Money School

Q. How can someone prevent investments crashing?

A. You can't, and more's the pity.

Here's the thing:

The economy waxes and wanes.

Markets go up and down.

It's all cyclical.

That's little comfort when you're watching your assets tank of course.

What you can do is:

▪️ Don't use money you can't afford to lose. Expect that cash to be tied up for 5+ years when you invest it.

▪️ Don't put all your eggs in one basket. Different markets move in different cycles. By having some investing across multiple markets, you are less likely to lose it all in one fell swoop.

▪️ Decide if you're even going to watch. You don't have to check your shares every day, and in fact probably shouldn't. If you're a long term investor and you've bought a quality asset you don't intend to shed, then stop looking regularly if it stresses you out.

▪️ Be prepared to understand what you're investing in. There's a difference between a correction, a recession, a depression and a crash. Know what you're looking at.

▪️ Don't confuse speculating with investing. I'm lookin' at you, .

Here's some reassurance on the whole issue: https://bit.ly/3Lp1WCU

*** This question came up in the most recent seminar. It's the fourth time Lacey has delivered the 'Securing your financial future' session for Future Women and, as always, the participant questions were fabulous! Thanks to all who attended.

💳 Credit cards.

⏳ Buy Now Pay Later.

💸 Pay advances.

It's never been easier to get your hands on the things you want sooner with a handy bit of debt on your side.

⚠️ Don't fall for it! It's a trap!

When it comes to buying anything that's not an asset, if you couldn't pay cash for it without resorting to debt, you can't afford it.

Instead of relying on debt - which will have to pay off later - hold off on buying that thing until you've saved enough to pay in full with cash.

Perhaps most importantly, once you have the cash set aside, you can then use a debt option like BNPL or a credit card to make the actual purchase. Just make sure you use the cash you set aside to pay it off in full before you're charged any interest or fees.

I realise this is a big ask.

We've gotten used to buying what we want, when we want it, regardless of how much cash we've got.

But, that instant gratification habit is bad news.

Learn to savour the wait.

Embrace as your friend on the journey to financial independence.

will thank you for it.

Six million properties have mortgages against them in Australia. Odds are good that you’re holding one of them.

If not, you might be among the aspiring home buyers wanting to join Australia’s mortgage-paying masses.

Whether you’re living in the property or you rent it out, paying interest on a mortgage sucks. It means the price you pay for the property is actually much higher.

For example, if you had a $500,000 mortgage at three per cent interest over 30 years and you made the minimum repayments, you’d give the bank $758,000 back.

$500,000 is the original amount you borrowed. The extra $258,000 is interest.

If interest rates get back to five per cent over the life of that loan - which is a reasonable average to expect - that interest swells to $466,000.

It’s a big chunk of change!

Read the full article on Kidspot at https://bit.ly/47KNSg0

We couldn't agree more, KJ. Thanks so much for the review!

'We all need financial literacy. Particularly women. Read it, make the changes best for you. Easy.'

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When should your kids have access to their own bank account?

Like all things parenting (and grandparenting these days!) there's many ways to approach this, and none are 'right' or 'wrong'.

There's only what works for *you and your family*.

In this chat with Dustin Skipworth on 3 August 2023 for ABC Perth Radio Afternoons, we covered some points to think about when making this choice.

Above all, I think it's important to acknowledge and work with that the personality of the child at least as much as what's considered sound financial education practise.

In my case, I've got one child who's a committed saver. I'm going to have to work hard to get that one to part with ANY cash to buy something wanted - though they'll also give their money away to a person in need in a heartbeat, so that's nice.

Then I've got one child who translates all money into how much LEGO it'll buy.

I told them the balance of their savings accounts recently, after they asked.

I fear I've made a mistake.

'Mum, mum, mum - I could get the Hogwarts Castle AND the Millennium Falcon!'

On the plus side, LEGO kid is getting some excellent mental maths practise by calculating the balance of the account if we bought so-and-so LEGO set.

..which said child has already researched online to find the best price.

Whatever way you choose, remember:

1. You can change your mind if it doesn't work.

2. Don't be afraid to let them make (what you deem to be) mistakes. Better to make them while the stakes are small than to wait till they're taking on a mortgage, right?

Listen to the 5min chat here: https://ab.co/45brGcY

Let’s be frank.

We all love a good day relaxing at home.

All-day PJ’s, sleeping in and doing all our favourite things are part of the package.

Sound like you? You might be a “self-confessed homebody”.

Shannon Hendley, who is one such homebody, says she thrived at home during the 2021 lockdown.

A lot of self-care and well-being also came with major savings to her account.

Being home more means that you have great control over your finances.

Lacey says: "You can prepare food and drink cheaper than you can buy it when you're out, even considering the cost of storage, heating and refrigeration.”

You can read about the various benefits of having a full at-home day in this ABC Australia article here:

https://ab.co/45w1L0q

Q. What if you have a large family and worry about not being able to work full time and care for lots of kids and elderly parents in case one of the partners gets sick or dies?

A. This keeps people awake at night, and with good reason sometimes.

The first things to think about are:

➡️ A decent cash buffer fund for each partner/couple/family unit, so if someone loses their job or dies, there's cash to get through a short period while they make other arrangements.

➡️ Life/TPD/income protection insurance, possibly within super and depending on how old the people involved are (it's rare to have life insurance in your 70s for example). Like a cash buffer, this is to get the family unit through a short period while they get a plan together.

➡️ Making long-term choices re: earning. If there's one 'breadwinner' and they get sick or die, you're exposing the whole unit to risk of not being able to replace that income. The more people capable of earning an income, the better.

➡️ Making sure everyone's financial house is in order. This means they each have a will, an enduring power of attorney, an enduring power of guardianship, and a file with all their pertinent info (mine's a hard copy file in our safe that starts with "Oh no, I'm dead! This sucks. At least you won't have to go looking for my finance info, because here it is..." and lists all my accounts, super, shares, mortgages, insurances etc).

➡️ Drawing some mental boundaries. For example, I believe you don't owe your adult kids anything and I'd think seriously about whether you want to be financially caring for a parent. Everyone's situation is different, and if that sounds harsh, it's because I think a lot of obligation is foisted onto women to take caring roles and that can include looking after people financially. I'm not saying don't do it - I'm saying make it a considered decision, not an automatic assumption.

*** This question came up in the most recent seminar. It's the fourth time Lacey has delivered the 'Securing your financial future' session for Future Women and, as always, the participant questions were fabulous! Thanks to all who attended.

Some people will tell you that you must share everything for a marriage to be successful, including all money and investments.

I'm calling BS on that idea.

Your relationship is not doomed to failure if you decide to keep your cash separate.

Likewise, you may find it works best to combine some cash and assets, but not others.

But please note: joint accounts are a CHOICE, not a given.

If you're wondering whether a joint account is right for you and your partner, I wrote an article on to help you decide: https://bit.ly/4t8pHj8

What works for you and your partner? Let me know in the comments - I'm always keen to hear different approaches!

Budgeting apps are fabulous for some, but if you’re like me* they might not appeal...

For starters, most people shudder at the word ‘budget’. I suspect accountants are about the only people who get excited when they hear that B word! But that doesn’t mean you can’t create a robust money management system to handle your spending plan.

Even better, you can do it for free and with fewer security risks. Enter the Budget By Bank Balance method (or 4Bs as I like to call it) - it’s been my approach to cash flow management for 20 years now.

I haven’t seen an app good enough to tempt me away from it… yet.

Read the full article on Kidspot at https://bit.ly/3JRFdhR