Season 3 Episode 1: Receiving an Inheritance
IN THIS EPISODE
Welcome back to The Money Collective Podcast! In this engaging episode, Mel Pearce and Darlene Neu kick off Season 3 with an exploration of a topic that touches so many of us: receiving an inheritance. With over 50 years of combined experience in finance and banking, Mel and Darlene blend expertise with practical advice, offering listeners valuable insights into navigating this often-complex financial and emotional journey.
Is receiving an inheritance a windfall of opportunity or a tangled web of expectations and emotions? Mel and Darlene dive deep into the financial, psychological, and relational dimensions of inheritances, sharing real-life scenarios and actionable tips for empowering yourself financially—whether or not a windfall is in your future. They explore how money stories, values, and generational beliefs can shape our decisions, and why independence and financial literacy are vital, no matter the circumstances.
From the joys of planning how to use newfound wealth to the challenges of navigating family dynamics, this episode delivers a balanced discussion to help you make informed choices. By the end, you'll be equipped with strategies for embracing financial well-being and crafting a plan that aligns with your values. Tune in to discover why inheritances are neither inherently good nor bad—it’s all about the choices you make.
KEY QUESTION IN THIS EPISODE
Setting a new, realistic budget that both partners agree on, and striking the balance with living now or saving for future plans.
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Welcome to The Money Collective podcast. We're here to uplift your financial wellbeing. Your hosts are me, Mel Pearce and Darlene Neu. We are the co-founders of The Money Collective and together we have over 50 years of finance and banking experience. We provide the tools, information and guidance to better understand your money and feel confident making money decisions.
0:23
Hi, Darlene. Hi. Welcome back, everyone, to Season 3. And here's our music. We did a bit of home decorating. At your house. That's where we are.
0:38
And it's cosy and nice and we feel like we're in your lounge room. Yeah, absolutely. We're in our lounge room. Back for more chats about financial well being.
0:50
We love talking about money and finances.And as always, like, let's just kick off talking about our own truth.
0:59
Where are we?
1:01
You go first. Now you've got back from Canada.
1:03
It's such an amazing trip.
1:05
Yeah, so we did.
1:06
We made it.
1:08
We got out of the country there.
1:09
I was a little bit worried that they weren't gonna let me for a few minutes there.
1:13
That might be another story.
1:17
And yeah, no, we spent five weeks overseas, so we went to the USA and Canada for my brother's wedding.
1:27
You know, so if anyone who's been playing along with us at home would know that it's been a bit of a drama for us to do that.
1:37
Like we first of all, we've got a family, so we've got two kids who are teenagers.
1:42
And yeah, So what we ended up doing was a big road trip up the West Coast from LA and then wired over the Canadian Rockies and into Vancouver.
1:52
But my husband before, which was the end of last year, 2023, he decided that he needed a hip replacement and he's self employed.
2:05
I'm self employed.
2:07
Then we had this big trip planned and it was just that big thing of like, how do we do it all?
2:12
How do we get the surgery done?
2:14
How do you he's had and I remember I've listened back to some of the podcasts and I was thinking that he'd have six weeks off.
2:20
He had three months off is what was required in the end.
2:26
And we did get the surgery done through work cover, which was amazing and did help with a little bit of income but really not much.
2:35
And he's just gone back to work.
2:37
He's had a couple of weeks back at work now and we've made it through.
2:41
We've all survived and how I feel about my money, I feel actually fine.
2:46
Like I did lots of planning beforehand, like what like AB and C, you know, could like the number one plan was to actually do it all like and we were able to do that, but that's meant that we really have depleted all of our resources.
3:05
I had to be very strategic on our budget, our accounts, where all the money was going and really step it right out.
3:15
So before I went away, like I had my budget, how much we could spend while we were over there.
3:21
That all worked out.
3:22
We actually went 5K over the budget and we realised pretty early doors on the trip that that was going to happen because the I think 'cause I did some research about how much it would cost for accommodation and just general living.
3:38
And I don't think my research was up to date with the current cost of living over there.
3:45
Like even how much it would cost for us to park up the RV every night, stuff like that.
3:51
And just eating out, like food was so expensive.
3:53
Like America was a lot more expensive than what I saw, even despite the exchange rate.
3:58
Yeah, Canada obviously has a better exchange rate, but yeah, anyway, so the money all worked out.
4:05
We did an extra 5K.
4:07
We were happy with that.
4:08
We thought, you know, we haven't been overseas before or you know, not with our kids anyway, or done a big trip like that.
4:16
So threw caution to the wind a little bit.
4:18
But we knew that that was measured at the same time and what an impact that would have.
4:23
So now that we're back the way that, and I had it all set up, all automated, I haven't had to do anything since I've been back.
4:34
Yeah.
4:34
And so and so Percy went back to work on the day that he said and we, you know, he's, I think we've received one invoice payment so far from him.
4:43
And so and he's, I've kind of changed it up to how I was operating before into like a new rhythm.
4:50
Because also before we went away, we just had heaps of expenses.
4:54
Like we just got really cleaned out of everything that we had.
4:58
And I'm so glad that we did have backup resources.
5:02
Yeah, so I want, but that means now that I don't have anything in backup for if that happens again, I'm building back up.
5:11
So, like, I'm staying on the tighter budget and the whole family knows that 'cause ***** *** Mel gets us good things.
5:20
That's it at the end of the day, holiday and some beautiful memories and Mel and all the family loved it.
5:27
So the things have been amazing.
5:29
We all got along really well, even for like sleeping in one of those.
5:34
Yeah, the, like the, IT was a motorhome, you know, so it had like, the bed over the driver's seat and then a double bed out the back.
5:42
And Tilly slept on like the kitchen, you know, folded into a couch.
5:46
And so she's 15 1/2.
5:49
And Willow’s like almost 18 in October, like coming up.
5:55
So they're big humans.
5:57
And yeah, it was the greatest time.
5:59
The best thing about it was spending the time with them.
6:03
Yeah.
6:03
Which is hard to do when you don't have that opportunity of work and school and just the everyday life and doing stuff and focusing on, you know, business stuff.
6:15
And it's really, really, I think super, super important to take time out of your regular routines and have, you know, time, Yeah, time out to not think about that, to give different perspective and just enjoy life a little bit, you know?
6:32
Yeah, Yeah.
6:33
So the last thing that I want to say about that before I open up to you and give you an opportunity to say anything about yourself is like how I'm tracking.
6:42
Like it has been a bit of an adjustment because while we were overseas, we were a lot more liberal with how much we spent.
6:48
You know, we went out for dinners and things that we haven't really been doing regularly lately.
6:54
And it's been a bit of an adjustment to get back on straight onto that really strict budget.
7:00
So I was just before I jumped onto the podcast because I transferred myself in a monthly in amount now for living.
7:07
And actually I was generous.
7:09
Like I've actually come back and I've only, I've spent almost all of it and I'm only halfway through the month.
7:15
Yeah.
7:16
So like, and I, I'm OK.
7:19
Like, it'll be fine.
7:21
I know it just will take maybe a little bit longer to get back on track.
7:24
Yeah.
7:24
But yeah, so like, I, I've only think I've got $327.00 left for the month, which is like $20 a day now.
7:34
I can't remember the number, but it was probably similar to that.
7:36
Oh, yeah.
7:38
My hardest budget was still only about $40 a day to feed the family and buy all the **** that we need.
7:44
Yeah.
7:44
Not pay bills.
7:45
It wasn't.
7:46
It's not a bills account, but it's.
7:49
Yeah, groceries and all of that stuff.
7:51
So anyway, who knows how that's going to pan out.
7:54
Maybe I can let you know next week.
7:55
And the last bit of good news is that Willow's just finishing year 12, so.
8:01
And he's looking at getting an apprenticeship and that's been a big thing to try and find somebody because we know lots of tradies and that's been a bit of a journey.
8:11
But he has found somebody who will hopefully take him on and he's starting some work experience and then hopefully he can start his money journey.
8:19
That's it.
8:19
Yeah.
8:19
And his bank account system set up.
8:21
That's.
8:22
Yeah.
8:22
Maybe a conversation for another day.
8:24
Yeah.
8:24
Yeah, definitely.
8:26
Well, I think just to, you know, what I take out of your truth is that it's just a really good reminder to spend quality time.
8:38
It's trying to find a balance around now what do I spend now?
8:41
And maybe if your values are creating memories, your family and stuff like that, versus what do I put away for the future?
8:49
It is very much a balancing act.
8:53
And yes, you've inspired me.
8:56
So I'm going to plan a trip for next year and I'll yeah, talk about more of that as it comes.
9:02
But yeah, it's already starting to think about how am I going to pay for that and go from there.
9:08
My truth today is about my husband, Dennis.
9:15
He has been in his job for my.
9:20
It's over.
9:21
It's not that long.
9:22
It's less than two years, but over a year.
9:25
And he loves his job.
9:27
Actually, he's really likes the work and the people.
9:31
But there is certainly some uncertainty about the future of that.
9:38
And it's very early days, so it might not be anything or it could be something, but it makes you start to think.
9:46
So where my feelings and thoughts have started to go to, well, what happens if his job finishes up and in some sense he's moved around some jobs for a while over the last decade, I guess.
10:00
So he did, you know, he's probably had four, 3 or 4 roles and he works in risk and compliance, so in finance.
10:08
So it's a pretty popular area, you know.
10:10
So as far as, you know, gaining another job, that is not too much of A concern.
10:17
But it has brought me to the thought of planning, right?
10:21
Because when you finish up a job, you know, if that was to happen, then you might be a few months in before you actually, you know, start the new one.
10:30
And you just need to budget that in now.
10:33
Yeah.
10:33
So I haven't got too much more to say as far as what that's going to mean to me yet.
10:42
But, you know, I'm definitely in the thought of do we plan?
10:47
How far do you plan or is it just too early?
10:51
Early.
10:51
It's never too early.
10:53
No way.
10:54
Well, we always need a resilience plan and the writing's on the wall.
10:58
Like if he's like, the longevity of his jobs has been such that he doesn't stay in them.
11:04
So whether it's he might stay in it, but I think you need to absolutely prepare like what that looks like and so that that plan is engaged straight away.
11:16
So then it's not like, oh, what do we do?
11:18
And then start planning when it happens.
11:20
Yeah, that's a very good point.
11:22
And maybe start to have a look where I can carve some money off and like, you know, from savings or even, you know, what are the goals?
11:33
We do have an emergency fund.
11:36
Yeah.
11:36
But I really need to check whether that's going to be enough or I can exactly, you know, because how many months do I plan for?
11:44
Probably in our world, I reckon 6 months.
11:47
Yeah, three to six or I'd probably, he'd probably pick up something over three.
11:51
But yeah, you know, exactly.
11:54
Conservative.
11:55
Yes.
11:55
And see what we could do.
11:56
Yeah.
11:57
So it's either emergency savings or what stops happening to in your life because things need to be maybe pulled back or you needed an adjusted budget.
12:06
So what does life look like when that happens?
12:09
So yeah, I'm not sure if you've got things going into the savings accounts or other things outside of your everyday living expenses, but for example, they could stop.
12:20
Yeah.
12:20
And the other thing that we did is, yeah, just, it's just how does that budget change and what impact does that have for your future?
12:28
And are you OK?
12:29
Where do you want to pull it from?
12:30
So coming from savings or it's coming from somewhere?
12:33
It has to come coming from somewhere.
12:35
And what is that impact?
12:36
Yeah, as a fact.
12:37
Yeah.
12:38
Which one?
12:38
Where are we pulling up from?
12:40
Well, you've given me very good thought and very good advice, so keep posted on that.
12:45
I'm gonna go away and yeah, review the budget and come up with a bit of an action plan on that.
12:50
I like that.
12:51
And then I'll, I'll come back and let you know.
12:53
Understanding the full financial position, isn't it?
12:56
It is understanding your full financial position.
12:58
And we've, yeah, we've got some other stuff going on around that.
13:02
We had some properties that we are selling.
13:05
So there's also I, I do feel like it's a bit clad because there's lots of things going on and variables are coming in and then some of those things that might happen that takes it out.
13:15
So I feel like I need to do a sit down and I feel like I'm in limbo.
13:19
Yes, that's the feeling.
13:21
I can understand that.
13:22
Yeah.
13:22
Because I don't know which is going to move first.
13:26
Yeah.
13:27
And you know, I could scenario, how far do I scenario plan?
13:31
Because I've probably got, I don't know, half a dozen things that could happen, but I feel like I need to think of the likely ones and just.
13:39
Yeah, Yeah.
13:39
And like in I would just be what happens if the sales don't come off?
13:43
Yes.
13:43
Or if they take a long period of time?
13:45
I wouldn't even factor that in for now.
13:46
Like, that's great if it happens.
13:47
And then what happens with the money?
13:49
That's right.
13:50
And then what do we do in the meantime?
13:52
Yeah, definitely reviewing the budget.
13:54
Definitely reviewing the budget and then seeing, you know, where that money is gonna come from in the case.
14:00
Yeah.
14:00
And then, you know, financial being is when, you know, you can sleep at night.
14:03
Because then I won't certainly not keeping me awake.
14:07
But you know, I'm obviously putting my mind to it at times.
14:11
So yeah, it's it's there.
14:12
So to put it to rest if I do the work now.
14:16
And how does that play out for you and Dennis in your relationship as well?
14:20
Is it something that you need to work through together to discuss?
14:22
Yes, I, I definitely think we need to sit down and, and work through that together.
14:28
Yeah, yeah, yeah.
14:30
Not me alone.
14:32
And just because that'll give him Peace of Mind too.
14:34
Or how, you know, anxious or emergency, you know, urgency of getting another job or the right job, you know, because sometimes what we do is between jobs, if we feel really urgent about it, then we we just take a job that's probably not going to be the right job for US.
14:53
Yeah.
14:53
Versus actually knowing what we want and, and, you know, staying in that path for a bit.
14:59
Yeah, doing your money planning will help do that.
15:03
Very good.
15:04
Report back.
15:05
That's good advice.
15:08
Alright, so today what we want to talk about is whether receiving an inheritance is good or bad.
15:18
That's such a big topic, but if you know us, nothing's good or bad.
15:23
So there's a little bit to it.
15:26
There definitely is.
15:29
And maybe if we start on, you know what, we all have different views about inheritances.
15:35
And definitely if I think I start about financial resilience, people actually as part of their financial resilience plan, it's very common for people to have inheritances in their mind, right?
15:49
Absolutely.
15:51
So many people, it's like, it's OK, I'll get through life now because one day I'm going to have a big window and, you know, they'll leave me the house or, you know, but it does come with ties and emotional things, I think.
16:08
Yeah.
16:09
So I, I think first of all, building for independence is really, really important and not being your that being your entire, you know, back up plan because it can change.
16:26
Yes, firstly, you don't know that is guaranteed and but what does it do to your psyche or your empowerment?
16:35
I think it really depends on your money story, yeah.
16:38
Like where you've come from, like, and how empowered you are as a person around money and whether you are reliant on receiving that, how independent you are as a person prior to receiving that inheritance as well.
16:53
Also stage of life, how old you are as well.
16:55
I think these things all play in cause a lot of young people receive inheritances and they're set up for life.
17:02
And even hearing those words, if you say, oh, geez, you're set up for life.
17:06
And then the pressure that comes with hearing those words, I was that, you know what happens if you screw that up?
17:11
You've got a house paid for outright when you're 20, like that happens.
17:16
Yeah, well, I, I mean, I've so many examples, you know, that we, I think we could draw upon.
17:22
But there's, you know, throughout, you know, coaching, there's, there's people that have, have got inheritances and, and like you said, that burden of feeling that I'm just gonna mess it up because I, you know, I, I haven't had money all my life.
17:40
So one scenario could be I haven't had money all my life.
17:43
Yeah.
17:43
I've now got the inheritance and I'm so scared I'm gonna bloat.
17:49
And what's that mean to the legacy or to the family or those belief systems Coming back to your money story.
17:54
Yeah.
17:54
Or what your parents said to you before they did pass away.
17:58
Yeah, You know, that can really impact 'cause I think too some people will get that story of oh, you'll be fine, Don't worry, you'll when I die, you'll have everything, everything's all sorted.
18:11
Like that is a storyline that some people hear.
18:14
It's not a particularly common 1, I don't think, but it's definitely one that impacts some people.
18:21
And then the pressure that comes alongside of hearing that story.
18:26
But can I step back for a little bit because like the original like thing, when we put it out is like an inheritance, good or bad, I immediately think it's good.
18:37
This isn't this fascinating.
18:38
I, I do not so OK, I'm I'm on the other side of the bench.
18:42
As I, like Mel said, we shouldn't be thinking about it as good and bad.
18:46
We don't.
18:47
But like I would get so excited for somebody.
18:49
And I think also like the if we receiving an inheritance and it being a bit more of a positive experience, I think can come from when you're just being very practical about it.
19:02
And it's more of a pragmatic thing around what do we do with the money?
19:06
But that can be hard too.
19:08
I think the biggest thing if it didn't come with all the emotional, let's say you received a chunk of money and it didn't come with emotional ties and he didn't feel like I'm a bad person.
19:19
He didn't think that if you've been empowered and you've been independent all your life and then you get the inheritance, yes.
19:28
Or you have a plan with it.
19:29
I actually am even thinking of people who haven't been very well.
19:33
It's very independent, but not had a lot of money, but still receive a big chunk and can go about it in a way that is I've got a plan, I've thought about it and these are the things we're going to do that understand.
19:46
It comes back to like what we teaching coach, understanding your highest values, what you want in life to the steps and then educating yourself around where you want that money to go.
19:57
And I think that's where a lot of people get to.
19:59
It's like, I've got this big chunk of money, where do I go?
20:02
It might even be a small chunk of money.
20:04
It might even be $10,000.
20:05
Like it could be tiny, but when you come into a windfall, it's like, what do I do with that?
20:10
And sometimes.
20:11
When it's small, it's not going to solve all of your problems.
20:14
So what is that top thing that's going to give you the most reward?
20:18
And I think a lot of people think, well, what is the financial?
20:22
What, where am I going to get the big biggest bang for buck?
20:26
Should I just go and put $10,000 into open up a Vanguard account and invest it, for example, or I've got a HECS debt.
20:32
Should I pay off my HECS debt?
20:33
And I'm also running a small business.
20:35
Should I invest in my small business or should I put it in my kids account?
20:39
Or should we go on a big holiday?
20:41
You know, they're the type of questions that you need to kind of talk about with yourself or if you've got a partner to really get to the bottom of it.
20:51
And I think if you understand your values, it's OK even if you decide to go on the holiday like in that situation.
20:59
But then obviously it can become a lot more complex if you're getting a really large sum of money.
21:06
But what I'm trying to say is if we can put it to the places where we want and be very take the emotion out of it.
21:16
Yep.
21:17
And that is really what you're going for.
21:19
I think.
21:20
Look, I think you know what you're talking about sort of makes sense if you are very pragmatic and very planned about it.
21:28
So if, if a windfall has come your way, then do the planning around and understanding how you manage money, your money story, actually do all the steps and and be more, you know, planned with what you're going to do in the future.
21:47
However, I would if if you're are expecting an inheritance in the future, it's still you want to have money on your terms today.
21:58
And what I mean by that is understand how you behave with money set up, you know, all the good systems and the behaviours and build your financial well being.
22:08
So then you'll know if and when that comes, how that's going to fit into that.
22:13
Otherwise, when it comes could be a trigger point to say, Hey, actually I want to learn about my financial well being and what I can do.
22:21
But in my experience, So I guess the, you know, the other side of inheritances are the, IT is the emotional baggage that comes or the emotional issues that it can cause.
22:34
Because what I what I see and through working finance for all our working lives and also, you know, even my family experience too, it does come from my mind belief it people tend to put value of love on how much they're loved and how much they receive or they don't receive.
22:58
So there's so many emotional ties that can come with money.
23:02
And then other people, you might siblings, yeah, fight.
23:06
They might they're great.
23:08
Are you talking about there like about that love part if siblings or family members receive different amounts.
23:15
Yeah, absolutely.
23:17
So and that feeling more broader of what that does.
23:23
And then, you know, I've certainly seen lots of inheritances be challenged because of those type of things.
23:30
And I made a decision a long time ago that I was going to live my life on not receiving any inheritances.
23:42
The other thing is generational is the problem.
23:45
So say you have good money, you know, savings and you've, you know, you've really been independent and empowered throughout your money life, for example.
23:56
Then if you get an inheritance, a lot of the time we want to pass it to our children.
24:01
But what are what?
24:02
What's that doing to their money story?
24:04
Oh, yeah.
24:06
Are we, you know, are they independent?
24:08
Do they feel empowered?
24:09
Is it going to, you know, diminish or increase their self worth?
24:14
And how do you go about that?
24:18
It is, it is really complex.
24:20
But you're right.
24:21
Now I have seen it really make a difference to people, you know, people's lives.
24:26
But I've also seen a lot of the opposite where it causes huge angst because there's so much emotionally attached to it and I can see those emotions setting in.
24:40
So as I said, I work in this.
24:43
I've been trying not to have any emotion around family and money, right?
24:48
But it's really hard not to bring that in.
24:51
And an example I've got at the moment is my mum has recently retired and they're selling the family home and we have some units Anyway, they're going to live in a unit that we've built and my brother and I built those together.
25:10
But then I can already see.
25:11
So, you know, there's some challenges around selling the house and where the money of the house is going and, you know, do they get all the money?
25:19
My brother thinks they should leave some in and he's going to invest in the land.
25:22
But then I get, oh, is that fair and reasonable?
25:26
Is that the best thing for mum?
25:27
You know, all the things, it gets quite intertwined and not always our parents or our family, depending on their state of mind or how old they are, is how much they need us to help them make those decisions or how much they can do it on their own.
25:47
And it there's so many, it's such a, Oh my gosh, it's like a needle in a haystack, you know, when you start to talk inheritances.
25:56
But I could, you know, I could see those feelings like needs to be fair and equitable.
26:02
And it's, you know, it's really silly because why does it need to be?
26:06
Why do we care about that?
26:08
You know, it's not our money in the 1st place.
26:10
So if it's not our money afterwards, that's just the way it is.
26:15
Yeah.
26:16
And I think it actually helps our, our growth if we've got to do things on our own.
26:24
And yes, we might fail and yes, we might succeed and we have setbacks and go, you know, it's the same.
26:29
And this is very relatable to the money we give our kids.
26:32
I, I, I was thinking that, So what would you do if you came into a big inheritance?
26:38
Let's just say you had a huge chunk of money, What would you do for your kids so hard?
26:45
Well, it's the same.
26:46
We've just done our wheels, you know, if I come back to that.
26:48
So we've just redone our wheels in a bit of estate planning and we have built into it that we, our kids couldn't have it till they're 25.
26:59
Yeah.
26:59
Now again, you know, I've got 2, we've got two kids.
27:07
It's, it's a really tricky one because at the end of the day, we, you know, we've left it to them equally.
27:14
And one we're going to trust because Louie's 13 and Logan's almost 25 S almost 23.
27:22
So, yeah, it it.
27:26
That's what we've done, right.
27:27
So we've, there's no rules or anything attached to that.
27:31
But that's assuming you've.
27:33
I haven't told him.
27:33
No, but that.
27:34
No, but that's an inheritance.
27:36
No, but that's a little bit different.
27:38
I mean, 'cause you're gone, you're out of the situation.
27:41
It's really not up to you.
27:42
Then you're not even watching the story.
27:44
That's right.
27:45
Making assumptions about what happens after we die here.
27:47
Yeah.
27:48
What?
27:48
We don't know.
27:50
But anyway, let's assume they're on their own.
27:51
That's up to them.
27:52
But what happens if you got an inheritance right now?
27:55
A huge chunk of money?
27:57
Oh, yes, I see.
27:58
And then so you're watching the whole thing play out.
28:01
You're feeling really responsible for it.
28:03
You want Lily to be empowered, responsible for it.
28:05
You know, you don't want her to go through the next 10 plus years of her life feeling entitled.
28:12
And I can see, like, you know what you would like.
28:15
Yeah.
28:17
Yeah.
28:17
And you're saying that receiving a large chunk of money is going to change you.
28:23
Does it change you as a person receiving huge sums of money?
28:26
And how do we let it not do that?
28:27
Oh, that's a big question too.
28:29
I would say no if you actually.
28:33
And I think as life has grown, that is a different answer than I would have given.
28:40
So if you just said that 20, yes, I'd say that absolutely would change my life.
28:43
I have all the things and, you know, travel the world and, you know, because I don't think my life would change that much.
28:52
I certainly don't think I'd give it to our kids, you know, Would you help them buy a house?
28:58
Maybe that's what is the caveat, you know, maybe, you know, or maybe, you know, you would guarantee because I can.
29:07
I know that you would be worried if you gave them, let's say they both owned their house outright.
29:11
They owned a house that they wouldn't have maybe a good work ethic, that they would feel entitled.
29:16
They wouldn't work hard, you know, that's it.
29:20
So I'm I'm trying, Yeah.
29:22
Like it's like as your values aren't that.
29:27
And then we try and control the values of our children and the destinies of our children as well.
29:32
We talk about that a lot.
29:33
And like this could be on any level, like I've spoken it about it before by just by taking and we both have taking our daughters to the shops, that sense of entitlement.
29:41
And so we're like, would you be prepared to put that on steroids?
29:45
But then it sets them up because you don't want them to have housing vulnerability or to be, have a roof over there.
29:52
Absolutely.
29:52
Like there's some primary things in life which we all need.
29:56
That's right.
29:57
But we can get them in different ways.
29:59
But can we can we can't really control these things for our kids either.
30:04
And I, I don't know, the best advice I've probably always had from people wiser than I is that you lead by example.
30:12
It's like what you do because they're always going to watch you.
30:15
They're always, always going to watch you.
30:17
So it's almost less important about what they do with their money, but more important about them what you do.
30:23
You ever control your own behaviour?
30:25
That's right.
30:27
Yeah.
30:27
And those conversations.
30:28
And I know that relationships work the best when there's strong communication, you know, So I think we don't want to become detached and get money to detach us from our children.
30:38
Of course, degrees of separation within a family, Yeah, Yeah.
30:44
So I think I think the hardest thing when I kind of visualise that situation is staying strong and true to your personal values, your core values, because your core values is more important than the money you have in the bank account.
30:59
Totally.
30:59
It's not who you are.
31:00
It doesn't define you, No.
31:02
But who we are does matter.
31:03
Who we are.
31:05
Yeah.
31:06
And who we are isn't our money.
31:07
That's right.
31:08
And so when we receive an inheritance, whether it comes with strings attached, it only comes down to you, who you are as a person.
31:18
It doesn't matter what that person, what you perceive their, what you want them, you know, 'cause if you somebody gave you money and said, oh, you'll be set for life, don't worry once you receive the money or don't screw it up like you're controlling.
31:32
It is very controlling.
31:33
But we need to somehow be able to let go of that, all of those thoughts and really come back to who we are as a person.
31:39
You know, what centres us, how do we want to live our lives?
31:43
And that should determine how we spend our money.
31:46
Look, I think there's something really validating if you.
31:49
I think it's also that communication and understanding the values of your children, right?
31:55
Yeah.
31:55
I mean, we start, you know, and I I hear this on workplace workshops that we do, you know, where say, for example, an accountant is going to come to.
32:05
Oh my gosh.
32:05
Got accountant accounting planners as parents.
32:08
Have we mentioned this before?
32:09
Maybe I have accounting.
32:11
Yes, good accounting dads, if you're an accountant and you're a dad to children, stop being so controlling, OK.
32:17
Right, please.
32:18
Because you are causing damage, particularly to your female daughters.
32:22
Yeah.
32:22
And they feel they're never going to live up to the expectations or they have to follow the goals that you think that they need.
32:28
And if you're a woman and your dad's an accountant, you can still be an empowered person with your finances.
32:33
Because what we see, Yeah, it's unbelievable how many times we've seen accountant dads or financial planners controlling the outcomes of their daughters, definitely.
32:41
And thinking that they need to be looked after for life and not be independent, that that's fierce women.
32:47
Exactly.
32:48
And and they definitely and in the majority of the people we've come across, those daughters feel really a big weight on their shoulders and that, that they can never live up to that.
33:00
Or, you know, they, they must, they must save for the house.
33:03
They must do the things, you know, well, they and I wonder whether it's aligned to their.
33:06
So it's like, it's like you hear them asking permission of their fathers, of what they can do in life, even when they're alive or when those fathers have passed on, you know.
33:17
Yeah, the hold.
33:18
So the point is, what are what power do you have over your children?
33:22
It is huge, the power you have over your children.
33:25
How independent do you want your children to be?
33:28
You know, we want them to be independent and making great choices on their own, which means we need to let go.
33:34
Yeah.
33:34
So, you know, coming back to the question.
33:36
Or will we help with a house?
33:40
It's been Logan's dream for you to buy him a house.
33:44
Well, no, for him to buy a house, right.
33:48
And so this is also about the independence.
33:51
So I think what I did hear about that is have really strong conversations with your children about what they value when they're grown up children or 16 plus about what they want.
34:03
And maybe 16 is too young, but the right time for the right person, you know, have those conversations around what they want and how to go about it.
34:12
Like the values.
34:13
I'm just want hearing this, like, how are they going to get there if Logan's highest, like if he's got his really strong goal to buy his own house, I want to own my own house, whatever that looks like for him.
34:23
Even it could just be the buying.
34:24
I don't want to buy my own house and I'll.
34:26
Yeah, whether he wants to pay you all off or whatever that journey is after that, but let's just say that goal is that I would say even if he had the means to, for you to just solve the problem like that with money.
34:38
No, So like you should be, he needs all of the education, he needs to understand the property market, he needs to understand the cost of a house, how to buy it, what the important.
34:48
If he was getting a mortgage, what does that mean?
34:51
How much interest would I be paying on that loan, like have the full education?
34:56
So because that means that they're not taking it for granted, it means that they understand how the system works.
35:03
He might then want to leverage the house and buy an investment property or property might be his thing.
35:09
So he needs to ultimately understand how that system works.
35:13
So important.
35:15
And yeah, so maybe when he was 16, he's 23 now, he come and he started asking me about houses and we did that.
35:24
And we've done his, you know, borrowing power and he understands, you know, the housing market and, you know, those type of things.
35:31
So again, find out what your kids like.
35:34
And education is always key.
35:36
Yeah.
35:37
And we should understand how these systems work, even if we've got enough money to just bypass them, because you might not always be able to bypass it.
35:46
And the more you know about how the system works that you operate in, the better choices you'll always be able to make about your finances, education and talking about and communicating at home is is really, really important.
36:00
So while I said I haven't told him about what's in the wheel yet, we have got a copy to give him.
36:06
We have made him one of the executives, so we are planning to have the conversation with him when he's home so he understands what's in it and what he needs to do.
36:18
Yeah.
36:19
Or what the role is of an executor.
36:21
What does that mean?
36:22
Yeah, That's right.
36:23
Yeah.
36:24
Yeah.
36:24
That's huge.
36:25
Yeah.
36:26
And so they're great conversations.
36:27
And he can tell even just by like this podcast episode, how long it takes to kind of get into like a deep and meaningful point where you can pass and share ideas around and get to the real crux of the matter too.
36:41
And everybody's situation is different.
36:43
Yes, you said it come depends on money stories, your money behaviours, your what you want and your value, you know, and how you're gonna take on, you know something if you received an inheritance, if you gave an inheritance what you know, do you think you've got rights on inheritance?
37:02
Well, particularly if it's a couple, right?
37:04
You know, so sometimes, you know, some of that money can pass hands to the children before, say the wife, say you've got a husband and wife, The husband dies.
37:15
It doesn't all necessarily have to go to the wife.
37:17
Sometimes it goes to the family.
37:19
There's so many different people, right?
37:21
Yeah.
37:21
But think about those, how those relationships will work.
37:26
And if you've been through a situation where you've seen family and inheritances and things happen, really think about what you want to do for the forward generation.
37:39
Yeah, I think we've got to be very careful about imposing our views on our children because, yeah, if we say you should always be independent or whatever, and then as soon as you're gone, that messaging is going to be the strongest message, you know, that is left with them, too.
37:56
What does that mean?
37:57
What pressure are we putting on them?
38:00
Yeah, that's right.
38:01
So fascinating.
38:03
So where do we get through from that?
38:04
Any.
38:05
Anyway, I'll accept any inheritance that comes my way.
38:08
Thank you.
38:09
All our listeners out there, I'm happy to receive.
38:14
If you've got one.
38:15
You don't know where to put it, right?
38:18
Anyway, yeah, I vote inheritances are good, but be wary.
38:25
I still say they're not good or bad, but really, really do some deep dive.
38:30
No, they're not good or bad.
38:32
You're right.
38:32
Yeah.
38:33
And let's stay there.
38:34
Yeah and, and, and no matter what your situation, build your own financial well being now start now.
38:41
Yes, yes, get empowered right now Love that.
38:46
Alrighty.
38:46
So let's finish up with a bit of a like a question from the audience, which is what's our question today?
38:54
Do you want to say, Yeah, so I had some coaching clients this week and I thought they had a question of me in that we have gone through our programme and they've deep dived into their past spending.
39:08
And then they've set a new budget and it's a husband and wife team and the husband thinks the expense budget is still too high even though they've gone and compromised and worked on what it should be.
39:23
And, you know, he's not sure where to get it from.
39:26
He thinks that the expense budget is still too high.
39:28
Now the female applicant actually manages the budget at home.
39:32
So she feels a huge burden to make that work.
39:37
And she's feeling the inadequacy because she feels judged by him because he's saying, get it down first.
39:44
You're spending too much money.
39:45
Yes.
39:46
So what should we do?
39:48
How hard is a woman?
39:49
Just spend less money, right?
39:54
We live in the house anyway.
39:56
I love this.
39:57
Yeah, right.
39:58
So I think this is a really.
39:59
So to me, it's conflicting or it's like, first it's like, what is a realistic budget?
40:05
So you need to have a realistic budget.
40:08
And that is also going to be competing against the future plans that you have.
40:13
That's where this comes.
40:13
So it's like, do we live comfortably now and have the things that we want at the risk of not having enough soon enough?
40:23
Laid out down the track, that is exactly what financial assuming that the rest of the money goes into savings for your future.
40:29
Exactly.
40:30
So he has.
40:31
He's a saver.
40:33
And so he wants to put all the money waiting for the future and he wants to retire by the age of 16.
40:40
Yeah.
40:40
So it's all about a future future.
40:43
And she's a, you know, she's got her teenage daughters.
40:47
They do lots of fun stuff together, you know, and family holidays are important and spending time and making quality memories.
40:55
So what I would say if if you're at home in that situation, then come up with a budget together, like do your past spending, get realistic, know your numbers actually then do the new budget together and even and accept it.
41:17
Like don't judge it either way because if you but you have to be more, more, more, more, you are setting yourself up for failure, particularly if you don't, if it's not achievable because then you won't achieve it.
41:33
You think it's all too hard and you'll just go back to spending the way you always did.
41:37
So I feel like it can be in stages that do something we both agree on, work really hard together to do that and then come back together and review and say actually, yeah, can we, we, we did that, That's amazing.
41:51
Can we do something more and also do lots of that forecasting out?
41:55
That's what I think too.
41:56
It's like if we have like a budget that is a little bit ****** right now, but it means that we can live good.
42:02
What does that mean for the future?
42:03
Like actually what?
42:04
Yeah, when can we retire based on this current behaviour that we're doing right now, that scenario?
42:10
And then if we do knuckle down a little bit more, how does that much rein it in or what other variables we have in the next three to five years that might influence the cut the future outcomes as well?
42:21
You know, so there's so much that.
42:25
Yeah.
42:25
And that just comes down to knowing all the information again, exactly being on the same page, good communication, that's it.
42:32
But also think if you can't get on that right page or agree, then that budget is going to be set up.
42:39
Send a failure, send your husband to the shops.
42:41
Well, I I also my other tip would be that to sit down and go through your money at the end of each month so you know you've got your actual spend, your budget.
42:55
How was it?
42:56
Do a bit of a reflection on what was, what happened and then what's coming up, but actually make it a joint decision.
43:02
And maybe you can, you know, for a little bit of time.
43:05
Maybe the person that's not doing the bookkeeping at home could actually have a go at it for a while.
43:10
Yeah.
43:10
And they'll have a different perspective of that.
43:13
And then, you know, even share that load and don't take it personally for the other person.
43:17
I find it hilarious because I do all the shopping in our house, and Percy almost never goes to a shop.
43:23
He'll just tell me when he's running out of something, like this morning, buy me more deodorant and stuff that makes my hair grow.
43:31
That were the two requests.
43:33
But it's funny because when we do go, he goes to the shops and then we buy, like, a bag of groceries.
43:38
One bag, and he's like $70.00.
43:40
And he's, like, shocked.
43:42
And I'm like, yes, it's been like this for a while now.
43:46
Like, get that reality check.
43:48
Like this one.
43:49
One of the expense lines that is under contention is the grocery bills.
43:54
Yeah, they're twice as much as what they used to be.
43:58
Otherwise, you have to make substantial changes and modifications in your lifestyle.
44:04
And in fact, I've heard a recent thing that people getting more cavities and because people are eating like lower quality food lately, they've adjusted their budgets and not eating as healthy.
44:15
So like, and again, it's like, what do we want?
44:19
What are our highest values?
44:20
Like is it retiring when I'm 60 or is it keeping my teeth in my mouth?
44:25
Well, you want to live to 60.
44:26
That's right.
44:26
That's right.
44:29
But how do you want to get to 60?
44:30
Do you want to limp over the line or do you want to have vitality?
44:35
Vitality so I can enjoy the next 20 years of my 100%.
44:39
And I think this is like there's a payoff.
44:41
And I think we've said it all day today, when you pay take from somewhere, it's affecting something.
44:47
You know, you can't have it all.
44:48
It's always a trade off, always a trade off.
44:52
And then we just need to get and have those really good conversations with our partners.
44:57
And if you're not used to having those conversations with your partner, they are hard and they take time.
45:03
And the only, only way that they get better is if you keep slogging through them and having the courage to turn up to the conversations.
45:10
So I think today, keyword is communication.
45:14
OK, Communication.
45:16
That's it.
45:17
Communication.
45:18
Talking, talking about money.
45:21
Every action has a reaction, a reaction, a reaction.
45:25
Talk about this stuff and try different things, you know, like, yeah.
45:30
So in that case, and there's no perfect formula, you know there's not.
45:35
Yep.
45:35
There's no point hoarding all your money, taking it to the grave and just dumping it on your kids at the end of the day.
45:40
Don't do that.
45:41
Well, I don't.
45:43
Yeah.
45:44
Everything has an impact.
45:45
Yep, that's right.
45:46
Don't issue.
45:47
Mothers have the same values as you.
45:49
Yeah.
45:49
All the stuff.
45:50
Yeah.
45:50
Anyway, Well, good luck.
45:52
Thanks for listening to the end. We appreciate your company as always. And we'll see you next time.
46:03
At The Money Collective we provide financial wellbeing, premium coaching, mortgage broking and workplace financial wellbeing programs, which we couldn't do without the seamless support of our fabulous team. If you'd like to find out more, head to themoneycollective.com.au or our socials to take action and engage our services. In our Facebook group, join the conversation and help us break down the taboo around money. All content in this podcast is for educational purposes only and is general in nature. For tailored personal advice please seek out a professional.
This podcast provides general advice only. It does not take into account your objectives, financial situation or needs. Before acting on any information provided, you should consider the appropriateness of the information and the nature of the financial product in regards to your objectives, financial situation and needs. We recommend discussing your personal situation with a financial professional.
Podcast by:
MEL PEARCE & DARLENE NEU
Co-Founders, Financial Wellbeing Coaches and Mortgage Brokers
The Money Collective
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