Presented in partnership with Verve Super
In any given year most of us will make thousands of money decisions, from how we travel to work, to what we eat for lunch and how we decide to invest our money. Our decisions add up over a lifetime and will determine our wealth. So how do we get the big decisions right?
According to Zoe Lamont, co-founder and head financial coach at women’s superannuation fund Verve Super, most women face five common “make-or-break” money moments. “Negotiate these moments successfully and you’ll reap the benefits,” she says. “But get them wrong and you could be counting the cost for years to come.”
We asked Lamont, along with members of the Verve Super “Support Squad” – a team of specialists who are available for free to Verve Super members – to tell us more about these key money moments.
1 Buying a house
“Ask yourself if you actually want to buy a house,” says Zoe Lamont, Verve Super co-founder and head financial coach
“When you’re thinking about buying a house, first consider whether you actually want to buy it. Older relatives often advise that it’s the right thing to do, with the assumption that the future will mimic the past in terms of growth.
But you need to be sure why you’re doing it. Is it a lifestyle choice, or an investment property? Are you ready for the financial commitment?
There are huge costs associated with buying a property – everything from stamp duty to legal and accounting fees. And given the costs associated with buying a house, in most cases it should be considered a longer term investment.
There’s an assumption the future will mimic the past
So if you haven’t yet saved up your deposit, or are unsure about locking so much money away for the long term, shares can be a good medium-term alternative.
Super is another easy and tax-effective way of squirrelling money away and investing for your future self. The first home super saver scheme allows you to make additional contributions to your super and then withdraw them if you’re buying a house. You get a tax benefit and in the current climate, where we’re not earning much interest in ordinary bank accounts, it can be a good option.”
2 Having a child
“Adapt your finances before you have a baby,” says Alysia Laird, Verve Super’s family-focused financial coach
“Having a baby means that one or both partners will take parental leave, some of which might be unpaid. So, basically, you’ll be reducing your income and increasing your expenses. We recommend establishing a ‘baby buffer’: a savings account that you can draw on once the baby arrives.
This is also a really critical time to look at your insurances. Couples often put off paying income protection when they have two wages, but once you’re down to one income that should really be protected. Life and disability cover become more important when you have a baby, too.
Women retire with almost half the superannuation of men and career breaks for kids are a factor in that. Your partner can make a voluntary contribution to your super fund, which they can offset against tax. That makes your finances a little fairer.”
3 Negotiate your pay
“Take an active approach to your salary,” advises Jocelyn Chong, Verve Super’s pay negotiation expert
“We often lack confidence in salary negotiations and trust our employers to decide the appropriate salary when we start a new role. Don’t do this.
Instead, research salaries in similar positions in three to five comparable companies, and bring up the question of pay early in the recruitment process. Take the emotion out of it. Use the same tone and manner you might use when ordering a coffee – bright, confident and direct.
Bring up the question of pay early
Always suggest a salary range, rather than a figure, to give your employer room to move. If they can’t meet your expectations, but you still want the job, suggest other ways they could accommodate you, such as a rostered day off.
Once you’re in a role, consider a salary increase every 12 months, but check in with your manager every three months to let them know your progress, how your role may have evolved and check that you’re meeting their expectations.
And when you’re outlining why you should get a raise, attach a dollar value to each of your achievements so they can see the financial benefit you bring to the business.”
4 Divorce or separation
“Don’t let divorce be a disadvantage,” says Jacqueline Wharton, Divorce & Separation Expert
“Women are often the financial losers in divorce. But there are some steps they can take during their relationship to help safeguard their financial situation if they do end up separating.
The first is to know your numbers. By this, I mean know what your mortgage or rent repayments are; your incomes; the details and balance of all of your bank accounts (individually and joint); and details and balances of both your superannuation accounts.
The more knowledge you have, the easier it will be post-separation to assess your financial situation accurately.
Know your numbers
If you go on parental leave or work part-time, use this time to really understand your finances. This is often the stage when women who’ve previously enjoyed an equal financial relationship take a step back. They allow their partner to take greater control while they’re occupied with looking after children.
This is a huge mistake. Use this time to make friends with your family financial planner, accountant, or personal banker. At the very least, make sure you accompany your partner to all your bank and financial meetings.
Make sure you have your own credit card and bank account as, if you separate, it may be more difficult to obtain a new credit card if you do not have a high income. And finally, always surround yourself with supporters and advisors that you trust.”
5 Returning to paid work
“Articulate your value,” says Tanaz Byrami, Career Change Coach
“If you’re taking parental leave, you need to plan for your return to work before you go. Have an honest conversation with your employer about your role and what it demands. For example, before having children you might work late, travel at a moment’s notice or have meetings after hours without requesting time in lieu.
That might not be possible when you have a baby.
It is very common for women to feel grateful to be in a role that is flexible enough to allow them to be home by 4pm, for example, or take conference calls in the car. They put enormous pressure on themselves to achieve a lot in the time they are in the office, because they don’t feel that they’re doing enough networking or they’re not visible enough.”
Plan for your return to work before you go
This makes them less likely to ask for a pay rise. Sometimes, women tell me they don’t even feel worthy of their salary.
But you should understand that you have a unique value proposition. The skills, experience and capability that made you the best candidate when you got the job also make you the best employee to keep in the role. Think about what you actually achieve each day. If you can articulate to yourself the value that you bring to your company, you can be more confident than others can see it too.”
In partnership with Verve Super
To find out more about Verve Super’s Support Squad visit their website. Verve Super is offering all Primer readers a free session with a Super Specialist to learn how to get your super sorted or to find out more about Verve. Book now.
Information provided is of a general nature only, your personal financial objectives, situation or needs have not been taken into account. If you are interested in receiving personal financial advice, please see a financial advisor. The Verve Squad members are not representatives of Verve Super.