The Super Review for Single Mothers

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The Super Review

No one really likes to talk about money. Not only is it incredibly un-sexy, but for many it’s also an uncomfortable and awkward topic. But this is an important conversation we need to have. We need to be aware of what’s going on.

Managing finances as a single mother can be tough, and going from a double income to a single income is a shock and an adjustment. For most of us, our priority is the here and now. Can I afford day care? Perhaps we shouldn’t go out for dinner and save our money instead? Oh crap, my daughter needs new shoes AGAIN. Why is my energy bill $700???

But one of the things that some single mothers forget to review is their superannuation. And really, as women, we should all be on top of our finances, particularly our superannuation. Single mothers or not.

Consolidate.

Firstly, it’s important to check that you only have one fund. When I did this several years ago, I discovered I had about five different superannuation funds that I had been signed up to through various casual jobs I’d had over the years. Not good.

The more superannuation funds you have, the more fees you have to pay. Choose a fund, and then consolidate all the funds into one. This is a fairly easy process, and should only be a matter of filling out a form or two.

Check your superannuation is not in a Fat Cat Fund.

If you find yourself in a similar situation as I was, how do you know which fund to choose?

One of the main things for me was to compare the fees. You want to ensure that your super is not in a ‘Fat Cat Fund’. According to Stockspot, a fund is called a ‘Fat Cat’ if, over five years, it has performed worse than other funds by more than 10%. The majority of Fat Cat funds (69%) charge their customers 1.5% or more in fees. It doesn’t sound like a huge amount of money, but compounded over 30 + years of work and paying superannuation – it’s a huge amount of money!

High fees + poor returns (i.e not doing a good job investing its members’ money) = #fatcatfail

Stockspot have recently published a report on the impact high fees have on our long-term superannuation savings. One of these findings is that a millennial could lose over $300,000 of their own money in fees if they’re in a Fat Cat Fund. That is staggering!

The study, which examines 4,102 funds, names the worst performing funds and highlights the undeniable link between high-fees and poor long-term performance. This year the report found $45 billion of Australians’ money is currently managed by Fat Cat Funds and $600 million was paid in fees to these funds in the last 12 months. WTF?

The impact on women is higher because of the 16% gender pay gap and time off from work for maternity leave. Women are then also generally the ones who are out of the work force for longer because they’re raising children, and often only returning to work part time.

As single mothers, we NEED to make sure that our money is in the right place. There may be no one else to share superannuation funds with. We need to protect our financial future. We need to look at this NOW.

I for one plan on living comfortably in retirement and an extra $300,000 (of my own hard earned money) would do nicely. 

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Take Action!

It’s super easy (like what I did there?) to check if your super fund is a Fat Cat; you can check right here.

Even if you don’t need to consolidate, I encourage you to review your superannuation. Check if your superannuation is in a fat cat fund, and consider swapping to a low-fee fund if you’re being charged too much. Super is one of the most important savings tools you will have in your life-time and how much you pay for it really does make a difference.

Take control of your money and where it is going. It could save you $300,000.


P.S DID YOU KNOW?

The first online course for single mums is now open! You can read all about it, and enroll right here. It kicks off on the 13 November. Enrollment closes at midnight (Australian Eastern Standard Time) on 12th November. Oh, and single dads – you can do it too!

Or find other ways I can help you here.

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