Episode 22 - Stop Wasting Money!

  Effortless English Podcasts

Effortless English Chat

Episode 22 - Stop Wasting Money! 

Allen: Welcome to Effortless English Podcasts!

Luna: Hey everyone!

Luna: This is Luna.

Allen: And I’m Allen.

Allen: Today, we’re talking about something super important—managing money and improving financial skills.

Luna: Yeah, because let’s be real, money problems stress everyone out.

Allen: Exactly.

Allen: Whether it’s budgeting, saving, or investing, financial management is a skill we all need.

Luna: But let’s be honest, a lot of people don’t know where to start.

Allen: That’s why we’re here!

Allen: We’ll break things down step by step and keep it simple.

Luna: And fun!

Luna: Because talking about money doesn’t have to be boring.

Allen: Right.

Allen: But before we start, a quick reminder—if you want a full transcript of this episode, you can find the link in the description.

Luna: Plus, we have subtitles in multiple languages, so turn on CC if you need them.

Allen: Now, let’s dive in!

Allen: Let’s start with the basics—why is budgeting so hard for most people?

Luna: Because it’s boring.

Allen: Well, yeah, but there’s more to it.

Allen: Many people don’t know how to set a realistic budget.

Luna: Or they just don’t want to.

Luna: I mean, who likes tracking every dollar they spend?

Allen: True.

Allen: But not having a budget can lead to overspending.

Luna: And then you look at your bank account and wonder where all your money went.

Allen: Exactly.

Allen: One big mistake people make is creating a budget that’s too strict.

Allen: If you cut out everything fun, you won’t stick to it.

Luna: Yeah!

Luna: It’s like going on a diet and saying, “No more chocolate, ever.”

Luna: That’s not gonna last.

Allen: Right.

Allen: A budget should be realistic and flexible.

Allen: Otherwise, you’ll give up in a week.

Luna: So, what’s the solution?

Allen: Start with simple categories—essentials, savings, and fun money.

Luna: Ooh, I like the “fun money” part.

Luna: That sounds way better than “budgeting.”

Allen: Exactly.

Allen: If you give yourself some money to enjoy, you won’t feel trapped.

Luna: What about tracking expenses?

Luna: That sounds like a lot of work.

Allen: It doesn’t have to be.

Allen: Use apps or even just write it down.

Luna: Or ignore it and hope for the best.

Allen: That’s how people end up broke.

Luna: Okay, okay.

Luna: So, small steps, right?

Allen: Yes.

Allen: Start by knowing where your money goes.

Allen: Once you see your spending habits, you can adjust them.

Luna: And don’t be too hard on yourself.

Luna: If you overspend one month, just try again.

Allen: Exactly.

Allen: Budgeting is about progress, not perfection.

Luna: Alright, that makes sense.

Luna: Maybe I’ll actually try it this time.

Allen: Alright, now that we’ve covered budgeting, let’s talk about spending.

Luna: Or, more specifically, spending too much.

Allen: Exactly.

Allen: A lot of people struggle with controlling unnecessary expenses.

Luna: Yeah, because spending money is fun!

Luna: Saving money?

Luna: Not so much.

Allen: That’s the problem.

Allen: People often buy things they don’t need, just because they feel like it.

Luna: Oh, you mean like impulse shopping?

Luna: Been there, done that.

Allen: We all have.

Allen: But impulse buying adds up fast.

Luna: Yeah.

Luna: You see a sale, and suddenly you “need” five new shirts.

Allen: Exactly.

Allen: Discounts make people feel like they’re saving money when they’re actually spending more.

Luna: So true!

Luna: I’ve bought things just because they were 50% off.

Luna: Did I need them?

Luna: Nope.

Allen: That’s why companies use sales tactics.

Allen: They know how to make you buy things you don’t need.

Luna: Okay, so how do we stop?

Allen: First, recognize your spending triggers.

Allen: Do you shop when you’re bored?

Allen: Stressed?

Allen: Hungry?

Luna: Wait, hungry?

Luna: What does that have to do with shopping?

Allen: Ever gone grocery shopping on an empty stomach?

Allen: You buy everything in sight.

Luna: Oh wow, that’s true!

Allen: Same idea applies to other shopping habits.

Allen: If you know what triggers your spending, you can control it.

Luna: Got it.

Luna: So, what else?

Allen: Use the 24-hour rule.

Allen: If you want something, wait a day before buying it.

Luna: But what if it sells out?

Allen: If it’s really important, you’ll still want it tomorrow.

Allen: If not, you just saved money.

Luna: Smart.

Luna: Any other tips?

Allen: Set a spending limit for non-essentials.

Allen: Give yourself a budget for fun stuff, but stick to it.

Luna: Oh, like a “guilt-free” spending fund?

Allen: Exactly.

Allen: You can enjoy spending without going overboard.

Luna: I like that!

Luna: So, it’s about balance, not cutting everything out.

Allen: Right.

Allen: Spend on what matters, and cut out what doesn’t.

Luna: Alright, I’ll try.

Luna: No promises, though.

Allen: Alright, now let’s talk about something people often ignore—emergency funds.

Luna: Oh, you mean the money I don’t have?

Allen: Exactly.

Allen: A lot of people don’t have enough savings for emergencies.

Luna: Yeah, because saving is hard.

Luna: And spending is fun.

Allen: True.

Allen: But emergencies happen whether we’re ready or not.

Luna: Like when your car breaks down.

Luna: Or your phone dies, and you suddenly “need” a new one.

Allen: Well, a broken phone isn’t exactly an emergency.

Luna: It is for me!

Allen: Okay, fair enough.

Allen: But real emergencies—like medical bills or job loss—can be financially devastating.

Luna: So, how much should people save?

Allen: Ideally, three to six months of living expenses.

Luna: That sounds impossible.

Allen: It’s not.

Allen: You just need to start small.

Allen: Even saving a little each month adds up.

Luna: Alright, so where should people keep this money?

Allen: In a separate account, not your regular spending account.

Luna: Why?

Allen: So you don’t accidentally spend it.

Luna: Oh, you mean like when I tell myself I’ll save but end up using the money for takeout?

Allen: Exactly.

Allen: If the money is too easy to access, you’ll spend it.

Luna: So, just hide it from myself?

Allen: Kind of.

Allen: Make it harder to touch so you’ll only use it for real emergencies.

Luna: Okay, that makes sense.

Luna: But what if someone is living paycheck to paycheck?

Allen: Then start small.

Allen: Even $10 a week is better than nothing.

Luna: So, baby steps?

Allen: Exactly.

Allen: The key is consistency.

Luna: Alright, I’ll try.

Luna: But if my emergency fund goes to coffee, don’t judge me.

Allen: No promises.

Allen: Now that we’ve talked about saving, let’s move on to investing.

Luna: Ooh, fancy.

Luna: Sounds complicated.

Allen: It doesn’t have to be.

Allen: Investing is just a way to make your money grow over time.

Luna: Can’t I just save money instead?

Allen: You can, but saving alone won’t build wealth.

Allen: Inflation will eat away at your money’s value.

Luna: Ugh, inflation.

Luna: The thing that makes my coffee more expensive every year.

Allen: Exactly.

Allen: That’s why investing is important.

Allen: It helps your money keep up with rising prices.

Luna: Okay, but where do beginners start?

Allen: First, understand the basics.

Allen: There are different types of investments—stocks, bonds, real estate, and more.

Luna: Stocks sound risky.

Allen: They can be, but risk isn’t always bad.

Allen: The key is knowing what you’re doing.

Luna: That’s the problem!

Luna: Most people have no idea how to invest.

Allen: That’s why you start small.

Allen: Don’t throw all your money into something you don’t understand.

Luna: So, no gambling on random stocks?

Allen: Right.

Allen: A good option for beginners is index funds.

Luna: What’s that?

Allen: It’s a collection of stocks that follow the market.

Allen: Instead of picking individual stocks, you invest in the whole market.

Luna: Oh, so it’s like buying a basket of fruits instead of just one apple?

Allen: Exactly!

Allen: It spreads the risk.

Luna: What about real estate?

Allen: It’s another option, but it requires more money upfront.

Luna: Yeah, I don’t think I can buy a house anytime soon.

Allen: That’s okay.

Allen: The important thing is to start somewhere.

Allen: Even small investments can grow over time.

Luna: So, patience is key?

Allen: Yes.

Allen: Investing is a long-term game.

Luna: Alright.

Luna: I’ll start small.

Luna: But if I get rich overnight, I won’t complain.

Allen: If that happens, you’re buying me coffee.

Allen: Now, let’s talk about something that stresses a lot of people out—debt.

Luna: Ugh, just hearing that word makes me nervous.

Allen: You’re not alone.

Allen: Debt can feel overwhelming, but it’s not impossible to manage.

Luna: Yeah, but it’s so easy to get into debt.

Luna: One credit card swipe and boom—you owe money.

Allen: Exactly.

Allen: And if you’re not careful, it adds up fast.

Luna: So, what’s the first step to handling debt?

Allen: Know what you owe.

Allen: Make a list of all your debts—amounts, interest rates, and due dates.

Luna: That sounds scary.

Allen: It can be.

Allen: But avoiding it won’t make it go away.

Luna: True.

Luna: So, once you know what you owe, then what?

Allen: Choose a repayment strategy.

Allen: Two popular methods are the snowball method and the avalanche method.

Luna: Ooh, sounds fancy.

Luna: What’s the difference?

Allen: The snowball method means paying off the smallest debt first.

Allen: It helps build motivation.

Luna: Oh, because you see progress faster?

Allen: Exactly.

Allen: The avalanche method focuses on the highest interest debt first.

Allen: It saves more money in the long run.

Luna: So, one is about quick wins, and the other is about long-term savings?

Allen: Right.

Luna: Which one is better?

Allen: It depends on what works for you.

Luna: What about credit cards?

Luna: They seem like a trap.

Allen: They can be if you don’t use them wisely.

Allen: The key is paying off the full balance every month.

Luna: What if you already have credit card debt?

Allen: Prioritize it.

Allen: Credit card interest rates are usually very high.

Luna: Yeah, I’ve seen some crazy rates.

Luna: So, the longer you wait, the worse it gets?

Allen: Exactly.

Allen: That’s why paying more than the minimum is important.

Luna: What about loans?

Allen: Same idea.

Allen: The faster you pay them off, the less interest you pay.

Luna: Okay, but what if someone really can’t pay off their debt quickly?

Allen: Then focus on making regular payments and avoid adding new debt.

Luna: So, don’t keep swiping the credit card?

Allen: Right.

Allen: Borrowing more to pay off debt usually makes things worse.

Luna: Got it.

Luna: Debt isn’t fun, but at least now I know how to deal with it.

Allen: That’s the goal.

Allen: Alright, we’ve talked about budgeting, spending, and debt.

Allen: Now, let’s discuss saving more money without feeling miserable.

Luna: Oh, that sounds nice.

Luna: Because most people think saving means no fun.

Allen: That’s a common myth.

Allen: You don’t have to give up everything to save more.

Luna: So, what’s the trick?

Allen: First, pay yourself first.

Allen: Before spending, put a part of your income into savings.

Luna: Like… treating savings as a bill?

Allen: Exactly.

Allen: If you don’t see the money, you won’t spend it.

Luna: Okay, but how much should people save?

Allen: A good start is 20% of your income, but even 5% is better than nothing.

Luna: 20% sounds like a lot.

Luna: What if someone can’t afford that?

Allen: Then start small and increase it over time.

Luna: Okay, what else?

Allen: Automate your savings.

Allen: Set up automatic transfers so you don’t have to think about it.

Luna: Oh, so I can save without effort?

Allen: Exactly.

Allen: If it’s automatic, you won’t “forget.”

Luna: I like that!

Luna: Any other tips?

Allen: Cut expenses that don’t bring real value.

Luna: You mean like gym memberships I never use?

Allen: Exactly.

Allen: Look at your spending and find things you can live without.

Luna: But I don’t want to feel deprived.

Allen: That’s why you focus on mindful spending.

Allen: Spend on what truly matters and cut the rest.

Luna: Okay, give me an example.

Allen: Let’s say you love coffee.

Allen: Instead of cutting it completely, maybe brew it at home.

Luna: Hmm, I see.

Luna: So, I don’t have to give up what I love—just spend smarter?

Allen: Exactly.

Allen: The goal is to save without making life boring.

Luna: Alright, I think I can do that.

Allen: Good!

Allen: Saving money should feel rewarding, not like a punishment.

Allen: Now, let’s talk about something people love to ignore—retirement planning.

Luna: Oh no, that sounds too far away.

Luna: Can’t we think about it later?

Allen: That’s what most people say.

Allen: But the earlier you start, the easier it gets.

Luna: Ugh, fine.

Luna: So, what’s the first step?

Allen: First, understand that retirement isn’t just for “old people.”

Allen: It’s about financial freedom.

Luna: So, retiring means I don’t have to work if I don’t want to?

Allen: Exactly.

Allen: And to get there, you need a plan.

Luna: Alright, where do I start?

Allen: Start by estimating how much money you’ll need.

Luna: That sounds impossible.

Allen: It’s not.

Allen: A common rule is to save 25 times your annual expenses.

Luna: 25 times?!

Luna: That sounds huge!

Allen: It does, but that’s why you start early.

Allen: The longer your money has to grow, the less you need to save each month.

Luna: Okay, so where should people put their retirement savings?

Allen: In retirement accounts like 401(k)s or IRAs.

Luna: What if someone doesn’t have those?

Allen: Then look into investment accounts.

Allen: The key is to invest in assets that grow over time.

Luna: Like stocks?

Allen: Yes.

Allen: Stocks, index funds, or even real estate.

Luna: But what if the market crashes?

Allen: That’s why you invest for the long term.

Allen: The market goes up and down, but over decades, it grows.

Luna: So, don’t panic and sell everything?

Allen: Exactly.

Allen: Stay invested and keep adding to your savings.

Luna: Alright, but what if someone starts late?

Allen: Then save as much as possible and invest wisely.

Allen: It’s never too late to start.

Luna: So, start early if you can, but if not, just do your best?

Allen: Right.

Allen: The most important thing is to take action.

Luna: Alright.

Luna: Maybe I’ll start thinking about retirement… tomorrow.

Allen: Alright, we’ve covered budgeting, saving, and investing.

Allen: But there’s one more key to financial success—learning.

Luna: Ugh, studying?

Luna: Do I really have to?

Allen: If you want to manage money well, yes.

Allen: Financial knowledge helps you make smarter decisions.

Luna: Fine.

Luna: So, where do people start?

Allen: Start with books.

Allen: There are great beginner-friendly books on personal finance.

Luna: Do I have to read a whole book?

Allen: No.

Allen: You can read summaries or listen to audiobooks.

Luna: Okay, that’s better.

Luna: What else?

Allen: Follow experts online.

Allen: Many financial experts share tips on YouTube, podcasts, and blogs.

Luna: But how do I know who to trust?

Allen: Good question.

Allen: Stick to experts who focus on education, not selling products.

Luna: Got it.

Luna: Any other ways to learn?

Allen: Yes.

Allen: Try online courses.

Allen: Many free or low-cost courses teach personal finance basics.

Luna: So, I don’t have to go to school for this?

Allen: Nope.

Allen: You can learn at your own pace.

Luna: What about real-life experience?

Allen: That’s important too.

Allen: Start small—track your expenses, set goals, and try budgeting.

Luna: So, learning by doing?

Allen: Exactly.

Allen: The more you practice, the better you’ll get.

Luna: What about talking to people?

Allen: Great idea.

Allen: Talk to financially smart friends or mentors.

Allen: Learning from others can be really helpful.

Luna: Alright.

Luna: So, read, watch, listen, practice, and ask for advice?

Allen: That’s the formula.

Luna: Sounds simple enough.

Luna: Maybe I’ll start today.

Allen: That’s the spirit!

Allen: Alright, we’ve covered a lot today.

Allen: Let’s do a quick recap.

Luna: Yes, please.

Luna: My brain is full.

Allen: First, we talked about budgeting.

Allen: A good budget should be simple, flexible, and realistic.

Luna: Then we tackled spending habits.

Luna: No more impulse shopping… hopefully.

Allen: Right.

Allen: Controlling unnecessary expenses helps you save more.

Allen: Speaking of saving, we also discussed emergency funds.

Luna: Yes!

Luna: I need to start one before my next “emergency” shopping spree.

Allen: Not the kind of emergency we meant.

Allen: But yes, having savings prevents financial stress.

Luna: Then we jumped into investing.

Luna: Stocks, index funds, real estate—lots of ways to grow money.

Allen: Exactly.

Allen: Investing is key to long-term wealth.

Allen: And don’t forget debt management.

Luna: Ugh, debt.

Luna: But at least now we know how to handle it.

Allen: Right.

Allen: Paying off high-interest debt first saves money in the long run.

Luna: Then we talked about saving more without feeling miserable.

Luna: Smart spending = more savings without sacrificing fun.

Allen: Exactly.

Allen: And we wrapped up with retirement planning and financial education.

Luna: Start early, invest wisely, and keep learning.

Allen: That’s the formula for financial success.

Luna: Alright, so what’s the next step for our listeners?

Allen: Take action!

Allen: Even small steps make a big difference.

Luna: And if you have questions or thoughts, drop a comment below.

Allen: Yes!

Allen: We’d love to hear from you.

Luna: Alright, that’s it for today.

Luna: Thanks for listening!

Allen: See you next time!