Today, we’re joined by the fabulous Effie Zahos—editor, speaker, author, and all-around finance guru!  

Effie dives into the emotional aspect of money management and how it’s more than just dollars and cents.  

She gets real about the challenges of curbing those late-night shopping sprees (we’ve all been there, right? 🛒💻) and how financial advice has shifted from freezing credit cards to tackling the psychology behind our spending habits. 

In this lively chat, Effie and the boys unpack the tricky relationship between financial literacy and behaviour. Spoiler: Even with all the money tips out there, people still struggle to get it right!  

Tune in and get inspired to take control of your financial story. 

Listen to the full episode here: Episode 235 | Money Hacks from the Money Queen – Chat with Effie Zahos 

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Following Up on these Words of Wisdom from Effie Zahos…

Did Effie’s advice resonate? Let us know! 

And if you’re keen to get your money management affairs in order, check out our bestselling book Make Money Simple Again. 

Featuring our proprietary MoneySMARTS system, you’ll learn how to trap and save more of your income, take control of your money, reduce stress levels and ultimately enjoy financial peace.

Best of all, the book is FREE! 

If You Enjoyed TPC Gold | Chat with the Money Queen – Effie Zahos, You Might Also Like:

• Ep 266 | The Wake-Up Call That Demanded Change and How She Used MoneySMARTS to Get Back on Track – Chat with Keren 
• Ep 322| When Wild Money Management Finally Gets Tamed! – Chat with Kellie 
• Ep 331 | What Is Your Money Personality? – Chat with Effie Zahos 

Transcript

Effie Zahos
Yeah, that’s interesting because I do, I probably see more of the extreme. So in the role of editing a finance magazine or in my role where I actually do a lot of seminars and talks, I did one last night for Rotary and (it was a) young crowd, mostly females. And the first question was: “What’s your dirty little money secret?” They were quite open and it was exactly what you’re saying. One was saying that she tends to spend a lot online in the night after work, and that’s a given. I was reading once a while ago…the retail therapy. Friday night, nine o’clock is the biggest traffic for people to actually be spending money online.  

Ben Kingsley
Wow.  

Effie Zahos
You’ve finished work, you’ve had a hard week. Have a glass of red maybe. And you’re on there and you think: I deserve it. I deserve it. My week was tough.  

Bryce Holdaway
What’s your advice to people who would come to you and say hey. Are they asking how to overcome that or are they just seeing that as part of life? 

Effie Zahos
A lot of us don’t realize what we’re doing and I’ve kind of learnt that through the years as well. It’s easy for me to say now. Back in the 90s when we first started talking about money; I mean I think I was one of the first females on a commercial station to talk about money. Back then our tips were if you’re spending on your credit card, put it in the freezer. You remember that tip? Put the card in the freezer, so if you have to use it, it’s got to thaw. Probably put it in the microwave; would that have melted the plastic? I never tried it, clearly.   

I mean, at that time, that was probably the best tip that I could give, okay? I’ve grown up too. Now it’s more of a case of, well, you know, why is it, why do you do what you do with your money? And there’s a chapter in there where I said, you know you earn 150k, why the hell am I still broke? Whether you earn 150k, whether you earn 60k, whether you earn 50k, you’ve got to understand: Why do I feel broke? Why am I feeling the pressure? And then understand why do you spend? What are those triggers? And then try and get those fixes. A lot harder.  

It’s easy for me to say, stop using your credit card, cut it up. It’s like saying to someone who has an addiction, just put it away. You’re not going to put it away. And you actually need to really have those conversations with yourself if you’re going to move forward. And I really do feel for the younger generation coming through because there are so many distractors out in the marketplace that I definitely didn’t have. And you know, one question I’ll ask you guys is that we have so much financial literacy out there. Really, everybody’s on their cause in the institution.  

Ben Kingsley
There’s a report on you coming out.  

Effie Zahos
Yeah, let me turn the tables. Let me turn the tables. Why is it that we are still failing in financial literacy? So you look at say, the HILDA survey, which they had those five simple questions. I don’t know if you’ve had a go at those. I’m assuming you’re going to get five out of five. I hope you did. 

Ben Kingsley
No, I did. I remember that, yes.  

Effie Zahos
I thought they were fairly easy questions. Fairly easy. You know, like you had $100 in your bank account, interest rate was 2%, how much would you have by the end of the year? Things like that. Risk for return, diversification, so on. No matter what gender you are, both failed. So I think only 49.9% of men got the five right and as little as 35% of women got those five right. With so much financial literacy out there, why are we still failing?  

Bryce Holdaway
Well, I always think that if it was as simple as reading, you know, we’d all be billionaires because we’ve just got to go to the library with a free library card. I think money is simple and behaviour is hard, right? Because there’s zero complexity you know, clearly with the property bias, there’s no complexity on how to invest in property and how to build a portfolio. When it comes to shares, it’s pretty straightforward. 

But I always reference Tony Robbins’ six core needs. I think it’s the greatest contribution he’s made. I’m not sure if you’re familiar with that, but certainty, uncertainty, love and connection, significance, growth, and contribution. He says if you do something that gives you three or more of those things, you will become addicted. So think of Facebook, for example, that gives you the uncertainty of not knowing what’s coming next on the scroll. It also gives you certainty because when you’re lonely, you can get on there. It also gives you significance because you post a photo and people give you 100 likes, 200 likes, 300 likes.  

Effie Zahos
So the same applies I guess if you’re saving and just watching it. Good or bad.

Bryce Holdaway
And online shopping. It gives you a connection, gives you uncertainty, a sense of significance. It fuels those needs. 

Effie Zahos
But when you were saying it’s more the behaviour… Yes you can read everything. We’ve got so much financial literature out there, and it is more about behaviour and the thing that worries me moving forward (is) it’s a case where I think the institutions actually have to get on board. So you can give so much help to consumers but if the institutions aren’t playing fair, it’s not going to work.  

Ben Kingsley
The studies were done about how marketers could attract teenage girls. So they’re trying to work out how they can improve their sales and connection. Because they knew that they were going to get part-time jobs, so this is through the 80s, right? So girls were starting to work, and so the psychologists were corrupted by the marketers in the sense that it’s pretty easy, right? You’ve just got to make them feel inadequate. And that’s all they did. So if you look at all of the marketing that’s done for most people today, and now we’ve got Instagram and all these types of things and the people who follow the people the most are the rich and famous. And what do they do? They post their best shopping. Their store is amazing. Whether it be Louis Vuitton or this or that. And that preys on the inadequacies of people.  

And so to get to that, we’ve got to feel like we’ve got connection. And so when you separate that inadequacy and that connection, then you will drag them in. And that’s the problem. So when you talk about industry and business getting on board with that…that’s a challenge, right? I mean, they might do it on the fringes and they might say, look, look what we’re doing here. We’re contributing to this literacy program, and we’ve got our little brand down the bottom and that makes us feel good. But the reality is, you know, the banks make money out of trading debt.  

Effie Zahos
So it’s counteractive. You know, that’s a bad habit. But by the way, if you go down onto page 50, there is some literature there to help you with your spending.  

Ben Kingsley
So they don’t see they have this inadequacy and then they can’t see forward enough. So that’s the biggest challenge you’ve got with the consequences of that money decision right now. So what did that really do for you in terms of growing that nest egg? Because the nest egg grows too slow. And even if I’m committed for six months on a budget, something’s going to derail me. And it’s usually relationship disconnection, retail therapy they call it. That’s all about feeling adequate. And unfortunately, when that little, you know, those dopamines and all that pass, we look at what we did buy and it hasn’t really fixed us.  

Effie Zahos
No, that’s right.  

Ben Kingsley
You fix from within, and I think that’s the message.  

Effie Zahos
Good point. There’s one in the book I wrote, where a lady came up to me. I seem to have this situation because of who I am or what I do that people just open up. And it can be quite confronting sometimes. But I guess I do the same if a chiropractor’s in the room. I’m just: “Right there, I’ve got this back problem”. And she was saying that, you know, I’ve spent $60,000 on my credit card. I have a private PO box, it goes there, my statement, and we’re about to get a home loan. Will my partner find out about this? And that was quite confronting that, wow, the fact that there was a private PO box sent for the statements to go there. But when we got to the bottom of it, forget about the fact that you’ve got this debt and yeah, I did answer the question. Yes, of course he’s going to find out, of course the bank’s going to know.  

Why? Why were you doing this? And she wasn’t happy in her relationship and the spending made her feel good. So there’s always a reason why we do that. And one thing that I did learn out of the book, which you know I need to kind of remind myself is never ever be embarrassed of your financial status. Never be embarrassed if you can’t afford something. Open up more. Can’t go out this weekend girls, I’m saving up for this. Or school fees have come in, I really shouldn’t be fine dining this weekend or whatever your vice is. Never be embarrassed. And never be embarrassed if you can afford it. Be proud. Be really proud that: Yeah, I can afford that. I bought this. I saved for it, and I’ve got it. Because, you know, the grass may look greener on the other side, but chances are… 

Bryce Holdaway
People will find the authenticity refreshing. You too? And you feel brave enough to open up and say me too. 

Effie Zahos
Yeah, exactly.  

Ben Kingsley
Your true friends will. Those ones who you think are your friends, who you might be, you know, moving in a group of people. And if they challenge that… So take, for example, when I moved interstate and I had a big group of schoolmates. Half of them were like: Yeah, you go out there and have the career that you want to have. The others were like: Look at him. They want to belittle the fact that you’re moving on. So you’re declaring that and they’re saying, “no, no, don’t be worried about that”. They’re not true friends, right? They’re not the people who are going to be there. And they’ll admire you later on when you circle back. 

Effie Zahos
Well, they’ve probably got financial woes themselves. So don’t ever be judged. That’s why I like that. And that came out from a behavioural economist that I had in the book as well, that it’s reassuring. And you need to remind yourself, never be embarrassed of where you are.