Ep 103: How to slow down our spending in 2024, with Max Phelps

In this episode of the Geared for Growth podcast, Mike is joined by Money Coach and Author of two books including his latest “Spending Fast and Slow”, Max Phelps. In a frank and entertaining discussion, Mike and Max talk about ways to control money better in the current climate, and why it has an impact on your property investing journey.

Max is a big believer that you can spend money on the things you love whilst still controlling your spending habits and investing wisely. He explains that our relationship with money on average in Australia is poor, with Australians spending 98.9% of our income, noting that we are at the mercy of advertisers and marketers, rather than focusing our spending on things that truly make us happy.

Imagine making a luxury purchase like a Louis Vuitton bag. The dopamine rush makes us feel so good initially but that feeling fades over time. Max describes how we can get a similar rush without the hefty price tag, merely by planning and prioritising exciting purchases, rather than acting on impulse.

Max gives great insight into how he and his wife manage their spending, and how they eliminated arguments over purchases by having set limits and a controlled budget. Max also talks about the psychology of money and why he believes that credit cards lead to bad spending habits.

As an experienced mortgage broker and financial planner, Max sheds light on the impact spending history can have on borrowing capacity, and what banks look at to determine your Household Expenditure Measure (HEM). He also gives his top tips on how you can get back in control of your finances.

In the midst of a cost of living and housing affordability crisis, this conversation is essential listening for anyone wanting to get a better handle on their spending. Max’s advice is refreshingly realistic and will have you looking at your budget as a means to financial freedom, rather than restriction. You won’t want to miss it.

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In this episode of the Geared for Growth podcast, Mike is joined by Money Coach and Author of two books including his latest “Spending Fast and Slow”, Max Phelps. In a frank and entertaining discussion, Mike and Max talk about ways to control money better in the current climate, and why it has an impact on your property investing journey.

• Our relationship with money and saving
• The dopamine hit from spending and how quickly it wears off
• How to control impulse buying
• The real beneficiaries of credit card and buy now, pay later schemes
• The psychology of gambling
• How to get control of your money
• The impact of your spending on your borrowing capacity
• Max’s tips on managing your money

“How about we focus the money on that stuff (you love) and preparing for your future so that you can buy investment properties, pay them off, do whatever you need but reduce the amount of money that you’ve got available to squander on the other stuff that you do but you don’t value” 1:36

“Australia at the moment is spending 98.9% of our income with saving 1.1% as an as an average” 2:52

“The truth is if you actually get down with laser focus it’s very specific things that are making you happier other things you’re spending money on they’re not actually making you any happier at all” 5:28

“We eliminated the arguments because every single month the credit card bill would come in and there would be an argument “you spent how much on what?” because for me everything was a problem and for her “it’s fine” ” 9:49

“When you read the studies. It’s that when people use a credit card on average they spend 25% more than when people use their own money or cash” 10:55

“Our brains work in our favour when we’re trying to manage a limited amount of resource and credit cards never make us do that ever” 13:26

“Once we can control our expenses we can then choose to increase our expenses when we want or decrease them but the key is control and most of us don’t have a control mechanism because for most of us all the income goes into one pot” 18:42

“Credit cards and debit cards have eliminated what we call that friction, it’s the advertiser’s dream to eliminate friction from the transaction so you can instantly access” 21:35

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