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How to build the ultimate budget

Louis: Gosh, little monstera. You've really come a long way, haven't you? Thank you for surviving. Mommy loves you. Now, if only my finances were this healthy.

Jade: Well, they can be.

Louis: Jade! What are you doing here?

Jade: I heard on the grapevine that you might need some help building a healthy budget.

Louis: Have my grapes really been gossiping about me again? ANZ presents: How To Build The Ultimate Budget. It's okay. I didn't know either.

Louis: So what makes a good budget? I mean, I feel like I have the basics down pat. I have a plan for my savings. I track my income, all of that good stuff. But I can never really get it quite right. You know what I mean?

Jade: I think the two biggest mistakes people make with their budget is that, one, they don't budget for everything. And two, they don't keep proper tabs on their progress.

Louis: Yeah, like I always forget to budget for things like I don’t know, a new washing machine or fun things like music festivals. Treat yourself.

Jade: You're not alone. It's easy to remember the big expenses, like rent and utilities and food, but often it's those little infrequent things that we forget. I was thinking maybe we could try breaking down all the different parts of your budget using these beautiful plants.

Louis: Okay, this one's giving house deposit. A little utility one. I think this one's giving transport. Sneakers for this one. Health care, 100%. Rent. Nah sorry. This snake plant is not giving fun fund. Eep! It just doesn't feel correct in my heart. It's giving more emergency medical expenses.

Jade: That makes sense.

Louis: You know what? This really does help to see everything visualised. Yeah. When it's in these smaller chunks, it feels a whole lot more manageable.

Jade: Louis, can I ask you a question?

Louis: Any time.

Jade: How do you eat an elephant?

Louis: Jade, I wasn't expecting you to ask that question. How do I eat an elephant? I don't know. I don’t know Jade, how do I?

Jade: One bite at a time. It's all about breaking it down into manageable chunks. You can even open up separate savings accounts for each thing in your budget so you can keep an eye on their individual progress. And it means you're earning interest on all that money before you use it as well. So it kind of like grows while you wait.

Louis: I'm with you. Also, no elephants were harmed in the making of this video.

Jade: I can also recommend doing it on an app so you can literally watch your balance grow. Sometimes numbers in a book or spreadsheet can feel too abstract and metaphorical. You actually have to see it happening.

Louis: Question for you- How much should I be saving every month?

Jade: Well, usually we want to aim for about 20% of our income going into our savings and then 30% of our income going into our wants and 50% of our income going into our needs.

Louis: You hear that babies...mommy needs an air fryer.

Jade: Mmmmm that’s more of a want.

Louis: You keep me humble. Well, if you found this video helpful, subscribe to our channel and watch me upskill on my financial wellbeing journey. Oh, and don't forget to check the links in the description for some more handy resources.

Jade: No.

Louis: Are you sure?

Jade: Yeah.

Louis: Oh!

How to make passive income

Louis: Check out these new wheels I bought without having to lift a finger. Hashtag passive income- Danny bought a car? How? Passive income. That's a thing? I thought you had to work for your money? ANZ presents: How To Make Passive Income. It's okay. I didn't know either. Jade! Danny- How did he make enough passive income to buy a car?

Jade: Well, there are a few different types of passive income. Put simply, it's a way to earn money without having to work for it.

Louis: So how does one get paid without working? That sounds fun.

Jade: Well, it's important to remember that any passive income requires a bit of upfront work. For example, buying a property and renting it out is technically passive income, but it takes some time to set up. It's only really passive once you've handed it over to a property manager or a real estate agent who takes care of the day to day.

Louis: Okay. But like, what if buying a house is just a little bit out of my reach for the time being.

Jade: An easy form of passive income is just investing. You don't have to do much to earn interest. So you can look at what your bank offers. You get all sorts of things like term deposits, shares. Once you've built up your portfolio, you can just let it grow. And with a little more effort, some people turn their side hustles or creative projects into passive income.

Louis: Oh well, I design t-shirts. Do you reckon I could turn this into passive income? Do you like it? Would you want to buy one?

Jade: I suppose there's a market for everyone, but anyway, it can be a lot of work to turn your side hustle into a passive income. But let's say, for example, you had your t-shirt design and you found a printer to get them made, you could outsource your business to an e-commerce platform and they'll hold all your stock and fulfil all your orders for you. It would still take some upfront work designing the shirts, but they do the rest. So that's passive. Remember, you're still responsible for managing your own taxes, so make sure you do your research and keep your business expenses and income in a separate bank account from your personal one. And, you know, find a niche that responds to what you're good at.

Louis: Okay. You've made your point.

Jade: Look, if you've got an entrepreneurial mindset, which you clearly do, this is absolutely something worth exploring. You don't just have to sell the merch either. You could film an online course on how to make your own merch. You only have to film it once, but lots of people can keep buying it over time. And remember, you can always fall back on basic investing. If a side hustle isn't your cup of tea.

Louis: Thank you Jade. If you've also found this insightful, subscribe to our channel and watch me as I upskill in a whole lot of other financial wellbeing topics. Oh, and check the links in the description for some more handy resources. And also check out my website. Do you want anything?

Jade: Oh, I like the fan.

Louis: $35.

Jade: Oh, that's expensive.

Louis: Premium.

How to start investing (for beginners)

Louis: So we were waiting for our nachos to come, and then he starts talking about capital gains. I know! I just had to fake a family emergency and just get myself out of there. I've never invested anything in my life. I'm embarrassed. How am I meant to know this stuff?

Liana: It's actually okay not to know this stuff. It takes time and a few lessons from people who have gone through it already. Liana, you are just the person I needed in this very moment.

Louis: Sorry. I found an expert. ANZ presents: How To Start Investing For Beginners. It's okay. I didn't know either. Okay. So I had this really awkward date last night with this regular “Wolf of Wall Street” kind of guy. And it just made me realise I know nothing about investing. Can you please help me upskill in a few things?

Liana: Yeah, absolutely. So what kind of investments are we talking about here?

Louis: Uh, yeah, that's kind of the most pressing question. I don't even really know where to start. I don't think I've invested in anything except myself.

Liana: Well, technically that's not true, most Australians are investing in a superannuation fund as soon as they start working without even knowing it.

Louis: So I'm an investor. Well, when should I start investing in other things?

Liana: Blazer looks fabulous.

Louis: Thank you. I’m an investor.

Liana: Well, if you have a bit of extra income or a goal you really want to work towards, then I would say the sooner the better.

Louis: Liana. This is really good stuff. Actually, I should write this down, I'm really feeling this CEO energy. What are my options?

Liana: You can invest directly in things like property, shares, cash or bonds. All of these involve investing in assets either on your own or via a broker or investment platform. Each comes with different risk levels, fees and charges. So it's really good to do some research or maybe even talk to a banker or an independent advisor about it. On the other hand, you could look at indirectly investing through a managed fund or an ETF, and that's where your money is pooled together with other investors and investment decisions are sort of taken out of your hands and managed by somebody else. It's a great way to get exposed to different markets and invest in asset classes you might not have direct access to on your own.

Louis: How much do I need to get started though?

Liana: It really depends on the investment type. So if you'd like to invest in shares, you could start with as little as $500. If you'd like to invest in managed funds and have someone else make those decisions for you, you might need a little bit more just to factor in brokerage and fees and getting someone else to set it up for you.

Louis: Wait before you go, capital gains. What's going on?

Liana: So capital gains - put simply - if you invest a dollar today and in 12 months time it's worth $2, the capital gain is $1.

Louis: Slay.

Liana: Where it can get a little bit more complicated is when we start talking about capital gains tax. I know, I know. It's frightening. So if you sell your investment within a year of buying it, any capital gains you made are taxed in full as normal income. But if you wait and your investment has been invested longer than a year when you sell it, you only get taxed half of your capital gains. So it's an incentive to hold onto your investments for longer than a year.

Louis: Okay, I think I'm ready for my second date now.

Liana: I'll leave you with this. The most important thing is to set clear goals so then you can make decisions that will help you get there. Short term, that could be a holiday backpacking around Europe. Long term, it could be a house deposit. If you know what you want to achieve, it's easy to cut back on spending now, so you reach your goals later.

Louis: So it's all about knowing what I want?

Liana: Absolutely.

Louis: Actually, ironically, that's kind of good dating advice as well. If you found this video helpful, subscribe to our channel and watch me as I upskill in a whole lot of other financial wellbeing topics. Also click the links in the description for some more handy resources. Yeah. Gavin, I think I'm ready for our second date and I really want to talk about capital gains. I love you.

Liana: It's... second date.

Louis: I think...I think there's just bad reception on his end. He'll call back.

Liana: Yeah. Yeah! He will totally. How could he not?

Louis: Okay.