The Sexism by Family and Friends After Separation
Have you ever found yourself being questioned by family about your personal choices after separation or divorce? Criticised for not making the ‘right’ choices or being called selfish?
For anyone who has gone through a separation you very quickly are forced to face the reality of increased expenses, tough decisions needing to be made quickly around where you will live, and feeling pulled in every direction to the point you no longer have time for you.
To top this all off we seem to face a barrage of sexism from family and sometimes even friends around the choices we have made.
Expenses Sky Rocket
In the immediate aftermath of a separation, there is the inevitable skyrocketing of expenses. Others may criticise you for not managing your finances, not appreciate that you have to buy furniture, need to cleanse yourself of old items with memories attached for your own mental health, or simply the reality that running two households is more expensive than one.
There will also be, where children are involved, an undoubted criticism if you don’t spend enough money on your children. Surely buying them things will help them cope? Right? WRONG! No amount of things or money will buy a child’s sense of security. It is instead how you show up each and every day and your ability to be present in those precious moments you get to spend with them.
However, whether it be parents, siblings or friends it can feel like everyone has an opinion on how you are managing your money and the choices you are making. Research Tall Poppy Woman has conducted shows that women are 70% more likely to be criticised in how they manage their money compared with men after separation. You need to stand strong to protect your financial security it is, after all, you who will be left to deal with the consequences of the financial decisions you make today in 10, 15 or 30 years-time not them.
It is also women who typically suffer the most financially between the time of separation and the formal financial separation being court approved. Often ex-partners threaten, bully or simply restrict access to cash making a tough situation worse and in some cases forcing continued dependency resulting in the ex-partner remaining in control.
General Advice Warning
This is the 2018 Federal Budget and End of Financial Year Strategies Webinar with Dominique Bergel-Grant.
The 2018 Federal Budget I am happy to say, with a sigh of relief, is one with no significant changes to superannuation. Although there will be certain opportunities for a few clients, for the majority the status quo remains. Helping to at least for now provide a sense of peace of mind around the superannuation system.
This however may be the last Liberal National Collation Budget before the next Federal Election.
For most Australians the immediate significance of the announcements will be minimal at best. However, as the seven years of taxation cuts are rolled out nearly every client will see themselves with more cash in their bank account each and every month.
The key is on what we all as individuals chose to do with this additional cash. The government is no doubt hoping it gets spent to drive economic growth and inflation. Which would result the Reserve Bank having greater flexibility to move towards higher interest rates.
However, if we look at the personal focus the greatest benefit comes from using this extra cash to reduce debts and save towards future investments. This is how as individuals we can get the greatest return on this new-found cash we will be receiving over the next seven years.
As always, the announcements in the Federal Budget are yet to be legislated, although the opposition has stated it will support at least the first round of personal taxation cuts.
If you are 30 today you have 35 years left in the workforce and need to save enough to fund at least 35 years in retirement. If you are older than 30 then the news gets worse… This is a confronting but true reality.
Why bother with your superannuation in your 30’s or even 40’s?
Far too often as a financial adviser I hear clients say, “right now I have too many other things to worry about, I have a big mortgage, have to fund kids education costs and I am just trying to keep my financial head above water and I will worry about my retirement later.”
The average Australian couple today needs $60,000 per annum in retirement to live comfortably. Remember this is the average and it certainly doesn’t mean that they are spending $60,000 per annum, as this includes costs such as home maintenance, the need to replace cars and a modest holiday.
For a 65-year-old today, with a balanced portfolio, they will need $1,050,000 to retire if they want their money to last 35 years. That seems like a long time to provide for in retirement considering the median age at death is currently 82. However, with improvements in medicine, the median age at death is increasing at a rate of 0.6 years with every year that goes by. So by the time today’s 65 year old reaches their mid 80’s the median could easily be 94. On top of this is the consideration that this is just the median, with 50% of people living beyond this statistical number.
So if you are in your 30’s or 40’s today the likelihood of needing to plan to fund your retirement till at least the age of 100, is certainly not out of the question. However, by the time the 30-year-old turns 65 they will need a much larger nest egg of $3,000,000 to achieve the same comfortable lifestyle.
So to be financially on track at the age of 30, assuming $10,000 per annum of combined super contributions you need to have investments outside of your home of at least $120,000. If you plan on upgrading your home you will need even more. The table below shows how a 30-year-old today would need to track financially over the next three decades:
|Net assets outside the home required|
|Age of 30||$120,000|
|When they turn 35||$220,000|
|When they turn 40||$370,000|
|When they turn 45||$590,000|
|When they turn 50||$900,000|
|When they turn 55||$1,360,000|
|When they turn 60||$2,100,000|
|At retirement age 65||$3,000,000|
How to get on track?
1. Review your superannuation fund
It is not just about fees, you need to carefully look at the investment returns after fees are paid. Also be careful about hidden traps such as taxation being taken out of your account before payment needs to be made to the tax office. Many super funds are guilty of this last one and this can equate to tens of thousands in lost investment returns over the years. If you are unsure it is well worth seeking professional advice as an adviser I spend hundreds of hours every year researching and assessing the complex world of superannuation.
2. Consider making extra contributions
There are strict limits on how much and what ways you can contribute to super, know the rules and where you can afford to consider making extra contributions.
3. Build up non-superannuation investments
With such tight limits in place, you may need to build up investments outside of the superannuation system. However, have a long-term plan on how to get these investments liquidated and transferred into super to reduce your tax in retirement.
4. Consider Gearing
Borrowing to invest is not suitable for all investors as it does increase your risk. However if suitable, remember borrowing to invest can be done both inside and outside of super into a range of investments including property, managed funds and shares.
5. Seek the Right Advice
Money doesn’t make the world go around but it does make it easier to enjoy. Seek professional financial advice, and start a conversation about your financial future.
Source: ABS Deaths, Australia (cat. no. 3302.0).
Inflation at 3% p.a.
Balanced portfolio 7% p.a. return
Funds invested in superannuation
Superannuation Contributions increase at rate of 3% p.a.
Many of us shy away from expressing ourselves openly at work. We may fear that we could come across as too aggressive, or we worry that we may overstep a boundary with our colleagues or boss. Or we may be concerned about not being able to get across what we want to say in a clear and effective way.
Avoiding conflict and keeping thoughts, feelings and emotions bottled-up can do us more harm than good. While keeping quiet may feel like a safe move, in the long term not communicating openly can cause anxiety and stress.
The good news is that developing a more assertive communication style can help reduce stress at work. Assertive communication is different from aggressive communication: it is about getting your message across in a considered, honest and diplomatic manner.
1. Assertiveness boosts self-respect
Communicating assertively involves having mutual respect for yourself and the person you are communicating with. When we clearly communicate our needs to others, we develop greater respect for ourselves. Over time, assertive communication also helps us to earn respect from others.
2. Assertiveness helps resolve inner conflict
When we don’t stand up for ourselves or ask for what we want, we can be left with a feeling of resentment or stress. Always going with the flow to please others, or saying “yes” when you really want to say “no” creates inner conflict because you are constantly putting the needs of other people first.
While sometimes putting others first is necessary, it is also healthy to express your genuine needs from time to time. Assertiveness helps break through patterns of people pleasing to resolve this inner conflict.
3. Assertiveness creates honest relationships
Learning how to clearly communicate and speak up for yourself helps the people you work with understand you better. When you can express yourself in a truthful, simple and direct way, you open the doorway for more direct and honest communication.
Building assertiveness gradually
As with anything in life, developing assertiveness takes practice and courage.
To develop your assertiveness muscles, try starting small with something relatively minor that has been bothering you. Then, try this.
First, write down what you want to say. Use “I” statements to let the other person what you want to say without accusing them of wrongdoing.
Second, consider and acknowledge why communicating what you want to say is important. This may include how you will regret it if you don’t communicate.
Third, rehearse. Being assertive can be hard at first, so practice keeping your emotions in check and standing your ground as calmly as you can.
Finally, commit to it, then go for it!
Afterwards take a moment to reflect on the experience. How was it? Was it worse than you feared? Chances are it felt good to express yourself.
It is time for Australian women to step up, take control of their financial future and consider financially breaking up with the men in their lives. Stereotypes about men and money need to be thrown out the window. The stark reality is that women need more money in retirement than men so it is our responsibility to look after ourselves and make that happen.
Financial stress is often cited as the top reason relationships break down so I am asking more and more couples this: why not take it out of the equation? That way they can be certain they remain in the relationship for the right reasons and not just for a sense of financial security. With one in two women saying that dealing with money is both stressful and overwhelming, it is time for a revolution in the way women engage with money.
The first step to a successful financial breakup and being on the road to financial independence is to understand the financial personalities of both you and your partner. Being aware of your individual financial personalities will reveal what triggers are behind the financial decisions you make.
There are six different financial personalities that I have researched over the past 10 years as a financial planner: Spender, Frugal, Helper, Savvy, Overwhelmed and Resilient. Each of these financial personality types makes financial decisions differently. Importantly each has good qualities so it is not about judgment.
The second step is to understand how financially independent you are. As they say: a man is not a financial plan. To do this we need to establish how much money we actually need today and in the future. The two questions to ask yourself are, "Without your partner's financial contribution how long could you financially last?" and "Would you be financially secure in retirement?"
The final step is to decide on the level of financial independence you are seeking. For some, it is about taking the step towards complete financial independence. For example, I have clients who have funded their own maternity leave, as they want to be in control and do not want a sense of being reliant on their partner. They also want to be in complete financial control in deciding when they go back to work.
Many couples today keep separate bank accounts, own separate investments and simply just have one joint account for those combined expenses, such as the home mortgage and bills.
Not only does this allow each of you to build your own financial independence, it also takes money out of the relationship, allowing you to each feel empowered and focused on the things that really matter emotionally to the two of you.
If you find yourself in a position where you are not financially independent or you fight with your partner about money, it is worth considering taking the opportunity to financially break up.
So how do you go about starting the conversation? The first thing is to gain knowledge about your financial options. Write down what financial independence means to you and then have an open and honest conversation with your partner. Do not forget that if you need help, turn to a professional Financial Planner who can act as the independent third party. They will work with each of you together and independently to ensure each of your objectives are met without conflict.
Once you get to the end of the process, the benefits are that each of you now are responsible for your own financial future and the issue of money has been stripped out of your relationship. This, in turn, removes money as a stress point ensuring you are now in the relationship for each other and not for financial security.
So the new financial year has started, you have been no doubt tried to put your best foot forward and set ambitious goals, but it never takes too long for old habits to creep back in. Particularly when it comes to money matters. Overhauling your spending habits is harder to do today than ever before thanks to new technologies like pay pass, pay wave and tap and go; they make it easier than ever to spend without consequences. At least until you see your bank balance.
Being jolted into reality by a scary credit card debt or a meagre bank balance can be like going out for a night on the town and waking up the next morning with a throbbing headache. It seemed like a good idea at the time, but in the harsh light of day, it’s not so clear. If you’ve been in this situation and want to take control of your financial health, it might be time for a financial detox.
This is my step by step guide to a financial detox
Step 1: Pay your overheads first
Sit down and review what your monthly expenses are that come out of your accounts via direct payment such as your mortgage, rent, phone bill and private health insurance.
Step 2: Pay your future self next
We all have financial goals, such as saving for a home, paying off that credit card or building an investment portfolio. Decide how much you want to put towards your financial future each month and put this money aside upfront.
Step 3: Pay yourself
This is the difficult part. Leave the credit card and debit card at home and take out a month’s worth of living expenses to cover your groceries, entertainment, and other bills in cash. That’s right, cash! For the next month, cash is your king and you have to make it last the whole month. If you can’t trust yourself from picking back up your cards, hand over your cards to a trusted friend or family member and set an agreed date when you can get them back.
Step 4: Keep on track
At the end of each day write down what you spent the money on and rate it as either a ‘want’ or a ‘need’ item and keep a running tally of how much money you have left.
Step 5: View your results
At the end of the month assess your spending habits between ‘wants’ and ‘needs’ and assess if you are happy with your results. If more than 30% of your spending is on ‘want’ items then you need to assess if you living a lifestyle today that you cannot maintain. You may be putting your financial future at risk. Also compare your spending to your normal pre-detox expenses. The results should speak for themselves.
Spending with cash always leaves you feeling more accountable; it is far harder, emotionally, to hand over $50 notes compared to tapping a credit card. If you find this strategy works for you, continue to the detox. The next month however you can break down step 3 to fortnightly cash withdrawals and the month after to weekly.
We start with a full month first, to ensure a full financial detox and the value of money is reinstated.
Even though I am a financial adviser, I still give myself a weekly cash allowance to cover my living expenses and I encourage all my clients to do the same. Cash keeps you more accountable and if, at the end of the week, you find yourself with money in your wallet, you can take out a little less the next week, helping you put more aside into savings for your future self.
Finding and keeping the best people to work for you is not always about money. Instead of paying people more money how about paying them in more free time?
In offices all over the country people are clocking in and out at the same time every day, but is this the most efficient way to do things? What if you only expected your teams to stay as long as necessary to get the job done? Early evidence suggests this leads to staff that are happier, work faster and quality of work actually improves.
Before declaring staff free to leave when they feel they are done for the day, or maybe even the week make sure the right conditions are in place.
Is it feasible for staff to leave early some days and expect them to stay late on others? If you're requiring people to serve customers it's not going to work. If you have team members who need to leave by a set time each day for caring or other commitments, set hours may work best for them.
Do you have clear reasonable work plans for people? This is a key tool for managing this type of working arrangement. It should clearly show who is responsible for what and when it needs to be done by.
A strong work ethic across the whole team. This approach whilst freeing people to potentially more free time also holds them to account. This is especially the case when people are working on tasks in teams.
For staff, this can give them time to do whatever it is that inspires them outside the office. For many of us what pays the bills isn’t always what inspires. If you are able to give staff the time to do this you can rest assured you are moving towards employer of choice status.
For you, there are also a few upsides you’re likely to see. Less time spent on social media, a greater focus on getting things done, no more endless meetings, better planning and best of all you may find yourself hitting deadlines early.
Holidays bring forth both joy and stress. I know, it sounds like someone gives you free money, but then you have to pay them back later. You have to deal with extra work, even more expenses and even less money than a normal day. Having more than one holiday in a certain month is sure to give you headaches financially and emotionally. But don’t falter. There are a lot of ways to make the best of your holidays. You just have to notice them and take them into account. Here are a few tips.
Written By One Of Our Clients
It all started with the realisation that we weren't quite so young anymore, seemed to have missed the homeowner's boat and that “catching up” would require most of our days spent apart and our daughter being cared for by someone else. Even then it was unlikely we would “catch up”.
So discussions were had, plans were made and teary goodbyes said. Then 12 months ago we (two 35-year-olds and a toddler) set off on our version of a gap year. A year into our adventure I am taking a moment to ask was it worth it? Did we get the break we were looking for?
Now to be fair it's not so much a gap year as it's been moving to Cambodia. My husband and I both work but less than we used to. The daily commute has dropped from 60 to 5 minutes. My daughter does go to childcare but instead of being in a centre with 30 plus kids she spends her mornings playing with nine others in the most amazing space and then heads home for a nap in her own bed. We aren’t hopping from one exotic location to another but we have managed a few beach holidays and found an amazing place by the river to escape to on weekends.
Do we miss the comforts of home? Not so much. Do we miss our families? Of course. But Skype, FaceTime, Viber and the odd cheap flight keep us all connected. Our family gap year will definitely stretch into two years. We have gained so much from this experience. We spend more time together, are taking on new challenges, changing our mindset, being brave enough to change our opinions and most of all slowing down. I would like to say slowing down to smell the roses but Phnom Penh doesn’t often smell of roses or anything similar. It is probably also worth noting that having a toddler who can say no in three languages just adds an extra layer of pain when it comes to tantrums but we wouldn’t change anything.
Constant traveling has never appealed to us but spending time in new places does. So for us, the family gap year is the perfect solution. You just need to set yourself up so it can work for you.
As Australians, we do know a growing trend when we see one.
Let's think about a recent trend we are all guilty of taking a part of; When It all of a sudden became “cool” to have a personal trainer or “cool” to be forever starting a new diet! Don’t get me wrong these are potentially decisions that lead us to a healthier lifestyle, the point here is that we are all guilty of following a trend at one stage or another, whether sub-consciously or not.
On the other side of the coin, are all the trends we follow necessarily a smart decision? As a Nation, just 4% of the population with dependent children have adequate insurance cover and this is a trend that is not increasing. Leaving the remaining population not knowing how much insurance cover they need, or even if they have any insurance cover at all.
Now is this a case of lack of knowledge? Lack of awareness? Or the old adage of the “Invincible Bronzed Aussies?” Actually, neither of the fore-mentioned!
In fact, there is plenty of information, advertisements and warnings in various forms of media to promote insurances and the devastating events these products aim to protect against.
Instead, this trend has come about due to a lack of action and often put in the too-hard basket. Lets face it, insurances can be quite a morbid topic but the reality is, The Australian Bureau of Statistics states that three in every four Australians will be diagnosed with a Critical illness during their lifetime. Now that’s not cool.
How do we reverse the trend? Well, short of having insurance sales people on every street corner, the barriers between receiving quality insurance advice need be broken and the message of “how much cover is enough” needs to be strengthened.
If you are reading this thinking that Hey! If everyone is being active and eating properly then the need for insurance decreases right? Yes, to a degree but sadly not the whole story. In short, only a small number of critical illness are actually preventable by our lifestyle choices and no amount of healthy eating can protect us from an accident.
Nor can an insurance policy right? True! But what an adequate level of insurance coverage does is give you options….
The option to take time off from work to fully recover.
Pay down your mortgage to leave a debt-free home to your family.
Pay-you a Tax-Free lump sum to receive the best treatment.
Replace a portion of your income until you are back at work.
Adequate insurance does not have to mean that your surviving spouse or children live a life of luxury and it doesn’t have to mean the family is eating baked beans 3 nights of the week just to pay for this cover. Adequate insurance means that at the time of claim you or your family have options and that financial burden is the last thing on your mind, whatever this looks like.
The “cool” thing is that, with various structures available and the potential to have insurance costs not affect your cash flow at all, there are certainly ways to provide an adequate level of cover.
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