Sort Your Money: Mastering Your Savings Strategy | Finder

Bryce: [00:01:04] Welcome to Get Started Investing. In this podcast, we cover all the basics that you need to start your investing journey. Are you joining us for the very first time or is this the very start of your investing journey? Well, before you dive into this episode with us, our feed is designed to go from the very beginning, so we strongly recommend that you scroll up and start at episode one. But if you are feeling brave and just want to dive in, then don't let us stop you here at Jaci. We want unpack all the jargon and confusing bits here your investing stories with the goal of making investing less intimidating and we want to have a good time along the way. My name is Bryce and as always, I'm joined by my equity buddy Ren. How are you going? 

Alec: [00:01:40] I'm very good. Bryce. Good to be back for episode two of this sort your money series, I guess. Get your money sorted. 

Bryce: [00:01:49] You're certainly sorting your money. 

Alec: [00:01:51] I am. I am. We had a lot. We had Graeme Cooke from Finder on for our last episode. You talk about debt. Luckily, debt isn't a true big an issue for me, but this episode is all about getting your cash flow, sorting your money. 

Bryce: [00:02:06] Is that an issue for you? 

Alec: [00:02:07] It's not an issue, but you can always do better. You know, it's a continuous improvement thing, so I think I'm going to well. We've already prepped to the notes for this episode, so I was about to think I'm going to learn a lot. I mean, I have already learnt a lot in preparing for this episode, so this is a good series to do. Four and a half years too late, some might say, 

Bryce: [00:02:26] Yeah, I did want to ask you last episode. Graham was talking about having multiple savings account to flick money around and also maximise interest rate and say How many different bank accounts do you have? So I have 

Alec: [00:02:37] I have a savings account and a transaction account, but with the same bank. Yeah, we're going to get into some in this episode and we're jumping the gun a little bit, but we're going to talk about some of the big dogs in the personal finance space. You know, the Scott Pipes and the Dave Ramsay's and some of the suggestions, which are a little bit different to what I've done. I might take it on board, but let's let's get through the intro before we get into that show, 

Bryce: [00:03:45] As Ren said in this episode, we're going to take a look at some of the key pieces of advice on sorting and managing your money from experts around the world will tie in with our stories and some stories from the Equity Mates community, so 

Alec: [00:03:58] let's kick it off. All right, let's do it now. You've put a note in here to start with the importance of talking about money. We literally talk about money for a job. Sort of. So does that mean we're the most important people? 

Bryce: [00:04:15] I actually don't think we talk about money, we talk about making money, but we don't ever share our personal financial situation with our mates, with each other. We're not. 

Alec: [00:04:26] I know how much you earn. 

Bryce: [00:04:27] Oh yeah, we did the books. What I mean by this is and then look, it's it's a very particular and a thing. And I think historically, a lot of people have always shied away from sharing how much they earn and all that sort of stuff for some valid reasons, because I think the next point I've written here is don't compare yourself with others. And I think it's very easy to do if you are aware of how much your friends earn and all that sort of stuff. So what I really want to get out of this point out of this episode is that there is value in talking to people about your financial situation and learning from what others do. The caveat to that is just because your mates might be earning more than you or someone's been able to save for a house deposit. The worst thing you can do is actually compare your financial situation with others because everyone is running their own race. So everything that we talk about in here. Obviously, everyone has their own situation, and it's how you can best apply it to what you're currently doing in life. 

Alec: [00:05:24] Yeah, I think it's worth giving a shout out to Tash Invest here. She is very strong on that, breaking the taboo around money. She's very public about how much she makes, how much she earns, and I respect that because I definitely wasn't like that. You know, there's three things you don't talk about politics, religion and money. And I think I think it's pretty impressive that, you know, she's she's willing to go out there. So go check out our interview with her if you want to hear more. I definitely also think there is a practical reason that you should talk about money. Companies thrive on you not knowing how much other people are earning, like there's an information asymmetry whenever you're negotiating your salary, whenever you are moving jobs. And if you don't know what a standard salary is, if you don't know how much your colleagues earning. Companies have an information advantage over you in those negotiations. And so they love that. And I think websites like Glassdoor and, you know, there's a bunch of a bunch of others out there. I think even LinkedIn is trying to give you like salary ranges and stuff like that. I think that's really important. But yeah, you're right. There's a there's a taboo around money. We should try and break it down. So in the spirit of breaking it down. What's your net worth? 

Bryce: [00:06:54] I'll take this off air, which 

Alec: [00:06:56] you get to practise what you preach. 

Bryce: [00:06:59] Take it off. And look, we are going to talk about salary as salaries and ways in which you can negotiate the salary a little later on in the episode. But let's start at the top Ren when it comes to personal finances and thinking about the way that we manage money and it really starts with cash flow. Yes, money in money out, 

Alec: [00:07:18] just like you want to invest in businesses that have good cash flow. You want to set your personal life up to have good cash flow. 

Bryce: [00:07:27] And what is good cash flow?

Alec: [00:07:28] Even Maine and Maine is like a river running dry. It's just basically that you're you've got a lot more money coming in than you do going out. 

Bryce: [00:07:39] Yeah, yeah. There's no way it's impossible to get ahead if you have more money going out than you have coming in. Simple maths So if we define money coming in pretty straight, straightforward Ren, it's things like salary from your job, income from a side hustle like Equity Mates or a gig economy job that you might have going on. You might be getting income from investments, be it dividends or rental income. And then, yeah, that's really what else would there 

Alec: [00:08:07] be capital gains? 

Bryce: [00:08:08] Capital gains? Yeah. So anything that's coming into your bank account is money in. 

Alec: [00:08:14] There might also be gifts. Yes. Yes. Yeah. No. So that's money going in and then money going out, obviously. Is you spending essential spending rent bills, food, nonessential spending, Bryce gambling habit Bryce a smoking habit. 

Bryce: [00:08:31] Not true. Not true. 

Alec: [00:08:33] No. But you know, the 600 subscriptions that we all seem to have these days travel when we can do it again, going out when we can do it again, all that stuff. And then, you know, all those fees and charges, interest on credit cards, late fees on Afterpay purchases, all that extra costs, speeding tickets that you know as the three. It's not clear if the law is. But look, obviously this isn't a revelation. Obviously, everyone knows that the way you manage your money is having more coming in than going out. But I think conceptually think about your personal finances like you would a business that you're wanting to invest in and optimise for good cash flow, cut those unnecessary expenses, increase that revenue line, improve that operating leverage. 

Bryce: [00:09:26] That's right. And I think 

Alec: [00:09:27] reinvest in productive assets. 

Bryce: [00:09:30] It's easy to say optimise for, but like, what does that even mean? 

Alec: [00:09:34] Well, I think before we talk about optimising for what it means is reducing your costs, increasing your revenue, improving your cash flow. That's what it means. But before we talk about how we do it, we probably have to talk about how we measure it because I am definitely the kind of person that understands everything that we've spoken about conceptually, but traditionally just never measured it. I have like vaguely good habits where whatever I get paid, I, you know, move money into different accounts, put some away all of that stuff sort of automatically. But I don't I don't have years 600 tab spreadsheet going with like, you know, they look up to three tabs along, you know, all that stuff. I didn't measure that well. And I think a really important lesson that I've taken out of this is that, you know, what gets measured gets managed. 

Bryce: [00:10:25] And yeah, I think that's the thing this it's impossible to set goals and actually stay on track with these things if you only vaguely know where your cash is going. 

Alec: [00:10:34] So obviously, you know, I'm very proud of my reputation for just vibing it out by being my money. Interesting. Okay. But I must confess that even before so, this series is obviously sponsored by Find Out. But even before we started speaking about sponsorship, I actually downloaded their app because I looked at you and the inspirational, you know, example that you're setting with all your spread. Sheets and I figured, you know, maybe I should get a little bit more more into the numbers, go a little bit more off the data than the vibe. And so I actually downloaded there and put all my accounts in and how to look at all my numbers. And I I got to say it's pretty good. Like I, I can see all of my different categories of spending. I can see my net worth, I can say. So you sort of sort of the, I guess, change over time and you know how my spending is different. Month on month. And you know, I can say my biggest my biggest spend is rent and groceries less on, you know, entertainment, restaurants, dining, all that stuff. So it's pretty good. I can kind of see where y you love looking at the numbers so much. 

Bryce: [00:11:56] Yeah. Well, you're certainly not known for frequenting the restaurants, but I'm not surprised that's not showing up. But look, it's good. 

Alec: [00:12:05] What's that mean to me? 

Bryce: [00:12:06] I guess it's good that you are tracking your money. Where does you know? Budgeting is obviously important? We're going to touch on that a bit later, and I guess the app also helps you do that, are you? So you're now tracking your spending, which is good. Where does that leave you with the budgeting side of things? Are you very much on the Vibe Train? 

Alec: [00:12:25] Still, no budgeting is still very much a vibe. I don't have like a set number, but just on this bloody restaurant comment, you know, just to just use you and Harriet have a separate line item in your budget for Italian eastern suburbs. Italian restaurants does not 

Bryce: [00:12:47] know that the numbers don't lie. And anyway, we'll move on. 

Alec: [00:12:53] So you've been doing it for a while. You're the old hand at this. What are the key things that you're measuring when you build your spreadsheets? 

Bryce: [00:13:01] Well, everything that you just spoke about in terms of cash flow Ren. So the first things I do is break down what am I essential spending so rent bills, food and I know that every month that is exactly what I'm going to need to survive to the next month. And it's so like down to the dollar, and it's the same every month that goes in petrol.

Alec: [00:13:19] So do you have a budget for each of those line items yet? JS you must be a fun person to live with. 

Bryce: [00:13:25] Well, I mean, it's a budget that it's enough that it goes in and I know use it or not, it's not going to be a question of, Oh, I've budgeted 40 for for fuel this week, but I need 50, so I'm going to only be able to fill my tank to 40 if that makes sense, like it's enough. It's less. It's well, it's specific numbers, but it's not. 

Alec: [00:13:46] It's not this. 

Bryce: [00:13:47] Well, anyway, I budgeted for like those sort of expenses. Then I go straight into, for example, any debts when it comes to our equity builder, for example, I know that that's the next thing in line that is most important to be servicing and then savings investing and then whatever is left to spend. So I just 

Alec: [00:14:09] set up direct debit on my equity builder and just know that they'll take the money out. Not enough to think about it. 

Bryce: [00:14:14] I've got direct debit as well, but it's specific. It's from accounts that I know is specifically set up for that. So I'll never go to the pub and accidentally take it out of my equity builder or I'll never like. It's just money that's out of sight. I'll never say it. Oh, okay, so I know whatever. Whenever I have my banking app, whatever in front of me, that's for me to use anything else. I know it's gone right? 

Alec: [00:14:33] OK, I never say it. All right. Let's take a quick pause here because you know you're in a relationship, you've got a partner that you've taken on this spreadsheet journey with you. I'm sure there's a lot of people out there that are listening to this, but maybe their is not listening to this. So for those people who are trying to think about, you know, I want to only get this cash flow right for us for this partnership, but I can't convince my significant other to to join me deep in excel. How did how did you take what you were doing personally and apply it to your partnership? 

Bryce: [00:15:11] Good question. I guess for me, it was starting small, which was, let's just start with those essentials that I spoke about tolls, petrol, food. If I tried to go and say, Harriet, let's build the world's biggest spreadsheet for you. That does everything for us, investing savings that would have been a get out of town. I can control it myself. So it was let's just start with the absolute basics and get that nailed first. And that's how that's how we picked it up. To be honest, though, not a whole lot of convincing was required. 

Alec: [00:15:44] Here's the critical question Would you have agreed to a joint account if it didn't come with spreadsheets included? No. Yeah. So maybe that's maybe that's the tip for people out there. 

Bryce: [00:15:57] If don't get me wrong, it required a fair bit of conversation because it's easy to. Put a lot of this money into a joint account, and then it's easy to lose track of. You know, you see this big lump sum in there, but then knowing a proportion of that needs to be saved for your annual insurance, for example, a portion needs to be safe the annual car service. It's easy to go to woollies in the pub to then just go, Oh, we've got heaps of cash. Let's just spend this on a joint account and forget that there's actually reason for a lot of that money being in the 

Alec: [00:16:26] OK, so that that's all about optimising for cash flow. We've got to measure it. You know, there's apps like the Find app, which I use, there's spreadsheets, which you use whatever is right for you or your relationship. You know, it's just the main thing is that you're measuring it. All right. So then there's two there's two elements to this saving and income. Yeah. Well, let's start with saving. Yes. Savings all about getting in good money habits and minimising the amount of money that's leaving your account. So we've we've really outsourced this because you know where, when not experts in personal finance. So we've gone to the Equity Mates community and we've gone to the experts and we have got a bunch of, I guess, top tips and tricks around how you can do, how you can maximise your savings before we start there. Any tips and tricks from the one, the only Bryce lucky. 

Bryce: [00:17:26] Just stick to it. I think that's the main thing. Like, it is easy to set budgets and sign up to apps, but at the end of the day, none of that is going to matter if you don't stick to it. So like, you could download all the products in the world, but if you're undisciplined to actually do what's in front of you, then it's going to make no difference. So don't overstretch, don't overstretch yourself. Be realistic with what you can save, but just do what you say you're going to do. 

Alec: [00:17:52] All right. Well, with that in mind, we've pulled tips from five experts dealer's choice who do want to start with a Ren. 

Bryce: [00:18:01] You'll be surprised that I want to start with the barefoot investor 

Alec: [00:18:05] just before we get into this. I have reached out to Scott Pape directly. I've reached out to his film production studio for his new TV show, trying to get him on the show if anyone knows him. Reach out on our behalf. 

Bryce: [00:18:19] So a couple of key points from him. So firstly, have to debit cards, one for a splurge account and one for an essentials account. That way, you can separate your money from that which you're going to go to restaurants and have a good time and that which you're going to need to survive. Clearly cut up the credit card, he says. The biggest purchase on your credit card is interest. No doubt that 20 per cent interest on whatever it is, nineteen point four is the average something like that. You need to be avoiding paying credit card interest, so cut it up. Tell your bank about a competitive interest rate period on credit card to get a pause on interest and pay off your credit card debt. The sooner that you can pay that off, the better. But if you are able to get a period of interest free and avoid actually getting charged on your debt, you're going to be able to pay it off even faster. So a couple of key points there from the barefoot investor. 

Alec: [00:19:13] Just a couple of many. I really like that splurge on essentials having two different debit cards. It would really allow you to track the two different types of spending. Yeah, that makes sense. Yeah, I mean, you 

Bryce: [00:19:27] probably want to know how many debit 

Alec: [00:19:29] cards I have, how many I do. I really do. How many 

Bryce: [00:19:33] I've got. I've got four. 

Alec: [00:19:37] Oh, oh, oh, oh, let's get it. Let's you know, what are 

Bryce: [00:19:46] those for ones? Join. 

Alec: [00:19:47] OK, yeah, one splurge. 

Bryce: [00:19:50] Look, I know that that's my weekly one is like bills. Okay? But that is split into two. So I've got like one that's like old rent and stuff. And the other is private health, gym, telephone, electricity, all that sort of stuff. Because the rent one was traditionally set up when I was in a share house, I 

Alec: [00:20:10] just kept okay, 

Bryce: [00:20:12] so I've just kept that going. But yeah, bills, splurge joints and rent and that sort of stuff. 

Alec: [00:20:19] There you go. All right. Well, you don't learn a lot of our Bryce as the remainder of this episode goes, but that's barefoot are the one that I'll start with is Dave Ramsey. So he is a massive personal finance radio host over in the US. I think these days he has the third biggest radio show in the US, so he is all about paying off debts. But he's got advice, which is a little bit unconventional. So when when you think about debts, you generally think about whatever has the highest interest rate, first is what you pay off first, because that's that's going to be the biggest cost if you have to keep paying interest on that. He has a different approach. And it's all about psychology. So here's this idea of a debt snowball, and you line all your debts up and you order them from smallest to largest, regardless of the interest rate. You know you might have a 20 dollar Afterpay debt all the way through to your mortgage and you line them up and you say, I'm going to attack the smallest and then the next smallest. And as you build momentum, as you gain confidence that you can pay these debts off, that starts to snowball and you start to get in better habits and you start to pay them all off. And so he calls this the debt snowball. I think it's just it's a pretty cool concept. 

Bryce: [00:21:40] Yeah, I like 

Alec: [00:21:41] that as well. Now it's important to stress that there are other people that would say that's the wrong way to do it, just pay off the ones with the highest interest first or try and consolidate them into one. But that's that's one of the things that he talks about. 

Bryce: [00:21:54] Mm hmm. So we've interviewed Melissa Brown. She was a financial expert that came on to Get Started Investing feed. So go and listen to that. If you haven't, a couple of her key points obviously avoid consumer debt. It's a common theme amongst all experts. Also, as we said at the start, she encourages to normalise talking about money with friends, your family, your partner. The more you can talk about it, the more you're going to learn and feel comfortable. Obviously build good money habits, which we're discussing right now. And then also, she reckons that sometimes budgets don't work. To get more info on that, though, go and listen to the episode. 

Alec: [00:22:32] Yeah. A club statement that made Bryce recoil in horror and it still haunts him to this day 

Bryce: [00:22:40] ran to close out any other exposure. Yeah. 

Alec: [00:22:42] We've got Glen James, host of my millennial money. We went on his show, so he's written a few things that I was writing in preparation for this episode. A few of his key tips how clear savings goals that you can work towards tracked every expense, every emphasis before you buy something, calculate how many work hours it would take you to buy that item and evaluate if it's worth it. I like that. I used to do this when I was in uni a lot because I hated my job and it would really make me think about it. Now I don't do it so much. Stay out of consumer debt, credit cards, personal loans. Buy now, pay later. Yeah, I think I think that's a recurring theme we're coming across and avoid lifestyle inflation. I think this is an important one. So the concept really is as your income grows, your lifestyle grows or with it, you know, you get used to eating out more or nicer bottles of wine or, you know, just buy more stuff or you want to fancy your car or, you know, as we get even older, we want a bigger house and stuff like that. And so it's, you know, being very aware of not allowing your lifestyle to get more expensive as you earn more. Really, take that extra money you're earning and put it into saving or investing. So I really like that concept, and that was definitely something I was guilty of when I went from uni to working a full time job for the first time. 

Bryce: [00:24:15] Fair enough, though. I think you need two full time jobs, a little different than being in a full time job and getting a pay rise like you are actually taking is pretty significant. 

Alec: [00:24:25] Sorry, sorry. The point was more that it was just so unconscious. It's just like, it's just sort of happened. You just have money and you're spending more. Yeah, yeah, going out more and 

Bryce: [00:24:36] definitely something to be aware of.

Alec: [00:24:38] All right. So that's for one bonus. Bonus expert. This is obviously this is obviously a series sponsored by Finder and French. Sebas Star, the co-founder of Finder, has written a lot on personal finance as well. I mean, Finder is a business has helped a lot of Australians save a lot of money. So Bryce give us a personal finance tip from Fred. 

Bryce: [00:25:02] One from Fred is to build a buffer and this applies. I think if you're an entrepreneur or anywhere, anyone in life and really what he's saying there is, I would take that as make sure you've got an emergency account. Another one from him is to reduce your personal debts again. There we go. Common theme coming through. Yeah. And to review your budget and to trim it where you can. So again, that comes back to cash flow more in, less out. 

Alec: [00:25:29] Well, I asked for one Bryce gave us three very bad at listening to instructions, but that that buffer concept is one. We're going to come back to that building and buffer. Having an emergency fund is an important one that we've heard from a lot of these experts. So we'll touch on that. We're also going to touch on maximising your income, the sexy part of personal finance. 

Alec: [00:27:25] I think the flip side as well is if they're struggling and cutting heads, yeah, they appreciated that you're asking for a payroll. Yes. 

Bryce: [00:27:34] Reflect on what you have achieved in this role. Decide on your target range for the rise. Don't go too crazy when you're going into the meeting room and asking for it. Prepare a presentation, practise negotiating with your family and friends and then schedule your meetings. So I think the key there for me really when it comes to this is just give it a crack. You have nothing to lose, in my opinion. 

Alec: [00:27:55] The key for me is be prepared like nothing would annoy your boss more than a half arsed. I want to raise, but like, you can't talk to the wire, you can't talk to them how much you like. Just do the work and have a more informal conversation. Yeah. So one thing, if you can't negotiate a raise or you try and negotiate a raise, but you're unsuccessful, it might be worth looking. The this is data from the US, but the average raise within a company is three percent. The average raise when you move to a new company is between 15 and 20 percent, so it might be worth looking elsewhere and then saying What else is out 

Bryce: [00:28:35] there for that sideways move and no 

Alec: [00:28:39] or diagonally or 

Bryce: [00:28:40] diagonally up? Yeah. So once you've negotiated your salary and hopefully taken it a little bump from that otherwise that you can maximise your income side hustles, there's no doubt that we live in the golden age of side hustles. At the moment you've got the gig economy, there's online content. You can be a influence. You can do drop shipping. Plenty of ways the internet's powerful place. And if you if you sit down and try something for five minutes, you never know what it's going to turn into. So there's certainly the ability for you to turn your hobbies into income streams. Gaming is another one live streaming gaming on YouTube. Plenty of opportunities to make some money are 

Alec: [00:29:20] just going to listen so

Bryce: [00:29:21] well. 

Alec: [00:29:22] Do you want me to? 

Bryce: [00:29:22] It so let's start with the gig economy Ren. Of course, you could be an Uber driver. You could go into food delivery. Airtasker, you name it. Plenty of opportunities. Online content. You could be a blogger, an Instagram influencer. You could jump on YouTube, start earning revenue from getting big on YouTube. Meme accounts are a big thing now. The ways that you make money from that through primarily advertising and affiliate relationships, they all they all pay based on that. And that's how Equity Mates started off friends. So that's close to our hearts. 

Alec: [00:29:56] We may start off. A main thing is still advertising. We literally just had an ad break. 

Bryce: [00:30:02] You could take a second job. Think about babysitting, walking dogs, freelance writing, tutoring virtual assistants, being a referee for you like a football club, plenty of opportunities for a second job on the weekends there. You could upskill Ren this this this one applies to you these days. You don't have to go back to school. You're always thinking about upskilling, taking on new, new courses all the time. 

Alec: [00:30:27] Not the best to

Bryce: [00:30:30] get accredited with Google or Facebook ads manager. We're hiring for an ad ads manager at the moment. Critical skill to have. You could learn to code, but also then finally, Ren you can look to what you can sell. So look around your house. You might have sneakers, Pokemon cards, close, you name it. Jump on Gumtree, jump on eBay. Start making a bit of money that way. So I think the key to that is plenty of ways you can make a secondary income through side hustles. Upskilling secondary job. The more that you can bring in, the more opportunity you're going to have to get ahead. 

Alec: [00:31:02] Do you have a side hustle Equity Mates? Do you have a main hustle investing? Well, it's funny you say investing, because if the first way is maximise your income at your primary job, if the second way is to create a secondary streams of income from side hustles, then the third way, I think, is build passive income streams. And this is really where investing comes into play. And so. You know, passive income income that you don't have to actually put in any effort to get all those all those side hustles you just spoke about require us to put effort in. So that's probably the distinction there. But passive income, own property get paid rent. Not a lot of effort, although good luck owning property in Sydney or Melbourne, especially, but Australia generally today. Next one Dividend paying stocks. We do nothing. The company management does all the work and we get paid dividends. Also, peer to peer lending, you can basically be the bank you can lend to other people who need to borrow and get paid interest on that. So there's a bunch of ways that you can start to build passive income that can improve your total take-home income at the end of the day. 

Bryce: [00:32:18] So we've spoken about sorting out or getting into good money habits, then maximising your income. And finally, Ren to close this out. Once you've sorted your cash flow, you really need to think about how are you going to protect it? How? What are you going to put in place to not only protect the money that you're bringing in, but also, I guess, your lifestyle or and to protect, I guess, the wealth that you're building. So go and yourself as a person. That's also something that's probably worth protecting. So it all starts with insurances. And this is where Find can help as well through comparison of insurances and super funds. So first place to start is know what you're paying for with your superannuation or superannuation funds. Give the option for insurances, income, insurance, life insurance. You just need to determine what insurances are right for you. Then obviously there's health insurance is here in Australia. They are actually important when it comes to tax time. So, yeah, how we think about your private health insurance. I think the main thing for me when it comes to insurance is Ren, and this is something that I've been doing recently is just make sure you're consistently checking what you're paying versus what's available in the market. And again, find it can really help with that. But they're very competitive market. They're always looking for new customers. So yeah, to do some due diligence. 

Alec: [00:33:41] Yeah. Find a dot com, you know, single, isn't it? Yes. So, yeah, insurance, that's an important one. And you're the responsible one out of the two of us. So I don't think I need to add anything there. Emergency fund this. You know, you mentioned Fred talking about building a buffer. Dave Ramsey, Scott Pape. All of these finance experts talk about an emergency fund. So basically what it is is if you lose your job, if everything goes wrong in Scott Pope's case, if your house burns down, do you have cash to just so you through that time? And this is money that you put away that you don't touch, that you put in a, you know, like a savings account that isn't exposed to the risk. This isn't, you know, you put it in stocks or you put it in housing or anything like that. This is cash under the mattress for a rainy day sort of vibes. So that's why they're important, because they protect you in the end in an emergency, as the name suggests. Then the question is, how much do I need? And this is a little bit of a how Long's a piece of string question like everyone's emergency fund is different. I guess we can't say there's a certain number that everyone should aim for, but there's a few rules of thumb out there that we can talk to. So Scott Pape in the Barefoot Investor said Start with a minimum of $2000, so, you know, save money until you get two thousand and then aim to grow it to three months of expenses. So, you know, if a Bryce that would be taking his meticulously itemised budget timing that by three, and that's the number that he wants. Dave Ramsey, the US personal finance expert Similar vibe to Scott Pape, he said, start with a minimum of a thousand, so prioritise getting to that $1000 number and then work to grow it to at least three months of expenses as well. So that's three months. Three months of expenses seems to be the general rule of thumb from at least Scott Pape and Dave Ramsey. I was about to ask, Do you have an emergency fund? But that's a dumb question. Of course you do. Yeah. How big is your emergency fund? 

Bryce: [00:35:56] Three months, three 

Alec: [00:35:57] months, yeah. And what state in dollar terms? 

Bryce: [00:35:59] Not. 

Alec: [00:36:00] So how do you starting this thing by like on public? 

Bryce: [00:36:05] Yeah, three months. I actually looked at it the other day just because when I first decided the three month rule, it was years ago. So I just you decided or sorry when 

Alec: [00:36:15] Scott and Dave got it from here, when I 

Bryce: [00:36:17] when I figured the number I needed to get to it was based on my expenses from years ago. But now that I've obviously changed living with Harriet, et cetera, those expenses have changed so. I actually need to top it up a little bit. 

Alec: [00:36:31] This episode came just at the right time. Yes, you may be surprised to know I actually also have an emergency fund. I knew that. Oh yeah, did you? Yeah, I have roughly three months. My biggest problem, and hopefully people can learn from a mistake that I've made is my emergency fund is too easy to access. It's like instant transfer back to my transaction account, right? Yeah, yeah. And that is a that is a mistake I am going to rectify at some point. But it requires an extra level of discipline to not transfer from the emergency fund back to your transaction account. Whereas if I went with like another bank, so that was like a two or three day time lag with the transaction with like a transfer that would enforce some discipline. Hmm. 

Bryce: [00:37:20] Yeah, I can't see mine. I have no, I have no way of saying it, and I don't even include it in the spreadsheet when it comes to like total and like total cash available or anything like that if 

Alec: [00:37:31] it's not in the spreadsheet. How do you know they even exist? 

Bryce: [00:37:33] Well, that's the thing. That's the beauty of an emergency fund. You just never say it. So Ren. Look, we've gone through a fair bit today, and I think it's important just to close out by saying it is. Remember, it's just all about cash flow. It's really about discipline setting yourself up for for good habits because in the next episode, we're going to be talking about once you have got your money sorted and got into these good habits, how you can then actually start maximising building wealth through investing.

Alec: [00:38:02] So yeah, that's the why in all of this, you know, we do all this so we can take that cash flow and invest it in property and shares and other assets and prove contributions to our super and sell wealth grow. Yes, that's the that's the law.

Bryce: [00:38:19] So we've got out of debt with Graham. We've put some basic principles in place here to actually start optimising your your money and your cash flow. And then next, we're going to have Kylie from fund to come to help us talk about the investing side. So if you feel like you want to take more control of your money and actually know where it is all going, it might be worth checking out. Find this app just like Ren. Sign up with Find Adcom Dot. I use Equity Mates. They have the Ultimate Money app available now. Even featuring Bitcoin trading, you can effortlessly manage your money in the palm of your hand. Say all your accounts in one place. Buy Bitcoin and track your credit score all in the one app. So check it out at the App Store or had to find a that I use Equity Mates. But Ren that does bring us to the end of today's episode on getting your money sorted. Stick around for the final one next week. Will you stick around where we have Kylie coming in to talk about sorting your money and starting to build wealth? I'm excited for it.