1) Track your money
According to the Australian Security and Investments Commission, the average Aussie household will spend A$69,166 this year on general living costs (or A$1,290 per week). If you want to check out the household spends by regions check out their spending clock. Sorry I don't have comparable stats for NZ. That spending clock is ingenious.
What's disturbing is that ASIC reports that more than half confess they don't know how that money will be spent and on what exactly. To help households figure it out and manage their money more effectively, ASIC has launched a free app called TrackMySpend. It enables users to track the money flows by logging all expenses into a smart phone or tablet. It also also users to set saving targets and spending limits to keep behaviour in line with budgets.
Why should you care living here in New Zealand? Alas, because it works here too. I downloaded it into the boss's iPad and gave him a personal spending allowance for next month. I'll report back and let you know how he's getting on with that mission. I'll also test drive it on my own technology and report back on its functionality. At first blush, I'd say it looks like the app I've been searching for. You'll forgive me that I found it in Australia, I hope.
You can download TrackMySpend on ITunes for free. While you're at it, check out ASIC's MoneyStart website (which works in conjunction with the app). Heaps of cool tools and calculators. You might prefer to use Sorted.org.nz but whatever works eh?
2) Teach 'em well
Teachers are notoriously bad with money. It's not just my impressions, having been married to one. I hear this all the time, mostly from teachers. It doesn't bode well for our kids which is why there are growing efforts to train teachers in personal finance so they can become better educators themselves.
Canadian Andrew Hallam, author of the Millionaire Teacher; The New Rules of Wealth you Should have Learned in School, is an exception to the rule. I'm sure he's not the only one, in fact I know he's not having connected with one of our readers, a teacher on track to retire before 50. In this Globe and Mail interview with Hallam (who now lives in Singapore) he discusses the pros and cons of moving abroad to save money. In Singapore the top tax rate is 18%. Hallam pays 9%. The danger of having more disposal income is you just end up blowing in on your lifestyle, he says.
Hallam's advice in a nutshell: make sure you do the math before you make the move and mind the personal finance pot holes along the way.
3) Imbibing idiot bias
The three martini lunch thing was before my time. Sadly, or perhaps happily, it's one trend that seems destined never to experience a comeback. The Economist takes a sobering look at workplace culture today and the "imbibing idiot bias". Don't even think about that wine spritzer at lunch. It'll kill your career prospects. Really? Any mercy for mojitos I wonder?
4) Equities dead? Hardly
There's been a fair bit of talk about the death of equities. Admittedly, the picture is not a pretty one these days, but dead? Hardly. This piece by yakezie.com looks at some of the historical trends and argues that what we're experiencing isn't a fatal illness in the markets but a reversion to the mean following an usually robust bull run. He reckons those with the gumption to stay invested will reap the rewards down the track.
5) An uneven split
When couples split, the courts dictate a 50/50 division of assets. The trouble is for women who have sacrificed career to raise children, the split can often leave them severely short changed when they lose their biggest asset; their partner's future earnings, the basis of which the home-based spouse helped to foster largely at her own expense. Eloise Gibson, writing for Business Day, reports on new research in NZ showing who ends up with the short end of the stick.
To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter @amandamorrall
5 Comments
Be very careful about the idea that somehow divorce isn’t 50/50. In the US there were a ton of laws passed “protecting” women form unscrupulous dead beat dads. Unfortunately this swung the pendulum too far the other way and gave women unprecedented “see no evil” power. Women often use the system to their advantage and now men are the ones that are often walking away homeless, flat broke and sometimes in jail on trumpet dup charges. Even in a no-fault divorce state like California it’s not unusual for no-asset divorces to take many many years and in the end only the lawyers win.
Also, nobody is holding a gun to anyone’s head and forcing women to give up careers to have children. Deciding to stay at home has its risk and rewards like any other career change. Why should there be any more importance place on that particular economic decision then deciding to make nay other career choice. A divorce should be just that a divorce and not another revenue stream. If the bread winner, in the course of a divorce, loses their livelihood or has to pay 50, 60 or even 70% of their pay to their ex how does the help the children? After a divorce the only financial priority should be towards the children and not the adults. There are way too many “desperate housewives” running around southern California living off the spoils of divorcing their very wealthy husbands. They are living in the lap of luxury that “they are accustom too”. Divorcee is not about the status quo it’s about change. So if we start enacting laws to make divorce “more fair” then what is in it for the bread winner in the relationship? There will be no economic incentive for marriage at all since the bread winner will always be skeptical that their partner is only in it for a payday.
I'm married to an accountant, so it's no surprise that for the first 20 years of our marriage we had very detailed breakdown of where all the money went. What I didn't like about it was the mental tendency towards defending every cent. I wondered if it wasn't making us less generous as people.
I'm not suggesting you go about blindly spending more than you earn. But if you have worked hard and have the fortune to live with comfort then spending your time watching your money lest a single cent end up in the wrong place isn't very healthy.
As I said once before, to pinch pennies is to foster a life long habit of looking down.
#2 Teachers not good with money? I think Stanley in "The Millionaire Next Door" used IRS data to show they're actually pretty good with their money. As a teacher I'd say our family is doing well given our income and I'd say the same of most teachers I've met. WHenever I hear teachers should do the parenting comments I wonder where this meant to happen? Primary or Secondary school?
Number 2: I estimate that of my 60 colleagues in a provincial high school that about 30 live pay day to pay day. 10 of them are seriously in debt with a sizable negative net worth, a further 10 are reasonably well off and the final 10 have a sizable net worth. And it seems to me that those with the lowest net worth have the strongest and loudest opinions on financial matters. The best people to teach financial understanding...........?????
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