#100 - STOP Making these Savings Mistakes!!!

Most people think they’re “saving” — they’re really just parking cash and calling it progress. In this episode, Zeke and Oscar break down the six most common saving mistakes they see every week and show you how to fix each one fast. We cover separate banks for savings vs spending, a simple budgeting model that actually works, cash drag and inflation, “saving to spend” (holidays, cars), automation that removes willpower, and why you should clear high-interest debt before you “save”. We also hit DCA vs lump sum, lifestyle creep, emergency funds, and the small wins that keep you consistent.

You’ll learn:

• The separate-bank setup that stops impulse transfers
• 3-bucket budget (fixed / variable / discretionary)
• How to avoid cash drag and set a cash threshold
• Why “saving for a holiday” isn’t wealth building
• Quick automation wins (+$10/month growth buffer)
• A simple rule for debt vs investing decisions

Chapters

• 0:00 Setting The Stage: Savings Mistakes
• 1:08 Hosts Reunite And Disclaimers
• 2:16 Why Behavior Shapes Your Money
• 6:08 Mistake #1: One Account For Everything
• 12:40 Mistake #2: No Structured Budget
• 20:40 Automating Transfers And Tools
• 24:12 Big Win Detour: Property Growth Story
• 28:26 Mistake #3: Leaving Cash Idle

Transcript

Zeke Guenthroth: 0:00

Today we're going to be jumping into a bunch of different savings issues. Mistakes, accidents, problems, all of the above. Any issue when it comes to saving.

Oscar Don: 0:11

Exactly right. This is one of the first episodes we actually did back in the day, probably three and a half years ago. So we're going to be touching on around the six common mistakes that we identified then and as well now. And kind of having our say on it and saying, how can you, if you are living with these mistakes, how can you avoid these mistakes and actually get moving forward?

Zeke Guenthroth: 0:31

Let's get into it. Welcome back to another episode of the Finance Bible Podcast.

Oscar Don: 0:45

Zeke here and your co-host and staff. But before we get into it, please note that nothing in this podcast should ever be considered as personal financial advice.

Zeke Guenthroth: 0:54

Although if financial advice is what you are seeking, let us know and we can get you in touch with the correct team.

Oscar Don: 0:59

But for now, sit back, relax, and enjoy the show. Let's get into it.

Zeke Guenthroth: 1:08

First of all, I just wanted to say an absolute massive welcome back, Oscar. It's been a while since you and I have been in the same room, sitting down, recording a podcast where we're not getting phone calls for work, we're not having to go do meetings, we're not having to deal with this, that, and the other. We'll put our phones on silent. They are still on, they are still in front of us. We might get a text message and interrupt the show. Just flipped mine around, actually, put the screen on the ground. But mate, welcome back. What a pleasure.

Oscar Don: 1:36

It is great to be back. The funny thing is we always say, saying I've moved back to New South Wales, it's uh I've actually seen you less than when I was living in Victoria. Can confirm that it's bona fine. Yes, bona fide. So this is the first time I've been up here in your the new new place. And love what I see, we're just listening to a bit of JB before we're recording this podcast. So bring back the good old days. There you go. I guess nothing has changed. Actually, it's bringing back the old days, but we used to get to the office at like 6 a.m. to record like five episodes before work. Yeah, that was good fun. Good fun. Great fun. All on lunch break, just duck upstairs. That is the boardroom, we can film slum. We used to do that as well. But jumping into it. But yeah, today we're mate, we're unpacking the biggest mistakes Australians make when saving. And Americans and Germans, GG and Worldwide, international. And I guess the main thing is we're we're gonna show you, and we're not showing, we're gonna tell you because you're not you can't see us how to fix them fast.

Zeke Guenthroth: 2:35

Yeah, and realistically, like common sense applies. Everyone knows, right, that saving is a good. Like no one out there is like, oh, shouldn't save money. Like everyone knows I'm serious, some people hate saving.

Oscar Don: 2:47

Yeah, they'd rather invest though, like, which is still a form of saving. Oh, even with that, I know some people who just want to spend everything spend money because they they're in their 20s and they have to like your life live your life and actually you know what's the word, like experience all these things and spend money. Much money's always gonna come back. It's like, yeah, but if you have 50 grand right now and you spend all the 50 grand, how soon is that 50 grand gonna come back?

Zeke Guenthroth: 3:10

My favourite thing to do in that scenario is pull up the old compound interest calculator and show them if they did 50 bucks a week from 20 to 30 and left it versus doing that at 50 to 60. Yes, the difference ends up being literally over a hundred grand. Like it's ridiculous. Right.

Oscar Don: 3:27

That um that compound interest calculator is a lead calc. I plan that like probably at least three times a week. It's a great calculator.

Zeke Guenthroth: 3:34

Can confirm money smart, get on there, have a little fiddle.

Oscar Don: 3:37

We've talked about it many times.

Zeke Guenthroth: 3:38

We've actually linked it in a couple weeks, which I don't recall, but we'll do it on this one anyway. We will. Yeah, well, I mean, in my opinion, most people, there is an exception to every rule when I talk, it's everything's a generalization in life. Like there's always a generalization, there's going to be minority that don't fall into that category. But generally speaking, everyone knows that saving is good. So I'm saying, generally speaking, everyone knows that like murder is not good, right? Yes. Yes. But there is those people that will do it. Speaking of which, the murderers. Gee, we're taking it. We have taken a turn. Well, that links directly into where I'm going with this, that behavioral issues cause a bit of issues with savings, you know. Discipline, structure, that kind of thing. So a behavioural issue, murder's an extreme behavioral issue. The other one, very modern, a bit of discipline and structure in your life. Like if you're looking to save, you need discipline, you need structure, you need a few different things going. And a common mental trap that people have is just having one account for everything, and they go, Well, this is my account, I'm saving because uh it's going up in value every time I get paid, but they're not actually committing to a savings plan.

Oscar Don: 4:48

Well, if you have money in your bank account anyway, not actually putting it into an investment fund or even just a very low compounding ETF, you are technically losing money with inflation. That's that is true. That is 100%. But it's funny with with savings as well, it's you you're correct, it's all about behavioural, you know, discipline and structuring and actually dividing where your money's going because there's some people on 60 grand who are really good savers, and then there's people on 200, 300 grand who are horrible savers and just burn through it. So it's funny because you think growing up that if you have to have a you have to have a large income to to save money, but a lot of these people who've got a hefty amount of money just burn it.

Zeke Guenthroth: 5:31

I'm I can attest to the fact and speak on it. I'll do it in front of a court if I have to. I'll put my hand up, hand on heart, and I'll tell the truth. Oh. I've seen some people on not great wages save more than I know with people that are on really good wages. Yeah. And I'm talking really good.

Oscar Don: 5:46

So it is a common thing because it in their mind they think they're rich. Yeah, that's right. So it's like, oh good, I can spend money, I don't have to stress. It's like yes, you're rich, but you're not wealthy.

Zeke Guenthroth: 5:56

Yeah, you go you gotta pull them aside and go, listen here, no, no, you're wrong.

Oscar Don: 6:00

A bit of a difference.

Zeke Guenthroth: 6:01

But that takes us on to our first lesson, which is a big mistake. Probably my favourite mistake to talk about is using the same bank account for savings and spending. So like one account as in like different buckets. Number two different bucket buckets. Yeah, okay. I'm talking income comes in, rent goes out, uh spending goes out, gambling goes out, bills go out, everything. So it's just like, oh yeah, this one account, it's going up each week. But it's really no way to track your growth and like anything you want to hit because you've got the instant temptation, it's like, okay, well, going to buy some beers or whatever. Oh cool, I've got thirteen hundred dollars, I can spend it. But that's all you have.

Oscar Don: 6:45

I think that's what I used to do. Well, I think I remember when I was in like year ten or eleven, I used to go out or early year twelve when I was eighteen. Not sixteen. Um used to go out and I had the one the one bank account. I'd like a legal disclaimer there. Yeah, yeah, I was 18. But I used to have the the one bank account. And I used to slide and I had my savings and I just used to transfer on the night, which that's a little bit different, but even with your savings, I think you've got to completely separate it. Yeah, it's it is a huge trap. Because I don't think I actually grew in terms of my savings balance for like two years because I just kept like pulling it out on a night out. I was like, oh, this is at least I got extra money out of friends. Yeah, yeah.

Zeke Guenthroth: 7:22

But um, what I've noticed in today's age, like when we were younger, is a little bit easier because if we had a different bank account, like as in if I had most of my accounts with CBA and then I had a savings account with Newcastle permanent, right? And then I would if I was going to transfer from Combank to Newcastle, my savings account, and leave not much in my spending account, which was Commonwealth, then if I wanted to send money back from Newcastle to Commonwealth so I could access it on a night out as an impossible decision, it would take two or three days. Yeah, it's good. Now we've got Oscar, we've got pay ID, you carry your card everywhere, bing bong bang, ATM, gambles.

Oscar Don: 7:58

Well, you were saying one of your mates is um transferring their money, their 500 bucks a week to a another friend that they can't get access to, which I think is very smart.

Zeke Guenthroth: 8:06

That is very smart.

Oscar Don: 8:08

So that is also a way if you have an accountability partner who you know, even like your parents or your friends or someone you can't get the act the money from quickly, do that if you're struggling.

Zeke Guenthroth: 8:18

Yeah, there's many different ways. I would I would personally do either a an account that doesn't have OSCO, like you know, a different financial institution, maybe like HSBC or something like that, and or make it so they have to go to a bank to do withdrawals, and or put a second person on it where you both have to go to a bank to do withdrawals, because then it's eventually impossible.

Oscar Don: 8:38

Yeah, this is like if you have no like willpower. Yeah, it's addictions. Yeah. Like this is like most like for myself, I've got one bank account, I gen, I just got like four different accounts, and savings is one of them, and I just don't touch it. But there's other people who can't do that and just have to touch it.

Zeke Guenthroth: 8:54

Yeah, so for for those guys out there, I know a few girlfriends that are out there and they uh may or may not get five different days of getting packages. You know, they love an online shop, they love to spend money. If you say, hey, we both got to go to the bank to uh withdraw funds, you solve that problem. And for the girls out there that have boys that love a bit of Uber Eats or DoorDash or maybe a little bit of sports bet here and there, common problem, I know. Do the exact same thing and you can hold each other accountable. It's way easier. But if you are disciplined, just be good. Have a separate account, don't transfer.

Oscar Don: 9:29

Just be good.

Zeke Guenthroth: 9:29

Yeah, just be good. Easy as well.

Oscar Don: 9:31

Yeah, like behavior, good. Yeah, that's um that's that's number one. But I think that's the most common mistake we've we've seen in the past. Yeah, absolutely. But number two is we've spoken about it quite a few times. No structured budget. So budgeting is is very important, even just figuring out where your pay is going to go, the money when you divide it. Obviously, if you're paying rent, you want to need to pay your rent so you can have somewhere to stay. And then figure out how much you're saving, spend any saving skills, etc. But without actually having your budget and clarity, your money literally will just disappear overnight. It's it's quite funny how that actually happens. And people overestimate what they should have left. I think when we did this episode, we had a special guest, actually talked us through his three-part budgeting method. Yes, yes, which we agreed on and were actually pretty much using similarly as well. So I think they had number one was fixed non-discretionary, so you know, your rent, insurance bills, things that you have to spend your money on. So these are non-negotiables. And then you've got your your variable and non-discretionary, so you know, your petrol, your food, your tolls, and then the third part of your budgeting, you've got your discretionary. So your fund spending, your social spending, and all your subscriptions.

Zeke Guenthroth: 10:46

Yes.

Oscar Don: 10:47

So they are the three main parts of a budget.

Zeke Guenthroth: 10:51

Yeah, so with that, you want to ultimately figure out what portion of your income do you want to allocate to each one. Yeah. But then also in that, what we need to mention as well is a part four of that budgeting method. Non-discretionary, so what has to happen? You've got your variable non-discretionary. So again, what has to happen, but they vary per week, and then your discretionary is you just having a bit of fun doing this, that, and the other. Um but part four is your savings, obviously. Savingslash investments. Yeah, so you need to figure out then, okay, well, my fixed to non-discretionary is X amount of my pay per week, break it down weekly, fortnightly, monthly, however frequently you get paid to make it easier for you to actually track for yourself. But you want to figure out that first and see if there's any way you can reduce that. Because if that's 70%, you're already bugging. So you want to drop that as low as you can, but that is what it is. Then you want to look at your variable non-discretionary and drop that as much as you can, but figure out how much that is as well. Now you might be at a combined rate of say 60%. So that's your housing, your food, your bills, insurance, petrol, tolls, whatever it be. And then you've got 40% left for your last two, which is discretionary spending, all your fun, partying, subscriptions, Netflix, all of that kind of thing, ice cream, all the fun stuff. And then savings. So then you want to figure out okay, what portion do I want going to each of them? That's a you decision. I personally, when I was going hard in the savings and really trying to get things going, I would do virtually no discretionary spending. Yeah, I'd partially put everything into savings and I'd put it straight in an investment because then it's like, okay, I actually can't do anything. If I want it, I have to sell shares and I'm not going to sell at a loss. And it's going to take two days to hit my account anyway. So I guess I'm just stuck really having no money. There you go.

Oscar Don: 12:41

And that works great. Yeah. But I think a main factor with this one when you are fearing out, especially with your savings, automate these transfers is probably the easiest way because then it's a consistent deposit coming to your account. So even if you there's so many different share, like for example, Comsec has Comsec Pocket and you can do automated transfers every week, fortnightly, or monthly. So you could literally just put, you know, after playing around with the compound interest calculator and figuring out that you need to put $100 a week to hit your goal in 20 years, you could just put $100 a week automated into your account. And then all of a sudden you won't even realize it's happened. And then three, four, five years later, you look at it and happy days. You're you're you're hitting your goals. Yeah. That's the same with all different accounts, like your savings, even your bills. Make it easier for yourself so you don't have to actually go out of the way and you might forget some weeks. So if you said and forget, that's the easiest way to do it.

Zeke Guenthroth: 13:36

Yeah, exactly. And if you're doing that strategy of getting investments going, this isn't a recommendation on any form of investment platform or anything like that. We're not able to do such on a podcast. However, back in the day when I was doing it, when I was playing around with really minimum dollars, I used Comsec Pocket because I think it was like a $2 transaction fee. And there's no minimum amount. The minimum was $100.

Oscar Don: 13:59

Oh, well now I think it's I don't think there is.

Zeke Guenthroth: 14:02

Oh, okay. But then when I started getting to the bigger dollars, we're talking, I was doing thousands at a time or whatever, I moved on to IG trading because their brokerage fee was only like $8 a transaction, whereas Comsec back then I think was $20. So double check all of that, but that's what I personally did. Before we get on to number three, I've actually just received a ridiculous email that I know we said we weren't going to look at the phones, but this is outrageous stuff, and you've got to you've got you're gonna love this. Get it up. So I've just had the the bank bill valuation on a client's property, right? Because yeah, refining and purchasing some more property. This was bought in 2023 at the epic, right? Late 2023 for about 740k. The valuation from three different banks has just come back at 1.2 million. So in two years and what three, four months it's gone up. The math on that is 60%.

Oscar Don: 15:03

That will be on our Instagram tonight. That will be on our Instagram tonight. I'm making a post after this. 60% capital growth in two years, basically. Yeah, that is let's not have it off you. Yeah, if you're if you follow the property investment industry, that is very, very good numbers. Well, exceptionally well. And guys, that is that's what happens when you have a dream team. We're talking investment property consultants, talking conveyances, brokers, accountants if need be. If you're wanting to get similar results or get into the property market, that's up.

Zeke Guenthroth: 15:35

Yeah, wow. Well, that is what we do. This is an episode on saving, and this is a kickstart up to getting to a position where you've got the capital and the savings and the investments to take that next leap, which is getting the investment property or the family home. So literally get this.

Oscar Don: 15:51

You could be on the how could you save like 400 to 500k in two years? That's pretty much you just can't. I'm still processing that 50% of it. That is insane. Wow. That's probably one of our best actual performances, I think, in a while.

Zeke Guenthroth: 16:06

That is outrageous. That is we had two clients next door to each other that both get it.

Oscar Don: 16:10

Yeah. So that's a that's a that's a that's a uh moment when you you tap yourself on the back and say, I'm I'm glad we did that.

Zeke Guenthroth: 16:17

Yeah, I'm gonna get a massage tonight, and the whole time I'm gonna be thinking, wow, well done. I think we'll go to the pocket no loss. Why not do better? Yeah, fair enough. I don't even know if that's how you pronounce it, but um just picture me with a little sombrero on on my head, the mustache, a couple of pistols, yelling more chili. I am now Mexican.

Oscar Don: 16:35

I love I I am on uh I was on day number 55 on Duolingo for Spanish, and now I uh on day three. So I'll get back there. That's uh yes, in terms of Mexican, I can speak speaking of a little bit of discipline.

Zeke Guenthroth: 16:48

There you go, that's a discipline failure. Yes. Mistake number three leaving money idle in cash, as the Don mentioned earlier. If you don't have your money invested in something, inflation is going to erode it, destroy it, decimate it, pump it, terminate it, and send it all the way down to the grave. It's just gonna go down and down and down.

Oscar Don: 17:09

And you may be thinking, but my balance isn't dropping. Like your bank balance in your savings isn't going to actually drop. Like you're not gonna lose money technically in your bank account, but when you put it against inflation, for what it's actually worth, that's where you lose the value of the money. So you're better off. Obviously, speak to financial advisor or planner or um do your own research because there's so many platforms online now where you can figure out a safe you know investment to shares, so many different index ETFs to choose from just to get your money actually working for you. And if you're uh if your goal is to purchase a property down the track with your money, well, how can you fast track your cash right now to propel you into that? Like physique, for example, we all know when he did his property, he put all his money into shares for a year or this is just a year. Well, yeah, I had my my storyline was and then you made a bit of money there and then you pushed it through to the property.

Zeke Guenthroth: 18:07

Yeah, I I was saving from 16 to 18 because you can't actually do anything else. But my my timeline was I was not in a rush. I didn't need a house, I didn't need anything, I was just big chilling and just doing what I could. I was just getting them by. Um I was out here being the boring guy. So what I did was I saved for those two years. And if I were if I was doing it again today, there's many different ways I'd go, and I'll get into that shortly. But I saved for two years because I wasn't 18 yet. When I hit 18, I then started investing in shares. The reason I did that, I didn't have anything coming up. If I had something coming up in 12 months, I probably wouldn't have done that because your timeline is going to impact it. Like if shares go down in six months and I need that money in twelve months, then I might be selling at a loss. Yeah, you got it in a good time. Yeah, I had unlimited time. I could do whatever I wanted. So I just pumped shares. That probably happened for about two, two and a half years because COVID came and you know, had to be a bit smart about that. And then I pulled that out and threw it in the property as a deposit and so on. But realistically, if you're doing it today, and again, not financial advice, but what you want to do is take a look at what are my goals and when are they. If you're on a short time frame, then it may not be appropriate to put it into shares or crypto, for example, because if in 12 months' time, if the shares go down or the crypto goes down, you don't have the time to recover it because you need it at that point in time. Like if you've got a a land settlement coming up to build your home, and you're like, I need this money for the deposit, or to settle the land or whatever it is, be dubbed the week before. Yeah, then you're gonna be short, you're gonna get settlement penalties, contract penalties, termination penalties, legal fees, and so on. So you need to think about that. If it's longer term, like three, five years, ten years, then shares may be appropriate. Again, they may not, it's up to your financial advisor in that circumstance. But you need to figure out what you're doing because ultimately inflation, let's call it three percent per year. If you're not making more than three percent per year on that money, you're losing money. Which most banks give you around one percent, so you're technically negative two. Yeah, well, I mean it depends what you're doing. If you're in a higher, higher interest savings, you may get like three, four, five, getting six, seven, eight virtually non-existent. But yeah, if even if you're getting three percent, you you're just sort of maintaining your money. You may as well just have a cash sitting under your mattress, like it's sort of pointless. So, yeah, not really useful. I personally would be investing it, otherwise it's just disappearing. Yeah, that's all I've got to say on the back.

Oscar Don: 20:44

Well, yeah, because I did it the other way around. I um I had money going into shares, but I was also saving the majority of my cash in like my bank account, which if I had my time again, I wouldn't have done. I would have invested heavily in shares when I was 18. But that also shows as well because I bought my property what three, four years after you. Yeah. So, you know, you there's still two ways, but definitely if you do want to get in quicker, you need to make your money work for you. Whatever that is, it's up to you and who you speak to. But but yeah, sitting in your bank account and just cash is not the best way to do it.

Zeke Guenthroth: 21:17

Well, it's like it's like that client. I just preferred him as Mr. Feathersword. You know the one I'm talking about. He uh feathersword. I don't know why I went there, but it it I guess it sounds like the name. Yeah, that's uh yeah. But he had like he he saved up for his whole home. Like I'm talking 700 grand over over like a 15-20 year period. I'm like, bro, you would have lost literally so much money to inflation if you had that invested in shares, like your timeline would have been way better. And even if you didn't buy the property, you just left it in shares, it would be worth over two million now.

Oscar Don: 21:54

Like it's just crazy, like high sides, that's an insane thing with what it especially when it comes to property. Yeah, it's now yeah, it is cooked.

Zeke Guenthroth: 22:01

Yeah, and I I always, if I'm doing an an investment plan and saving, I won't throw absolutely everything into the investment. Like I know I said I've got my spending account and I would minimise that by putting it all into the savings and shares, but I would have a separate account purely of savings. Didn't have like a three-month threshold, like a rainy day fund.

Oscar Don: 22:23

Yeah, I say and I've spoken about it on my my recent solo episodes, how important a rainy day fund is. Exactly. But this it moves on to number four, which saving for consumption instead of wealth. So, for example, saving for a holiday is not savings, it's delayed spending. It's as we used to say, it's kicking the tin down the road. Remember that old saying? I do. So it's the same as like saving for a new car, saving for you know a shopping spree, just saving for things which aren't you know, investing in your future or or gonna help you pay you an income down the track. It's purely for consumption and materialist materialistic items.

Zeke Guenthroth: 23:02

So it's like when we meet a client, we go, oh, how much are you saving per year? And we we know it's zero because their savings account is zero. And we're like, how much are you save per year? And they're like, Oh, you know, like 15 grand. I'm like, so you're 40 years old. You save 15 grand a year, your savings account's got $800 in it. Can you just explain that a bit further? Yeah, how does that work? Oh, yeah, we we went on a holiday this year, and last year we bought a car, and the year before that we went on a holiday. I'm like, okay, so you don't actually save anything.

Oscar Don: 23:30

Yeah, like you spend it. It's fine to have like goals to save for a holiday, but have different accounts like what we said earlier. Have an actual wealth-building account where pure money goes into for saving purposes for your future you, and then maybe have a little account for holidays or a new car. But don't just put all your savings into a for a holiday or a new car because as soon as that holiday's finished, yeah, you might have had a good time, but you get back to work and it's you're back from you know square one. It's like a um I know a couple who who's got married 12 months ago and they literally took out loans for the whole wedding. We're talking like six-figure loans. And then they hadn't haven't got they didn't have any assets or anything for that together either. Oh no. And then they're like, oh well, it may as well get another loan out for the honeymoon. I don't know how everyone else's money spending makes me screwed.

Zeke Guenthroth: 24:22

So I I just took out all the um the edge, WWE, about to do a spear, brush the hair bucket over my face.

Oscar Don: 24:28

But they took out loan for the wedding and the honeymoon, and then they get back to work, and all of a sudden, starting from scratch. Like, yeah, we're married, but we're starting from zero. That's crazy now. What the hell? I I felt sick. Yeah. And that that alone I think that's a very extreme example though. Like that's I don't think that's I don't think that's often common. I mean, it may be kind of surprised by that.

Zeke Guenthroth: 24:53

But that like even though I think about it sometimes, don't get me wrong, I'm by no means like absolutely silly with money. Um you were gonna spend no, no, I would never spend that. But if we're if we're going along like the train of figuring out where money goes and that kind of thing and how it builds up. Yes, obviously I save. Yes, I have an idea of what we're doing financially and stuff. But even just thinking like money that I've spent on say holidays or something, or like I I bought my car in cash obviously is like 50 grand or whatever. I didn't get a loan or anything, smart financial decision. But even I am in a mindset where I think back to that, which is like what two years ago, three years ago, it's like 50 grand on a car, like yeah, sure, it's a brand new car, it's gonna last me a long time. I'm gonna run it into the ground because I'm money savvy. But that 50 grand invested into say shares or something, when I'm running a 46% return this year, like not even counting last year, you know, that would be worth at least 75 grand today of that cash. Then you throw in like what I spent on say holidays or parties or gifts to people or whatever, we'd be talking like a good maybe 150, 200k all up that I could have made in that time frame. And it's like I kick myself about it. Yeah. And so I mean, yeah, it's it's ridiculous. You you don't realise I mean, you might, but when you think about the level of money you actually spend, and then you forward calculate that into what it could be, like that it could be that amount for me between 150, 200 grand in a two-year period. So imagine three, four, five, imagine in 20 years, it'd be like nearly a million.

Oscar Don: 26:41

Yeah. Yeah. Anyway. And then what can you do with that million? Cool. There's a lot of things you can do.

Zeke Guenthroth: 26:46

Yeah, there is. But realistically, the whole point of this one is saying, cool, you can save up for temporary happiness, holidays, cars, whatever, but you also need to be actually saving and generating wealth. You need to have that an actual saving account. Yeah. Yeah, because saving for a holiday is not saving, it's delaying spending. Saving for wealth is saving. Which brings us to number five. A lack of automation. We've kind of spoke about it already. We have. But real simple, we don't actually need to talk about that one. Just split money up, automate it, have it go here and there and there, know where it's going, and let it run, let it run its course.

Oscar Don: 27:25

Yeah, literally, like I was a few years ago, I always found that for Christmas time, especially, I was spending so much money when it came to it for buying gifts for people that might have been, you know, the whole period I spent five, six hundred bucks. I love a gift. Like getting them for people. So do I. But like, and then I get excited and buy more, like, and spend more money. So I was like, I don't actually have this money set aside. So now, what I figured out is at the start of each year, I figured out all right, I need around 800 bucks for Christmas time. So divide that by how many weeks in the year, and then I just automate spending every single week into this Christmas account, and then come Christmas time, I've got all the money there. So this Christmas gonna be a breeze. I've got cash sitting there and just ready to go. Because the whole year it's just been automating my deposits. So happy days.

Zeke Guenthroth: 28:10

Yeah, this we're coming up on when Santa comes around in about a month and a bit. And I haven't actually got anyone anything yet. True, literally is just over a month. Could this be the year that I hold back? December's gonna be a good month. Could I be a good man and get no one anything? I highly doubt it. Well, we're gonna have to wait and see.

Oscar Don: 28:31

Final big point. Yep. The final big point, ignoring debt before you actually start saving. So common error is starting your savings journey while you're still carrying that high, hefty credit card debt that you're struggling to pay off. So if you're paying 18 to 20% on your credit card, and then you're also trying to save, well, I hate to say it, but one, you're probably not going to be saving much. And two, you're probably not going to be paying off your debt much because you can't juggle the two. Firstly, that the number one thing you have to do if you do have credit card debt is get rid of that as soon as possible. You might, you know, if you're putting aside 400 bucks a fortnight into savings, pull that into your credit card, make extra repayments because you want to be debt-free in terms of bad debt, as like personal loans, credit cards, etc., before you do anything in terms of you know your savings. And there's quite a few different methods to this in terms of removing the debt on credit cards, like a snowball method and avalanche method. We have spoken about them before, but definitely if you have debt, even if it's a thousand bucks or three or four thousand, put a plan together to actually knock that out first.

Zeke Guenthroth: 29:44

Yeah, I mean, I don't have too much to add to that. I'm going to keep it very simple on that point. The way that I calculate what debt is going to be repaid for people if we're looking at different avenues of generating money or saving money, repaying debt, that kind of thing. If your interest rate is higher than what you can generate, prioritize paying it off. So for example, if a mortgage is 4% but shares can return 9%, then 9% minus 4% is 5%. You've got a 5% net gain from the shares in that aspect. Whereas if it's a 12% interest rate on the debt, for example, a credit card, and you can only generate 8 or 9% with shares, then the 12% is higher than the shares. So it's going to cost you 3% more. So that's a simple way of calculating it. It's literally that easy. Figure it out. Do your own research, talk to planners, and take the leap from there. There is a couple of additional little tips and tricks. Or things to talk about. Just to rattle off a couple, and we're not going to dive into these because they're the main ones we wanted to talk about. But lifestyle creep is a huge issue. Simply put, when your income goes up, your spending does not need to go up with it.

Oscar Don: 31:07

Yep, that's a very common thing that happens. Simple. Then we got uh psychological. So, you know, using mental accounting, naming accounts by purpose increases your commitment. So let's say you have a savings account and you you go in 12 to 18 months to buy a house, you can simply name that account future house deposit. And you know, if you are putting money aside for a holiday, this can be your holiday account. So that will actually visualize it for yourself as well and give you a bit of urgency and want you to keep saving because at the end of the day, savings is actually fun. Yeah, small wins.

Zeke Guenthroth: 31:40

Celebrate them. If you get to your first 1k saved and you've saved nothing ever, that's a huge win. When you get to 5k, then another huge win. And if you pump yourself up, like, oh yes, I reached my goal of 1k, how good is that? And you genuinely make yourself feel good about it, you get up and about, you you know, tell your friends, your family, or whatever, oh you know, I've just got my first K saved or whatever, or I've just got my first 5k, 10k. If you're a big baller, it might be 100k or whatever, 1 mil. Yeah, then celebrate it. That's how you keep propelling yourself to success. If you just go, oh yeah, I'm at 50k, like you're not gonna be up and about. Get up and about.

Oscar Don: 32:17

Agreed. And then you know, we've got a category for tools. So this is where you there's budget-friendly apps out there and websites. And even if you just Google budget tools online, there'll be plenty that come up, like WineNab, Pocketbook, Money Brilliant, heaps of different people as well just give away their Excel spreadsheets online for free. So you can download templates, that's what I've got, and you just save a copy as your own and then put your own numbers in. But there's so many different platforms out there for you to simplify your budget because it's not as complicated as it sounds. When you hear about budgeting, it does sound pretty intense, but it's very easy. So don't overcomplicate it.

Zeke Guenthroth: 32:54

Exactly. And that's all of the savings chips we have for today. But our next episode is going to be a direct correlation. So now that you understand savings and how to do that and start generating some investment income and that kind of thing, the next one along in this quick series is going to be compound interest. So, how do we take that saving amount and the savings you're generating, and how do we compound them into the next episode after that, saving your first hundred K. So it's gonna be a step one, step two, step three. We love it. And you're really gonna start building that income. Keep tuned in, keep listening, keep growing, keep investing. DALA. See you next week. Well, that is the end of the episode. We hope you enjoyed it, and if you did, you know exactly what to do.

Oscar Don: 33:39

Hit that follow button, like button, subscribe, share it to your friends, families, or even a coworker.

Zeke Guenthroth: 33:45

If you're really feeling generous, you could send it off to an ex. But catch you next time. Hope you enjoyed it. DALI.

Oscar Don: 33:51

Ciao.