?
Speaker 2 (21:06):
Cannor?
Speaker 1 (21:07):
If we want more information, where do we find you?
Speaker 2 (21:09):
Best base tomind me and contact me is through Instagram.
Speaker 1 (21:11):
And you can hear me every day with Sean Aylmer
on Fear and Greed. Daily business news for people who
make their own decisions. Thank you for listening to how
do they afford that? Remember to hit follow on the podcast.
That is most important and the best thing you can
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Welcome to How Do They Afford That, The podcast that
peaks into the financial lives of everyday Australians. I'm Michael Thompson.
I'm a writer and the co host of the podcast
Fear and Greed business news. As always, I am with
Canna Campbell, financial planner, founder of sugar Mama TV, the
financial literacy platform covering YouTube and podcasts and books and
Instagram threads, TikTok and more. Hello, can a happy New Year.
Speaker 2 (00:26):
I am so motivated. I have had a break, I've
recharged my batteries. I am ready to relaunch.
Speaker 1 (00:33):
You look motivated. There is a buzz about you if
you are casting around right because it is the new year,
It's twenty twenty five. If you are not yet sure
what to do for your new year's resolution, we are
here to help because you what I would really like
(00:53):
would be to make this year the year that you
kind of take control of your money. Because we've covered
so much stuff, haven't we We've covered so many different things,
and there's never better time to start things than right away.
But if you want a milestone, if you want a
time to do it at the start of the new year,
perfect exactly so today we are putting together twelve goals
for twenty twenty five. Shall we jump into it?
Speaker 2 (01:15):
I love that kindograumd money all right?
Speaker 1 (01:18):
Number one, And look, these don't have to be your goals.
You can take and leave any of them depending on
what suits your own personal circumstances. But number one, make
a budget.
Speaker 2 (01:30):
Make a budget, or if you already have a budget,
review your budget, which I should add you should be
doing every single month, reviewing it. But it is so
important that you have a budget and that it is
written down and you can easily access it to update it,
to check it, to see what other new expenses have
slipped on.
Speaker 1 (01:46):
In New Year's is typically when I know I should
be doing it more regularly. But New Years is typically
when I'm kind of looking at my budget and because
there's a little bit more downtime and you can sit
down and do it. For those who haven't got a
budget and who perhaps hearing this podcast for the first time,
in thirty seconds or less, can you tell us how
to actually sit down and do it. Is it about
just assessing what you're already spending and just writing it
(02:08):
down on paper.
Speaker 2 (02:09):
Oh my gosh, no, you can't do that. In thirty seconds.
We need to do it. I think we need to
do a whole new session maybe on budgeting and cash flow.
But you need to go through your transactions. So look
print off if you need to, or have on a
separate screen your bank statements so you can actually see
the reality of what your life costs. You need a calculator,
you need a piece of pen and paper. I actually
(02:31):
recommend writing it down on paper before you go and
plug it into an Excel spreadsheet or a budget ten plate.
But you can pretend that you spend this much on takeaways,
but your bank account and those transactions will tell you
the truth and reality.
Speaker 1 (02:44):
Okay. Goal number two is to make twenty twenty five
the year that you actually create a buffer in your budget. Right,
and that's kind of tied into what you just said
there about kind of almost stop lying to yourself and
stop kind of deceiving yourself more so so about what
you're actually spending. Be realistic and go one step further
and build a buffer in.
Speaker 2 (03:06):
Also, with the rise and cost of living, expenses are
going up all the time, you know, particularly around for
example insurances, So round everything up so you've got a
margin of error and what I say to people through
the Sugar Mama Budget and cash Flow Academy program is
round it up to the nearest five, ten, one hundred dollars.
So if it's eighty dollars, quarter one hundred dollars, if
(03:28):
it's seven dollars, caught ten dollars. But once you go
to one hundred dollars and more, add ten percent on there.
So it just keeps you in a very safe playground
when it comes to managing your cash flow and you're
not caught short.
Speaker 1 (03:39):
Okay, nearest five dollars, ten dollars, hundred dollars or above
that ten percent okay, Because a lot of people would
just look at the budget and just go, okay, this
is exactly what we've spent in the past, this is
exactly what we will allow for in the future. But
the cost of everything just keeps going up, and also
things can catch you out, and it's better to have
that little buffer there exactly for peace of mind. Number
(04:00):
three speaking a peace of mind emergency money.
Speaker 2 (04:05):
So your emergency money should be in a separate account,
and I recommend you nickname it our emergency money. But
it's not about just having emergency money, about having the
right amount of emergency money, I will say when it
comes to your separate account, it is potentially and speak
to your bank or mortgage work before you go and
do this, But have a look at having a redoor
(04:27):
facility or an offset account, so at least while that
emergency money is building up, it's helping you to save
on your interest. And this is so important. And when
I say to people when they say, well, how much
emergency money is the right amount, look at the reality
of your life and things that could happen and what
they would cost, and then pick three things that could
happen simultaneously that will impact your situation. So and I
(04:50):
say that because things often sometimes things happen in threes.
And you know, only back in early December, we had
a electrical fire, our power for the day and so
I lost all day's worth of works. I couldn't do
any work. And then my car broke down and it
broke down as I was driving trying to cross intersections,
(05:10):
so it had to be towed a long way away
and then huge expense to fix it. So that happened.
Then also washing machine broke and the air conditioning went,
so it was you know, things happened, it's not. Don't
think I will. Only one thing could happen at a time.
You never know, so be smart. You never regret having
(05:32):
too much emergency money and then having that offset account
orriginal facility can actually work to your financial advantages and
saving money in the main tab. But it means you
sleep well at night.
Speaker 1 (05:41):
I always struggle with the idea of what constitutes an emergency.
Speaker 2 (05:45):
I did get a message this week from you about
a certain situation. Whether it was classified as coming out
of the emergency money.
Speaker 1 (05:53):
Yes, and it was. We established that I was expecting
a much more negative response than the one that I
got because our coffee machine diet and it's hardly kind
of a it's a very very first world problem.
Speaker 2 (06:05):
And still it's part of your.
Speaker 1 (06:06):
Ritual and it's actually really really important, and you are right.
We did the sums. Then again, shann and I did
the sums, and she was like, hey, you do realize
that if we were to buy kind of these coffees
every day out, we would be spending X amount And
it was a staggering sum compared to what it costs
to do it at home. Once you've done the initial
outlayer of the machine. And so my message to you was, hey, Cana,
(06:28):
do you reckon a new coffee machine? That count as
an emergency for the emergency fund. And I was expecting
this all caps response, no, that's not an emergency something,
and the response came back, if you really love your coffee,
then yeah, it probably is.
Speaker 2 (06:43):
It's helping you said money. It's also a very beautiful ritual,
I think having a coffee at home.
Speaker 1 (06:47):
Yeah, yeah, no, absolutely, Okay, So make twenty twenty five
of the year set up your emergency fund because you
will sleep better at night having that there.
Speaker 2 (06:57):
And also when things do go wrong, you don't fall
into a mess and a panic like, yes, a crappy week,
but you know I was able to have a moment
go thank goodness we have submergency money there.
Speaker 1 (07:09):
Yeah. Number four, what have we got?
Speaker 2 (07:12):
Pay down debt? So draw a line in the sand.
No more toxic debt. If you're relying on credit cards,
you're a lying on buy an how pay later to survive.
That is your red flag that you need to get
the monkey off your back. Pay those debts down and
take a break from using them, or don't use them
at all. And you you know when it comes to debt.
The rules are under the general advice only is you know,
(07:36):
credit card debt, buy now, pay later, the ones that
have that toxic impact on your financial situation, and just
work through your list. And I have a strategy called
the hitless strategy where you it's not it could mean
that you pay a little bit more money in interest,
but it's more about the mindset and shooting into the
psychology of money.
Speaker 1 (07:55):
What's it called.
Speaker 2 (07:56):
It's called the hit list.
Speaker 1 (07:57):
Hit list.
Speaker 2 (07:58):
We can do an episode if you're like, really only.
Speaker 1 (07:59):
Hit I would be open to this.
Speaker 2 (08:01):
But you go through the smallest step first, and you
build up momentum and work through. And yes it means
ignoring which interest rates have the highest interest rate, but
it's about building a sense of progress with it then
fuels you and motivates you to keep going. And I've
approached so many people out of huge amounts of debt.
But you know, review it and then tracking it so
you can see it's actually working. But twenty twenty five,
(08:22):
say goodbye to toxic debt in your life. It is
financially and emotionally draining.
Speaker 1 (08:28):
Number five on the list is to start paying attention
to your superannuation now. I know this is one that
you are very very passionate about, and just start today,
because the earlier you can start paying attention to your superannuation,
the longer you have to build up the benefits.
Speaker 2 (08:47):
Well gets monitored, gets made. So find out where your
superannuation is. Do a search just if you've got any
old missing superannuation accounts, which is very easily done online,
and then look at where it is invested. But don't
just look where it's invested. Make sure it's right for you.
So go once you've seen where it is. And a
lot of people in this default balance fund or I
actually had someone message me to say that they did
(09:08):
a search and found had been sitting in cash for
the last fifteen years. What horrified than they were so
upset of themselves. They listened to your advice through your podcast.
I went, did this and now fixed it and I
feel so much better. But obviously she was this person
was kicking themselves. So make sure it's right for you.
So once you find out where it is, then go
into a risk profile and you know if you need
(09:30):
to make some changes, get advice because obviously there are
consequences like capital gains tax and by cell cost brokerage
and so forth, So that's really important. And also whilst
you're there, check that your contributions have been going in
and they've been going on on time. In a previous episode,
I shared about a friend of mine that discovered her
employee UH had never been paying SUPER and she missed
(09:52):
out on about thirty five thousand dollars with SUPER contributions,
which was devastating ouch.
Speaker 1 (09:57):
And that's just in the contributions. That's not adding up
up what that would have cost at retirement time, when
all of a sudden, the power of compound interests and
the power of having those investments working for you would
have seen it worth a lot a lot more. Yeah,
And it's worth also mentioning the fact that everything that
we're talking about here we have done episodes on these
ones individually in the past. So if you're a new
(10:18):
listener to the podcast, welcome first, but also have a
bit of a scroll back through the past catalog, because
we have taken a deep dive in the past into say,
doing your risk profile and deciding where you should have
your money within your superannuation, what type of assets and
kind of what the appropriate level of risk is for you.
So We've got more information on all of these in
(10:40):
previous episodes. Today's really just this is putting together the
ultimate list of goals to make this year the year
that you take back control of your money. One more
before we take a quick break though. Number six. Start
an investment portfolio. This is filled countless episodes on its own.
Speaker 2 (10:58):
Now's the time to invest. I don't believe superannuation on
its own is going to be able to fund our
retirement or the retirement that we actually want. It is
important that you're investing as well. And obviously, you know
some people in certain age groups may actually want to
have a bias towards super or bias towards investing. But
you know, this is the year to start investing. If
you've been thinking about it and wanting to do it's
(11:20):
been on your list but never actually done it, or
you started it and just kind of drop the ball
on it, reconnect with it, get it going again. And
that's why I love the thousand Dollars project because you know,
you can start with a thousand dollars and it's exciting.
You can watch it grow and you can think outside
of the square to how you're going to get more
money and you start tracking that passive income and thinking about, Okay,
well I now make two thousand dollars a year of
(11:41):
my portfolio. That's going to contribute towards my retirement goals.
You know, the sooner you can start investing, the better.
Speaker 1 (11:47):
I love that like it is. That is one of
those ones that gets people genuinely excited because it is
working towards a different future, better future. Yeah, indeed, all right,
So that's the first six about twelve goals for twenty
twenty five. Let's take a quick break and come back
and get the next six. Cana, we are setting twelve
(12:12):
goals for twenty twenty five where you're just coming up
with ideas really here, and you can pick and choose
the ones that suit you and the ones that are
appropriate for you. Number seven, improve your financial literacy. Make
twenty twenty five the year that you do that. And hey,
if you're listening to this podcast, it's probably already a
good start.
Speaker 2 (12:31):
Right, you know. Create a habit system. You have a
simple goal. You listen to one podcast a week like
this one or Sugarmumas Fireplay, or you read one book
per month, or you watch a video on YouTube about investing,
or you spend half an hour every Monday morning going
through the money Smart website, which is created by Ask.
There is so much free information out there to help you,
(12:54):
and great quality information to allow you to make far
better decisions with your money. And I prove your financial
wellbeing in seeing it in your bank balance, but also
internally as well.
Speaker 1 (13:06):
That's a good one, isn't it because it is something
that you can do at your own pace too, and
you can do it in a way that works for you.
If you are a podcast listener, there are a great
podcast out there to listen to. If you like reading
books and kind of taking a deeper dive into things,
then go for that. And the money Smart website that
you mentioned is a fantastic resource for explaining terms in
(13:27):
really simple language and kind of helping to educate you.
And no one needs to know what you were researching.
It's a great way of kind of filling some knowledge
gaps that you might not be comfortable admitting that you have.
And I've done it. I've jumped on there and looked
up stuff. Oh okay, all right, that wasn't so hard
at all. Now that's number seven. Number eight vitally important.
Speaker 2 (13:49):
I will admit I need to do this. I have
a will, but it needs to be updated and I
need to make some changes. So you know, you've got
to have a will in place. You may think, well,
I've got nothing, you know, no assets, but that's not
the issue. Issues. You do have assets, you have superinnovation,
but also you may have some debts as well. You
need to be thinking about this, and you know, thinking
about what is the best for your family, for your
(14:11):
loved ones, and where do you want the wealth that
you've established so far. You've got items, You've got your
belongings that are valuable. So you have a will if
you don't, or make sure it's updated.
Speaker 1 (14:22):
Yeah, and it's just one of those things that it's
an uncomfortable thing to do. But once you've done it, okay,
you're good for a bit. And you do need to
kind of keep reviewing it and keep checking it every
now and then to make sure that.
Speaker 2 (14:34):
It is current, especially if your situation changes.
Speaker 1 (14:36):
Yeah. Absolutely, but just get it done in the first place.
Speaker 2 (14:39):
And include a charity in there as well.
Speaker 1 (14:41):
Yeah, great idea, thank you. I like that. While we
are reviewing things, Number nine is review your insurances.
Speaker 2 (14:49):
Yes, not just your general insurances, but your personal insurances
as well, so you know income protection, life and TBD,
trauma cover home and contents. You know, maybe if you
have an investment, probably might have landlord insurance. Go far
and wide with this, and also I recommend when you
do that search for your superannuation accounts, which I believe
was number five, is to have a look at what
(15:12):
insurances might be attached to those old superinhnuation accounts. I
know when I was running my financial planning practice, I'd
always come across an old superhneration account for a client
and have like a five hundred thousand of a life policy.
They had no idea existed. So do your research, you know,
see what insurance policies attached to superinnuation accounts. Also might
add accidental cover. I had completely forgotten that when Rocker
(15:36):
was a baby, I took out accidental cover on him,
and it wasn't until I got something in the mail
saying that actually hit default because I changed bank accounts
and not updated it. I was like, oh my goodness,
I completely forgot about that. So make sure you take
stock of what you have in place and what you
need and what you potentially don't need, because you're doubling.
Speaker 1 (15:55):
Up somewhere else at number ten, there's one that you
are very past because you have talked about it a
number of times, calling up your utilities provider and asking
for a better deal.
Speaker 2 (16:07):
Oh, I do this every free will February.
Speaker 1 (16:09):
I know you're and you're very satisfied when you do
it well.
Speaker 2 (16:12):
I've shared previously, I have the numbers in my phone,
and in my phone, I will have also my account number,
so it's very easy to access the information to make
sure my phone call is very efficient, and I can
do it literally in the car obviously with two hands,
using bluetooth, responsible driving at all times, but asking for
a better deal. I do this with Foxtel. I do
this with our energy and gas bill, everything. I leave
(16:35):
no stone unturned in It's amazing. If they think they
can lose you, we'll pull a rabbit out of my hat.
Speaker 1 (16:41):
Isn't that great? And there is nothing more satisfying than
feeling like, Hey, I've just saved money that I would
not have saved if I hadn't taken that step.
Speaker 2 (16:50):
And I know this sounds really weird and odd coming
from a financial planner, but sometimes the smallest savings are
actually more satisfying than the big savings.
Speaker 1 (16:59):
Yes, I know exactly what you mean. It's also then
leads us very neatly into number eleven on our list.
Because we talk about kind of small savings. This is
at the other end, this can lead to some big, big,
big savings. We are calling up your bank, yes, and.
Speaker 2 (17:15):
Asking for a better deal with your home loan. Now,
I will say be careful with this because if you
call your bank, they're obviously only going to talk about
their bank products and you know, try and get you
on one of their products, which is obviously their work
for the bank. That's their job. So if you get
a no from your bank or you're not happy with
the answer, reach out to a mortgage broker and experienced
(17:36):
mortgage broker that can actually go and look far and
wide for you with other financial institutions that maybe have
an even better interest rate for you. And Adam McCabe
we've had on the show here from blue Land and
you're brilliant hack. It's like, what you can do is
look at what your current bank is offering new customers,
(17:57):
and if that new rate for new customers is lower
than what you're playing, that is often a sign that
they will go and reduce your rate to at least
match that.
Speaker 1 (18:05):
If you're not better, It shows they have the capacity
to do that.
Speaker 2 (18:08):
Don't exactly, but it is going to depend on how
long you've been with the mank what the size of
your loan is, what you've paid off so far, value
of your property. There are a lot of obviously variables.
Speaker 1 (18:18):
And if you're not a confrontational person, if you're a
bit of an introvert. Honestly, this is a fairly easy
call to make. To talk to someone at your bank
about this. I've done this before. Talk to them and
they did reduce the rate fairly significantly. But if you
are not comfortable doing that yourself, then talk to a
mortgage broker and get them to do it for you.
And will they will do that.
Speaker 2 (18:38):
It is no skin off their nose, and a good
more would wreck will happily do.
Speaker 1 (18:41):
It for you. And they've already got that. They know
where to go, they know which banks are the ones
that are more aggressively chasing customers and things, and they
are the ones that typically will actually move the greatest.
Speaker 2 (18:52):
Exactly, but obviously use those savings, don't spend it, don't
put that new found savings back into your budget. If
you can afford to increase your more payments by that,
you found savings. Last savings can expand massively.
Speaker 1 (19:05):
The last one, number twelve. What do you think about
this one? It's kind of fun. Actually, they've got a
fun one for number twelve. Learn your credit score? Do
you reckon? I reckon? Most Australians probably would have no
idea what their credit score is.
Speaker 2 (19:19):
I know I agree with you on this one. A
lot of people think, oh, learning need to worry about
that when I go borrow money. But we've mentioned this
in the past identity theft. You can see what's going
on who's potentially taken a credit card out in your name,
And obviously if you're preparing to borrow some money, they'll
be buying a home or boring to renovate, or maybe
looking at borrowing money to do a debt recycling strategy.
(19:41):
Jump online. It takes five minutes if that, and it's free.
It's free.
Speaker 1 (19:45):
Yeah, and it's quite satisfying. Again, I know this is
this sounds like all I'm looking for is satisfaction from
all of these resolutions, But it is quite satisfying to
go in there and to check it, and you can
check it again, lady, you can check it in six months,
you can check it in a year and see where
your credit score is in fact improving or whether it's
not backwards going backwards. There we go, because it is
(20:06):
something that you do need to keep an eye on because,
as you say, just that red flag of identity theft
for one thing.
Speaker 2 (20:12):
And also, don't people don't realize if you have a
good credit score, you're in a better bargaining position when
it comes to negotiating a better for your homelan.
Speaker 1 (20:19):
That's a good point. So you can actually say, hey,
I know my credit score is X. I am a
good candidate for this, I'm a good customer exactly. Okay,
all right, that's a good list.
Speaker 2 (20:31):
We have delivered. I feel like this morning.
Speaker 1 (20:33):
Yeah. Twelve solid goals for twenty twenty five. Make a budget,
create a buffer in your budget, set up an emergency fund,
pay down debt, pay attention to your super start an
investment portfolio. Improve your financial literacy. Set up or update
your will, review your insurances. Call up your utilities provider
(20:54):
and ask for a better deal. Call up your bank
or mortgage broker and ask for a better deal. On
your home loan and learn your credit score. It's going
to be a very busy January.
Speaker 2 (21:04):
Bring on twenty twenty five.
Speaker 1 (21:05):
It's very exciting, isn't it? All right?
Speaker 2 (21:06):
Cannor?
Speaker 1 (21:07):
If we want more information, where do we find you?
Speaker 2 (21:09):
Best base tomind me and contact me is through Instagram.
Speaker 1 (21:11):
And you can hear me every day with Sean Aylmer
on Fear and Greed. Daily business news for people who
make their own decisions. Thank you for listening to how
do they afford that? Remember to hit follow on the podcast.
That is most important and the best thing you can
do is tell somebody else send them this episode. Spread
the word about how do they afford that? Thank you
for your company. Join us again next week
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