How we track our spending and know how much we can invest

Bryce: [00:00:30] Welcome to Get Started Investing feed podcast, where we help you learn to invest in 15 minutes or less. Each episode we take one real world business story and apply a key investing lesson to help you build your investor toolkit. If you're joining us for the very first time, welcome. We strongly recommend that you scroll up and start at episode one. And just a reminder before we start that we are not experts, we're not financial professionals and we are not licenced. We're here learning just like you, and nothing on this podcast should be taken as advice. With that said, let's crack on. My name is Bryce and as always, I'm joined by my equity buddy, Ren. 

Alec: [00:01:02] How you going? I'm very good, Bryce. I am very excited for this episode. I have reached out to you. I need your help. But not just your help. We've got the Equity Mates brains trust. Here I am, Darcy in the studio with us. Hello. Welcome. Good to be here. Get started investing. We like to talk about a news story and then draw a lesson out of it. So, guys, big news for me today. I'm getting serious about tracking my spending. That's big news as well. We always know that Bryce's been the king of the spreadsheet, and I've been a bit more vide based when it comes to spending. This market downturn has got me looking at everything, everything that I'm spending. I sold my car to free up liquidity. So I've been trying to like track my spending, categorise, maximise what I can invest. And it's harder than I thought and it's harder than I thought because my bank is really letting me down. Like, Here's the level of what I've been doing. I created a separate transaction account, so now I've got like a money in account and a money out account. This might be really basic for you guys, but this is big for me. And then I'm trying to track all of my spending, but it's difficult. And so I wanted to get you guys all in here to find out how you guys track your spending and know how much to invest. Because I'm trying to learn and I figure there's people out there also trying to learn. So let's do it publicly. Nice. But before then, give me 2 minutes. I want to get on my soapbox. I want to say something directly to Commonwealth Bank and we should be filming this and I should be looking down the barrel of the camera telling them because their app sucks and in particular they're the way to categorise spending. So basically every transaction in there you can categorise it, but they have fixed categories, eating out groceries, you can't rename categories and you can't add more categories and you also can't rename individual transactions. But what it means is that the categories are just thoroughly unhelpful to accurately track where your money's going. So, for example, we went away on Bryce's bucks last weekend. All the alcohol that we. 

Bryce: [00:03:22] Need to track that spending, that is beers. 

Alec: [00:03:24] That's it. No, but I want to know how much I'm spending on alcohol. No option. Can't create your own category. Can't do anything. So you have to choose between groceries, shopping. 

Bryce: [00:03:35] What is it? Category?

Alec: [00:03:35] Eating out. [00:03:36][0.4]

Bryce: [00:03:36] Groceries. [00:03:36][0.0]

Alec: [00:03:37] Groceries or maybe entertainment. And yeah, I want to track Uber eats separately to all my other aiding can't do that. I mean it would be a terrible number what I find out bikes on Sunday things like subscriptions you can't have like you can't track how much you're spending on like Kayo Netflix Stan binge all of that. There's no category for investing. There's just nothing there. You can't track how much money you're sending to an investment account. There's this broad category of health that covers everything from, you know, I bought Suncream at the Chemist to my gym subscription. Like, those three things shouldn't be in the same category. All we need is subcategories. So Commonwealth Bank, you have 50,000 employees, you have a mortgage book of half a trillion dollars, you serve about half the retail investors in Australia. Surely you can build add your own category functionality to your app. So that's my message to them. And now I want to. [00:04:33][56.6]

Bryce: [00:04:34] So what are you going to do about it? [00:04:35][0.8]

Alec: [00:04:35] Well, that's why I've got you guys here. I want your help. So how do you track your spending? What platforms do you use? What can I learn? [00:04:41][6.5]

Bryce: [00:04:43] How do I check my spending? I used to do it pretty granularly in a spreadsheet. I got to the point where I just felt it was pointless, like tracking, like how much my spending on alcohol, blah blah blah. I went the other way. It was like, What am I prepared to spend on all of these? And then I've built accounts accordingly. So everything is fully automated now. [00:05:01][18.6]

Alec: [00:05:01] How many accounts do you have? [00:05:02][0.8]

Bryce: [00:05:02] I'll tell you. So firstly, I have a few rules of thumb, few rules of thumb, and I think this is a finance one that you should you should desperately try and keep your rent to below 25% of your take home income. Okay, I'm at 14%, so that's good. You should try and save obviously as much as possible. So I have total expenses. Insurance, rent, payment, equity. Build a golf streaming food business. [00:05:27][25.1]

Alec: [00:05:30] Expensive. [00:05:30][0.0]

Bryce: [00:05:31] Surely its own category. [00:05:32][0.8]

Bryce: [00:05:34] They take up about 40%. And then I'm I guess I'm fortunate enough to be able to save about 50% of my income. J Yeah. [00:05:41][7.3]

Alec: [00:05:42] And then does that include investing? [00:05:43][1.5]

Bryce: [00:05:44] That includes, yeah. So at the moment I have 35% of my income sorry, 38% of my income saving in cash because I have a wedding and travel. Yeah, 10% then goes into investing 11% and then I have 10% of my total income is designed for spending. Uber eats beers if I go to lunch or whatever. Like those are everything outside of that. Okay, how do I make this work without. [00:06:13][29.4]

Alec: [00:06:14] A lot of people would put discretionary golf in the discretionary spending bucket. So it's good that you're putting it in the same bucket. As I said. [00:06:21][6.8]

Bryce: [00:06:21] The reason the reason is it's because it's a fixed cost. Like for me, it's like a monthly. It goes out every month. [00:06:28][7.1]

Alec: [00:06:29] Oh yeah. [00:06:29][0.4]

Bryce: [00:06:30] I don't need to think about it and like it has to be paid, you know, to me has to be, well, it's a month. So then I thought I used to track it all in a spreadsheet, but then I thought the best way to do it is to just leave what I am prepared to spend in an account and don't touch anything else. So I have a personal spending account which 10% goes into and that's just my tap and go. I've got a personal bills account which everything goes into that is like direct debit bills, phone, all that sort of. [00:06:57][27.6]

Alec: [00:06:58] Shit, all gym. [00:06:58][0.5]

Bryce: [00:06:58] Girls gym. Yeah. Then I've got personal investing accounts, which is all my brokers and stuff, and then a personal savings account which all my cash goes into. And then I've got joints with Harry, so joint spending, which is food and all that stuff, if we're going to shops, joint bills, joint savings. So I've got one, two, three, four, five, six, seven bank accounts, okay, seven bank accounts, not including brokerage and those sorts of things. And every time it's unpaid, everything gets split into those. And what's left is like what I have said I'm willing to spend and that's I don't need to track that right. Because it's just like I know that I'm happy with 10% going into my investing. If I want more, I know I've got my savings account in cash that's for travel and whatnot. I can withdraw on that. Okay, etc.. [00:07:42][44.0]

Alec: [00:07:43] So my gripe with CommBank categories wouldn't really matter for you because you don't care what you spend in that 10%. [00:07:48][5.3]

Bryce: [00:07:49] No, no. [00:07:50][0.8]

Alec: [00:07:51] Okay. [00:07:51][0.0]

Bryce: [00:07:52] It's kind of like I know I've said if I want to be investing 20%, then I make that happen and then that leaves me with 5% to spend every fortnight. Sure. Okay. So it's kind of like but I did the exercise of what am I spending on, cut everything back and then did this of I want to have these percentages. Yeah. [00:08:10][18.6]

Alec: [00:08:11] Oh yeah. Makes a lot of sense. [00:08:12][1.1]

Bryce: [00:08:12] And then when the wedding's gone, there'll be cash to burn straight into the investor, straight. [00:08:17][4.4]

Alec: [00:08:17] Into new golf clubs, strengthen the golf clubs, or that's how. [00:08:21][3.5]

Bryce: [00:08:21] I do it. And I did have it all in a spreadsheet, but kind of felt it became just too much. Like it didn't really. [00:08:28][7.4]

Alec: [00:08:29] Get too much money, not really. [00:08:31][2.4]

Bryce: [00:08:32] Add anything. And now this is a good system where everything is automated. I don't touch the thing. [00:08:37][5.3]

Alec: [00:08:38] Right. Okay. Well, let's take a quick break and then EM and Darcy, I want to get your thoughts. But before then, a quick word from our sponsor. All right, Darcy, we've brought you into the studio. You're under all of these lights. The price keeps buying. It looks like outside. Talk to me about your spending. What? What can I learn? [00:08:59][20.9]

Emily: [00:08:59] Help me. So I'm a little bit like Bice. I'm a reformed spreadsheet, huh? I used to log every single spending in my little Excel spreadsheet, and I found it got a little bit restrictive. And then. So if I spent a little bit too much money one month, I would just fill it out an hour. A little bit cranky at myself. So now I'm with Up Bank and my. [00:09:23][23.9]

Alec: [00:09:23] Sponsor. [00:09:23][0.0]

Emily: [00:09:24] Not sponsored might be the solution to some of your problems. I've got 13 sub accounts with intel and so like similar to Bryce. So you got like a discretionary I've got like my skincare account that I need each month, my gym account that I need each month, my light drinking account that I need each month. And then I've got my like rent, my bills, streaming accounts, all of the other stuff. So then when it just gets to the point where I need to pay any of those bills, I just allocate the money out. [00:09:51][27.1]

Alec: [00:09:52] How many cards do you have with the 13 accounts? [00:09:53][1.8]

Emily: [00:09:55] It's just the one. And then you can do the little sub like savings accounts within that. [00:09:59][4.0]

Alec: [00:09:59] Okay. [00:09:59][0.0]

Emily: [00:10:00] And then you can put an emoji next to them as well, which I feel just no extra happiness. [00:10:03][3.7]

Alec: [00:10:04] But it does. Can you categorise your spending? You know, like my original gripe. Can you do that? Can you? Yeah. [00:10:10][5.4]

Emily: [00:10:10] It's everything that I call the names of everything myself. [00:10:15][4.4]

Alec: [00:10:15] Okay. [00:10:15][0.0]

Emily: [00:10:16] Yeah, yeah. It's all my own little thing. [00:10:18][1.8]

Emily: [00:10:18] I guess the question is, are you in? Like, what am I spending on mode or you want to categorise to stop yourself spending? [00:10:23][5.2]

Alec: [00:10:23] No. So I'm in though. What am I spending on? And also all of these weird name transactions like easy money. What the hell is that? Oh, it's my gym membership. Like, that's just a random example, but like, like a fake example, but like, I want to be able to rename transactions. So, one, I know what they are and then put them in categories that matter to me. Yeah. So then I can be like, geez, I spent 200 bucks on Uber Eats last week. I'm a place. I mean, I just saw this. [00:10:50][26.9]

Emily: [00:10:51] So mine. Yeah. So it doesn't necessarily let you categorise all of your transactions, but it's more that I have the sub account. So then when I go to pay Ubereats, if I had an ubereats sub account, I could take the money out of that and allocate. [00:11:04][12.5]

Alec: [00:11:05] So I guess I could do that with Commonwealth Bank. I could create like six transactions accounts, but like that's that's not what I want to do. I don't, I just want to categorise what's going out. [00:11:15][9.9]

Emily: [00:11:15] You could print out, oh no, we don't like paper for that. You can highlight everything and then reallocate it because that's traditional money hacks in. [00:11:26][11.1]

Alec: [00:11:27] I could before we go too far down this rabbit hole, I might turn over to Darcy and see if he's got any idea. Okay, so. Right, I'm with CommBank as well, so. Oh really? It sounds like a bit of a year for. I'll join you on the soapbox again. [00:11:42][14.8]

Darcy: [00:11:42] I'll explain my saving habits. I'm a bit more on vibe so I don't really categorise or care where my money is being spent as long as. [00:11:50][7.8]

Emily: [00:11:50] I've got the money. [00:11:51][0.4]

Darcy: [00:11:53] So any income I make goes into my primary spending account that about an hour later that evening, after I've been paid, I automatically transfer a certain percentage to my savings account. So that includes investing and holidays. Okay. It's pretty much just investing at the moment, but yeah, that goes straight into that. Then I also have an automatic transfer into my rent account and then separately I have an emergency account which is out what I want it to be out right now, but so I don't have an automatic transfer there. And then anything that's left over in the spending account I can basically spend for that two week block before I get paid. There will be weeks where I spend over, but I have to. That kind of annoys me if I spend over. I always have to add in more the week after so that I stay at the same level. Yeah. Yeah. So I actually am very similar to you. Like I have a saving like an emergency fund, a holiday fund and a house deposit fund is like three separate savings accounts automatically allocated like on the same. But it's just what is left over in that spending bucket. And what I'm hearing from you does and you Bryce it's just like whatever. But let me put it to you. Imagine if you tracked that and you knew that there was fat that could be cut. You could invest more. [00:13:10][77.6]

Emily: [00:13:11] Yeah, no, but I think like it's not like it's 10% like it's pretty trim. [00:13:16][5.1]

Darcy: [00:13:17] But 10% compounded, 8% a year over for. [00:13:20][2.6]

Emily: [00:13:20] Me is my take. Like you don't want to be living like a uni student your whole life. And this is my whole like fire thing. Like you're like, I'm comfortable, more than comfortable with every. [00:13:29][8.6]

Darcy: [00:13:29] Difference between four ubereats orders a week and two over one isn't isn't you know. [00:13:35][5.8]

Emily: [00:13:36] You haven't over eight. [00:13:37][0.9]

Darcy: [00:13:39] Episode could be sponsored by so I think. [00:13:42][2.6]

Emily: [00:13:42] It just comes down to stop. [00:13:43][0.7]

Darcy: [00:13:43] Ordering rates. Yeah. Like there's just so much stuff like that just is direct debit that you just forget about. Like I had a bunch of work subscriptions, like four different platforms really using that. I just never, never checked. I was just like, I'm sure that's something that but it's a weird name, but I'm sure it's something like. [00:14:03][19.6]

Emily: [00:14:03] When I look at it like streaming, I reckon I'd pay a lot in streaming, but like it would give me an extra thousand bucks a year to invest or something like over a long period of time. That's right. [00:14:13][9.5]

Darcy: [00:14:13] Our money back goes on for the thousand dollar bills. [00:14:15][2.3]

Emily: [00:14:15] That or sit at home and watch pay like free to air. Like that's is something that I'm willing to. [00:14:21][6.0]

Darcy: [00:14:22] But what about. So here's a classic example. For about six months I was paying for a subscription to Doc play. I guess it's like a documentary streaming service that I signed up for the free trial watch something completely forgot about. And then it was just paying those like some random privately. Yeah, that's why I want better categories cuz if I categorise strangers, I mean. [00:14:47][25.1]

Emily: [00:14:47] You never looked at your accounts for six months you said. [00:14:50][2.6]

Darcy: [00:14:50] I don't know, I look, I look, but I'm like, that's a weird name. You Google the name. Nothing comes up because it's never like, you know, doc play or maybe that one was. But you know, okay, I just I just want, like, what I'm like, I want to set my mind to something. I just want to be able to make everything clear, properly, categorise it, and then have that automated from there, not sponsored. [00:15:08][18.0]

Emily: [00:15:09] But you should look at way money. I'm pretty sure it allows you to do that. [00:15:12][3.0]

Darcy: [00:15:12] Okay. [00:15:12][0.0]

Emily: [00:15:13] Yeah, but it means you have to sync all your bank accounts up. [00:15:15][2.2]

Darcy: [00:15:15] Yeah. So I'm not going to name them because I think they're a pretty average option. But I did do that with one other app and it was potentially even worse. Okay. It's again, it's just like, let me make my own categories. Don't tell me what the categories are. You don't know me up. [00:15:31][15.1]

Emily: [00:15:32] Yeah, well, it says you can automatically categorise your transactions. [00:15:34][2.1]

Darcy: [00:15:35] But can you make your own categories? [00:15:36][0.9]

Emily: [00:15:36] Because you can not? We will. [00:15:40][3.4]

Darcy: [00:15:40] Say that. No, but CommBank, let me categorise my transaction. Yeah, I guess. Yeah, but just to the I'm pretty poorly defined category. [00:15:48][7.8]

Emily: [00:15:48] I'm pretty sure they do. Yeah. Not sponsored. [00:15:50][1.6]

Darcy: [00:15:51] Anyway. Which said this is not sponsored a lot. We're almost out of time. Any final pieces of advice from any of your CommBank accounts? High interest savings, yes. But they like who gets interest? Yeah. Yeah, that means you've got to add money to it each month net. Right. Yeah. Yeah. To get the to get the bonus. Yeah, yeah, yeah. I'm the same but hardly get anything. Yeah. So my emergency fund, my travel fund and my house deposit because I don't plan to take money out. Yeah, yeah. [00:16:17][26.1]

Emily: [00:16:18] Well, I hate to break it to you guys, but I'm pretty sure on just 3.35%. What? Yeah. [00:16:22][4.0]

Darcy: [00:16:22] That's not sponsored either, but it should be. Yeah. [00:16:25][2.3]

Emily: [00:16:26] I'm pretty sure. Or something like that. Um, and it was a, you've, you've got to just put cash in and you can only have X amount of withdrawals. [00:16:33][7.5]

Darcy: [00:16:34] Wow. [00:16:34][0.0]

Emily: [00:16:35] And it's, I could be speaking out of school, but I'm pretty sure it's there's a bonus rate like that. And would you say with you bank, how many. [00:16:41][6.0]

Emily: [00:16:41] Do you bank. [00:16:41][0.2]

Emily: [00:16:42] They also have pretty decent rate. 3% as well I think. [00:16:44][2.4]

Darcy: [00:16:44] High interest saving. Yeah, I've got you. But again. [00:16:46][1.7]

Emily: [00:16:46] 3.1 for Iron J. [00:16:47][1.1]

Darcy: [00:16:48] Yeah. [00:16:48][0.0]

Emily: [00:16:50] That's what I'm trying to figure out. [00:16:51][1.2]

Darcy: [00:16:51] No, it's not. I'm good at saving. Yeah, and I'm pretty good at investing spending. I'm really going to. I'm too good at spending. [00:16:58][6.6]

Emily: [00:16:59] I think. Okay, take away is that you just need to cancel your over account. [00:17:02][3.6]

Darcy: [00:17:03] I know, but it's not just Uber, it's, you know, doc pay. [00:17:07][3.6]

Emily: [00:17:08] To cancel that too. [00:17:08][0.7]

Darcy: [00:17:09] So we, we rebuild our website here at Equity Mates for like six months. I was playing for Paying for Elemental, which is like a page builder that we no longer use since we rebuild our website. But I was paying for it. Still paid. So anyway, I've got a problem with automated subscriptions. [00:17:25][16.2]

Emily: [00:17:27] So they set aside to cover that. [00:17:28][1.5]

Emily: [00:17:29] I think my key takeaways are that there's there are more and more we've known know it through the show, more and more apps coming out that are trying to facilitate this. So I think it's definitely for those in Ren's position worth having a look at. If you're with CommBank and feel like they're not solving your issues or you just go old school and literally for a week, just.

Darcy: [00:17:48] Just tried it. Yeah. 

Emily: [00:17:50] And then I could kind of get a vibe, but. 

Darcy: [00:17:52] It's like it was so the technology is so good. Everything else. Yeah, yeah. I don't want to go out of the app. Yeah. Anyway, I think we're over time. So, CommBank, my last message to you. I've been with you since I was a Dolomites kid. Just help a brother out. 

Emily: [00:18:08] All right? Ren. Well, it's great to chat, as always. A reminder, film fest tickets are available powered by stake and hope you can pick them up at Equity Mates dot com slash Finn fest. They're only 47 bucks and we are only 33 days away from Fin Fest. So it's coming in. Hot tickets are selling fast and they're going to run out first release before they go to $67. Well yeah. So grab them all. The 47 speaking.

Darcy: [00:18:32] Is speaking of getting your spending on the nickel. 

Emily: [00:18:35] That's it Irene we'll pick it up next week. 

Darcy: [00:18:37] Sounds good.