Tag Archives: Women in Finance

14 money mistakes to avoid in your younger years

By Robert Wright /February 04,2021/

Here’s a list of things you could stop doing if you no longer want to rely on the bank of mum and dad, or that credit card.

Going without a budget

If you’re looking for somewhere to start when it comes to creating a budget, jot down what money is coming in, what cash is required to cover the bills and any loans you’re paying off, and what might be leftover to split between savings and the fun stuff. This will help you identify where there’s room for movement and where you could be cutting back.

Using your credit card for everything

Credit cards are convenient, but they’re often more expensive than other forms of credit as they usually charge higher interest rates which means you could end up paying back a lot more than what you initially borrowed.

Keeping up with the Joneses

The pressure to stay up to date with your peers and even celebrities can be a subconscious but very real motivation behind some of your poor financial decisions. Try to live within your means, stick to realistic goals, and when you’re looking to make a purchase, ask yourself if it’s something you really need or if it’s something you simply want this week.

Borrowing money from those nearest and dearest

When you’re in a bind you may be tempted to ask your folks or bestie for a cash hand-out but remember it could put some strain on the relationship, particularly if it becomes a regular thing.

Buying or taking a loan out on a pricey car

The purchase price of a new car is one thing but remember added costs (such as insurance, rego, petrol and regular servicing) are another.

Pursuing higher education without a plan

While it’s possible that tertiary qualifications could increase your employment opportunities and potentially help you to earn more over the course of your career it’s also not guaranteed. With that in mind, it’s worth asking yourself whether the field you want to enter requires tertiary qualifications. After all, if you can get where you want through alternative routes, these may be worth exploring, particularly with the average debt for a tertiary student in Australia about $19,1003.

Quitting your job after a bad day

You may not like where you work but if you’re planning your exit march it’s wise to have another gig lined up, as it could be months before you find another opportunity and have cash coming in again.

Not prioritising what you really want to do in life

The benefits of thinking ahead when it comes to what you want are pretty clear. For instance, buying a car, going on holiday and moving into a new apartment all within a six-month period mightn’t be financially doable, but if you spread those things out they might be.

Saying ‘whatever’ to an emergency fund

Only one in four Aussies has savings to stay afloat when faced with unforeseen circumstances. And you don’t want a busted phone or car tyre, let alone a bad landlord or lover, leaving you financially stranded. An emergency stash of cash could give you some peace of mind and reduce the need to apply for a loan or ask someone you know for a handout.

Avoiding the money talk with your partner

Nearly one in three Australians in a relationship claims they fight about money at least once a month. So, before you set up joint accounts or make a big purchase together, think about how you’ll both contribute. And if you’re planning on moving in with that special someone, make sure you’re also across what happens to your finances if you split up with a de facto.

Spending a fortune on the wedding

The average wedding today costs around $36,200, with 60% taking out a loan and 18% using their credit card. To avoid blowing your budget, start saving, talk to your partner (and parents if they’re involved), write down what you can afford, get quotes, and look at how many and who’ll be on your guest list early.

Being blasé about protection

There will be people who’ll inevitably suffer from an unforeseen event that will leave them incapable of working at some point in their lifetime. While you may choose to go without insurance to save money, for a number of people it may be affordable through monthly premiums or paying out of their super money, but do your research.

Choosing a property that’s not within your means

Whether you’re renting or buying, it’s important to think about the upfront and ongoing costs involved, and the location you’re looking at as different suburbs come with different price tags.

If home ownership is on the cards, get a full run-down of the costs you’re likely to come across.

Not caring about your future self

It might seem like a lifetime away but with some people looking at a retirement of 20 years or more (and the Age Pension alone unlikely to be enough to support a comfortable lifestyle), putting money into super may be worth thinking about while you still have time on your side.

Source: AMP

How to start saving for your future in your 30s

By Robert Wright /February 04,2021/

Some big life changes – and big expenses – can occur in your 30s. The key to maximising your retirement savings now is making savvy, forward-thinking financial decisions. 

This becomes even more relevant when you’re surrounded by the current economic uncertainty. Short-term needs and expenses are front-of-mind and you might prioritise saving more money for a rainy day. Even so, it’s still possible to balance this with preparing for retirement while in your 30s to help make sure you eventually leave the workforce with sufficient financial freedom. 

Set a budget – and stick to it

Your budget shouldn’t be static, and it’s a good idea to reassess it at different stages of your life. This is particularly important from age 30, when you’re potentially faced with a lot of large expenses, both expected and unexpected.

Start saving as much as you can

You’re no longer new to the workforce and, with a decade of experience under your belt, you may be in a position to receive a promotion or pay rise.

But just because you’re earning more doesn’t mean you should spend more. In fact, as your income grows, so too should your financial and savings goals. If you developed strong savings habits in your 20s – now’s a good time to save and invest to set aside even more for your future.

Boost your super

It’s time to get serious about super, so your retirement savings are maximised – like consolidating funds where appropriate, choosing a fund that’s in line with your values and understanding where and how your money is generating an investment return, then it’s time to think about these tasks.

Next, if you were one of the thousands of Australians who withdrew their superannuation under the Federal Government’s early super access scheme, start thinking about how you might be able to replenish your super balance. You could do this by making a personal super contribution – you could then try claim this amount as a tax deduction in your tax return or potentially receive a government bonus to your super in the form of a co-contribution.

If you’re an employee, on top of the compulsory superannuation guarantee (SG) from your employer (currently 9.5%) you might also consider salary sacrificing, which is where your employer makes additional voluntary contributions to your super account. You choose the amount your comfortable salary sacrificing, and it’s paid directly from your before-tax income.

Whatever strategy you choose, by setting up payments as an automatic contribution, you’re less likely to even notice them coming out. Plus, putting these tactics in place now means you’re taking a small but vital step toward ensuring your financial wellbeing and a comfortable retirement.

Identify additional income streams

Help save for retirement in your 30s through a side hustle or by regularly getting rid of the stuff you no longer use. It’s also potentially a fun way to meet new people and spend more time doing the things you love. Consider putting whatever you earn from these side projects directly into your retirement account – you’ll be building funds for your future, while decluttering or getting your creative juices flowing.

Assess your insurance needs

With more responsibilities, and possibly debts, it’s probably a good time to make sure your financial future is protected with insurance. You might consider taking out private health insurance before you turn 31, to avoid paying a lifetime health cover loading on top of your premium.

While it may not seem like something you need just yet, income protection and life insurance are not just for oldies. They’re relevant for Aussies at all life stages, especially those of working age with ambitions for the future. Imagine if you couldn’t work because of illness or an accident – taking out insurance can protect you from having to dip into your savings to pay for unforeseen expenses whilst you’re off work.

Save and invest wisely

This is the decade where you might consider investing more aggressively for your future, however it’s important to make considered decisions with advice from those in the know.

If you’re a newbie investor, there are a lot of factors to take into consideration, including what level of risk you’re comfortable with and how diversified you’d like your portfolio to be. Start small, set clear goals and continually re-evaluate your progress.

Get personal finance advice

Whether you talk to your partner, use savvy friends as a sounding board, or get advice from your parents, it’s good to have honest conversations about personal finance. But it’s also important to understand the value of qualified professional advice. Consider making an appointment to see a financial adviser to help you better understand your financial situation, so you can set and reach your retirement goals.

Source: AMP

The right times for financial advice

By Robert Wright /December 04,2020/

COVID-19 has created uncertainty everywhere and impacted not just our health but our wealth too. From millennials to retirees, we’ve had to review our finances and adapt to the changing environment.

We’ve seen volatile share markets, slashed dividends on bank stocks, record-low interest rates and sectors like airlines, tourism and traditional retail struggling to survive. On the other hand, online shopping and e-commerce have surged, and more people are saving now than before the pandemic.

During this uncertainty, many people have found their financial adviser to be a critical source of guidance and a valuable sounding board. In many cases, the adviser-client relationship has been a long-term connection. It’s built over many years and based on trust and confidence that the adviser has the client’s best interest at the centre of every decision.

Demand for advice doubles

The financial advice industry is full of examples of clients reaching out to their advisers in recent months, leveraging these long-term relationships at a time of worry and crisis.

Recent research from the Investment Trends 2020 Financial Advice Report showed three in four financial advice clients had been in contact with their adviser to discuss the impact of the COVID-19 pandemic.

Advisers are also fielding an unprecedented number of calls from potential clients who are confused by the current markets and understand they need help.

The instability of recent times has undermined the confidence of those who are retired or are about to retire, with many wondering if they’ll be left with enough superannuation savings for a comfortable retirement. But those who have a long-term relationship with their adviser can rely on the fact their adviser knows them well, understands their unique circumstances and life goals, and can deliver advice tailored to them.

Advice for different life stages

Financial advice can be helpful at a range of life stages, not just when thinking about retirement. Some common things advisers can help navigate financially are:

• saving for and preparing to buy your first home
• getting married or starting a family
• budgeting and money management
• growing wealth
• estate planning
• planning for retirement
• retirement and aged care.

Advisers can help with practical advice in all these scenarios. But more importantly, they can help you focus on your financial priorities and goals and create a plan to achieve them.

Life’s journey has many twists and turns and points at which priorities change. For many people, it’s a journey best navigated not only with partners, family and friends but with a trusted financial adviser by their side.

Source: AMP

Many Aussies in the dark about retirement

By Robert Wright /November 18,2020/

There’s always been a lot of unknowns when it comes to retirement but throw a global pandemic into the mix, and we’re feeling more uncertainty than ever before. Things we once thought of as quite certain– like being employed, getting decent returns on investments and savings, and a continual rise in house prices – seemingly changed overnight.

And while that’s all led to a whopping 76% of us believing it’s more important than ever to plan for a secure financial future, we still don’t know what that means when it comes to retirement.

The first step is figuring out how much you need. Once you know the figure you’re aiming for, how much you currently have, and how many years you are away from finishing work, you can put a plan in place to help you reach your retirement savings goals.

Ways you might consider doing this include:

• Topping up super with additional contributions. (Be aware of contribution caps).
• Replacing any super that’s been accessed through the COVID early release of super scheme.
• Paying down personal debt like loans or credit cards.
• Making additional home loan repayments so you own your home sooner.

Consolidating your super accounts so you aren’t paying multiple fees. (Check you don’t lose important insurance benefits or won’t be charged an exit fee first).

Plan to protect retirement savings

COVID has made us pay closer attention to how our retirement savings are invested and some people may have seen their super balances drop. If you’ve got 15 or more years before you retire, chances are, your balance will likely have time to recover with the usual long-term market movements. But there’s no guarantee, and it doesn’t mean you can just sit back and relax.

It’s worthwhile checking what type of superannuation investment product your retirement savings are invested in. Diversified or balanced options can help offer some protection against volatile market swings because they’re made up of assets other than shares, like buildings and other infrastructure (although these are still susceptible to fluctuations).

One of the most important things to do is avoid making hasty decisions. Do your research, and if possible speak to your financial adviser if you’re wondering whether it’s the right time to switch investment options or move your super from one fund to another. There may be a risk of locking in losses or unfavourable tax components that could have a significant impact on the kind of retirement you’d like.

Don’t bank on working for longer

Given what we’ve seen with COVID and the economy, it’s hardly surprising 30% of people said they were worried about sequencing risk – a market crash or downturn which significantly reduces the value of super savings. And if that happened, over 50% of us say we’ll work for longer to build our retirement savings back up.

However, that might not be a failsafe backup plan. ABS data shows that of the people who retired in 2018-19:

• 21% had to stop working due to sickness, injury or disability
• 11% retired because they were made redundant or couldn’t find work

Add to that the average retirement age was just 55.4 years, working for longer to top up your super isn’t an option for everyone.

Educating yourself and taking control of your financial future can help alleviate concerns about retirement. Having a plan and feeling financially prepared can give you peace of mind. You spend your life working hard, and deserve to feel excited, not anxious, about retirement.

Source: AMP