Are you looking after yourself?
Are you looking after yourself?
REST Industry Super recently publicised some research on a 1000 mothers between the age of 25 and 55. Titled ‘The Super Mum Index’, its contents made for fascinating reading. Nearly two in five mums were at risk of becoming a burden on their children by not saving enough for retirement.
Putting the kids first
Two-thirds of those surveyed (63%) reported that they focused so heavily on family expenses as the reason that they don’t top up their super. And one in ten reported feelings of guilt about taking money away from their families immediate needs stopped them from saving more actively for their retirement. For these women it isn’t apathy or a lack of information that was getting in the way, but the desire to put their children’s welfare first.
What’s the impact of neglecting your long-term financial security?
It’s not a surprise that the overwhelming majority of mums (90%) prioritised their children’s wellbeing, but it’s important to understand the potential long term ramifications. While they may want to give their children the best start to life many of these women are setting themselves and their families up for long-term financial stress.
8% of the mum’s surveyed were in the position where they had to financially support their parents and the implications of this went well beyond the financial pain that this caused. Seven in 10 of the women who were financially supporting retired parents felt the weight of this financial and mental burden suffering from headaches (43%), sleeplessness (43%), anxiety when spending money (35%) and tearfulness (33%).
Rethinking, how you think about your finances
This research struck a chord with me because it reminded me of the power of reframing a problem.
Over the past few years I’ve been feeling bad about my physical activity (or lack of it). I’ve never been that thrilled by sport and I was never particularly good at it. For me it has always been a chore and something that I would do from time to time when I felt that I wanted to lose weight. Since having kids it’s felt that much more difficult and that’s because it took time and money. There never seemed to be enough time on the weekend or the evenings to waste the hour I need for my yoga class and the cost of the gym just felt like an indulgence we couldn’t afford.
So what changed? I read an article about the mistakes that are made when trying to encourage people to exercise (particularly parents of young children). It focused on the benefits of increased physical activity that included increased energy, reduced stress and increased health. I started to rethink the purpose of exercise for me. It was no longer about looking thinner but instead about investing in quality of life not only for me, but for my kids as well. That the time and money I would spend would be for all our benefit. In the short-term the kids would enjoy me with more energy and less stress. I would be a better role model for the active lifestyle I wanted them to enjoy. And last but not least, I’d have a lot better chance of being around for them in the long term. This turned the equation right around for me and I could lose the guilt.
So, it’s worth taking some time to think about whether we should be reframing the issue of our finances. Taking some measures to protect your long-term financial security is not about being selfish, it’s about making sure you are in the best position to protect yourself and your kids over the short, medium and long-term.
Some questions to ask yourself
1. Do I have lost super?
Don’t let your lost super waste away, track it down and make it work for you. To track down your lost super you can visit https://www.moneysmart.gov.au/superannuation-and-retirement/keeping-track-and-lost-super
2. Am I paying too much in fees?
It worth checking out how high the fees are in your super fund, it’s not always a case of get more if you pay more. If you have more than one super fund, consider whether you can also save on fees by combining super funds. But be careful that you check out what insurance or other benefits you might lose before you rollover.
3. Can I start small and make some extra regular contributions
Even a little bit extra regularly contributed to your super can make a difference over the long term, when you take into account the impact on compounding returns. Just remember that this money is generally not available to you until you retire. There are different ways to contribute depending upon your income level and personal situation. For middle to higher income earners the tax benefits of salary sacrifice can be attractive, for those on lower incomes after-tax contributions may help you get access to the government co-contribution
4. Can I make use of my a pay rise, or increasing your working hours?
If you’re about to get a pay rise, go back to work or increase your working hours it’s a great opportunity to take the time contribute some more into your super (before you’ve gotten used to spending the extra cash!)
5. What can I do with my bonus or inheritance?
You might like to consider allocating some of the funds to your long-term financial security through super.
* More information regarding superannuation and retirement can be found at the Government’s Money Smart website www.moneysmart.gov.au
# Information regarding the REST Industry Super report ‘Super Women Index’ can be found at https://www.rest.com.au/News-Media/Media-Releases/2015/Aussie-Super-Mum-Index-reveals-potential-burdens-p