In our recent Money Chats series, we touched on some grunty topics. Topics based on life events that really required a shift in your mindset as to how you manage your money. These were having the right retirement mindset, sorting your finances ahead of parental leave, and the ins and outs of intergenerational wealth.
Here’s what we learned.
Having the right retirement mindset
When it comes to our retirement, we (may) spend enough time making sure we have enough to last all those years when we’re not working. But we may not be spending quite as much time preparing ourselves mentally for what it’s gonna be like when we’re seeing all our hard work being ‘eaten away.’
And so, there are three key components to being a) retirement ready and b) ready for what that means for your money.
- Is knowing how much you’ll need to fund your retirement
- Is understanding how we can ensure you’ll have enough – and the risk you’ll need to take with your investments to get there
- Is ensuring that when you retire your money keeps working for you & earning interest. And this will act a little like an income, even though you’re not working a traditional job
According to Hannah McQueen, “Most Kiwis don’t set a strategy for their investments; we almost seem to have an allergic reaction to doing some planning for this despite it being one of our biggest financial milestones. But, you’ll be more comfortable staying the course when you understand the course you’re taking, the reasons why, and the impact of changing.”
And Nicki Morsink, head of enable.me investment likens many people’s ideas around their money at retirement as “Feeding into this feeling that you get to retirement and everything you’ve got goes into cash. And it just sits there in the bank.” But, according to Nicki, “that’s the last thing you should be doing. Because that money needs to earn its keep and keep you in the lifestyle to which you’d like to become accustomed.”
To learn more about preparing yourself financially and mentally for your retirement, you can watch the full Money Chats session with Hannah McQueen, Nicki Morsink and Nadine Higgins here.
Sorting your finances ahead of parental leave
Having a baby is such a magical time. Their teeny tiny fingers and toes, their sweet button nose, their huge drain on your finances. Just so special.
And, you don’t want to waste those first precious first months stressing about money.
So how can you make sure you’re set for when baby arrives? (Spoiler alert – it’s not buying all the latest gadgets and gizmos, get the grandparents to do that for you 😉).
Step 1 is making sure you don’t have short-term debt. When asked whether delaying even trying for a baby for six months or so to pay off short-term debt, Shelley Palman’s short answer was ‘yes.’
The longer answer: “You definitely don’t want to be going into a maternity leave year with short-term debt on board. One of the issues there is that if you have short-term debt, this generally means you’re not saving or don’t have savings. There’s nothing more stressful than being in a maternity year with no savings.”
And there may be other financial milestones that it’s worth knocking down before getting knocked up. Because once you have that baby, it’s going to delay any kind of financial planning you can do.
Watch the full Money Chats session and find out what tips mums Shelley Palman and Lisa Butler, mum-to-be Ngaire Peek, and Nadine Higgins have for Sorting Your Finances Ahead of Parental Leave.
The ins and outs of intergenerational wealth
Now, you may be at the other end of the spectrum. Your kids have left the nest and you’re wondering how you may be able to support them now that they’re adults. You may be considering whether you help them pay off their student loan or give them a leg up into their first home. Or maybe, you’re considering what you’ll leave behind for them in your will.
And you’re probably wondering how you can protect your legacy from landing in the hands of your kids’ less-than-desirable other halves…
And, well, this also takes a bit of planning – and potentially getting legal support.
And as Roger Swift quipped “Planning for this would be so simple if we knew what day we were going to leave this earth”.
Because while it’s great that you want to support your kids and pass your wealth onto them you also don’t want to generate entitlement where your kids expect to inherit some of your wealth or jeopardise your own retirement.
And, when it comes to planning your retirement and the legacy you leave, dying early isn’t a great strategy. Because, as Ray McKeown says to his clients who say they’re not expecting to last beyond 85, “You’d hate to be disappointed on your 86th birthday that you’re still alive.”
Find out what else Roger Swift, Ray McKeown, Dianne Barlow and Nadine Higgins had to share about the ins and outs of intergenerational wealth and how to leave a lasting legacy here.
Whether you’re looking ahead to retirement, preparing for a baby, or considering what type of legacy you’ll leave behind, if you’re having trouble setting up a plan and knowing what actions to take, come and get some advice from an enable.me coach. (A fee applies). They can help you determine where you’re at, what you’re working towards, and help you each step of the way. But maybe don’t ask them if you should have kids… 😉
Disclaimer: This blog post is for informational purposes only and does not constitute individual financial advice. If you’re interested in receiving personalised financial advice, you can book in a consultation with an enable.me coach. Costs apply.