Listener Questions and Answers, Pt2 - BOD021

0:00I hope you're both well. Are you well?

0:01Pete:I am well. Good. Thank you. Just got back off holiday. What's up? I'm well too, thanks. Such a twat. Your goal is to finish the course in the lowest number of sips. Seems like that's not necessarily complicated. And that's going to get even more complicated. The drunken you get. Hi and welcome to the Bank of Dad podcast. I'm Kate and this is my dad Pete. Hello. And we're here to teach you the money lessons we were never taught at school. there's no judgment no jargon just real talk about how to handle your money part two of our Q &A yeah you know there was Cam actually from the previous Q &A would like a compilation of all your hellos hello he's not having the hey oh no he is oh no we can't do that again but he yeah he said it makes him laugh every time hello he said such a dad hello it is isn't it I don't know if there's a different way hi no immediately not um watcher what's up bro there's no it's i guess it's just me i mean you never had to say it you just kind of did hello hello oh hey we're from scotland now i could do it in a different language every week wouldn't have well you have just come back from berlin couldn't have it i don't know he's in czech also come back from czechia so uh i'll probably just keep doing what i'm doing Anyway, just made me giggle.

1:29And I might make that compilation for you, Cam.

1:31Pete:Yeah. So, as we said, we are continuing our question and answer session because we had so many lovely questions and we split it into two episodes. Another five questions today. Another five questions today. But because Dad has got himself a button for the Wanky Word of the Week. You can't see the button. It's here. You can't see the button. It is here. We're very proud of it. Wanky Word doesn't really make sense, really, for these episodes. But because we have the button, we are doing it. Yeah, I think it makes sense. I'd be a bit disappointed if we didn't do it so it's time for Wanky Word of the Week

2:07tell you what it's a tune

2:09Pete:it is a tune and I feel like we can vibe to it properly in time yeah no before we can actually hear it we're just faking it but now we can appreciate it for its wanky glory this week's Wanky Word is inspired by one of the questions question uh dominic's question actually which is uh so uh what is it what is the word the word is or phrase is behavioral finance it's very wanky isn't it yes yeah behavioral finance we're talking about this today weren't we in the office yeah or behavioral economics uh wow you just double dosed the wankiness yes there you go um so gosh i mean i kind of wish i'd sort of looked up a textbook definition for this, but my definition is it's the way we react, respond and make decisions around our finances as humans.

3:04Yes, because as we said last time, we're not robots. We are soft beings with emotions and we react on them.

3:13Pete:We do and we can't help it. I think being aware of some of these things. So behavioral economics, behavioral finance is a whole study. I mean, like a really deep study of the psychology of money, how it makes us behave, and our biases when we sort of approach and interact with money. It's an unbelievably broad and deep subject. And it's fascinating. I mean, you know, and I've said many times I'm meaningful money and I think before here the reason I love my job is not because it's anything to do with finance that bores me shitless but I love my job because I love people and they're a source of endless fascination and you have two people in identical financial situations and the recommendations will be different because they are different individuals and so different goals yeah fears fears concerns ways of reacting upbringings really important so behavioral finance is essentially the science of that and we're going to obviously not deep dive into the science of material finance in question three.

4:18Pete:I mean it could be a life's work. Yeah. Best book on this for ordinary mortals is called The Psychology of Money by Morgan Housel. Wasn't that the book? 10 million copies. Yeah I was going to say it's the big one that's kind of. Yes he's a publisher stable mate of mine he's a Harriman House author and he may have outsold me by about a billion but yeah I mean Psychology of Money is a brilliant book and anybody can read it it's superb oh amazing okay well there you go that's the first link in our show notes stick a link in those yeah right let's get straight into it so question one is from Henry now Henry sent this question in to me before Bank of Dad was even created it was when I first posted it on my personal socials about 18 months ago and he sent me this question about 18 months ago so he says hey Kate you might remember me from school I do remember you Henry because we were in the same tutor group and we were with each other every day for four years.

5:08Pete:If you didn't remember, you'd have had a stroke. Because you moved to my school in year eight and we spent every day of year eight to year 11, every morning in registration together. So I do remember you. Very much so. Only fond memories, I'm sure. I have a question for you. I wonder if he would say the same of you. I mean, we were very different social circles. We got on, but he was sporty and I was not. Still not. So I don't know how he remembers me. Anyway, I am a social person and I get invited to a lot of social events and gatherings, but it's very hard to balance it financially. I don't want to abandon my social life, but I also struggle to pay for necessities.

5:46Like I had to pay for my windscreen and my wipers to be fixed the other day and it sent me back£165. But at the same time, I have pub golf tomorrow, which will be quite expensive. Is there any advice you could give someone who struggles to balance their expenses, social life and necessities without it becoming unsocial? because it's very important to my mental health and I really enjoy spending time with my friends.

6:08Pete:What's pub golf? Any idea? Pub golf, it's... Oh, God, isn't it? So you don't know what you do. No, I've never played it. But I've heard people talk about it. It's where you go from pub to pub and you... Is that not a pub crawl? No, it's different. You know what? Let's search it. Yeah. So it's basically a pub crawl but in the sort of theme of a golf tournament. So each bar acts as a whole. Every assigned drink has a par and your goal is to finish the course in the lowest number of sips. Seems like that's very complicated. And that's going to get even more complicated. The drunk you get. Yeah. Cool.

6:41Pete:Well, there you go. But yeah, but I'm from how, I mean, presuming it's the same, I imagine it is, but Henry was very much into his sport and it's well known that in the sort of rugby, cricket, sports circles, that there's often very big social culture. Yeah, of course there is. And it's like you're human, right? So most humans thrive on social interaction. language is really important I don't want to abandon my social life yeah you don't have to that's very binary it's like I never have a social life and I buy things you know I'm financially secure or I have a social life and I can't buy anything I know you're not saying that but you know always got to be careful with language yeah because it does impact how you think it does and you talk yourself into corners potentially so I think it's important to understand that you can have a full and thriving social life and be financially careful and disciplined right um but like anything you have to know you have to learn how to do it right there's nobody's the reason we're doing this is because we're not taught how to do this and we went to the same school together so we know that we weren't taught exactly right so is there any advice you could give to someone who struggles to balance their expenses social life and necessities without becoming unsocial.

7:58Pete:Budgeting. It's very important to my mental health. Yes, it is. Budgeting is the answer. I really wish there was a silver bullet, right? There was some sort of weird sort of, actually, they don't teach you this, but here's the perfect sort of answer. Just do this, the secret, and you'll be fine. You'll be a millionaire, and you'll be able to sort of eat out. Play as much pub golf as you want. Exactly, right. So this is going to come down to a bit of planning and a bit of thinking. Say, right, okay, on an average month, how many times would I like to go out what is that going to cost me have a plan for that and if that figure means that you are continually living paycheck to paycheck something else to give you either have to just accept that that's going to be life and you'll never grow and you'll never build wealth you'll have to work every day for the rest of your life you'll never be able to save into pensions or ISIS it's a free country right in a largely free world if that's what you want to do then that's there but the fact that you're asking the question suggests that you don't really want that yeah and so so right okay if my social budget is 500 quid a month but that means that i can't save for the future your social budget needs to give or something else needs to give yeah right something else in your budget will need to give in order to keep the social budget where it is and enable you to save or your social budget will need to drop a bit and you redirect that money into savings and especially because we're not even talking about savings, he's talking about necessities.

9:27Pete:Well, yes. Then definitely something has to give. But it doesn't mean, like you say, abandoning your social life, going for a walk is free. You know, like, and I get the whole you know, drinking culture and everything, it's expensive and it's not saying never ever go on those nights out ever again, but just you've got to, I guess, find the balance. If it's the difference between going out three times a week or twice a week, actually that's probably a couple hundred quid a month. Do you know what I mean? Potentially it's 50 quid a night. You're really going to miss out. You're still going out two times a week, say.

9:56Pete:If you have friends who put pressure on you to go out, even when you want to make a change to your finances, they're crappy friends. Yeah. I hate to say it. And actually, they wish, I imagine deep down, they wish they would have the strength to say what you're thinking of doing. And when you're the one with a house or a nice car or the one who's done something because they've managed to save. Or gone travelling for six months because you've been able to take time off work because you've got money behind you. Yeah. Money brings freedom. And, you know, the only way, there is no magic bullet, it all starts with managing your spending.

10:35Pete:And that comes with planning. You have to tell your money where to go, not just kind of wonder where it went. And I think, yeah, exactly. And I think that includes the small ones that you forget about. Maybe it's you don't buy lunch at work every day. Yeah, maybe that's what changes. And if you go, if you make your lunch every day. Yeah, and you save the 150 quid a month that you save by not buying lunch. And that gives you that bit of extra. You know, it might not be that the social budget has to go down. No, but something will need to. But the one thing I noticed from starting to budget more was the little, the five quids there, the 10 quid there.

11:09Those are the sneaky ones that add up. Maybe you need to have a look at what those are for you.

11:12Pete:Yeah, exactly. If you're banking with Monzo or any of the decent banks these days, they will either offer you some kind of budgeting app or it'll be built into their app and you'll be able to see where you're spending your money. So only you can decide. I mean, if you're, there's a guy in America called Dave Ramsey, right? He's like a much more popular version of me, right? Literally speaks to millions of people every single week in America. And he would say, if you want to live like no one else, you need to live like no one else. In other words, you need to sack your friends, laser focused on the finances.

11:52Pete:I disagree with that entirely. Yeah, it's a bit too binary. Yeah, it is. It's too binary. And you're not going to sack your mates. No, of course you're not. You've got to be a human, right? So find something that works, but nobody's going to do it for you and it's not going to happen by accident. You have to be intentional, I'm afraid. Budgeting is the answer. So yeah, Henry, you've got this. Yes. You were always very driven and focused at school from what I can remember. So you'll be fine. You've got this. question I was about to say seven no it's question two it is and this is from Melissa hi Kate and Pete it's weird that it's Kate and Pete that's as it should be I guess it is but in life it's never you know what I mean anyway hi Kate and Pete I hope you're both well are you well I am well good thank you just got back off holiday what's up I'm well too thanks such a twat how are you Kate are you well yeah Thanks for nothing.

12:49Okay. My dad has been listening to Meaningful Money for years. Sensible man. And recently told me about the Bank of Dad podcast. And I just want to say how much I've been loving it. I'm around a similar age to Kate. And honestly, I feel like this is exactly the kind of podcast young women really need. Thank you.

13:05Pete:Spread the word, Melissa. Because not enough young women are watching and listening. Yeah, not enough young women are kind of interested in their finances. We only get stats on YouTube, don't we? Yeah, I don't know the stats for podcasts. but it's I mean all are welcome here men you are welcome non-binary people you are welcome all of you are welcome but there aren't many women watching and we need to we need to do that so thank you Melissa for your lovely words and spread those words thank you I've been listening every week and have already learned so much so thank you both for creating something that feels so practical approachable and genuinely helpful thank you really kind I recently listened to your episode about insurance and I had a question afterwards you spoke quite a bit about phone insurance and it made me realise I'm not really sure whether that's something I should have.

13:47I have just bought myself a new iPhone 17 Pro, nice, outright after saving for a while. And with moving to London soon, I'm becoming very aware that I should probably think about protecting it, especially after spending around 1.7K on it. I did ask my dad, but he doesn't really use his phone in the same way I do. I don't think he'd even notice if he left it at home for a day. So, I wondered what your thoughts would be. Would you personally recommend getting phone insurance in this situation? And if so, are there any providers you generally suggest looking into? I know in the episode you mentioned prioritizing things like life insurance and income protection, which completely makes sense.

14:26I just wasn't sure where phone insurance sits in the worth it versus not worth it conversation. Thank you again for such a brilliant podcast. I genuinely look forward to each episode now and can't wait to keep listening. Best wishes, Melissa.

14:37Pete:Great question, Melissa. And thank you. Yeah, lovely, kind words. Really appreciate it. I wouldn't have a clue about what providers. We couldn't advise even if we did. No, no, no. But what I think, certainly what I do and what I think most people would do is have phone insurance included with your house insurance. And she's moving to London. Moving to London. So even if you're renting, you don't own the house, you will normally insure the stuff in it. I was going to say, would that count as contents insurance? Contents insurance, yeah. and usually it's covering your mobile phone is included. You just need to check the wording.

15:15Pete:So what is included? It will certainly be included if it's stolen. You need to check if damage is covered if you drop it. So accidental damage, that's called. You need to check if it's a new for old policy. So in other words, if you drop your phone after two years and it's destroyed, it's not the latest phone anymore. And a new for old will give you an iPhone 19 Pro or whatever in two years' time, whatever, potentially. you need to check that the amount that's called the sum insured is enough to cover a new phone so this is the sort of thing that you need to just dig a little bit deeper than just sort of diving on to compare the market or whatever and just getting whichever's cheapest but I think you probably ought to, we don't like the word should no but it's a good idea to ensure that nice new phone especially in London well yeah totally if you've saved you've saved 1700 quid to buy an epic phone yeah you're obviously the fact that you're asking obviously you know this is you're thinking proud and pride and joy but you you know you've you've worked hard to have a nice phone um you'd be gutted if you lost it it was nicked or you dropped it and it completely smashed and was useless after you've put all that work in and if there's always a bit of a value judgment it's like okay i'm gonna pay an extra you know i wouldn't pay like 30 quid a month for phone insurance because that's like 360 quid a year but if it's a 5 quid a month addition to your contents insurance it's probably worth it do you know what this is reminding me of do you remember when we were in London and I was in Zara or I was in Hollister and I bought something and I'd paid Apple Pay or something I'd done something I just put my phone on the tail counter whilst I was doing it and put my stuff on the bag where it walked out I got three shops down not far at all and I realised I don't have my phone on me I was like shit pegged it back to Hollister I was like look I'm a country bumpkin from Cornwall if it was Cornwall they would have they would have chased me down the street you've left your phone you know in London I was thinking shit that's three people down it's wiped three shops down there's no yeah it's already yeah it's already been on yeah I've got to say so I ran back to Hollister I went to the lady in the door I was like I think I've left my phone on the counter can I please look can I please look and she said I bet I doubt it's there but please look and by some miracle it was there face down on the counter anyone could have nicked it it really is a miracle that it was nicked but our whole lives are on our phones photos plane tickets and all sorts so yeah I would say when you've worked like you said if you've worked as hard to get what it is and it's clearly something you should be proud of the fact that you've worked hard to buy it protect it protect it it's important to protect it you know I think the data on it very often is backed up and all that sort of stuff.

18:07Pete:You could get the data back, potentially, if you've backed up. I was going to say, if my iCloud storage is currently full. Is it? Don't you pay the$2.99 a month for your iCloud? No. Ah, yeah, I do. Shouldn't be full then. How many photos have you got? Don't answer that. 800 of them are for Jackson's. Get me a work phone. It might come to that.

18:31Pete:So, you know, it's more about, if you think about the hardware that's in a phone, It's astonishing, really. I don't want to sound like an old man, but it's just like, I remember when, you know, the technology they used to put a man on the moon was about the computing power of a spoon compared to what's in your phone. And so the hardware is incredibly, it's expensive for a reason because it's astonishingly capable. And yeah, definitely. I think... If it's valuable, ensure it. We'd agree, yeah. Because if you leave it on a counter, you might not be as lucky as me. Yeah, no, it sucks. Okay, question three is from Dominic, and it was Dominic's question that prompted Wanky Word of the Week, wasn't it?

19:12Pete:It was. All right. Hello. Hello, Dominic. Hello, Dominic. Are there any tips and tricks to staying tuned out of the news and remaining blissfully unaware of the market or what may be going on in markets? It seems to be the case that if you can automate investing but focus on your work and family life and ignore all news, that increases your risk-tolerant. Deleting social media? Deleting pop-ups on phone? Subscribing to private eye and ignoring online source of news? Are there any suggestions to structure your life to remain blissfully unaware of what is going on? Thanks. Good question, Dominic.

19:47It's a great question.

19:48Pete:It is. Because I hate the news. Yeah. Well, I mean, news is... If it's serious enough, I'll find it out through the grapevine. Yeah, I mean, if you're having dinner, we'll put news on you. you're like, it's just depressing. Life is too short for this. It is. It's not, but like, yeah. You kind of, being blissfully unaware, I'm not sure that's super healthy. It's a little bit head in the sand. I'm going to be a hermit and live in a cave as opposed to being aware, but understanding how it affects you and hence being mindful about how much you take in. Yeah. We talk a lot about being intentional here and I think that it applies.

20:35Pete:So this inspired the Wacky Weather Week of behavioral finance, which is the study of how we behave around money, how it affects us, how we make decisions. And Dominic says, it seems to be the case that if you can automate investing but focus on your work and family life and ignore all news, that increases your risk tolerance. So what this says to me is, Dominic, when he hears something like on the news about markets tanking because Trump said something stupid or Putin's leveled bombs in Ukraine or whatever, his immediate thought is, well, shit, what's that going to mean for my pension or my ISA or my investments?

21:16Pete:Are they going to go down? Should I do anything about that? It's immediately panicky, isn't it? That's what it's implying. It is implying. I'm not sure whether that's the case, Dominic, But if that is the case, there's a clear link between news and your fear about your investments and your desire to do something. Which is understandable. It's totally understandable. It's human nature and it's fight or flight. You know, we work hard, we save and we see our investments grow. And then somebody entirely outside of our control says or does something. And what we see is the value of our pension tanking.

21:49Yeah.

21:50Pete:It's worrying. Yeah, it's frightening. No doubt. It's frightening. and so our fight or flight our sort of base animal level response is I must do something to make this better to stop this fear to stop the rot and of course what people do is they sell out their investments usually at the worst possible time and so Dominic's question is so what do I do to the source or the trigger for that fear to stop me feeling like that you can be a hermit if you want I was going to say if deleting the news app helps you delete it yeah definitely turn off notifications notifications are the work of the devil I swear to god I don't know why this makes you sound so old oh come on though this is basic you're not wrong but it does that makes you sound old why the problem with notifications is that it immediately imposes somebody else's agenda on your life you sound so preachy I am fucking preachy I just why do I have all notifications off my phone except whatsapp Really?

22:51Pete:Yeah, I never get an email notification. Messages and WhatsApp, I never get news. I certainly don't get email, my God. Oh yeah, email for you would be carnage. For most people. Instagram, no. Nope. Couldn't care less. I'll read it on my own terms. I'll step off the soapbox and I'll just put it to one side. Do you know what I mean? I do see what you mean. And I think there's also a slight generational difference. I've grown up with notifications. Of course. You have gone from being able to be blissfully unaware and go outside in the summer and leave your bike and your parents forget you've been outside all day and they forget you exist and then they call you in at 9pm.

23:28We didn't have that so much.

23:29Pete:Gen X for the win. So, you know, like, in terms of your generation, there will be a different impact. I agree that notifications are too much. They bombard you. Yeah, and they force their way into your consciousness. I must pick up my phone to see what happens. It's the news. oh, the markets have tanked, right? Yeah. Just for God's sake, don't have stock notifications. Don't have news notifications. It's really bad for your mental health. Delete social media if you think it will help. Maybe tailor who you see on social media. Yes. Unfollow anyone that's money related. Anytime you see one, click the three dots and say, I don't want to see content like this.

24:15Pete:Yeah. And eventually, well, very quickly, your algorithm will learn. So then you can still see your grandma's... Yeah, yeah, messages and pictures and stuff like that on Facebook if you really want to. You can train the algorithms as well to, you know, show you more stuff that's healthy for you. Yeah. You know, by intentionally searching for it, you know, making sure you're not clicking on stuff which isn't helpful for you. Remember when it comes to news, I think a core message here is the news outlets, the social media companies they don't care about you at all their only job is to keep you on their app bad news sells it really does and algorithmic doom scrolling means they can show you more ads they can make more money they don't care about the value of your pension they certainly don't care about your mental health and so you know you if you understand that it kind of i think it gives you a bit of perspective you can say well it's not like they're trying to be helpful by showing me this stuff they're just trying to serve their own needs and so i'm aware of that and so i can kind of compartmentalize it a little bit um really need to know your own triggers so if when you are tired or when you've had a glass of wine or two um you're more likely to react negatively to something you need to be aware of that and then take steps maybe i will turn off my notifications yeah every night at eight o 'clock yes use focus mode on your phone whatever to go into do not disturb and just use the tools to make your own mental health life easier give yourself some space yeah there's no shame in it because this stuff does impact people yeah man it really does and we're very complex creatures but i think it all starts with knowing yourself knowing what triggers you and then saying how can I either avoid that or at least reduce the impact of it and building frameworks um we're going to do a couple of episodes on this yeah you know it's a deep subject but we'll try to be as practical as we can it's it's things like some another kind of behavioral finance thing might be I tend to buy more stuff in the evenings when I'm tired you or is that an example that's an example it's not wrong right but it is you know and so or i'm more likely to uh make snap decisions about my investments um when i've had a crap day at work or whatever or i've had a barney with my wife or whatever that's a northern thing wasn't it barney with my wife barney wife yeah no again those are examples are not no no no generally yeah yeah but if our emotions are in play or are heightened and then something else kicks on with our finance we're more likely to make a bad decision and so we need to build frameworks to help ourselves yeah to help ourselves and make good decisions so we'll get to that yeah okay so hopefully that answers your question if it doesn't we've got a couple episodes coming up dominic yeah be intentional and do what's necessary but don't be a hermit yeah so question four is from lava and lava has um sent questions into Meaningful Money before.

27:34So thank you for all the support, Lava. I appreciate it. Dear Kate and Pete, I have been a follower, here we go, of Meaningful Money for years and started listening to your podcast, Bank of Dad, since the day it started and I'm loving it. Thank you. I'm in my early 30s, single and live alone. So I find a lot of the stuff is quite relevant to me. I heard that you're doing a Q &A and if possible, I'd like to submit a question. Of course you can. And it's related to your last episode on investment platforms.