Just before we get started, we'd like to acknowledge and pay respect to Australia's Aboriginal and torrest Rate islander people's. They're the traditional custodians of the lands, the waterways and the skies all across Australia. We thank you for sharing and for caring for the land on which we are able to learn. We pay respects to elders past and present, and we share our friendship and our kindness.
She's on the Money, She's on the Money.
Hello, and welcome to She's on the Money, the podcast Millennials who Want Financial Freedom. Today is Friday, my Friends, which means it is time to sit back with the girls, namely my girls, Jess and George, and we're going to sit back with a bev in hand, to unpack our favorite moments of the week and of course to celebrate you how incredible She's on the Money community. As always,
we're going to be sharing our favorite money wins. We're going to be discussing what's making news in the finance world cough scimo cough, and we'll be helping to answer a very juicy money question, which this week is all about salary sacrificing But first things first, guys, it is time, as always to recap the week that was Mistiss GURRICHI can you please tell us what happened on our money Diary Monday?
I sure can. This week's diarist was living the dream. She was working in an incredible role in a nonprofit making change, which is so incredible. She was really really passionate about the space, and particularly about getting women a seat at the table, getting voices of diverse people heard, which we need to see more of it. We talk about it all the time, so it was really incredible
to hear her say that. But she actually realized that after a few years there, she wasn't feeling fulfilled anymore, and she had a few other things that she wanted to do, and she took a lee of absence, which she's currently still actually on, and we chatted a bit about what her plan looks like and what she'll be doing going forward. So at the moment she's just taking some time with her family, which I think is really special.
But we delved really deeply into the nonprofit space and what it's like to be on a board as a woman, and why you should want to be on a board as a woman. Because I think for a lot of us, a board is a bit of.
A like bougie. It's like so out of reach.
Yeah, it's a concept that, to be honest, I've never really thought about. Like it's like I know that they exist, didn't know what they did really though, So true.
And it's it's funny because I'm on a board and you work with me, but you wouldn't see any of that work I do because I don't do it during business hours, so you'd be like, oh, yeah, she's at a board meeting, like you have any idea what I do. And I find that quite funny because I'd never, i guess, thought about the fact that nobody really knows what I do in that space or how that works. But I also found it really cool because she is a friend
of ours from across the ditch. She lives in New Zealand, and in New Zealand they have been far better at embracing diversity than we are here in Australia. They have embraced so many beautiful malady people to come into Parliament as well, which I absolutely adore, and I think that, yeah, we've got a lot to learn from them. And she was so special But the other thing we touched on in that episode, which I thought was really cool. Nothing to do with boards. I'm sorry that could be a
little bit dry, but it was actually income guilt. So she felt really guilty about how much money she was earning. Because she was quite senior, she did have quite a significant income, but she was still like, I'm an exec and I feel really guilty. Obviously working in a non
for profit sector. She felt like that was you know, a lot of money that could be allocated, and I was like, yes, but like, you're working really hard and you're worth every cent, and I just think that no one should have guilt over what they're earning because you're literally earning.
It.
Correct very interesting, very interesting episode indeed, so highly recommend giving that one to listen.
Skip on over to our Wednesday episode, Missus Georgia king a, hoy, hoy, how are you? My Lafe's are we? And happy? Is it because you saw Jess?
Yeah?
Well could have been that to be with my girls in the studio.
What happened on our Wednesday episode.
My last on Wednesday this week, girls, we discussed weddings.
Sad which it was.
It was a good time because one of the three of us sitting at this table, is in fact planning her own weddings.
Why didn't you tell usring on my hand?
But it was super interesting, of course, picking the brains of Victoria divine, part bride to be part financial advisor.
It's the purpose, It's really not. It's really not.
You had lots of tips.
I tried to give lots of tips. It's interesting because after that episode, I had a few chats. I have a girlfriend who's also a financial advisor, and she planned her wedding to a t like absolute budget queen, like you can learn a lot off this woman. Facts On the podcast Rebecca Pritchard, we talked about baby stuff. Yeah, she's gorgeous. Anyway, she planned it to an absolute chage and I feel like I'm trying really hard to do that. I promise I would like to call myself the Queen
of spreadsheets. But just because you have a spreadsheet and just because you're tracking, it doesn't mean you're not naughty
and you're not overspendy. And I feel like recently I've just been like, yeah, but I really I really want the cute matching pajamas and I didn't realize how expensive they were, and I want like all these other things that I'm like, all right, actually I need to take a step back and reevaluate my budget because I had just assumed, like, this is so dumb because Peter Alexander pajamas. Obviously not everyone in my bridal party is getting Peter
Alexander pajamas. Sorry, not sorry, but I just assumed that they were, like, you know, forty or fifty bucks just to get like some Plaine matching. No, everything's just blowing out of proportion. Guys. I am a wreck and I need help.
Lots of people have been asking for the wedding contents, so I hope they were some happy people.
Maybe a lot to come. Amah, there's so much more to come because I feel like I'm also learning a lot on this journey as well about values and priorities. And it's one of those things that you know, when you're buying a house, for example, with a partner, it's do we buy this house yes or no? Whereas with the wedding, there are so many different moving parts that we have to allocate different budgets towards, and Steve likes some things that I don't like. And Steve's priorities are
quite different to mine. Like I think we've mentioned it before. He's a bit more of a party boy, whereas I'm kind of like, oh, I really want good wine and he's like, oh, I kind of don't mind. I love a good wine, but like I'm going to be drinking heaps of it, So well, oh that's not me at all. So there's just this consistent conversation of either compromise or not. And it's a lot harder than I thought it would be.
Because as much as you know, we're very grateful to be going through this process with you know, easier budget, I would say, it doesn't mean that it's not hard to still pick and choose and oh my god, Florist's let's not even start on that too much to think about it too much, too hard, way too hard. You know what's not hardeg way of breaking the sheese on the money community. Who's with me? Girlies?
Ah?
We are? I think you know what's not hard? Was going to go into my direction, but it didn't.
So let's get into out this week budget direct money wins guys.
Let's do it very exciting. So the first win this week, ladies, comes from Erin it's quite exciting. I have been offered a promotion after getting a new job just eight months ago. Between my new job and this promotion, I will have almost doubled my income in less than you are amazing. The next win comes from Indiana Money Win. I normally spend seven dollars a day on coffee, five days a week.
That adds up.
So I trotted down to Coohl's and they had the Nest Cafe packets of twenty six sachets for eleven dollars. So now I make one every day before going to work.
That's a hot saving of eighteen hundred and twenty dollars a year from scouts. I also rate those Nest Cafe you know what, They're not that bad and they're not that bad. I feel like instant coffee gets a really bad rap. But I have a secret addiction. It's not so secret now to a million people, but a secret addiction to the ConA caramel one. You probably had it at my house, because if you come to my house, I'll be like, you're on a coffee We do have
a coffee machine, or offer you that. But I'll also be like, do you want to macona? Though you want you want the good stuff. It's in the coverage. I love that.
I'm gonna chop that and buy some later. The next one here, ladies, comes from may Read. There is a lot going on, so keep up. I'm apologies in advance.
We are strapped in. I paid off the.
Remainder of what I owed to my mum. I'm broke now, but at least that's finally done. That's point one, done and dusted. Nice so impulsively bought a Dyson air rap on Zippay. I know, I know, dot dot dot sigh, but you guys can relate to that.
I know that the air rap is epic. I mean the way you've acquired it, let's be honest, but you're quite clearly very aware of it.
Yes, She then packed it up and posted it back to Dyson for a refund.
I just said how good it was. I hope that that doesn't trigger any regrets.
Maybe she can say for it and then by it at a more sensible time in her life.
I agree. In fact, that's actually a really adult decision. Exactly how many times have you I can't say I've ever bought something and then returned it because I'm like, do you know what. This wasn't in budget.
I've done it once.
But that's really cool, isn't it. Yeah?
I think I genuinely think, you know what, And in my situation, I feel like maybe in her situation as well, it was just like and in the moment, you're like, I deserve this, I'm going to get it, treat yourself, and you know what, you do deserve it. However, I think if it arrives and you're regretting it, you're going to continue to feel that regrets. So I think it's awesome that she's gone, actually, don't love this for me, I'm going to send it back.
That takes real power. That's a really good win. Yeah, love that, But it goes on girls. Oh.
I then popped to my local library and picked up a copy of Victoria's book, so hopefully that will lead to more money wins.
Finally, So I thought she was going to say she went into the lib and there was an air raft and I was going to go this story to well recently that my local library. I don't know, I'm not telling you which one because that would be a bit too much personal information, but they rent out cake baking trays, so really, yeah, so like, if you want to make a dinosaur cake? Oh, I have it? Yeah, Like there's tubs of.
Like can they to go alongside that? They have a copy of the Women's Weekly?
Could borrow it?
Can we have a competition?
I don't remember.
I saw something on TikTok where everyone made a Women's Weekly cake?
Can we have the cake off? Let us know?
Would you be interested in how she's on the money?
Cake off? I reckon? That would be so fun.
It's not money related at all.
I don't even care. Let's call mastership ask if we can borrow their kitchens. Our whole heap of novices who can't bake in to make a duck with chippy lips. I love that one? How good?
The next one comes from Sophie. It's diy vibes. Yes you're listening. I was quoted eleven one thousand dollars for new flooring in my recently purchased apartment. I managed to knock off three thousand dollars by doing my own removal of the old floor and skirting boards. It was exhausting work, but at least it makes it more affordable.
Incredible.
I think a really good place to save if you're running v you're going through this right now, and you guys did a bit of a dareut wide job as well in your backyard.
We did, We did, I mean I did have some professional help. But floorboards. When we got the quotes for the floorboards, I was shook. So I love Pinterest right, and Pinterest blows our expectations completely out. For water, you go, I want that that doesn't look too hard, very clean, easy kitchen. They're like three billion dollars. No, I don't think so.
Yeah, but if you don't have the skills to put something in yourself, maybe you can take it out because argument it takes less skill to remove it and you can save yourself and get a big of aggression out.
Yeah, it's really expensive, and we got a quote that was very similar in cost, and we've now decided to just polish the pre existing floors and call it today, because you have to have some level of compromising your budget when you're renovating, because otherwise it all just completely blows out. And as much as I wanted the beautiful herringbone floorboards, it just wasn't a money win day. Next time.
The next week comes from Lauren. I paid off my after pay and closed the account. After listening to the podcast every morning for the last two weeks.
Oh my gosh, hi again, we've seen each other every day.
For the first time in a decade. I'm going to have money leftover in my next fortnight's pay now onto financial freedom.
That makes me so happy.
Well done, Lauren.
That must be such a good feeling to be like. I've never had money left over in my payin now I do.
Yeah, really special stuff. The next weeen is from Ali massive money win. I went to Spotlight to buy some jars that were on sale to deck out my pantry. I walked to the car after paying, and I thought that was a little bit more expensive than I thought it would be. Looked at my receipt and lo and behold. It turns out the discount wasn't applied. So I went back in and the lady at the counter calculated my refund incorrectly, so instead of getting fit fifteen dollars back,
I got seventy dollars back total. I walked away with thirty glass jars with bamboo leads for twenty five dollars, so like cool, no.
Corporation, they'll rat.
Finally, the last one here is.
From don't Company Swotlight. Sorry, we still want to get sponsored. Jessica is really good at do I want to do now? I would love to do a DIY series. If anyone knows anyone's get let us know. Sure, I'll refund. That's seventy bucks you guys, so that there's no qualm still, please talk to us.
The last one, guys, comes from Rose. I started a new job with a twenty thousand dollar pay rise working from home part time, so no fuel costs.
How cool?
Rat I successfully negotiated to work four days thirty hours over three days to save money on crazy childcare costs. I would have never had the balls to negotiate my new working arrangement without the support of my feminist husband, Victoria Divine.
Thank you.
I do I do for best husband?
How iconic?
Oh my god. Well I'm taking that and running with it. It's been great celebrating some of your budget direct money wins, who were the winners of the Cancer Insurer of the Year Award twenty twenty two. Budget Direct Insurance Solved. But now we're going to go to a really quick break.
Alrighty, guys, I've got a good one.
This week.
It was requested so many times, and before before I get anywhere out, Victoria Divine, I know you're ready to go. I can see it in your eyes. You're ready to take someone down. I just want to say, because we got torn a new one on our Instagram and just.
Always get torn a new one on Instagram for just.
A little reminder, Guys, when you're cracking onto you know a company's post, generally there's a very soft, very sad social media manager on the other side of that, and in our case that's me. So Jessica, it's been kinder sometimes it's very easy to make her cry. It really is, you know what, I need to grow a bit of thick skin. But just very very clear, we as a podcast have not and will not be taking a political stance. It is not our place, and we so strongly encourage you.
If you don't know who to vote for, head to the vote Compass website. Find a party that aligns with your personal values and your personal beliefs. We can't tell you who what when we're or how However, today we are going to talk about a proposed policy. We're not talking about the political party in question, just the policy. The policy in isolation, and if you follow Victoria Devine or Scomo if that sip thing on Instagram, you may have seen her kicking up a bit of a fuss
in the comments over this proposed new legislation. Ah, yes, sir, I regret nothing. Yeah, look, it was very funny. I will not lie to you.
But there is a very big difference though, between She's on the Money, which is a platform that exists to educate you and provide as much information as possible, and sometimes our personal opinions do trickle into that because obviously we'll be like, oh, we love that or we don't love that. But this is a line that I think you know, I've discussed with them, and I'm like, I don't care who you vote for. I care who I vote for, and I will share my opinion on my
personal Instagram. But you don't come to Sheese on the Money to be told who to vote for. Like that isn't it. We are so deeply grounded in you guys having your own values and your own opinions, so it just seems really counterintuitive for us to then turn around and be like, okay, cool, so this is who we'd vote for. But over the weekend. Yes, Jess, I did kick up a bit of a stink in Scott Morrison's comments section on his recent post, and it wasn't because
of who posted it. It was actually the policy they were posting about I felt like was a relatively cheap grab for vote that does not put any of our community in the best possible position.
Yes, And just to be really clear, because I think some people were a little bit confused. When you see something scary online you kind of go, oh my god, how's that going to impact me? It is just proposed legislation. It's in effect, and even if his party were to be elected, there are no guarantees.
But they actually do what they said Originally pretty.
Common that in you know, right now election run up. They just want your votes, so they're telling you what they know the experience. Whether or not that does come into effect remains to be seen, but regardless the policy Victoria to.
Talk about it. So the Liberal government have come out and said that they are proposing that people will be allowed to take up to fifty thousand dollars worth of their superannuation out to purchase property. And I find this incredibly detrimental for a couple of reasons. So firstly, they're saying that it will push property prices down. No, it absolutely will not. It will push property prices up, and it will make you more reliant on welfare if you're
not properly structured in the future. So they've said it's up to fifty grand, which is forty percent of your super which is massive, and I find that to be It's very different to the first time super savor scheme, which is where you can put money into superannuation and you're able to then access it later for property.
Because that's an additional contribution, not your mandated ten percent, and from your employees.
So this would be digging into your pre existing superannuation balance, and from my perspective, that is so bad. We as females, especially as females, are already so behind when it comes to super that to then take that and put that on steroids is terrible And I don't want a stereotype. But the people that would be most reliant on this potential legislation are the people who are most at risk.
They're the people who don't have enough financial literacy. They see it as a really easy ticket to get into the property market. Because I had so many conversations over the weekend in my DMS of me posting, Okay, this is what that means. So fifty thousand dollars of your super Jess, let's say you go and do this scheme. You are young, so you'll go. It doesn't matter. I'll
make it back later. But that fifty grand and an average return of seven and a half percent, which is our market average when it comes to predicting potential increases in income, that becomes five hundred and seventy five thousand dollars. That is more than what the average female retires with. That's pretty crazy. What that's far more than what the average female retires within super? How is that normal?
Like?
How is that not putting you in the worst possible position ever? Yeah, that's wild.
And like to put it in perspective, I'm gonna generalize a bit and say first home owners between you know, let's say twenty and maybe thirty five. That's kind of our approximate age in the podcast. I fall squarely within that bracket. As you guys know, I'm a first home or hope for a first home buyer. The average person aged between thirty and thirty four in Australia has fifty one, one hundred and seventy five dollars in their super. So that is like almost every dollar that you have in
your super at the age of thirty four. And obviously you can be older or younger, or you might have more or less whatever, But I don't know that many people who would enough.
To take the full fifty Yeah, the fact that they're like fifty seems like a good number. How many people have that at our age? But not many unless they've really prioritized it or are super high income earners, which would really make me wonder why they're relying on superranuation to buy a first property, because they probably have enough
disposable income, again generalizing to purchase a property. But I did the maths because obviously not all of us can rely on that fifty grand right, they said forty percent of your super up to fifty thousand dollars at a cap. So let's say that you know that twenty five to forty four year old bracket is what we're talking about. If you're twenty five to thirty four years old, which is about what our She's on the money demographic is, you only have thirty one thousand, eight hundred dollars in
your superranuation. And then if we said, all right, well what's forty percent of that? That's twelve and a half thousand dollars. What house are you buying with a twelve and a half thousand dollars deposit to make taking that amount of money off you in retirement actually worth it? Like, twelve and a half grand is not a deposit on any property that I'm allf.
So are we thinking that this is maybe then just a bit of a ploy for votes more than anything, and that people are going to read the headline only it's.
Insane because then if we look across the country, we know property prices in Melbourne and in Sydney are well on average, well above a million dollars, But across Australia the median house price is eight hundred and fifty one thousand dollars. But that means an average twenty percent deposit. We're not getting into the semantics of what a guarantry is. Or if you have less or more but a twenty percent deposit on that median house that's one hundred and
seventy thousand dollars. So how is this strategy that's going to put us so far behind when retirement comes, actually putting us in a better possible position to purchase property.
It's not at all.
And I kind of want to unpack this in two places, going back to what you kind of said at the start, where the most common responses we're seeing are people saying, oh my god, it's going to push the property prices down, and then oh my god, what is that going to mean for a tirem So let's talk about property first, because I feel like that's what people care about.
I would just like to carry on about super for a really long time, but this is a very good time.
We could talk about it all day. But obviously there's a bit of back and forth. The people who are in support are very much saying this is going to be great, like you can afford a house sooner, better, wonderful. Why is that not the case? What impact is this potentially going to have on property prices?
So let's pretend for a hot second that everybody was able to get out fifty grand and then magically have their house deposit. They might already have some savings, or it might actually take them to the point where they have enough for the house of their dreams. Right, there's more people in the market, and the property market is
driven by supply and demand. Are we building a whole heap of other houses to now keep up with the increased demand that is going to exist because there's going to be more people like Jess who have money to spend on property now because they've pulled it out of their subernuation. So Jess, you who has saved fort literally years to afford your first property, and you're now in this position where we're looking for one, and it's very exciting if this goes through and it happened, and let's
be honest, none of that ever happens quickly. That will take a very long time. But if this happened, you now have more competition. There's no more houses, so that would increase property prices, not decrease them, just because people have a lower deposit amount.
And it's also for that more affordable demographic. Right, it's all the same first home buyer is going for the same property, so that they're those practically driven up exactly.
And we're not just talking about the property market across the board, like we need to talk about accessibility and what types of properties are actually being bought by millennials because I think everyone goes, wow, the averages million dollars. I'm like, well, not every millennial is buying a million dollar property like that is a ridiculous amount of money to be spending. And lots of you are looking at like four hundred or five hundred thousand dollar property purchases,
and that seems quite normal in our community. They're the ones that are going to increase significantly in value because they're the ones that are in demand. What another four hundred thousand dollar property is going to be popping up anywhere. No, because we don't have the capacity to do that. So I just think that it's a bit flawed in that if they're saying, oh, it'll make property more aft.
How yeah, let's say it works. You get your property, you have your house, stoked on life. Forty years goes by, when now sixty five and ready to retire, what does that potentially now look like with the impact of what we've withdrawn.
So they're talking about how this is actually a good system because you'll put the money back in your super real you know. Apparently apparently, So let's pretend for a hot second that was mandated and you had to put your money back into super if you sold. Why are you selling your family home when you're retiring? Where are
you planning on living? I guarantee the type of person, and this is not me stereotyping or being rude about at a promise, but the type of person that needs to rely on their superannuation to pull money out buy their first property. Is not buying a house you can downsize from. You're not buying a five bedroom mega mansion that you can and then go down to a cute little two bedroom apartment like. No, you're actually buying the two bedroom apartment as your home you're going to get
all the way through to retirement. You're going to retire. And most people who invest in their first home as their actual investment, which I don't believe it is. And I've said this a million times, your family home is not an investment. And I say that because I don't want you to be reliant on what your family home is worth when you retire to have to survive. We want to rely on investments and subernuation and things that actually put us in a position where how good is this.
We've bought our two bedroom apartment and Let's pretend we never buy another property again, we never sell it. We've lived there forever, we've now retired, we don't have a mortgage, were completely rent free, and we now rely on our super How good is that?
But that't the fact that you got rid of half your stupid to get the house in the first place for.
Not half, not half. Don't be so dramatic, Jessica. Sorry, sorry, Let's say that you did that. You're putting yourself nearly half a million dollars more than half a million dollars beyrend in retirement by making that decision. And if we look at the property market as a bit more of a whole, I think that there still seems to be this bubble of people who are like property is the only option when it comes to investment, because it's so powerful.
Look how much, jess it's increased in last thirty years. You go, okay, but that's actually completely unsustainable. Yes, property is increasing, but it's definitely not increasing in the way that it has historically. There was obviously that bubble during COVID where regional properties increased significantly because we could work more remotely, and that made a lot of sense because that was related to demand, but our incomes have not
increased in line with property growth. So how on earth is the average Australian going to actually afford a property. I think there's going to be a cap point. And when I say that, I don't mean oh my gosh, property is going to cap out it's going to be so reasonable.
No.
I think what's going to happen is there will be a point at which property won't increase that much. So if you buy a seven hundred thousand dollars house in ten years, it's probably going to be worth seven hundred grand. Again, it doesn't mean it's going to be more affordable, but will mean that there's not an increase in demand and therefore an increase in what your purchaser is willing to pay for that because they don't have the income to support that.
Yes, that mean it's growing at the pace that it's growing. At some point, surely it's just going to get to a place where it's like no one can afford it. And I mean it's obviously approaching that point now where first home buyers like myself are finding it harder and harder and harder and stract further and further to get there if it kept growing at the rate that it's growing out, literally just no one would buy houses because they literally couldn't afford that exactly.
And I mean there's so many dimensions that come into play here. People will be like, oh, well, interest rates have never been lower in this and that and the other. Let's take a step back. When my dad bought his first property, real cool guy bought it at like twenty one water bawler my dream, it was three and a half times his annual salary. Today, for the average Australian to purchase a prop it's a minimum of thirteen times their annual salary. Yeah, tell me how property prices are
staying in line with rage growth? It's not so how is that sustainable? We are now bending over backwards to get into properties that we arguably can't afford anymore. For what for the you know, ability to say, oh my gosh, Yess, I own a house and like, please, guys, I'm not throwing Jess under a bus. We've done some pretty significant financial planning for that woman, like we know that's the
right decision for her. But looking at a lot of people, and it's a very hard reality to swallow because it is really sad for a lot of people in our community, buying a property is not the best decision for them financially, because it's actually going to put them further behind because what they would pay in mortgage or payments impacts their lifestyle so significantly, and it impacts their ability to generate wealth so significantly that even if they got to retirement
and they paid their entire home off in that thirty year mortgage period, they have nothing else to show for their wealth. They might own that apartment, or they might own that home, But what do you have in super that can support you in retirement? Do you have any other assets? Do you have savings? Do you have any type of investment outside of super? If you are stretching yourself so thin when it comes to mortgage or payments,
you're probably going to find yourself in that position. And that's why I'm so pro education and so pro talking about other investment types, because you know, we could invest in shares thirty forty years ago, but the world has completely changed since then, and we need to look into other avenues of wealth generation and wealth creation so that we end up in the position we hope we end up in because it's not as easy as it used to be.
And there's no guarantee either that the education that needs to be there will be because a lot of people are saying, oh, well, you know we pulled money out during COVID. You could pull money out for super then yep. And I mean, I would argue that it's a very different place when you know, pulling money out to survive.
That's it's a very different circumstance versus purchasing a property, which arguably is a one.
But we actually spoke about this at the time because we felt there was an anywhere near the level of
education or awareness generated that needed to be. There was none people recognizing the impact of pulling out money out if you needed it one hundred percent, if that was the difference between you putting food on the table or losing your house or being homeless or whatever, of course that was a good decision, But there was no education about the long term impacts of that, and we spoke about it, and v You personally campaigned about it really strongly to make sure that people knew.
It angered me because too many people thought, wow, or just take that out, then if I can access it, it's my money. I know someone who used it to buy a car, and I'm sure even start any person that why. I was having a rant obviously on Instagram over the weekend, but I ended up in a very good DM conversation with one of my friends who's a sex worker, and she says she knows a guy who took out of Super twice twenty grand and blew it all on sex workers.
Wow.
Like, if if you can do that, yeah, anyone can lose money. And we're not talking about what he spent the money on, but the fact he could access it to then have no accountability of where that money went like that, I promise you what he spent his money on wasn't a need that was an absolute want, and it didn't put him in a better financial position, and it didn't keep food on his table and a roof over his head, which is what claiming that should have been for.
Yeah, and I mean obviously, because this is just a theoretical campaign run proposal. There's no real information on, you know what, the situation we're making.
All of that. But I just Jess George, I find it so irresponsible of them to say things like this, which they know are going to be relatively inflammatory. And when I say inflammatory, I don't mean they're trying to start an Instagram fight, which is what they got from me. But what I mean is people are going to pick it up and be like, Wow, that's so helpful. Yeah, I'll vote for him like that. It is a shameless
grab of votes. And it makes me feel really icky because I'm like, we're not talking about the education around here, Like imagine if instead they were talking about a school financial literacy program, or let's be a little bit brutal, let's talk about stamp judy. Why are we still spending that? If you guys flipped that and said, do you know what first home buyers don't have to pay stamp duty? Do you know how many more people would be able to afford houses? Do you know how many more people
wouldn't be compromised in retirement? Millions? So I just think that there's a lot they could do, a lot they're choosing not to do, and they're trying to market themselves so well, so they look like little angels. I could go on and on. I got a lot to say.
Oh, there's so much to say, and Souper is just such an interesting conversation to have, and I think before I worked here, I didn't know anything about it. And now to all of my friends, I'm like, make sure you were paying yourself super if you're self employed.
Exactly every time one of my friends gets they're paying into your super while you're not working.
You guys must be nightmares like I do you want to come to my house and talk about super Laba. I was holding the one you bring the goodbbe.
Hi bear. Have you got a money dilemma you just can't solve? The Sheese on the Money Team is here to help. Every week, we tackle your dilemmas, both big and small, to answer your most burning money, career and life questions. To get involved, simply head to our website and leave us a quick voice recording and you may just find yourself on the show. Now, let's take a listen to today's money dilemma.
Hi, guys, just wondering what your thoughts were on the salary sacrificing. To sum up, I've been salary sacrificing since I started working three years ago. It was pretty much sold to us at orientation, and it seems like it's good.
Like I salary sacrifice three hundred and forty dollars a fortnite to my rent, which covers my rent for the fortnite I live in a sharehouse, and one hundred and eight dollars to a meal entertainment car, which I find worthwhile because it's money that never comes into my account that I can use for like a night out or a brunch. But in saying that, it's like so much conflicting information, and I just don't know if it's actually the right thing to do financially.
All right, Salary sacrificing has been a relatively spicy topic in the She's on the Money community, and I'm glad someone's asked the question because it's good and bad, right, Like, I obviously don't know your personal circumstances, so I can't be like, oh my gosh, you should be salary sacrificing X, Y and Z, because that makes the most sense. But I found the point in your question really interesting because you said it was basically sold to us at orientation,
because that's how it works, right, and it sounds so good. Right, you can salary sacrifice stuff and it's pre tax money. So for those of you who don't know what salary sacrificing is, or it can be called like salary baggaging. It's basically to enable an employee, usually someone who works for like the government or in healthcare, to receive a combination of income and benefits in a super tax effective manner.
The reason they do this is because they can't usually afford to pay even more salary to people, but they can use their tax structure to make sure you can access some pre tax benefits. Right. So it's usually in areas, as I said, like government and healthcare, where they don't have the ability to be like, oh, Jesse, you've been performing so well, like here's a massive pay rise, because
it's usually government mandated or there's some reason why. There are also a lot of other employers who are like, this is a great benefit to our employees, like we're just going to add it on. But the background is that's why it basically exists. But essentially what happens is you take some of your remuneration in the form of concessionally taxed benefits instead of taking it as fully assessed income.
This process is called salary sacrificing, which our listener she mentioned before, she's been sacrificing three hundred and forty dollars in rent every single fortnight, and one hundred and eight dollars in meals and entertainment. So that's about eleven thousand dollars a year, or about eighty eight hundred dollars just for rent, which you go, all right, well, rent is a cost that you're going to have to pay regardless.
Kind of cool that she can, you know, not pay tax on that amount, because think about it, marginal tax rates are pretty high. That means she's saving at least twenty five percent at a minimum on her rent. A bit of a money win. But essentially what you do is you salary sacrifice money and it gets paid back
to you in a different way. So it could be paid back to you in the form of an entertainment and a meals card, or it might be paid directly to your rent, so you don't personally see that money usually, which is kind of cool because it can be like a little bit of making sure that your rent's paid in a forced saving sort of way. There are a fair few things you can salary sacrifice, so rent obviously, meals and entertainment obviously because our listener mentioned it, but
you can also salary sacrifice car costs. You can salary sacrifice car parking, which is kind of cool because Jess and I look about how much costs to park at a time. You can obviously salary sacrifice superannuation, which is my favorite kind. But there are number of advantages which you guys probably have already alluded to. But I'll give you a very good example. So say our listener, she didn't tell us how much she earned. I always love
knowing what people earn if they call up. So you just call up, be like, Vie, I earn this amount, and I'll be like, heck can Yeah. But let's just say someone earns one hundred grand a year and they want to buy a new car for work, and that car's worth twenty two thousand dollars. Had they entered into an employee salary sacrifice scheme, the twenty two thousand dollars would have been taken out of their pre tax income.
So instead of being paid and then buying a car with the money that you've saved, it comes out of that before, which means actually decreases your marginal tax rate because you go into potentially not for everybody, because you might stay in the same salary bracket but they would have ended up in a lower tax bracket because it decreases their taxable income to seventy eight thousand dollars a year.
So there's a number of benefits there obviously, But what that means is you can make the most of your pre tax dollars. But the trippy thing here is that people get really caught up in it. They'll go, oh, I should buy a new car, Like my friend, did you need the new car or was it just a good idea? Like just because you're saving money, and this goes for anything, right, just because you're saving money doesn't
mean that you need to spend it. Like you're spending money to save money, Like that's taking you backwards if it's actually something you didn't need or didn't actually plan on purchasing. And the same happens. And I do see this happen a lot. Is the food and beverage cards or the food and entertainment card that was mentioned that seems to get out of hand. Now I have absolutely no judgment how much you spend on food and entertainment, but a lot of people will be like, oh, I've
got this like food and entertainment card through work. So let's just go out for dinner. Yeah, okay, you need to use it IP, yeah, I need to use it up. It's like not this mentality of well, actually that's my money. Like, it's a very different mentality. And I think we have to be really careful of that because our listener just said, I salary sacrifice one hundred and eight dollars per fight, which doesn't seem that much, but over a year that adds up to be a couple of grand Like, that's
not a small expense. And if she's going, yeah, just doing it on groceries and that's actually what my budget is, I'll be like great. But if you're just going out, but you're trying to stay for a home or you're trying to be more budget conscious, like, it's still your money, regardless of whether you're you know, making a good tax saving on it or not. So I think the main thing with salary sacrificing is yeah, great, it makes a
lot of sense. And if you need to buy a brand new family car because you're having a baby and there's all these other things, like, it might be a strategy that you make use of. But I do think that it can be a little bit of a slippery slope for people because they justify their spending because they're like, ah, but I've got this card, and I'm it's basically free money. It's actually not.
So it's a very personal thing. Yeah, absolutely, But for anyone who is interested and wants to know more. We did do an episode all about salary sacrifice. He did That was April last year. Thank got your so scroll buck in your feed and we go really deep into that one.
It's called nice Salary Package. I'm pretty sure I came up with that name of my own.
That's an episode a year ago. You've just been sitting on that as like the best episode you've ever NATed.
I think it's one of the best names I've ever done.
Well, we've covered a lot in today's episode, but unfortunately, guys, I think that is all we have time for today. But just before we head off, miss Georgia King, could you please wrap the boring but very important stuff.
It would be an honor. Alrighty, guys. The advice shed on She's on the Money is general in nature and does not consider your individual circumstances. She's on the Money exists purely for educational purposes and should not be relied upon to make an investment or a financial decision. And
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