Sandra McGuire on Mastering Financial Literacy

In this episode of the Wisepreneurs Podcast, Sandra McGuire, a certified money coach and financial educator, joins me. With a rich financial advising and accounting history, Sandra brings a wealth of knowledge. She shares her journey from corporate roles to founding her business, Money Wellness.

She is passionate about helping others. She discusses the importance of financial literacy, understanding personal finance, and using money to achieve life goals. Sandra's unique approach demystifies finance, making it accessible and manageable for everyone.

Mentioned In The Podcast

Afterpay,  a popular buy-now-pay-later service (BPNL), offers a flexible payment option that allows consumers to purchase products immediately while spreading the costs over time.

Superannuation in Australia represents a cornerstone of financial security for retirement, serving as a mandatory savings system that enables individuals to accumulate funds throughout their working life. This essential financial framework supports Australians in building a substantial nest egg, ensuring a more comfortable and secure retirement.

Connecting with Sandra

Website www.moneywellness.com.au with a free ebook— Three steps to achieve your financial goals

Take the money quiz
https://moneywellness.com.au/take-money-type-quiz/

LinkedIn www.linkedin.com/in/sjmcguire

Facebook https://www.facebook.com/SandraMoneyWellness

Instagram https://www.instagram.com/money.wellness/

Transcript

Speaker 1: 0:00

Hello and welcome to the Weisspreneur's podcast. My name is Nigel Roulins and I work with a range of professionals in their field. They're often 50 to 60 years old who want to start their own business. In this podcast, I'll be interviewing a range of guests who will be able to tell you how they've done it themselves, and others who'll give you hints and ideas and tips and maybe the confidence you need to go out and start your own business.

Speaker 1: 0:29

The book the 100 Year Life drew attention to our extended lifespans, and an earlier discussion I had with Letitia Vittorod on the future of work from the feminist perspective, which you'll find in episode 6 of the podcast, drew attention to the need for financial literacy, especially for women. Letitia highlighted the risk of underpreparedness for retirement due to underestimating future financial needs. I invited Sandra McGuire, a certified money coach from Melbourne, australia, to join us. She's here to help us understand financial literacy and make intelligent choices for our future, security and independence. Why do our feelings steer our spending and saving habits, often leading us down less than ideal paths? Sandra reveals strategies for overcoming these emotional barriers and hoping a shift towards financial security and mental peace. She's uniquely qualified to guide us in addressing these questions and offers valuable insights into navigating your finances with wisdom and confidence. Sandra, welcome to the Wise Piner's podcast. Could you tell us something about yourself and where you're from? Hi, nigel.

Speaker 2: 1:42

It's great to be here today and thanks for inviting me to speak on your podcast today. So a bit about me. I'm a certified money coach and financial educator and also a former financial advisor and accountant. I've got my home office and I work from Melbourne but deal with clients all around Australia, and I like to empower people to improve their financial situation through coaching and education. It's been a bit of a journey to find out what I love to do and who I love to work with. I found that I love to teach and see people grow in their skills and confidence and show them that personal finance is not hard and doesn't have to be complex, and if they take control of their financial situation, they really can use money as a tool to achieve their life goals. One of the things that drives me is I'm a believer that everyone deserves the same opportunities to achieve their financial potential, but some of us just haven't had the education or background that others have had. So a little bit about me.

Speaker 2: 2:48

I love numbers, spreadsheet debits and credits, and I call myself a numbers nerd. I did maths and science at school. I liked it, but because I was good at it, I did some engineering studies at university and worked out that wasn't for me and I ended up working for a small firm during reception and accounts and decided that's where I wanted to be and started a bachelor of business in accounting and did that part time over six years. I then moved into a large corporate. I did many different accounting roles and progressed through the ranks. They were very supportive of my studies and my career. So I found I liked accounting but it wasn't just about the numbers and producing reports and tax returns. I enjoyed analysing the numbers and telling the story behind the numbers and the monthly profit, such as why did profit go up this month? Was it due to high cost of goods or lower volume of sales etc. So I stayed with that corporation for a bit on 20 years and along the way I had two kids and managed two. Lots of maternity leave and worked part time for five years and had to manage the juggle of kids and child care and costs and school holidays and that sort of thing.

Speaker 2: 4:12

But once both the kids went to primary school I reassessed what was motivating me to go to work and, to be honest, working for a large corporate managed by head office overseas wasn't doing it for me. Well, the pay was very good. The constant family juggle didn't seem like it was worth it. So I decided to take a break from work and work out what I really wanted to do. I guess I was able to do that because my husband and I had established a good financial base and we had a manageable home line and it gave me options and I could choose not to work for a while. So I worked out.

Speaker 2: 4:50

I wanted to have an impact more with individuals and I wanted to show them how to improve and understand their own personal financial situation. So I decided to move into financial advice and work with individuals to build their wealth, and I completed a diploma of financial planning and worked in wealth firms as Paraclanor Associate Advisors and then as a financial planner for a super fund. So, as I said before, I had the support from my husband and partner and we established financial stability, because moving from corporate into a new industry in financial advice meant I had to take a pay cut of more than half my wage, but financially we knew we could cover that and I really wanted to do work that was more aligned to my values. So I lived.

Speaker 2: 5:37

I did financial advice for a while, but about two years ago I decided to start my own business. I was frustrated with the traditional advice industry and the complexity and compliance and cost of formal financial advice put it out of reach for most people and especially those who really needed it. And I recognise that some people just need a little bit of help and knowledge to get started or to move forward and be confident with their finances. So I looked around and couldn't find anyone providing this type of service. So I started my own business called Money Wellness Good.

Speaker 1: 6:16

Do you want to just explain some of the basics that you think that was lacking, that people lack about finances?

Speaker 2: 6:26

So we know the environment's tough out there at the moment. We've got interest rates going up from record lows in COVID and in the last 18 months to two years interest rates have gone up 12 times, almost 4 per cent. So people's home loan repayments have almost doubled, if they're on the minimum, and inflation is running at 5% to 6% at the moment. Last year it was 7%, normally somewhere around 2% or 3%. It's a tough environment. Things are costing us more our home loans, our bills.

Speaker 2: 6:56

One of the things that we came across when I did my certified money coaching is that we often have a lot of emotions attached to money. We often had stories in our head about money and we call that our money mindset. We're not hunting together anymore. We need money to survive. So with that comes a lot of emotion.

Speaker 2: 7:19

And thing with money is that we're not formally taught. We're not formally educated about money. We don't have conversations with our friends or family about money. It's one of those taboo subjects. So there are a lot of people who are fearful or embarrassed about past mistakes and talking to others about money. So it's one of those topics that we're not educated. We don't talk to others about it. So it is quite normal to acknowledge and in the community, that we don't know a lot or we're not very confident around money. And my job is to, I guess, take that embarrassment or that shame away and to bring conversations into the public and say it's OK to acknowledge that and let's talk about that. You'll need some help, you'll need some education and there are people and independent sources of knowledge you can speak with and trust.

Speaker 1: 8:17

There's a couple of things you mentioned there that I thought were really, really interesting. One was stories, because most of us listen to stories, but if the stories don't help us or remind us of maybe, that's a mistake to do that or to think that way. And then you mentioned mindset, which I thought was really, really important. So do you want to talk a little bit about, maybe, the mindset, because I think you're onto something there. Can you tell us a little bit about your thoughts on those things?

Speaker 2: 8:45

So when I was setting up my money coaching business, I did a course to become a certified money coach through the Money Coaching Institute of the States, and they deal with what we would call our money stories and the mindset we have around money. As said so, we know what we should do, we know the rational stuff around money save, budget, invest. For some reason we don't do it and that's because there's some emotions and some other things going on that are influencing our behaviors and then our habits around money. And you'd be surprised to learn that our mindset or our unconscious patterns are formed when we're children. So, as I said, if we're not educated and we're not talking about money, all we do is absorb stories and meaning that we've given to money from experiences we've had growing up and things we've seen our parents do and the people around us do, and often this is going on in our head and we're not aware of it, so we've got unconscious bias.

Speaker 2: 9:57

For example, I had a client who came from a very religious family. She got through her career and she was earning very good money, but she found she was spending like crazy and never having enough, and we went back a little bit in terms of what money meant to her as a child and what values she put on money and the family story around money was money is the root of all evil, and somehow that stayed in her head and so her behavior when she was an adult was if I've got money, I need to get rid of it, I need to spend it, I can't hang on to it. Nice people aren't rich or flashy or materialistic Story she was telling herself and influencing her behaviors, without her even knowing about it and what I'm watching that I do not only looks at the practical sort of stuff money in, money out but also looks at what are our habits and what potentially some of the stories that we tell ourselves that are going on when we're behaving with money.

Speaker 1: 10:59

Now that's an interesting point. So at some point they find you and come to you and saying they've got a problem with money and you're sensing, okay, well, is there a habit in there, is there a mindset? So how do you explore those things?

Speaker 2: 11:12

We do actually go back and look at our history with money. Look at what our upbringing was with money and the habits and experiences we had with our parents. Was mama horda or was data tyrant with the money? Were we told that rich people are snobs or money doesn't grow on trees? You have to work hard for everything you've got and don't go into debt and don't risk. You do actually go back and look at some of those experiences and see what your parents did and how you experience money as a child You've taken into your adult code.

Speaker 2: 11:49

I guess one example for me sharing my story is that we were from a working class background. Mum stayed at home, looked after us kids. Dad worked two jobs. We didn't have a lot of money. He'd work at the office during the week and drive taxis or clean on the weekends, but mum would defer to dad on every financial decision. While he wasn't a tyrant or anything, I felt she didn't have a lot of power and she had to ask him if she wanted to do anything major or spend any money. And I guess for me, while I didn't inhabit that behaviour, I actually went completely the opposite. I was determined that I would be financially independent and be able to make my own decisions and earn my own income and be in control. That was one example. So we do go back a little bit, but it's important because, as we said, we know what we should be doing but some reason we're not. If we're just giving people budget advice, it's not going to work unless we address the underlying behaviours around money and spending.

Speaker 1: 12:53

So basically what you're saying there is unless you deal with these deeper emotional things that are often invisible, they're not going to change their habits. One of our earlier guests, Laetitia Vittorre, a French feminist, suggested that women really need to learn about finances. So what are some of the basic financial literacy that every woman should know and maybe think about the age groups that they should maybe consider these more?

Speaker 2: 13:20

Sure. So first up, as we said, we need to be okay with saying that we don't know. Don't just stick your head in the sand and leave it up to somebody else, or stick your head in the sand to say this is too hard, it doesn't have to be complex and you can learn, and there are safe places for you to get independent, simple information which can help you understand how to build your wealth. So I guess that's the first point Don't be embarrassed, don't be ashamed. There are a lot of people out there in the same place. So I guess, first and foremost, we need to understand where we're at now and knowing your numbers now, and then we can look at where you want to be.

Speaker 2: 14:03

So we can do a bit of a personal profit and loss understand your money coming in and understand where your money's going out, what you're spending your money on. It sounds simple, but not everybody does that, and you can look at when you're spending how much is going on essential living costs, mortgage rents, food, groceries bills, that sort of stuff and how much is going on lifestyle items such as clothes, going out for dinner, holidays, that sort of thing, and you can sort of get an idea of where the money goes out. And then, after you spend, is there any money left over? Do you have a profit, and are you putting that profit into the savings or investments? So understand your cash flow, your current point in time, and then you've got your personal balance sheet. So that's your asset your home, your car, investment super and any loans that you have Home loans, credit cards, other loans and, yes, afterpay is dead. So I caution on afterpay. Even if you pay your repayments in full, sometimes it tricks us to spend more than we can afford a time.

Speaker 1: 15:06

We should probably mention what afterpay is, because we do have some international listeners. Afterpay, I think, is across the world, but maybe explain that a bit more and how that can sort of pile up.

Speaker 2: 15:18

Okay. So if you get a good handle on your money, as I said, where you're spending, we've got apps and different things to use because we can get detached from our money at the moment Can be just numbers on a screen we don't get physical cash anymore and it's really easy to touch and go. You've got your credit card. You don't even need to sign these days or you go online. Credit cards already link to the website and things like afterpay, where you spend $100 and they offer you pay 25 upfront and then you can pay 25 another three times over the next couple of weeks and you don't get charged interest for that if you meet your repayments on time. But what it does?

Speaker 2: 16:01

It's a well-known trick to say consciously we're spending $100. But in our mind we only really see the 25. And so, therefore, we spend more, and afterpay and other what they call by now pay later schemes tell their merchants that people who use afterpay will spend at least 30% more than they normally would if they had to pay things upfront. So, as I said, even if you clear the debt straight away, you sort of mind gets tricked into spending more than you would. So get it getting in touch with where your money's going out and ensuring that you're spending it on things that are meaningful to you and not sort of lifestyle items that provide you some short-term benefit or keeping up with your friends and other things when you can't afford to.

Speaker 1: 16:54

It's interesting. What you're talking about is you've got to be disciplined to see what money you've got coming in, what you're spending. But you've also got some fixed costs, haven't you? And I know we're talking about accountancy in a way. But from the personal thing, most people aren't a business though probably a lot of my listeners might be or a small business or self-employed, but the financials are the same. So the money coming in, the money going out and the potential to spend money that you don't have through the afterpay and credit cards, I guess in many ways people aren't worrying too much about the future. They'll think I'll have the money to pay for that until something goes wrong. In a sense, what we're saying here we've got to be disciplined right now about the future, because the future comes back to Bidus, doesn't it?

Speaker 2: 17:39

Yeah, we can watch where our money goes. We can set budgets and other things and we are talking about. If you really want to shape your future, you need to take control, so let's have some systems which make it easy for you to do that. So what we normally would recommend for people is you've looked at your spending and you split your spending into essentials living costs and you've got a separate bank account which covers just your bills, your mortgage repayments, your electricity, your car, your other stuff and so you've got your wage and you put the money into there. Then you've got what we call your lifestyle cost or your nice to haves, and you've got a separate bank account with that, which separate from your bills, and that might only have a debit card on it, so you can't get into trouble and you put a portion of your wage into that. And then the third account that you have is your savings, and that's another account which you put money into on a regular basis and you make it hard to get access to.

Speaker 2: 18:46

Ideally, some people talk about 50, 30, 20. So ideally, your wage comes in, 50% goes to your bills, then you put 20% into your savings automatically, be that through your pay or be that through a regular bank transfer. So you're paying your future self first. Then what's left over maybe it's 30% goes into your fund money, your lifestyle account, and if you run out of money in that lifestyle account for the week, so be it. You have to cut back for a couple of days until your next pay comes in. But you know that your bills are taken care of, you know your savings are taken care of, and then you can have some sort of guilt free spending with your fund account until that runs out or the next pay.

Speaker 1: 19:31

No, that's very sensible. So what you're saying there is be realistic, understand your fixed costs that you've got to spend. So have a bank account where that's in there, so it's ready. Because I know with some younger people that don't always think about car insurance or they might need some car maintenance or something like that, and by having the separate bank accounts, it's a physical way of saying oh right, okay, if I'm going to transfer money from there, that's my fund money or that's my future savings. So, yeah, that's a very sensible account. So one basic thing to do is work out your costs, work out your expenses and then make separate bank accounts. And I think with most bank accounts now, you can have three bank accounts in one, but unfortunately it's easy to transfer between them, isn't it?

Speaker 2: 20:15

Look, yeah, the banks will let you have online savers. You can have multiple bank accounts, having them linked. As I said, it just put boundaries in place and gives us sort of a bit more discipline but structure. So, as I said, this accounts just for that and I won't take money out of the bills account, but just knowing when those lumpy expenses come in as well.

Speaker 2: 20:36

And when we talk about savings, we're often told to save for a rainy day, but that doesn't mean anything and it's not motivating to a lot of people. So what are we saving for? Ideally, one piece of savings we'd like to have is a bit of an emergency fund. So in our savings you have a couple of months worth of wages If you got put off your job or if you got sick and couldn't work. That you've got some money in savings to cover your family extensors. You can also look at having sort of backup insurances like income protection and permanent disability and life insurance as well. But then also in savings, you've got a bit of emergency fund If you've got some large expenses that come up, like last week the air conditioning in my car conked out or you've got to fix the roof on your house, or you've got some dental bills or something.

Speaker 2: 21:25

So in these savings you've got a bit of an emergency fund and then you can set yourself some goals in terms of holidays or home deposits and things like that within your savings accounts. While we've got savings, it's also important to put a motivator behind it. It's not about having a million dollars in the bank. Money is just a tool, and if we can take that emotional mindset stuff out of money, what do we want to do with our money? If we had a million dollars, what do we want to spend it on? Which makes it a lot more meaningful and achievable if we've got that in mind.

Speaker 1: 21:57

So what you're saying is we've got to cover our fixed costs, the expenses that we have to pay, but have some goals for the other accounts. So sure, if you want to have a social thing Now I guess that's an issue, the social one, but the savings could be a bit of a rainy day, but also for a decent holiday, and holidays are important. So you have to have some sort of goal. But coming back to that social one, I guess at different ages you've got different demands for your social life. I suppose Married couples may be going out with their friends, single people going out with their friends, but nowadays I've had to think twice about going out for dinner, because you go out for dinner and you have a glass of wine and the main course and it's over $100. That's a big amount nowadays, isn't it?

Speaker 2: 22:42

Yes, yes, a family of four of us went out the other night and we got up to.

Speaker 2: 22:46

You know, I think we had two courses and a drink or something like that, and we were up to 200. If we are aware of what we're spending our money on and we've put that aside in our sort of lifestyle account, you know you can do that guilt-free. One of my bosses a while ago used to have a saying and that was you can only spend a dollar one, and so being aware that if we spend some money now, there may be some trade-offs that we'll need to make in the future. A lot of people don't like having budgets because they feel it's restrictive, a bit like a diet. But I'm not going to tell you that you can't go and get to daily coffee from a coffee shop, but as long as you're consciously aware where you're spending your money and sometimes there's these trade-offs when you do that- One of the secrets to understanding finances is to be aware of the money that you have and what you're doing with it, rather than being unaware, which is very easy to do with credit cards and debit cards.

Speaker 1: 23:43

All right, let's talk a little bit about different age groups. Obviously, with young people, it depends what their source of money is. When I go up to the supermarket, you see the young kids working there. They're obviously saving money. When I was a kid I used to have all sorts of different jobs but I spent every cent I got on chocolates and things. God knows what I spent my money on. But I spent all sorts of money, I think, because my parents never saved. They did eventually. They sorted it out eventually. But in their 50s and 60s I think they started getting sensible. But in the early days everybody in Australia I don't know if you remember when the first credit cards came out everybody was sent one. But yeah, you got a credit card and off you went. How bad is credit card debt, do you think?

Speaker 2: 24:30

Debt is the main thing that holds people back from building wealth when you're in your 20s. You're living in the moment and that's fine. You can do that for a while. You've got plenty of time to earn money and buy the house and do that sort of stuff, so it's okay to have a bit of fun. But just certainly be careful about getting into any bad debt.

Speaker 2: 24:51

Car loans not great debt to borrow at a high interest rate for an asset that potentially going to go down. Certainly, with credit cards, the banks used to be fairly free in giving them out and fairly free in increasing your credit limits, so it was easy to spend more than you earned to build up your credit card debt. Look, and if you got your credit card statement and it said you owed $5,000 and they're suggesting the minimum repayments on the statement, if you did those minimum repayments it would take you more than 15 years to pay off that credit card. So certainly if you have a credit card and some people do it for points and other things pay it off as quickly as possible or really make an effort to pay that debt down. You're getting charged more than 20% interest on a credit card. And also those companies which really annoy me, those ads on TV payday loans they call them. They're charging you 20% a week or something impossible. They're saying, oh, just put your money here.

Speaker 2: 25:55

So as a young person I've just said, be careful of getting into debt. And it is easy to spend money just to keep up with your friends or to have a flash car or the latest iPhone or that sort of stuff. If your money is tight, just have it. Think about this is nice to have, or do I really need it? Can I go for an iPhone that's two years old rather than the latest one? So I guess for young people that's what I'd say. But even a little bit of savings at that age can help, because if you're going to be saving or investing for 20 plus years, the compound interest on that will just build and build and build.

Speaker 1: 26:30

I think the problem a lot of us have is we don't think we're going to get old when we're young. We don't realise that one day we're going to be 50 and then suddenly we're retired. Now I am retirement age. I'm 68 in March. I don't know what's happened to the last 50 years. I was an 18 year old, at some stage in a 20 year old, and suddenly you're stuck with what you've got. So we've talked about the young ones. I've got to be very, very careful of debt, payday loans and spending. Obviously, some people get married or they're with a partner and maybe they have children. What are some of the issues there? And let's talk specifically about women. What are some of the issues? Say, once you hit your forties, you're in a relationship. What should women be aware of, do you think?

Speaker 2: 27:15

It's a common thing that if you've got children, one of you in the partnership has decided to no-transcript, stay at home part time or full time to Chop with the kids and take a cut in income.

Speaker 2: 27:30

So guess, if you know your ins and outs and and what you're living on and what your basic needs are, what your essentials are, you can work out. Can we survive on one income? Can we survive on one and a half incomes? Can we reduce our mortgage repayments to a minimum for a couple of years While we're doing that, while one partner chooses to be at home with the kids before school? And look, I did part time for five years until both the kids were into primary school, but we'd established a good financial base and we knew that we were able to pay the bills and afford the Mortgage to do that. And I guess that's the thing with with money. We want to have financial freedom and have choices more. More money doesn't always solve our problems, but it provides us with choices. So the ultimate goal for everyone is to have enough wealth or assets where we've got financial freedom and we work because we want to work, not because we have to get out of bed to pay the bills. That's the ultimate goal. But it is a real juggle when you're in your 40s and I guess again it comes down to debt sometimes. And with the home loan I was saying avoid debt. But there are some things where debts are good thing. If you're buying an asset that's going to go up in value as long as you can afford to read and you've got a bit of a buffer, if interest rates go up you can afford bigger repayments. So debt's not always a bad thing. But I guess we don't need to buy the biggest, flashiest health in the best suburb just because our friends did. If that Moral gauge is really going to be a millstone around your neck and restrict your lifestyle, it's not worth it. Certainly, borrowing for home is okay but we really conscious about the affordability and maybe you don't get your dream house first up and that comes 10 years later or you renovate it later on. It's being really conscious that you can afford that debt without lifestyle.

Speaker 2: 29:26

Certainly, having goals when you're a couple working together, what I do find with couples is generally one person in the couple will take the lead around managing the personal finances. Sometimes the other person will Be involved and know what's going on and involved in some of the decision-making. Other times the second person just lets the other one do everything and is just happy with a bit of spending money each week. But certainly as a woman, please Understand what's going on with your family finances. Do not sign anything that you don't understand or feel pressured to Take on personal loans to help him buy a car or to help their business Another things. Be very careful of what's going on and that, even though if you're not paying the bills or Managing the family finances, that you'll understand certainly your position and, if needed, you can take that on.

Speaker 1: 30:23

Okay, what you're talking about there is what we call sexually transmitted debt, so let's talk about that.

Speaker 2: 30:28

There can be that. There has been cases. We said before, money's an emotional thing. There are forms of what we call financial abuse can be in couples.

Speaker 2: 30:39

It's also been known to be done to elderly people by their children or others, where people use money to control others behavior, restrict money, restrict their earning capacity or force them to sign documents that they don't understand. So, look, be very, very careful of what you're signing. If you don't understand it, be confident to speak up and say no. If you a joint signatory on a loan or, we said before, a young person's in a shared home and they've got a couple of names on the lease and the other person doesn't do the right thing and you know you've got creditors coming after you, that will affect you personally and your personal credit score and your ability to access loans and finance in the future. So certainly be very conscious about what's going on and if someone's trying to hide money or control you with money, it is a form of domestic violence and you can get help and assistance.

Speaker 2: 31:37

It's a tough topic to talk about but it does happen, because the other thing I touch on with people in that age bracket We've got a couple once earning less because you've made a decision that one of you is going to look after the kids and not be in an income earning capacity, but you've agreed that your share all the family bills, even though the income is more on one side. Be conscious of superannuation and there are ways to ensure that not only it's splitting the bills financially, but that saving for the future and superannuation equally in both names, and there's lots of different strategies and initiatives you can look into in terms of spouse co-contributions, contribution splitting, government co-contributions, to make sure that the person that's not earning the wage and getting the employer contributions can still build their super in an equal way.

Speaker 1: 32:30

In Australia, superannuation is a percentage which is up to taken out of your salary.

Speaker 2: 32:36

Superannuation is a government design retirement scheme which you can get access to at 60 or 65. At the moment, if you're employed as an employee, your employer will pay 11% of your wage and will eventually go up to 12% into a superannuation.

Speaker 1: 32:53

That really does compound.

Speaker 2: 32:55

Yeah, it certainly does. 11% sounds like a lot, but when you get to retirement, you're going to need a little bit more than that.

Speaker 1: 33:01

The other issue too. There is that the woman who takes the part-time role or stays at home and looks after the children raises them. Unfortunately, divorce is quite prevalent nowadays. What does she need to know? I know this sounds awful that you have to plan for divorce or anything like that, but there has to be an awareness that at some point maybe that relationship's not going to last. What happens then financially?

Speaker 2: 33:25

Doing it as a single is really tough. If you have a good understanding of where the family finances are, you can ensure that you get your fair share. But also what is really tricky and we find, if the women hasn't been involved in the finances and they split from their partner, it's really hard for them to start out and to start managing their money and their investments and their future on their own. So they do need to reach out and to get help and, I guess, take control. What we find with a lot of women in their 50s.

Speaker 2: 33:59

Say, you get divorced and the one that gets most of the custody of the kids wants to keep the family home, to keep the kids together in a stable environment.

Speaker 2: 34:08

So they choose to take the house or buy out their partner out of the house. So they've got a very large asset but because they've been at home, they've been looking after the kid and they're working part-time or whatever, they've got a very large asset but they haven't got much income or their ability to go and earn income is hard. So they find that they're really cash strapped paying the bills. So sometimes you've really got to think about it and take the emotion amount of getting the house or taking on the mortgage on the family home on your own may not be the best thing to do if your cash is going to be so tight that it makes things really hard. Or your partner's done the wrong thing and you're in your 50s and you end up with no house and it's really hard.

Speaker 2: 34:54

And you'd be surprised that women over 50s is the fastest growing demographic of homeless people at the moment. They've done the hard yards but somehow they've got to their 50s and they find they're on their own and they don't have a lot to show for it. So it's really important to understand early and to get on top of it and to just be conscious of where you're at and what you can afford. But certainly singles have got it tough rentals and mortgages and other things and that's where we're talking about when you're younger.

Speaker 1: 35:26

Just be aware of that. One day you will be 50 and I don't think 50 is old anymore. I think 50 can be young, but when you're in that situation it can make you feel very old and depressed. I would say, okay, now, let's talk about 67 now as the retirement age in Australia, where you can access the government pension. At 67, you can get a government pension in Australia if you haven't got too many assets and all that, but what age can you start accessing your superannuation in Australia?

Speaker 2: 35:56

Interesting question. Look, you can retire anytime you like from work, right, but you've just got to have the money to support yourself. So, as you said before, in Australia we have a government age pension which is available to you when you're 67, but there are asset tests and income tests that you need to be under to to meet that. In terms of superannuation or the retirement system, you can access your superannuation at aged 60 with some conditions, or you've got unrestricted access to your superannuation at 65. So you know, a lot of people, when they get to retirement, will have a combination of money coming out of superannuation and maybe a part government pension to help them. But I guess that's where you've got to think about what are my living costs when I'm retired? Are they going to be the same as what they are now?

Speaker 2: 36:51

The Australian Foundation of Superannuation funds put some recommendations in terms of what are modest and what a comfortable lifestyle is per year, and that's somewhere up around sort of a comfortable lifestyle is up around 50 or $60,000 a year and you've got to work out how am I going to generate that sort of income selling down assets or income from my assets, and then you can sort of work out, go backwards. I want to retire at 67. I'll need these many dollars and there's lots of calculators and predictors you can do which will help you get there. So we were talking about retirement, and if you want to retire before 60, you certainly can. But you need to think about building some assets outside the superannuation system, investments in your own name which you can access, which will bring in income Well one of the other things is we are living longer now, so it's going to be very interesting to see how long some of us actually live.

Speaker 1: 37:44

I'll be turning 68 in March. Well, I'm a very fit, healthy 68 year old. I do a lot of exercise. I don't have any medical conditions. I'm very lucky. My wife and I own our house. If you're on the pension, you can actually earn extra money, which the government allows you to do. So there are some benefits of continuing to work after you've, say, retired from work. Any thoughts on that?

Speaker 2: 38:09

Here's one thing that when we talk about women, women live longer than men. It's an old fact. On average, I think, the life expectancy of a woman is about 86, men's 84. But you wouldn't be surprised to know when we get to retirement. Because of the wealth gap and the wage gap, women have less superannuation than men. The double whammy is they've got to make it last longer.

Speaker 2: 38:33

So yeah, if you retire at 67, you might be around for another 20 years and you need to fund your living costs by then.

Speaker 2: 38:41

And if you've got work that you enjoy doing and you can do on a part-time basis and supplement your income, that's great.

Speaker 2: 38:49

But otherwise one of my bosses, who was a financial advisor, used to talk about don't just stop work and do nothing.

Speaker 2: 38:57

You need to have a hobby or maybe try part-time work for a while and see how yourself or your partner might drive each other up the wall, being around each other 24, having a bit of a plan, not just for your money for a while for retirement, but in terms of what you want to do with your time and the first couple of years. You might want to buy the caravan and drive around Australia or take a couple of overseas holidays, not only just looking at your living costs, but some of those expenses that you want. Obviously, once you get to late 70s and 80s, you might slow down and need less money to live on because you're not going out so much. One tricky thing is we never know what our medical costs or potential aged care costs will be at that stage either. It is a long time away, but we just have a little bit of a think about it and start doing a little bit now and then as we get closer.

Speaker 1: 39:44

Well, one of the lucky things we have about being Australian is that we have got a Medicare system, a free hospital system, for emergencies that is. So you're not going to be saddled with a great medical bill, unless, of course, you want to take out private insurance or do something not urgent that can cost you. But in terms of an emergency, we are well covered for in Australia. So we're very, very lucky, say, compared to some other countries. Now we're probably coming to the end of our time here. Is there anything else that we should mention? One thing you did want to make it clear is that this is not financial advice. It's only general information that we're talking about. We've got to make that very clear. Did you have any other points you'd like to make?

Speaker 2: 40:24

Legally, I'm supposed to disclose that what we've discussed today is for general information and education purposes only, as your personal circumstances are not known and therefore this information shouldn't be constituted as professional advice. If you're wanting specific information, you can reach out to me and I can give you education and strategies. I can't give you specific recommendations or product, but I've got a number of trusted people I could refer you to.

Speaker 1: 40:52

No, that sounds good. Because, really, who do they reach out to first? Because, if you're looking for a financial advisor, there's heaps of them out there, whereas you may wish to discuss your circumstances and then get a better idea of where you should go. I really like your advice here. I think that's good. What else would you say?

Speaker 2: 41:11

If you just want to educate yourself, there are some good independent sources of information. The government have a website called Money Smart and there's all sorts of basic information on there and calculators like the home line calculators, debt savings insurances and some good information there that's from an independent source and they're not trying to sell you something. Then, if you're interested in the investing piece, I'm not recommending Vanguard as such. They've got some really good information where they call it plain talk investing library and they talk about the different types of assets, the different types of investments and risks and things to consider Once you are building up your savings and you want to do more than just stick your money in a bank and earn a little bit more. I can certainly give people the links to that. In terms of my services, I can provide one-on-one education sessions or I've got a package of coaching where we do six sessions over 10 weeks and we can really go from where are you now, where do you want to be, and put some high level strategies in place and some systems about budgeting and forecasting and that sort of stuff. But in terms of getting advice, ask people around you. Have they used anyone that they like or they trust.

Speaker 2: 42:30

Take a word of mouth, or if you go to somebody and trying to sell you something or they're trying to give you something that you don't understand, don't do it. You don't have to. If they're saying this is complete, let me manage it for you. Be very wary of that. Some people will try and make it more complicated than it needs to be so that you use them. But really saving and investing should be simple and you should understand where your money is at. It's your money at the end of the day. And one thing I'll quickly mention is if we're in Australia and we're employed, we will have superannuation and you should know what your superannuation is doing. You can ring up your super fund and get a free what they call health tip and they'll tell you how much you've got in your superannuation and where they're investing it, what it's returning, what it's costing you and if you've got any insurances like life insurance and other things in your super. That's one thing you can get on top of as well.

Speaker 1: 43:30

That is actually fantastic advice, sandra, and I think it would be a fantastic gift for parents to give to their daughters to have some sessions with you. But if you're worried about learning something about finances, this is probably a very good way of doing it to have some coaching sessions just to get a better idea of it and then point them in the right direction. Sandra, what's the best way for them to find you?

Speaker 2: 43:55

Yes, certainly, it's okay to admit what we don't know, and I really try to find a safe space, non-judgmental. We all probably made mistakes in the past or we might be embarrassed because we think we should know a bit more about money and we don't, but that's perfectly normal and I will hold your hand and give you the right information, and my job is not to look after your money, it's to look after you and to get you to the point where you can manage it yourself. That's what I'm here for. So my business is Money Wellness, and so I've got a website, moneywellnesscom, or you can find me, sandra McGuire, on LinkedIn, or Money Wellness is on Instagram and Facebook. I certainly believe that we all deserve the opportunity to meet our financial potential and just that little bit of help and that little bit of confidence can make a real difference.

Speaker 1: 44:49

Thank you very much, sandra, for being part of the Weiss-Peneaux podcast. Thank you, I've enjoyed our conversation today. I'm looking forward to continuing to provide you with engaging and informative episodes to help you level up in your entrepreneurial journey. Thank you for joining me on the Weiss-Peneaux podcast.