Some more equal than others...still striving for equal pay

I snuck off to a movie on my own last week, and ended up having to wipe my nose on my sleeve, as I didn’t have a friend to ask for a tissue. Relevance? Admittedly I well up easily, but even so I was unprepared at how moving I found the subject matter. I wondered about it afterwards, and concluded it was the age-old story of courage and strength displayed by the underling in pursuit of justice. Sisters in a struggle for equal pay. And they were successful, as their efforts were directly responsible for a change in legislation in the UK only two years later. It wasn’t that long ago in the scheme of things – 1968, not quite living memory for me, but for many.

It got me thinking, looking back through the millennia of civilization, how recently women have attained our modicum of equality in the political, economic and social spheres. Women’s suffrage was adopted arm-in-arm with property rights, then the birth control pill and legislated equal pay all pretty much in the past century. In the 1970’s, with the introduction of “no-fault” divorce family structures seemed to break down, leading to many single female parents struggling to support their families. Currently, nearly one in three marriages in Australia end in divorce.

Ruminating on all the above, I am mystified when I see yet another woman peeling herself off the mat after a financial knockout delivered by her marriage breakdown. Because she has played by traditional rules.

So, what is the implicit contract a man and woman enter into, when they adopt long established norms of male breadwinner and woman nurturer? On face value it’s an acceptance of a symbiotic team-based approach in quest of a happy balanced family. And when the marriage ends? More often than not, the female partner will end up significantly worse off and unlikely ever to attain the lifestyle she enjoyed in her married state (unless she remarries). All too many women spend their final years in poverty.

It’s a double whammy. Women experience enormous disadvantages in their accumulation of wealth as a result of stepping out of paid work as carers, and in the workforce the economic gender gap persists endemically (in Australia women’s pay stuck at only 84% of men’s).

So where’s everything that was fought for? We need our female leaders to take the example of the likes of Barbara Castle, UK Secretary of State in 1968, who forged ahead to introduce the Equal Pay Act of 1970, despite enormous resistance from her male counterparts. Julia Gillard, think of those hard working social workers struggling to support their families…Oh dear here we go again - tissue please. Anyone?

Going for Green – the case for ethical investing

How would you feel knowing your investment funds have been put to use in a mining company needlessly degrading the environment? Or a pharmaceutical group that tests their products on animals? Perhaps in a tobacco company, or gambling projects?

When you pass your money over to your financial adviser, where it ends up need not be completely out of your hands. It’s worth finding out from your adviser where your funds are going. Ask about ethical investing.

What does ethical investing actually mean? And can we afford to worry about moral issues when investing our hard earned dollars?

Funds promoting ethical investing undertake to funnel capital only into sustainable assets, those promoting social and environmental good. There are several Australian funds available that actively invest in clean technology, waste management and healthcare. And the good news is, having a social conscience doesn’t have to shrink your bottom line when it comes to making investment choices.

According to Morningstar, ethical funds as a group have outperformed mainstream Australian share funds over a five-year period (4.65% versus 4.21% for the five years to July 31, 2010). The best performer over the past 5 years has been Perpetual’s Wholesale Ethical SRI Fund with an average of 7.78% over the past 5 years.

And your adviser? Be prepared to probe deeper if a glib answer is forthcoming. Perhaps he/she has not thought about it – let them know that it matters to you. Many advisers remain oblivious or resistant to client demand for responsible investment decisions - it may be worth looking around for someone who shares your values. It’s ultimately your choice where your money is going.

Good vibes and great returns? Ethical investing definitely gets the green light from us!

Back in Black - are your finances fashionable?

The unfunded black hole? Or the budget surplus, aka being “in-the-black”? Interesting how the same colour is used to describe opposite ends of the spectrum. But the current political discourse shows which one is de rigueur. Yes, it’s fashionable to balance the budget. So why is it so important? And does it have relevance to us personally?

Committing ourselves to reaching surplus in our own mini-budgets is a mind-set that goes hand in hand with “having enough”. We all know those who manage to spend as much, or more, than they earn, whose expenditure swells to reach their incomes no matter the level. It takes a measure of restraint and control to actively conquer the consumption bug, or to rein it in.

And a budget can be difficult to keep to – who can predict those unexpected but necessary expense items that seem to crop up so regularly? We can’t hold off replacing the brake pads because “it’s not in the budget”, can we?

An effective and practical way to start becoming aware of our spending behaviour, is to take just three or four discretionary expense items, say eating out, clothing, gifts or personal grooming and to allocate a realistic amount to them, monthly or quarterly. Then the countdown begins. Note everything you spend on those items, and subtract the amount spent from your allocated amount until you reach zero. And then? You stop spending. Until the next period.

It’s a bit like when you’re trying to get a grip on your eating habits – writing down everything that enters your mouth can be very enlightening and may be somewhat surprising when added up… but invaluable. Because that’s when we can really start making pro-active choices. wisewomen’s equivalent of the saying: “A minute on your lips, a lifetime on your hips”, is: “Forgotten in your closet? Or towards a house deposit.” Try chanting it next time you’re slipping out your credit card to make that “gotta have” purchase.

So we’re in “surplus”, now what? Where does our first “allocation” go?

Well, our miniscule home budget is in principle not that different from the mega federal multi millions. Just like the government, when we spend more than we earn, we’re in deficit. The money we use to fund the difference is often from borrowings or debt. And it’s not called “bad” debt for nothing, because we pay for the interest in after-tax dollars. Financing our everyday lives with a credit card or personal loans is a no-no when it comes to balancing the budget. So, our first step is to get rid of “bad” debt – easy to say yet in reality it may take months to achieve. But slow and steady wins the race to surplus - remember the government is only planning to get there in 2013!

Then what? Back to our expected unexpected costs - we need to have an emergency fund or buffer, to cater for the types of costs that we can’t foresee, but know will turn up. The size of this buffer is dependent on your personal circumstances, but hopefully by this time you’ll be starting to get a good handle on where your money is going, and how much you’ll need to put aside (in a high interest savings account) for your emergency fund.

And after that the fun starts because the hard part has been achieved. The first and most difficult steps towards building wealth are the spending-less-than-you-earn and the paying-off -your-personal-debt bits.  

Now you can consider the possibility of a new experience: watching your monthly savings mount, your investments grow; the pleasure of receiving a dividend cheque – guaranteed to rival retail therapy in the personal satisfaction stakes… and what’s more it keeps coming!

Remember it’s not what we have but rather what we do with it that really matters. And it feels so good to be back in black.

Hug-your-Provider Day!

If you’ve been in a marriage, had children and one of you more or less stays home with children, the other being the main breadwinner, then you may well have had the age old “who’s got the harder life” argument. You know how it goes. The breadwinner, feeling grumpy as they traipse off to work on a Monday morning, pointedly asks what you are doing with your day and the SAHS (Stay at Home Spouse) defensively lists the domestic chores: cooking, cleaning, washing, food shopping and a bit of slugging it out in the traffic on the school and activity run. There are no winners in this game. Volumes have been written and endless hours of debate and discussion haven’t resolved whether having to show up to work 5 days a week for seemingly longer hours every year is a harder grind than the sometimes tedious, repetitive and often thankless role the SAHS plays as a support person to family and home life.

This is not intended to add fuel to the fire of this debate but rather to encourage those of us who are NOT in the role of the main breadwinner to spare a thought for the provider in our lives. If you don’t have one, then you may well be the main provider so then, spare a thought for yourselves!

Being the provider incurs a large sense of “the buck stops here” burden. It costs a large amount of money to run a modern family, it’s highly competitive in the job market and when you do have a job the pressure to keep performing is always there. Payrises, office politics, and business travel that’s not nearly as glamorous as it sounds can wear your enthusiasm down for having the career that you always wanted. Freedom from deadlines and calendar scheduling can feel very enticing to the person in a 9 to 5 routine.

Sometimes, providers manage their anxiety at being the one responsible for bringing home the bacon 24/7 with what appears to be controlling behaviour. Maintaining a watchful eye on the SAHS’s purchases despite feeling free to spend themselves because of a sense that it’s “their” money can result in subtle power games that can be detrimental to the relationship as a whole.

We are not minimising the vital role of the SAHS. That too has it’s challenges (don’t we know them!) but today let’s give our attention and yes, empathy to our provider. Because empathy is the way out of delicate disputes over who has the mantle of hardest done by. A spontaneous big hug and a kind word of recognition of the great job they are doing in keeping the money flowing in can go along way to smoothing the furrowed anxious brow of your breadwinner.

Having sat on both sides of the fence I can appreciate both perspectives but at the moment with bills rising constantly, Christmas on the way and the children reaching an age where they put their hands out for $30 every time they go the movies (and there are 3 of them!) I find myself on occasion wanting to lie down on the floor and throw a massive tantrum when mild panic over money ensues. Instead I have decided to give myself a big hug and pat on the back for the job I have been doing. No mean feat in this day and age.

So, I urge you to do the same for the provider in your life. If, like me, it’s you who shoulders the responsibility and there is no one to supply the necessary physical embrace, be kind to yourself today! Remember…wisewomen appreciate!

How you feel about your provider?