The financial advisor behind Australia’s top business podcast has revealed the three biggest problems young women have with their money, and the six bank accounts you need in order to save thousands of dollars for the future.
Victoria Devine – who recently made the Forbes 30 under 30 list for 2021 with her She’s On The Money podcast – said the ‘first step to create a solid cashflow plan is to have the right banking structure in place’.
The 29-year-old from Melbourne recommends six separate accounts that will help you to spend and save, without feeling deprived.
The financial advisor behind Australia’s top business podcast revealed three biggest problems women have with their money, and the six bank accounts you need (Victoria Devine pictured)
Victoria Devine (pictured) – who recently made the Forbes 30 under 30 list for 2021 – said the ‘first step to create a solid cashflow plan is to have the right banking structure in place’
The six bank accounts everyone needs
1. The Cash Hub
2. The Food, Fuel and Fun Account
3. The Emergency Fund
4. The Short-Term Savings Account
5. The Long-Term Savings Account
6. The Other Emergency Fund
‘It’s very personal how many bank accounts you have, but personally I always suggest clients have at least six in their possession so they are able to keep on top of their budget and cashflow,’ Victoria told FEMAIL.
The six separate accounts include one called ‘the cash hub’, one for ‘food, fuel and fun’, an ’emergency fund’, a bank account for ‘short-term savings’, one for ‘long-term savings’ and another ’emergency fund’ for other last-minute situations.
‘The two most important of these account are the cash hub, so that you don’t mindlessly spend everything that comes into you account, and the emergency fund, so you’re not tempted to dip into it,’ Victoria said.
1. The Cash Hub
The Cash Hub is where your income should go as soon as you earn it.
Ideally, Victoria said it wouldn’t have a debit card associated with this account, but if it does, don’t keep the card in your wallet.
The financial advisor recommends you link all of your direct debits to this account including your bills and expenses.
2. Food, Fuel and Fun
The second bank account Victoria recommends you have is a personal spending account – or a ‘food, fuel and fun’ account.
This should have a debit card associated with it, and it will be where you do your weekly spending.
Victoria uses this account for everything from personal care to dining out, clothing and entertainment.
She ‘pays’ herself on a Thursday in any given week, and then she knows she has a weekly spending allowance she can’t go over.
3. Emergency Fund
Thirdly, every good saver needs an emergency fund – as this is what will give you financial security for the future.
Victoria said how much you keep in your emergency fund will depend on your situation and income, but she personally likes to keep at least three months’ worth of bare basics expenses.
The six separate accounts include one called ‘the cash hub’, one for ‘food, fuel and fun’, an ’emergency fund’, a bank account for ‘short-term savings’ as well as ‘long-term savings’ and another emergency fund, Victoria (pictured) said
4. Short-term Savings
Alongside the Emergency Fund, you need an account for Short-Term Savings.
Short-term savings goals include things like holidays, weddings or something big that’s coming up in the next few months.
‘This account should be a fee-free, high-interest savings account,’ Victoria said.
Victoria is the author of a new book called She’s on The Money (pictured)
5. Long-term Savings
You’ll also need a Long-Term Savings account, which is where any savings for medium or long-term savings live.
‘This could be anything from saving for a home, working towards financial freedom or saving money towards the cost of having a family one day,’ Victoria said.
Again, how much you keep in this account depends on your situation, but having it in a high-interest savings account is good seeing as it’s going to be there for some time.
6. Second Emergency Savings
The final bank account to own is a Second Emergency Savings account, which is designed for last-minute plans you don’t want to miss out on.
If you get invited to a friend’s birthday dinner, Victoria said you should never dip into your savings account bur rather use this account.
Keep as much or as little as you think you might need for this account.
Victoria’s top savings hacks revealed
Victoria (pictured) shared her top savings hacks for boosting your cashflow
1. AVOID SALES/USE THEM STRATEGICALLY: Just because it’s on sale, Victoria said you don’t need to buy it. Instead, you should only use sales strategically when you plan ahead, know they’re coming and know you need something.
2. DITCH AFTERPAY: ‘Buy Now Pay Later providers sound good in theory – you can have what you want now and future you can just deal with the finance – but the theory is flawed and if you get sucked into using AfterPay, it usually means you’ll end up in a sea of debt,’ Victoria said.
3. UNFOLLOW AND UNSUBSCRIBE: The financial advisor said it’s crazy how much we are influenced by things like emails and Instagram. If you ever find yourself mindlessly scrolling and shopping, she recommends unsubscribing from the mailing list and unfollowing the triggering account. ‘By unsubscribing from these emails and unfollowing these brands, it’s much easier to resist the urge to purchase,’ Victoria said.
4. SHOP MORE CREATIVELY: ‘When it comes to clothes avoid buying things full price and look to op shops and markets for more unique buys,’ Victoria said. Instead of going to the supermarket, you could go to the local market at the weekend to save money on food.
5. PUT TIME BETWEEN YOU AND YOUR PURCHASES: Victoria explained that while sporadic purchases happen from time to time and lead to a feeling of regret, the best way to avoid this is to put time and space between you and your buy. The advisor recommends at least a day, and if you still think you want something, add it to your cart.
The financial advisor (pictured) said you should never assume you can get on top of things with your money later on
What are the worst things young women do with their money?
When it comes to the main problems young women have with their money, Victoria said there are three things she recommends you stop now.
‘Stop assuming you can get on top of things with your money later,’ she told Daily Mail Australia.
How to improve your finances instantly
1. Up your education: Expose yourself to as much information about finance as possible. Listen to podcasts, read books and articles and talk to people as much as possible.
2. Reduce non-essential spending: If you want savings results, work hard to reduce the daily spend that seem innocuous, but which also add up. Things like this include your daily latte, a gym membership you don’t use and buying lunch. To do this, Victoria said you should write down everything you save and revisit the list at the end of the month. You’ll be shocked at how much you manage.
‘Now is the time to start your journey to financial freedom, not “one day” when you have a high-flying job.’
The advisor recommends you implement as many smart money management methods as possible no to put ‘future you’ in a better situation.
Secondly, Victoria said you need to banish AfterPay from your life forever:
‘No surprises here, I see so many young women trapped in a vicious cycle with providers like AfterPay, because they buy items they can’t afford and then get lumped with fees they also can’t afford to pay back,’ she said.
‘Resist the urge to use this service and save before you spend.’
Finally, Victoria said you need to stop not talking about money, just because you think you shouldn’t or you’re not educated enough.
‘For so long, women have been excluded from conversations around money, and I think it still feels quite taboo to discuss our cash, but it shouldn’t,’ she said.
‘We need to be talking about money, both about what we’re earning and how to make our money work for us when it comes to investing.’
Victoria said taking control starts with a conversation, so talk about these things with your friends.
‘Remember to be kind to yourself,’ she added.
‘The road to financial freedom is long and falling down is inevitable. When that happens, pick yourself up and keep striving towards your goals – you’ve got this!’
Victoria Devine is the author of the new book She’s On The Money. For more information, please click here.