As the new financial year begins, personal finance journalist Nicole Pedersen-McKinnon explains how grateful she was – when blindsided by a life crisis – that she walks her money talk
“I’m sick of the hustle.”
“The workload intensification is extreme.”
“Pitching week after week… all the effort you can’t invoice for: it just grinds you down.”
Sound familiar? Yep, for most of us.
Working in media is more professionally and financially hectic than ever… such that personally, in the past couple of years, there are things you’ve probably, unfortunately neglected.
I’m talking about the important stuff like financial future-proofing. Hell, possibly even changing your phone plan!
How grateful I was – when I was blindsided by a life crisis – that I ‘walk’ my money ‘talk’ with my powerful but simple blueprint to survive tighter times now and – just in case – tougher ones later.
What to do F.I.R.S.T. Indeed, today.
F. is for Holy Shit Fund - get one of these just in case ‘shit happens’.
I didn’t know I would find a malignant lump in my breast aged 45… in a million years, I didn’t think my marriage would end either… and I sure didn’t expect both within three months of each other.
But my wonderful former husband and my Holy Shit Fund – economically at least – saved the situation. And that’s a huge weight off when everything else is weighing so heavily.
A bit of a buffer helps hugely when salary is uncertain, too. Almost half of us, says the latest Women in Media Industry Insight Report 2024, are concerned about the impact of budget cuts in our industry.
You should aim for a cash stash of six months’ salary – don’t stress if you have very little reserved now but save what you can over time to build some peace of mind.
And sit it safely and sagely, if you have a mortgage, in an offset account alongside of it.
I. is for Insurance - three insurances are vital. Firstly, I credit health insurance with, umm, my life.
True, it’s expensive but you will pay a tax penalty if you don’t have it and earn over $97,000 (singles) or $194,000 (couples). You also get a tax rebate.
Besides, if you buy extras and claim all the allowances and freebies (hello bi-annual dental checks and cleans for the whole family), you can make it pay for itself.
For me, private health covered most of the cost of a double mastectomy and simultaneous reconstruction… to stop cancer in its tracks. My hospital bill alone would have been $30,000.
But your protection needs don’t stop there. How would you pay your bills if accident or injury left you unable to work? Insurance for income protection is vital, especially if you are single. It’s tax deductible as well.
And safeguard any dependents with life insurance – they won’t want your debts and will need looking after.
R. is for Rates (not mates) – forget loyalty when it comes to your home loan… it’s likely leaching money from you.
There is now a massive 3 per cent between the highest and lowest mortgage interest rates, Mozo tells me.
That didn’t make you sit bolt upright? Then realise it would put about $1000 back in your pocket a month to switch a pretty typical $500,000 home loan.
If you can’t refinance though, because you won’t get approved now rates have risen so high, just threaten to leave… and cite the best interest rate you find online, currently 5.89 per cent.
You might get an instant discount for no further effort!
S. is for Superannuation – did you know super is inherently sexist?
We’re all acutely aware of the 21.7 per cent gender pay gap, calculated by the Workplace Gender Equality Agency – and pay is a concern for an enormous 58 per cent of the women who are considering quitting the media industry, WiM’s Insight survey says.
As an employee, rises are rare and as a freelancer, getting paid at all can be a fight. And show of hands who’s sick of hearing: “Do it for the profile”?
(This freelancer – because I’m a known subject expert – in the privileged but impossible position of being quoted by other journalists who then get to invoice for my words. “Just email your responses to my questions,” they say. It’s a tricky one!)
Well, super bakes in low pay and career pauses to care for kids, such that the average woman now retires with 25 per cent less than men, according to the Association of Superannuation Funds of Australia.
Super fix 1: The new financial year means a lift in what your employer must pay into your fund, to 11.5 per cent. Check you’re getting it.
Super fix 2: With your annual statement arriving about now, run a vital ruler over your fund: the median Balanced fund made a decent 8.8 per cent after fees the past year and 6.2 per cent a year over five, according to SuperRatings. Did yours? Ranking your fund – and ditching a dud – is now easy via MyGov’s YourSuper portal. https://www.ato.gov.au/calculators-and-tools/super-yoursuper-comparison-tool
Super fix 3: That potential $1000 monthly mortgage saving from above? A salary sacrifice into super should turn it into far more and make your retirement dramatically brighter.
T. is for Tests – make time for self-care… and your well-being.
Particularly, finally cross off those medical tests that have been languishing on your long to-do list.
Because – trust me – health is wealth.
Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available at www.nicolessmartmoney.com.
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