These Four Phrases Could Be Costing You Money
You might not think that words and money have much in common. Money is straight-up, no-nonsense numbers that add up or don’t. Words – well, they are malleable, depending on who you are talking to and what you are trying to achieve. Our words reflect our emotions and our relationships but they can also affect our bottom line.
Research shows that men and women approach money very differently. Men have a straight-line approach: “This is where I’m going and that’s the pathway I’m going to take to get there.” For women, financial decisions are often guided by their relationships. What many women don’t realise is that the conversations they have – with their partners, with their children, or even with themselves – may end up shaping their financial future. Here are four simple sentences that can cost you in the long run.
1 “Of course I’ll sign that”
The two riskiest words in any relationship are, “sign here”. That applies equally whether you are newly in love or getting divorced. Many women won’t take the time to investigate exactly what they are signing, because they value their relationship and don’t want to create conflict. It’s important to understand that conflict is okay in a relationship. Positive conflict should boost a relationship, not destroy it. As soon as you start framing the conflict as a natural part of a healthy relationship, you can start dealing with things differently and ask the questions that you would instinctively ask if you were dealing with anyone other than your partner. Simply put: don’t sign anything until you know all of the ramifications.
2 “I’m not leaving my home”
When your world is being fractured by a divorce, it’s entirely understandable that you want to hold onto your home, filled as it is with family memories. However, that’s not always a wise move. In the division of marital assets, you may get much better results by choosing superannuation and cash assets. With cash, you can invest in income-producing assets, and perhaps buy a smaller home that suits your current circumstances. The family home will also probably appreciate in value over time, but it does require ongoing maintenance. What’s more, the emotional tie involved means that you may hesitate to sell it at the best time, which can also cost you.
3 “The kids can look after themselves”
Teaching your children to stand on their own two feet is admirable. However, when your children are starting their adult lives, helping them arrange income insurance may be a smart move not just for them, but also for you. Look at it this way: if your child goes skiing and breaks a leg and maybe can’t work for a period of time, they won’t have any income. And if they don’t have income, who are they going to turn to? You, of course. And how will that impact your finances? If your children are younger, look into life insurance for yourself. I remember standing on the sidelines at one of my son’s AFL games, talking to a couple who looked too old to be the parents of my son’s teammate, but too young to be the grandparents. It turned out they were one of the boy’s godparents; his parents had died in a car accident. This couple had retired, sold their business and were planning to travel the world when they suddenly found themselves taking care of a 13-year-old and they had to go back to work to help support him. If his parents had set aside sufficient funds, or had a solid life insurance policy, it would have made all the difference.
4 “I can always find another job”
If you know you are a capable worker with a solid work history, it is empowering to feel that you can walk away from a less-than-perfect workplace and pick up a new gig. But as you get older, job security becomes increasingly important. Many industries still suffer from ageism, and it seems to disproportionately affect women. We are all aware of it, but we sometimes forget to factor it into our plans. I have a number of clients who took a redundancy for one reason or another; all of them are now contracting because it’s often more difficult for older women to get another permanent job – whether full time or part time. That doesn’t mean you have to stay where you are forever once you hit 50, but it does mean that job security should be factored into your career decisions.
Kate McCallum is the author of The Joy of Money.
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Illustration_ Lou Fay