Money Masterclass

Money Masterclass transcript 29th November 2022

 

Do you avoid all money talk because its to hard

OR

Do you spend first, regret later?

Tonight we are going to talk about your mindset – what makes you do the things you do, where your money actually goes and how to create some really small habits to get you on your own happy money journey.

Its all stuff I know first hand because I have made all the mistakes with money – including but not limited to, living off credit cards, giving money to a significant other, spending too much on children – and going without myself! And I will remind you nobody is perfect, I can still slip up, spend too much and regret it – but what I know now is that I am ok and will always be ok.

Anyway – lets get started…

And lets start with Mindset because, until you change your mind, you really can’t change anything at all.

There are a few core beliefs we carry with us from when we grew up, what we learned along the way, our inner six-year-old screaming at us – whatever drives your unconscious to act in a certain way.

Your mindset can change – I don’t know if you had a chance to look at your money type, but that is a god way to unravel what drives us.  Basically it’s a quiz developed at Kansas University that determines if you

money worship,

money avoid,

money vigilance or

money status

You might have a feeling for how you, or those around you fit into those boxes.

But how do you change that, and become money normal, money fearless, money secure or money control?

Can you identify one thing that you say or do when it comes to money, that you know in your head is not true (for example all rich people are evil) and connect the dots on how that might hold you back from being in control of your money.

Take a moment…maybe write it down.

Do you want to share? You don’t have to but I have a good one!

I’m no good with money!

Such a common mis held belief.

Now unpack that for a moment… how does holding onto that serve you?

If you think you are no good with money does that mean you can transfer all control to someone else…and if they control it can you blame them if something goes wrong?

What if you were good with money? How would it look? Would you feel better or overwhelmed? Is it possible you are good with money already? Or at least a little bit good? I mean you have managed up until now to pay rent / mortgage/ food / clothes / have a job…

Sometimes we hold onto things because they serve us in ways we don’t even realise until we shine a light.

So this then brings us to where you are now – that core belief is there holding onto you. In the Money Makeover we do a deep dive into this but with you today just look at your last few transactions (and this could be big with the sales) and see if you notice any patterns – spending on take away food? Coffee? Was this unusual? Normally you might not do this but this week was busier?

This was me – every day I would go out to lunch at work with my friend Renee – we would get a coffee in the morning $5.50 + sandwich and drink at lunch $15.40 plus another coffee and maybe an afternoon cookie  $5.50 + $2 there I am spending $27.40 a day on take away (and its not that nice)

That happens!

Sometimes its had to know where your money goes but tracking is a great way to look into it.  Maybe your bank tracks it for you.

In the course we go through a really deep dive into your spending because your spending really does reflect what you value, what’s important I look at people through bank statements all the time.  The health conscious with the sneaky McDonalds visits, the secret smoker…its all there in peoples bank statements.

Anyway back to you.  Feel free to share in the comments but if you would rather stay quiet have a think about where your money goes, and when was the last time you missed a bill or had a surprise cost out of nowhere, that was really stressful because you really couldn’t afford it.

Now back to that bank statement – how rare was that week really?

Tell me how do you organise yourself? Are you operating out of one account that everything goes into and comes out of so you think you have more money than you do?

I reversed traditional thinking on this – rather than set up a bucket for every little thing I need (you know emergency buckets, fun buckets etc etc)

Its too confusing, right?  – but in a ways its also simple. 

We look at money available in a weak moment and just spend it – so to me the easiest way to get around that is to get it out of my sight into another account and let it all happen (and look we do this in the course as well we test bills and check stuff but for now this is enough).

What we really need to do to get on top of our money is to create habits around our spending.

Pay the big bills, the little bills everything comes out by direct debit….basically I set up two buckets – fun bucket and boring bucket…in the book I call it basics and wants – and this way I stop overspending because I know where my money lives, and what its job is and how much is there.

Of course at first I kept transferring money into my spending – but then I remembered that I was actually good with money and stopped all that, and now I have what I have and its simple.

So what we are really doing is creating habits over goals.  Goals are great but habits are like a little road map to your future.  Its what you start doing now that really matters.

Goals can be big and scary and look really unachievable but you know with these things if you break it down to the daily habit that you need to achieve the goal – saving $10,000 a year might seem too hard, saving $27.40 a day because I stop buying the two take away coffees and a sandwich for lunch every day at work seems very possible.  Because (of course) Guess what – $27.40 a day is $10,000 in a year (no interest or dividends on that either) – small steps and micro habits are what we look at to achieve those hard goals

 So to recap

What you think actually matters – it makes a big difference so to change the way you deal with money find a core belief and turn it on its head

Where you put your money matters – keep it simple and put all your hard expenses in one (not fun) bucket and all your other spending including clothes and food into another bucket

Only play with the fun bucket.

Know your goals but check your habits – they make the big difference

Nothing I have shown you today is theory – this is exactly how I started to get control of my money.  And now I have money and I feel good and I don’t wake up in the middle of the night thinking its all going to fall apart, it just works.

It took me years to get this and that’s why I wrote the book and its why I will keep doing masterclasses like this one so if you were feeling out of control I really hope this gave you some real actions to dive into.

 

Contact Phoebe

Phoebe is available for interviews, guest appearances, article commentary, and talks on a range of topics relating to property, mortgage broking, and personal finance (particularly for women!).