8 'Accountant Secrets' To Manage High Cost-Of-Living

Get ready for some money-saving strategies to help you stretch your hard-earned dollars. Join Andrew, Chris, and Young on the talkBIG podcast as they tackle the challenges of a high cost of living and rising interest rates. In this episode, the hosts reveal eight "accountant secrets" for smart money management and household budgeting. Learn about compound interest, paying yourself first, offset accounts, paying down your mortgage principal, and more.

We know that the rising cost of living can put a strain on your finances, especially when interest rates start climbing.  Whether you're a homeowner or renter, this episode is full of valuable tips to help you save on expenses and manage your finances effectively. From budgeting groceries to evaluating fixed rates versus variable rates, the talkBIG team has got you covered. 

Tune in now and start your journey towards financial well-being and a brighter future. Don't forget to like and subscribe for more money-saving tips.

Share your thoughts, questions, and stories with us through our website, social media channels, or email, and let your input shape future episodes!

Thanks for listening! Visit the RSM Australia website to ask the hosts a question.

Chapters

• 0:20 Accountant secrets to smart money management
• 0:54 Accountant Secret #1 – Compound Interest
• 3:28 Accountant Secret #2: Pay yourself first
• 5:01 How to save money on your mortgage
• 5:34 Accountant secret #3: Offset accounts
• 7:19 Accountant secret #4: Pay down your principal
• 7:36 Managing your household budget
• 7:56 Accountant secret #5 Expense audits and cutting costs
• 8:40 Buy now, pay later: is Afterpay budget-friendly?
• 11:33 How to save money on your grocery bill
• 13:30 Is it time to consider fixed rates over variable for your mortgage?
• 14:19 Money-saving tips for renters
• 16:15 Accountant secret #6: Don’t let auto-renew cost you more money
• 19:00 Accountant secret #7: Get started now.
• 19:48 How can young people today save money for a house?
• 20:44 Accountant secret #8: Enjoy life

Transcript

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Hello, everyone,

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and welcome back to another episode of the RSM talkBIG podcast.

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I'm your host, Andrew Sykes, and I'm joined in the studio today by Chris Oates.

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G’day everyone. And Young Han. Hi everyone.

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Well, how’s everyone feeling with the rising cost of interest rates?

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I think it's about time we did actually explore some practical money saving tips.

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Everyone thinks there's a bunch of secrets accountants have.

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And they're not so secret, but they are common sense advice

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and we're going to go through that today.

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We're going to have a bit of a talk on some strategies to help you save,

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some strategies to cope with rising mortgage interest rates and payments

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and just general budgeting and getting ahead in life.

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Chris, let's have a talk about compound interest right now.

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Everyone tells us this is the secret of saving.

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Walk us through it.

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If you've got an example for me.

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Yeah, so compound interest.

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It's basically the longer you're doing something...

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Whether you're saving on interest or you're getting a return,

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you keep earning money on the money you're making money on.

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So the longer you can do it, the more money you make.

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Cause, you think about it.

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A 25 year old, if they were going to invest

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until they retire, let's call it age 65.

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If you putting $200 a month aside, earning 6% interest.

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Over that 40 years, you make around about $393,000 at the end.

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If you waited ten years and you did it from when you were 35,

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you're only going to have about half of that at about $201,000.

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So by waiting ten years, you've only dropped a quarter

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of the investment time, but you've halved what you end up with at the end.

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And it costs you...

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it's 24,000 more that you've put in, but you end up with what,

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nearly 200,000 more at the end?

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like a snowball effect.

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So when you start making snowball, it's really hard at the beginning.

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It doesn't feel like it's getting any bigger.

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But once it gets to a certain stage, it's just getting bigger

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and bigger and faster and faster.

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And you know, technically when you're younger, it's easier for you

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to make a big snowman, whereas when you get older, it's harder.

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It's just exactly the same.

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Well, if we said that compound interest is the real secret of wealth,

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so to me, compound interest just means you're getting paid money

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without having to work for it. Yep.

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So that's your return on your investment.

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The earlier you start, the more time you've got.

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If you don't start until you're 45 or 50,

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you just don't have time to build a lump sum to get compound interest on do you?

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And it’s hard to put that money aside to save.

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Yeah, And after a while you get used to it.

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So, yes, as you said, Young, it hurts to start with,

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but you get used to that money not being there.

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And because you don't see the big

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difference upfront in your interest and what you're earning,

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a lot of people stop because they don't see what it's worth.

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But it is at the back end where you've got more money.

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So your interest is growing, because you're getting

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more interest on a bigger amount.

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So it makes a difference.

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You've got to stick to your strategy rather than starting and then

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dropping off.

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And there's a couple of really good points raised there.

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Young, you said it's hard to save.

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Well, yeah, that's true.

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So I think it's a matter of choose your hard.

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It's hard to save, but it's also hard to have no money.

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You know what? Choose which hard you want.

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An easier strategy is ask your payroll people

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to send your money into two different accounts.

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One you never see

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and the other to the account that you have to pay for things.

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So that's that old secret: pay yourself first. Yep.

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So I think we've touched on it before is that lifestyle expands

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to meet your income. That's right.

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So if you if you take the money out so say

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you're getting $5,000 net per month.

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If you stick $500 a month before you even see it,

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you'll learn how to live on four and a half or even four.

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Think about when you were going through uni and how much money you actually spent.

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Did you actually end up going out to have a coffee every day?

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No, I didn’t.

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Yeah.

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That's because when I was at uni they didn't have coffee shops anywhere.

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Nah, it does.

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It is, the old adage, if you get a pay rise and you spend it,

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you'll get used to spending it. So do it early. Yeah.

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And if we looked at that, if we took your example, Chris,

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if that 25 year old saved $800 a month

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and they did it till they were 65, they would have nearly $1.6 million.

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Yeah, it's a lot of money when you don't think about it.

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$800 a month, you think, Oh, how am I ever going to get there?

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That's a big difference.

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Yeah.

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Now the big topic on everyone's mind at the moment, interest rates.

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What are we going to do?

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We've had back to back interest rate rises.

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We've got talks of mortgage cliffs and all of these things.

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What are some practical things

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that we're working on with our clients to ease this burden?

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I think the easiest or the most simple solution is

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think about where you're putting...

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we're talking about savings.

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If you just - if you're putting it into a bank account and you're thinking,

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just put it into a savings account where you might be getting 2-2.5% interest...

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Use offset accounts.

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So an offset account basically sits next to your mortgage,

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same as a savings or a normal bank account.

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But whatever's in that account you don't pay interest on - on your mortgage.

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That means you're paying more of your actual principal amount down.

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Exactly.

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And also, why would you want to pay interest, especially on your mortgage?

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It's not tax deductible.

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And if you put that money not in the offset account,

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you actually have to pay income tax on the interest that you earn.

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So utilizing offset account is actually a really good strategy.

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I think it's a great strategy,

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but offset accounts need to be backed up with discipline.

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Okay, so put it in your offset account.

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But that doesn't become your spending because that's your saving.

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And if we go back to our first point about compound interest,

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if we put it into an offset account for 10 years, that's great.

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That's going to guarantee your 6% return, particularly at current rates.

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But you don't want to then take it out after ten years and not have any savings.

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That's true.

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You talk to a lot of people, they say, yes, I'm putting an extra

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$500 into my offset account every month.

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And then you go, you look at it after a year.

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Yeah, but there's not $6,000 in your offset account at the end of the year

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because people are spending it.

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So it's about having that applying like a bucket strategy almost of going,

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okay, here's my spending money

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and having that very separate to what’s your offset and your savings. Yep.

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So really treat it as savings, it’s

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not there to be used for a holiday or for a new car.

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Or you can have a multiple offset account attached to it as well.

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So you can use that strategy to segregate the money

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that you’re never going to touch,

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but the money that you just want to keep it in the bank account

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as long as possible before you actually have to pay for things.

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So offset accounts are great.

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I think one of the rules that's been missed a little bit in low

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interest rate environment was always pay principal and interest. Yes.

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If you're on interest only, work out a way to get the principal and interest.

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And generally

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that is having a look - lots of people can go through and say, okay,

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well yeah, do we really need to subscribe to

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every streaming service?

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There's a lot of, you know, could you cut down

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one coffee a week? Yep.

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How many days do you buy your lunch?

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Yep, correct. Go through your expense audit.

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Whether this is something really you have to use

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or it's something by choice and lifestyle choices.

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But Chris raised a really good point there as well.

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If you look at the numbers, it's really easy to spend money in small amounts.

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So if you looked at two coffees a day

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plus lunch, that's $30 a day.

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That's $150 a year, which is going to run you,

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what, $7600 in after tax income

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over the course of a year.

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It's exactly the same way - spending works, the same way as savings.

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It's saving little bit that compounds spending.

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Spending just adds up in little small amounts.

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The other thing I wanted to touch base on is about, you know, buy now, pay later.

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That promotion that you can hear from all the major retailers.

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What do you think about that, Chris?

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Well, it's kind of kicking the can down the road, isn't it?

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You've got to pay for it at some point.

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And it's the same with the credit card.

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If you've got a credit card and you're not paying that off in full

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each month, you're just causing a problem for later.

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And again, it's a snowball effect.

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So if you do it and you keep doing it,

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eventually they're going to come knocking and want their money back.

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But if you had paid out of money you already had.

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So it comes down to saving and knowing you've got the money when you spend it.

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And if you go over the time frame that they'll let you,

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generally they’ll charge you a big interest rate.

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There is a scheme - that no interest loan

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scheme up to $1500 for essential goods and services.

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So if you really need to replace your fridges or washing machines

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or even car repairs and things like that, you can actually access those

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through the government.

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Yeah, you can.

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And there's, there is a bunch of reading...

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I was reading on the weekend a really good article about the

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mental health benefits of setting goals and delayed gratification.

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So spend now pay later.

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Quite often I find that the joy of whatever

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you bought has disappeared by the time the bill has turned up. Yep.

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And that really

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applies if we're looking at mortgages as well.

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Drawing down on your mortgage for consumption,

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arguably the worst thing you can do financially.

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So this is where we might want a new car

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instead of getting a-- Very commonly used.

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People go into the mortgage because it's a cheaper interest rate.

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But guess what? You actually pay for a longer period.

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Exactly right. You end up paying that car off

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over 20 years and it gets much, much more expensive.

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So if I was to summarize my three top tips

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for mortgages: principal and interest, always,

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you've got to pay that debt down, so work out how to do it.

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And tighten your budget up elsewhere.

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So that works for both savings and managing your mortgage.

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Make some extra payments early on.

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The power of compound interest works on your mortgage as well.

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So if you could pay an extra thousand or two here or there,

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you're really going to get some big benefits.

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And the other one I like is generally your bank will set you up

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with monthly payments.

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If you make fortnightly payments,

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you end up making 26 payments a year,

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so you end up paying an extra month. Yep.

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And you don't even notice that.

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And that can cut seven or eight years off the life of your mortgage.

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And you've made a repayment in the middle of the month.

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So at the end of the month, your interest actually isn't charged

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on that extra payment you've made during the month.

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So you're getting compound interest working again for you.

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For me, I think I just want to share tips

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about how you actually save money to do what Andrew suggested.

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It's probably looking at how you do your grocery shopping because I feel it.

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I go exactly the same thing, I buy exactly the same stuff.

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At the moment, I think I'm paying at least 40% more than I used to pay.

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And the other thing is probably looking at

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not going to Costco too often or buy things that you think that you needed.

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You don't need it.

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I only have certain things that I buy from Costco

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because I know that half of it, I will waste it.

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And that wastage is a really good point.

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In Australia, somewhere around 20% of groceries are in fact thrown away.

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Wasted. That's one bag in five. Yeah. Yeah.

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So if you're one of those people who does waste a lot of food, you're going out

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and spending $500 on your groceries and you're wasting $100. Yep.

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So do a smaller shop.

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Plan. Plan out what you're going to buy.

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Reduce, get away from that impulse, ‘Oh, we won't cook tonight.

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We'll go out for dinner.’ It's not a lot of fun.

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Who doesn't like going out for dinner?

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But that's where a lot of wastage comes from.

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And take note of what you have wasted because next time you go shopping,

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you don't need to buy as much of things that you have bought.

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Yeah.

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And also consider getting some vegetables delivered to you

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and especially those that’re odd shaped, they’re actually

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20% cheaper than the normal ones that you can buy from the supermarket.

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And they're just cheaper because they look ugly.

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Can you order odd shape vegetables?

00:13:10:18 - 00:13:13:06
I didn't know that. Yes, it is.

00:13:13:06 - 00:13:17:19
I think it's called junk junk funk, funk food or something like that.

00:13:17:19 - 00:13:21:18
So they’re in the major, like in north Queensland, there's a lot of farms,

00:13:21:18 - 00:13:25:22
so they actually have a delivery on the weekly basis for those odd shapes.

00:13:25:22 - 00:13:30:10
They couldn't sell it to the supermarket and they’re 20, 20 to 40% cheaper.

00:13:30:11 - 00:13:31:19
So vegetable.

00:13:31:19 - 00:13:32:10
Oh yeah.

00:13:32:10 - 00:13:36:11
Not a bad result and that's, that really is, that's another good point

00:13:36:11 - 00:13:40:04
is look at your current expenditures, see how you can change them.

00:13:40:10 - 00:13:46:15
At the moment, one year fixed rates are significantly lower than

00:13:48:05 - 00:13:51:17
the current variable rate Sitting around 6%, you could

00:13:51:17 - 00:13:56:15
you should be able to get a one year fixed rate for under 5%, Chris?

00:13:56:17 - 00:13:59:17
Yes, and that gives you

00:13:59:21 - 00:14:01:06
the flexibility

00:14:01:06 - 00:14:04:07
to know what you're actually spending on your mortgage for the next year.

00:14:04:07 - 00:14:08:00
Because the scary thing for people is that as rates are going up, you don't know

00:14:08:09 - 00:14:11:05
month to month what your mortgage repayments are going to be.

00:14:11:05 - 00:14:14:17
One, if you fix it for a year you get a bit cheaper interest rate.

00:14:14:24 - 00:14:15:10
And two,

00:14:15:10 - 00:14:17:17
you know what your actual payments are going to be every month,

00:14:17:17 - 00:14:20:17
which makes that budgeting that bit easier.

00:14:20:19 - 00:14:21:10
Yeah.

00:14:21:10 - 00:14:25:10
Now that's for people who do have mortgages, but all of these tips

00:14:25:10 - 00:14:29:10
apply for anyone on the saving and the cost cutting.

00:14:30:01 - 00:14:34:17
What are some of you know, if I'm a renter and I'm looking to get into the housing

00:14:34:17 - 00:14:39:01
market, it's a pretty high barrier at the moment and rents are going up.

00:14:39:21 - 00:14:45:04
Do we have any tips on how we can explore some savings for renters?

00:14:46:12 - 00:14:49:12
I think the thing is you'd need to

00:14:49:12 - 00:14:52:03
talk to your agent, have the open discussion with them.

00:14:52:03 - 00:14:54:21
A lot of the misconception is, as a renter,

00:14:54:21 - 00:14:58:00
you're kind of at the landlord's discretion,

00:14:58:10 - 00:15:00:19
whereas if you actually have that open discussion,

00:15:00:19 - 00:15:05:04
if you're already in the place, it's a lot easier for a landlord to extend

00:15:05:04 - 00:15:10:06
a lease rather than find somebody else go through the whole process.

00:15:10:23 - 00:15:13:21
And if you're a good tenant, they probably want to keep you as well.

00:15:13:21 - 00:15:14:03
Yeah.

00:15:14:03 - 00:15:17:09
And see, you might be a good tenant that has some skills.

00:15:17:09 - 00:15:21:02
You can say to your landlord, ‘Hey, I'll look after the repairs

00:15:21:02 - 00:15:24:18
and maintenance and fix things around the house myself.’ Yep.

00:15:24:24 - 00:15:28:16
Saves them money and maybe you can negotiate a little bit

00:15:28:16 - 00:15:32:15
off the rent or importantly, avoid rent increases.

00:15:32:24 - 00:15:33:19
That's right.

00:15:33:19 - 00:15:38:10
And I think the other thing, as a renter, there is a new scheme

00:15:38:13 - 00:15:42:24
about energy efficiency, a scheme for the rental property.

00:15:42:24 - 00:15:47:03
So, in ACT, it started from the first of April that they going

00:15:47:03 - 00:15:53:07
to have to kind of, you know, upgrade your energy efficiency rating.

00:15:53:07 - 00:15:58:10
So by increasing insulation, anything that could help energy saving.

00:15:58:10 - 00:16:01:07
And as a renter, you have to pay for your utilities.

00:16:01:07 - 00:16:04:22
So if you have a house that's have a better energy rating,

00:16:04:22 - 00:16:07:22
then you're actually going to save money on utilities.

00:16:08:04 - 00:16:09:10
Yeah, that can be bad.

00:16:09:10 - 00:16:12:23
And acknowledge it's a very difficult market at the moment

00:16:13:17 - 00:16:15:19
with shortage of properties everywhere in Australia.

00:16:15:19 - 00:16:16:17
It’s tough. Yep.

00:16:17:21 - 00:16:18:13
But there are

00:16:18:13 - 00:16:21:13
other ways that we can look to save.

00:16:21:17 - 00:16:23:07
One of the things that I think is

00:16:23:07 - 00:16:27:00
very powerful is challenging the power of incumbency.

00:16:27:05 - 00:16:32:04
As a new customer, you tend to get better pricing than you do as an existing one.

00:16:32:16 - 00:16:37:02
So whenever insurance renewal comes in, go and test the market.

00:16:37:09 - 00:16:42:00
Quite often you could save two, three, $400 on doing that.

00:16:42:00 - 00:16:45:00
Yeah, don't pay royalty tax.

00:16:45:07 - 00:16:46:13
That's it. Yeah.

00:16:46:13 - 00:16:48:24
And it's too easy just to renew.

00:16:48:24 - 00:16:53:24
Young, you've already touched on those buy now pay later schemes.

00:16:53:24 - 00:16:56:01
They should just be avoided.

00:16:56:01 - 00:16:59:06
Don't buy anything unless you can afford it. Yep.

00:16:59:21 - 00:17:02:04
And I think the

00:17:02:04 - 00:17:03:00
insurance renewal...

00:17:03:00 - 00:17:04:20
The same example goes with mortgages.

00:17:04:20 - 00:17:07:24
The amount of times you hear somebody go to their bank and say,

00:17:08:17 - 00:17:10:10
can I get a better interest rate?

00:17:10:10 - 00:17:12:00
The answer's no.

00:17:12:00 - 00:17:15:15
They then go and go try and refinance with someone else,

00:17:15:15 - 00:17:18:05
get a better interest rate because they're a new customer.

00:17:18:05 - 00:17:20:08
There might be cashback offers.

00:17:20:08 - 00:17:22:13
So you've tested the market.

00:17:22:13 - 00:17:24:08
If you can then talk to your existing bank.

00:17:24:08 - 00:17:28:20
They want to keep your business, so they hopefully will go, okay.

00:17:29:05 - 00:17:32:03
Usually a phone call will get you a better rate.

00:17:32:03 - 00:17:35:20
And if you are actually at the position where you can actually refinance,

00:17:35:20 - 00:17:37:18
the bank will listen to you.

00:17:37:18 - 00:17:38:11
Yeah, yeah.

00:17:38:11 - 00:17:41:18
But you're also talking about something Australians generally

00:17:41:18 - 00:17:44:18
don't like doing, which is haggling. Yep.

00:17:44:23 - 00:17:46:02
What's your best price?

00:17:46:02 - 00:17:48:17
Walking into a store saying, what's your best price on that?

00:17:48:17 - 00:17:50:21
Really good example.

00:17:50:21 - 00:17:56:18
I went to Levi's on the weekend and they had one pair of jeans, it was $109.

00:17:56:18 - 00:18:01:02
Different colour, in the same style, $129.

00:18:01:04 - 00:18:04:16
So I said, Well, can I have them at the same price?

00:18:05:07 - 00:18:07:04
So don't be afraid to ask.

00:18:07:04 - 00:18:09:01
And don't be afraid to go to the counter and say,

00:18:09:01 - 00:18:12:01
‘What's your best price on that?’ And you'll be surprised.

00:18:12:04 - 00:18:14:08
You quite often get a discount.

00:18:14:08 - 00:18:17:01
And I actually bought another charger thing

00:18:17:01 - 00:18:20:05
online and I really liked it, so I wanted to buy again.

00:18:20:05 - 00:18:22:23
So I actually emailed the customer service.

00:18:22:23 - 00:18:25:21
I'm a return customer, do I get a discount?

00:18:25:21 - 00:18:28:06
And they gave me a 50% discount.

00:18:28:06 - 00:18:30:03
I wouldn't have got it if I didn't ask.

00:18:30:03 - 00:18:32:02
What's the worst thing they'll say? No.

00:18:32:02 - 00:18:33:06
Yeah, they'll say no.

00:18:33:06 - 00:18:36:15
If you're satisfied with something, rather than shopping around and getting an

00:18:36:15 - 00:18:40:22
inferior brand, there's normally a margin there to give a discount.

00:18:41:22 - 00:18:43:21
I reckon a really interesting one.

00:18:43:21 - 00:18:49:14
One thing I hate is speeding tickets and parking tickets.

00:18:49:14 - 00:18:53:05
Plan your trips, don't have to speed in.

00:18:53:08 - 00:18:57:16
Yeah, because that's gonna chew up your fuel costs as well when you speed

00:18:57:16 - 00:19:00:16
and then you know stop all of a sudden because you're in a hurry.

00:19:00:22 - 00:19:01:12
Yeah.

00:19:01:12 - 00:19:04:12
But I think the overall thing, the most important thing,

00:19:04:24 - 00:19:07:03
get started on any of these.

00:19:07:03 - 00:19:11:14
Too often we have aspirational goals that are some time in the future.

00:19:12:12 - 00:19:14:15
It's all about today.

00:19:14:15 - 00:19:17:08
Really good practice is when you're

00:19:17:08 - 00:19:20:24
on your way to work in the morning, say to yourself, ‘What

00:19:20:24 - 00:19:26:04
am I doing for myself and my family to achieve my long term goals today?’

00:19:26:06 - 00:19:31:04
And then when you’re going home, say, ‘What did I do for myself, my family,

00:19:31:19 - 00:19:34:24
to achieve my long term goals?’ You know.

00:19:34:24 - 00:19:35:03
Did I

00:19:36:10 - 00:19:37:03
have a plan to

00:19:37:03 - 00:19:40:05
save something today, to look at my costs today.

00:19:40:05 - 00:19:41:23
And did I actually do it?

00:19:41:23 - 00:19:44:24
And keep yourself honest, I think is the key message.

00:19:45:08 - 00:19:47:17
Keep yourself honest. Well, if you want to have a lump sum.

00:19:47:17 - 00:19:51:11
So if today you don't have a house and yeah,

00:19:51:12 - 00:19:53:08
you might be a young person and

00:19:53:08 - 00:19:55:22
you want to get into the housing market, how do you do it?

00:19:55:22 - 00:19:58:19
You get started with your saving and your investment plan.

00:19:58:19 - 00:20:03:08
Chris, how easy is it for a young person to start a savings plan?

00:20:04:01 - 00:20:07:01
It's as easy as: One.

00:20:07:01 - 00:20:08:18
If you just wanted to use a bank account.

00:20:08:18 - 00:20:11:02
Two, just use your existing bank account.

00:20:11:02 - 00:20:13:10
If you wanted to do some sort of investment,

00:20:13:10 - 00:20:16:10
you can generally nowadays set things up online.

00:20:16:19 - 00:20:18:02
It might take you just a little bit.

00:20:18:02 - 00:20:20:14
Just do your research on what you're going to invest in.

00:20:20:14 - 00:20:22:05
But it's so simple.

00:20:22:05 - 00:20:24:10
It's a matter of maybe an hour.

00:20:24:10 - 00:20:28:15
Popular thing at the moment is just rounding up your spending for the week.

00:20:28:15 - 00:20:32:11
So those apps that looking at your credit cut spending

00:20:32:11 - 00:20:34:06
and just round it up to the dollar.

00:20:34:06 - 00:20:36:05
But they're putting it into the investment portfolio.

00:20:36:05 - 00:20:37:04
Yeah, your micro investing.

00:20:37:04 - 00:20:39:12
It’s the same concept as compound interest.

00:20:39:12 - 00:20:42:12
Put a little put it aside you don't notice it

00:20:42:12 - 00:20:44:22
you wouldn't notice $0.40 - $0.50.

00:20:44:22 - 00:20:46:10
Yeah. Off your card.

00:20:46:10 - 00:20:49:03
Because at the end, you still want to enjoy your life.

00:20:49:03 - 00:20:53:13
We're not asking you to be very stingy and not missing using out on everything

00:20:53:13 - 00:20:55:07
that could possibly happen in your life

00:20:55:07 - 00:20:58:07
because you're so fixated about how much you have to save.

00:20:58:14 - 00:21:01:23
It's about finding the right balance that's going to keep you happy,

00:21:01:23 - 00:21:05:05
feel motivated to save money because you actually enjoy what

00:21:05:05 - 00:21:09:02
you can now, but also putting aside a few for the future.

00:21:09:14 - 00:21:11:07
Yep, and a lot of saving.

00:21:11:07 - 00:21:13:23
It's not about taking all the fun out of life.

00:21:13:23 - 00:21:16:23
I'm not going to buy coffee anymore and just, you know,

00:21:17:13 - 00:21:20:19
takes all the joy out of your morning not having a nice coffee.

00:21:21:03 - 00:21:24:03
But it's about not wasting your spend.

00:21:24:06 - 00:21:24:24
Yeah.

00:21:24:24 - 00:21:28:06
So being a bit more careful with your shopping and set yourself

00:21:28:06 - 00:21:32:12
a goal, say, okay, well, I'm going to cut my shopping bill by 10%

00:21:32:20 - 00:21:34:02
over the next month.

00:21:34:02 - 00:21:35:07
How am I going to do that?

00:21:35:07 - 00:21:37:07
I'm going to look at where I'm wasting.

00:21:37:07 - 00:21:38:08
Or set up a goal.

00:21:38:08 - 00:21:41:12
Say if you wanted to go overseas trip at the end of the year,

00:21:41:17 - 00:21:44:15
don't think about, oh, I'm going to excess my offset account.

00:21:44:15 - 00:21:46:07
No, just set up a plan.

00:21:46:07 - 00:21:49:09
Okay, if I need, say $4,000 by December.

00:21:49:09 - 00:21:52:08
What do I need to do every month and how do I do that?

00:21:52:08 - 00:21:55:07
Or what do I need to do every day? Yeah, exactly.

00:21:55:07 - 00:21:58:07
The old thing of look where I am, look where I want to be,

00:21:58:07 - 00:22:01:07
and then fill in the What do you need to do, in the middle. Yep.

00:22:01:07 - 00:22:04:07
And it still can be fun. Yeah.

00:22:04:07 - 00:22:07:16
And I think the best way to do that, if we go back to what we started

00:22:07:16 - 00:22:10:16
talking about, is pay yourself first.

00:22:10:23 - 00:22:13:19
And I think that's got to be a number one rule, doesn't it?

00:22:13:19 - 00:22:16:19
Yeah. Give it. Put your savings aside first.

00:22:16:20 - 00:22:18:22
You won't notice it after a few pays.

00:22:18:22 - 00:22:22:07
What percent do you recommend to put? I

00:22:23:07 - 00:22:25:23
see the rising mortgages, rising cost of living.

00:22:25:23 - 00:22:29:09
But if you could put 10% of your pay aside into savings,

00:22:29:14 - 00:22:35:06
generally we like to say 20% but I know at the moment cost of living is hard.

00:22:35:06 - 00:22:37:23
So at least if you're putting 10%, you're doing something.

00:22:37:23 - 00:22:38:20
Yeah, yeah.

00:22:38:20 - 00:22:43:22
And as a parent, I always educate my children that money is not,

00:22:44:08 - 00:22:47:22
you know, anything like endless out of the plastic card.

00:22:47:22 - 00:22:49:16
It is actually limited resources.

00:22:49:16 - 00:22:51:19
So share that experience with your kids.

00:22:51:19 - 00:22:54:08
When you go to shopping, just tell them, okay, look at,

00:22:54:08 - 00:22:56:03
you know, how much this is per unit.

00:22:56:03 - 00:22:59:05
So they actually learn from the early age and it just becomes

00:22:59:05 - 00:23:00:17
a part of your education.

00:23:00:17 - 00:23:04:15
But because you're teaching your children, you become more cautious about what

00:23:04:15 - 00:23:06:04
you are doing as well. Yeah.

00:23:07:04 - 00:23:08:07
And it's about having a

00:23:08:07 - 00:23:11:20
look at what you're spending, being very conscious.

00:23:12:11 - 00:23:14:07
I have had

00:23:14:07 - 00:23:17:00
some commentary about this and I've read a bit about it,

00:23:17:00 - 00:23:21:19
is that when we were paying with cash, everything 10 or 15 years ago,

00:23:22:03 - 00:23:24:16
you'd have a certain amount of money in your wallet

00:23:24:16 - 00:23:27:14
and you would be very conscious of what you're spending.

00:23:27:14 - 00:23:29:23
Shock therapy. You could do.

00:23:29:23 - 00:23:31:22
Yeah, well,

00:23:31:22 - 00:23:34:19
tapping is now, what, a $200 limit?

00:23:34:19 - 00:23:38:17
And I think with face I.D., there's no limit on it.

00:23:38:17 - 00:23:44:06
So you can just tap and you have no conscious view on what you're spending.

00:23:44:06 - 00:23:46:15
Before you know it, there's nothing in your account.

00:23:46:15 - 00:23:47:01
Yeah.

00:23:47:01 - 00:23:50:18
So, so just have a think and say, ‘Do I need to spend this?

00:23:50:20 - 00:23:55:09
Do I really want it?’ And for bigger spending amounts

00:23:55:09 - 00:23:59:20
if you know you're going to spend more than say four or $500 maybe

00:24:01:04 - 00:24:01:15
ask a

00:24:01:15 - 00:24:04:15
shop assistant to put it aside and say, I'll be back in half

00:24:04:15 - 00:24:07:21
an hour or an hour and go away and think, Do I really want this?

00:24:08:09 - 00:24:11:17
Is this going to stop me achieving my savings goals?

00:24:12:19 - 00:24:14:22
Good tip. And I reckon to me that's all.

00:24:14:22 - 00:24:19:03
But pay yourself and conscious spending is all you need to do for budgeting.

00:24:19:16 - 00:24:21:14
Yep. Common sense.

00:24:21:14 - 00:24:23:08
Common sense.

00:24:23:08 - 00:24:24:01
Thanks, guys.

00:24:24:01 - 00:24:28:13
Thanks for joining me today and hopefully there's some good tips in there.

00:24:29:20 - 00:24:31:00
My name's Andrew Sykes.

00:24:31:00 - 00:24:34:04
This has been the RSM Talk Big podcast.

00:24:34:04 - 00:24:38:02
You can download us wherever you subscribe for your podcasts

00:24:38:02 - 00:24:41:03
at, look forward to talking to you again soon.

00:24:41:07 - 00:24:44:07
Thank you.