Article Your relationship with money according to The Beatles 30 May 2023 Read time: 4 min Aussies, we’re doing it pretty tough when it comes to money. Collectively, we’re getting ravaged by the increased cost of living with 7% inflation, higher mortgage repayments after 11 cash rate rises, and stalled wage growth. The perfect, wicked storm. It’s a very challenging economic picture to accept. Like many, you’re probably battening down the hatches to brave an uncertain time. Given this, we thought it was worth checking in… How are you dealing with things? How’s your money mindset at the moment? We’ve got a few tips to help you better frame your money mindset, that are easily actionable for your household and business (we promise!) To make just a little light of our dark and cloudy economic times, we’ve framed our thoughts around some of the Beatles songs. Um, ok, why? Because like with the world’s-greatest-band-of-all-time, sometimes, it’s best to go back to the classics. You can’t beat solid, classic rock, and you can’t beat solid advice. You Never Give Me Your Money. This track is about the financial struggles the Beatles faced towards the end of their career due to tension with their manager (yep, even the Beatles did it tough, or tough for them). Money can create tension and resentment in personal and business relationships, especially if we feel we don’t have as much of it as we think we should (like our salary, or our hard-earned savings). So, let’s check in. What can you do to ease the push-and-pull? You know, those home and work tensions that arise in any relationship, especially in families that own and run businesses together. Our very own Paul Kearney tells us one of the best things you can do is get a really detailed household financial plan in place. If you do nothing else, a good, solid budget and cash-flow management system can ease a lot of pressure. And, if you happen to run a business as well, we suggest working with a team of advisers (nudge, nudge our IATs). This way your needs and goals are understood from a 360-degree perspective. And, your plans, budgets and forecasts can be fully integrated to ensure both your work-life and life-life are on the same page. Can’t Buy Me Love. How do you advocate for yourself when it comes to money with your employer? How do you divide and conquer in your household when it comes to primary earning and primary caregiving, and does this allow for much financial wiggle room between partners? In one of our favourite articles of all time, one of our advisers, Nga Vu, called for an urgent shift in how we talk about the cost and benefits of life as a working parent. It’s easy to see that one benefit of a woman returning to work is a bump in family income. So when we’re considering the ‘costs’ of childcare, they need to be spread out and weighed up against total family income as well – not just offset against the woman’s annual salary alone. So often we see women saying: ‘it’s just not worth it for me to pay for childcare when my salary is only $50,000’ – but this kind of thinking puts the cost of childcare disproportionately on the person returning to work – most often, the woman. Nga Vu Partner & Risk Specialist, Kearney Group As remedy, Nga says it’s best to talk and think about childcare as a cost, and a benefit, that’s spread across the entire family unit. This same logic can be applied to return to work plans and modifying work hours for new families. “When a child needs to be cared for,” says Nga, “we tell our clients to assume that both spouses can bear some of the caregiving.” Taxman. An obvious one. But we couldn’t not include it, ha. As the saying goes – the two certainties in life are death and taxes. What’s less certain is what you should be doing to make sure you can meet your tax obligations (without killing yourself and thereby achieving both truths at once). Enter, tax planning. Yep, that’s a thing. And, if you run a business, it’s just about one of the most important things you can do. During tax planning, your business adviser will deep-dive into your financials and look ahead to the future. Together, you’ll create a detailed tax strategy that ensures you’re proactive, not reactive, when it comes to your obligations. It helps you spot opportunities and dodge pitfalls, which is especially important given the ever-changing regulatory landscape. Nowhere Man. This one’s about a man who feels directionless in life. At the moment, we’re meeting lots of people who feel that way about their money. In fact, only one in five Australians feel they are in full control of their finances. And this lack of financial stability and direction can leave you feeling a bit like a hamster on a wheel, exerting lots of effort just to keep things turning. If you’re feeling hamster-y, we know it can be hard to think about financial goals. It’s tough to plan for the future when life, week-to-week, is so expensive. But having the right team around you definitely helps. “Having a plan in place is one of the best ways to calm yourself in times of uncertainty,” says Paul. “A good adviser can help you understand and visualise what’s within your control and the things you can just let go of because no amount of worrying will change them.” Paul tells us being clear about long-term goals helps you avoid short-term thinking, and weather the inevitable shocks and jolts along the way. “During covid, we began talking to clients about the concept of ‘delay’,” he says. “It sounds incredibly simple, but giving our clients the planning and forecasting tools allowed them to see that covid slowdowns were often just ‘delay’ not necessarily ‘derailleur’ of their goals and dreams. And that really helped people put things in perspective. It didn’t mean you’d never retire or never buy a house or never go on holiday again… it was just a little further down the track.” A good adviser can help you understand and visualise what’s within your control and the things you can just let go of because no amount of worrying will change them. Paul Kearney CEO, Kearney Group Here Comes the Sun. We know, you want to know when things will feel predictable again. The good news is that this too shall pass, eventually. It always does. In fact, in the May 2023 Federal Budget, we learned that Treasury is predicting that inflation will (finally!) begin to fall – hitting about 3.25% by mid-2024. This means we’ll see cost of living pressures begin to ease for all of us. And hopefully, this will allow us to reset our money mindset. So, let’s call it how it is – a little bit miserable right now. That’s okay, because you and we, we’re not fair-weather friends. Sure, we’re here when the sun is shining, its warm financial rays of low-interest rates, strong economic growth and good business prospects (ah, the memories). But we’re here now, too. To understand your concerns and feel frustrated for you, too. Together, we can start planning for our brighter future. Because just around the corner… here comes the sun. Want to reset your money mindset? Don’t just Let It Be. Let's Come Together.