I’m still baffled at times by the financial services industry in Australia. You’d think they’d be getting their act into gear after the Royal Commission exposed all the lies they’ve been spouting and dodgy deals and all that stuff. It sounds horrible and cynical to say, but you need to understand finances because history (or current reality) has shown us that you can’t trust your bank/adviser etc to actually do what’s best for you.
Financial literacy is actually something I would say requires a lot of knowledge. I wouldn’t consider myself financially literate, even though I DIY’d my financial review last year. In my book, being financially literate would mean I’d actively be interested in new products, news, ideas and so on. And I’m not.
I’m interested in my finances. So I consider myself not financially literate, but financially aware. I know what I have. I know what it roughly looks like. Most importantly, I know how to check for details.
Please Try To Be Financially Literate (Or At Least Financially Aware)
The Super Fund Email
Recently, I received an email with my insurance statement (life and TPD coverage summary) from one of my super funds. All good, I understand they send these so you’re up to date. It said on the introductory page that my super balance is going down. It’s not the account my day job super goes into so logically it doesn’t grow a great deal, but going down? I thought that was odd.
I logged into my online account and saw that my super balance is still going up. If I didn’t already have a sense that my super balance was indeed going up each year, then I could have panicked at the insurance statement. Instead, I merely logged in and verified my understanding.
Having a sense of where I am made verifying my understanding a simple, two minute task. In my book, this is the advantage of being financially aware – there is no panic, there is a quick & easy task to verify the truth.
I have no idea why the insurance statement said that I was losing money when it’s a blatant lie. I assume that it’s their cash grab, designed to induce panic and make you roll all your accounts into their account only.
More Than One
You may have noticed from context clues that yes, I have more than one super fund. In fact, I have three. This happened by semi accident but has been kept by active choice. It’s probably an unpopular choice that you won’t read about elsewhere, however, it suits my personal preferences and circumstances.
With financial stuff – always remember that myself, or 99% of people who may talk to you about this, are unlikely to be an expert (and I am NOT a financial adviser!) and also that you can make the choice that YOU feel comfortable with. It’s not the broker/adviser who has to live with the consequences of a crappy decision, it’s you. You can make an unpopular decision, if YOU feel it’s right for you.
Please Be Aware
It worries me when people say that their partner does the finances, or that they don’t really know what’s in their bank account or how much debt they have (or whatever it is along these lines).
Checking your finances and super and all that is not really considered fun (and it took me months to fully review my circumstances in 2017)… but how will you know if you don’t, well, know? You don’t have to be a spreadsheeting obsessive to have a sense of where you are with your debt, budget, super and insurances (and anything else that I’ve forgotten about financial wise).
I think it’s healthy to know the rough idea of where you are. It reduces the “oh shit can I pay this/OMG I don’t want to check my bank balance” feelings. Wouldn’t it be nice to not have that feeling?
Do you consider yourself financially aware on a personal level? Do you make sure you check your letters when they come from super companies (and insurers and all those companies?)
I’ve always had to manage my own finances obviously (always been single) but my superannuation is the one thing I don’t fully understand. I combined almost all of mine a few years ago, so only have two and I left my Commonwealth Government one separate as there were some penalties at the time from transferring it over. And then I have my State Gov QSuper account. I did notice my balance was significantly less than it had been years ago and assume that’s because the market had dipped. But I really probably need to better understand it cos I have no idea what’s there, what I’m owed and when etc…
I think I live in this false hope that – because most Qld Government employees use it – they can’t screw people over, but guess that’s not necessarily the case!
I guess you haven’t seen the news about QSuper and what they did to some defined benefits accounts then… pretty crap stuff happened & they are making people already on a pension repay significant money.
I can’t say I understand super a lot – but I have enough of an understanding to know where I’m at and that I’m ok with my choices within the funds. My main super account has a lovely woman we can meet with in person for free and while it isn’t personal advice, the other year I went to see her a few times and asked ALL the dumb questions and she answered them all very patiently.
I’ve become more personally aware of my finances thanks to learning through some very painful mistakes in trusting the wrong people. Thanks for the reminder to always keep on top of these things.
I am fortunate to have a trustworthy accountant and the advisor who helped me with life insurance.
SSG xxx
I think sometimes those mistakes help us learn the lesson in a way we don’t ever forget !
I thought I’d left a comment, but obviously it didn’t save. This is a soapbox issue for me. When I was working in retail banking I saw way too many people who had no idea about basic financial matters. Unfortunately, too many of these were recently separated women who had assumed that he would look after that – until he didn’t. Know your own money, people – regardless of your relationship status!
Yes!! So much. It’s too important to assume someone else knows best.
I agree entirely. Fortunately I’ve always taken an interest in our finances and as a former bookkeeper I was in charge of our company’s accounts. I do know a few woman who openly admit that they have no idea about their financial situation. They think it’s their husband’s domain and boy aren’t they going to be in for a shock when they’re on their own! #TeamLovinLife
It shocks me that it being the “husbands job” is still a thing, it really does!
My part-time day job is in a supermarket. It constantly astounds me how many people don’t have a clue how much money they do or don’t have in their accounts or how many accounts they have. One card will decline and they’ll just whip another one out and try it.
This literally happened to me this morning. I was buying $4 of things in the supermarket and my card got declined. I know full well I had more than $4 in it so I was of the pffft stupid machine mindset than “oh crap” mindset. Worked the second time so I guess the machine was in a bad mood the first time!