How to be financially independent at any age

How to be financially independent at any age

“Its not what you earn that counts, but what you spend.”

BY Business Chicks, 10 min READ

This summary has been prepared by Business Chicks based on Effie Zahos’s Masterclass, thanks to our friends at AustralianSuper

In a recent Masterclass author, Canstar Editor-at-large and financial commentator Effie Zahos shared a four-point hit list to to set yourself up for financial independence at any age. Padding the budget, getting out of debt, building wealth and managing your superannuation are not impossible goals, and with Effie’s practical advice you can feel positive and in control of your finances.

The psychology behind saving

A recent study found that 57% of women save a percentage of their after-tax income, 16% are unsure as to how much they are setting aside, and 26% revealed that they don’t save at all*. According to Effie, there is no secret formula to what percentage of your pay check you should be saving. Everyone’s financial journey is personal, and while saving as much as possible is the ideal scenario, we’re all facing unique circumstances. The easiest way to save? Begin with an end goal and treat your savings as a regular expense.

When it comes to money, it’s more than just dollars and cents. There is behaviour and psychology linked to the way we save and spend. We have triggers that lead us to spend, so to overcome this behaviour it’s all about identifying and addressing these triggers head on.

Effie suggested naming your accounts by their purposes, for example, a Splurge, Tax and Holiday account. What worked for her was naming accounts after each of her children. She found there was more emotion involved in taking $100 out of her child’s school fees account as opposed to an Everyday bank account.

Effie also suggested distributing money amongst different savings accounts, to make each transaction feel more meaningful and aligned to an end goal. When you’ve got your money saved in one account, it’s likely that you feel less accountability over withdrawals.

Managing your finances during crisis

“The most important thing when going through a crisis is to put food on the table, a roof over your head and be able to turn the lights and heating on.” Funding those must-haves can be made easier by following Effie’s seven tips.

  1. Count all your beans. Where is your money coming from? What other sources of income are available to you?
  2. Apply for any (and all!) hardship reliefs. These may include rent or mortgage relief, or delayed payments on any loans. Keep in mind you’ll have to pay them back eventually, but buying yourself some time may make the world of difference.
  3. Draw up all of your expenses and allocate them into one of three buckets. Your must-haves (food, rent/mortgage, power), your need-to-haves (kids entertainment, internet) and your nice-to-haves. You’ll have to rip up whatever is in your nice to have bucket, but we promise your future self will thank you.
  4. Review your must-have bills. Call your energy supplier and health/home/contents insurance provider and ask if you can get a discount. If their answer is no, compare the market and switch providers.
  5. Reserve your cash flow. If you have accrued vouchers or loyalty points, try and shop with these for your must-have purchases.
  6. Hit pause on your saving goals (and don’t feel bad about it!)
  7. Vow to set up an emergency account when life resumes as normal.

Identifying  your bad debt

When it comes to debt, there’s good debt (say, a home loan) and then there is bad debt. Bad debt (think car loans, credit cards, pay day loans or buy now pay later programs) is debt that holds you back. Unfortunately, good debt can become bad debt. Has it changed your behaviour? Has it stopped you from being able to save money in the future? Then you’ve got yourself a bad debt, and you should focus your savings efforts on freeing yourself from it.

Is FOI (Fear of Investing) holding you back?

There are several ways to invest, and you can do so directly or indirectly

  • Cash: savings accounts, term deposits
  • Fixed income: bonds, debentures
  • Property: building, land factories
  • Equities: shares

When and where to invest in property is one of the most commonly asked financial questions. Effie referred to the answers below** from three experts published in her Money Mondays newsletter. While we haven’t seen the predicted 30% fall in house prices this year, we haven’t yet hit the September cliff, where government stimulus packages are due to end, and mortgage pauses are lifted. Effie’s advice? Regardless of when you’re planning to invest in property, do your due diligence.

Making superannuation work for you

“Time in the market is better than timing the market.” Superannuation is a long term savings vehicle and performance needs to be considered over the long term. Even in your 40s and 50s, you likely have many working years ahead of you to see it compound and grow.

Effie’s advice was that superannuation should not be seen as an emergency access account. It’s the most effective tax strategy that we have, and withdrawing it will directly impact your future. Before accessing your super early, ask yourself:

  • Are there any other options?
  • Do you know the impact of accessing your super early?
  • What will you do with the money?
  • Does it make financial sense?
  • Do you need expert independent advice?

Effie’s advice on picking a super fund? Look at the returns over the past 5-10 years.  Last year’s winner is no guarantee on this year’s winner. Want to see how your super is tracking? Check out the Super Balance Detective to found out roughly how much you should have in superannuation today for a comfortable future retirement.

And remember, it’s never too late. You can contribute up to $25,000 into your super every year, including what your employer is contributing, to be taxed at only 15%.

Re-negotiating your mortgage

Re-negotiating your mortgage might seem like a good idea, but there are a few things to consider before jumping in. First things first, you have to be what the banks see as a “good customer”. If you’re in an industry that is perceived to be high risk, the bank will likely not make any changes to your existing arrangement. If you haven’t paid at least 20% of the price of your property,  you’d also have to pay Lenders Mortgage Insurance to a new bank were you to switch. Banks will also look at your digital footprint (yes, that includes meal delivery services). If it’s relatively clean, then you may have a shot at renegotiation. Effie’s advice was to call your lender and ask what they can do for you. Try negotiating with your existing bank, you might be surprised that they come to the party. A lot of banks have a basic home loan that is cheaper than their advertised specials.  If they won’t come to party, walk the talk and switch banks.


As Australia’s largest super fund, and with a history of strong long-term performance, AustralianSuper is committed to helping members achieve their best possible retirement outcome. AustralianSuper can help you with small, simple steps that could make a big difference to your financial future and set you up for the retirement that’s right for you.  

The views expressed in this article are those of Business Chicks’ guest presenter, Effie Zahos, as at the date of publication, and not AustralianSuper. The article provides general information and should not be considered as financial product advice. Please seek professional advice that is appropriate to your own business and personal circumstance.


*Canstar’s 2019 Consumer Pulse Report  

**Money Mondays newsletter – canstar.com.au


©2020 Business Chicks

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