I have always been pretty good at saving money, something instilled in me by my mum from a young age. Unfortunately, in my twenties (like most of my friends) there was a disconnect between saving for retirement through my super as opposed to saving for that rainy day with money in the bank.
At 25, I had 3 different accounts with three different super funds. I had no idea I was paying multiple sets of fees or if I had the right insurance across any of my accounts and while I worked in finance, I genuinely did not know any better.
I wish I could say I got more cluey, about it by my early 30’s but with the juggle of a newborn and a toddler and trying to find work which offered flexibility and purpose it was completely off my radar.
My lack of engagement has cost me thousands and I know I am not alone here. Hoping others can learn from my lack of engagement, I asked my colleagues Rachel and Prue the same question…
When it comes to super, what do they wish they could tell their 25-year-old selves?
Rachel, Head of Customer Experience
- Sort your super now - you only need to contribute a small amount extra at this age, and you won't notice it, plus it becomes a habit. If you wait until you are in your forties, it will require real sacrifice as the amount needed to catch up is so much more.
- Don't feel dumb because you don't understand super and financial concepts. It isn't taught in schools or in most homes, and even less so to girls. You're smarter than you think - you just haven't found the right way to learn it yet.
- Don't relinquish decisions about finance to someone else; it's ok to ask for help to understand stuff, but you put yourself at risk by handing it off to them because it is too hard.
Prue: Corporate Management & Engagement
- Consolidate your super by making sure you only have one super fund. This will ensure you are not paying lots of admin fees to lots of super fund.
- Ensure you are invested in an ethical super fund....one that does not invest in any dirty investments such as tobacco, fuels or weapons. This will help you do your bit to help keep our environment green for our children's children.
- Start adding a small contribution to your super fund now, don’t just rely on employer contributions as it will not be enough to retire on. For example, by adding only $5 a day to your super account, that will leave with an extra $125k plus when you retire in your mid-60's!
And to their great advice, I would like to add the following I have gleaned along the way.
When you consolidate, don’t just transfer your super into the account with the biggest balance. The best account for you might be one of your small accounts or it could be an account with a completely new fund. ASIC’s Moneysmart website is a great place to start your search. https://moneysmart.gov.au/how-super-works/choosing-a-super-fund
Find a super fund designed with members in mind. At FairVine Super, we have developed fair policies to help our members at different life stages such as:
- Our small balance protection where we rebate fees if your balance is under $5000
- Our baby bonus which puts a pause on your fees for up to 12 months while you are on parental leave
- FairShare – our policy which facilitates the sharing of super contributions when one partner has taken time out of the workforce.
We have also made it seamless to boost your super through self-contributions using our innovative RoundUps, TopUps and FairGig tools, and through our amazing FairRewards shopping portal which allows our members to earn super while they shop online.
Finally and most importantly, whether you are 25 or 55, it really is never too late to make small changes which your future self with thank you for.
Written by Leyla Sacks, Corporate Partnerships and Engagement