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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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Traveller's $3,000 mistake at airport security

<p>A grandmother from New Zealand has copped a whopping $3,000 fine after failing to declare an airport sandwich to border control officers. </p> <p>June Armstrong, 77, was travelling from her native Christchurch to Brisbane to housesit for a friend, and treated herself to a muffin and a sandwich ahead of her 4am flight. </p> <p>Ms Armstrong ate her muffin before boarding the plane, and stashed the sandwich in her carry-on luggage to eat later on the flight. </p> <p>However, the grandmother fell asleep on the plane and the sandwich was left uneaten. </p> <p>When she woke up from her nap, she filled out the declaration form to enter Australia, as she had prescription medication, but completely forgot about the sandwich.</p> <p>When she arrived at the security gates at Brisbane Airport and her bags were checked, she was met with an unfortunate welcome to Australia as she was slapped with the fine. </p> <p>“I was just sobbing and said “$NZ3300 for a little sandwich?” Ms Armstrong told the <a href="https://www.nzherald.co.nz/nz/canterbury-grandmother-fined-3300-for-chicken-sandwich-by-australian-border-officials/3KJUEZBB2JHVLHBNSXFY3XPKLE/" target="_blank" rel="noopener"><em>NZ Herald</em>.</a></p> <p>She said asked the official who found the sandwich if they could throw it away for her, but after they walked away and came back, they allegedly just said, “Twelve points, $3300”.</p> <p>Ms Armstrong first thought they were joking, but when she realised they were serious, she broke down in tears as staffers "strongly advised" her to appeal the fine within 28 days. </p> <p>She went through with the appeal to avoid forking out the four-figure sum, but to no avail and eventually ended up coughing up the hefty fine. </p> <p>“My husband kept saying, 'Just pay it'. I said, 'It’s our pension, we can’t afford this’,” Ms Armstrong said, adding that they had about $30,000 in savings as well as their pensions.</p> <p>Ms Armstrong sent an email asking why she was fined, considering it was her first infringement, and why the cost was so high, especially considering the sandwich was untouched and sealed. </p> <p>She also outlined the impact the fine was having on her mental health, but she allegedly never received a response.</p> <p>Six months on from sandwich-gate, she has accepted she won’t be getting her money back and has since spoken out to warn fellow passengers not to make the same mistake. </p> <p>“Everybody I show the fine to is dumbfounded, they just can’t believe it,” Ms Armstrong told the <em>NZ Herald</em>.</p> <p>Australia’s Department of Agriculture, Fisheries and Forestry said Ms Armstrong needed an import permit to bring the chicken sandwich into the county, adding it could have been a much higher penalty, as fines can be as much as $6260. </p> <p>“Meat has strict import conditions which can change quickly based on disease outbreaks,” a departmental spokesperson told <a href="https://www.news.com.au/travel/travel-updates/warnings/grandmother-who-forgot-to-declare-chicken-sandwich-cops-3000-fine-at-brisbane-airport/news-story/2bc94ac2e7e4f59cd16e5798fc7f9f7b" target="_blank" rel="noopener"><em>news.com.au</em></a>. </p> <p>“Uncanned meats, including vacuum-sealed items, are not allowed into Australia unless accompanied by an import permit."</p> <p><em>Image credits: Getty Images </em></p>

Travel Trouble

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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>

Money & Banking

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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>

Money & Banking

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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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Why do I have to take my laptop out of the bag at airport security?

<p><em><a href="https://theconversation.com/profiles/doug-drury-1277871">Doug Drury</a>, <a href="https://theconversation.com/institutions/cquniversity-australia-2140">CQUniversity Australia</a></em></p> <p>Anyone who has travelled by air in the past ten years will know how stressful airports can be.</p> <p>You didn’t leave home as early as you should have. In the mad rush to get to your gate, the security screening seems to slow everything down. And to add insult to injury, you’re met with the finicky request: “laptops out of bags, please”.</p> <p>But what does your laptop have to do with security?</p> <h2>The day that changed air travel forever</h2> <p>Airport security changed dramatically after the terrorist attacks in the US on September 11 2001. Before 9/11, you could pass through security with a carry-on bag full of everything you might need for your holiday, <a href="https://www.npr.org/2021/09/10/1035131619/911-travel-timeline-tsa">including a knife</a> with a four-inch blade. Indeed, that’s how the 9/11 attackers brought their <a href="https://www.npr.org/2021/09/10/1035131619/911-travel-timeline-tsa">weapons on board</a>.</p> <p>After 9/11, screening processes around the world changed overnight. In the US, private security contractors being paid a minimum wage were swapped out for a federalised program with highly trained security personnel. Anything that could be <a href="https://www.frontiersin.org/articles/10.3389/fnhum.2013.00654/full">considered a weapon</a> was confiscated.</p> <p>Around the world, travellers were suddenly required to <a href="https://books.google.com.au/books?hl=en&amp;lr=&amp;id=6hBnJ-1hRp0C&amp;oi=fnd&amp;pg=PA86&amp;dq=why+do+I+have+to+take+my+shoes+off+at+airport+security&amp;ots=o6JIFHJzF1&amp;sig=B6azb6xqN2uxM9CP-VZdfyt3Ag0#v=onepage&amp;q=why%20do%20I%20have%20to%20take%20my%20shoes%20off%20at%20airport%20security&amp;f=false">remove their shoes</a>, belts and outerwear, and take out their phones, laptops, liquids and anything else that could be used as part of an improvised explosive device.</p> <p>This lasted for several years. Eventually, <a href="https://www.sciencedirect.com/science/article/pii/S2212478013000944">more advanced</a> screening methods were developed to effectively identify certain threats. Today, some countries don’t require you to remove your shoes when passing through security.</p> <p>So why must you still take your laptop out?</p> <h2>Airport scanners have come a long way</h2> <p>The machine your bags and devices pass through is an X-ray machine.</p> <p>The main reason you have to remove your laptop from your bag is because its <a href="https://www.smh.com.au/traveller/reviews-and-advice/why-do-i-have-to-remove-my-laptop-from-my-bag-at-the-airport-xray-machine-20170320-gv1vqs.html">battery</a> and other mechanical components are too dense for X-rays to penetrate effectively – especially if the scanning system is old. The same goes for power cords and other devices such as tablets and cameras.</p> <p>With these items in your bag, security officials can’t use the screened image to determine whether a risk is present. They’ll have to flag the bag for a physical search, which slows everything down. It’s easier if all devices are removed in the first place.</p> <p>A laptop inside a bag can also shield other items from view that may be dangerous. Scanning it separately reveals its internal components on the screen. In some cases you might be asked to turn it on to prove it’s an actual working computer.</p> <p>With newer multi-view scanning technology, security officials can view the bag from multiple angles to discern whether something is being covered up, or made to look like something else. For instance, people have tried to <a href="https://www.sciencedirect.com/science/article/pii/S2212478013000944">mix gun parts</a> with other components in an effort to pass checked baggage screening.</p> <p>Some airports have upgraded <a href="https://www.smh.com.au/traveller/inspiration/no-more-removing-liquids-and-gels-laptops-at-melbourne-airport-as-new-scanners-installed-20191002-h1ijdf.html">3D scanning</a> that allows travellers to pass their bags through security without having to remove their laptops. If you’re not asked to take out your laptop, it’s probably because one of these more expensive systems is being used.</p> <p>Nonetheless, amping up the technology won’t remove the lag caused by airport screenings. Ultimately, the reason these are a major choke point is because of the speed at which staff scan the imagery (which dictates the <a href="https://www.sciencedirect.com/science/article/pii/S2212478013000944">speed of the conveyor belt</a>).</p> <p>Unless we find a way to automate the entire process and run it with minimal human supervision, you can expect delays.</p> <h2>What about body scanners?</h2> <p>But your bags aren’t the only thing getting scanned at airport security. You are too!</p> <p>The tall frame you walk through is a <a href="https://science.howstuffworks.com/transport/flight/modern/airport-security3.htm">metal detector</a>. Its purpose is to uncover any weapons or other illegal objects that may be concealed under your clothes. Airport metal detectors use non-ionising radiation, which means they don’t emit X-rays.</p> <p>The larger body scanners, on the other hand, are a type of X-ray machine. These can be <a href="https://www.sciencedirect.com/science/article/pii/S2212478013000944">active or passive</a>, or a combination of both.</p> <p>Passive scanners simply detect the natural radiation emitted by your body and any objects that might be concealed. Active scanners emit low-energy radiation to create a scan of your body, which can then be analysed.</p> <p>The kind of machine you walk through will depend on where in the world you are. For instance, one type of active body scanner that emits X-rays in what’s called “backscatter technology” was once <a title="https://electronics.howstuffworks.com/gadgets/high-tech-gadgets/backscatter-x-ray.htm" href="https://electronics.howstuffworks.com/gadgets/high-tech-gadgets/backscatter-x-ray.htm" target="_blank" rel="noopener">used widely</a> in the US, but is no longer used. It’s also banned in <a title="https://www.homeaffairs.gov.au/about-us/what-we-do/travelsecure/passenger-screening" href="https://www.homeaffairs.gov.au/about-us/what-we-do/travelsecure/passenger-screening" target="_blank" rel="noopener">Australia</a> and <a title="https://www.forbes.com/sites/daviddisalvo/2011/11/15/europe-bans-airport-body-scanners-over-health-and-safety-concerns/" href="https://www.forbes.com/sites/daviddisalvo/2011/11/15/europe-bans-airport-body-scanners-over-health-and-safety-concerns/" target="_blank" rel="noopener">the European Union</a>, where only non-ionising technology can be used.</p> <p>Another type of scanner emits lower-energy <a href="https://science.howstuffworks.com/backscatter-machines-vs-millimeter-wave-scanners.htm">millimetre waves</a>, instead of X-rays, to image the passenger. Millimetre wave frequencies are considered to be non-ionising radiation.</p> <h2>AI in our airports</h2> <p>AI seems to be all around us lately, and our airports are no exception. Advancements in AI systems stand to transform the future of airport security.</p> <p>For now, human reviewers are required to identify potential threats in scanned images. However, what if an advanced <a href="https://thinkspace.csu.edu.au/artiificialintelligenceinsecuritycheck/article/">AI was trained</a> to do this using a database of images? It would do so in a fraction of the time.</p> <p>Some airports are already using advanced <a href="https://www.in-security.eu/index.php/editorial/the-future-of-airport-security-faster-smarter-safer">computed tomography</a> (CT) <a href="https://www.theguardian.com/australia-news/2022/jun/21/3d-body-scanners-at-australian-airports-what-are-they-and-how-do-they-work">scanners</a> to produce high-definition 3D imagery. In the future, this technology could be further enhanced by AI to detect threats at a much faster rate.</p> <p>Hypothetically, CT scans could also be used for both humans and their baggage. Could this allow travellers to walk through a body scanner while carrying their bags? Possibly.</p> <p>Until then, you should probably try your best to leave the house on time.<!-- 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/209041/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/doug-drury-1277871">Doug Drury</a>, Professor/Head of Aviation, <a href="https://theconversation.com/institutions/cquniversity-australia-2140">CQUniversity Australia</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/why-do-i-have-to-take-my-laptop-out-of-the-bag-at-airport-security-209041">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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“Turn your phone off”: The simple reason behind Albanese’s warning

<p>Prime Minister Anthony Albanese has issued a clear warning to the public, advising them to "turn their phones off" as a safety measure to avoid potential dangers.</p> <p>Albanese delivered this cautionary message last week while announcing the appointment of Australia's first national cybersecurity coordinator, Air Commander Darren Goldie of the Royal Australian Air Force.</p> <p>Goldie was quick to echo the Prime Minister's sentiments, emphasising the importance of mobilising both the private sector and consumers in the fight against cyber threats.</p> <p>"We all bear responsibility in this matter. Simple actions, such as turning off your phone every night for five minutes, can make a significant difference.</p> <p>"I encourage everyone watching to adopt this practice once every 24 hours, perhaps while engaging in daily routines like brushing your teeth," stated Albanese during the press conference.</p> <p>While rebooting your device on a daily basis may seem like a basic precaution, it can greatly enhance your protection against cybercriminals. Often, various applications and processes continue running in the background of your phone or computer, even when you're not actively using them.</p> <p>If unauthorised individuals gain access to these apps and processes, they can monitor your activities and collect your data, including financial information and identification documents, and even hijack your webcam or phone camera.</p> <p>By rebooting your phone, you force the closure of all background applications and processes, effectively evicting anyone attempting to track your virtual movements.</p> <p>Priyadarsi Nanda, a cybersecurity expert at the University of Technology Sydney, supported Albanese's advice, emphasising the importance of periodically turning off one's phone.</p> <p>"Considering how extensively we use smartphones in our daily lives, there have been cases where individuals haven't turned off their phones for an entire year," Dr. Nanda told <em>The Guardian</em>.</p> <p>"If there is a malicious process running, switching off the phone breaks the chain. While it may only provide protection while the phone is off, it undoubtedly frustrates potential hackers. Although not foolproof, rebooting can make it more challenging for hackers to compromise your device."</p> <p>It is crucial to note that this measure does not safeguard against all forms of cybercrime. If your password has been stolen or you are being repeatedly and strategically targeted, for example, a simple reboot is unlikely to deter the most persistent hackers.</p> <p><em>Image: Wikimedia / Australian Government</em></p>

Technology

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Huge fallout after panicked passenger opens exit door midflight

<p>Asiana Airlines has immediately stopped offering its emergency exit seats after a passenger opened a door during a flight over South Korea on May 26, sparking panic inside the plane.</p> <p>Passengers will no longer be seated in emergency exit seats on its 174-seat A321-200 aircrafts and the 195-seat A321-200s, as a safety measure.</p> <p>According to airline officials, the man, 33, who opened the door was seated near the emergency exit.</p> <p>During preliminary questioning, the 33-year-old told investigators that he felt suffocated and tried to get off the plane quickly, police reported.</p> <p>Twelve people suffered minor injuries as a result, with air blasting in the cabin and terrifying passengers.</p> <p>Some testified they suffered severe ear pain and saw others screaming and crying.</p> <p>A video shared on social media shows passengers’ hair being whipped by air blowing into the cabin.</p> <p>The emergency exit doors usually cannot be opened mid-flight due to the difference in air pressure inside and outside the plane.</p> <p>However, the 33-year-old managed to open the door likely because the plane was flying at a low altitude while preparing to land and there wasn’t much difference to pressure, Asiana Airlines officials report.</p> <blockquote class="twitter-tweet"> <p dir="ltr" lang="en">(warning: distressing)</p> <p>A man traveling on an Asiana Airlines flight opened the plane's cabin door minutes before it came in for its planned landing. <a href="https://t.co/QUIUXuVDgD">pic.twitter.com/QUIUXuVDgD</a></p> <p>— NowThis (@nowthisnews) <a href="https://twitter.com/nowthisnews/status/1662179612804149249?ref_src=twsrc%5Etfw">May 26, 2023</a></p></blockquote> <p>The Transport Ministry said the plane was at 213 metres when the man pulled the door open.</p> <p>The aircraft, which was flying to the city of Daegu from the southern island of Jeju was carrying 200 passengers and landed safely.</p> <p>Passengers onboard included teenage athletes on their way to a track and field competition, according to Asiana Airlines.</p> <p>The 33-year-old told authorities that he had wanted to get out of the plane because he felt suffocated, <em>Yonhap</em> news agency reported, citing police.</p> <p><em>Yonhap</em> said the man told police he had suffered stress after losing his job recently.</p> <p>A district court in Daegu has since approved a warrant to formally arrest him.</p> <p>"I wanted to get off the plane soon," the man told reporters at the court ahead of his arrest warrant review.</p> <p>"I'm really sorry to kids," he said, likely referencing the teenage athletes.</p> <p>Daegu police said they have up to 20 days to investigate the man before determining whether to send him to prosecutors for a possible indictment.</p> <p>If convicted, he faces a maximum sentence of 10 years in prison for breaching the aviation security law that bans passengers from handling entry doors, emergency exit doors and other equipment on board, according to the Transport Ministry.</p> <p>Those who were taken to hospitals were primarily treated for minor issues such as breathing difficulties.</p> <p><em>Image credit: Twitter</em></p>

Travel Trouble

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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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Buckingham Palace in ‘total lockdown’ due to 'loud explosion'

<p>Buckingham Palace has been placed under lockdown after a man reportedly threw shotgun cartridges at the royal residence.</p> <p>International and British media surrounding the palace grounds were evacuated from the area amid the security scare, and a man has since been arrested – with <em>BBC news</em> reporting a controlled explosion was executed by specialists as a precautionary measure.</p> <p>Initial reports suggested King Charles was in residence during the incident, however, the <em>Washington Post</em> has confirmed he was just nearby with Queen Consort Camilla at Clarence House.</p> <p>According to the Metropolitan Police, the man was found to be in possession of a suspicious bag and was arrested on suspicion of carrying an offensive weapon.</p> <p>Speaking to <em>news.com.au</em> workers on the grounds said they heard a “loud bang” around 8pm. They also said the palace was not evacuated but surrounding media outside were cleared from the premises.</p> <p>The Mall, the street which lines from the palace to Trafalgar Square, is cordoned off from the public. Police are telling people in the area that the road is blocked off for a scheduled coronation rehearsal.</p> <p>British politician Jacob Rees-Mogg was in the area when the incident occurred and told <em>GB News</em> he was waiting to go on-air to discuss the upcoming coronation.</p> <p>“People came to us using yellow tabards to say there was an incident and we all had to go. Just an element, of I fear, not ‘keep calm and carry on’ [but] ‘let’s hustle and bustle’.”</p> <p>Ben Briscoe, <em>GB News’</em> Head of Programming, also told the program, “There was definitely a very, very loud explosion … As it stands the Palace and the surrounding areas are in total lockdown and it doesn’t look like it is going to be lifted anytime soon.”</p> <p>The royal standard, which signifies when the monarch is in residence, was not seen above the palace the following day but has since been erected on the roof.</p> <p>The incident comes as Australian Prime Minister Anthony Albanese was one of the first dignitaries to meet the King ahead of the coronation, with his arrival at the palace on May 2.</p> <p>It is believed the lockdown has since been lifted as investigations proceed.</p> <p><em>Image credit: Getty</em></p>

News

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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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00-No: US traveller puts border security to the test with a golden gun

<p>A 28-year-old traveller from the United States has been arrested after Australian Border Force officers allegedly discovered a firearm in her luggage. </p> <p>According to a report on the ABF website, the weapon - a 24-carat gold-plated handgun - was unregistered, and the passenger was not in possession of “a permit to import or possess the firearm in Australia.”</p> <p>If convicted, she will face up to 10 years of imprisonment. And while she was arrested and charged, she was released on bail at Downing Centre Local Court, and is expected to face court again in a month’s time. She remains subject to visa cancellation, and faces the likelihood of being removed from Australia. </p> <p>As ABF Enforcement and Detained Goods East Commander Justin Bathurst explained, the discovery was made with a combination of ABC officer skills and detection technology, one that served to prevent a dangerous weapon from entering the Australian community. </p> <p>“Time and time again, we have seen just how good ABF officers are at targeting and stopping illegal, and highly dangerous, goods from crossing Australia's border," he said.</p> <p>“The ABF is Australia's first and most important line of defence. ABF officers are committed to protecting our community by working with law enforcement partners to prevent items like unregistered firearms getting through at the border."</p> <p>Photos distributed by the ABF present the image of the gun in its case, as well as a scan of the passenger’s luggage, with the gun clearly visible among the rest of her possessions. </p> <p>While travellers on domestic flights within the United States are able to carry firearms in their checked luggage - granted they are unloaded and securely locked away, and the proper authorities have been informed - Australia has much stricter laws surrounding firearms. </p> <p>In the wake of a 1996 Tasmanian tragedy, in which 35 people lost their lives to a gunman, all automatic and semi-automatic weapons were outlawed in the country. Meanwhile, in the United States, a frightening sum of 6,301 were confiscated at checkpoints as of December 2022, according to the Transportation Security Administration.</p> <p>For many, the news was broken on social media, with comments sections reflecting the shock - and disapproval - of the masses, with the occasional 007 reference thrown in. </p> <p>“Smuggling firearms into Australia is a serious offence,” wrote one on Twitter, “and should be met with the full force of the law as it endangers citizen safety.”</p> <p>“That’s a fantastic bit of security work by our airport staff,” someone commended. </p> <p>Another had one very important question, asking “how did she get it out of the US to begin with...??? TSA should have caught that at the airport before she even left. Even if it was in a checked bag, it still had to be declared.”</p> <p><em>Images: Australian Border Force</em></p>

Travel Trouble

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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>

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Don’t let financial shame be your ruin: open conversations can help ease the burden of personal debt

<p>Nearly <a href="https://www.ipsos.com/en-nz/19th-ipsos-new-zealand-issues-monitor">two-thirds of New Zealanders</a> are worried about the cost of living, and a quarter are worried about <a href="https://www.canstar.co.nz/wp-content/uploads/2023/03/Consumer-Pulse-Report-NZ-2023-Final-4.pdf">putting food on the table</a>. But the <a href="https://visionwest.org.nz/food-hardship-part-one/">shame</a> that can come with financial stress is preventing some people from seeking help. </p> <p>According to a recent survey, a third of New Zealanders were not completely truthful with their family or partners about the state of their finances, and 12% <a href="https://www.stuff.co.nz/business/money/129477493/financial-infidelity-research-finds-kiwis-hiding-debts-from-their-partners">actively hid their debt</a>. This shame and worry about money can spill over into <a href="https://www.nzherald.co.nz/bay-of-plenty-times/news/concerns-buy-now-pay-later-schemes-could-fuel-addiction-as-kiwis-spend-17b-last-year/VOV3VIDIG2MZBGJEGPMLGWDMJI/">addiction</a>, <a href="https://www.newsroom.co.nz/i-had-serious-concussion-bad-credit-and-15000-debt-abuse-survivor">violence</a> and <a href="https://corporate.dukehealth.org/news/financial-strains-significantly-raise-risk-suicide-attempts">suicide</a>. </p> <p>Considering the effect of financial stress on our wellbeing, it is clear we need to overcome the financial stigma that prevents us from getting help. We also <a href="https://www.apa.org/topics/money/family-financial-strain">owe it to our kids</a> to break the taboo around money by communicating our worries and educating them on how to manage finances better. </p> <h2>The burden of growing debt</h2> <p><a href="https://www.stuff.co.nz/business/money/300817697/mortgage-pain-homeowners-facing-repayment-hikes-of-up-to-900-a-fortnight">Ballooning mortgage repayments</a> are compounding the financial distress of many New Zealanders. At the beginning of 2023, an estimated 11.9% of home owners were behind on loan payments, with more than <a href="https://www.rnz.co.nz/news/business/485045/data-shows-430-000-new-zealanders-behind-in-credit-repayments-in-january">18,400 mortgagees in arrears</a>. </p> <div data-id="17"> </div> <p>Given the <a href="https://www.treasury.govt.nz/publications/an/an-21-01-html">majority of household wealth</a> in New Zealand is in property, our financial vulnerability is closely linked to the ebbs and flows of the <a href="https://content.knightfrank.com/research/84/documents/en/global-house-price-index-q2-2021-8422.pdf">second most overinflated property market</a> in the world. </p> <p>There are also cultural reasons for growing financial distress. Many households have taken on significant debt to “<a href="https://www.stuff.co.nz/business/7616361/Keeping-up-with-the-Joneses">keep up with the Joneses</a>” and to pursue the quintessential <a href="https://www.interest.co.nz/property/99890/westpac-commissioned-survey-suggests-many-new-zealanders-still-pine-quarter-acre">quarter-acre dream</a>. Social comparison and peer pressure act as powerful levers contributing to problem debt and over-indebtedness. </p> <p>The average household debt in New Zealand is more than <a href="https://tradingeconomics.com/new-zealand/households-debt-to-income">170% of gross household income</a>. That is higher than the United Kingdom (133%), Australia (113%) or Ireland (96%).</p> <h2>The rise of problem debt</h2> <p>And we are digging a deeper hole. Over the past year, <a href="https://www.rnz.co.nz/news/business/485045/data-shows-430-000-new-zealanders-behind-in-credit-repayments-in-january">demand for credit cards increased by 21.7%</a>. The use of personal debt such as personal loans and deferred payment schemes <a href="https://www.nzherald.co.nz/business/demand-for-personal-credit-rises-arrears-also-up-as-cost-of-living-bites/YCEM74CII5FQBPJXO3UOG4Y3GY/">is also climbing</a>. There is a real risk this debt could become problem debt. </p> <p>Problem debt can have severe and wide-reaching consequences, including <a href="https://theconversation.com/over-300-000-new-zealanders-owe-more-than-they-own-is-this-a-problem-173497">housing insecurity</a>, <a href="http://www.socialinclusion.ie/publications/documents/2011_03_07_FinancialExclusionPublication.pdf">financial exclusion</a> (the inability to access debt at affordable interest rates), <a href="https://www.tandfonline.com/doi/full/10.1080/07409710.2012.652016?journalCode=gfof20">poor food choices</a> and a plethora of <a href="https://bmcpublichealth.biomedcentral.com/articles/10.1186/1471-2458-14-489">health problems</a>. </p> <p>Yet, the hidden <a href="https://spssi.onlinelibrary.wiley.com/doi/10.1111/sipr.12074">psychological</a> and <a href="https://link.springer.com/article/10.1007/s11205-008-9286-8">social cost of financial distress</a>remains often unspoken, overlooked and underestimated.</p> <p>Even before the pandemic, <a href="https://www.scoop.co.nz/stories/BU1909/S00616/research-shows-financial-stress-impacts-mental-wellbeing.htm">69% of New Zealanders were worried</a>about money. The share of people worrying about their financial situation was higher for women (74%), and particularly women aged 18-34 (82%). It is no coincidence that the latter are particularly at risk of problem debt through so-called <a href="https://acfr.aut.ac.nz/__data/assets/pdf_file/0008/691577/Gilbert-and-Scott-Study-2-Draft-v10Sept2022.pdf">“buy now, pay later” schemes</a>. </p> <p>The stigma of financial distress extends beyond the vulnerable and the marginalised in our society. A growing number of <a href="https://www.rnz.co.nz/news/political/467417/middle-income-families-hoping-for-help-in-budget-as-rising-costs-sting">middle-class New Zealanders </a> are quietly suffering financial distress, isolated by financial stigma and the taboos around discussing money. When pressed, one in two New Zealanders would rather <a href="https://www.scoop.co.nz/stories/BU2203/S00384/research-shows-wed-rather-talk-about-politics-than-our-finances.htm">talk politics over money</a>. </p> <h2>Time to talk about money</h2> <p>Navigating financial distress and <a href="https://digitalcommons.law.seattleu.edu/cgi/viewcontent.cgi?article=2526&context=sulr">stigma</a> can feel overwhelming. Where money is a taboo subject, it may feel safer to withdraw, maintain false appearances, be secretive or shun social support. </p> <p>This tendency to avoid open discussions and suffer in silence can lead to <a href="https://loneliness.org.nz/lonely/at-home/financially-struggling/">feelings of isolation</a> and contribute to <a href="https://theconversation.com/how-financial-stress-can-affect-your-mental-health-and-5-things-that-can-help-201557">poor mental health</a>, such as depression, anxiety and emotional distress. </p> <p>Sadly, the trauma of living in financial distress can also <a href="http://irep.ntu.ac.uk/id/eprint/39442/1/1307565_Wakefield.pdf">break up families</a>. Losing the symbols of hard-gained success and facing the prospect of a reduced lifestyle can be tough. It often triggers feelings of personal failure and self doubt that deter us from taking proactive steps to talk openly and seek help. </p> <p>But what can families do to alleviate some of this distress?</p> <h2>Seek help</h2> <p>First, understand that <a href="https://www.ft.com/content/86767aac-98e0-4dae-8c5a-d3301b030703">you are not alone</a>. Over 300,000 New Zealanders <a href="https://theconversation.com/over-300-000-new-zealanders-owe-more-than-they-own-is-this-a-problem-173497">owe more than they earn</a>.</p> <p>Second, seek help. There are many services that help people work through their financial situation and formulate a plan. In the case of excessive debts, debt consolidation or <a href="https://goodshepherd.org.nz/debtsolve/">debt solution loans</a> may help reduce the overall burden and simplify your financial situation. </p> <p>For those struggling with increasing interest on their mortgages, reaching out to your bank early is critical. During the 2008 recession, banks in New Zealand <a href="https://www.beehive.govt.nz/release/banks-exchange-letters-crown-support-distressed-mortgage-borrowers">worked with customers</a> to avoid defaulting on mortgages, including reducing servicing costs, capitalising interest and moving households to interest-only loans. It is essential to understand that the <a href="https://www.stuff.co.nz/life-style/homed/real-estate/130677426/are-we-on-the-brink-of-a-wave-of-mortgagee-sales">banks do not want mortgagees to fail</a>, and that options exist.</p> <p>To help future generations avoid debt traps, we need open communication about money – also known as “<a href="https://link.springer.com/article/10.1007/s10834-020-09736-2">financial socialisation</a>”. This includes developing values, sharing knowledge and promoting behaviours that help build <a href="https://files.eric.ed.gov/fulltext/EJ1241099.pdf">financial viability and contribute to financial wellbeing</a>. </p> <p>The lessons about handling money from family and friends are crucial for <a href="https://www.frontiersin.org/articles/10.3389/fpsyg.2020.02162/full">improving our children’s financial capability</a>, helping them be <a href="https://www.fsc.org.nz/it-starts-with-action-theme/growing-financially-resilient-kids">more financially resilient</a> and better able to survive the stresses we are experiencing now – and those <a href="https://www.stuff.co.nz/business/money/300836616/heres-how-much-household-costs-are-expected-to-increase">yet to come</a>.</p> <p><em>Image credits: Getty Images</em></p> <p><em>This article originally appeared on <a href="https://theconversation.com/dont-let-financial-shame-be-your-ruin-open-conversations-can-help-ease-the-burden-of-personal-debt-202496" target="_blank" rel="noopener">The Conversation</a>. </em></p>

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Are you financially literate? Here are 7 signs you’re on the right track

<p>With the cost of living and interest rates rising, a growing number of Australians are struggling to manage their <a href="https://www.smh.com.au/money/planning-and-budgeting/almost-half-of-australia-is-financially-stressed-here-s-one-way-to-fix-it-20221011-p5bowq.html">finances</a>. Many are experiencing real <a href="https://www.anu.edu.au/news/all-news/australians-under-increasing-financial-stress#:%7E:text=The%2520level%2520of%2520financial%2520stress,say%2520they%2520are%2520struggling%2520financially">financial stress</a>.</p> <p>But even in the best of times, managing your finances is hard. Every day, you’re making complex financial decisions (some of which carry huge ramifications) and there are more financial products and services available than ever before. Navigating this minefield can be overwhelming and lead to financial anxiety.</p> <p>Being financially literate helps. But what does “financial literacy” mean in practice?</p> <p>Here are seven signs you’ve got the basics covered.</p> <h2>1. You track your cashflow</h2> <p>By tracking your cashflow on a regular basis, you’re ensuring your expenses don’t exceed your income. In other words, you make sure you’re earning more than you spend.</p> <p>A good sign you’ve successfully managed your cashflow is that you have a surplus or a buffer.</p> <p>These left-over funds can be used to boost savings, pay off debt or meet other financial commitments.</p> <p>Cashflow management allows you to assess whether there are opportunities to increase your savings and/or reduce spending. Being able to manage your earnings and spending is a key financial skill.</p> <h2>2. You have a budget – and you follow it</h2> <p>Setting and following a budget requires financial discipline, which is a key part of financial literacy.</p> <p>By following a budget, you’re putting a measure in place to live within your means and reduce the risk of overspending.</p> <p>With all the competing demands that come with managing money, your budget can be a tool to keep you on track. And developing this habit over time can empower you to make wise financial decisions.</p> <h2>3. You understand the difference between good debt and bad debt</h2> <p>Love it or hate it, debt forms part of our financial portfolios and sustains the financial institutions we interact with. Knowing how to make debt work for you is a skill and a sign of good financial knowledge. It is crucial to understand the difference between good debt and bad debt.</p> <p>Good debt is debt used to improve your long-term financial position or net worth, such as a home loan.</p> <p>Bad debt tends to be consumption-driven and doesn’t have lasting value. Examples include payday loans or retail accounts.</p> <h2>4. You have your money in various places</h2> <p>One of the key concepts of financially literacy is understanding the importance of diversification.</p> <p>By having your money spread across various places (such as a savings account, property, the share market, superannuation and so on), you’ve reduced the concentration of risk.</p> <p>This helps protect your wealth in tough economic times.</p> <h2>5. You understand how financial assets work, along with their pros and cons</h2> <p>Financial assets refers to things like cash, shares and bonds. It’s important to understand how financial assets work and how they can either help or hurt your financial position.</p> <p>For instance, savings accounts are a safe financial instrument that earn interest on the amount accumulated within the account. But the fact they’re so safe also means that they won’t outperform inflation.</p> <p>This type of knowledge is an imperative part of financial literacy.</p> <h2>6. You’re aware of your financial strengths and weaknesses</h2> <p>Financially literate people reflect on their capabilities.</p> <p>When you can appreciate where your financial strengths and weaknesses lie, you can make better financial decisions and prioritise your needs.</p> <p>On the other hand, being oblivious to your strengths and weaknesses means you miss opportunities to improve your financial health.</p> <p>For example, perhaps you buy unnecessary stuff when you feel sad. Or maybe you panic when faced with tough financial choices and make quick decisions just to make the problem go away.</p> <p>Neglecting to reflect on patterns of behaviour can lead to serious and possibly irreversible financial mistakes.</p> <h2>7. You set financial goals and put measures in place to meet them</h2> <p>Financially literate people plan for their finances. This involves setting goals for either earnings, savings, investments, and debt management or putting measures in place to protect wealth (via, for example, insurance to protect your wealth against loss).</p> <p>Setting goals is one thing, but it’s also important to have a system and habits in place to achieve them.</p> <p>Make sure you understand what you’re trying to achieve with your goals, why the goals are important and how you’ll achieve them.</p> <p>Boosting your financial literacy can feel tough at first. But tackling your finances head on, controlling spending, participating in financial markets, handling debt, being able to understand financial assets and working towards financial goals can help you feel in control of your financial situation.</p> <p><em>This article originally appeared on <a href="https://theconversation.com/are-you-financially-literate-here-are-7-signs-youre-on-the-right-track-202331" target="_blank" rel="noopener">The Conversation</a>.</em></p> <p><em>Images: Getty</em></p>

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