The cost of divorce: unhealthy spending, retirement ‘bleak’, huge benefit and court costs.
The cost of divorce: unhealthy spending, retirement ‘bleak’, huge benefit and court costs
Using mindfulness practice helps reduce financial stress and strain
Using mindfulness practice helps reduce financial stress and strain.
The word ‘mindfulness’ seems to be everywhere these days.
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Financial wellness eluding Americans: could mindfulness help
Financial wellness eluding Americans: could mindfulness help.
Financial stress is rife in the western world, perhaps no more so anywhere than the United States.
Continue reading “Financial wellness eluding Americans: could mindfulness help”
Can’t afford a comfortable retirement
Can’t afford a comfortable retirement.
A huge 47 per cent of Australians between 26 and 64 – 6.1 million people – are not likely to have enough money, even accounting for superannuation, assets and the aged pension, to maintain a “comfortable standard of living” in retirement.
That’s according to CommBank’s ‘Retire Ready Index’, which is compiled using data from 10 million Australians’ superannuation accounts and Australian Bureau of Statistics’ data on personal wealth.
On the flip-side, 53 per cent of people in the same age bracket should have enough for a comfortable retirement, although that figure drops alarmingly to just 17 per cent if the aged pension were not available.
Although there are no signs the aged pension is under threat, there are fears about its long-term sustainability, especially after then-assistant Australian Federal treasurer Kelly O’Dwyer claimed in 2016 that the “objective behind the superannuation system” was for people to not rely on the pension.
The pricetag for a “comfortable” retirement, according to figures released last September by the Association of Superannuation Funds of Australia, is $43,372 a year for singles and $59,619 for couples.
Having enough money to budget these amounts each year from age 67 (from 2023 that will be the age at which Australians qualify for the pension) until death is what it means to be “ready” for a comfortable retirement. The calculations use average life expectancy.
ASFA said this “comfortable” standard would afford: “a broad range of leisure and recreational activities [and] a good standard of living through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel”.
A “modest” retirement could be attained with $23,996 a year for singles and $34,560 for couples. No further details were offered on what a ‘modest’ retirement meant, but one might guess it means choices would have to be made between holidays of any kind, a car and/or a low level of health insurance.
Overall, one in two households expect to be ready for retirement – but by far the strongest households in this sense are those run by couples. While only 27 per cent of singles are on track to be ready, 76 per cent of couples expect to be ready.
Breaking down singles’ retirement readiness by gender reveals some major concerns for women: because of lower incomes, time lost from their careers to raise children and longer life expectancies, only 22 per cent of single women are expected to be ready for retirement at 67, while the figure is 31 per cent for single men.
It’s a given that mindless spending habits including impulse spending – which happens when people are feeling anger, guilt, stress or boredom – are affecting people’s ability to save enough for retirement.
A mindful approach to all personal finance issues, especially over-spending and under-earning, is gaining momentum as a solution.
Employees want mental health at work taken seriously
Employees want mental health at work taken seriously.
Australian employers don’t understand their employees’ major life concerns, according to a study of 500 workers and 300 bosses released in November 2016.
Insurance company Metlife’s Employee Benefit Trends Study found that Australian bosses dramatically underestimated the importance of staff concerns about mental health issues. Depression, anxiety, stress and work-life balance while overestimating fears about physical health.
Financial stress played a big part in employees’ worries. A huge 41 per cent of employees admitted being distracted at work because of financial worries, while 31 per cent admitted having taken time off work to deal with “a financial issue”.
“This highlights a need for employers to step in with professional support and education to help boost their staff’s financial literacy, giving them peace of mind about their future security,” the report concluded.
The top five financial worries for staff were: job security, and not having enough money to live comfortably in retirement (both 55 per cent).
Having more time with my family, and financial security for my family if I’m not able to work (both 53 per cent); being able to cover medical expenses from a major illness (52 per cent).
Employers were asked what they believed their employees’ major health fears were and 88 per cent thought medical problems would top the list, with emotional problems identified by 69 per cent of employers.
Only six per cent of business managers nominated depression and anxiety as an issue, while 11 per cent identified stress and nine per cent believed work-life balance was a big issue.
Employee’s actual health concerns were the other way around however: 84 per cent mentioned emotional wellbeing, and 70 per cent named medical issues.
Depression, anxiety and stress were much bigger issues for employees than managers realised: 38 per cent of staff mentioned work/life balance, nearly a third (32 per cent) said depression and anxiety were major concerns and 29 per cent nominated stress.
The study conclusions included the claim employers could “win hearts and minds by encouraging emotional and financial wellness”.
Employers could “enhance employees’ ability to take control of their financial wellness by offering professional support and education”.
Metlife’s research also found employees were prepared to split the cost of customised benefits programs, including: medical or health insurance, flexible work arrangements, income protection, employee awards and incentives, and health and wellness programs.
Single Women Leading Men in US Home Ownership
Single Women Leading Men in US Home Ownership.
The latest research into women’s struggles with money, Mary Pilon of Bloomberg notes, can make for dreary news.
“Women earn less than their male counterparts, pay harsher workplace penalties for pursuing parenthood, struggle more with debt, and save less for retirement,” Pilon wrote of the situation in the United States, although she could easily have been writing about Australia.
Crucially, women also lose years from their careers by raising children, they do mountains of unpaid (and often unappreciated) domestic work and to top it all off – when facing financial stress – often give birth to under-weight babies.
Many also still face nagging historical stereotypes that women can’t manage money – despite evidence showing women shoulder more financial decision-making and responsibility in families, marriages and relationships than ever before. Sound like a recipe for financial stress?
Forget ‘dreary’ – the news about women and money can be downright depressing.
But according to new research from the National Association of Realtors, single women in the US are leaving single men in the dust for home ownership compared to single men.
The NAR says 17 per cent of American homebuyers are single women compared to single men, who make up just 7 per cent of the market.
Pilon spoke to “30-something” Michelle Jackson who bought a one bedroom apartment in Denver in 2007 which she plans to renovate and is even considering buying a second property.
“I’m so happy,” Jackson said. “It’s completely changed how I feel connected to the place where I’m living. It’s one of the best things I’ve ever done.”
Jackson’s motivation could easily echo the story of many Australian women: “I wanted to have my own place,” she said.
“A lot of people in my circle of friends were women purchasing their homes when they got married, but I still felt like I wanted to build my own wealth and buy.
“If and when I met someone, it’s something that just added to what I bring to the relationship. It didn’t make sense to wait.”
In Australia single men still lead single women when it comes to applications for mortgage finance, according to Aussie Home Loan data reported by domain.com.au in 2016, but the gap is closing. Aussie Home Loans data said 12.34 of mortgage applicants were single men and 11.22 were single women.
Swinburne University social researcher Andrea Sharam said historical discrimination against Australian women in the loan approval process was shifting.
“It’s appalling to suggest women are more financially illiterate than men,” Sharam told domain.com.au.
“I think younger women in particularly are now thinking about housing as something they do as a part of their life plan … it doesn’t matter if they get a partner or not.”
Find your pulse, stop impulse buying
Find your pulse, stop impulse buying
Who hasn’t indulged in a little retail therapy from time to time, especially after a shocking day at work, or an argument with your partner?
It often seems like a good time to buy a pair of new shoes perhaps, go to a movie or buy an album, a bottle of wine, a therapeutic massage to de-stress or even sign up to a gym membership.
So it can feel a little impulsive to spend money we haven’t budgeted on, so what? On the surface it seems like we are taking care of ourselves: doing something to comfort ourselves to deal with the anger or frustration of having our feelings trampled, or not living up to our own or someone else’s expectations.
According to a poll of 1003 consumers by US website creditcards.com, five out of six American admit to impulse buying. One in five people had spent more than US$1000 on impulse, which rose to one in three for people earning over US$75,000.
Spending money impulsively can make you ‘feel better’ and ‘more alive’. It can certainly seem exciting, and it’s hardly as reckless as taking drugs or gambling, right?
But it can be a serious problem if this is something we begin to regularly, or with expensive items, as a way of coping. And let’s face it, jobs and relationships – and life in general – can be stressful for extended periods.
Fortunately there are plenty of strategies to manage your impulse buying urges –according to BetaBait.com (a website helping start-ups connect with early adopters) you are much less likely to buy on impulse if you plan your shopping trip or walk to the shops rather than drive.
It found that sales are a trigger for impulse spenders (a staggering 88 per cent of impulse buys are items “on sale” – even if you didn’t need that item). It also said impulse spending often happens when you feel “angry, stressed, guilty or bored”.
Let’s consider that last point: when you feel “angry, stressed, guilty of bored”. Anyone would admit the issues making us angry, stressed, guilty and bored – or sad, or ashamed, or lonely – are not solved by a bottle (or a case) of wine, or upgrading computer or bike or car, or booking a holiday or seeing a movie.
Chances are we are just escaping feelings which will overwhelm us again in a few hours or days.
Working through complex and difficult problems is of course not easy. But we also forget what a hugely painful thing financial stress is. Ask yourself honestly, is your impulse buying adding to your financial stress?
Financial worries are now accepted as a leading cause of stress in people’s lives throughout the western world.
“Member financial wellness, engagement and measurable behaviour change is what we are aiming for. Members learn through awareness and education to build sustainable healthy habits.” says Financial Mindfulness Founder & CEO, Andrew Fleming.
In a sea of couple conflict, find stability
In a sea of couple conflict, find stability with Financial Mindfulness.
David and Lisa were filled with love and optimism when they wed amid colour and song in Hawaii in 1994 but like many couples, they recently separated.
With the holiday season over and the New Year sending them back to work and to their new solo routines, 2017 looks like a tough year ahead for the whole family. David, 51 and Lisa, 46 are parents to Joshua (8), Jake (13) and Bella (11).
Josh misses his dad while Bella is angry at her dad and hasn’t seen him for 4 months. She quit her after-school job at a retail chain because she has exams this year. Jake’s behaviour problems at school have worsened since the break-up.
David works as an executive in a chartered accountancy firm and has strong earning capacity but as a divorce seems likely he may have to give the house to Lisa as it’s simpler for the children to spend the school week with her.
Both David and Lisa have been emotionally and physically affected by the separation and are worried about the future. Although each have big financial worries they have become less careful with money, sometimes spending to numb emotions like anger, grief, loneliness and sadness.
David and Lisa would see improvements to their mood, energy and sense of security if they introduced proven mindfulness practices into their lives, especially around how they use money – in other words, Financial Mindfulness. Mindfulness is not, as some people believe an attitude, but is better described as the regular practice of moment-by-moment awareness.
A ‘financial wellness’ study by PwC, employees found 52 per cent stressed about their finances with 45 per cent reporting more financial stress in the last 12 months.
More than half of Australians say personal finance issues are the leading cause of stress in their life, according to the Australian Psychological Society.
Reconciliation after 23 years of marriage seems unlikely for David and Lisa. The couple argued loudly at home for six years before they agreed he would move out.
Lisa is angry and feels disrespected and that David has been a poor husband, although she accepts he has mostly been a good provider and done his best as a father. She accepts some contact with their father is good for the children but struggles with any interaction with David.
“How can I trust anything he does now?” she often hears herself saying to friends and family.
Lisa feels resentful with three children to look after, and tries to make herself feel better by socialising with friends over dinner, at concerts and art galleries, pampering herself (at health retreats when David has the kids).
She has taken a few short holidays and one extended one to Britain where her sister and her husband live and then through Europe. She also re-joined the gym because she is drinking and eating more and has started smoking again.
She is still working in human resources as a consultant but has a rising credit card debt.
David now lives alone in a two-bedroom apartment 30 minutes from the family but still does maintenance on the house he owns with Lisa, though he isn’t welcome to let himself in. He also maintains their investment property. Since the separation (7 months ago), David drifted into depression and is finding seeing the children for only 3 days each fortnight difficult.
He is working longer hours, going out for late dinners, is drinking more and goes on fishing and golfing trips with old friends.
He has also increased his spending on his two collecting hobbies: wine and sports memorabilia but is also gambling too often. He recently lost his driver’s licence for drink-driving.
“I sometimes wonder what the point is to any of this,” David often thinks. “Without the kids there wouldn’t be much to life for me.”
David and Lisa are doing individual therapy and meet for family counselling once a month. But growing financial pressure and stress is not helping their coping skills and both find themselves unhappy and snapping at their children sometimes.
In the coming months, separated couples like David and Lisa, going through these very normal life changes, can find some respite by empowering themselves with the comprehensive one-of-a-kind personal program to be delivered by Australian start-up company Financial Mindfulness
Financial Mindfulness will bring a completely new element to the world of personal financial behaviour by giving people medically and scientifically-proven tools to make spending decisions that they will be proud of later (instead of regretting).
“Everybody has a need to manage their financial affairs in a complex world. We understand people would like to improve their financial wellness.”
“We can actually help, for the first time people can choose a comprehensive, medically tested personal pathway of actions, to take responsibility in dealing with their financial stresses. A personal program as an app, also transferrable to your computer.”
“Financial Mindfulness creates a pathway for users from the experience and impact of ‘financial stress’ to one of financial health, wellness and fulfilment.” says Financial Mindfulness Founder & CEO, Andrew Fleming.
“As a result people like David and Lisa will become more self aware and take responsibility of their unhealthy financial habits and use the tools of our program to form new healthier behaviours over time. This improves their self-esteem, their productivity at work and by extension, improve the lives of their children.”
