Indigenous Woman, Hear Me Roar!

Hi Scott,

I am a young professional Aboriginal woman from Cape York. In the past I made some foolish investments, but a few years ago I picked up your book. I loved it, though I struggled to get my hubby to read it. So I played him your audio-book in the car. He was so excited, given how easy it is to follow. 

Long story short — we are now on our way to financial freedom! We no longer have credit cards or a car loan, we have refinanced our mortgage, and our renters are paying our mortgage off for us. We also have a joint account and have started our little guy on the jam jars. I would love you to do a ‘Barefoot Walkabout Tour’ once COVID is out of the way. 

Tania

Hi Tania,

This makes me so happy. Well done!

We have a shameful history of finance companies ripping off Indigenous communities (especially when it comes to funeral insurance). One not-for-profit group that is making a huge difference in this area is MoneyMob Talkabout, who employ Aboriginal elders to teach financial education in remote communities. Check them out at moneymob.org.au.

The true story of two alpacas

I picked a tough time to change careers:

Last year I went back to study so I could become a community-based financial counsellor.

In January I was sent off to help survivors on the bushfire frontlines. It was the hardest thing I’ve ever done.

Then came corona.

Right now I find myself on the financial frontlines as a counsellor.

Let me tell you a couple of things I’ve learned from sitting across the table from people who are financially broken:

The first hour of the meeting is often a write-off. 

The client will tentatively sit down … and then verbally vomit at me. Nothing makes sense.

That’s because they’re consumed by fear. They’re ashamed about their situation. They feel out of control.

Understand this: no one makes good financial decisions when they’re in a state of fear.

No one.

And, right now, a lot of people are consumed by fear. I can see it in the thousands of emails I’m getting each week.

They stay up late ‘doom scrolling’, which makes them worry about getting sick … and dying.

Or they worry that the economy is going into a recession ... or a depression.

Will we be shut down till June? Or Christmas?

Fear is debilitating. It freezes you up, and shuts you down.

So what’s the antidote?

You need to take action ... alpaca style.

Let me explain (it’s kind of weird):

A few years ago we inherited two alpacas, whose job it is to protect our lambs from foxes.

They’re surly buggers … they’re basically camels without humps, and as aggro as Alan Jones.

When the bushfire came through our farm and burnt most of their flock, a ranger turned up the next day with a gun to finish off the wounded sheep.

The alpacas were wounded themselves. Their burnt hoofs made it hard for them to stand.

But they did.

They shielded their sheep. They stared down the barrel of a gun … and charged at the freaked out ranger.

No one was messing with their flock!

And in a time of crisis, when you’ve lost your income, you need to do the same.

Every dollar you get should go first into protecting your flock:

You put food on the table.

You keep the lights, heating and internet on.

And you keep a roof over your head.

These are non-negotiables. 

If you have money left over you can make repayments on other debts, but these are your priorities.

Here’s how you do it:

First, work out how much your basic needs (above) realistically cost each week. Write down the figure.

Second, go through your bank statements and cancel your direct debits and other non-essential payments.

Third, email your creditors, explain your situation, and request a payment extension.

You won’t solve everything quickly, and you shouldn’t expect to. That’ll come later.

Right now, your only job is to protect your flock.

Tread Your Own Path!

I Lost My Job This Week, But I Got This

Hi Scott,

I wanted to get in touch with you to say thank you. I lost my job this week. Previously this would have been a devastating blow for our finances. However, thanks to reading your book three years ago, my husband and I are now in a very strong financial position. We have paid our mortgage down by half, and we have a good amount of Mojo in the bank. Now we are able to focus on our kids in this scary time. Thank you!

Jill

Hi Jill,

What a strong position you’ve put yourself in. Congratulations!

You’ve also made a really important point about focusing on your kids.

Don’t think your kids aren’t watching you very closely.

Generational attitudes to money are being forged around the family dinner table right now.

So let them know you’re in a decent financial situation because you sacrificed in the good times.Drill it into them.

You’re sorted, Jill, but what about all the parents reading this now who are really stressed about their financial situation. What should they do?

Well, some parents will try to shelter their kids from the financial reality of this situation.

Yet kids are smart: they pick up on what’s going on.It’s okay to be worried. Just channel that fear into something that will serve your kids, like saying to yourself: “Things may be tough now, but we’ll get through it. And never again will this family be financially vulnerable. It starts today.”

You got this!

Scott

Dirtbag Roommate

Hi Scott, 

My housemate and I are both on the lease and we split the rent 50/50, paying separately. I am always on time, but my housemate is lousy at keeping up regular rental payments. So, every eight weeks or so, we get an email from the estate agent reminding us to pay. It is not fair. I am fastidiously going through my “Barefoot Steps” — saving to pay off my car loan and build up a house deposit. But I worry what damage my housemate’s bad rental history will do to my ability to get a home loan in the next couple of years. What do you think?

Lisa

Hi Lisa,

Well that sucks.

But it’s also a rite of passage: we’ve all had a dirtbag roommate at one time or another (or been the dirtbag!).

Will being late on your rent affect your ability to get a home loan? Unlikely.

For that to happen, your rental manager will have to be registered with a credit reporting agency, and they’re generally not.

Will it affect your mental health to live with someone who doesn’t share the same values as you? Absolutely.

So, in the first instance, I’d suggest looking into bill-splitting apps like easyshare or Splitr, and let the tech do the money-crunching and send gentle reminders. I’d also look at creating written rules around bill payments and household chores … and (if all else fails) moving out!

Scott

Tired of earning less than 3% on your money?

I’ve got an old bloke who comes out and services my tractor.

Mostly we talk about hydraulics, but the other day he rifled through his overalls and pulled out an ad he’d ripped from a newspaper. Then he handed it to me with his grease-stained hands.

The ad was from an outfit called “IPO Wealth”, whose tagline is: “Are you tired of earning less than 3 per cent p.a. on your idle money?”

“They’re paying 5.3 per cent for a 12-month term deposit,” my mechanic mate said.

(It turns out he’s an old cocky who has the proceeds from the sale of his farm invested in low-earning term deposits, which is enough to qualify him as a “high net worth investor” suitable to invest with IPO Wealth.)

I studied the ad, which had a picture of a Great Dane towering over a hairless chihuahua.

“What do you think?” he asked.

“I think you’re the chihuahua!” I laughed.

He did not.

“But it’s a term deposit … so it’s safe, right?” he said tentatively.

“Well, that depends,” I replied. “Where will they invest your money?”

He shrugged his shoulders. I shrugged my shoulders.

Then he snatched the paper back from me, stuffed it in his overalls and turned back to the tractor.

Awkward.

So later that night I did some research.

It’s clear that IPO Wealth is marketing its product as an alternative to term deposits.

“The fund is considered by our investors as an attractive alternative to term-based investments, investment property and stock market investments”, their website says.

And it’s clear they’ve spent a shedload of money on advertising, including creating infomercials with appealing retired women talking about their investments with IPO Wealth.

And it’s also clear it’s working: IPO Wealth says it has taken $100 million in deposits in the past two years.

So where is all that money invested?

Well, it’s hard to tell. The fund lends depositors’ money on to a related party, a privately held investment group called Mayfair 101.

Mayfair 101 says its policy is “not to publish a list of its entire investment holdings as many of these assets are private companies”.

Bugger that!

So I got on the phone and spoke to them directly, and they confirmed that Mayfair 101 has spent $31.5 million buying Dunk Island (an island south of Cairns that was wiped out by Cyclone Yasi in 2011) and has also invested in various cryptocurrency-related companies, a food app, and a host of other investments across 11 countries.

My old mechanic mate clearly didn’t understand that this was not a traditional bank term deposit (which would be covered by the government’s bank deposit guarantee if something goes wrong).

Yet I totally understand his frustration: with interest rates at all-time lows, it’s bloody hard for retirees trying to live off their interest.

My worry is that income-poor retirees could be sold a pup:

They may believe they’ve got a Great Dane guarding their money … only to find out later it’s a hairless little chihuahua.

Tread Your Own Path!

You’re a Shocker, Barefoot (Part 2)

Scott,

Your article ‘Prisoner’s Last Chance’, about the prisoner coming into a six-figure sum of money, is the most disrespectful article I have ever read. You tell the guy “good on you for learning how to manage your money” and give him advice on how to invest, then gloat about how you donated your books to prisoners. How shallow are you?

What about telling him to clear his conscience and pay back the money he probably stole from victims, or compensate those he has offended against. Come on! I’m disgusted in you not telling him to give his six-figure sum to victims he most likely never had the mind to compensate.

I challenge you to say in one of your articles that you offered wrong advice on this matter and should have told the person in prison to compensate those he did wrong by. Bet you won’t.

Ricky

Hi Ricky,

I bet I won’t either, cobber!

It sounds like you (or someone you love) has been wronged by someone, and you’re still bitter and beat-up about it. Here’s how the prisoner described his situation:

“I have spent most of my life in institutions, from boys’ homes to jails (I’m 59). My goal is to have enough money to buy my own home before I die, with no debt and maybe some savings. After all, isn’t that every man’s dream?”

Now, here’s my thinking:

I don’t know what crimes he did … and neither do you.

Though I do know one thing: after doing their time, everyone deserves a chance to put their lives right.

And if he can achieve financial security, he’s more likely to stay straight and not end up back in the clink.

That’ll potentially save the taxpayer the $110,000 a year it costs to keep a prisoner locked up.

That’ll also help keep the community safe.

And it may just give this bloke some peace after a lifetime of pain.

Scott

Shaken, Not Stirred

Hi Barefoot,

I just wanted to drop you a line from the comfy living room of my first property. If you’d told me two-and-a-half years ago that I’d own this place today, I would have dropped the dirty martini in my hand! At $25 a pop, those drinks (which I had regularly) didn’t come cheap, but they sure numbed the fact that as a single, 35-year-old woman I would never own my own home! Or so I thought.My father got fed up with my bleak outlook, so he gifted me your book for Christmas 2016. To say it changed my life is an understatement. The best thing about the book is its foolproof nature ‒ no knowledge of money required. All I had to do was follow a few simple instructions, check in on my savings from time to time, and eventually I had a property deposit!Not only this, your book has taught me to be self-reliant, to take responsibility for my life, and has given me confidence about my future. I even gave up booze along the way ‒ a great move if you ever want to see money pile up at warp speed. If you’d met me in 2016, I’d have told you (probably slurring) that I was terrible with money. Your book has since taught me that ANYONE can be good with money.

Thank you.

Leah

Hi Leah,

Yes, I seem to have a booze theme this week. Well bugger it, let’s run with it:

In many parts of the country, property prices are staggering around like a drunk at closing time. However, the real opportunity for first home buyers will come in the next few years when the debt hangover really kicks in. Mark my words, this is a genuine opportunity for first home buyers ... but only those who have been soberly saving.

Congratulations on your success, Leah. You should feel proud. You Got This!

Scott

The Alcohol Experiment

Hi Scott,

Last week you answered a question from Jane (“I am NOT an Alcoholic”), who was clearly struggling with alcohol.For people who are after help with stopping/reducing alcohol intake (not physiological-addiction-level alcoholics), I strongly recommend the book The Alcohol Experiment by Annie Grace. It helps you to do 30 days alcohol free, to start.I drink a moderate amount, and after one or two always hanker for another, but after reading the first chapter of this book I found it easy to give myself a decent amount of time completely off booze. It changes your relationship with alcohol, including challenging why you drink, in much the same way that you ‒ as the Barefoot Investor ‒ change people’s relationship with money, including what they spend (on ‘postcode povvo’ houses and fancy cars!)

Simon

Hi Simon,

I LOVE my community.

They’re always sending me fascinating stuff that I’ve never heard of this before, like this book.

Now of course I don’t have a problem with alcohol.

Then again, on Tuesday night I caught up with an old mate (one beer), on Thursday I went to dinner with another mate (two beers), and on Friday around 20 of us went to the comedy festival to celebrate a friend’s opening night and, given we all had babysitters, we had (many) drinks afterwards.Hmmm.Anyway, I read the The Alcohol Experiment and it’s a cracking book that really opened my eyes (and I can understand why it’s getting so many rave reviews across the internet).And if you give up the grog, amazing things can happen, like Leah found out.

Scott

How a Financial Advisor Can Make You a Millionaire

Hi Scott,

My daughter is a hardworking 22-year-old who lives in a share house. She is struggling with her living expenses.

(I pay for her weekly grocery shop, and she feels bad about it). She earns $3,068.32 after tax each month.

Here are her monthly expenses:

Rent $760
Financial advisor $190
Savings $400
Share portfolio $250
Insurance $58
Super $100

She feels grateful that her financial advisor has enabled her to do all this. Is there anything she could be doing differently?

Maria

Hi Maria,

The monthly expenses you’ve listed come to $1,758, which means your daughter has $327 a week to spend on food, booze, bills and transport. That’s doable. (I lived on less when I was 22, though admittedly I drank a lot of homebrew, ate spag bol most nights, and drove a 1966 XP Falcon that mostly ran on potato skins.)

Having said that, she needs to eat without resorting to dumpster diving. I’d suggest she looks at scaling back her saving for the moment rather than relying on you (of course a ‘care package’ from Mum now and then never hurt anyone).

Other than that, your daughter is an absolute bloody legend.Let me paint you a picture:

Let’s say she invests that $250 a month into the share market, from age 20 to 30 (starting from zero and assuming an 8% return) could grow to $43,460.

Then, at age 30, she stops saving, leaves the investments to grow, and never puts in another dollar.By the time she’s 65, that $43,460 will have grown to $642,571.

Noice … but let’s not stop there ‒ let’s make her a millionaire!

I’d suggest your daughter meets with her financial advisor ‒ who has done a terrific job setting her up ‒ and get her to have an awkward conversation with the advisor.

Play him Bette Midler if you want, and assure him ‘you’ll always be the wind beneath my wings ... but I ain’t paying you a monthly retainer anymore’. Then, she adds the $190 a month she’s paying to the advisor, and add it to her low-cost index fund.

If she does, her end balance will be boosted to $1,001,130.

Scott

I am NOT an Alcoholic

Scott,

I currently spend about $100 a week on alcohol ‒ it is pure habit and l love the taste too. I am not an alcoholic, but I do need some incentive to drop the habit, like a financial goal! What else could I be doing with that $100 that will give me the kick l need to replace booze with something more intoxicating?

Jane

Hi Jane,

I’m good, but I’m not that good.

There is nothing I can do with my trusty old Casio calculator that will beat the buzz you’re currently getting from boozing it up. (Case in point: on the form you submitted to ask your question on the Barefoot Investor website, there’s a box that says ‘Summarise your financial situation in one word’. You answered: ‘Tipsy’.)

At Barefoot, we talk a lot about having an Alpaca Attitude. It’s named after my two headstrong alpacas ‒ Pedro and Alberto ‒ who will spit, kick and stomp on anyone who tries to mess with their flock. In that regard, getting on top of your money isn’t that dissimilar to losing weight (see, I’m still hanging on to the Barefoot Bikini Challenge):

We all know what to do, but you need to come up with the why for you.

Scott

How a Barefooter lost 97 kilos, and saved fifteen grand in 18 months

I’ve decided to make a move into a new industry: health and fitness.

(I’ve even come up with a catchy name for my program: ‘The Barefoot Bikini Challenge’.)

Why am I so excited?

Well, I just read the following email from Claire, who has given me one of my most inspirational book testimonials yet.

Here it is:

“Hi Scott,“My fiancé and I started ‘going Barefoot’ in November 2017.

“At the time, we were living paycheque to paycheque at my in-laws’ house. I was also battling some demons in regard to my physical health, being obese at 170kg.

“Fast forward to now ‒ 18 months later ‒ and we have achieved the following:

• Paid for gastric sleeve surgery out of our own pocket ($5,000)

• Gone to America for three weeks

• Paid off one of our credit card debts ($3,000)

• Moved into our own property and bought brand-new furniture and appliances

• Paid for multiple things for our wedding using savings and not credit

• And ... still managed to save $15,000.

“What’s more, I have lost 96kg, which has eradicated my physical health problems. I have included photos from before and after starting Barefoot, because without your advice I don’t think I would have been able to have this surgery and achieve so much in such a short period of time!

Thank you,Claire”

Holy Guacamole!

96 kilos?

So, how did Claire nail the two biggest goals most people have (fitness and finances) in one hit, and so quickly?Well, it had nothing to do with fad diets or get-rich-quick schemes … which never work out in the long run.

And she certainly wasn’t spurred into action by continually beating herself up about her situation.

This reminds me of a book that legendary financial columnist John Beveridge wrote called Invest or Die.

Full. On.

Truth be told, my book has roughly the same stuff in it (just with less death threats and more date nights).

And the Barefoot approach worked for Claire:

She created rituals, like going to the pub for Barefoot date night. And while she was there she automated her finances so she didn’t have to rely on her willpower … or even think about her finances after it was set up. And the process of continual wins built up her confidence, little by little.

The outcome is that she’s not only changed her life, she’s saved her life.

Tread Your Own Path!

The Best Thing I Ever Saved For

Dear Mr Pape,

I bought your book while in severe financial difficulty — I actually had to save money for six weeks just to buy it! Anyway, I am 10 months in and will never look back, having managed to pay off $25,574.23 worth of debt. I still have a fair way to go, but I am churning through it. Thanks heaps!

Callum

Hi Callum,

Dude, you could have loaned it from the library!

What I love about your email (okay, testimonial), is how detailed you are with your digits:

You haven’t just paid back ‘twenty five grand’, you’ve calculated it down to the cent!

A report this week by NAB found that 20% of Aussies said they don’t have even a cracker saved up.

Don’t let that be you.

If you’re following my plan, you should have nailed the first step: open your separate Mojo account, with an initial $2000 deposit. And if you don’t have a spare $2000, look around your house and see what you can flog on Gumtree.

Scott

Does Renting Now Make Sense?

Hi Scott,

I would like your thoughts on something that is bothering me. Forecasters think that house prices are set to fall at least 5% over the next year. If you buy a million-dollar house now, in a year you will have paid 4% stamp duty upfront and 4% interest in servicing -- and suffered a 5% drop in value. That’s 13% gone, wiping out over half of a 20% deposit! Isn’t renting at a 3% to 4% yield better? Should there be a ‘Barefoot Warning’ that rent money sometimes is not wasted?

Dee

Hi Dee,

My warnings for first home buyers aren’t about falling property prices, but rising interest rates.I devoted an entire chapter to it in my book: it’s called ‘The Curious Case of the Postcode Povvos’ … first home buyers who live in cafe suburbs … but can’t afford a coffee because they’re a slave to their mortgage.

In that regard, I totally agree that rent money is not dead money if you can’t afford to comfortably service a mortgage and have a commonsense buffer for higher interest rates (which will come at some stage in the next decade).

My view?

With falling prices, there is absolutely no rush to buy your first home. Yet don’t get paralysis by analysis. You’ll pay stamp duty and interest whenever you decide to buy. So, once you find a home you love, that you can afford, and that you will live in for at least a decade, buy it.

Scott

19-Year-Old Girl Wins the Lottery

Hi Scott,

I am 19 and was given your book last Christmas. I am not the greatest saver — I like to splurge a little too often. Yet a year after reading the book I have over $16,000 in savings, $4,000 of which is in shares. Recently I did my tax return and the accountant was asking how a 19-year-old girl seems to have it so together. I explained that she could buy your book for $29.95 (or less at Big W), and while she was doing my tax return I drew your ‘serviette strategy’ on the back of an invoice sheet. She looked at me in amazement the entire time, even though I was basically regurgitating everything you had explained. It was an awesome feeling. So I wanted to say thank you — you have given me a $29.95 lottery ticket that has earned me thousands!

Zoe

Hi Zoe,

I’m punching the air as I’m reading this.

Most people leave school believing they have no idea about money, and then they prove it to themselves.

Not you!

I guarantee your accountant was thinking, “Why wasn’t I this sorted out when I was 19?”

(As are everyone reading this right now.)

Well done. You got this!

Scott

The Second Chance

Hi Scott,

I was so excited when I read last week that you donated some of your books to a father doing time in Bathurst Correctional Complex. I just wanted to say thank you. Having someone in your position say “everyone deserves a second chance … and many people inside are parents” means a lot.I work for a non-profit volunteer group called Second Chances SA. We work with prisoners, their children and their families to help them create a better future for themselves. It’s not easy, but it’s just so important for the kids. They’re the innocent victims of their parents’ crimes. It’s not their fault!

Helen

G’day Helen,

You’re in luck.At the beginning of my new book I make what I call ‘The Barefoot Pledge’.

It was inspired by my old man. When I told him I was writing another book he said: “Just make sure you don’t become a wanker. Look after the battlers, son.”

So for every 10 copies of the book that I sell, I’m pledging to donate one copy to a parent in hardship.

And having a parent in the clink would certainly be bloody hard, so I’m going to send you through some books.

Thanks for the hard work you do.

Scott

A Total Disaster

Hi Scott

I am a 50-year-old widow with an eight-year-old. After nursing my partner through cancer (he lost his battle on Boxing Day), I have just refinanced my house to consolidate some credit card debt. I have also borrowed an additional $100,000 to invest. My financial planner suggested this as a way of getting my mortgage down. Now I am starting to panic about maybe doing the wrong thing, but I don't see any other way of reducing my debt quickly and setting myself up for retirement. I am really nervous.

Rachel

Hi Rachel,

I’m really sorry for your loss.

Now I don’t know your personal situation, only what you’ve written. So, like everything I write, this is general advice from a guy who doesn’t have a vested interest in flogging you anything.

I’ve had the privilege of working with many widows over the years, and if I was sitting across from you there is absolutely no way I’d advise you to borrow $100k to invest.

Why?

Because your partner just died, and you have a young child. This is not the year to be making major financial decisions. It’s the year to hold on and grieve.

Yet I totally get that you’re clutching for security when your life has been turned upside down.

However, this isn’t the way to do it. The truth is that debt always makes life more complicated. It always makes life more stressful. And heaping on more stress right now is the last thing you need.

You have 20 years (or so) before you retire ‒ so there’s no need to panic. Amazing things can happen when you work diligently towards a commonsense goal, but the first thing to focus on is getting yourself right.

Scott

The Billionaire

Dear Mr Pape,

My name is Lachlan, I am 16 years old, and I live on the Gold Coast.I have a keen interest in finance and economics, and through my part-time job I have been able to build a share portfolio worth $3,000, on top of $2,000 in savings. I would like some help on how to best manage my funds as I look to achieve my one life goal: to reach a net worth of $1 billion.I have thought about joining a super fund, but that idea has continuously fizzled out because I am sure I will never need it. If you could provide me with some information about how best I should go organising my finances, it would be greatly appreciated.

Lachlan

Hi Lachlan

Look, I like ambition as much as Malcolm Turnbull ... but your one life goal is to become a billionaire?

Just 0.00002% of the global population are billionaires. I fear you’re painting yourself into a corner, cobber!

Anyway, let’s hear from one of them, Bill Gates: “I can understand wanting to have millions of dollars, there’s a certain freedom, meaningful freedom, that comes with that. But once you get much beyond that, I have to tell you, it’s the same hamburger.”

He’s right.

Being a billionaire won’t make you a thousand times happier than being a millionaire. As Bill says, you can achieve the lifestyle and the freedom you want with a few million bucks ‒ which is still ambitious but, with enough time and the right plan, is achievable.

So your first goal ‒ your only goal ‒ is not to strive for some pie-in-the-sky figure you think will make you happy.

Rather, it’s to focus on finding something that is guaranteed to make you happy.

How do you do that?

My friend Arun Abey, a wealthy man himself, has a strategy he calls ‘the three circles’.

It involves asking yourself three questions:

What am I deeply passionate about?

How can I work, over many years, to become truly great at it?

And, finally, how can I make enough money from doing it?

Fulfilment is found at the intersection of these three circles.

One last thing: you should keep this article and re-read it in 40 years’ time.

Scott

Proud, Angry, Happy!

A couple of day ago I finished reading your book, and immediately phoned my bank (Suncorp). My husband and I have had our home loan with them for close to 10 years. I told them I was currently paying 5.02% and would like them to reduce the rate. The woman I spoke to said the bank would review it, and after a few minutes on hold she came back and said my new rate was 4.02%. I must admit I had a little cry — not sure why … proud … angry … happy! I will be phoning them every six months from now on. (I have also bought three more copies of your book and given them to my nieces.)

Melanie

Hi Melanie,

Let me channel my inner Oprah: You go, girl!

Even better, like ‘O’ I can give you the equivalent of a free car:

If you’ve got a $300,000 mortgage, with 15 years left on the clock, that five-minute telephone call has saved you $27,618. A few taps on the MoneySmart mortgage switch calculator suggests that, if you maintain the same minimum repayments as your current loan, you’ll save $36,908 over the life of your loan and be debt free 15 months earlier!

Thank-you for reading

Scott

I Am Never Looking Back

Dear Scott,

Six years ago I left my ex, due to him punching me. It was the right thing to do, but it certainly set me back financially. That is why I have found your book so amazing. I already feel much better about my situation. I have my new fee-free accounts set up with better interest rates, have been on the phone to my super, and have split my money into ‘buckets’. This is the start of financial control, for my sake and my children’s. While I still feel anxious ‒ as a single parent with a mortgage and $8,000 of debt (personal loan and credit card) ‒ I feel more in control, and I know I’ve got this! I am never looking back.

Tanya

Hi Tanya,

What you’ve done is taught your kids two amazing life lessons.

First, that domestic violence is not acceptable.

Second, that you are strong enough to stand on your own two feet financially.

Thank-you for reading,

Scott

Can I Afford to Become a Mum?

Hi Scott,

My husband wants us to have a baby, but I am petrified at the thought of not earning money. How far backwards would we go if I can work only a couple of days a week, and/or have to pay daycare fees so I can work? Hubby runs his own business earning around $120,000 a year, and has two small business loans for equipment. His income varies month-to-month, so it is my wage ($57,000) that gives us the steady money. We have no loans other than our mortgage, and have Mojo tucked away. But can we afford a baby? Please tell me it’s going to be OK!

Hannah

Hi Hannah,

It’s going to be OK.

(Well, so long as you haven’t gone all ‘postcode povvo’ and got a supersized mortgage.)

I’ve spent my entire married life as a small business owner, so I have some ideas.

First, you are very much a part-owner in the business, so you need to be across the numbers, even if that means sitting down with the family accountant and having them explain the current state of the business to you. Fact is, you’re going to be relying on this business to take care of your family, so you need to know it inside out.

Second, the benefit of understanding the true state of the business isn’t just that you’ll stress less, but that the two of you should be able to set some realistic 12-month business goals, both in terms of lowering costs and increasing income. Write them down, and review them at least quarterly.

I actually do this with my wife on our Date Nights. At the start she was more ‘nah’ than ‘yeah’, but after seven years of being my partner in the business she’s shown insights I would never have had. Plus she’s actually way more hard-nosed than me when it comes to negotiating deals.

Finally, I’d go out on a Barefoot Date Night and sketch out your buckets – Daily Expenses (60%), Splurge (10%), Smile (10%) and Fire Extinguisher (20%) – and base it only on a conservative estimate of your husband’s income from his business.

If the numbers stack up, it’s time to become a mum!

Scott