Manage Your Money with Fay Chan from Budgeting 123 (scroll down for video and podcast)
Fay Chan from Budgeting123 is a financial readiness coach who assists people in gaining clarity around their finances, and she provides easy to follow budgets tailored to each individual or family’s needs.
I have used Fay’s services myself. I believe in getting help wherever you need it from people who specialise in certain areas, whether that be a personal trainer or business coach or anything else.
I admit, I dragged my feet in contacting Fay, but in the end the process was so simple and easy. By the end of a single one hour session I had clarity around what my numbers were. I understood how much I needed to allow for living expenses and how much for saving and how much I was allowed to splurge. I knew the numbers were specific to my income and expenses, rather than a generic percentage recommendation that may not take into account my specific situation.
I walked out of our appointment surprised with how simple and quick the process was. I thought it would be more involved with more stuff to work on. But it was so quick and simple, my only regret was not contacting Fay sooner!
Fay says that my experience is common, “It (the money management process) is simple. I think what stops a lot of people and the complexity that people perceive is really the emotions that become the blockages. Looking at the facts is the simple part and the very, very easy part.”
Do people hesitate to contact you because they feel they should know this stuff and not need help?
Yes, definitely. It’s not an easy topic for people to talk about even though the solution is easy. You have to get over all the emotional blocks and hurdles before you get to a place where you’re willing to accept help.
I’ve had people follow my page, seen my interviews, seen my videos, for about 2 years before they reach out. That’s very normal. I get people contacting me and saying they’ve been following me and they’re ready for help and I’m like,’Who is this person? I don’t know this person. They’ve never liked or commented on anything!’
What are your recommendations for understanding where your money goes?
You can do a spreadsheet of your major bills: rent, mortgage, utilities, groceries. So look at all your major bills as a whole.
The flip side, and where most people fall down, is in the incidental spending. That’s normally where the blowouts happen in budgets. So there’s 2 things. Understand what your big bills are and then understand how you spend your money on a daily basis.
What are your thoughts on credit cards? Do you have one?
Yes, I do have one. I was brought up with one. Mum would come to me with a statement. She’d hand me a bunch of receipts, and I’d tick of the receipts against the statement. Anything that wasn’t there, I’d highlight and say there’s a discrepancy. Then she’d hand me cash and I’d go over to the bank and pay the credit card IN FULL.
If you have points, it may or may not cover the fee of the credit card and no interest. Effectively you could pay zero fees for your card, because if you pay it in full there’s no interest and you may get points which may cover the fee. So that’s how a credit card should be used, so that it works for you.
If you can’t trust yourself with a credit card and use it as it’s meant to be used, then don’t have one.
What are your thoughts on AfterPay?
It’s similar to the credit card. I remember when Coles introduced credit cards being allowed to be used to buy your groceries, and I was a teenage. I was confused about the concept of eating now and paying later.
AfterPay isn’t a credit facility, but it is the concept of ‘have now, pay later’. If you don’t have the money, don’t buy it. I might work in particular situations, if you have planned for it and know you can afford it. But if you use it as an extension of your spending arm, so that you can avoid the pain of paying now, and delay for later, sorry, it doesn’t work like that.
So use with care, if you must use it. If all else fails, fall back to cash.
What are your tips for people in business with seasonal or sporadic income?
What I do with budgets that have sporadic income is that I always average it out. If someone gives a tax return from last year and shows me what their normal year looks like, they might say it’s $40,000 they take home, in their pocket. So I’ll use that $40,000 and divide it over 12 to understand what the monthly income is. You can only work on averages. You might work backwards and work out what your basic expenses are and what your business needs, so there’s a threshold, and you have to earn that threshold regardless. Anything extra is a bonus. You tuck that away in case there’s a month you don’t quite meet the threshold and that covers for the lack. So you should understand what you’re minimum cost is and that’s your threshold and you have to earn above that to cover yourself.
What are your budget friendly marketing strategies for your business?
What I find is to do what works for you. There’s so many recommendations around. For myself, I’m a mum. If my son’s at home, I can’t get work done. So what I do is quite sporadic. I might have a plan when I might do certain projects, like the big milestones. But the in between is not really structured. I do what works for me in terms of getting the work done.
I use Facebook groups to my advantage in terms that I build relationships. Consistency works. If people see you all the time, you’ll be the natural go to when people need to think about a certain topic.
The emotional side with couple’s finance
With couples and families, it’s usually the females that come to me and say, ‘I’m so frustrated. I can’t get him or her to really get on board.’
It happens in pretty much every single couple that I’ve seen that there’s always a disparity. They might be on the same page and come to the appointment, but there’s always a disparity between the two. One might think this way and the other the other way and they’ve never communicated it. And when they do, they go “Oh! Is that what you meant!” So often, for one person, the blockage is personal to them. You might be married to them, but it’s their personal blockage.’
So Fay’s message is, ‘Everyone goes through the same thing and you’re not alone.’
Interview conducted by Olivia de Sousa-Ferres for the SEMBA Facebook Page.
You can find the SEMBA South East Melbourne Business Associates Facebook page here.
You can contact Fay Chan from Budgeting 123 here
SEMBA is sponsored by Officeway . Their office furniture website is here.