Why we struggle to save money
Join me in a conversation. For anonymity I will call you Alex. Alex: (sipping coffee) You know, Tony, I’ve been trying to figure out why it feels so hard to save money. I mean, I have a decent income, but it feels like I’m constantly running in circles. Tony: (nodding) Trust me, you’re not alone. It’s not just about how much you earn—it’s how banks and companies have designed the system. Honestly, a lot of it comes down to how they profit from our lack of understanding and subconscious spending habits. Alex: (frowning) Lack of understanding? What do you mean? Tony: Think about it. Banks make most of their money through fees and interest. Overdraft fees, late payment penalties, credit card interest—those things add up. And who’s most likely to fall into that trap? People who don’t fully understand how money works or don’t have a solid financial strategy. Alex: (leaning in) Okay, but how do they get us? Tony: Marketing. Clever, psychological marketing. Ever notice how we are constantly bombarded with options of credit cards with rewards programs or offer “buy now, pay later” plans? They know the truth that most people won’t pay off their balance in full every month and those that do only ever do for a short period of time before they too find themselves carrying a balance, now stuck paying them interest—sometimes upwards of 20% or more. Alex: (surprised) Wow. So, they’re profiting off our bad habits? Tony: Exactly. And it goes deeper. Millions of dollars are continually spent by companies studying human behaviour. They know we’re emotional creatures. That’s why you see ads that make you feel like you deserve that new outfit or the latest gadget. They tap into our desire for instant gratification. Alex: (sighing) And then we swipe the card or sign another loan agreement without thinking about the long-term consequences. Tony: Yep. And banks count on that. I think the most subtle and expensive trap is how they rarely ever talk about how they will help you pay off your mortgage sooner they just hope the financial pressure you are feeling will cause you to make one of the most costly mistakes which is to refinance. They wave under your nose a lower interest rate. And most people take the bait when the interest rate has nothing to do with helping them get out of debt sooner. Alex: (thinking) And here I thought they were just being helpful. Tony: (laughs) They’re helping themselves, not you. The truth is, it’s a cycle. You spend without planning, end up with debt, and then feel stuck because the system keeps you there. Alex: So, how do we break free? Tony: First, awareness. Understand the game being played. Banks and businesses aren’t evil—they’re just doing what they’re designed to do: make a profit. But you don’t have to play their game. Alex: (curious) What’s the alternative? Tony: Learning to understand the system and manage your money smarter. Once you start doing this the right way, then tracking your expenses starts to pay off. Having a clear budget and plan goes past the numbers and actually starts to make a financial difference that you can benefit from. People I coach normally have the start of their emergency fund in place in a matter of weeks so they can become less reliant on credit when unexpected costs come up. Alex: (nodding) That makes sense. Tony: Also, be mindful of emotional spending. Before buying something, ask yourself: Do I really need this, or am I just trying to feel better about something? Alex: (smiling) Wow, Tony you should write a book or something. Tony: (grinning) Funny you say that. I did. Helping people like you understand this stuff makes a huge difference to their lives. Alex: This chat’s really got me thinking, I need to get a copy of your book and get out of this cycle I have been stuck in for far too long now. Tony: That’s a great starting step Alex, investing in yourself is one of the best investments you will ever make. Alex: Thanks, Tony. Tony: Anytime. Hey quick question, I noticed when you bought your coffee you waved your card over the terminal to pay, why did you do that? Alex: It just keeps life simple. Tony: So you know what we talked about? Habits and human behaviour. Did you know Covid had us start behaving that way, contactless payments we adopted out of the promotion of the benefits amidst a pandemic. And it made sense. But here’s the thing, in the beginning it didn’t cost you anything to pay this way. Alex: Oh yeah I’m aware we pay now, but it’s very little so for the convenience I don’t mind. Tony: Really? Have you stopped to calculate what it actually costs you? I’ve worked it out and the average person is paying close to $1,200 a year on these fees. That’s $100 a month you could get back starting today if the only change you made was to switch off payWave and start taking a moment to punch your pin number in instead. What’s could you do with an extra $1,200 a year? Enjoy the book, and you know how to find me if you want some help fast tracking your progress and understanding what other simple changes would benefit you personally. Alex: Thanks Tony, I’m starting to understand why your clients speak so highly of you. This short conversation has already made a huge difference. Check out my book here
Is refinancing my mortgage the best decision?
Refinancing your mortgage might seem like a great option but for many people it’s actually not. We all have those hindsight moments in life right, I will never forget that moment for a couple I met just after the GFC. Their hindsight moment was realising that the true cost for them from the previous two decisions to refinance was just shy of $600,000. It’s a costly mistake that anyone can make. This article covers some key questions to ask yourself before you head down the refinance decision so you can avoid costly mistakes and be confident in your choice whether that’s to refinance or stay with your current lender. Here’s five questions worth asking yourself when evaluating if refinancing is the best option for you.
Why won't the bank lend me money?
If I had a dollar for every time I have been asked this question I could probably be a bank myself. “I earn good money”, "I have a good deposit” and even “My mortgage payments would be less that what I pay in rent” are probably the most common statements people voice when they are asking me this question. And even though lenders may differ in their processes, they all have a requirement to meet their responsibilities under the ‘Responsible Lending Code’. So imagine yourself in this situation You are relaxing at home one Sunday evening when there’s a knock on the door. Upon opening the door, you are greeted by...