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081: The importance of financial wellness with Obu Ramaraj
2.9k Plays1 year ago
In this episode, Mia and Dinah follow Obu's journey from an affluent upbringing to navigating financial constraints, setting the stage for a discussion about helping women take control of their financial wellbeing.
Obu Ramaraj is a money management speaker, author of two books: Smart Women: Smart Home Loans - what your lenders won’t tell you and Smart Women Smart Habits - powerful practices to create your ideal financial future. She’s the CEO of Smart Money Solutions. Her mission is to help women take control of their financial lives, helping women transform their relationship with money to transform their relationship with life.
The key topics covered include:
What is financial wellness and how to improve financial literacy
- Obu highlights the common mistake of women relying solely on their partners for financial decisions, emphasizing the importance of financial independence and open communication in relationships.
- The absence of financial literacy in traditional education is highlighted, with Obu stressing the importance of understanding where one's money comes from and where it goes.
Uncovering Money Stories, Limiting Beliefs and Emotional Spending
- Recognizing one's money stories and limiting beliefs is paramount for making sound financial decisions. The conversation spotlights the psychological factors influencing financial choices.
- The issue of emotional spending is discussed, with a focus on identifying triggers and developing healthier habits to curb impulsive buying.
Aligning Values with Financial Priorities
- Creating sustainable financial plans involves aligning financial priorities with personal values and desires. Setting specific financial goals is a fundamental aspect of financial planning.
Money management
Obu emphasizes the importance of financial tracking and the availability of apps and tools for tracking spending is discussed, along with the value of using spreadsheets. The conversation encourages individuals to create separate financial buckets for savings, investments, and daily expenses to ensure proper allocation of funds.
Superannuation and Retirement Planning
- The discussion delves into the topic of superannuation, emphasizing the need to understand fund and investment options and the benefits of regular contributions
Insurance and Emergency Funds
- The conversation highlights that insurance isn't solely for major events and recommends having a financial safety net to cover unforeseen expenses.
Investment and Overcoming Risk Aversion
- The conversation addresses the common tendency of women to be risk-averse when it comes to investing. It encourages women to overcome this fear and explore long-term investment options.
LIFE ADMIN RESOURCES
- Obu Ramaraj's website
- Obu's Savvy Finance Tracker
- Episode 70 - Your Money Mindset
- Episode 68 - Managing investments
- Episode 30 - Sorting out life insurance
Recommended
Transcript
Introduction to Life Admin and Financial Wellness
00:00:00
Speaker
This is Life Admin Life Hacks, a podcast that gives you techniques, tips, and tools to tackle your life admin more efficiently, to save your time, your money, and improve your household harmony. I'm Mia Northrop, a researcher and writer who studied an entire commerce degree and came out the other side of it normaliser about how to deal with my personal finances. In this episode, I interview Obu Ramaraj, a money mindset and financial wellness coach.
00:00:31
Speaker
Hello and welcome to Life Admin Life Hacks.
Money Coaching and Financial Challenges for Women
00:00:34
Speaker
This is a solo episode today without my lovely partner in Life Admin, Dinah Roe Roberts, and I talked to Obu Ramaraj, who revealed where money coaches focus compared to financial planners and accountants, typical mistakes that women make when it comes to money, habits and rituals you can adopt to manage your money better.
00:00:52
Speaker
If you'd like a better grip on how you save money, spend money and build wealth, this app's for you. And we know it's only mid-October, but if you celebrate Christmas and you're already anxious about your schedule and to-do list heading into the festive season, then do we have a checklist for you? Head to lifeadminlifehacks.com and download our Get Ready for Christmas checklist to help pace you through the activities and tasks you'd like to do.
00:01:17
Speaker
to prepare for the silly season and if you're hosting Christmas lunch or dinner on the big day. Lean on this list to help minimize your stress and maximize your joy. Obie Ramaraj is a money management speaker, author of two books, Smart Women Smart Home Loans, where your lenders won't tell you, and Smart Women Smart Habits, powerful practices to create your ideal financial future. She's the CEO of Smart Money Solutions,
00:01:45
Speaker
and was a research scientist in a previous life. Obu is a certified multiple brain integration technique coach who has been nominated for both the Telstra Business Women and Oz Mom Pranur Awards and has served on the boards of nonprofit organizations to fulfill her desire to give back to community.
Obu Ramaraj's Financial Journey and Career Shift
00:02:02
Speaker
Her mission is to help women take control of their financial lives, helping women transform their relationship with money, to transform their relationship with life. Obu, thank you so much for coming on the show.
00:02:13
Speaker
Thank you so much for having me, Mia. So this is a topic that's dear to my heart, because even though I originally studied a commerce degree that involved subjects in accounting and finance and economics, I really only got my act together when it came to my personal finances in my 40s, I reckon. And I bought shares only because I worked in tech firms that went public. And I dabbled in term deposits at managed funds only when I wanted to save up for like a car or a big holiday. It was all very ad hoc.
00:02:43
Speaker
And I knew enough to consolidate my super, but I wasn't making any extra contributions. And really, the only time I scrutinized my finances was to either prepare paperwork for a tax return or for a loan application. And professionals would ask, you know, what are your financial goals? And I actually wouldn't even know what a financial goal could even be or what dollars to attach to it. So I'm really curious, like, what was your relationship with money as a younger woman?
00:03:12
Speaker
So I grew up in India and I've only been in Australia since 2006, which is long enough, but not like my younger ages were spent back in India. Back in India, my father was a businessman. He still is. So when I was really young, again, I don't remember a lot of things, but mum always says that they had to go through the hard yards.
00:03:35
Speaker
And all I remember when I was a young girl is abundance. Father was in business. He had multiple businesses, theater, restaurant, and you know, it was like abundance. I never knew the idea of lack. So growing up that way up to my mid 20s and when I got married and I came to Melbourne for the very first time, we're just living on one income.
00:04:00
Speaker
and my husband had a student debt that he had to pay off as well. For the very first time in my life, I was facing lack and it hit me like a brick in my face. I had no idea. On one hand, even though I say this, I still enjoyed my life. We enjoyed small pleasures, you know, it was an arranged marriage, so coming together and learning about each other and things like that. But sometimes when
00:04:24
Speaker
Like, for example, I wanted to go to a restaurant and I realized, okay, we don't have enough money. And it used to hit me like, oh, back in India, I never even thought about these things. So it was really interesting for me. And I'm saying interesting now, but it was not. That's probably not the term you're using at the time. No. I was like, did I make the right choice of deciding to get married and come here? You know, all sorts of thoughts.
00:04:47
Speaker
went on in my mind. But over time, starting my business as a mortgage broker, I've been doing this for 14 years now, and I saw various kinds of people and their mindset, which is very, very fascinating for me. I saw some migrant couples who are on really low income and managed to save up really good money, whereas some single women and men earning very good income but had no savings.
00:05:13
Speaker
That's sort of fascinated for me to think, why is it that one group is different to the other? And even otherwise, I was always curious with neuroscience and mindsets and things, which is why I did that MBIT coaching, which sort of talks about the heart, brain and the gut as brains rather than just the brain we use.
00:05:30
Speaker
So as a coach, I think I've always been a coach, being a mortgage broker and advising clients as to, you know, is this good for you or is this not good for you? But in terms of calling myself as a coach, I think once I did my embed certification, that's when I really knew, okay, this is where I want to head and I wanted to coach more people and help them out with mindset and finances and things like that.
00:05:51
Speaker
Yeah. Oh, there's so many little veins that I want to track there. So you were originally a research scientist. So what led to the pivot into finance? I completed my Master of Science Biotechnology back in India. And I was going to do my PhD and get into the university. It was a very prestigious university. And that's when I got my parents found the match they wanted me to marry. And my husband was in Australia. So I landed in Australia.
00:06:17
Speaker
When I came here due to visa restrictions and I was also pregnant, I couldn't work for a bit. And when I wanted to get into work, because my son was young, I really wanted to be able to work part time and spend some time with my son growing up because we don't have family here. And I did not want to miss out those important early years with my son.
00:06:38
Speaker
couple of years after my son was I think two or two and a half and I really wanted to get back into science. And when I approached, you know, went to interviews and things like that, the first opportunity that I got was a volunteer role. So they said, seven months, you can work for free, do what you need to do.
00:06:54
Speaker
if there is an opportunity, we'll consider you and it's not a promise. And I'm like, okay, I'll take that. I'm like, I'll take it, I'll take it, you know, some opportunity. And so, you know, for seven months, weekly, I think twice or thrice, I used to drop my son off at childcare, head off to this institute. It's the Baker IDI Heart and Diabetes Research Institute in St. Kilda. I used to go there, do my work, go back home and do all that closer to the time that I was about to
00:07:20
Speaker
finish up my volunteer role, there was an opportunity that came up. And I was very happy because I thought, OK, you know, I've done this good job. And why I say I've done a good job because they were going to publish a paper, a research paper. And the head of the department asked me if I was happy for them to include my name as a contributor to the research that's being done. I'm like, OK, so I've done something well and they're happy with me. So when this opportunity came, I went and I asked him, OK, you've been happy with my work. Can you consider me for the role?
00:07:49
Speaker
And then, you know, in the usual fashion, I guess, to say, oh, we have to, you know, conduct interviews. That's the right way to do blah, blah, blah. I said, OK, fine. That's fine. I'll attend. And a few days after the interview, probably a week or 10 days later, I went back again. It was one of the last few days to finish up. And I saw somebody there and I knew that job had gone to somebody else. I was like, devastated. That is devastating. I was like, I'm Ted Hooks. What's this story going to go?
00:08:16
Speaker
Oh, I was devastated. And when I went and approached the head of the department, what can he say? I don't know. I think there's like always politics here. So thinking back now, I think it's a blessing in disguise because that's what pushed me to go into mortgage broking.
Financial Coaching and Mindset Alignment
00:08:32
Speaker
After that episode, I thought I'm just going to take up whichever happens next, because in the few years proceeding to that volunteer job that I did, I also completed my certificate in mortgage broking.
00:08:43
Speaker
But I was not ready to jump into it yet because back in India, I spent like five whole years trying to become a research scientist. And that's where my passion was. But when it didn't happen, I had to make a choice and I thought, OK, fine, I'm just going to jump into this. And this happened. And it's the best thing that ever happened to me.
00:09:00
Speaker
I feel like we could do a whole other podcast episode in your whole arranged marriage, moving to Australia, no family, pregnant, small child. Like, wow, that's that's all. There's some intense years in there, I imagine. There are a lot of finance professionals that people can lean on. So there's financial planners, accountants, stockbrokers. What was it about coaching that you saw value in?
00:09:24
Speaker
As I mentioned, I came from a well-to-do family. When I came to Melbourne, then I got into LAC, and then I moved from there, starting my business, having run it for 14 years. I've seen a lot of people go through stuff. I myself have gone through stuff. And I'm a person who takes complex stuff and breaks it into simple
00:09:46
Speaker
versions of things, both my books. That's why they are really good resources because for me, that's my sort of my superpower, I think. So I felt that if me coming from India, I could have done this, then there are so many other people that I can probably help. And that's why I wanted to become a financial wellness coach.
00:10:08
Speaker
financial planners, accountants, even like my clients, some of them who walk into branches and then come to me, they're like, oh, I never was told about this. I never understood this. So I think it's one of my things to break it down so that people really understand what it is about. And that's where my passion comes from, to make it super understandable for people, but then be there to handhold and coach them if they need that.
00:10:31
Speaker
Yeah. And your coaching certification is quite a specific modality. What is it about this modality that it works well when it comes to helping people with money? People often don't realize, you know, we are only taught to think with our brains, but like you hear sometimes, what is your gut reaction? What does your heart say? We fail to tap into this very often. Like for me personally, I was that sort of a person. I always was in my head and people say, go into your heart. I'm like,
00:10:58
Speaker
What does that even mean? I don't know what you're talking about. But once I did that coaching and over time and experience has taught me that at different times, we need to listen to different parts of either the gut or the heart or the brain. But how do we bring all three in alignment so it will help us live life in a truly fulfilling kind of a life? And it's even more important when it comes to money because sometimes we don't know which way to go.
00:11:28
Speaker
You might say, do I do this? Do I buy this house now? Do I not buy this house? And sometimes you have to listen to your gut. Sometimes you have to do your math and make sure that everything works out. And so with finance and money, it's super important that we use all the three parts of our body to make those kinds of decisions.
00:11:45
Speaker
That's really interesting. So in the last few years I've become so much more interested in money psychology and thinking about people's money personalities and money stories. And it can be, you know, people can be quite in denial about which part of themselves is actually making a decision or in control. When it comes to money, they can be thinking that they're making very rational decisions, but really it's sort of, you know, there's limiting beliefs at play in the background. So I love the idea of using
00:12:13
Speaker
your gut and your heart and your brain and having them in alignment and being aware of what messages you're getting from, you know, what part of your body you're thinking and you're feeling. I think it's all about training because like you said, we might think, you know, oh, my gut's telling this, I'm going to listen. But then if it's not in alignment with the brain, it might not be the best decision. Yeah. So not everyone may have heard of money stories or money personalities. Can you explain to our listeners what they are?
00:12:40
Speaker
We all grow up in a particular household listening to different things from our parents. They might have their own set of beliefs that they grew up with or they've learned from their parents. So that's how it's passed on from one generation to another. And sometimes we have traumas that are stored in our bodies which make us believe in certain things. So when it comes to money, again, as with anything, we don't even realize that we have some limiting beliefs that are stopping us or making us behave in a certain way.
00:13:09
Speaker
The first step to making any change with money is to identify these limiting beliefs and I'm very strong about this. For me myself, I did not even realize that I had shifted from a mindset of abundance to that of lack. It took me so many years, nearly 10 plus years to realize that was what was happening to me.
00:13:29
Speaker
So situations can make us move from one end to the other and usually it's from a lack to abundance. For me it was from abundance to lack, back to abundance. So identifying where you are and I think predominantly that can be done through observing feelings in our body. It's super important to pay attention to feelings because they are the guides to saying what's exactly happening with us in any given moment.
00:13:53
Speaker
Yeah, that's really interesting how you said, you know, you went from abundance to lack and then lack to abundance. I guess when people are, you know, depending on how they've grown up in a situation they've grown up in and then they go through transitions, like you might move country or we might change the kind of work you're doing, or you might come into a relationship or out of a relationship and at those transitional moments. Yeah. I guess you can move along that continuum. I feel the same way I'm thinking about
00:14:18
Speaker
You know, when I have worked, I've earned good money and I'm in an abundance and then I got separated and I'm like, oh my God, my finances is just me. And I think I went zooming down to the lack end. Like it does move around. Yeah. When you, for example, if you're working and then you want to
00:14:35
Speaker
move into business you know you have all these fears but then there could be a period of time when you might have some lack or you might have to scale down with your finances and that's something as well I'm quite passionate about once you realize your triggers and your behaviors and your limiting beliefs it
00:14:51
Speaker
Shouldn't be that hard to move from one end to the other. Going up is always easy and to come back and scale down is the hard bitch. But once you know how to do it, I think it's important. Life is always ups and downs. We're not expecting bad things to happen, but to know and to scale down when things need to be scaled down is an art in itself.
Empowering Women in Financial Independence
00:15:10
Speaker
Yeah.
00:15:10
Speaker
We recently had a masterclass about reducing your cost of living without reducing your creature comforts. And we talked a little bit about money psychology. We talked about money stories. We talked about money personalities or money archetypes. And we also talked about money dials, which is this concept from the US author Ramit Sethi. And he talks about money dials being the areas that you really like to spend on.
00:15:36
Speaker
you know, if you look at your credit card or your bank statements, it's like, yeah, there's a whole bunch of stuff on a restaurant. So I'm always going to save up for travel or whatever it might be. You can have anything could be your money dial and to really have some self-awareness about that, because when you are thinking about your money management and where you want to cut back, you kind of have to look at it really realistically and not be in denial about areas where it's inevitable that you will spend on that because it's either important to you
00:16:05
Speaker
or it brings you a lot of joy or it's just the way you were wired. And you can think about other areas where you're happy to mercilessly cut back because it's not that important to you. So I think it's nice to know sort of these different dimensions of your money mindset and your money psychology. So you can operate in a sense of what's going to be real and sustainable for you in terms of your reaching your financial goals. That's so true. Quite often in my speaking engagements, I mentioned this,
00:16:34
Speaker
you can make a million dollars and still not have enough money. So if you're constantly gonna be upgrading your life with every paycheck that goes up, at one point you might find that you're not going to have enough. So it's being wise and choosing where you want to spend your money, what is your priority, and as they say, have those baskets for emergencies and savings and investments and things like that. So you're not just going to feel the lag when something should happen.
00:17:00
Speaker
And Oba, your work focuses squarely on helping women with money. What led you to this choice? Through my initial years of being in mortgage broking, I saw a pattern where if it's a couple, usually the husband is the one who's talking to me about their home loans and choices and
00:17:18
Speaker
You know, the wife will probably come just to sign on the dotted line. And I always used to think, what is causing this? And I've seen some cases where women have approached me where they've gone through divorce or going through divorce. The husband's cheated on them.
00:17:33
Speaker
having seen that enough times, I felt that women need a different kind of hand holding compared to men. And again, I'm just generalizing, yeah, there's always either end of the spectrum, men and women face their own difficulties. But for me, I could resonate with wanting to help a woman come up in her life, because as a woman, if she is educated enough and wise enough, that's going to carry on to so many more future generations than a man. So that's where my passion comes from.
00:18:01
Speaker
Yeah, I know in people that I've coached and people that have come into our community that there have been quite a few occasions where someone said, yes, I kind of abdicated my responsibility when it came to the finances. And that was just something else that got taken care of by, you know, somebody else in the in the relationship. And then they want to get closer to it and start making their own decisions and control things themselves. So I guess, you know, I'm interested in the mistakes that women make with their money. So let's walk through. I think you've mentioned that there are seven
00:18:30
Speaker
typical mistakes that women make with their money. Let's walk through what they are and how to avoid them. Well, we just spoke about the first one, you know, neglecting your finance, relying solely on your partner for financial decisions. One of the things which I've noticed and I feel why the reason women do that is
00:18:51
Speaker
As women, we are natural nurturers. We want to take care of our family. If we have one, you know, kids, pets, or even just a house, we are more keen on doing that. And as women started working and, you know, work stress can be quite heavy sometimes. There's only so much that we can juggle. So women think, you know, this is not another thing on my plate. I don't want to do this.
00:19:15
Speaker
And women think it is their thinking that men are better at finances, which is actually not the case. It's funny that study shows that this is actually not true. Men are overconfident when it comes to making some decisions, whether it is for work or investments or with finances, they're more open to trying and taking the risk.
00:19:34
Speaker
But as women, we think men are better and we are happy to hand over that financial making decision to their partners. But as we spoke about it, women, when they go through divorce or even having to handle their finances after the death of a spouse, it can be really hard if you don't have that knowledge.
00:19:53
Speaker
and that's where I come from to say that take an interest you don't have to do it just know what's happening in your family the financial situations the decisions that are being taken and then if you don't want to do it that's fine add it over to your partner but probably have like a monthly check-in or something to say what's happening and just be on top of finances and especially this is important if
00:20:15
Speaker
the partner is a big spender and it's even more important for the women to be involved to make sure that as a family that you are guiding the family's finances to where it needs to be. Yeah, I think that's really important that, you know, depending on your skill levels and interest and if you're in a relationship, how you're splitting those responsibilities in a household, it doesn't mean that you suddenly have to start doing a lot of it, but you do need to be across all of it. Understand, you know,
00:20:40
Speaker
Be part of the decision making, understand where the money is, where the documentation for things even is, and then be comfortable with how you're going to do that ongoing decision making and checking in. One
Financial Education and Literacy
00:20:54
Speaker
thing I also suggest is to have his account, her account, and a joint account.
00:20:59
Speaker
and then direct the money accordingly in each of these accounts. So when it comes to like, you know, an indulgence or something, you're not feeling guilty that you have to get the other person's permission and you have your own financial independence as well. That's a that's a tip that anybody can follow, I guess. And I can imagine as listeners out there who are thinking, OK, well, we just have one big massive offset account that's attached to our mortgage. I don't want to split up accounts and, you know, not have my money offset, but you can have
00:21:29
Speaker
facilities set up so that you can have multiple little bank accounts in the offset. So it's still offsetting your home loan. It's still offsetting those interest fees. But you can see you both can have ownership over your own money. That's right. Not all banks offer that, but it's a great thing that you mentioned because those options are there. If you know that it is there, you can go back to your bank and ask them to set it up in a certain way or your broker and ask them.
00:21:57
Speaker
or you can even change banks to suit what you need because this is an important thing. Once everybody has a little bit of financial independence, you're more open to being able to discuss financial and make financial decisions as a family. I'm moving on to the next mistake that women make is lack of financial education. I did not have financial education as such when I grew up back in India.
00:22:20
Speaker
It's not a focus there. Back in India, and I don't know if it's still the case, but for me, growing up at that time, my focus was predominantly education. Back in my times, the trend was that girls got married very young. And for me, I think it got stuck in my mind that if I'm not going to study well, my parents can get me married quickly, so I better focus on my studies.
00:22:42
Speaker
That was one of the things. But I think my mom, she got married young and she also realized the value of education and the importance that education can bring to a girl's life. So she was very specific that we complete at least an undergraduate degree. And I was lucky enough to complete my master's degree as well.
00:22:59
Speaker
But even if here, if we look at schools, there is some sort of financial education, but not to the level that it needs to be. Like everybody knows how much money is coming in, you know, even a 15 or a 16 year old going to work will know how much is coming in. But do they know where the money is gone by the time the next paycheck comes? It might have disappeared.
00:23:20
Speaker
And that's one of the biggest things I advocate with in terms of financial wellness or financial literacy is finance tracking. It's super, super important to know where your money goes. And if you don't, there's no way you can do anything either for growing your wealth or for emergencies or for any sort of fun stuff. It's going to be super hard.
00:23:40
Speaker
And there are so many apps, I guess, now, you know, your bank can provide you with an app. And then there are other free apps like, you know, Frollo, WeMoney or whatever. But my favorite way is the good old spreadsheet where you can go in and jot down some numbers, know what's happening.
00:23:56
Speaker
that way you can control and regular reviews. For anyone who wants to grab a free copy, I do have that on my website. We'll link to that in the show notes, yes. Thank you very much. That's one of the biggest things, I think, as a first step that women need to do
00:24:13
Speaker
But further than that, it's educating yourself consistently and then setting aside some time to actually either to educate or to at the end of the month, look at what's happening with your finances. Constant review. That's so important. Yeah, it's really interesting that it's sort of two concepts there. There's one is getting up close and personal with your outliers, your expenses, where is your money going? So some of us have quite good online banking now. The banks have finally got their acts together.
00:24:42
Speaker
where you can log in and there might be some sort of insights area where you can see where your spending is going. It'll have pie charts and say you spent X percent on food and X percent on clothes and blah, blah, blah. But as you said, there's those apps that are out there.
00:24:57
Speaker
that can help as well. I'll be very happy that you mentioned a spreadsheet that just makes me shudder. But there's all these, you know, there's, so there's tools out there to help you get an understanding of where your money is going. And then there's the other sort of learning, which is all the financial concepts and all the jargon, like there's so much jargon. It does feel sometimes impenetrable and complicated and quite intimidating, some of the jargon around.
00:25:23
Speaker
the jargon around investing in super retirement funds and all the different types of ways you can divvy up your money into the different buckets. What are some other websites or books that you think or podcasts that you think do a good job of explaining some of these financial concepts so people can get their heads around them? I will be talking about a couple of those in the other mistakes, but when it comes to financial education in terms of
00:25:51
Speaker
a budget planner or finance tracking, I guess that's the very, very first step. And like you said, sometimes we can get too overwhelmed with trying to do too many things at any given time. If there's one thing that anyone can do to take control of their money is to just understand the simple thing of how much money is coming in and how much is going out and where it is being spent.
00:26:12
Speaker
I also want to mention with some of those apps that you mentioned, yes, it gives you a breakdown. But as a mortgage broker myself, we have to comb through the statements of our clients to make sure they are actually representing their living expenses in a true fashion.
00:26:27
Speaker
And sometimes the clients are shocked when we go back and say, you know, this is how much they're like, no, no, no, that's not me. That's not me. I'm like, no, we actually comb through your statements to find this. And that's where I guess doing it manually. And sometimes it can be hard. And through my tracker as well, I am offering some help if anybody needs it. Doing it manually sort of jolts and wakes you up to actually understand what is happening in your life, because that one thing can actually
00:26:53
Speaker
tell you where you need to cut back and that's if it's happening without your knowledge. Yeah. What's even scarier is when there's like a black hole, there's like $5,000. You don't even know where it went. You saw that thing that came in, you've added up everything else. It's like, where did that other 5K go? Exactly.
00:27:10
Speaker
I tell my clients, you know, you say this is, this is how much you spend. So, okay, let's say you make $6,000 and you only say you spend 3000. Where's the rest of the 3000? Where did it go? They're like, I don't know.
Negotiation and Risk Management for Women
00:27:20
Speaker
I'm like, nah, that's not good enough. So let's just get working on that. That's super important. Yeah. Okay. What's the next one? Failing to negotiate. I'm not sure about you, but I'm big on negotiation because back where I come from.
00:27:37
Speaker
women negotiate like anything. So negotiations are super important here. I guess women shy from asking stuff like a salary or a promotion, they're like, oh, I'm not sure if I'm good enough. They're not confident enough to go and own their value.
00:27:56
Speaker
They think they're not good enough and they don't want to go and put their hand up and say, I need to be paid more. So back where I come from, I have this interesting observation. I'll give you a simple example. This fruit vendor, she comes home, she goes from door to door carrying a fruit basket on her head.
00:28:15
Speaker
that's more fresh than going to the store. So when she comes in, you know, mom and she will have a conversation which goes like this. She's like, oh, these mangoes are like 80 rupees a kilo or something. I think it's too cheap that I'm holding. But anyway, just as an example, 80 rupees a kilo. Mom's like, can you give it for 50 rupees a kilo? She's like, no, that does not work for me. And all the while they're just filing and negotiating. And it's like there's no hard feelings.
00:28:39
Speaker
And finally, they end up with a value. And my observation of all this is if it doesn't work for the fruit vendor, she's not going to sell the fruit. And if it doesn't work for my mom, she's not going to buy. The main thing to note here is that both are OK with having that negotiation as a conversation without feeling that each one is attacking another. And final thing is whatever works for each party, that's how it is. So that's the attitude we need to have when it comes to
00:29:06
Speaker
negotiation whether it's about salary career a job or even when you go out and buy some things yeah I don't negotiate on like you know when you do like a service-based business you don't negotiate on that but when you go out and buy some big ticket items it's super super important to have those negotiation conversations
00:29:24
Speaker
Again, there's an interesting story that my grandfather in the 1960s, he was visiting family back in UK for the first time he's gone there. And then he went to a clothing store and then he asked for a discount. And the shopkeeper was like taken aback in 1960s. Nobody asked for a discount in the UK. And he was like, oh my God, I've never had anybody ask for a discount and you asked, so I'm going to give it to you. So that's the power of asking, you never know.
00:29:50
Speaker
I think there's some real cultural benefits, like depending on where you've grown up from or your family, your culture, you're so much more comfortable with having those conversations and approaching them in a really reasonable way. I think for some people, it's like the most uncomfortable thing to do.
Retirement Savings and Superannuation Guidance
00:30:08
Speaker
And we talk about the importance of comparison shopping. There are some things like insurances or loans where it's
00:30:15
Speaker
in your best interest to ring up and have a conversation and say, you know, ask for a discount because you've been a loyal customer or because you've seen that a competitor is offering a different rate and can they match it? Those kinds of conversations. And we often would provide scripts because people are like, oh, my God, I don't know what to say. What if they say this? How do I what do I return? So, yeah, I think if you have come from a country where like kind of negotiation is just how things are done. Yeah. Distinct advantage. Yeah.
00:30:44
Speaker
Next one. Neglecting their retirement savings. Big mistake that women make. You mentioned about Super. How many women, when they first get into a job, go into a default mode into their Super without even understanding what options are there or how much fees are being charged.
00:31:03
Speaker
And I guess depending on the age, I'm not a financial planner and this is not a financial advice, but depending on the age, many people do not even know that you can choose different modes of growth in your super. It could be low, it could be balanced, it could be a growth mode. So it's super important to understand these things. And the earlier you invest, the better it's going to be when you're planning to retire. Like my son, he started work last year, he was only 15.
00:31:32
Speaker
And one of the things I mentioned to him is, have you thought about super? He's like, yeah, my friends and I, we're talking about it. So I was really surprised. Yeah. And he's already started contributing, which is not much, you know, 50 or a hundred dollars a month, but from such a young age, the power of compound interest. Yes. Absolutely.
00:31:49
Speaker
It's going to be amazing by the time, and I keep telling him, whatever you do or don't do, don't stop putting small amounts into your super because that can mean the world to you when you want to retire. So that's super important. And as you mentioned, you know, multiple superannuation accounts, how often do people take notice of that and say, OK, I need to consolidate those accounts so you're not spending or money is not leaching out in the form of fees and charges? Yeah.
00:32:16
Speaker
The options you're given with super, you might have options like balanced or conservative or growth or high growth. And it's really good to understand where your age and your risk profile, because if you're younger, you could probably, you might be more sort of open to risk.
00:32:34
Speaker
and have some of those high growth accounts, also high growth options, where the ups and downs of the share market can sort of play out over a long period of time. Whereas if you're closer to your retirement, you want to might, and again, big caveats, I'm not a financial planner, but this is just the principles of how these things work. You want to go to a more conservative kind of
00:32:56
Speaker
asset allocation so that you're not going to take up on lots of risk because you don't want that money to plummet because of, you know, huge fluctuations across the different asset classes. So, yeah, it's really good to understand how old am I? What is my appetite for risk? And to keep tweaking that and consolidating. Yeah, it's a huge one. The fees can be outrageous.
00:33:21
Speaker
I also tell people if you're not comfortable, it's okay to pay a financial planner. You don't have to pay them ongoing. Just go get that initial advice and you can pick their brains and try to understand what each thing is. So you know that you are making the right choice or what is the right choice for you rather than just make a default choice and wondering, should I now change? Should I not change? Things like that. It's okay to pay a professional and get that advice where it is needed.
00:33:47
Speaker
Absolutely. I guess the other thing to think about retirement funds for women is when they if they taking time out of the workforce because they're doing child rearing stuff and they're not getting any super and that could be a long time. It could be years, decades where you've been out of the paid workforce and nothing's been contributed. What do you recommend for people who are in that position?
00:34:09
Speaker
If I guess women are, I mean, it's hard to predict what life will bring us or what's going to happen. Yes. So women, if you are thinking that you want to have a family sometime in the future, how about start contributing a little bit more when you're younger, you know, sometimes they have this employee matching things that happens from the employer. So perhaps think about contributing a little bit extra
00:34:34
Speaker
And again, depending on the family situation, if they are taking time away, caring for a young family, and if the partner's working, how about the partner do some contribution into the super? These are all again, negotiations and conversations to be had. It may or may not be possible, but some of
00:34:50
Speaker
these things, if it can be done, perhaps it will help women with their super. On that note, I think insurance as well, you did ask about it earlier, is one of the other things, not protecting their lifestyle and income with insurance. In my journey as a mortgage broker, I've seen and heard so much with people who don't want to take insurance, especially people from
00:35:12
Speaker
migrant communities who think that nothing will happen to them. Insurance is for when something happens to you. And I've seen time and again where people have not had insurance because they think they can't afford it and then something happens and they're
00:35:27
Speaker
reaching out to the community to ask if they can help. We all have insurance for our car, for our house, so really, really super important to have insurance for ourselves. One of the other things I've also seen is people often say, oh, I have insurance inside my superannuation, so I'm fine. It's to go through with a fine comb to see what insurance is there and is that enough for your life situation?
00:35:52
Speaker
Situations change. When you're younger, you don't have much debts. As you grow older, things change. You get a family. It's even more important to protect your income. Do you have income protection insurance? All those questions as well. If you don't have capacity to understand, again, one time, probably go and talk to a financial planner. Pay them some money.
00:36:12
Speaker
to go through your super, to go through your insurance, and just to make sure that there is enough insurance that you're not going to be disadvantaged should anything happen to you.
Emergency Funds and Insurance
00:36:22
Speaker
Yeah. And if people want to know more about the different types of personal insurances you can have, we have a whole podcast episode that gets into the nitty gritty of life insurance, income protection insurance, trauma insurance. It's a whole thing. Yeah. Again, we're not financial planners, so it's best to hear from
00:36:41
Speaker
financial planner about this and individual situations are different as well. So there's no one set plan for when it comes to insurance and super. Okay. One other thing I want to mention with insurance, insurance is all good and fine when you have it, but it's also important to have an emergency fund because I've heard this from financial planners themselves that sometimes it can take time for your insurance
00:37:05
Speaker
claims to be made. What happens when you really need, like it could even be a hot water system. It's not like life threatening, but if you don't have money or you can't claim that, yeah, what are you going to do? So it's very, very important for women to have that kind of an emergency fund for white goods, for life stuff that happens, do not always depend on insurance.
Investment Strategies and Overcoming Cultural Barriers
00:37:28
Speaker
And how big does that... I mean, what type of dollars are we talking there? What's a ballpark? In terms of living expenses, we always suggest three to six months worth of living expenses. But when it comes to anything like air conditioning in the house or anything like that, it really depends on the house. And just to have, I don't know, $5,000, $10,000 as an emergency. And then if you tap into it, you can always start working on filling it up again. Yeah, so that's another important thing.
00:37:55
Speaker
Okay, so the next thing, the next mistake that women do is not investing. Again, as women, I used to be so risk averse when I first came to Australia, never liked to do anything at all. And I always said, because I saw how hard my dad worked and a little bit of the ups and downs in business, I always said, I do not want to start a business, I'd rather go and work for somebody. But as life would have it,
00:38:21
Speaker
It said, no, you're going to start a business and this is what you're going to do. So over time, my risk profile changed considerably. But again, women tend to shy away from taking risks compared to men. But just like anything else, we go to school, we get qualifications, and then we do a job sometimes better than our counterparts, men.
00:38:44
Speaker
Similarly, with investing as well, with a little bit of knowledge and understanding, it is not hard. You just need to take some interest. If you don't take interest, again, you can give it away to a financial planner to do it for you. But again, for me, the trend has always been to know how things are done and then to hand it over
00:39:03
Speaker
somebody else. If you want to, so should anything happen, then you know what's happening and you can keep an eye on it. Going back to my culture back in India, women investment equals gold. Gold jewellery at any given time. For generations, I've known Diwali, which is like our Christmas, go buy a gold jewellery, a birthday jewellery. If you save up some money, go buy gold. That's how women used to. I think it's still sort of a safe, risk-free kind of an investment, isn't it?
00:39:32
Speaker
compared to men like my dad, multiple businesses, that's so risky, but they are okay too. So I don't know if it's like a women versus men thing where we tend to shy away from risky investments. Probably all sorts of social and cultural things at play there. But for a lot of people, investing sounds so complicated and sophisticated and daunting and only worth doing if you're earning multiple six figures and just have piles of extra cash.
00:39:58
Speaker
It can be a reminder that yes, buying gold jewellery, you're investing, you've got superannuation. Those contributions are being invested in shares, in property, in funds. And there are different ways that you can enter into investing.
00:40:13
Speaker
But even with super, yeah, like you mentioned, that's a kind of investment. It's not like should you decide, oh, that's risky. I'm not going to contribute. No, you still need to contribute some of your income into a superannuation. And that happens sometimes not by choice. And we're still OK with that. So I guess it's just approaching
00:40:33
Speaker
I guess now there are so many people who are offering courses on investment. So it's just growing your knowledge so you can take action and just like anything else, becoming confident enough to do something. You don't have to be the risky investor if you don't want to. You can always choose less riskier investments, which means you're not going to lose your capital, but still your money is growing, working for you.
00:40:57
Speaker
There's, you know, there's solid advice out there that investing should be boring. It should be like automatic. That's right. Your money's going to something that you understand that is giving you fine returns. It's not day trading. You don't have to immerse yourself in exactly what's happening with the share market. There are all sorts of apps out there. There are all sorts of ETFs, exchange traded funds out there where you can just sort of pick a fund or an index or a theme.
00:41:26
Speaker
and decide I'm just gonna invest in that. And it just, you know, a bit of the money just pops into that account each week or month and is invested for you. And you just look at it in 50 years time and you go, oh, oh, thank you, you know, past me. That's worked out nicely. Yeah, and that's the attitude we need to have. It's a long-term investment. We're not going through day trading. We don't want that. As women, we need to approach it in a way that it's a long-term, just like our superannuation.
00:41:53
Speaker
Contribute it, be comfortable and don't keep looking at it all the time because it is going to go up and down yet. It's not going to stay stable. So that's the attitude we need to adopt with when it comes to investing.
Managing Impulse Spending and Budgeting
00:42:05
Speaker
I have a good one here, overspending and impulse buying. So is this when we're talking about entitled spending versus intentional spending?
00:42:15
Speaker
Oh, that's one of my favorite things, you know, entitled versus intentional. As women, how many things can we buy? You know, the temptation is endless. You can just go out and buy so many things. And we all indulge in retail therapy every now and then, which is okay if you have lots of money and if you don't.
00:42:35
Speaker
and you're going to spend on your credit card, is it as much fun when you get your credit card statement in your email or by post? It's not, is it? And I think as women, we tend to spend emotional spending. That's another kind of thing that we do. Oh, something bad happened today. I'm just going to go and buy this. I had a fight with my partner. Let me go buy this. I had a good day. OK, let me go buy something else.
00:43:01
Speaker
Emotions and the triggers, we need to stop it. We need to understand what's causing these triggers and to find alternate ways to counter those triggers, or how else can you make up for your emotions? And it can be hard. There's no point beating ourselves up about things that have happened in the past. With anything it comes to, the first thing is realization. Realizing that there is a pattern and that you want to break it,
00:43:29
Speaker
and constantly realizing if it happens, because it's going to take a long time to break any habit if it's gone around for a long time. With the first thing we spoke about, finance tracking, that could be the very first step to even identifying some of these emotional buying habits that we have, and then from there we can take steps to manage.
00:43:51
Speaker
And so to finish up, Obu, what are some other positive habits and rituals that are worthwhile adopting so we can manage our money better? So let's talk about budgeting, which is one of the most important things. Once you track your budget, don't beat yourself up about it, but go and find out ways for you to make your budget work. So perhaps when your money lands into your bank account
00:44:16
Speaker
you can create buckets for it to be automatically transferred. So, you know, a bucket for savings, a bucket for investment and for your everyday expenses. So that way, you know that you're not going to be overspending or taking money that you don't have. And it comes to habits as well. Sometimes we think, oh, just this one time, let me dip into this bucket or that bucket. So it can be hard, but it's not something that's not doable.
00:44:41
Speaker
So that's one thing is to find systems and processes that will make it easy for you to manage the spending habit. And if you're someone who already has that under control, it's to start investing into, as we discussed, find out apps or some things that can really help you understand.
00:44:58
Speaker
I think even each of these investing apps have a lot of information on them for you to understand how to invest or based on your age or your risk profile and things like that. So that's something else women can. It's not about taking everything all at once. So each person can be at different stages. So if you have the basics at hand, then look at what is the next thing that you can perhaps do. Investing could be even buying a house. It doesn't have to be the risky investments
00:45:27
Speaker
term deposit, whatever they're comfortable with. So just putting away some money regularly as savings to achieve. One of the important things with this is to set goals. When you set a goal, they say it's easier for you to start putting money away towards that goal. Super important with setting goals and the right goals as well. Yeah. And for people who are looking to learn more about investing, I can really recommend the podcast You're in Good Company. It's by two Australian millennial
00:45:57
Speaker
maybe they might even be Gen Z as they're pretty young. And they really break it down. They break down how to invest in the different asset classes, whether it's property or shares or funds. And they talk about all of the apps that are out there. They go into the nitty gritty and they make it super accessible.
00:46:14
Speaker
So have a listen to that if this is an area where you'd like to learn more. Obu, thank you so much for sharing your experience and ideas with us today. It's been very illuminating and an absolute pleasure. Thank you so much for having me on your podcast, Mia. Where can our listeners find you if they want to hear more? Obu Ramaraj is my handle on Insta, Facebook, LinkedIn. That's where they can find me. Thanks for listening. Show notes for this episode are available at lifeadminlifehacks.com.
00:46:44
Speaker
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