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Rough seas or smooth sailing? The cruise industry is booming despite environmental concerns

<div class="theconversation-article-body"><em><a href="https://theconversation.com/profiles/frederic-dimanche-836528">Frédéric Dimanche</a>, <a href="https://theconversation.com/institutions/toronto-metropolitan-university-1607">Toronto Metropolitan University</a> and <a href="https://theconversation.com/profiles/kelley-a-mcclinchey-1287281">Kelley A. McClinchey</a>, <a href="https://theconversation.com/institutions/wilfrid-laurier-university-1817">Wilfrid Laurier University</a></em></p> <p>Cruise ship season is officially underway in British Columbia. The season kicked off with the arrival of Norwegian Bliss on April 3 — the <a href="https://www.cheknews.ca/first-cruise-ship-of-the-season-to-arrive-in-victoria-in-less-than-2-weeks-1196426/">first of 318 ships</a> that are scheduled to dock in Victoria this year. Victoria saw a record 970,000 passengers arrive in 2023, with more expected in 2024.</p> <p>The cruise industry <a href="https://doi.org/10.1016/j.trip.2021.100391">was badly hit</a> by the <a href="https://financialpost.com/financial-times/the-2020s-were-meant-to-be-a-boom-decade-for-cruises-then-covid-19-hit-them-like-a-tidal-wave">suspension of cruise operations due to the COVID-19 pandemic</a> in 2020. Fuelled by heavy consumer demand and industry innovation, cruising has made a comeback. It is now one of the fastest-growing sectors, rebounding even faster than international tourism.</p> <p>While many predicted <a href="https://www.cnbc.com/2020/04/05/carnivals-struggle-to-survive-the-coronavirus-as-outbreak-wipes-out-the-cruise-industry.html">a difficult recovery</a>, a <a href="https://cruising.org/en">recent industry report shows a remarkable post-pandemic rebound</a>. Two million more people went on cruises in 2023 versus 2019, with demand predicted to top 35 million in 2024.</p> <p>But environmental issues plague the sector’s revival. Are they an indication of rough seas ahead? Or will a responsive industry mean smooth sailing?</p> <p>Cruising has long been criticized <a href="https://www.sbs.com.au/news/article/their-purpose-is-to-be-fun-but-theres-a-dark-side-to-cruising-the-seas/dzxivdoos">for being Janus-faced</a>: on the surface, cruises are convenient, exciting holidays with reputed economic benefits. But lurking underneath are its <a href="https://doi.org/10.1016/j.tourman.2017.11.002">negative environmental and social impacts</a>.</p> <h2>Unprecedented growth</h2> <p>Newly constructed mega-ships are part of the industry’s unprecedented growth. Royal Caribbean’s Icon of the Seas is the <a href="https://www.cruisehive.com/top-10-biggest-cruise-ships-in-the-world/66448">largest cruise ship in the world</a>, with 18 decks, 5,600 passengers and 2,350 crew.</p> <p>MSC World Europa with 6,700 passengers and 2,100 crew, P&amp;O Arvia with 5,200 passengers and 1,800 crew, and Costa Smeralda with 6,600 passengers and 1,500 crew also claim mega-ship status.</p> <p>Those sailing to and from Alaska via Victoria will be some of the <a href="https://hakaimagazine.com/features/cruise-ship-invasion/">estimated 700,000 passengers departing Seattle</a> on massive ships three sport fields in length.</p> <p>Baby boomers represent less than 25 per cent of cruise clientele. Gen X, <a href="https://www.thenewdaily.com.au/life/2024/01/15/cruise-millennials-gen-z">Millennials and Gen Z</a> have more interest than ever in cruising, with these younger markets being targeted as the future of cruise passengers.</p> <p>The Cruise Lines International Association asserts that <a href="https://cruising.org/-/media/clia-media/research/2024/2024-state-of-the-cruise-industry-report_041424_web.ashx">82 per cent of those who have cruised will cruise again</a>. To entice first-timers and meet the needs of repeat cruisers, companies are offering new itineraries and onboard activities, from <a href="https://www.timescolonist.com/business/royal-caribbean-quantum-cruise-ship-1st-at-sea-bumper-cars-skydiving-observation-capsule-4585987">simulated skydiving and bumper cars</a> to <a href="https://nationalpost.com/travel/cruise-ship-offers-pickleball-on-the-high-seas">pickleball</a> and lawn bowling.</p> <p>Solo cruise travel is also on the rise, and <a href="https://www.cruisetradenews.com/demand-for-multi-generational-cruise-holidays-on-the-up-data-finds/">multi-generational family cruise travel</a> is flourishing, explaining the extensive variety of cabin classes, activities and restaurants available on newly constructed and retrofitted ships.</p> <p>However, only a few cruise ports are large enough to dock mega ships. Cruise lines are responding by offering off-beat experiences and catering more to the distinct desires of travellers.</p> <p>In doing so, there is a <a href="https://www.positivelyosceola.com/2024s-top-cruise-trends-embracing-smaller-ships-solo-adventures-and-luxury-suites/">move towards smaller vessels and luxury liners</a>, river cruises and <a href="https://www.travelweek.ca/news/cruise/expedition-cruising-what-is-it-and-how-do-you-sell-it/">expedition cruising</a>. Leveraging lesser-known ports that can only be accessed via compact luxury ships <a href="https://www.cntraveler.com/story/small-cruise-ships-are-more-sustainble-and-on-the-rise">offers more mission-driven, catered experiences</a> for the eco-minded traveller.</p> <h2>Cruising and environmental costs</h2> <p>Cruise ship visitors are known to negatively impact Marine World Heritage sites. While most sites regulate ballast water and wastewater discharge, there are <a href="https://doi.org/10.3390/su12020611">concerns about ship air emissions and wildlife interactions</a>.</p> <p>Cruise ship journeys along Canada’s west coast, for example, <a href="https://www.theguardian.com/environment/2022/jul/09/us-cruise-ships-using-canada-as-toilet-bowl-for-polluted-waste-alaska-british-columbia">are leaving behind a trail of toxic waste</a>. <a href="https://foe.org/wp-content/uploads/2023/04/Comparison_of_CO2_Emissions_v2.pdf">A study by environmental organization Friends of the Earth</a> concluded that a cruise tourist generates eight times more carbon emissions per day than a land tourist in Seattle.</p> <p>Also, a rise in expedition cruising means more negative impacts (long-haul flights to farther ports, less destination management in fragile ecosystems, <a href="https://www.nytimes.com/2024/03/03/briefing/last-chance-tourism.html">last chance tourism</a>) and a rise in carbon dioxide emissions.</p> <p>Toxic air pollutants from cruise ships around ports are higher than pre-pandemic levels, <a href="https://www.transportenvironment.org/discover/europes-luxury-cruise-ships-emit-as-much-toxic-sulphur-as-1bn-cars-study/">leaving Europe’s port cities “choking on air pollution</a>.” Last year, Europe’s 218 cruise ships emitted as much sulphur oxides as one billion cars — a high number, considering the introduction of the <a href="https://doi.org/10.1016/S2542-5196(20)30002-4">International Maritime Organization’s sulphur cap in 2020</a>.</p> <h2>Rough seas ahead or smooth sailing?</h2> <p>Royal Caribbean said its Icon of the Seas is designed to <a href="https://www.reuters.com/business/environment/worlds-largest-cruise-ship-sets-sail-bringing-concerns-about-methane-emissions-2024-01-27/">operate 24 per cent more efficiently than the international standard</a> for new ships. International Maritime Organization regulations <a href="https://www.bloomberg.com/news/articles/2024-01-22/royal-caribbean-s-icon-of-the-seas-highlights-climate-impact-of-cruises">must be 30 per cent more energy-efficient</a> than those built in 2014.</p> <p>But despite the industry using liquefied natural gas instead of heavy fuel oil and electric shore power to turn off diesel engines when docking, industry critics still claim <a href="https://www.theguardian.com/environment/2024/jan/26/icon-of-the-seas-largest-cruise-ship-human-lasagne-climate-fuel-lng-greenwashing">the cruise sector is greenwashing</a>. As a result, some cities like Amsterdam, Barcelona and Venice are <a href="https://www.forbes.com/sites/maryroeloffs/2023/07/21/war-on-cruise-ships-amsterdam-latest-port-to-limit-or-ban-cruise-liners">limiting or banning cruise ships</a>.</p> <p>Environmental critiques remain strong, especially for <a href="https://dergipark.org.tr/en/pub/ijegeo/issue/65449/957262">polar expeditions</a>. The industry must respond and <a href="https://doi.org/10.1007/978-3-031-01949-4_131">increase sustainability efforts</a>, but their measures remain reactive (i.e., merely meeting international regulations) rather than proactive. In addition, by sailing their ships under <a href="https://www.washingtonpost.com/opinions/2020/05/13/real-problem-with-cruise-industry/">flags of convenience</a>, cruise companies evade taxes and demonstrate an unwillingness to abide by a nation’s environmental, health and labour regulations.</p> <p>In any case, environmental concerns are escalating along with the industry. <a href="https://www.nationalgeographic.com/travel/article/cruising-green-eco-operators-make-waves">Travel agents and industry figures are aware of these impacts</a> and should help promote cruise lines that demonstrate a commitment to sustainable practices.</p> <p>Local residents need to expect more from port authorities and local governments in order <a href="https://doi.org/10.1016/j.annals.2024.103732">to cope with cruise tourism</a>. Cruise consumers should recognize the environmental costs of cruising, and demand accountability and transparency from cruise lines.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/228181/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><a href="https://theconversation.com/profiles/frederic-dimanche-836528"><em>Frédéric Dimanche</em></a><em>, Professor and Director, Ted Rogers School of Hospitality and Tourism Management, <a href="https://theconversation.com/institutions/toronto-metropolitan-university-1607">Toronto Metropolitan University</a> and <a href="https://theconversation.com/profiles/kelley-a-mcclinchey-1287281">Kelley A. McClinchey</a>, Teaching Faculty, Geography and Environmental Studies, <a href="https://theconversation.com/institutions/wilfrid-laurier-university-1817">Wilfrid Laurier University</a></em></p> <p><em>Image credits: Shutterstock</em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/rough-seas-or-smooth-sailing-the-cruise-industry-is-booming-despite-environmental-concerns-228181">original article</a>.</em></p> </div>

Cruising

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Battling to make ends meet? Financial planning expert offers 5 tips on how to build your budget

<div class="theconversation-article-body"><em><a href="https://theconversation.com/profiles/bomikazi-zeka-680577">Bomikazi Zeka</a>, <a href="https://theconversation.com/institutions/university-of-canberra-865">University of Canberra</a></em></p> <p>Every day seems to bring new headlines about rising costs. <a href="https://www.news24.com/news24/africa/news/nigerias-big-unions-call-indefinite-strike-over-fuel-prices-and-the-cost-of-living-20230926">In Nigeria</a>, unions are threatening to strike amid soaring fuel prices; the country’s inflation rate <a href="https://www.cbn.gov.ng/rates/inflrates.asp">hit 25%</a> in August. The amount it costs to fill a food basket in South Africa <a href="https://pmbejd.org.za/wp-content/uploads/2023/09/PMBEJD_Key-Data_September-2023_27092023.pdf">keeps climbing</a>. Ghanaians <a href="https://www.reuters.com/world/africa/multi-day-protests-over-economic-crisis-grip-ghanas-capital-2023-09-23/">took to the streets</a> of Accra in late September to protest about the cost of living.</p> <p>A <a href="https://www2.deloitte.com/us/en/insights/industry/retail-distribution/consumer-behavior-trends-state-of-the-consumer-tracker.html">recent study by the audit and consulting firm Deloitte</a> found that 75% of South Africans were concerned that the prices for everyday purchases would continue to increase, while 80% of consumers across all income groups expected the prices of groceries, household utilities and fuel to rise.</p> <p>This stark reality means budgeting may be more necessary than ever.</p> <p>If you don’t know how to create a budget, then you shouldn’t feel bad – most adults aren’t taught how to create one. And most people don’t budget, because they see it as restrictive or unsustainable. But it need not be: once you appreciate that a budget can work for you, it can be a financially empowering exercise. It’s a cornerstone of financial planning because it ensures you are living within your means and helps you remain in financial control.</p> <p>As a financial planning academic, I focus in <a href="https://researchprofiles.canberra.edu.au/en/persons/bomikazi-zeka/publications/">my research</a> on improving financial wellbeing and promoting savings behaviours through interventions such as budgeting. Here are five guidelines for creating a budget.</p> <h2>1. Apps vs spreadsheet</h2> <p>A good place to start is to choose the format of how you’re going to budget. There are several <a href="https://www.sanlamreality.co.za/wealth-sense/setting-up-a-family-budget-that-works/">online templates</a> and apps you can use for budgeting. For instance, <a href="https://www.22seven.com/">22Seven</a> has gained popularity in South Africa due to its compatibility with several financial institutions, including the country’s big five banks. Similarly, <a href="https://www.the-star.co.ke/business/kenya/2021-01-25-budgeting-using-mint-app/">Mint</a> is a popular budgeting tool that is used in Kenya and Nigeria.</p> <p>If you prefer to put pen to paper, some online templates come with <a href="https://www.wonga.co.za/blog/free-budget-template">free printable budgets</a>. Creating your own <a href="https://create.microsoft.com/en-us/learn/articles/how-to-make-excel-budget">Excel spreadsheet</a> is an equally good approach.</p> <p>What matters most is using a tool that you can commit to.</p> <h2>2. Itemising your income and expenses</h2> <p>A budget essentially shows how much you’re spending in relation to how much you’re earning. So once you have selected your budgeting tool, you need to fill in your income and itemise how much you’re spending on each expense in a month. A budget can be considered a cashflow statement because it allows you to track money coming in (income) and money going out (expenses).</p> <p>If you are living within your means, your budget should indicate a surplus – more cash inflows than cash outflows. So budgeting provides an accurate account of your short-term financial position.</p> <h2>3. A realistic account of expenses</h2> <p>When you look at your financial statements, fill your expenses into your budget honestly and accurately. Don’t cheat! Since everyone’s financial situation is different, your budget will also be unique.</p> <p>Even though there is no one-size-fits-all approach to budgeting, it should still consider all of your expenses (both regular and intermittent). A general rule of thumb is that if it’s deducted from your account then you should treat it as an expense. This includes payments for housing, medical insurance, fuel, dining out, credit card repayments and even bank fees.</p> <h2>4. Save first, spend later</h2> <p>Now you’ve seen how much you’re spending. Either it’s too much – and you can plan where to cut back – or you have savings at the end of the month.</p> <p>When compiling your budget it’s important to demarcate how much will be in the form of savings. What’s more important is getting into the habit of saving before you spend instead of saving after spending. If you spend first then you’ve deprived yourself of the opportunity to save for a rainy day.</p> <p>Furthermore, <a href="https://eprints.hud.ac.uk/id/eprint/10231/1/Microsoft_Word_-_submitted_version_3rd_June_201.pdf">research</a> has shown that getting into the habit of saving has a transgenerational effect: it can be considered a cultural value that is passed on from one generation to another. So think of saving as paying yourself first. Once you have done so, you won’t feel guilty for treating yourself because you’ve already done the financially responsible thing by putting your savings aside.</p> <h2>5. Considering assets and liabilities</h2> <p>Once you’ve become comfortable with consistently budgeting, you can take it up a notch by including your assets (everything you own with an economic value) and liabilities (everything you owe) to determine your overall financial position.</p> <p>You can get a clearer picture of your overall financial wellbeing by compiling a list of all your assets, for example your savings and <a href="https://www.investopedia.com/terms/h/home_equity.asp">home equity</a>, in relation to liabilities (such as bank loans). Knowing your long-term financial position can indicate how financially resilient or vulnerable you are. In the event of a financial emergency, you will know which resources you can draw upon to meet an unexpected expense.</p> <p>By creating a budget (and sticking to it), you can protect yourself and your household from financial shocks. Consider the alternative. Imagine you haven’t budgeted and set savings aside. If a financial emergency were to arise, your next best bet would be to borrow the funds you need. You’d have to come up with a plan to repay what you’d borrowed while also building your savings.</p> <h2>A healthy habit</h2> <p>Getting into the habit of budgeting isn’t easy, especially if you haven’t done it before or you’re intimidated by the process. But, as the expression goes, “a journey of a thousand miles begins with a single step”. Think of budgeting as taking a small but important step towards reclaiming control over your finances and improving your financial well-being.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/214861/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><em><a href="https://theconversation.com/profiles/bomikazi-zeka-680577">Bomikazi Zeka</a>, Assistant Professor in Finance and Financial Planning, <a href="https://theconversation.com/institutions/university-of-canberra-865">University of Canberra</a></em></p> <p><em>Image credits: Getty Images </em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/battling-to-make-ends-meet-financial-planning-expert-offers-5-tips-on-how-to-build-your-budget-214861">original article</a>.</em></p> </div>

Money & Banking

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If you have money anxiety, knowing your financial attachment style can help

<div class="theconversation-article-body"><em><a href="https://theconversation.com/profiles/ylva-baeckstrom-1463175">Ylva Baeckstrom</a>, <a href="https://theconversation.com/institutions/kings-college-london-1196">King's College London</a></em></p> <p>The number of people struggling with money in Britain is at a <a href="https://www.theguardian.com/money/2024/mar/18/record-numbers-of-uk-people-in-debt-warns-charity">record high</a>. Financial charities say that people are contacting them for help with debt, paying bills and insolvency. The campaign group Debt Justice found in a <a href="https://debtjustice.org.uk/wp-content/uploads/2024/03/WalnutOmnibus-Debt-Justice-Policy-Development-Weighted.xlsx">survey</a> that 29% of 18- to 24-year-olds and 25% of 25- to 34-year-olds had missed three or more bill payments in the last six months.</p> <p>A majority (65%) of people don’t think they can survive on their savings for three months without <a href="https://www.money.co.uk/savings-accounts/savings-statistics">borrowing money</a>. Statistics from the UK’s financial markets regulator show that more than one-third of UK adults have less than £1,000 in savings. And a survey by Money.co.uk found that 30% of Brits aged 25-64 do not save at all <a href="https://www.pensionsage.com/pa/Nearly-one-third-of-Brits-are-not-saving-for-retirement.php">for retirement</a>.</p> <p>With figures like that, is it any wonder that 75% of people in the UK feel <a href="https://www.mentalhealth.org.uk/about-us/news/financial-strain-driving-uks-anxiety#:%7E:text=Almost%20three%2Dquarters%20of%20the,cited%20job%20insecurity%20or%20unemployment">anxious about money</a>?</p> <p>The current state of the economy is particularly scary for young people. Unless you were born with a trust fund (not most people), you are likely part of the first generation to be financially worse off than <a href="https://edition.cnn.com/2020/01/11/politics/millennials-income-stalled-upward-mobility-us/index.html">your parents</a>. Retirement seems like an impossibility, and you’re unlikely to own your own home. Eighty percent of people in their early 20s worry about <a href="https://www.youngminds.org.uk/parent/parents-a-z-mental-health-guide/money-and-mental-health/#Thelinksbetweenmoneyandmentalhealth">not earning enough</a>.</p> <p>It is important to start planning for your financial future early in your career, but you may find it overwhelming. The good news is, there are ways to overcome this.</p> <h2>Finding your financial attachment style</h2> <p>As a psychotherapist and finance researcher, I work with people to help them to increase their financial confidence and find the motivation to start planning. This often starts with understanding what influences their relationship with money.</p> <p><a href="https://www.cambridge.org/core/journals/behavioral-and-brain-sciences/article/bowlbyainsworth-attachment-theory/6D35C7A344107195D97FD7ADAE06C807">Attachment theory</a> is a psychological concept introduced in the late 1950s. Your attachment style – which can be, for example, secure, anxious or avoidant – explains how you approach creating emotionally intimate relationships with other people. Some people feel secure building relationships, while others are extremely anxious. Some avoid close relationships altogether.</p> <p>Attachment style can also apply to your finances. If you feel confident and safe when it comes to money, you are secure in your relationship to saving and spending. But if the thought of opening an ISA or filling out a tax return, let alone planning for retirement, fills you with dread and panic, you may be anxiously attached. And if you if you push money worries to the back of your mind, you are likely avoidant.</p> <p>Attachment theorists and psychotherapists like me think that attachment styles are shaped by childhood experiences – for example, how well you were looked after by your parents or carers, and how safe and loved you felt.</p> <p>The way money was handled in your family growing up is likely to have set the blueprint for your <a href="https://www.sciencedaily.com/releases/2020/02/200225114410.htm">financial attachment style</a>. Outside influences like education or work experiences may shape this too.</p> <p>Although financial education is part of the <a href="https://maps.org.uk/en/work-with-us/financial-education-in-schools">school curriculum</a> in the UK, 76% of children leave school without sufficient <a href="https://maps.org.uk/en/media-centre/press-releases/2024/hundreds-of-thousands-leaving-school-without-money-skills#:%7E:text=In%20its%20poll%20of%201%2C012,knowledge%20they%20need%20for%20adulthood">financial knowledge</a> to manage their lives. Similarly, financial services like banks have done a poor job helping people establish secure financial relationships. Complex and <a href="https://www.pwmnet.com/private-view-blog-time-for-the-financial-industry-to-jettison-the-jargon">off-putting language</a> has placed a barrier between those who know about money and those who need to learn.</p> <p>If you feel unable to keep up with financial terms, or that you don’t understand money, this is likely to hurt your confidence in your financial planning abilities and fuel a more avoidant attachment style.</p> <p>Identifying your attachment style can help you nurture a better relationship with money. You will be able to understand and predict how and why you react to finances in certain ways. And, it can provide confidence by reminding you that money struggles are not necessarily your fault.</p> <h2>Getting over financial anxiety</h2> <p>Some of the recent financial trends spreading on social media may give an insight into your attachment style. Are you <a href="https://www.cnbc.com/select/what-is-loud-budgeting-trend-can-it-work/">“loud budgeting”</a> (being vocal about why you aren’t spending money)? This could be a sign of financial confidence and that you have secure financial attachment. Or are you “doom spending” (spending money you don’t have instead of creating a <a href="https://www.theguardian.com/lifeandstyle/2024/jan/31/are-you-loud-budgeting-or-doom-spending-finance-according-to-gen-z">nest egg</a> for the future)? You may be avoidant.</p> <p>Healthy relationships with <a href="https://www.nhs.uk/every-mind-matters/lifes-challenges/maintaining-healthy-relationships-and-mental-wellbeing/#:%7E:text=People%20with%20healthy%2C%20positive%20and,such%20as%20stress%20and%20anxiety">people</a> and <a href="https://www.nhs.uk/every-mind-matters/lifes-challenges/money-worries-mental-health/#:%7E:text=Our%20mental%20health%20might%20be,earning%20enough%20or%20currently%20unemployed">money</a> are both critical for our survival and mental health. As an adult, you have the power to improve these relationships. But because attachment patterns were formed early on, they are difficult to change. Therapy and other support can help you adopt healthier habits, as can increasing your financial knowledge.</p> <p>If you want to change your relationship with money, you should try to be mindful of what may be influencing you. While financial advice on social media may be useful and help young people feel more empowered to <a href="https://www.forbes.com/advisor/investing/financial-advisor/adults-financial-advice-social-media/">talk about money</a>, it can also <a href="https://www.mcleanhospital.org/essential/it-or-not-social-medias-affecting-your-mental-health">increase anxiety further</a> and be <a href="https://theconversation.com/if-you-get-your-financial-advice-on-social-media-watch-out-for-misinformation-222196">full of misinformation</a>. A good place to start for accurate and helpful information is the government’s <a href="https://www.moneyhelper.org.uk/en">Money Helper website</a>.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/225243/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><em><a href="https://theconversation.com/profiles/ylva-baeckstrom-1463175">Ylva Baeckstrom</a>, Senior Lecturer in Finance, <a href="https://theconversation.com/institutions/kings-college-london-1196">King's College London</a></em></p> <p><em>Image credits: Getty Images </em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/if-you-have-money-anxiety-knowing-your-financial-attachment-style-can-help-225243">original article</a>.</em></p> </div>

Money & Banking

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‘Girl math’ may not be smart financial advice, but it could help women feel more empowered with money

<div class="theconversation-article-body"><em><a href="https://theconversation.com/profiles/ylva-baeckstrom-1463175">Ylva Baeckstrom</a>, <a href="https://theconversation.com/institutions/kings-college-london-1196">King's College London</a></em></p> <p>If you’ve ever calculated cost per wear to justify the price of an expensive dress, or felt like you’ve made a profit after returning an ill-fitting pair of jeans, you might be an expert in <a href="https://www.standard.co.uk/news/world/girl-maths-tiktok-trend-its-basically-free-b1100504.html">“girl math”</a>. With videos about the topic going viral on social media, girl math might seem like a silly (<a href="https://www.glamourmagazine.co.uk/article/girl-math-womens-spending-taken-seriously">or even sexist</a>) trend, but it actually tells us a lot about the relationship between gender, money and emotions.</p> <p>Girl math introduces a spend classification system: purchases below a certain value, or made in cash, don’t “count”. Psychologically, this makes low-value spending feel safe and emphasises the importance of the long-term value derived from more expensive items. For example, girl math tells us that buying an expensive dress is only “worth it” if you can wear it to multiple events.</p> <p>This approach has similarities to <a href="https://www.investopedia.com/terms/m/modernportfoliotheory.asp">portfolio theory</a> – a method of choosing investments to maximise expected returns and minimise risk. By evaluating how each purchase contributes to the shopping portfolio, girl math shoppers essentially become shopping portfolio managers.</p> <h2>Money and emotions</h2> <p>People of all genders, rich or poor, feel anxious when dealing with their personal finances. Many people in the UK do not understand pensions or saving enough to <a href="https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/workplacepensions/articles/pensionparticipationatrecordhighbutcontributionsclusteratminimumlevels/2018-05-04">afford their retirement</a>. Without motivation to learn, people avoid dealing with money altogether. One way to find this motivation, as girl math shows, is by having an emotional and tangible connection to our finances.</p> <p>On the surface, it may seem that women are being ridiculed and encouraged to overspend by using girl math. From a different perspective, it hints at something critical: for a person to really care about something as seemingly abstract as personal finance, they need to feel that they can relate to it.</p> <p>Thinking about money in terms of the value of purchases can help create an <a href="https://www.thetimes.co.uk/article/every-time-i-use-my-card-my-phone-buzzes-and-that-stops-me-shopping-ps0fjx6nj">emotional relationship</a> to finance, making it something people want to look after.</p> <figure><iframe src="https://www.youtube.com/embed/GPzA7B6dcxc?wmode=transparent&amp;start=0" width="440" height="260" frameborder="0" allowfullscreen="allowfullscreen"></iframe></figure> <h2>The girl math we need</h2> <p>Women are a consumer force to be reckoned with, controlling <a href="https://www.forbes.com/sites/bridgetbrennan/2015/01/21/top-10-things-everyone-should-know-about-women-consumers/#7679f9d6a8b4">up to 80%</a> of consumer spending globally. The girl math trend is a demonstration of women’s mastery at applying portfolio theory to their shopping, making them investment powerhouses whose potential is overlooked by the financial services industry.</p> <p><a href="https://www.theguardian.com/world/2019/oct/28/women-paid-less-than-men-over-careers-gender-pay-gap-report">Women are disadvantaged</a> when it comes to money and finance. Women in the UK earn on average £260,000 less than men during their careers and the retirement income of men is twice as high as women’s.</p> <p>As I’ve found in <a href="https://www.routledge.com/Gender-and-Finance-Addressing-Inequality-in-the-Financial-Services-Industry/Baeckstrom/p/book/9781032055572">my research</a> on gender and finance, women have lower financial self-efficacy (belief in their own abilities) compared to men. This is not helped by women feeling patronised when seeking financial advice.</p> <p>Because the world of finance was created by men for men, its language and culture are <a href="https://www.routledge.com/Gender-and-Finance-Addressing-Inequality-in-the-Financial-Services-Industry/Baeckstrom/p/book/9781032055572">intrinsically male</a>. Only in the mid-1970s did women in the UK gain the legal right to open a bank account without a male signature and it was not until 1980 that they could apply for credit independently. With the law now more (<a href="https://www.worldbank.org/en/news/press-release/2023/03/02/pace-of-reform-toward-equal-rights-for-women-falls-to-20-year-low">but not fully</a>) gender equal, the financial services industry has failed to connect with women.</p> <p>Studies show that 49% of women are <a href="https://www.ellevest.com/magazine/disrupt-money/ellevest-financial-wellness-survey">anxious about their finances</a>. However they have not bought into patronising offers and <a href="https://www.fa-mag.com/news/gender-roles-block-female-financial-experience--ubs-says-73531.html">mansplaining by financial advisers</a>. This outdated approach suggests that it is women, rather than the malfunctioning financial system, <a href="https://www.theguardian.com/commentisfree/2020/sep/16/women-are-not-financially-illiterate-they-need-more-than-condescending-advice">who need fixing</a>.</p> <p>Women continue to feel that they do not belong to or are able to trust the world of finance. And why would women trust an industry with a <a href="https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/genderpaygapintheuk/2019">gender pay gap</a> of up to 59% and a severe lack of women in senior positions?</p> <p>Girl math on its own isn’t necessarily good financial advice, but if it helps even a handful of women feel more empowered to manage and understand their finances, it should not be dismissed.</p> <p><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><em><a href="https://theconversation.com/profiles/ylva-baeckstrom-1463175">Ylva Baeckstrom</a>, Senior Lecturer in Finance, <a href="https://theconversation.com/institutions/kings-college-london-1196">King's College London</a></em></p> <p><em>Image credits: Getty Images </em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/girl-math-may-not-be-smart-financial-advice-but-it-could-help-women-feel-more-empowered-with-money-211780">original article</a>.</em></p> </div>

Money & Banking

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Millions of eligible Aussies about to receive financial boost

<p>Starting this Wednesday, millions of Australians relying on Centrelink benefits will see a welcome increase in their payments. With indexation kicking in, fortnightly boosts ranging from $14 to $30 will be allocated to eligible recipients, depending on their specific circumstances and the type of payment they receive.</p> <p>This adjustment will not only benefit current beneficiaries but also extend support to more individuals, with an additional 77,000 parents now qualifying for higher payment rates. The eligibility criteria for certain payments have been expanded, particularly for parents whose youngest child is under 14, a significant extension from the previous threshold of under eight.</p> <p>Income and assets limits tied to these payments will also experience an uptick in line with the indexation process, offering further relief to recipients. But how exactly will these increments manifest across different categories of payments?</p> <p>For single parents, the fortnightly payment will see a boost of $17.50, while partnered parents will witness an increase of $12.30 individually. Moreover, the income free area will rise to $1,345 for each person, an enhancement of $20 per fortnight.</p> <p>Jobseekers with children or those aged over 55 will receive an additional $14.40 fortnightly. Single JobSeeker recipients without children and individuals aged over 22 on ABSTUDY will enjoy a $13.50 increase per fortnight, with couples receiving an extra $12.30 each.</p> <p>Rent assistance, however, will see relatively modest increments, ranging from $2.27 to $3.40, depending on the recipient's family situation.</p> <p>For those on the age pension, disability support pension, and carer payment, the increase is more substantial, with singles receiving an extra $19.60 and couples combined receiving $29.40 each fortnight. This brings the maximum rate of the pension to $1116.30 for singles and $1682.80 for couples, including pension and energy supplements.</p> <p>Amanda Rishworth, the Social Services Minister, explains that indexation plays a crucial role in ensuring that welfare recipients can cope with inflation and the rising cost of living – and that addressing these pressures remains a top priority for the government.</p> <p>This increase in Centrelink payments comes at a critical time when many Australians are grappling with economic uncertainty due to various factors, including the ongoing pandemic. While these adjustments may seem modest to some, they can make a significant difference for those relying on welfare support to make ends meet.</p> <p>It's essential for eligible individuals to stay informed about these changes and ensure they receive the full benefits they're entitled to. For those who may be unsure about their eligibility or how to navigate the system, seeking assistance from Centrelink or relevant support services can provide valuable guidance.</p> <p>As the cost of living continues to evolve, initiatives like indexation serve as vital mechanisms for maintaining the welfare safety net and supporting vulnerable members of society. By keeping pace with economic realities, these adjustments strive to provide meaningful relief to those who need it most, contributing to a more equitable and inclusive society for all Australians.</p> <p><em>Image: Getty </em></p>

Money & Banking

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How baby boomers are benefiting from Australia's "worst financial mistake"

<p>A financial expert has explained how baby boomers have remained largely unscathed by the ongoing housing crisis in Australia. </p> <p>ABC finance guru Alan Kohler described the crisis as Australia's "worst financial mistake", as Adelaide has now become the country's second least affordable city. </p> <p>The South Australian capital, which has long been known as one of the more affordable places in the country to live, has skyrocketed in price, as the median price for houses and units in Adelaide was $721,376 in January, which is 7.9 times higher than the state's average full-time salary of $91,026.</p> <p>"There are a couple of things that might surprise you: Adelaide became the second, least affordable Australian city last year," Mr Kohler explained.</p> <p>"Adelaide has just taken over from Hobart in second place."</p> <p>"What's going on: put simply, incomes in Adelaide, Hobart and Brisbane are not keeping up with house prices, which are being pushed up by fast-rising population and by first-home buyers."</p> <p>Mr Kohler, a baby boomer, noted that when he and his wife bought their first home in Melbourne for $40,000 in 1980, he was earning $11,500 as a journalist, meaning his home cost just 3.5 times his income before a mortgage deposit.</p> <p>"When my wife and I bought our first house in 1980, the average house price was 3.5 times average income," he said. "Now, it's 7.5 times and rising."</p> <p>"That didn't have to happen: it's Australia's worst, economic mistake."</p> <p>Mr Kohler said parents were increasingly propping up the mortgage deposits of first-home buyers, as first-home buyer subsidies from the federal government only pushed up property prices.</p> <p>"Despite rising prices and crushing interest rates, first-home buyers were the fastest-growing type of borrower," he said.</p> <p>"The Bank of Mum and Dad coughing up early inheritances and politicians showering them with grants and concessions, desperate to appear to be doing something about affordability while actually making it worse."</p> <p><em>Image credits: Shutterstock / ABC</em></p> <p class="mol-para-with-font" style="font-size: 16px; margin: 0px 0px 16px; padding: 0px; min-height: 0px; letter-spacing: -0.16px; font-family: graphik, Arial, sans-serif;"> </p>

Money & Banking

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Monty Python star's candid financial admission

<p>Monty Python star Eric Idle has made a candid admission about the state of his finances, revealing why he still has to work at the age of 80. </p> <p>The comic legend admitted he receives only a fraction of the millions the Python team have made in the past because the finances are a “disaster”.</p> <p>In messages on X, formerly Twitter, Idle wrote: “I don’t know why people always assume we’re loaded”.</p> <p>“I have to work for my living. I never dreamed that at this age the income streams would tail off so disastrously."</p> <p>“I have been working and earning for Pythons since 1995. And now no more.”</p> <p>Idle also took aim at TV lawyer Holly Gilliam, the daughter of fellow Python member Terry Gilliam, who took over the Python brand in 2013 as part of HDG Projects Ltd. </p> <p>He said, “I guess if you put a Gilliam child in as your manager you should not be so surprised”.</p> <p>“One Gilliam is bad enough. Two can take out any company.”</p> <p>Daughter Lily Idle backed him, writing online, “I’m so proud of my dad for finally finally finally starting to share the truth.”</p> <p>The Pythons, who also included John Cleese, 84, Michael Palin, 80, and the late Terry Jones — made a fortune thanks to their iconic cult films, including <em>Life of Brian</em>, hit stage show <em>Spamalot</em>, which Idle co-wrote, and the original <em>Flying Circus</em> BBC TV series.</p> <p>They were back in the limelight in 2014 with <em>Monty Python Live (Mostly) — One Down, Five to Go</em>: a reference to former member Graham Chapman who died in 1989 aged just 48.</p> <p>It featured interpretations of some of their famous sketches, and reportedly earned the surviving members at least £2 million ($3.87m AUD) each.</p> <p><em>Image credits: Getty Images </em></p>

Retirement Income

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Could you cope with a shock to your bank balance? 5 ways to check you are financially resilient

<p><em><a href="https://theconversation.com/profiles/bomikazi-zeka-680577">Bomikazi Zeka</a>, <a href="https://theconversation.com/institutions/university-of-canberra-865"><em>University of Canberra</em></a></em></p> <p>Imagine the dentist has just said you urgently need a A$2,000 dental crown. A week later, a pipe in your bathroom bursts, causing $8,000 worth of damage. Suddenly, you’ve been hit with a $10,000 financial shock.</p> <p>As the cost-of-living crisis plunges more households into financial uncertainty and at least <a href="https://melbourneinstitute.unimelb.edu.au/data/taking-the-pulse-of-the-nation-2022/2023/australians-face-challenging-budgetary-constraints#:%7E:text=Over%20the%20past%20six%20months,has%20increased%20to%2060%20percent.">one-third</a> of Australians struggle to make ends meet, it’s more important than ever to ask yourself: how financially resilient am I?</p> <p>Being financially resilient means you aren’t left financially devastated when an expensive emergency creeps up on you. Here are five key signs of financial resilience.</p> <h2>1. You have a plan for what you’d do if you suddenly lost your salary</h2> <p>Financial resilience means having a plan to fall back on during tough times. This extends to how you’d make money if you lost your job.</p> <p>In practice, that means things like making sure your skills and contacts are kept up to date so you can more easily find a new job. You might also consider whether a “side hustle” job such as tutoring could work for you in the short term, and how you’d put that plan into practice if needed. Perhaps you have a spare room in your home you could rent out for a period of time if you lost your salary.</p> <p>Those examples won’t work for everyone, of course, but it’s still worth asking yourself the question: what would I do if I lost my salary tomorrow?</p> <h2>2. You have enough liquid assets to meet an unexpected financial expense</h2> <p>Liquid assets means money that can be accessed quickly and easily to overcome an unplanned financial expense. Savings are a good example. They provide a buffer so you can cope in the short term if a financial shock strikes. The federal government’s Moneysmart website suggests you aim to have enough in your emergency savings fund to cover <a href="https://moneysmart.gov.au/saving/save-for-an-emergency-fund">three months of expenses</a>.</p> <p>Having an <a href="https://moneysmart.gov.au/glossary/offset-account">offset account</a> as part of a mortgage is another option that provides a buffer. Putting money in an offset account helps you save while reducing the amount of interest on a home loan. You can still access the money in an offset account at any time.</p> <h2>3. You have bought the right financial products, such as insurance</h2> <p>Financial products, such as insurance, hedge against potential losses.</p> <p>Personal insurance is important because it provides income in the event of death, illness or injury. Examples include:</p> <ul> <li> <p>life insurance (which pays out to your beneficiaries, such as your partner or children, when you die)</p> </li> <li> <p>total and permanent disability insurance (which means you may get some money if you acquire a disability that prevents you from working)</p> </li> <li> <p>income protection (which provides you with an income if you can no longer work)</p> </li> <li> <p>trauma cover (which covers a life-changing illness or injury, such as cancer or a stroke).</p> </li> </ul> <p>Check if your superannuation has any of these insurances included in it. <a href="https://www.griffith.edu.au/__data/assets/pdf_file/0030/295770/FPRJ-V4-ISS1-pp-53-75-insurance-literacy-in-australia.pdf">Research</a> has found that many Australians are underinsured.</p> <h2>4. You can still pay your debts when times are tough</h2> <p>Being able to borrow money can help when you’re in a tight spot. But knowing where to borrow from, how much to borrow and how to manage debt repayments is crucial.</p> <p>Financially resilient people use debt responsibly. That means:</p> <ul> <li> <p>not using debt for frivolous expenses like after-work drinks</p> </li> <li> <p>staying away from private money lenders</p> </li> <li> <p>being cautious about buy-now-pay-later services</p> </li> <li> <p>watching out for debts with high interest rates, such as payday loans and credit card debt</p> </li> <li> <p>maintaining debt repayments consistently.</p> </li> </ul> <p>If you’re having debt problems, talk to your lender about renegotiating your repayment arrangements, or contact the <a href="https://ndh.org.au/">National Debt Helpline</a> on 1800 007 007.</p> <h2>5. You are financially literate</h2> <p>Being financially literate means you can assess the benefits and risks of using savings or taking out debt to meet an unplanned financial need.</p> <p>As I have <a href="https://theconversation.com/are-you-financially-literate-here-are-7-signs-youre-on-the-right-track-202331">written</a> before on The Conversation, key signs of financial literacy include tracking your cashflow, building a budget, as well as understanding what debts you have and which to pay first.</p> <p>It also means storing your money across different places (such as superannuation, savings accounts, property and the share market) and understanding how financial assets like cash, shares and bonds work.</p> <p>Being aware of your financial strengths and weaknesses, and having financial goals is also important.</p> <p>Nobody is born knowing how to make sound financial decisions; it’s a skill that must be learned.</p> <p>It’s good to think about the resources you would draw upon to help get yourself out of a difficult financial situation – well before disaster strikes.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/218126/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><a href="https://theconversation.com/profiles/bomikazi-zeka-680577"><em>Bomikazi Zeka</em></a><em>, Assistant Professor in Finance and Financial Planning, <a href="https://theconversation.com/institutions/university-of-canberra-865">University of Canberra</a></em></p> <p><em>Image credits: Getty Images</em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/could-you-cope-with-a-shock-to-your-bank-balance-5-ways-to-check-you-are-financially-resilient-218126">original article</a>.</em></p>

Money & Banking

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5 financial lessons you should impart to your adult children

<p>Ultimately, we want our kids to live long, happy, healthy lives. </p> <p>Financial security is central to achieving this dream. So it may be time to have a chat about matters of money and ensure they are well set up for a prosperous future!</p> <p>While there are many important things to instil in future generations, the five below are perhaps the most crucial current-day issues for your adult children to master.</p> <ol> <li><strong>Avoid BNPL</strong></li> </ol> <p>Buy now, pay later (BNPL) schemes have taken off in popularity in recent years, allowing shoppers to purchase and use goods straight away yet pay for them over time in instalments. Sound too good to be true? Indeed.</p> <p>Most schemes attach hefty penalties and interest for missed or late repayments – much the same as credit cards. The debt quickly balloons, and can become unsustainable.</p> <p>The best approach to instil in your children is to always live within their means.</p> <ol start="2"> <li><strong>Avoid sexually transmitted debt</strong></li> </ol> <p>Joint finances, loans, credit cards, utilities, subscriptions, vehicles, businesses, property… all of these and more are shared liabilities. </p> <p>Even if a partner is the one who racks up the debts, your child is equally responsible for repaying them. This is what I call sexually transmitted debt.</p> <p>It could be inadvertent (such as having a partner who, despite their best intentions, is simply bad with money); hidden (like gambling addiction), deliberate (financial abuse), lose their job, have an accident, get seriously unwell.</p> <p>Either way, sexually transmitted debts can create long-term and even life-long problems, regardless of whether the relationship that created those debts survives: repayment struggles, credit constraints, bankruptcy, legal woes.</p> <p>When it comes to money, your children (and yourself) need to think with their head, not their heart.</p> <ol start="3"> <li><strong>Start investing </strong></li> </ol> <p>The number one thing financial advisers hear most is “I wish I started years ago”.</p> <p>Investments typically grow over time. The more time you allow, the bigger their value.</p> <p>Younger adults have big demands on their hip pocket. However, even starting with small investments allows compound growth to work its magic.</p> <p>Plus, given the housing affordability constraints facing younger generations, investments that can be sold or leveraged could better help them onto the housing ladder in future.</p> <p>Superannuation is another investment to pay attention to from a young age: managing investments, ensuring they are in a cost-effective fund, and avoiding mistakes – like consolidating funds without getting advice, which can inadvertently see them consolidate into a poorer performing fund or cancel attached insurances that had preferential terms.</p> <ol start="4"> <li><strong>Get a will</strong></li> </ol> <p>While young people may feel invincible, untimely deaths or disablement claims sadly can and do happen. And often unexpectedly: land transport accidents and accidental poisoning, together with suicide, make up <a href="https://www.aihw.gov.au/reports/life-expectancy-deaths/deaths-in-australia/contents/leading-causes-of-death">the biggest causes of death for under 44s</a> in Australia.</p> <p>Not having a will and a nominated executor complicates matters for grieving family and can delay all-important access to finances. How would your child’s partner and kids (if they have them) survive if their super, insurances and other payouts are delayed through probate? </p> <p>Remember to point out that superannuation (and other structures like companies and trusts) are treated separately from a will, and so need beneficiaries nominated within them.</p> <p>Younger people are also less likely to have discussed their final wishes with loved ones – funeral arrangements, burial vs cremation, organ donation, inheritances etc. This is where a separate statement of wishes can be useful.</p> <ol start="5"> <li><strong>Get insured</strong></li> </ol> <p>Insurances – save perhaps vehicle and house/contents – are rarely on the minds of younger people. But they should be.</p> <p>That is because many insurances are cheaper and offer better coverage when people are younger and free of any health complications. That includes private health, life and permanent disability, and income protection cover. </p> <p>Other insurances, like asset protection, can also be more lucrative to lock-in early. Just think about how the Ts and Cs on insurances have changed (become more restrictive) since you were their age!</p> <p>So encourage your adult children to scrutinise their insurance coverage. (And keep them away from drugs and smoking to stay healthier for longer!)</p> <p><em><strong>Helen Baker is a licensed Australian financial adviser and author of the new book, On Your Own Two Feet: The Essential Guide to Financial Independence for all Women (Ventura Press, $32.99). Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at <a href="http://www.onyourowntwofeet.com.au">www.onyourowntwofeet.com.au</a> </strong></em></p> <p><em>Image credits: Getty Images</em></p>

Money & Banking

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7 ways to create realistic financial goals that you'll actually stick to

<p>Establishing robust financial habits not only fosters comfort but also alleviates anxieties about the road ahead. A positive change in our financial circumstances commences with a shift in our money mindset. When you shift to creating lasting change, you can achieve more than you believe is possible. </p> <p>When creating financial goals that you’ll actually stick to, parallels can be drawn between achieving physical and financial fitness. Let’s take a look.</p> <ol> <li><strong>Precision in Goal Setting</strong></li> </ol> <p>Just like any other endeavour, the path to financial well-being requires setting clear objectives that are both quantifiable and feasible. Whether it's building an emergency fund or saving for a major purchase, your goals need to be well-defined and measurable.</p> <p>Just as a fitness regimen consists of various exercises targeting different muscle groups, your financial goals should cover different aspects of your financial life.</p> <ol start="2"> <li><strong>The Inaugural Step</strong></li> </ol> <p>The hardest part is starting – there will always be competing priorities.   Think of it as taking one step at a time.  Starting your financial goals might feel overwhelming due to competing priorities and uncertainties.</p> <p>Start small and build momentum gradually. Establish a budget, track your expenses, and save a modest amount regularly. </p> <ol start="3"> <li><strong>Avoiding Extreme Measures</strong></li> </ol> <p>Remember, lasting change comes from sustainable actions. Financial quick fixes like waiting for bonuses or tax returns won't foster healthy habits and can lead to financial fatigue. Instead, embrace gradual progress; small efforts compound over time.</p> <p>The allure of crash diets can be tempting, but they rarely yield lasting results. Instead, opt for consistent, manageable actions. Focus on building sustainable habits, like making regular contributions to savings or investments.</p> <ol start="4"> <li><strong>The Power of Knowledge</strong></li> </ol> <p>Equip yourself with information. Education is a powerful tool in achieving financial well-being.  Understanding the options available is pivotal to making informed financial decisions. Gain a comprehensive understanding of your financial options.</p> <p>Research investment opportunities and strategies that align with your goals. Knowledge empowers you to navigate the complex landscape of personal finance confidently.</p> <ol start="5"> <li><strong>Exploration of Strategies</strong></li> </ol> <p>Just as someone might prefer running over cycling, finding financial strategies that resonate with you enhances your chances of long-term success. Experiment with diverse approaches to identify what resonates best, reducing stress and enhancing commitment.</p> <p>Opt for strategies that resonate with your values, minimise stress and amplifying commitment.</p> <ol start="6"> <li><strong>Consistency </strong></li> </ol> <p>Success lies in cultivating steady habits over time, ensuring enduring benefits. Just as regular workouts lead to improved physical health, cultivating small, consistent financial habits over time leads to enhanced financial well-being.</p> <p>Set up automated transfers to savings accounts, make incremental increases in contributions, and avoid overspending.</p> <ol start="7"> <li><strong>Intermittent Rewards</strong></li> </ol> <p>Occasionally treat yourself.  Sporadic indulgences can enhance well-being and acknowledge hard-earned victories. Rewarding yourself for achieving financial milestones enhances your commitment and prevents financial fatigue. It's essential to strike a balance between frugality and enjoyment.</p> <p>By embracing these principles, we not only engineer realistic financial objectives but also cement a commitment to achieving them. That’s the key to lasting financial prosperity.</p> <p><strong><em>Amanda Thompson, author of Financially Fit Women, is a sought-after speaker and qualified financial adviser.  As the founder of Endurance Financial, Amanda is driven to support women to have a great relationship with money and own their own financial success. For more information visit <a href="http://www.endurancefinancial.com.au">www.endurancefinancial.com.au</a></em></strong></p> <p><em>Image credits: Getty Images</em></p>

Money & Banking

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What does financial abuse really look like?

<p>Sally is in her 20s, lives in a dilapidated rental home and works three jobs. Fifty-something Sarah owns a large home, drives a Mercedes and is a corporate executive. Pensioner Scott, in his mid-70s, still lives in the home in which he and his late wife raised their children. Who would you say is more vulnerable to financial abuse?</p> <p>The answer, you may be surprised to learn, is all three. Financial abuse, according to the government’s <a href="https://moneysmart.gov.au/living-in-retirement/financial-abuse">MoneySmart</a>, is a type of family and domestic violence:</p> <p>“It often happens alongside other types of violence, such as physical or emotional abuse. It can leave you feeling vulnerable, isolated, depressed and anxious. It can also take away your independence.”</p> <p>Commonly a spouse or partner is the perpetrator, but it can come from any relative or friend. A <a href="https://www.commbank.com.au/content/dam/caas/newsroom/docs/Cost%2520of%2520financial%2520abuse%2520in%2520Australia.pdf">2022 Commonwealth Bank report</a> suggests over 623,000 Australians experienced financial abuse in 2020 alone – roughly one in 30 women and one in 50 men. Anyone – regardless of age, wealth etc. – can be a victim. </p> <p><strong>Financial abuse has many faces</strong></p> <p>Just as finances are complex, so too is financial abuse, which can be viewed from many angles:</p> <ul> <li>Couples: One partner controls everything money related. I know of one instance where a woman’s partner went so far as counting coffee pods; another checked car mileage to stop his partner driving further than school drop-offs.</li> <li>Exes: Not working specifically to avoid paying child support; withholding information to delay settlement; bullying into a menial settlement.</li> <li>Multi-generations: Children or grandchildren milking elderly relatives; seizing control over their finances and living arrangements.</li> <li>Non-relatives: Such as friends buying property together without properly documenting everything, then fighting come sale time.</li> <li>Business relationships: Duped signatures on trust and business documents; hiding debts; impeding or undervaluing someone’s exit.</li> </ul> <p><strong>Warning signs </strong></p> <p>There are common warning signs that you, or someone you know, is suffering financial abuse:</p> <ul> <li>Pressure to make decisions: to invest your money or superannuation in crazy things that go bust, or to do nothing and not keep up with inflation (let alone grow your wealth), go guarantor on a loan, or sign power of attorney.</li> <li>Draining money: using your money to fund their business or investment on the promise a return is coming that never does (which could be poor management or deliberate deceit). This could continue for years until you’re left homeless and bankrupt.</li> <li>Unfair claims: your partner came into the relationship with nothing and stays just long enough to make a claim on your home.</li> <li>Controlled spending: this may start small (‘Don’t spend so much on clothes!’) but can become extreme. </li> <li>Blackmail: I’ve heard of people denied access to their grandkids unless they gave their son/daughter money or amended their will.</li> <li>Restricted access: you’re denied access to your own or joint finances, from having your own accounts, or are banned from working to earn your own income and superannuation.</li> <li>Tracking: sharing your location by smartphone may sound practical or safe but is open to abuse.</li> <li>Social isolation: cutting you off from friends and family; pressing for an interstate move.</li> <li>Reckless spending: your money is spent haphazardly – you may be kept in the dark or pressured not to ask questions.</li> <li>Tying down: trapping you into a big mortgage to crimp your freedom.</li> <li>Guilting: I have seen wealthy adults guilt their less fortunate parents into paying their bills, and gambling addicts guilt partners into paying their debts (with no intention to address their addiction or plan to pay it back).</li> </ul> <p><strong>Protecting yourself</strong></p> <p>The best prevention of all is to avoid thinking ‘it won’t happen to me’. So many victims of financial abuse once thought exactly the same.</p> <p>Other tips include:</p> <ul> <li>Speak up: Sometimes, starting a conversation can be enough to deliver positive change and even save a relationship (avoiding divorce is cheaper for everyone!)</li> <li>Have an emergency fund – cash only you can access, easily, in a crisis.</li> <li>Keep separate bank accounts – deposit your income here, then transfer money for joint bills into a joint account. </li> <li>Make decisions together – don’t leave money matters to your partner/children. It’s your money too.</li> <li>Get outside perspective: financial advisers are accountable to you as their client and help provide visibility over your assets, liabilities and risks. Ensure they are qualified and currently practicing.</li> </ul> <p>If you think you may be a victim of financial abuse, I beg you – seek help immediately. Suffering in silence and letting the situation snowball is the costliest thing you can do. Both financially and emotionally!</p> <p><a href="http://www.lifeline.org.au/">Lifeline - </a>13 11 14</p> <p><a href="https://www.1800respect.org.au/">1800RESPECT - </a>1800 737 732</p> <p><a href="https://www.familyrelationships.gov.au/talk-someone/advice-line">Family Relationship Advice Line - </a>1800 050 32</p> <p><a href="https://goodshep.org.au/">Good Shepherd Australia Financial Independence Hub  - </a>1300 050 150</p> <p><a href="http://www.ndh.org.au/">National Debt Helpline - </a>1800 007 007</p> <p><strong><em>Helen Baker is a licensed Australian financial adviser and author of the new book, On Your Own Two Feet: The Essential Guide to Financial Independence for all Women (Ventura Press, $32.99). Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at <a href="http://www.onyourowntwofeet.com.au">www.onyourowntwofeet.com.au</a></em></strong></p> <p><em>Image credits: Getty Images </em></p>

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#GirlMaths: a seemingly innocent and fun way to justify expenses that can have serious financial consequences

<p><em><a href="https://theconversation.com/profiles/janneke-blijlevens-150258">Janneke Blijlevens</a>, <a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</a>; <a href="https://theconversation.com/profiles/angel-zhong-1204643">Angel Zhong</a>, <a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</a>, and <a href="https://theconversation.com/profiles/lauren-gurrieri-5402">Lauren Gurrieri</a>, <a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</a></em></p> <p>These shoes are perfect, made for me! I have to get them! But really, I should be paying off my car loan instead. I can’t justify this purchase. Or can I …?</p> <p>We all know this feeling, this tension between what you really want to do and what you really should, or shouldn’t, do. What you are experiencing is <a href="https://www.britannica.com/biography/Leon-Festinger/Cognitive-dissonance">cognitive dissonance</a>.</p> <p>It’s a psychological discomfort we feel when our behaviours and our values or beliefs do not match. Not to worry, we can make that discomfort simply disappear with a good dose of #GirlMaths!</p> <h2>So what is #GirlMaths?</h2> <p>GirlMaths recently became a viral phenomenon on TikTok after New Zealand FVHZM radio hosts Fletch, Vaughan and Hayley used #GirlMaths to justify one host’s mother’s expensive dress purchase as basically free because the dress was going to be worn at least four times.</p> <p><iframe id="tc-infographic-904" class="tc-infographic" style="border: none;" src="https://cdn.theconversation.com/infographics/904/f0b5e215a804bb450e609c397b96c7fcbf46172f/site/index.html" width="100%" height="400px" frameborder="0"></iframe></p> <p>Since then, influencers have added to the #GirlMaths trend with gems such as “If I buy it for $100, wear it, and then resell it for $80 then I basically wore it for free”, “If I pay with cash, it means it’s free”, and “If I just returned something, then purchase something new for the same amount of money, then it’s free”.</p> <p>The reason #GirlMaths resonates so well with everyone and allows it to go viral is that we are very familiar with this type of thinking. The mental gymnastics of #GirlMaths needed to justify cost-per-wear or cash-is-free is a perfect display of behavioural biases and heuristics, such as confirmation bias and denomination bias, being applied to everyday consumption decisions.</p> <h2>The psychology of decision-making</h2> <p>Behavioural biases and heuristics are shortcuts in our thinking that help us make decisions quicker and easier, and are great for reducing the cognitive dissonance we sometimes experience.</p> <p>Our brain has a lot of decisions to make in a day and simply doesn’t have the power to scrutinise every little detail of every <a href="https://theconversation.com/what-shall-we-have-for-dinner-choice-overload-is-a-real-problem-but-these-tips-will-make-your-life-easier-193317">decision</a>. These shortcuts in our thinking may facilitate the decision making process, but they don’t always mean we make the most optimal decisions.</p> <p>Confirmation bias is a bias where you justify your decisions by considering only the evidence that supports what you want and ignore the evidence that would mean you’d have to make a different decision. Cost-per-wear does sound quite financially savvy. It is just like bulk-buying pantry essentials, right?</p> <p>The issue is you are ignoring the facts such as: 1) your disposable income does not match this expense in light of your utility bills, 2) you could rewear a cheaper dress all the same, and 3) by spending money on a fancy dress, you lose the opportunity to spend the money on other better investments for wealth accumulation, or to pay off your car loan.</p> <h2>The financial and social costs</h2> <p>But it’s all a bit of innocent fun, right? Surely people won’t take #GirlMaths that seriously? We beg to differ.</p> <p>First, the term is unnecessarily gendered. Gendered language operates to reinforce societal expectations with a particular gender and can promote stereotypes, biases and binary categories.</p> <p>In this case, the term “girl maths” reinforces problematic stereotypes that equate women with consumption, frivolity and extravagant spending. When stereotypes are reinforced within our own social circles, we are more likely to <a href="https://journals.sagepub.com/doi/abs/10.1177/0146167299025007004?casa_token=dOhnQVtFwPsAAAAA:XSBdix5AB6bDfGjNgfbX9OIjstw4KE071GP0l60mAxvHJMaEwkyPERqHXf3z9PhctWJUl6h7TgTHg_U">internalise these as part of our identity</a>.</p> <p>By representing women in a less favourable way, the term operates to both demean and discriminate on a gendered basis. This is heightened by the use of “girl” as opposed to “woman”, which implies someone is childlike or lacking in knowledge or experience. It also begs the question what “boy maths” - set up as something opposing and different - might connote.</p> <p>Second, the #GirlMaths trend reminds us of the power of “<a href="https://theconversation.com/fintok-and-finfluencers-are-on-the-rise-3-tips-to-assess-if-their-advice-has-value-161406">finfluencers</a>” – social media content creators amassing huge online followings by sharing advice on anything from budgeting to buying a house, to investing.</p> <p>These online gurus appeal to Gen Z and millennials, simplifying complex financial concepts into digestible nuggets, much like #GirlMaths simplifies purchases based on cost-per-wear or cash-as-free.</p> <p>Just as regulators such as <a href="https://moneysmart.gov.au/other-ways-to-borrow/buy-now-pay-later-services">ASIC</a> repeatedly warn us of the dangers of buy-now-pay-later services, we must caution the #GirlMaths trend as a dangerous cocktail for young women who are susceptible to the “advice” of finfluencers.</p> <p>The trend resembles BNPL by breaking down expenses into smaller, more palatable portions, making purchases seem justifiable and affordable at the moment.</p> <p>Denomination bias describes this tendency to spend more money when it is denominated in small amounts rather than large amounts. We find it much easier to spend $50 four times than $200 all at once.</p> <p>However, the convenience of these shortcuts in our thinking can obscure the hidden financial risks. You may overlook the bigger picture of your financial health, and spend more than what you can afford. That’s why a large number of BNPL users find themselves ending up in a <a href="https://www.choice.com.au/money/credit-cards-and-loans/personal-loans/articles/bnpl-submission-to-treasury">modern debt trap</a>.</p> <h2>The perils of #GirlMaths</h2> <p>The danger of #GirlMaths to young women lies in the cocktail of feeling oddly familiar and reinforced in this biased thinking, the problematic stereotypes that shape identities, and the power of finfluencers, who wield increasing influence over the financial choices and decision-making of young women.</p> <p>While the term may initially come across as innocent fun, it’s crucial not to underestimate its potential harms. Instead, let’s champion the use of inclusive language in finance that doesn’t perpetuate gender biases.</p> <p>And if you’re a staunch supporter of #GirlMaths, we strongly urge you to take into account the possible adverse financial consequences of these quick-fix spending habits.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/211903/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><em><a href="https://theconversation.com/profiles/janneke-blijlevens-150258">Janneke Blijlevens</a>, Senior Lecturer in Marketing, <a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</a>; <a href="https://theconversation.com/profiles/angel-zhong-1204643">Angel Zhong</a>, Associate Professor of Finance, <a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</a>, and <a href="https://theconversation.com/profiles/lauren-gurrieri-5402">Lauren Gurrieri</a>, Associate Professor in Marketing, <a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</a></em></p> <p><em>Image credits: Getty Images</em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/girlmaths-a-seemingly-innocent-and-fun-way-to-justify-expenses-that-can-have-serious-financial-consequences-211903">original article</a>.</em></p>

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Four myths about the financial side of divorce

<p><em><a href="https://theconversation.com/profiles/emma-hitchings-388514">Emma Hitchings</a>, <a href="https://theconversation.com/institutions/university-of-bristol-1211">University of Bristol</a> and <a href="https://theconversation.com/profiles/gillian-douglas-1428314">Gillian Douglas</a>, <a href="https://theconversation.com/institutions/kings-college-london-1196">King's College London</a></em></p> <p>It’s no wonder many people think divorce involves going to court, huge legal fees and decades of spousal payments, considering these are the cases that dominate our headlines. However, the kinds of divorce cases reported in the news involve the very rich, and are far removed from the reality for most couples.</p> <p>The Law Commission of England and Wales, the body responsible for law reform, <a href="https://www.lawcom.gov.uk/project/financial-remedies-on-divorce/">recently announced a review</a> of the law of finances on divorce, with a scoping report due in September 2024. Review of this law is much needed, given the legislation governing how couples in England and Wales sort out their financial affairs upon marriage breakdown mainly dates back to the 1970s (the <a href="https://www.legislation.gov.uk/ukpga/1973/18">Matrimonial Causes Act 1973</a>).</p> <p>The problem is that key politicians <a href="https://hansard.parliament.uk/lords/2023-03-08/debates/3AB3D708-24E5-4FF2-8481-05EFA27E2593/DivorceFinancialProvision">who have been calling for change</a> still rely on the issues raised in these <a href="https://hansard.parliament.uk/lords/2018-05-11/debates/89A33706-7DCD-4FA0-AE0D-B06E11FAF264/Divorce(FinancialProvision)Bill(HL)">exceptional, “big money” divorce cases</a>.</p> <p>We need to correct the misleading narrative about divorce if reform is to address the needs of the 110,000 couples <a href="https://www.gov.uk/government/statistics/family-court-statistics-quarterly-july-to-september-2022">who get divorced in England and Wales each year</a>. Although there is limited research about this issue, we do know enough to challenge the following myths.</p> <h2>1. Spouses are often forced to fund costly legal battles</h2> <p>Family courts grant divorces and the fee is currently £593. However, it is not mandatory for a divorcing couple to get an additional order regarding their finances, and there is no need for expensive court hearings.</p> <p>In fact, <a href="https://www.gov.uk/government/statistics/family-court-statistics-quarterly-july-to-september-2022">fewer than 40%</a> of those divorcing each year do so. While there is no authoritative data on average legal costs incurred in these cases, it seems that, for many couples, the costs of sorting out their financial arrangements need not be high because the courts are not involved.</p> <p>And even those couples who do use the courts for their financial matters overwhelmingly settle rather than fight their case, which limits their legal costs. Only <a href="https://www.gov.uk/government/statistics/family-court-statistics-quarterly-july-to-september-2022">13% of financial orders</a> made in a divorce are actually decided by a judge after contested litigation. The rest are consent orders: orders finalised by the judge on terms that have already been agreed by the divorcing couple.</p> <h2>2. Everything is split 50/50</h2> <p>The law does not lay down a principle of equal sharing of the marital assets on divorce. However, the courts <a href="https://www.lawteacher.net/cases/miller-v-miller-mcfarlane-v-mcfarlane.php">do accept this is a desirable goal</a> if this can be done while meeting both parties’ needs – and those of their children.</p> <p>Research suggests that, rather than rigidly applying a 50/50 split, couples focus on their needs first and <a href="https://research-information.bris.ac.uk/en/publications/financial-remedies-on-divorce-the-need-for-evidence-based-reform">particularly those of their children</a>. This can result in an unequal split of the value of the main asset most couples have – the former marital home.</p> <h2>3. Men have to pay lifelong maintenance</h2> <p>Some news media object to the current law as they claim it allows an ex-wife to be supported <a href="https://www.dailymail.co.uk/news/article-5965629/Surveyor-marriage-ended-16-years-ago-WINS-Supreme-Court-battle.html">for the rest of her life</a> by her former husband (or vice versa). The argument is that this casts ex-wives as dependants who cannot look after themselves, and prevents husbands from moving on after their divorce.</p> <p>In reality, lifelong maintenance is rare, and even limited ongoing financial support is uncommon. The most recent data found that only 16% of court orders involved any kind of ongoing spousal support – of which, two-thirds were for a fixed term. Nearly all such orders involved <a href="http://www.nuffieldfoundation.org/sites/default/files/files/briefing%20paper%20Jun%202018%20FINAL.pdf">dependant children</a>, with the order terminating when the youngest child reaches a certain age or stage of education.</p> <h2>4. London is the divorce capital of the world</h2> <p>Some news media <a href="https://www.theguardian.com/lifeandstyle/shortcuts/2015/feb/24/divorce-rich-husband-london-english-law">report</a> that the courts’ endorsement of the principle of equal sharing has led to some wives, married to oligarchs, sheikhs and tycoons, seeking divorce through an English court due to its “generous” treatment of them. For example in 2021, a High Court judge ordered Sheikh Mohammed bin Rashid al-Maktoum, the emir of Dubai, to pay a <a href="https://www.businessinsider.com/why-london-divorce-capital-world-for-mega-rich-2019-7?r=US&amp;IR=T">£554 million divorce settlement</a> to his former wife, Princess Haya.</p> <p>By their nature, these cases are atypical – that’s why they make headlines. But why should the fact that English law takes spousal equality seriously be a matter for regret? The 1970s legislation aimed to ensure the non-financial contributions of spouses, such as home-making and caring, should be recognised. Judges have been clear <a href="https://uk.practicallaw.thomsonreuters.com/3-503-7596?transitionType=Default&amp;contextData=(sc.Default)&amp;firstPage=true">it is discriminatory to assume</a> the breadwinner spouse is making a greater contribution to the relationship and should keep a larger part of the wealth than the other who takes on the role of carer. Surely this is an enlightened position.</p> <p>That doesn’t mean we shouldn’t update the law, though. Working patterns have changed but women still earn, on average, <a href="https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/genderpaygapintheuk/2022#:%7E:text=Image%20.csv%20.xls-,The%20gender%20pay%20gap%20has%20been%20declining%20slowly%20over%20time,up%20from%207.7%25%20in%202021.">less than men</a>. They are still more likely to assume the bulk of <a href="https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/familiesandthelabourmarketengland/2021">child care</a>, <a href="https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/familiesandthelabourmarketengland/2021">work part-time </a>, and, in consequence, have <a href="https://adviser.scottishwidows.co.uk/assets/literature/docs/women-retirement-report-2022-press-release.pdf">smaller pensions compared with men</a>.</p> <p>The result is that, far from being treated generously, women still come out of divorce <a href="https://ses.library.usyd.edu.au/bitstream/handle/2123/26207/Fisher_2018_AJFL_Final.pdf?sequence=1">financially worse off than men</a>.</p> <p>But there is still so much we don’t know about how divorced couples divide their assets. Since the norm is for couples to stay out of the courts, there is no official record of how the majority of the divorcing population arranges their finances. That’s why <a href="https://research-information.bris.ac.uk/en/persons/emma-hitchings">one of us</a> (Emma) is leading the Fair Shares Study, expected to publish in autumn 2023. This will provide the <a href="https://www.bristol.ac.uk/law/fair-shares-project/">first nationally representative picture</a> of couples’ finances on divorce.</p> <p>We need a law that meets the needs of all divorcing couples rather than the few wealthy exceptions, and a major corrective to the myths that abound in this area of family law.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/202975/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><em><a href="https://theconversation.com/profiles/emma-hitchings-388514">Emma Hitchings</a>, Professor of Family Law, <a href="https://theconversation.com/institutions/university-of-bristol-1211">University of Bristol</a> and <a href="https://theconversation.com/profiles/gillian-douglas-1428314">Gillian Douglas</a>, Professor Emerita of Law, <a href="https://theconversation.com/institutions/kings-college-london-1196">King's College London</a></em></p> <p><em>Image credits: Getty Images</em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/four-myths-about-the-financial-side-of-divorce-202975">original article</a>.</em></p>

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How your favourite things can boost your financial wellbeing

<p><em><a href="https://theconversation.com/profiles/jingshi-joyce-liu-1424398">Jingshi (Joyce) Liu</a>, <a href="https://theconversation.com/institutions/city-university-of-london-1047">City, University of London</a>; <a href="https://theconversation.com/profiles/amy-dalton-1425283">Amy Dalton</a>, <a href="https://theconversation.com/institutions/hong-kong-university-of-science-and-technology-1153">Hong Kong University of Science and Technology</a>, and <a href="https://theconversation.com/profiles/anirban-mukhopadhyay-1425284">Anirban Mukhopadhyay</a>, <a href="https://theconversation.com/institutions/hong-kong-university-of-science-and-technology-1153">Hong Kong University of Science and Technology</a></em></p> <p>The cost of living crisis has left many people struggling to afford basic necessities such as food and heating for their homes. On the other hand, the top ten richest men in the world <a href="https://www.weforum.org/agenda/2022/04/economic-inequality-wealth-gap-pandemic/">doubled their wealth</a> during the COVID pandemic while 99% of people became worse off.</p> <p>While this is a comparison of two extremes, many people attempt to “keep up with the Joneses” – looking at what the people around them own and striving to afford the same things. Comparing material wealth and resources to those around you is even more common when others are better off. It’s hard not to wonder why someone else has a nicer car or better clothes.</p> <p>Lots of <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/jasp.12631">research supports</a> this tendency, <a href="https://journals.sagepub.com/doi/full/10.1177/00222437221141053">including our own</a>. For example, when we asked American people to watch a video about research on income inequality in their own country, unsurprisingly, it made them think about their own wealth and how it compares to those around them.</p> <p>And we found that it doesn’t matter how wealthy a person is. Relatively well-off people still tend to look upwards in this way. There is nearly always someone who has more money or owns a better car, a bigger house or the latest gadgets.</p> <p>But while money may not buy you happiness, <a href="https://journals.sagepub.com/doi/full/10.1177/00222437221141053">our research shows</a> that a favourite possession can actually help to make you feel happier when facing income inequality. Thinking about a single treasured possession – even something small like a favourite book gifted by a friend or a keepsake from a trip – can help prevent these feelings of deprivation and actually boost your wellbeing.</p> <p>We used the <a href="https://www.investopedia.com/terms/g/gini-index.asp">Gini coefficient</a> – a common measure of income inequality – to analyse more than 31,000 Instagram posts from 138 countries. We found that posts tend to convey less happiness in places with more income inequality (i.e., when the Gini coefficient of the location of the post increases).</p> <p>We focused on posts that were about favourite possessions (that used hashtags such as #favouritething, #favthing), comparing these with posts about favourite things in general, that is things that aren’t “owned”. The latter posts used hashtags such as #fashion or #favoritepeople.</p> <p>Posts that used hashtags about general consumption and favourite things that aren’t “owned”, such as music or friends, were typically less happy and posted in areas with more income inequality. But when we looked at posts that used hashtags about favourite possessions, such as #favouritething or #favthing, we found there was a weaker relationship with income inequality.</p> <p>So whether a post was happy or not wasn’t linked to the equality of the area it was posted in. These posts about favourite possessions were therefore less affected by income inequality.</p> <p>This means that encouraging people to think differently about things they already own could help some cope better with inequality. Rather than focusing on how much you own, which tends to exacerbate social comparison and undermine happiness, focus instead on your favourite possessions. Our research indicates that people who do this tend to make fewer material comparisons, and are happier as a result.</p> <h2>Simply remember your favourite things</h2> <p>A treasured possession doesn’t even have to be particularly expensive. From a memento purchased on a trip abroad, to your grandmother’s embroidered cushion, a football jersey that reminds you of your old school teammates, or even that tattered t-shirt of your favourite band, such items can feel priceless to their owners because they are unique and their value transcends any kind of price.</p> <p>In a separate multi-country study using an online questionnaire, we asked 1,370 participants from China, India, Pakistan, the UK, Spain, Russia, Chile and Mexico to describe either every item of clothing they had recently purchased, or a single favourite item of clothing. After participants described these things, we asked them about their wellbeing, as well as their perception of income inequality in their country.</p> <p>Those who thought about recent clothing purchases reported lower wellbeing when thinking about income inequality in their country. In comparison, those who talked about a single favourite piece of clothing were not as affected by the income inequality they perceived around them.</p> <p>Three more online experiments with over 2,000 participants <a href="https://journals.sagepub.com/doi/full/10.1177/00222437221141053">revealed that</a> when people are reminded of their favourite possessions they feel less affected by income inequality because they are making fewer material comparisons.</p> <p>In one of these studies, we found that merely describing a favourite possession made people less likely to compare their wealth to that of others. When people stopped making these comparisons they were happier – even those living in places with more income inequality.</p> <h2>#FavouriteThing</h2> <p>Our research shows the benefits of focusing on a few favourite things that we own, rather than thinking about the amount of possessions we have and what else we need to “keep up with the Joneses”.</p> <p>Hashtag trends like #ThrowbackThursday encourage people to post photos on certain themes. In a similar vein, encouraging more people to post photos of their favourite possessions using hashtags like #FavouriteThing could do a lot to help boost happiness during the cost of living crisis.</p> <p>Income inequality is rampant and the cost of living crisis has only made its effects worse. But we all possess something dear to us that can keep us from comparing ourselves to others and help protect our wellbeing in this difficult economic environment.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/201997/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><em><a href="https://theconversation.com/profiles/jingshi-joyce-liu-1424398">Jingshi (Joyce) Liu</a>, Lecturer in Marketing, <a href="https://theconversation.com/institutions/city-university-of-london-1047">City, University of London</a>; <a href="https://theconversation.com/profiles/amy-dalton-1425283">Amy Dalton</a>, Associate Professor of Marketing, <a href="https://theconversation.com/institutions/hong-kong-university-of-science-and-technology-1153">Hong Kong University of Science and Technology</a>, and <a href="https://theconversation.com/profiles/anirban-mukhopadhyay-1425284">Anirban Mukhopadhyay</a>, Lifestyle International Professor of Business and Chair Professor of Marketing, <a href="https://theconversation.com/institutions/hong-kong-university-of-science-and-technology-1153">Hong Kong University of Science and Technology</a></em></p> <p><em>Image credits: Getty </em><em>Images </em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/how-your-favourite-things-can-boost-your-financial-wellbeing-201997">original article</a>.</em></p>

Money & Banking

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2023 Australian Book Industry Awards winners announced

<p>The winners of the 2023 Australian Book Industry Awards (ABIA) have been revealed, while a whole host of titles taking home their well-deserved accolades from an impressive shortlist of 70. </p> <p>Categories included Book of the Year for Social Impact, International Book, Literary Fiction, New Writer, General Non-Fiction, Biography, Children’s Picture Book, and more - to the delight of booklovers all across the nation. </p> <p>There was an ‘overall’ winner from the big night, too, with Nagi Maehashi’s <em>RecipeTin Eats: Dinner </em>taking home the Book of the Year award. </p> <p>Nagi took to social media to celebrate her win, in the wake of her self-proclaimed “worst acceptance speech of the year”, to thank everyone and express her enthusiastic gratitude for all of the support for her work. And, of course, to thank her four-legged best friend and ‘co-author’, Dozer the dog. </p> <p>She wasn’t the only one with a smile on her face on the big night, however, with her fellow given plenty of reason to rejoice right along with her. </p> <p>And so, in no particular order, here are all the winners from the 2023 ABIAs! </p> <p><strong>ABIA Book of the Year &amp; Illustrated Book of the Year:</strong> <em>RecipeTin Eats: Dinner</em>, Nagi Maehashi</p> <p>“150 dinner recipes. Fail-proof. Delicious. Addictive. The food you want to cook, eat and share, night after night.</p> <p>"Through her phenomenally popular online food site, RecipeTin Eats, Nagi Maehashi talks to millions of people a year who tell her about the food they love.</p> <p>"Now, in her first cookbook, Nagi brings us the ultimate curation of new and favourite RecipeTin Eats recipes - from comfort food (yes, cheese galore), to fast and easy food for weeknights, Mexican favourites, hearty dinner salads, Asian soups and noodles, and special treats for festive occasions.”</p> <p><strong>General Fiction Book of the Year: </strong><em>Dirt Town</em>, Hayley Scrivenor</p> <p>“On a sweltering Friday afternoon in Durton, best friends Ronnie and Esther leave school together. Esther never makes it home.</p> <p>“Ronnie's going to find her, she has a plan. Lewis will help. Their friend can't be gone, Ronnie won't believe it.</p> <p>“Detective Sergeant Sarah Michaels can believe it. She has seen what people are capable of. She knows more than anyone how, in a moment of weakness, a person can be driven to do something they never thought possible.</p> <p>“Lewis can believe it too. But he can't reveal what he saw that afternoon at the creek without exposing his own secret.</p> <p>“Five days later, Esther's buried body is discovered.”</p> <p><strong>Literary Fiction Book of the Year:</strong> <em>Horse</em>, Geraldine Brooks</p> <p>“A discarded painting in a roadside clean-up, forgotten bones in a research archive, and Lexington, the greatest racehorse in US history. From these strands of fact, Geraldine Brooks weaves a sweeping story of spirit, obsession and injustice across American history …</p> <p>“With the moral complexity of March and a multi-stranded narrative reminiscent of People of the Book, this enthralling novel is a gripping reckoning with the legacy of enslavement and racism in America. <em>Horse</em> is the latest masterpiece from a writer with a prodigious talent for bringing the past to life.”</p> <p><strong>General Non-fiction Book of the Year: </strong><em>Bulldozed</em>, Niki Savva</p> <p>“Between 2013 and 2022, Tony Abbott begat Malcolm Turnbull, who begat Scott Morrison. For nine long years, Australia was governed by a succession of Coalition governments rocked by instability and bloodletting, and consumed with prosecuting climate and culture wars while neglecting policy.</p> <p>“By the end, among his detractors — and there were plenty — Morrison was seen as the worst prime minister since Billy McMahon …</p> <p>“Niki Savva, Australia’s renowned political commentator, author, and columnist, was there for all of it … Now she lays out the final unravelling of the Coalition at the hands of a resurgent Labor and the so-called teal independents that culminated in the historic 2022 election. With her typical access to key players, and her riveting accounts of what went on behind the scenes, <em>Bulldozed</em> is the unique final volume of an unputdownable and impeccably sourced political trilogy.”</p> <p><strong>Biography Book of the Year: </strong><em>My Dream Time</em>, Ash Barty </p> <p>“<em>My Dream Time</em> is about finding the path to being the best I could be, not just as an athlete but as a person, and to consider the way those identities overlap and compete. We all have a professional and a personal self. How do you conquer nerves and anxiety? How do you deal with defeat, or pain? What drives you to succeed – and what happens when you do? The answers tell me so much, about bitter disappointments and also dreams realised – from injuries and obscurity and self-doubt to winning Wimbledon and ranking number 1 in the world.</p> <p>“My story is about the power and joy of doing that thing you love and seeing where it can take you, about the importance of purpose – and perspective – in our lives.”</p> <p><strong>Social impact Book of the Year: </strong><em>The Boy from Boomerang Crescent</em>, Eddie Betts</p> <p>“How does a self-described ‘skinny Aboriginal kid’ overcome a legacy of family tragedy to become an AFL legend? One thing’s for sure: it’s not easy. But then, there’s always been something special about Eddie Betts …</p> <p>“Sometimes funny, sometimes tragic and always honest – often laceratingly so – <em>The Boy from Boomerang Crescent</em> is the inspirational life story of a champion, in his own words. Whether he’s narrating one of his trademark gravity-defying goals from the pocket, the discrimination he’s faced as an Aboriginal person or the birth of his first child, Betts’s voice – intelligent, soulful, unpretentious – rings through on every page.</p> <p>“The very human story behind the plaudits is one that will surprise, move and inspire.”</p> <p><strong>Book of the Year for Older Children (ages 13+): </strong><em>Blood Traitor</em>, Lynette Noni</p> <p>“Kiva thought she knew what she wanted - revenge. But feelings change, people change … everything has changed.</p> <p>“After what happened at the palace, Kiva is desperate to know if her friends and family are safe, and whether those she wronged can ever forgive her. But with the kingdoms closer to the brink of war than they’ve ever been, and Kiva far away from the conflict, more is at stake than her own broken heart.</p> <p>“A fresh start will mean a perilous quest, forcing mortal enemies and uneasy allies together in a race against the clock to save not just Evalon, but all of Wenderall. With her loyalties now set, Kiva can no longer just survive - she must fight for what she believes in. For who she believes in. But with danger coming from every side, and the lives of everyone she loves at risk, does she have what it takes to stand, or will she fall?”</p> <p><strong>Book of the Year for Younger Children (ages 7–12): </strong><em>Runt</em>, Craig Silvey (illustrated by Sara Acton)</p> <p>“Annie Shearer lives in the country town of Upson Downs with her best friend, an adopted stray dog called Runt. The two share a very special bond.</p> <p>“After years evading capture, Runt is remarkably fast and agile, perfect for herding runaway sheep. But when a greedy local landowner puts her family's home at risk, Annie directs Runt's extraordinary talents towards a different pursuit - winning the Agility Course Grand Championship at the lucrative Krumpets Dog Show in London.</p> <p>“However, there is a curious catch: Runt will only obey Annie's commands if nobody else is watching.</p> <p>“With all eyes on them, Annie and Runt must beat the odds and the fastest dogs in the world to save her farm.</p> <p>“<em>Runt</em> is a heart-warming and hilarious tale of kindness, friendship, hurdles, hoops, tunnels, see-saws, being yourself and bringing out the best in others.”</p> <p><strong>Children’s Picture Book of the Year (ages 0–6): </strong><em>What to Say When You Don’t Know What to Say</em>, Davina Bell &amp; Hilary Jean Tapper</p> <p>“A warm and whimsical guide to negotiating life's little moments and big emotions with empathy, kindness and words from the heart.”</p> <p><strong>International Book of the Year: </strong><em>Lessons in Chemistry</em>, Bonnie Garmus</p> <p>“Chemist Elizabeth Zott is not your average woman. In fact, Elizabeth Zott would be the first to point out that there is no such thing.</p> <p>“But it's the early 1960s and her all-male team at Hastings Research Institute take a very unscientific view of equality. Forced to resign, she reluctantly signs on as the host of a cooking show, Supper at Six. But her revolutionary approach to cooking, fuelled by scientific and rational commentary, grabs the attention of a nation.</p> <p>“Soon, a legion of overlooked housewives find themselves daring to change the status quo. One molecule at a time.”</p> <p><strong>Small Publishers’ Adult Book of the Year: </strong><em>The Dreaming Path</em>, Paul Callaghan</p> <p>“The Dreaming Path has always been there, but in the modern-day world, it can be hard to find. There are so many demands on us – family, health, bills, a mortgage, a career – that it can be hard to remember what’s most important: you.</p> <p>“It’s time to reconnect with your story.</p> <p>“Through conversations, exercises, Dreamtime stories and key messages, Paul Callaghan and Uncle Paul Gordon will sit you around the fire and share knowledge that reveals the power of Aboriginal spirituality as a profound source of contentment and wellbeing for anyone willing to listen.</p> <p>"This ancient wisdom is just as relevant today as it ever was.”</p> <p><strong>Small Publishers’ Children’s Book of the Year:</strong> <em>Off to the Market</em>, Alice Oehr</p> <p>“Sunday is market day. We are looking for pumpkin, apples, eggs, and bread. What else will we find? Where did it come from? And what will we make with it?</p> <p>“Learn all about produce in this delightful child’s tour of a food market, full of fun facts, delicious new discoveries, and charming characters.</p> <p>“A loving ode to the people who bring food to our table and connection to our community, from acclaimed artist Alice Oehr.”</p> <p><strong>Audiobook of the Year: </strong><em>The Whitewash</em> (Siang Lu, Wavesound) </p> <p>“Siang Lu's searing debut is a black comedy about the whitewashing of the Asian film industry, told in the form of an oral documentary. It sounded like a good idea at the time - a Hollywood spy thriller, starring, for the first time in history, an Asian male lead. With an estimated $350 million production budget and up-and-coming Hong Kong actor JK Jr, who, let's be honest, is not the sharpest tool in the shed, but probably the hottest, Brood Empire was basically a sure thing. Until it wasn't …</p> <p>“<em>The Whitewash</em> is the definitive oral history of the whole sordid mess. Unofficial. Unasked for. Only intermittently fact-checked, and featuring a fool's gallery of actors, producers, directors, film historians and scummy click-bait journalists, to answer the question of how it all went so horribly, horribly wrong.”</p> <p><strong>The Matt Richell Award for New Writer of the Year: </strong><em>WAKE</em>, Shelley Burr</p> <p>“Evelyn simply vanished …Mina McCreery's life has been defined by the intense and ongoing public interest in her sister's case. Now a reclusive adult, Mina lives alone on her family's sunbaked, destocked sheep farm. The million-dollar reward her mother established to solve the disappearance has never been paid out.</p> <p>“Enter Lane Holland, a private investigator who dropped out of the police academy to earn a living cracking cold cases. Lane has his eye on the unclaimed money, but he also has darker motivations.</p> <p>“<em>WAKE</em> is a powerful, unsparing story of how trauma ripples outward when people's private tragedies become public property, and how it's never too late for the truth to set things right.”</p> <p><em>Images: Instagram</em></p>

Books

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Are bigger super funds better? Actually no, despite what the industry is doing

<p><a href="https://theconversation.com/profiles/geoff-warren-3657">G<em>eoff Warren</em></a><em>, <a href="https://theconversation.com/institutions/australian-national-university-877">Australian National University</a></em></p> <p>Australia’s superannuation funds are getting bigger – and fewer. There were <a href="https://www.theguardian.com/australia-news/2021/aug/29/australian-superannuation-mergers-cut-number-of-funds-by-half-in-a-decade">close to 400</a> funds in 2010. With mergers, it’s now <a href="https://www.investordaily.com.au/superannuation/53144-are-mega-funds-poised-to-dominate-the-super-industry">closer to 120</a>. By 2025, according to industry executives surveyed last year, there will be <a href="https://www.investordaily.com.au/superannuation/50971-rise-of-mega-funds-set-to-intensify-erasing-100-funds-by-2025">fewer than 50</a>.</p> <p>The portfolios of the two biggest super funds, AustralianSuper and Australian Retirement Trust, are bigger than even the federal government’s Future Fund Management Agency, which oversees the A$194 billion <a href="https://yearinreviewfy22.futurefund.gov.au/performance-results.html">Future Fund</a> and several other funds worth a total $242 billion.</p> <hr /> <p><iframe id="0wOBb" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/0wOBb/5/" width="100%" height="400px" frameborder="0"></iframe></p> <hr /> <p>Underpinning this consolidation is the idea that larger scale is beneficial for superannuation fund members. But that’s not necessarily true. A bigger fund is no guarantee of better returns.</p> <p>I’ve examined the issue of fund scale with Scott Lawrence, an investment manager with 35 year’s industry experience. Together we’ve written <a href="https://theconexusinstitute.org.au/wp-content/uploads/2023/03/Does-Size-Benefit-Super-Fund-Members-24-March-2023.pdf">a report</a> for the Conexus Institute, an independent research centre focused on superannuation issues.</p> <p>Our conclusion: funds, large and small alike, succeed or fail depending on how well they formulate and execute their strategies.</p> <h2>Managing assets in-house</h2> <p>The first potential benefit of bigger size is that funds can manage assets using their own dedicated investment professionals, rather than outsourcing everything to external investment managers to invest on their behalf.</p> <p>For example, UniSuper (the higher education industry fund) manages <a href="https://www.unisuper.com.au/investments/how-we-invest/investment-managers">70% of assets in-house</a>. AustralianSuper, with more than double UniSuper’s assets, manages <a href="https://www.australiansuper.com/-/media/australian-super/files/about-us/annual-reports/2022-annual-report.pdf">53% of assets</a> in-house.</p> <p>This can be cheaper than paying fees as a percentage of assets to these external providers. It offers more control as the super fund can decide the assets in which they invest, rather than leaving the decision to someone else.</p> <p>But fund members will only benefit if the internal team makes investment decisions that are as good as the service they are replacing. For this reason, there is no reliable correlation between performance and degree of in-house management.</p> <h2>Investing in big-ticket items</h2> <p>The second potential benefit is it becomes more possible to become successful direct investors in “big ticket” assets such as infrastructure and property, instead of just focusing on shares and other assets traded on stock exchanges.</p> <p>For example, AustralianSuper owns <a href="https://www.australiansuper.com/-/media/australian-super/files/about-us/media-releases/australiansuper-increases-investment-in-westconnex.pdf">20.5% of WestConnex</a>, Australia’s biggest infracture project, having contributed $4.2 billion to the consortium that is building the mostly underground toll-road system linking western Sydney motorways.</p> <p>Opportunities like this are easier to access by large funds, and can help to diversify their portfolios.</p> <p>But such direct investment is costlier than buying shares and bonds. This limits the potential for fee reductions.</p> <p>For members to benefit, these investments must deliver attractive returns. This requires a fund developing capability in what are specialised markets. Size alone won’t deliver on its own.</p> <h2>Economies of scale and scope</h2> <p>The third potential benefit is that size brings economies of scale and scope.</p> <p>Scale can reduce fees, by spreading the fund’s fixed costs over a larger member base.</p> <p>Our review of the research literature confirms there are solid reasons to expect administration costs to reduce with size, as well as in-house management reducing investment costs.</p> <hr /> <p><iframe id="26cxr" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/26cxr/3/" width="100%" height="400px" frameborder="0"></iframe></p> <hr /> <p>Economies of scope involve an organisation being able to improve or increase services, say by investing in better systems and more staff.</p> <p>But investing in better systems also brings potential pitfalls. Big visionary projects tend to run over time and over budget, and sometimes fail.</p> <p>An example is the disastrous attempts of five industry funds (AustralianSuper, Cbus Super, HESTA, Hostplus and MTAA Super) to develop a shared administration platform, called Superpartners. It was meant to cost $70 million, but development costs blew out to $250 million before <a href="https://www.investmentmagazine.com.au/2016/12/link-group-completes-superpartners-integration/">they gave up</a>.</p> <h2>Size brings its own challenges</h2> <p>Large funds also face some unique challenges. Because they have more money to invest, they have more work to do in finding sufficient attractive assets to buy.</p> <p>The risk is they need to accept some assets offering low returns to do so. They can also outgrow some market segments, such as owning shares in smaller companies.</p> <p>Large organisations are typically more complex, more bureaucratic and less flexible. They can find it difficult to coordinate staff to work towards a common purpose. These elements may create dysfunction if not managed.</p> <p>This may explain why, despite the potential increased scope of their offerings, surveys suggest large funds tend to deliver <a href="https://www.investmentmagazine.com.au/2022/08/members-willing-to-pay-for-better-service-post-retirement/">less personalised service</a>.</p> <p>So the idea “bigger is better” is not necessarily true. Large size is not an automatic win. Whether the advantages outweigh the disadvantages and challenges ultimately depends on fund trustees and management doing their jobs well so that members benefit.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/203417/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><em><a href="https://theconversation.com/profiles/geoff-warren-3657">Geoff Warren</a>, Associate Professor, College of Business and Economics, <a href="https://theconversation.com/institutions/australian-national-university-877">Australian National University</a></em></p> <p><em>Image credits: Getty Images</em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/are-bigger-super-funds-better-actually-no-despite-what-the-industry-is-doing-203417">original article</a>.</em></p>

Retirement Income

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Financial guru reveals how to shop at Costco without membership

<p>With the cost of living crisis, people have started abandoning their local supermarkets and heading to Costco to do a shop that doesn't break the bank.</p> <p>While best known for its deals, shoppers must have a membership with the wholesaler, meaning they pay a yearly fee of $60 to shop there.</p> <p>However, one bargain hunter and money-saving expert has revealed how to shop at the supermarket without paying the membership fee.</p> <p>To access a Costco without a membership, shoppers need a shop card, financial guru Little Birdie explained.</p> <p>The cards can be preloaded with any amount from $25 to $999.99, with recipients then able to use them for purchase in store.</p> <p>There is a catch - the cards have to be bought by a current member, and can’t be used online, or in fuel stations, Birdie continued in her TikTok.</p> <p>Currently, there are only 15 stores across Australia.</p> <p>Parents of larger families have reported getting hundreds of dollars off their grocery bills by buying in bulk at Costco.</p> <p>“Every time I go to Costco, my favourite part is seeing how much money I saved. Yesterday was my first trip there in a few years. I spent $593,” one woman wrote on Facebook.</p> <p>“I did a (fake) online order with Coles, selecting equal quantities as what I have purchased at Costco. Coles would have cost me $783.”</p> <p>She claimed the quality of the products, particularly meat, is better than other stores and is the ideal place to purchase expensive dog food in bulk at a quarter of the price.</p> <p>“We actually ended up saving around $35, on approximately six weeks food for our dogs. But the real win is that we have it already, and don't have to get stress when we're running out and all the supermarkets are out of stock!”</p> <p>The wholesaler has served to help many families in desperate times with one woman saying she <a href="https://www.oversixty.com.au/lifestyle/food-wine/groceries-option-even-cheaper-than-aldi" target="_blank" rel="noopener">saved a whopping $600</a> by shopping at Costco.</p> <p><em>Image credit: TikTok</em></p>

Money & Banking

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How to tell if your partner is stealing from you

<p>Financial infidelity can take many forms and it can be devastating to a relationship. From secretive purchases to hiding debts, dishonesty about income to secret investments, it can cause significant harm to both partners. If you want to avoid becoming victims of financial infidelity, it is important to communicate openly and honestly about your finances. </p> <p>Taking responsibility for your financial health is good for your wellbeing. Whether it’s being pro-active in the face of financial infidelity or recovering the damages, being aware of the common forms and red flags can help you build strategies to move forward. Here is what you need to know.</p> <p><strong>Common financial ‘secrets’ </strong></p> <p>Money lies take several forms and they all involve secrecy, for example, buying items without informing your partner, gambling or other expenses that are unaccounted for, frivolous spending on unnecessary items, not disclosing debts or loans, and lying about how much money you make or your financial situation.</p> <p>Then there are the secret bank accounts and investing money without your partner's knowledge. Your partner may be harbouring one or many of these common financial secrets, so knowing the red flags will help you bring the dishonesty to the surface.</p> <p><strong>Signs of financial infidelity</strong></p> <p>It is important to keep an eye out for signs of financial infidelity. The red flags that will call out secretive behaviour include new credit card statements or bank accounts that you know nothing about, new items appearing in your house that you didn't buy, packages not addressed to you, new passwords on financial accounts and an unwillingness to discuss money matters.</p> <p>Your partner's behaviour is also a warning. Pay close attention to reactions that don’t seem authentic and displays of paranoia about you opening the mail – especially the bank and credit card statements.</p> <p><strong>Moving beyond financial infidelity</strong></p> <p>If you suspect your partner is guilty of financial infidelity, there are simple steps to help you both move forward. First, you will need your partner to come clean. Ask, listen, and be supportive. They may be feeling embarrassed or ashamed, and fearing judgement.</p> <p>Next, get help. Consider a professional. This could be both financial and personal – by planning a way forward together, you can re-affirm your views about money and trust in your relationship. Financial infidelity can destroy trust in your partner, so you both must be willing to work towards healing the hurt and reducing the risk of future money sins.</p> <p><strong>Make money a talking point</strong></p> <p>When it comes to financial matters, maintaining honesty and trust in your relationship can be challenging. To be on the front foot, try talking about money regularly. Normalise it. For example, talk about your bank balance, who is paying what bills, what you’d like to buy and how you plan to buy it, your savings plans, how your superfund is performing.</p> <p>Set up these conversations in advance and use them as a time to check in on your money goals. You must both feel empowered to ask money questions, so the more you make money conversations the norm, the better.</p> <p><strong>Create a personal finance village </strong></p> <p>Try adding someone to your personal finance village. Consider working with an accountant or financial advisor who can independently help you and your partner to plan open discussions in a safe manner to address your financial issues. Ask their advice on enabling ‘safe’ confessions like having a no-judgement rule for raising money sins.</p> <p>Allow yourselves the opportunity to come clean on spending and work out how best to address this going forward. This offers you the freedom of being on the same page financially and working towards the same financial goals.</p> <p>Finding yourself in a situation involving financial infidelity can be utterly devastating. Of course, the best way of addressing any kind of money cheating is to know the red flags and avoid it altogether.</p> <p>However, as this is not always the case, consider getting professional advice on working towards common financial goals so you can move forward in a positive way. Remember, communication and honesty are key to a healthy and successful financial relationship. </p> <p><strong><em>Jacqui Clarke FCA, FTI, GAICD, JP, author of Stop Worrying About Money (Wiley, $29.95), is a trusted advisor, board member, executor and veteran business executive. As a personal wealth and money management expert and over three decades of experience , 25 years at Deloitte and PWC helping high-net-worth families, individuals and business owners to build, manage and preserve their wealth. Her message is simple: with careful planning and effort, you can manage your money, so it doesn’t manage you. <a href="https://www.jacquiclarke.me/">https://www.jacquiclarke.me/</a></em></strong></p> <p><em><span style="background-color: #ffffff;">Image credits: Getty </span>Images </em></p>

Money & Banking

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3 sales tactics rife in the real estate industry, and why they work

<p>Buying a home is likely to be the biggest financial transaction you will ever make, and you’re at a distinct disadvantage. You’re an amateur up against professionals – real estate agents – versed in psychological tricks to get you excited about owning a property and paying more than you planned.</p> <p>These tricks start with comparatively simple things such as making rooms look bigger in adverts by using a wide-angle photography. They extend all the way to the point of sale. </p> <p>None of these tactics necessarily involve outright lying – there are laws against false and misleading conduct. But they are manipulative, exploiting the fact that humans are emotional beings with many “cognitive biases” – a perception of reality that is more emotional ratther than rational.</p> <p>The three most common tactics come down to manipulating your confidence in your own decisions. Close to <a href="https://www.worldscientific.com/doi/abs/10.1142/S0217590816500156">80 studies</a> suggest overconfidence is one of the most significant cognitive biases influencing behaviour in the real estate market.</p> <h2>1. Underquote, entice the bargain hunters</h2> <p>You see a property in your price range that’s everything you want. You call the agent, inspect the property, then prepare for the auction. It sells for $200,000 more. </p> <p>Underquoting involves deliberately advertising a property significantly lower than its likely sales price. While the prevalence of the practice is disputed, with industry representatives saying most agents do the right thing, <a href="https://www.theage.com.au/property/news/new-3-8-million-crackdown-on-underquoting-by-victorian-real-estate-agents-20220914-p5bhzq.html">anecdotal evidence</a>points to underquoting being very common. </p> <p>Underquoting is effective because it attracts more interested buyers and increases the number and intensity of bidding. It exploits two of the most ubiquitous cognitive biases – herd behaviour and irrational exuberance. </p> <p>More interest doesn’t just increase competition. A real estate agent will communicate that interest to us, confirming our desire in the property is justified. </p> <p>This tendency to “follow the herd” and imitate others, as US economist Robert Shiller noted in an influential <a href="https://www.jstor.org/stable/2117915">1995 paper</a>, is built on the assumption others have information that justifies their actions. </p> <p>This helps explain pretty much every stockmarket bubble since <a href="https://theconversation.com/tulip-mania-the-classic-story-of-a-dutch-financial-bubble-is-mostly-wrong-91413">tulipmania in the 17th century</a>, including the <a href="https://lsecentralbanking.medium.com/how-did-herd-behaviour-contribute-to-the-global-financial-crisis-3b0024a4755e">Global Financial Crisis of 2007-8</a> and <a href="https://www.sciencedirect.com/science/article/abs/pii/S1544612318303647">speculation on cryptocurrency</a>. We are emotionally swayed by the decisions of others, assuming their decisions are rational, even when they are not. This is fertile ground for our own decisions to be manipulated.</p> <h2>2. Hide reality, inflate expectations</h2> <p>Real estate agents will generally favour auctions to extract the <a href="https://www.domain.com.au/news/selling-at-auction-in-melbourne-earns-vendors-tens-of-thousands-in-extra-cash-1072565/">maximum sales price</a>, for the reasons outlined above and the prospect of <a href="https://www.researchgate.net/publication/220505543_Understanding_auction_fever_A_framework_for_emotional_bidding">auction fever</a> – when carefully decided limits are forgotten in the thrill of the moment. </p> <p>But that’s not always the case. In a soft market with few buyers, agents may instead opt for a private sale, sometimes called a “<a href="https://attwoodmarshall.com.au/the-silent-auction/">silent auction</a>”. The goal here is to cause you to overestimate the degree of competition and thus make a bigger offer.</p> <p>An agent might assist this perception by instead supplying you with information from previous public auctions of similar properties more favourable to their preferred narrative.</p> <p>The value of hiding information also explains why you may come across so many sold listings with <a href="https://www.smh.com.au/property/news/should-you-be-able-to-know-how-much-your-neighbours-sold-their-house-for-20220223-p59z2t.html">labels</a> such as “price not disclosed” or “price withheld.” The reason for this may well be that the property sold for less than hoped.</p> <p>Hiding information the agent doesn’t want you to think about depends principally on exploiting our cognitive bias towards <a href="https://www.sciencedirect.com/topics/psychology/overconfidence">overconfidence</a> – assuming we are smarter, more knowledgeable or better skilled than we actually are.</p> <p>In lieu of that negative information, you are more likely to focus on the available information – particularly if it suits what you want to believe.</p> <h2>3. Talk up nominal gains</h2> <p>You may have heard the <a href="https://www.smh.com.au/property/news/do-house-prices-really-double-every-10-years-20211203-p59eif.html">old saying</a> that property values double every 10 years. Stressing what a property is likely to be worth in a decade <a href="https://www.realestate.com.au/news/suburbs-you-shouldve-bought-a-home-in-10-years-ago-and-how-much-your-area-has-grown/">based on what it was worth a decade ago</a> can be a powerful motivator to bid more.</p> <p>As Robert Shiller noted in his 2013 book <a href="https://press.princeton.edu/books/paperback/9780691156323/the-subprime-solution">The Subprime Solution</a> (about the property-buying mania that led to the Global Financial Crisis), homes are such significant investments that we tend to recall their prices from the distant past (unlike, say, like a loaf of bread or bottle of milk).</p> <p>This tendency results in an unconscious focus on nominal values rather than <a href="https://www.fool.com/investing/general/2012/04/12/the-illusion-of-housing-as-a-great-investment.aspx">real (inflation-adjusted) values</a>. This cognitive bias is known as the <a href="https://www.emerald.com/insight/content/doi/10.1108/14635789810212931/full/html">money illusion</a>, a mental miscalculation that may increase your willingness to pay more for the property. </p> <h2>In conclusion…</h2> <p>There’s a case for laws to <a href="https://www.realestate.com.au/news/push-to-end-home-sale-price-confusion-in-victorian-property-industry-review/">increase transparency</a> and the accuracy of information available in the real estate market. </p> <p>But in the meantime, if you’re buying a home, it’s wise to acknowledge your limitations. Do your homework, seek out independent advice and even consider hiring a professional advocate with the knowledge and experience to balance emotional and rational thoughts.</p> <p><em>Image credits: Getty Images</em></p> <p><em>This article originally appeared on <a href="https://theconversation.com/3-sales-tactics-rife-in-the-real-estate-industry-and-why-they-work-202960" target="_blank" rel="noopener">The Conversation</a>. </em></p>

Real Estate

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6 financial decisions you need to make before retiring

<p>Daydreaming about avoiding the Monday morning commute or perhaps cutting back to 2-3 days per week is something we’ll all start thinking about at some point. But if you don’t take some time to start thinking about your retirement plan, that last pay-check will need to last you a lifetime.</p> <p>The Australian Superannuation Funds Association (ASFA) says to live a <a href="https://www.superannuation.asn.au/resources/retirement-standard">comfortable retirement</a> at age 67, a couple need a superannuation balance of $690,000 and single needs a superannuation balance of $595,000. Both super account balances assume you own your home and are relatively healthy. So how does that stack up for most Australians? Let’s take a look at the numbers.</p> <p>In 2022 <a href="https://d.docs.live.net/a698625ddb93f108/Wiley%2520Editing%2520-%2520The%2520Strategy%2520Stacker/Book%2520Publicity%2520-%2520Scott%2520Eathorne/Article%2520Requests%2520-%2520Scott/2022_Superannuation_Account_Balances_Research.pdf.aspx">ASFA reported</a> the average super balance for a 65 - 69 year olds in Australia is just $414,380 or men and $370,042 for women. If we look at median balances in the same report, that is the middle value when all account values are placed in order from lowest to highest, the median balance for men is $189,856 and even lower at $180,718 for women. The reality is that for most Australians, super won’t be enough to live a comfortable retirement by itself. So how does your super stack up and what can you about it before you retire?  There are 6 key questions all pre-retirees should consider. </p> <ol> <li><strong>Do you know your numbers?</strong></li> </ol> <p>A good place to start is to work out how much each year you’ll need to live on in retirement. I speak to a lot of pre-retirees and they often look at their spouse and then at me and say ‘well how much do we need’? I can’t answer that question of course, as everyone lives different lifestyles and has different goals and interests in retirement.</p> <p>A good place to start though is thinking about what your current income and expenses are. Remove all the work-related expenses like dry cleaning and work travel costs and add in the expenses like travel or other hobbies you’d like to pursue in retirement. ASFA also offers a comfortable and modest retirement <a href="https://www.superannuation.asn.au/ArticleDocuments/ArticleDocuments/269/2303-ASFA_Retirement_Standard_Budgets_December_2022_quarter.pdf.aspx?Embed=Y">budget breakdown</a> too for both couples and singles that’s worth considering to help your own post work budget development. </p> <ol start="2"> <li><strong>Will you retire owning your own home?</strong></li> </ol> <p>Paying off the mortgage is a worthy goal at any age but it probably becomes more important when you’ve retired from work? Why? Well most retirees are on fixed incomes. This means they no longer can earn overtime or bonuses to help top up income levels.</p> <p>If you have a mortgage think about how you can extinguish it before you retire. Rising interest rates also mean the cost of repayments are rising. For retirees on fixed incomes, it means that they need to find savings in other areas which can cause financial stress. No one wants financial stress in retirement.</p> <ol start="3"> <li><strong>Will you help your adult kids?</strong></li> </ol> <p>In might surprise you to learn that helping your kids can create a risk to your retirement plans. For many Australians the ‘Bank of Mum and Dad’ has been instrumental in helping the next generation secure their first family home. I’m not saying you shouldn’t help your kids, for many parents it reflects their values.</p> <p>What I am saying is that have a formal loan agreement in place and find a solicitor to get one drawn up. Why is this important? Well if you adult child gets divorced, you still deserve to get your money back. Similar considerations must be made if you decide to go guarantor for your adult children’s loans too. There are real risks for your retirement plans.  </p> <ol start="4"> <li><strong>Is it time to downsize?</strong></li> </ol> <p>Many retirees decide to have a tree change or sea change at retirement, moving to a smaller homes, units or retirement villages. It doesn’t need to be a change of suburb of course, just a move into something that meets your changing lifestyle needs.</p> <p>The benefit of downsizing is that allows many retirees to top up their super. There are some <a href="https://www.oversixty.co.nz/property/downsizing/5-key-things-you-need-to-consider-before-downsizing">important considerations</a> but it can help you live a more comfortable retirement life.  </p> <ol start="5"> <li><strong>How will you fund your retirement income?</strong></li> </ol> <p>For most Australians, turning your super into an account-based pension provides them with a retirement income stream. It can also be supported by Centrelink if you’re eligible too. Many Australians may also receive an inheritance from their parents at some point too. All of these sources of funds will help you determine what your retirement income will be.</p> <p>Many retirees find great comfort in having a retirement plan and having confidence in knowing what they have to live on before they give up retirement. Don’t dismiss part time work either or transitioning to retirement by reducing your hours of work. Both strategies here allow you to top-up your income (and super) before you say goodbye to work. </p> <ol start="6"> <li><strong>Will you seek advice to help you make the most of your options? </strong></li> </ol> <p>As a financial planner I talk to pre-retirees to help them create retirement plans almost every working day. I’ve lost count of the number of times a client has said to me ‘Can I do that?’ or ‘I wish I’d know about that strategy ten years ago’, often followed by a look of disappointment when they realise they should have started their retirement plan much sooner.</p> <p>The reality is that superannuation legislation is complicated and there are a range of contribution strategies (some of which include getting a tax deduction while you’re working) that can help boost your super. Seek advice from a licensed financial planner if you need help to create a more confident retirement plan if you need help. </p> <p><strong><em>Luke Smith is a licensed Australian financial planner and author of the new book, Smart Money Strategy – Your Ultimate Guide to Financial Planning (Wiley, $34.95), published by Wiley. Luke is also the host of the popular podcast ‘The Strategy Stacker – Luke Talks Money’ and appears every Friday afternoon on Canberra’s 2CC. Found out more at <a href="http://www.thestrategystacker.com.au">www.thestrategystacker.com.au</a></em></strong></p> <p><em>Image credits: Getty Images</em></p>

Retirement Income

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