For financial expert, entrepreneur, and shoe fanatic Melissa Browne, her money philosophy has a lot to do with chocolate.

“I don't believe money is good or evil in the same way that I don't believe that food is good or bad”, she explains. “Food should just be a tool to nourish us, give us energy and help us live. It's the same for money.” 

The author of Unf**k Your Finances is not a fan of budgets - so much so that she wrote a book entitled Budgets Don’t Work (But This Does). “Budgets don’t work in the same way that diets don't work”, she says. “Long-term, they're super restrictive.”

So can you have your cake and eat it too? Well, yes, according to Melissa. If you set up a good financial framework, then there’s enough wiggle room for your favourite indulgences. “We can rely on our self-discipline, or we can set up great money environments and boundaries, so that we're not having to fight our natural tendencies”, she explains. It might mean cutting up your credit card, or unfollowing brands and influencers who tempt you into sales. What it doesn’t mean is living your life off an Excel spreadsheet.

There are plenty more easily digestible nuggets of wisdom in our interview with Melissa. So let’s talk salary negotiation, financial detoxing, and why your reason not to invest is probably actually a reason to invest…

Where does your passion for finance come from, and what money habits were you taught growing up?

It's funny, but I'm actually not passionate about finances! It's something that I happen to be good at, but what I am passionate about is a transformational change, and the choice and the options that you can have if you care about finances. So I'm far more passionate about the result than I am about the vehicle. 

But of course I'm a bit of a numbers nerd. My Dad was an accountant, but he actually didn't teach us a lot of money habits. What I absorbed was that one person always had power and control in the relationship. My Dad handled the money and he absolutely decided where and how it was all spent. And I decided I did not want to be my Mum. I wanted to be the one with the power and control. I learned later on I actually don't want power and control, but the ability to have the decision-making. But the other money habits he taught us were just working really hard and being super frugal. And again, they weren't necessarily great money habits, but certainly that was what was modeled to us and my Dad retired at age 53. And he retired really well, but we were never shown how he did that. So certainly my sister and my brother don't have great financial literacy, because it wasn't something that we talked about.

So what do you think it was that was different about what you absorbed, and what they did?

I think I have that oldest child syndrome where I just wanted to do all the things and learn what I can, and achieve. And I think it's interesting when I've had the conversations with my sister, she saw my Dad be super frugal, work really hard, and then a new car would turn up. And that was because it was a tax deduction, and then we had to be super frugal. And then you go away on an extravagant holiday. And so she kind of walked away going ‘I actually don't understand how to do money, because all I saw was feast and famine’. So we saw similar things, but took different messages.

You call yourself an accidental entrepreneur. Why is that?

Yeah, I absolutely did not intend to own multiple businesses and to be doing all these things. If you'd asked me at 16 to 18, I was going to study law, be a lawyer, married by 28, have two kids. It was very traditional. My life now is I've had three businesses, chosen to be child-free, live part of my life in the mountains, part in the city, and absolutely the spark of it was accidental. I discovered business because I thought I’d do some work on the side, just while I did some more study. When I divorced my first husband I had that crisis at 33 going, ‘Oh my gosh, what do I want to be?’ What I figured out was that I actually loved business. It wasn't accounting, it wasn't law, or it wasn't any of those things. It was actually business that I loved. So it was totally accidental.

What has been one of the most defining moments of your career so far?

The launch of my first book was so exciting. I've won awards, and they were exciting too, being acknowledged. Having Cosmopolitan magazine contact me and say, ‘Hey, we want to feature your book on a full page spread in the middle of the magazine’, was a pinch me moment. I grew up loving those magazines, so being featured by Harper’s Bazaar and Vogue, those magazines that I just love so much, was amazing. But I have to say the most defining moments for me, now, looking back, are the women who will contact me or stop me in the street and say, ‘I've cut up my credit cards. I've invested in shares for the first time because of what I learned from you’. Or, ‘I was heading down this path and now I've bought property or I've started a business’ and it's that transformation or impact I've had. That absolutely has been the defining moment.

I want to ask you about the gender wage gap, because it obviously directly impacts the ability of women to invest, and it creates a gender investment gap. So can you talk us through your experience of that?

What I find really fascinating about this is a couple of things. One is there is a gender wage gap and I find it really distressing that we're still having to talk about this. But there's not just a gender wage gap in corporates. ABS statistics show that there's actually a gap between business owners that are male and female as well. So in a place where women are setting their own prices, setting their own terms, there's a gap in earnings there. So that to me says it's a systemic problem, that is as much to do with us as it is to do with corporate Australia. That gender wage gap affects everything in how we view money - if I have a money story that's, ‘I'm not enough’, then potentially I'm not going to price appropriately in my business. If I have a money story around minimisation and not wanting to be a tall poppy, then I'm not potentially going to price appropriately in my business. So for me, it starts there. It's not just going and asking for a pay rise and being paid appropriately in corporate. It happens in business as well. And the problem of course is if we don't have the same pool of funds to play with, because we're not earning the same as the blokes, then therefore there's going to be an investment gap because we don't have the same to invest. 

And the sad fact is that women over 55 are at the highest risk of homelessness, which is frightening because they don't have that same super pool, because they haven't earned as much or they've had career gaps or they've looked after kids. Or because they've been sole traders and they haven't had to pay super for themselves. What happens a lot with women is they put everyone before themselves, so they don't pay super, or they pay for the family. Part of it is what we're charging. Part of it is what corporates are paying. Part of it is simply us not having the same pool of funds. 

But I think part of it also is because as a society, we don't believe that women are good investors. And there was research from the US that found that 93% of people surveyed believed that men were better investors than women. Yet studies show that over a three-year period, women and men both beat the index, and women were better investors than men. So I feel like that question is a whole conversation. But there absolutely is a gender pay gap. And it's as much mindset, and how we perceive ourselves, as it is not having the right and the appropriate pool of funds to play with.

You said something really interesting, which was that money is neither good nor evil. What do you mean by that?

So if I ask you, ‘do you think money's good, bad, or, okay?’, you might have a money story that says you actually don't think it's okay to have too much money. And I've actually had women say to me, ‘I think money is icky or it's just not good’, or they've even used words like evil. Money can be lost where that becomes all-consuming. I don't believe money is good or evil in the same way that I don't believe that food is good or bad. Food should just be a tool to nourish us, give us energy and help us live. It's the same for money. Money should just be a tool that helps us get to that life that we want to design. When we could remove the emotion from money in the same way that we want to remove the emotion from food, then we can move it simply back to being a tool that we can look at quite unemotionally and say, right, ‘how can I best use this to help me get to the life I want to design?’

Similarly, there can be an element of guilt with finance...

Yes, I see the same self-talk and if I use the analogy of food and money, we often use words like, ‘I'm being a bit naughty today. I am having some chocolate’, or ‘I'm a bit naughty today. I dipped into my savings’. Enough with naughty and the good and the whatever - let's just set it up so they're nourishing, they’re fueling, and they're getting us to that life we want to design.

You've written a book called Budgets Don't Work, But This Does. We’ve all heard that sticking to your budget is the most important thing you can do to manage your money. So what's your stance on that?

I disagree that the most important thing you can do is have a budget. And I'm not alone. So an emeritus professor from a university in Bristol in the UK actually accidentally discovered that budgets don't work. She talked about that at the Good Shepherd microfinance conference in Sydney a number of years ago, and I was in that audience going, ‘of course they don't, in the same way that diets don't work’. Long-term, they're super restrictive. Often what they do is it becomes almost a wishlist rather than a budget. And to stick to it is almost all-consuming. 

I'm a fan of figuring out how much it costs you to live. So still figuring out how much is my rent and my insurance and my groceries, and those things that are our needs rather than our wants. And then figuring out what savings do I want, what are the goals that I have, where do I want to go? And then with what's left, I can then spend that on whatever I want, guilt-free. Really it's about spending to what's left, rather than having to account for every single cent for everything you're spending in your life. I'm also a fan of tracking your spending. So bringing consciousness to how I'm spending and asking, ‘how do I feel about that? How does that fall within my values?’ 

How do you personally approach budgeting?

I have a bills account where I've worked out this is how much it cost me to live the basics of my life, and the money goes there every month. I have a savings account which has shares, so I put my spare money into that. And then I eat from what's left. I have a bit of a predilection for shoes, so I will overspend on shoes and clothes and those sorts of things. But then if I'm asked to go out with a girlfriend for cocktails, and if there's no money left in that account, I'll say I'd love you to come to my house and have a glass of wine instead. So it's about not moving to a credit card, or not dipping into the savings once that everyday money is gone.

And that's how I am able to live within my means, in the same way that I can't have chocolate in the house. If it's here, I'm just going to eat it in one go. Or if I was to have all my money in the one bank account and say, you need to budget on this Excel spreadsheet, it wouldn't work. So moving the money to the bills account, moving all my spare cash into shares, and then having the rest in an everyday account that I can spend guilt-free, works beautifully.

So how do you avoid the cycle of being strict, and then ‘falling off the wagon’?

Once or twice a year, I'll go off sugar. Usually by January, I'm consuming sugar by the handful, so January will be sugar-free month for me, and January will also usually be a financial detox for me. I don't buy anything new for 30 days. And I find just doing things like that gives you that financial reset where you shift back into being a conscious consumer. I'm not just tapping and paying, I'm not just jumping online. I can pick up why I'm spending, and I can get back to how I want to behave. So I've got hacks and things that I use that I encourage others to use as well, rather than strict budgets.

You've also written another book, Unf**k Your Finances, which is an essential guide to financially adulting. So can you tell me what you mean by financially adulting?

For me it means facing your finances. So rather than running from them, or exercising financial apathy, or thinking that's a problem for the future, you say I'm going to face them. I'm going to decide to do something about them. Choosing to take action, and not financially defaulting. So not just doing something because that's what your peers are doing or that's what others are doing and it's not right for you. Financial adulting, I think, is being brave enough to exercise choice with your finances, so that you're running a system and you're investing in things that are right for you.

What would you say are the key steps that you need to take to get control of things financially?

We need to break up with money, which turns it from that emotional thing back to being a tool again. So how we do that is through financial detox. That's how we break defaulting patterns. We want to essentially figure out who we are and where we are. So what does ground zero look like for us - what bills do I have? What debt do I have? Where do we want to go? I think too few people have figured out this is actually the life I want to design. They've just thought well, ‘I'm supposed to buy a house. So maybe I'll just save for that’. So actually sit down and figure out where do I want to go, and what's the action plan to get there. 

The book itself is quite visually beautiful, and quite unusual for a book on finances. Can you tell me a little bit about that?

I wanted it to be appealing. I wanted it to be like a little black book that you pick up and you just want to read, and you want to have out, rather than putting it away. I engaged a graphic designer to create it and she used to work for House and Garden, and different magazines. When Allen and Unwin came along and said, ‘Hey, can we publish it?’ I said, ‘yes, you may. But it still has to look beautiful. I want it to be hardcover. It has to have that same typography. It has to look pretty.’ If finances aren't appealing, at least we can start with something that's visually appealing.

You’ve also got a course on this topic. So can you tell me a little bit about that?

Books work for some people, and podcasts work for some people, and a financial advisor works for some people, depending on where you're at, but other people just need a bit more help or they want that deep dive. So it's an eight week course that covers everything on financial awareness. We spend the first two weeks building financial foundations, because I believe it's like building a house - unless we have really great foundations, it's just going to crumble. We spend three weeks on creating your own financial strategy. So everything from, where am I now, through to where do I want to go? Where's the gap, and what could I do to close that gap? So how to find more cash, how to pay down debt, all those things that we should know, but don't necessarily, and then three whole weeks on investing.

There’s a week on shares, because I think a lot of us are used to property, but no one's really talking about shares in a way that makes sense. I've been investing for quite some time, and I'll open my share portfolio, not to say, ‘this is what you should do’, but just so you can see. We can drive past a house and go, ‘oh, that's interesting’, but we can't peek inside people's share portfolios, usually. So I explain how I invest, what I look for, and then show you how to buy and sell a share. So that if you want to, you can go and do that yourself, without having to engage a financial advisor. Then there’s a week on property, a week on business, including how to develop seven streams of income, and then finally a week on money habits so that you can set up great habits to see you through, and then some bonus modules.

During the eight weeks, there’s a closed Facebook community that you get lifetime access to, where you can pick my brain about money. I do a weekly live Q&A where I talk more about that particular topic from that week, but also answer questions, because not many of us have a financial expert on tap that we can just ask the questions that we've always wanted to know. And that's the part that I must admit I really love, because it's watching people have their ‘aha’ moments and their financial transformation, but also appreciating how little people know. I remember talking about equity last round, and someone said, ‘can you just explain what equity means? Because I just have never wanted to ask, and now I don't feel bad’. So it's a beautiful course. And it's one that we've had hundreds of women go through. It's life-changing, which is exciting.

Having had the year that we've just had, do you think that we've become more conscious consumers?

I absolutely have seen some people really become super conscious. They've appreciated that because when COVID hit, they had those sleepless nights, so they set up buffers and they paid down debt and they just needed to really reign in their spending, through to other people where we know the stats on them grabbing 10 grand out of their super. 63% of it was spent on discretionary spending - for the blokes that was Sportsbet, for the girls it was clothes and shoes. So yes and no.

Studies have found that buying luxury items can open the flood gates to purchasing even more stuff, which is the perfect recipe for credit card debt. You talk about how buying luxury items isn't necessarily a bad idea, but it should never be done at the expense of your financial goals. So how do we keep ourselves in check there?

I think part of it is being so excited about your financial goals that you're not prepared to risk it for short term gratification. So it's actually sitting down and working out, not just what goals do I think I should have, but what goals do I want and what sort of life do I want to design, which is a different question. And once you've figured that out, whether that's visually or whether that's written out, put it places. So for me, it might be on your phone, putting it on your fridge, putting it on all those places where you may spend. So there’s that visual to stop you, before you do. I've got a friend who puts ‘STOP’ on their savings card. And when they've handed it over the shop assistant has said, ‘are you sure?’

But it's also realising that buying luxury brands isn't necessarily a bad idea. How we can keep it in check is one; making sure that we’re super excited about our goals. And they're there as a constant reminder. But also, setting up our money environment in such a way that we're not going to be tripped up. So whether it's cutting up your credit cards because you're going to spend more, or it might be unfollowing, unsubscribing, and unliking people that you follow online because either they are influencing you to spend when you otherwise wouldn't have, or as much as you try not to you’re sucked in by them every time there's a sale. You just need to opt out of all that, so you're not tempted. We can rely on our self-discipline, or we can set up great money environments and boundaries, so that we're not having to fight our natural tendencies. So both the goals and that money environment I think is really crucial.

And when it comes to salary negotiation, what have you learned over the years?

I've been a boss for more than 20 years now. And what I hate is when someone will come when it's their one year anniversary and just say, ‘hey, I think I deserve a pay rise’, for no other reason than time in the seat. And what I know is that women will often not value themselves, and often won't ask. So what we want to do is remove the emotion, both for the boss and for you, so that when you're going in, you're arguing for something on merit. I would have the conversation earlier to say, ‘hey, I want to move up in salary. What would you want to see for me to get there?’ So then you've got a really clear path, or else to sit down and work out what results have you had for the company? What wins, what things have you achieved? And they don't have to be financial, they could be efficiencies. They could be projects that you've managed, and take that in as a reason for you to have the pay rise. Because as a boss, I'm always far more impressed by that than I am by, ‘hey, it's now time’. 

And that also removes the emotion, which is helpful for both the boss and also for you asking for it, because then if they say no, you can say, okay, what can you tell me about that presentation, or those reasons you're not comfortable giving me a pay rise. And then what would it take for you to give me that pay rise? So that way there's that rational, non-emotional discussion. And if they told you no, I'd stick it in my calendar in six months time, do all the things, and then go and ask for it again.

When it comes to women specifically, obviously there, there is the wage gap to factor in. But what other factors do you think hurt women's ability to invest?

There's a bunch of things. There's not enough financial literacy and I know that that's across the board both men and women, but I think for women it's even more important to have financial literacy, because we've got a lower amount of funds to start. So yes, there's the gender pay gap, but just the fact that women will have time out potentially from the workforce to have kids, can hurt a woman's ability to invest because they feel like they've got to save for that. And certainly I have a lot of conversations with couples where they'll say to me, ‘it's not worth her staying at work because 50% of her wage would go to childcare’.

In which case I'll say, well, that's interesting because I didn't realise it was her baby. Talk to me about what percentage of your joint money is going to go to childcare. And they might work that out as 20% and then go, ‘oh, that we can cope with’. 

Putting the family first hurts your ability to invest. I had someone say to me once,‘I can't really afford to pay the monthly fee for your course at the moment’. And I said, I totally get that. And I had a conversation with her and she had a few kids and we worked out she was spending about 200 dollars a month on all of their activities. And I said to her, ‘I love that you're putting all of them first, but what about your own financial oxygen mask? You know, what are you going to do for yourself?’ And I think women have this attitude of, ‘I put everyone first except for me’. And when it comes to female investing, I see too many women divorced, with nothing, and no financial literacy, or they just don't have their financial independence because they haven't put their own financial oxygen mask on first. So I think a lot of the excuses or the reasons we use to not invest are actually reasons to invest.

What are some of the biggest investing mistakes that you see people making?

The biggest mistakes are not starting early enough, not holding long enough, and not backing themselves. In your twenties is the ideal time to start investing, because you have time, you've got this beautiful compound interest; the greater length of time, the smaller amount you could start with. So if you're young and you can't start with much, and are therefore wanting to opt out, my argument would be starting small now you'll get far bigger bang for your buck than someone in their forties starting with more. So just start with what you have early. 

Also, people want to defer it because they say ‘I've got a mortgage and I want to pay that off first’ or ‘I've got kids and I just need to get them settled first.’ There's always going to be a reason not to start. But if, for example, you want that emotional thing of paying off your mortgage first - you can't eat your house. Your house isn't an income-producing asset. So once you've got that mortgage to a point where you can afford to pay the mortgage at two to three percent, I'm such a fan of asking what else do I want to be investing in? If you're using the equity in your home or starting to invest in shares or a business or something else, so that you can set up your seven streams of income - whether it's in business, whether it's investing, whether it's asking for a pay rise, it's just back yourself, back yourself.

Lots of people do feel pressure to keep up with their friends. So what advice do you have on navigating this and not falling into the comparison trap?

It's so hard. That comparison culture is so insidious. Keeping up with the Joneses is real. So if you have people in your friendship group where you're comparing yourself to them and they're earning more, or they've had an inheritance, it's catching yourself and going, ‘okay, it doesn't matter that I'm not at the stage that I think I should be at. Where do I want to go? And how can I run my own race? And what would it take for me to get there?’ 

If you had people in your peer group that were causing you to spend, then I would be looking at what boundaries could I put around there? What conversations do I need to have, where I might say, ‘I'm prepared to do this, but I'm not prepared to do that’. You know, destination weddings are a huge one. I know I had some people in my course for the last round that had four destination weddings, even during COVID, where they're saying, this is crippling us! So again, it's that, it's that conversation to say, am I going to go to all four? Am I going to Zoom into some, am I going to go to a party afterwards? Do I have to turn up in new outfits for all of them? Or can I rent them? I see this as such a problem, but it's working out then who do I place in my life? And what conversations do I need to have, so that this is not all I see. And this is not all I'm influenced by.

Finally Melissa, what's some lasting advice on money that you've been given and never forgotten?

A couple of things: the best time to start was yesterday. Even if you're sitting here saying, ‘I wish I'd started sooner’, still start. The best time to start was yesterday, the second best time to start is today. And when I realised that most millionaires have seven streams of income, that really motivated me to figure out, how can I have that? How can I have these different streams of income so that I'm not just relying on one thing? And I'm not suggesting that everyone has to have seven, but realising that we need to have not just your wage and super and a home that doesn't give us an income, but actually to create these multiple income streams, gives this financial choice and financial options. 

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