Building Your Snowball

So my name is Jordan Vaka. I'm an independent financial planner with The Advice Gallery. And we're running this series of webinars to help people build the fundamentals and the foundations of a really solid financial life. We’re big believers here at the advice gallery that controlling the basics and getting them in place is going to put you on a really good path towards financial independence and financial strength. So that's why we're doing this. This is our money management series. We’re coming to the end of this series, the next batch of webinars will be around insurances that we want more, we want more technical, a lot more explanatory of the different types of insurance that are out there. And then from there, we'll move into I think it's Superannuation, and then investments as well. So there's a fair bit of ground to cover, we are scheduled through till the end of the year. So there'll be plenty of these kinds of discussions coming on.

These webinars are also being saved and uploaded to our YouTube channel. And clips are being released via our social channels, which are our Facebook, LinkedIn, I think there might be some Instagram as well. So we're trying to get the message out there. And they are always all free.

So let's hop into the presentation itself. Bear with me while we go running. And I do encourage you that if there's any questions along the way, just shout out. And today we are talking about building your snowball, more specifically around the debt snowball method of reducing your overall debt position.

So a few disclaimers, the usual ones, don't take anything that we're going to cover today, as advice specific to your circumstances. Be sure to get independent financial advice around anything here before you make any changes. I don't know your circumstances. So some of this might be dreadful advice for you. And finally, everything has been recorded as well. So we will be sharing this online.

So let's start with the concept of the snowball. Now we don't have a lot of snow here in Australia, particularly not in Melbourne, given last weekend we've just had, but Snowball is the idea is that you start with a tiny a little ball at the top of a hill and you push it down the slope. And as it rolls and gathers more snow, it increases in size, increases in mass and increases in momentum until eventually by the bottom of the slope, it is rolling along at a rapid pace with its own momentum and force behind it. And it starts making real progress. And the reason this is such a good analogy, when it comes to debt repayments, we'll walk through the specifics of the process here. But the idea here is that it starts slow, like anything worth doing, it takes quite a while to get a bit of movement going. But then after a while the momentum starts to kick in. And you start to see some really big significant victories in terms of repaying that debt. So I spoke a little bit earlier that this series is starting with the fundamentals of finance. And another way of looking at them is the jigsaw pieces. So if you think about your financial life as a great big jigsaw puzzle, we're all trying to assemble the pieces into a picture that works for us. And I know when I started jigsaw, I had the greatest success when I actually start out with the edges. So I think of these fundamental aspects of financial kind of literacy as some of those edge pieces in a jigsaw. So we'll talk about the financial freedom pyramid, we've talked about Dave Ramsey's five basics, or sorry, six baby steps, we've talked about the five basics of money management. We've talked about the three buckets in our last webinar of allocating your money. Today, we're covering the Debt Snowball, and then we will start looking into savings ratios and the power of compounding in future webinars.

So we're talking about the debt snowball, it's a really good idea to start with, what actually is this that we're talking about. So if we start with the presumption that you are looking to repay your debts and clear the amount of debt you have behind you, this is one method that you can use that is being designed to give you the greatest chance of success. So what it is, is that you concentrate your efforts on paying down your smallest debt first, and we will be working through a case study around this shortly. But you clear that smallest debt first, it might be a $95 parking ticket, it might be a $300 speeding fine, whatever it is, you pick the smallest debt first, you pay that off. Once that's paid off, you take the amount you're contributing towards that on a regular basis and roll it into the next smallest debt and onwards and onwards and onwards.

Now mathematically, this is not the most optimal option, and we'll talk about that a little bit later as well. But what this does do is it takes a bit of a behavioral habit, but people have that the frequency of small wins along the way by clearing the smaller debts early helps you maintain the motivation. Motivation is notorious for kind of fading away fairly quickly. And again, most of you might get 15 to 20 days of real motivation around a big change you're looking to make particularly with debt repayment, because we are talking about sacrifice to clear these debts. So to maintain that kind of sacrifice, you need to maintain a level of motivation and that motivation, if it's just internal, if it's just, I'm going to do this, I'm going to make sure I take care of all of this that fades away really quickly. What this method does is it utilizes that uptick of motivation you get from having these small wins to keep driving you forward to the next when it's pretty close to sort of gamification, if you're familiar with that the way some products are being designed. So it's about taking that satisfaction that small dopamine hit and linear roll that on to the next step.

So a big question, I guess, is why would you bother doing this? Everybody has debt. Debt has a function in everybody's life. Why would you bother clearing it quicker? Why would you bother using this particular method. So I'm a financial advisor. I'm speaking currently in the offices of The Loan Gallery, their finance broking option. And it may sound a little bit strange, but I know all of us are all in agreement here that debt limits options, that debt is a fantastic leverage tool to help you achieve things you want to achieve. It is a completely necessary part of personal finance. But ultimately, it limits options. And that's when we start talking about there being good and bad debt, I get it, there's good and bad debt. But any debt whatsoever limits your options. Now, the distinction for me between good and bad debt is good debt is limiting your options so that you can do something that is in line with your values that you really want to achieve. So a classic example here is mortgage. Yeah, buying a house using a mortgage limits your options. But the upside of doing that is so far beyond those limitations, that is well worth doing. On the other side, bad debt might be something like buying a jet ski on a credit card. That'd be fun, fantastic. But in the long run, it's not really in line with the life people may be wanting to build. And as limiting options because those debts have to be repaid that jet ski has to be paid off. So that money that's going towards that short term, indulgence, let's call it, is now limiting your options of what you can do with that money.

So all debt limits options, it's just in some ways, that's a good thing. And in other ways, it's a bad thing. But regardless, we want to have a plan in place to help you manage the debt that you have, so that you can start getting it paid off faster, because if you pay off the debt faster, it reopens those doors back into who controls actual money. It takes control of your financial future and puts it where it belongs, which is in your hands, not a bank's hands on a credit card company hands down to the payday lenders hands or anything like that, I believe and the team here at Advice Gallery and Loan Gallery believe that you should be the one that's in control of your financial destiny. So by having a committed plan to repay the debts that you have, you are each month taking back control of your own financial position. The issue is though that paying advisor minimum repayments can deliberately take ages. I mean, if you've ever had a credit card statement, they have a breakdown. Now I think they're legally required to show you to clear the debt in two years, you need to pay X. But if you pay the minimum, that's fine. And it'll just take like 38 years to clear the debt at the current interest rate. Now, obviously, the lender wants that to happen, they make more money doing that. So being conscious of repaying, just the minimum is going probably keep you treading water more than anything else. So this Snowball Method, and it's alternative cousin, the Debt Avalanche Method is really a way to take back that narrative and take back control and helps you drive that timeline of getting the debt repaid. And then be also really intentional with your money, which if any of you have joined us on any of these previous webinars, we'll know that it's a big factor for me, for people when we're advising them, be intentional about your money, almost to the point where I don't really care what you do with your money. But do it deliberately. Don't do it on autopilot, and don't do it by default, be really clear and intentional with your money.

So all that being said, let's look back to what you actually need to do to set up this debt snowball. And I will just actually pop back over the team's call just to make sure that we don't have anybody waiting. Good and lack of chat or questions I'm going to take to mean that the sound is working. So that's good.

So before you start out on this debt snowball, you can kind of really just pick it up and say I can Monday I'm going to start doing this you need to be prepared and committed beforehand. The first one might sound pretty obvious, but you really do need to be committed to eliminating your debt. And you're genuinely committed to not passing new year's resolution kind of passing phase I'll clear that credit card.

Clearing debt early takes commitment, it takes sacrifice, and it takes effort. It's going to take you saying no to things. Which if you have a history of personal debt, sometimes that has come about because we don't like saying no, we don't like missing out being committed declaring that it is most likely going to require you're saying no to some things missing out on some things and saying in sometimes. So you need to make the snowball work. You really need to be committed to that goal. Leading into that is you also really, you need to avoid taking out any new debt. Taking out a new loan, even a consolidation loan or anything like that subject to getting advice from a broker or an advisor doesn't really fit in with the Debt Snowball Method, because all you're really doing then is consolidating smaller loans into one big repayment. And you're depriving yourself of that, that dopamine hit that we're chasing by achieving the repayment of the smaller loans early. So if you had five loans that were small, small, small, small, and then my big one, for you, then combined all the small ones into one big loan, all you're going to really be doing is smashing those payments.

Now, may you get it paid down quicker, maybe it's hard to say, but will you feel as good by achieving those things along the way, I doubt it, it's going to feel like a bit of a millstone. The other one is just some fundamental research know your balances and interest rates that apply to your different debts. So most people will know now that credit cards are the highest rate of interest, generally, you can pay unless you're getting your money at the back of a laneway from somebody with more tattoos and motorbikes. But I can’t avoid that kind of option.

So, credit cards are generally going to be your highest rate of interest, then personal loans, maybe business loans, different bank loans and your mortgage. Now, I should make a note here that what we're really talking about is kind of non-mortgage debt. Paying down your mortgage quickly is a fantastic aspiration but not really something you're likely to do in the next three to four years. What we want to do instead is use this method to clear the other personal debt that you have to free up that cash flow. So you can put that cash flow to better use. Now the better use may be clearing your mortgage early, which is fantastic in need of earning more money down that path, it might be investing, maybe rolling into another investment property or generating an investment portfolio, it might be Superannuation, or it also might be lifestyle. You know, if you've freed up this money from the repayments of loans, there's nothing to say you can allocate part, or even all of that money towards more enjoyable things, paying for holidays, cash up front, taking time off work, spending time with your family, like all of those things can be done. Now, because you've freed up this obligation that's sucking money out of your budget every month. This is the big one. So in order for the snowball to work, you do really need to have the capacity to make extra repayments against the debts. The strategy hinges on maintaining minimum repayments across all the loans, plus having an extra amount of money to put towards the loan, the smallest loan.

Now, this is a lot easier said than done. I'm very conscious of that. Because for a lot of people across Australia, budgets are compressed. We are feeling that cost-of-living crunch that we keep hearing about. So I may come across glib in this next section. But I would say it is important to try to increase the income that you're earning and minimize your expenses if you can, we're trying to create a gap between what you're taking home each month in terms of pay and what you're spending each month in terms of expenses. Most people with those numbers are very, very close together. So what we're trying to do is just shoehorn a little bit of a gap between them. And you know, it might be all the typical tips, flogging some stuff on marketplace, asking for a pay rise. Having a mortgage refinance, trimming expenses where you can by maybe cutting off one of the subscriptions services a lot suck.

Normally, I'm not really a huge fan of making 20 to $30 sacrifices in a monthly budget because it doesn't really move the needle for the big picture that we're talking about. This is an exception, even 20 to $30 extra per month, if you can dedicate that entire amount against your debt position will improve your financial future significantly. Now, that may mean that you clear your debts three months early, clearing your debts three months early can translate into starting an investment three months early, or clearing your mortgage three months early. So the slightest changes here, if they're deployed well and deployed really intentionally towards the debt position you're in can make a massive difference to your long term financial picture. So this is probably the one exception I would flag with that. If your retirement planning getting rid of Netflix isn't really going to make a big difference. But getting rid of Netflix and putting that extra $18 against your credit card or you’re parking fine while we're here.

So let's get into the nitty gritty of how this process actually works. So we've talked a lot about snowballs. And she kept that idea in mind of the little ball starting on the top of the hill and gaining momentum as it plowed down. Yeah, that will ignore the idea of us falling over the snowball we've made for ourselves. But I should point out that like everything else was spoken about on this webinar series and for everything that I believe in when it comes to money, there is no quick fix here. This is not a get rich quick scheme. This is not a method of clearing the debts immediately and freeing you up to roll into more debt. This is more about creating a structure and a framework for you to follow with ease so you can set this on autopilot once you've made the decision. and life just rolls on. That kind of habit building is where the most successful people I've seen in this world and managing their personal finances come from. So it's not really about how much you earn, it's not even really about how much you spend. It's how structured and intentional you are around managing the money you have. So there's five steps involved in building your own debt snowball.

Number one, list all of your debts from smallest to largest. Now, there's going to be some quibbles at the bottom end of that does a parking fine count as a debt. Does a speeding fine count as a debt? Or is it just a bill and accountants out there might really take offense to me saying that I think you should list these things as debts. For two reasons. Firstly, paying them off is going to feel really good. And we're trying to chase that dopamine, we're trying to chase that feeling of being really good about your money. So why not put in some easy wins in there? Secondly, you owe them money. So it has to be paid. Now, yes, you're not paying interest. Yes, it's not a regular monthly repayment. But you owe the money. So let's put it towards it. Now down the track, you might think, and we'll talk about this in the savings ratios piece. But you may start to think well, once I've got this clear, why couldn't I start paying some of my bills in advance and considering them as a debt. Maybe your electricity bill is counted as a debt, maybe you've had the air conditioning, like I have running for four days straight, and you're shudder to think what the electricity bill is going to be. So why not consider that as a debt and start making payments against it. Now there are quibbles, there are arguments either way. But really, you need to do what works for you and list your debts from smallest to largest.

So here's our case study. Here's our example. Now starting from the bottom, you'll notice that I've included the mortgage, it's not relevant for what we're working through. But I'm included in there to show you the scope of what the repayments are doing to this particular family's budget. But starting from the top, we have the car loan, which is the largest non-mortgage loan that This couple has. And they pay 6% per annum interest on that. And that translates to $550 per month, they then have a personal loan that they took out for a big family holiday a couple of years ago, we have a few people that have done this, you know, the big American blowout holiday with the siblings and the mom and dad have retired. So these people put it onto a personal loan, because some 7.5% and it's costing them $247 per month, they then have one credit card. Now for some people on the call or watching the recording, you may have more than one credit card. Fantastic. Put them here separately, don't bundle them up into one. But this family in particular, they've got $2,780 on their credit card with a $5,000 limit that they're paying effectively 20% interest on. I'm looking at that realizing maybe I should have double check credit card interest rates, because I think that's low, actually, I think they all have a two in front of them now. I'll stand corrected. Now that's costing them 9% $80 per month just in the minimum repayments. So that's not making any real impact on the principal. So if they maintain that, it'll take them years to clear that. So in total, they are a little bit under $50,000 worth of personal debt, and it's costing them $930 per month in repayments.

So we moved to the second step now, what we want to do is keep making the minimum repayments on all of those debts. Now your debt picture may be longer, maybe shorter, it doesn't matter. Keep making the minimum repayments across all of those debts. The exception here is the smallest debt on the smallest debt. We'll come back to in a moment, but we want to make extra repayments on that. So keep making the $550, $247 per month. So your total debt commitment there excluding the mortgage is $927. You can see that between the mortgage and the outgoings That's what's at $5,000 per month, $60,000 net a year, you're looking at somebody's entire maybe $90,000 wage being consumed by these debt repayments. Not unusual at all. But still a very significant point. Can you imagine what somebody's life might be like if they had an extra $12,000 a year in their pocket.

So step three, you making the minimum repayments. So now you pay as much as you can off the smallest loan every month until it's gone. Now this example, we're going to assume that they've been able to squeeze out $500 per month of extra income that they can dedicate towards this extra loan repayment. It's a big number to completely concede that. But in my experience, if you have a two-income household, there is room to cut some things back to free up a good couple of $100 per month. Now there might be saying no to things that might be missing out on things. There may be refreshing things a little bit.

You know, we worked with somebody recently and they moved there. I don't recommend this. They were in a tight spot. They moved their medical appointments. They were in a bad way in a particular area from four weeks to six weeks, not ideal, but it was something they had to do to make their budget fit. So we put that at one end of kind of the spectrum of saving money. There's plenty of room between that and not doing anything that would free up some money in your banking structure. This is where we come back to that idea of being truly committed to the process. Because doing this is not comfortable, you will have to cut back on some things, you know. So I know some people that go out to dinner twice a week, as a family, they love it, it's a really fantastic thing that they do. But it's costing them about $400 to $500 per week to do that, they've got the income to support that. But ultimately, if they were in this position, they would have to cut one, probably both of those meals out of their calendar for a period of time. And that is a sacrifice, I'm not going to sit here and pretend that’s going to be really easy. And it's just a matter of just making that decision. It's a sacrifice. But I can also tell you that the sacrifices you make to achieve these things make the achievement so much sweeter. And it gives you a huge amount of pride over how you're controlling your financial picture, to the point where your bigger risk is probably becoming a little bit smug about it, which I think is not a bad place to be. But it will give you greater confidence around controlling your money.

So in summary, I acknowledge $500 per month is a significant amount of money. But I think there's often some amount in people's budgets that they could allocate based $50 $100 $1,000, there is some dollar figure that you can allocate towards making extra repayments. So if you don't want to do that, in this case, the smallest loan in their register, or in the list is the $2,780 on the credit card. So instead of just paying $78 per month, they're going to keep paying the minimums on everything else but add $500 per month to that repayment against the credit card. Now, this feels intuitively correct, of course, I mean, paying extra money off the credit card will make it go faster, paying $500 per month should clear that within five months, realistically. So huge difference like a bit of a no brainer. The difference here though, is instead of allocating $500 per month across all three loans, or prorating, or proportioning it across, it's the same note, we are going to hammer this nail with his great big hammer as fast as we can to get it out of the way. And when that happens, we'll then have an extra $78 to dedicate towards the loan repayments.

So here's if they just keep paying $78. So roughly, they're going to be paying about $46 of interest. So they're paying off what $32 per month against the capital, it's really not going to work, it's not going to get very far. And as you can see here, even with immense discipline and not incurring any further expenses on there, they will be what $200, not even $200 better off. If alternatively, and again bit of a no brainer, because we're pumping $500 against it per month, they'll have the credit card cleared within six months. Now, again, this isn't a two-month period, so six months is a fair way away six months takes us back to before cup day of last year. To put that into context. However, by sacrificing and being disciplined around that, they now don't have a credit card debt. That's gone now. So they've now taken one huge step towards control of their financial picture. That wasn't easy, because that's six months since they have gone out to dinners. And maybe they've put off buying new shoes or not repairing the cars, I've put up repairing cars before it's cost me triple. So it's not that but you're making decisions within this context of No, I'm not going to do that right away, I'm going to prioritize clearing the credit card for everything that means to me and my family. It's a very different mindset, I think. I mean, maybe. Maybe some of the people on the call, that's not really a big shift.

Step number four, once you've cleared the smallest debt, then you take what you were paying against that the minimum repayment plus the $500 in this instance, and you roll it up to the next smallest debt. So in this case, the credit cards are gone. Now we have $578 to put towards the personal loans that are outstanding. Now that sits on top of the $247 per month, we're paying against that already. So again, intuitively, that's going to make that get paid faster. There’re no real surprises around that there's no magic here. But what it does is you ride that momentum of clearing the credit card. And you know, being really proud of that like high fiving really celebrating that and then moving on to the next month and driving that momentum until that personal loan is cleared. Because you can see that when the personal loan is cleared, that's going to free up another $250 per month of cash. So all of a sudden, we've got spare cash flow coming in all of a sudden we're making decisions around allocating that money, rather than living paycheck to paycheck and wondering if the card is going to clear when we make a payment for groceries. We're taking back control, which I'm a huge advocate for.

So based on this analysis, you know, assuming the interest rate stayed where it was, they're paying the minimum repayments per month. I think I've made a typo. I have so they're paying $18 more in this scenario than expected. But regardless, it means that the current balance won't be repaid for at least four years. So it might have been a six or seven year personal loan. There's nothing wrong with that. That's the one they took out. They're making the repayments they can afford the repayments that's fine by accelerating that loan repayment, they're going to free up that money faster, but also just be gone with the debt like this is not going to be hanging over them, they're not going to have to be worried about it. 

Now there is something that we're seeing a little bit more of where this really comes into play is when people are maybe looking at being retrenched or being made redundant, being made redundant when you have a litany of debts behind you, as a huge amount of anxiety, stress and fear. Because you genuinely do wonder how the hell, I am going to make ends meet, when I've got to find $930 per month, and I've just lost my job. By not having these kinds of debts behind you, you get to narrow your anxiety, because you'll probably still have a mortgage. So you get to just focus on that, which doesn't make the anxiety go away. But it limits how hard it is for you. Because in those moments, you're going to be stressed enough. By not having the debt side of it to play with your mind as well, you have greater cognitive space to focus on these other areas, because that cognitive space will be consumed by the sheer stress of being made redundant. And those redundancies don't come out of nowhere. So you will have had months of stress leading up to it. So this is another reason why I'm such an advocate for taking control of your financial picture, minimizing your debt picture, maintaining your options and control.

But it's been over four years. Now we're making these extra repayments shockingly enough, they clear it really quickly, which you would expect again, because they're paying $840 per month against it instead of $265. So this is just the first six months you can see it makes a material difference, they are $3,000 ahead, but then of six months, and means that the loan is then repaid in 15 months. So this is repeating that point I was making earlier that this isn't a get rich, quick kind of thing, like 15 months is a lot of delayed gratification. There are a lot of decisions and micro choices you're having to make in those 15 months to stay on track here. It is a committed process you need to follow to get this cleared. However, that's 35 months extra without debt 35 months with extra cash flow coming into the family household, which gives them more options. Three years potentially, we could have started an investment plan, you could have started paying down the mortgage faster, however you wanted to do it again, control and intentionality.

Step number five, easy just keep going. So Kev rolling through the debts as they get cleared until all the non-mortgage debt is gone. So personal loan is clear. Now we're tackling the car loan with a much bigger amount of money. Now I'm going to ignore the idea that this may have been done through work, you might have other tax benefits, let's just focus on the sheer amount of debt that needs to be repaid, they pay $550 per month, but we now have an extra $843 per month to pay against that. So we're now paying two and a half times the minimum repayment. So as it is, now you're looking at a five year loan, they've just taken out this car loan. And at $550 per month, they will have cleared that by some stage by the month 60. So within five years, paying extra though, makes a huge difference. And we'll talk in a moment of interest and time saved. But it means they'll have the car repaid within two and a half years. Now again, not getting rich quick, right? This is 15 months plus 27 months like this is all adding up to some real time. However, it's all about tipping these dominoes over as you go through, and you start to see things accelerate, and you start to see real progress getting made. And as you're in my experience, if people are really committed to this, and they really get into it, you start finding ways to find extra cash flow, you start to really enjoy making those extra repayments. as nerdy as that sounds, that's where you get to make some really amazing progress.

So just broadly, and this is a very simple model. So there are some really good calculators online, the Dave Ramsey website has some really cool stuff around this. I've been doing some reading about Dave Ramsey lately. And I may end up regretting sort of using him as an example. But his website has some really good resources. So you can see here that obviously shaves a lot of time off the repayment process, which in this example, saves them about just under $6,000 of interest across the three, four years. Not huge money, you know, selling your house for $300,000 more than you bought it for will make you more money than this. But the value here is not just in the interest saved. It's in the control that you're taking over your money. And one of the biggest things that I have a lot of trouble articulating when I talk to people is it's your money. Do not let everybody else, peers, family, friends, colleagues or marketing. Don't let them dictate where your money goes or how it's used. And what I really love about this process is it gives you better control.

You don't need somebody like me to tell you to do this, like this is a really usable and functional approach to debt repayment. And it's just one of those jigsaw pieces that will help you feel really in control of the way you're meant. hedging your money. So those are the five steps. I'll leave it on the screen for a little bit just in case anybody has any questions. Like I said, the Dave Ramsey website has some really good resources. We will be getting a transcription for this up on the website in the next couple of early weeks to be honest backlog.

But it's a really good structure, I think, to use the clear debts. And occasionally, you may fall off the path a little bit, that's cool, you just hop straight back on and start again, like any progress you make here is good progress. There was a cigarette smoking ad, they changed the pitch a little bit, and they're making it now every cigarette you don't smoke is doing you damage every extra. Every cigarette you don't smoke is not doing you damage. I think it's the pet tagline.

Anyway, the idea here is that every extra repayment you're making is helping your future self. So even if you do go for six months, and then you sort of fall off and fall out of the habit, get straight back on the horse when you can and start again, those extra six months will put you in good steady.

Now the alternative I mentioned a little bit earlier was the Debt Avalanche, a very different kettle of fish, in terms of the dramatic impact it has on the mountain landscape. But where this there's a different perspective. So the Debt Avalanche method is, instead of focusing on the smallest debt, first, you pay the highest interest rate first. So you can making your minimum repayments across all the loans, but you pay off the highest interest rate first. This saves you more interest in the long run. So mathematically and in terms of the arithmetic involved, this is often a better outcome for you. The downside, though, is that it takes ages to do it. If the highest interest loan is also one of the bigger loan balances, it's going to take you ages to clear that so you're depriving yourself of that dopamine hit that comes from her getting those quick and easy wins. So mathematically fantastic. In my experience, people that are really mathematically inclined, the cliche is kind of engineers and teachers that really love this kind of method, because he can see the quantifiable difference. But for other people that maybe it's about maintaining that momentum and keeping those habits going, rather than maximizing the arithmetic, the Debt Snowball can be a much better option, but they don't have it can work really well. So have a look into that if that sounds a bit more up your alley.

So a little bit of homework for those that are interested, list all of your debts or order them by balance, this can be a productive exercise to deal with your partner, or do it on your own. But if you deal with your partner, it can also kind of highlight some of the ways money communication is a really big thing, particularly in couples. And I think it's something we all need to practice, but it's very difficult. This can be a nice little practice element, provided there's no secret that's floating around. If all of a sudden, your significant other comes out with a handful of statements for debts that you didn't know about. Just navigate that very carefully. And then talk about how much extra you can pay each month "can pay" not would like to pay or not if we eat bread and water every day for six months, we'll pay what can you reasonably put towards this project? And if that's $50 a month, that's $50. Wow, that's cool. Like, just be conscious of what that dollar amount is one of the downsides that comes with budget kind of work that we see, particularly when things are a bit tight as they are now. If you don't have that context or that reason to do it, you won't stick on the path that causes difficulty. So if we look at your budget, and we say, Oh, look, there's $1000 extra here, you're just kind of wasting $1,000 a month. Stop doing that. Everybody will say of course now. Yeah, great idea. Okay, I'll stop, I'll say that $1000 never happens, because it's not for anything. If instead it's, you've got $1,000 in your budget that we think you could trim. Instead, you could dedicate that towards retiring early, or your kids’ education or working on an A four days a week or something like that, by linking it to some things, some context, it makes them far more likely to people stick to that difficult path. So that's why when you're looking at number two here, have that in mind that we are working towards something we're dedicating this money towards something for our future. But how much pain are we willing to absorb for the upside of what we're looking to do. And there's like three steps one or two over and over and over again, sorry to defer.

Or if you'd like it's easier to zero in we've got a copy of this worksheet I put together. It's just a fundamental Excel spreadsheet, but it shouldn't make it a bit easier for you to knock everything together and then have those discussions and one solve the repayment figure for you. But you just put your details into the highlighted cells, and it'll help you work out. That's a good starting point more than anything else.

That's everything. So thank you everybody for your attention. And thank you for listening. If you do have any questions, of course, there's my number and email address check out the website. I will repeat again for any Loan Gallery or Metricon clients. We are offering limited promotion, where all advice fees. So all of our fees will be waived for anybody who is a Loan Gallery or Metricon. Client. So if you do have any questions about advice, if you'd like to have a chat, give me a call, we can try to book in time to see you.

I should let you know that obviously, this offer is quite attractive, and it is filling my diary fairly quickly. So at this stage, I think we have one or two slots left for March, April is about 50% full, and then we'll be taking bookings for may as well. So like I said, it's a limited, limited promotion, limited time promotion. So be conscious of that. If you do have any questions or you wanted anybody to help you with your financial questions, give me a call or send me an email and we'll try to find a time because I'd really love to help.