Ask the experts
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.