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1803 cba i female financial freedom ai

 

How women can take charge of their money at every stage of life

Thursday 8 March is International Women's Day – a time to celebrate what has been a remarkable year for women around the world. From the #metoo and #timesup campaigns to demands for equal pay, women are taking unprecedented strides in both the professional and public spheres. 

In this new era of female empowerment, however, there's at least one area where women remain at a disadvantage: their finances. From the gender wage gap to career breaks for raising children, women still face unique barriers that can prevent them from achieving financial security. 

But for women who manage their finances proactively, it's still possible to successfully navigate these obstacles and regain financial control at each stage of life. Here's how to do it. 

Starting out (18–34)

For many women, early adulthood means juggling tertiary studies with part-time or casual work. Then, when you begin working full time in the early stages of your career, having a regular paycheque coming in may be your first taste of financial independence. 

But when you're starting out in the workforce on a limited disposal income, it can be challenging to manage your bills and day-to-day expenses, especially if you're paying off a student-loan. This can be even harder for women than for men, because the unfortunate reality is that full-time female workers still earn an average of 15.3% less than males.i 

With so many temptations out there for you to throw your hard-earned money at, it's important to be careful with your spending. What may start with a few innocent taps of your credit card could lead to a debt spiral that takes years to escape. 

So before you find yourself saddled with additional financial responsibilities as you move through life, or a starting-out loved one, now is the perfect time to develop smart saving habits. Your financial adviser can help you set up a regular savings plan to get you, or friend of family member started. By putting aside even a small amount of money each week or fortnight, you can make a big difference to your savings over the long term. 

A balancing act (35–44)

As you move through your career, you'll hopefully land higher-paying jobs as well. But even if you're now richer in assets and income, you're probably also facing a significant amount of debt – from a mortgage to a car loan and perhaps a few credit cards in between. 

If you're like many women in this age bracket, things are even more complicated if you're juggling your professional responsibilities with the demands of raising children. And while you're focused on keeping up with bills, groceries and other household expenses, it can be hard to plan seriously for your family's future. 

At this stage of life, many women also take time out of the workforce to look after their kids before they start school. If you're one of them, it's worth preparing financially before taking a career break. One way is to start salary sacrificing a bit extra into your super from your pre-tax pay while you're still working. This will help ensure your retirement savings don't fall behind during the period when you're not receiving super contributions from your employer. 

With your children's future to consider, it's also essential to have the right insurance cover. This might include taking out income protection and life insurance policies, so your loved ones will be covered financially if the unexpected happens. 

Remember, a financial adviser can help you put together a strategy so you can make the most of your income and protect your wealth. 

Changing direction (45–54)

It's common for women to experience a period of change during their 40s and 50s – whether it's a career shift or a relationship breakdown. Even a small setback can have a lasting financial impact, so it's vital to have your finances under control. 

As senior family members become frailer, you may also find yourself squeezed between the responsibilities of taking care of ageing parents as well as teenage children. In fact, around 60% of Australian female workers deal with life's conflicting demands by sticking to part-time or casual work, compared to only 32% of Australian men.ii 

On the other hand, as your children get older, you might be returning to the workforce full time after a lengthy career break. In this case, it's important to put your renewed financial independence to good use. 

For instance, you might want to focus on getting your mortgage out of the way so you can enjoy a debt-free future. It's also a good idea to begin preparing financially for your retirement – you can start by asking your financial adviser about the best ways to grow your nest egg. 

Rich with life experience (55–64)

Your children have probably flown the coop by now, so you can really knuckle down on getting retirement-ready. This is especially important if you've had career breaks over the years that have taken their toll on your super balance. 

In fact, by the time women reach this age bracket, they have an average of around $180,000 in super savings – compared with over $320,000 for men. What's more, only 17% of women say they regularly engage with their super – so for most women, their super may not be working as hard for them as it could be.iv 

At this stage of life, it's also important to start thinking long-term about your health and possible future medical needs. One option could be to take out trauma insurance, which can provide much-needed financial support if you're ever struck by a serious illness like cancer, a stroke or a heart attack. 

Financially fit for retirement (65+)

For Australian women who are now reaching retirement age, their average life expectancy is currently above 87 – around three years higher than men.v While this is good news for women, it also means you'll need your retirement savings to stretch further than a man's, especially if you want to avoid relying on the Age Pension. 

Entering retirement is also the perfect time for a change of scenery – whether it's taking the overseas trip you've always dreamed of, or making a permanent sea or tree-change. And if you choose to downsize your home to something more manageable, you might even be able to give your retirement savings an extra boost. 

From 1 July this year, Australians aged 65 or over who sell their eligible family home can contribute up to $300,000 of the sale proceeds into super. This could be the extra push your nest egg needs to ensure you'll be financially comfortable for the rest of your life. 

When you're weighing up your options on how best to structure your super and other investments, be sure to speak to your financial adviser. They can also make sure you're receiving any Centrelink benefits you're entitled to, so you can make your retirement years as enjoyable as possible. 

i Workplace Gender Equality Agency, Australia's gender pay gap statistics, August 2017. 

ii Workplace Gender Equality Agency, Australia's gender quality scorecard, 2017. 

iii Australian Bureau of Statistics, Gender indicators, 2016. 

iv Commonwealth Bank, Enabling change: A fresh perspective on women's financial security, 2017. 

v Australian Institute of Health and Welfare, Life expectancy, 2017. 

05-Mar-18



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Wedding thrills minus the endless bills

1802 cba i wedding thrills

Many newlyweds start married life struggling from heavy debts from their big day. But with a proper financial plan, a walk down the aisle can also be a stroll in the park. 

With the average cost of an Australian wedding now over the $30,000 marki, tying the knot can mean a huge financial burden for many couples. It can also have a knock-on financial impact for years to come – for example, if they use credit cards or a personal loan to cover costs, or if their wedding debt means they have to put off buying their first home. 

Of course, most couples want the happiest day of their lives to be as grand as it is in their dreams, but that doesn't mean it needs to break the bank. In fact, with some careful cash flow management (and maybe some minor compromises), a couple can save themselves thousands. And if the parents of the bride or groom are also chipping in as well, it's important to make sure the festivities aren't overshadowed by family tensions over a blown budget. 

Watch out for hidden expenses

Wedding budget blowouts can happen without warning and can easily snowball out of control. To avoid this happening to you or your loved ones, ask recently married friends if there were any unexpected costs that tripped them up. Here are some of the common ones: 

  • Package deals. Many wedding venues offer food and drinks packages at a fixed cost or per head. Make sure you know what's covered, so you can see which option will give you the best value for money.
  • Venue extras. Be clear about what you're getting for your venue hire fee, otherwise you could get stung for the extra cost of things like lighting, sound, décor and bar staff. Plus, if you've booked an outside venue, is there an inside option if it rains on the day – and is it covered by the venue fee?
  • Overseas costs. If you're planning an overseas wedding, remember to factor in things like visa costs and currency fluctuations. The last thing you want is for your guests to have to pay more than they bargained for.
  • Taxes and service charges. Check and double check the fine print in your contracts and service arrangements to make sure there will be no difference between the price you've been quoted and what the final bill will come to.

5 ways to do a wedding cheaper

If you want to keep costs down, there are plenty of ways to go about it – you might even end up making the event more memorable for your guests: 

  1. Wedding on a weekday. If your wedding is a gathering of your nearest and dearest – and you give them plenty of notice – no one will begrudge taking a day off work to attend.
  2. Budget clothes. Okay, the words 'budget' and 'clothes' together for a wedding day may seem unappealing, but so does paying thousands on outfits you wear once. A non-traditional wedding dress will always be cheaper, and you could save even more by hiring or making one.
  3. Buy your rings online. To find the cheapest price for your wedding jewellery, start looking online. But if you're buying overseas, make sure you factor in the exchange rate and any taxes.
  4. Make your own decorations. Not only will this save you money, it also gives your wedding a personal touch. If you don't think you're arty enough, enlist a friend who is to give you a bit of creative support.
  5. Keep it small. A small family ceremony can create a special and intimate event. And if you have it at home rather than hiring an expensive venue, you could save a fortune.


01-Feb-18 

i Easy Weddings, Annual Australian Wedding Survey, 2016. Based on a survey of 2,300 Australian couples between August and September 2016.



For more information

Contact your financial adviser who can help you manage your cash flow and work with you and your partner towards other significant goals and milestones. 

Call 0883225088 or email us at enquiries@jsaaccounting.com.au

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