What’s motivating Australians to take control of their finances

By Amy Cooper

This content is produced by The Australian Financial Review in commercial partnership with MLC.


We all experience different triggers when it comes to financial wellbeing, as these Australians share.

“I’m passing my strategies down to the next generation”

“I come from a family of hard workers who saved and invested in property, but for whatever reason, I veered from the path that was instilled in me.

My parents were horrified when, in my early 20s, I told them I was quitting my job and taking out a $25,000 bank loan to invest in a skincare marketing business.

Although that business ultimately fell over, it was a great experience. And I continued to start other businesses, so professionally I was thriving, but the same was not true financially.

There was no structure around how I put money aside. I fell behind with my tax and accounting. And I didn’t have any superannuation because I had zero understanding about it.

By the time I hit my early 30s I had quite a bit of debt accumulated. I’d bought and sold an investment property, but didn’t do anything smart with that money, like reinvesting or saving it.

When I started my communications business, The PR Hub, I was sharing office space with some accountants and financial advisers, and during discussions with them it really hit me that financially I was way behind.

I realised I needed to start doing things differently, because I didn’t want to be like that for the rest of my life – scared to open bank statements, and having ‘spending hangovers’ after splurging.

So I established some rules and structure around my finances, putting aside regular amounts for tax, savings and super.

Today, having goals really helps me achieve, and that’s how I approach my super – aiming high. My financial adviser explained that I could put extra money into super, so I started adding as much as I could. Once that money is in my super, I know I can’t touch it. For someone with my personality, who otherwise could just spend, spend, spend, this is an excellent strategy.

Having a baby five years ago transformed my financial motivation again. With another person to look after I became even more mindful of the long-term future. I want to be a good financial role model for my daughter, and I don’t want to be a burden to her when I’m older.

As a result, I’ve adopted even better day-to-day financial habits. Little things can make a big difference, like making sure I’m on top of subscriptions for streaming services and apps.

Those little monthly fees really add up until you realise there’s $50 that could have gone into your savings. I am much better with credit cards too. I used to shrug off $100 interest payments; now I pay my credit cards off in full every month.

You actually reduce your stress and anxiety by putting some of these rules in place.”

Samantha Dybac, 42, Owner of a PR and communications company

 

“I’m working towards more balance”

“Although having worked initially in financial services, I always wanted to work for myself, so I started my health supplements company, Arborvitae, seven years ago.

The business is growing well, and now I’m working towards a future with a better work-life balance. Ideally, I’d like to work three days a week and have a four-day weekend. But like many people, I only started significant planning for the future once I had family commitments and my priorities changed.

My wife and I did a lot of buying, renovating and selling of properties for a number of years; we took more risks back then and perhaps borrowed a bit more than we should have. When you’re younger you feel bulletproof.

Now, I’m not as open to risk as I used to be. I’ll take educated risks to grow my business, but personally, my focus is on trying to reduce my mortgage and add value to the home. One strategy I have is an interest offset account, which reduces the mortgage interest.

Superannuation is our main asset, apart from the house. I contribute for my wife and myself, putting in as much as I can without being penalised, and it has been steadily growing over the years. From a tax point of view, super is quite advantageous; as I get older, I know I don’t want to rely on the pension.

There’s a generational shift from my parents, who were content with the pension after retirement. But it isn’t much to live on every week. I think you have to set yourself up instead.

I’ve tried to pass on this mindset to my kids; instilling in them not to waste money and to set goals. Whether it’s a house or car, have something to reach for. For younger people, those short-term goals can help them to build good financial habits.

Something that business teaches you is to try and look forward to where you’re going to be in six months, 12 months, two years’ time, and further – and it is working for me.”

Brendan Howell, 58, Director of a health supplements company

 

“I want to keep living life to the full”

“When I started my own practice, Reid Family Lawyers, in 2006, I did everything for the first year, right down to licking stamps for envelopes. It’s since grown into a successful business with 10 staff and two offices.

For many years the focus was on paying for our children’s education, but I’ve also used my income to try and enjoy life to the full, with lots of travel, good food and drink, and a beautiful home by the beach.

There’s a balance between preparing for your future and living a good life. I guess in hindsight, had I allocated a portion of my spending to reducing my personal debt and mortgage, I might be in a better position financially right now. But it’s hard to regret having enjoyed life!

My priorities shifted when I turned 50 and thought: am I going to work until I’m 80 or am I going to look at retiring earlier? And then I decided I’d better start knuckling down and think more about the future.

My strategy has been to reduce personal debt and try to increase my superannuation as much as possible. The rental income from an office I own goes into my super fund so it’s a way of accumulating more, and that property is also an asset that I can sell one day.

I’ve been trying to make sure that my non-deductible debt is cleared so that my house is mortgage-free and I’ve got a roof over my head if things ever go south.

I’m hoping I’ve taught my kids the importance of establishing a habit, such as putting aside some money early on – whether it’s 5, 10 or 20 per cent of your income.

They have even more temptation to spend on consumables than we had at their age. I’ve encouraged them to try and get into the property market sooner rather than later, especially taking advantage of low interest rates; while they’re young with plenty of time to pay down that mortgage.”

Fiona Reid, 54, Managing director of a law firm