Ask the ex­perts

Money Magazine Australia - - CONTENTS -

NAME: Prue Arm­strong

STA­TUS: Mar­ried with two daugh­ters but re­cently lost her hus­band to brain can­cer.

QUES­TIONS: Where do I re­fresh my skills about sav­ing, bud­get­ing and in­vest­ing so I don’t make fi­nan­cial mis­takes? How do I be­come a strong role model for my daugh­ters to help them with their fi­nances? How will part-time work af­fect the part pen­sion that I re­ceive from my hus­band’s su­per fund?

AN­SWERS: Fo­cus on get­ting on top of your mort­gage. Ask your hus­band’s su­per fund about how your work will im­pact on his pen­sion pay­ments. Don’t com­mute your de­fined ben­e­fit fund – it is too valu­able. Fol­low a sim­ple fi­nan­cial man­age­ment plan that is sus­tain­able over time.

There is a piece of ad­vice that Prue Arm­strong wished some­one had given her when her hus­band, Peter, de­vel­oped a ter­mi­nal brain tu­mour: “Don’t make any big de­ci­sions for at least a year.”

Prue says that as a full-time carer, her fo­cus had been her hus­band and fam­ily.

“Nei­ther of you have the abil­ity to stop and dis­cuss your fi­nan­cial mat­ters. You just pay the bills and put all your ef­forts into fight­ing the can­cer,” she says. “The grief and trauma are so huge it is hard to think straight. In the af­ter­math there are plenty of de­ci­sions to make, par­tic­u­larly around the many un­ex­pected med­i­cal and fu­neral costs.”

Prue says that af­ter los­ing Peter she tried to fo­cus on ways to save money but ad­mits she wasn’t in the best frame of mind to make big de­ci­sions. One of her big­gest re­grets is chang­ing health funds, go­ing from what she now re­alises was a good fund to one that isn’t as com­pre­hen­sive. She also re-mort­gaged the home that she and Peter had built 20 years ago.

“I switched health funds think­ing I would be sav­ing money but in hind­sight I should have stayed in the one I was in due to the length of time we had been in it,” she says.

She doesn’t want to make any more fi­nan­cial mis­takes. Peter had or­gan­ised their fi­nances and rel­ished such things as shop­ping around for the best in­sur­ance deal. He was in­ter­ested in in­vest­ing and fol­lowed the share­mar­ket.

But now Prue re­alises she needs to move from her back-seat role and take over. “I re­ally need help as I don’t know where to start re­gard­ing a bud­get, the mort­gage is get­ting higher and I can­not af­ford to make big mis­takes,” she says. “Bud­gets of to­day are very dif­fer­ent to when I last did a bud­get.”

But where does she learn the ba­sics? Who will teach her how to save, bud­get, jug­gle the bills, use credit cards wisely and find the best deals? Prue wants to be a strong role model and suc­cess­ful for her two daugh­ters.

Is there a men­tor who can help em­power her in fi­nan­cial mat­ters? “I ac­tu­ally don’t have any­one who can sit me down and say, ‘OK, this is what you need to start do­ing and sav­ing and in­vest­ing,’ ” she says.

Prue re­ceives a part pen­sion from her late hus­band’s de­fined ben­e­fit su­per fund but she would like to find some work. She gave up a good job to care for Peter. She has some cash set aside for emer­gen­cies.

She won­ders how re-en­ter­ing the work­force will im­pact the part pen­sion. Is there any­thing she can do to re­duce the amount of tax she will have to pay by in­vest­ing in prop­erty, shares or su­per?

She would also like to help her daugh­ters, who are study­ing and live away from home.

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