Are You Wasting Money Without Realising It?

**Tim Elliott** (0:00)
This is the Morning Drive, tightening one's belt in tough times. Your money now, James Thomas is back with me, he's a licensed, independent financial consultant, and he is here, it's good to see you.

**James Thomas** (0:13)
Likewise, good morning.

**Tim Elliott** (0:14)
I haven't seen you for a couple of weeks.

**James Thomas** (0:15)
No.

**Tim Elliott** (0:15)
It's been, I don't know, I wondered if you were avoiding me, and then I realized it was Eid, so it was probably, you've been away.

**James Thomas** (0:21)
Yeah, went back to the UK, blessed with some amazing weather, great to catch up with some family and friends.

**Tim Elliott** (0:27)
You say that, but you're blessed with the highest temperatures in recorded history or something.

**James Thomas** (0:32)
Oh, in May's recorded history.

**Tim Elliott** (0:34)
In May's recorded history, without air conditioning. So, more for you.

**James Thomas** (0:37)
Yeah, but it's like a Dubai winter. It was Dubai winter temperatures. Yeah, it was lovely. I found it, yeah, it was quite amusing, because in the UK, Brits love to talk about the weather, because every conversation, oh, it's so hot, and you're thinking, no, it's not, it's beautiful, but.

**Tim Elliott** (0:54)
Yeah, yeah, I love that. Brits love to talk about the weather, which is ironically where we are at the moment.

**James Thomas** (1:02)
Yeah, well, indeed.

**Tim Elliott** (1:03)
Time to move on, probably.

**James Thomas** (1:04)
Keeping up with our stereotypes.

**Tim Elliott** (1:06)
There were a few people that melted in the United Kingdom.

**James Thomas** (1:08)
Apparently so, yes.

**Tim Elliott** (1:09)
But they're going to be fine. They put them back together.
Look, lots of us currently putting off larger purchases at the moment, and I wanted to talk about this with you today, because I think it's something that, you know, people I talk to, it's like, I'm going to wait for this. I just talked to Michael, who produces this show day before yesterday, and he said, I'm not going to buy the new laptop at the moment. I'm still using my old one. I know everything's worn. All the letters are worn off the keys. I'm not going to buy one at the moment. And it made me think that I think that's how a lot of us feel. You know, when things are uncertain, you kind of hold off, and we're all in kind of wait and see mode. So I wondered what that means for our money, you know, putting off larger purchases. Whenever there's, you know, uncertainty, that kind of happens, whether it's conflict or inflation or whatever.

**James Thomas** (1:55)
Whatever it might be, it does generate that uncertainty, and that then leads to hopefully, as we've always discussed, just to have that extra thought about what we're spending our money on.

**Tim Elliott** (2:07)
Yeah, exactly right.

**James Thomas** (2:08)
So turn that negative, potential negative into what I believe is a positive.

**Tim Elliott** (2:13)
Turn that smile, that frown upside down, as they say. So I've got seven points here I want to put forward to you for your thoughts. What can you do or what should you be doing with your money at the moment? And I suppose the first one is to prioritize liquidity, having some cash aside.

**James Thomas** (2:32)
Absolutely. We always say have three to six months, immediately available cash. But no harm in just adding a bit more to that, just in case, just to make sure that should anything happen, you've got enough money to do whatever you need to do.

**Tim Elliott** (2:50)
Yeah, and to not have your... I mean, you know, to keep saving.

**James Thomas** (2:53)
And then not have to dip into savings. I mean, often, and again, I'm going to curse things probably, but when you look at financial markets, they've actually been doing incredibly well, which is almost going against what you might expect to happen when there are times of uncertainty. And again, we haven't really got time to go into that. But why I mention it is because we don't want to have to dip into our longer-term savings. So if we've got the cash in the bank, that's the place to access.

**Tim Elliott** (3:21)
Yeah, okay. So for banking, for travel, for employment, whatever disruptions might come along. The other thing, if you're prioritizing liquidity, then you should probably be doing whatever you can to reduce debt.

**James Thomas** (3:35)
Always.

**Tim Elliott** (3:36)
Reduce unnecessary debt.

**James Thomas** (3:37)
Unnecessary debt. And again, that ties into this. Because we're thinking about whether we should spend on something, discretionary spend. But if we already have and we've got that debt on a credit card, on an unsecured loan, think about trying to get that paid off as quickly as possible.