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Serious thinking comes too late

LOCAL financial planners fear women and young people are leaving it too late to consider establishing a financial plan.

Jenzen Investment financial planner Josette Bourke said less than two per cent of her clients were single women, while Relationships Australia psychologist and counsellor Janet Renner said many young women still believed financial security would come with a partner.

“Generally speaking, women have tended to let their finances go on the backburner,” Ms Bourke said.

“They have not been proactive in managing their money because it has often been portrayed as a male role.”

Blueprint Planning director David Baruffi believes young people, in general, do not think seriously about ensuring financial security and establishing assets until they set up with a partner with the intention of settling down.

People were settling and marrying much later than a generation ago, Mr Baruffi said, but would still go through the financial life cycle including a house, children, interrupted working life, schooling and after-school care.

Young people in their 20s were in the accumulation stage of their life, but the family life cycle would eat into long-term accumulation of assets, he said.

“You can’t party for eight or nine years first,” Mr Baruffi said.

 “If you haven’t planned, it shortens your horizons.”

Another problem in getting people to start accumulating assets and investments was that information was not enough, Mr Baruffi said.

“It’s the motivation to do something about it that is needed,” he said.

“That needs to be sparked.”

The Government could help by ensuring practical financial education was offered in schools, as people were wary of investments mainly because of a lack of understanding about them, Mr Baruffi said, and it also needed to provide some incentive to building wealth.

“Building wealth in Australia has limited benefits because it is heavily taxed,” he said.

“That destroys people’s interest in it, and they stay with the notion of basic security from a job and a house.”

The biggest incentive to wealth building was superannuation, because it was tax effective, Mr Baruffi said.

But even then, people did not trust the Government not to dip its fingers in that till, he said.

Department of Justice employee Martine Newman said she avoided finance subjects in school and at university.

It was not until her late 20s, when she was told her rented home was no longer available, that she thought seriously about finances.

Ms Newman then decided she wanted to purchase her own home.

“I had always been goal oriented, but I just did not know where to start,” she said.

“I did not have a lot of understanding about finance and I was a bit scared of it.”

Ms Newman said her first port of call for advice was her parents, from whom she was referred to a financial adviser.

Now she says she has made the “natural progression” into income protection insurance and managed funds.

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