Wednesday, August 24, 2016

Raising the financially independant female

I recently read an article regarding Disney Princesses and how exposure to these fictional characters can lower girl's body image in childhood.  As a mother whose 3.8 year old daughter spent most of the weekend dressed up as Rapunzel from Tangled, or Elsa from Frozen, I have some awareness of the impact that this can have in developing my daughters tastes in life.  As a Financial Planner, I have, anecdotally noticed this Disney effect with young, female clients, and, if truth be told, have even been a victim of this myself.
It seems to me, that there are a large proportion of young women who are waiting for "their Prince to come".  It may not be deliberate, but whereas young men are encouraged to be the proactive provider (aka The Prince), and take control of their finances at a young age, young women seem to hold off making important financial decisions until The Prince comes along.  For example, although young men will save and purchase their first home, organise their personal insurances and even start a regular investment plan, young women seem to be whiling away their time in their tower until The Prince can come and show them the way.  As a matter of fact, I'm pretty sure that if it wasn't for the superannuation carrot, I wouldn't see any single women in their 20s come through my door.  And we all know what a abysmal carrot superannuation is.
As a female, I find this stereotyping irritating, as a parent, I find it incredibly worrying, but as a financial planner, I am wracking my brain to think of a counter example.  And the best I can come up with is that they are few and far between.
I have women in networking groups, I have female friends, and even the daughters of existing clients who all fall into this category.  I talk ad nauseam about the importance of having goals and taking control of your financial future, and sometimes I even see a flicker of excitement about the idea of giving yourself options, but it very, very rarely seems to manifest in a young lady walking into our office.  This wasted financial potential upsets me.  Not in the quiet, reflective way.  In that outraged, angry and outspoken way that I do so well.
Money may not buy you your happily ever after, but it sure does help the world go round.  Having your own asset base does not make you less feminine.  You shouldn't wait until you are married to purchase your first home.  Creating options for your future self is not only a smart thing to do, but also an attractive thing to do.  It gives you confidence because, as a friend of mine once said to her own daughter, "life is your journey.  Some people are there for a long time, and some people are only there for a short time, but the only person taking your journey for the whole trip is you".
So, I urge all young, single women to stop waiting for The Prince or your Knight in Shining Armor, saddle up your own horse and ride into your own sunset.  If you're the parent of a young woman in their 20s, then rather than sending them on a cruise for their 21st, pay their consultation fee and let them use the money to invest (sorry, ladies).  Their future self with thank you.
By Erin Wright B.Int Bus Dip. FS(FP), Accredited Aged Care Specialist
Find Erin at Achieveit Financial Planning or call for an appointment on 07 4638 5011

Tuesday, August 2, 2016

Lets talk STDs (Sexually Transmitted Debts)

Whether you're a health professional or a financial planner, talking to your client about their STDs is an uncomfortable experience.  The fact that the client has walked through your door in the first place is an indication that they are getting desperate for help, because, as with a traditional STD, they are embarrassed and just don't want to talk about it.

The end of any relationship is a traumatic experience, and the majority of us have been through the feelings of abject failure and loss that comes with it.  Couple this with the stress of being left to foot the bill, and it's easy to see why there are so many bitter and twisted ex-partners out there.

Avoiding an STD is all about prevention, and I have a discussion regarding the "Separation of Church and State" with all of my single clients.  I explain that this concept can be used in relationships as well, in that your emotional attachment and romantic relationship should be viewed as separate to your financial state.  Communicating your financial goals with your partner, understanding theirs, and setting "couple" goals is important.  Opening a joint bank account to save for holidays or a wedding is a great idea.  Going guarantor on a car loan is not.

What you bring into a relationship should be protected, and most people understand and accept this basic principle, even when their only exposure to it has been through rom-coms (thank you Hollywood).  But you also need to have the discussion about what happens once you have moved in together.  What happens when one of you need a new car, or your bundles of joy come along sooner than expected?  I have heard many horror stories of one partner co-signing a car loan and then the other leaves with the car and refuses to pay their half.  In this scenario, you can't sell the asset without joint consent, but if you only pay your half, then a default will go on your credit record as well.  In one way, investing in a relationship is the same as investing in the share market.  Everyone is a high risk investor when things are going well, and everyone is looking for someone to blame when it goes badly.

Now, I'm not sure of what other planner's experiences are, but my clients seem to be less and less dependant on a traditional partner arrangement when building their wealth.  I have an increasing number of clients, male and female, who are going into their first serious relationship with an asset base.  Those of us who have already been through the wringer will be screaming "co-habitation agreement", but will they listen?  It is easy to get caught up in the warm and fuzzy, and the discussion of legal documentation before co-habitation is hardly the most romantic form of courtship, but a full disclosure and understanding of your partner's financial health and attitude is necessary. Jumping in without knowing will not only make your financial planner very cranky, but it can also have long term ramifications for your credit rating and wealth strategy.

For those of us who have already had the unfortunate experience of encountering an STD, don't be embarrassed.  Think of it as a learning experience.  A good financial planner will be able to adjust your strategy around this roadblock, and will help you rebuild your finances, one bitter little step at a time.  

By Erin Wright B.Int Bus Dip. FS(FP), Accredited Aged Care Specialist
Find Erin at Achieveit Financial Planning or call for an appointment on 07 4638 5011