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The formulation of good decisions; Financially intelligent career moves; New retirement realities; Return premiums; Managing your money thru divorce

The formulation of good decisions; Financially intelligent career moves; New retirement realities; Return premiums; Managing your money thru divorce

By Amanda Morrall

"Personal finance is 80% behaviour. That means living on less than you make is a matter of controlling yourself, not a matter of math." - Dave Ramsay

1) Good behaviour

Dave Ramsay is right on the money when he says that behaviour is the driving force of personal finance. Until we learn how to control consumer impulses, to fully understand the difference between needs and wants and learn how to execute mindful and well considered choices about how to manage our money we risk a vicious circle of spending that results in no net savings or else worse - debt.

The following from looks at what distinguishes good from bad financial decisions and offers some tips on how to transform one's behaviour so that on balance we are making more good than bad decisions.

2)  Career moves

There's an old saying about not trying to fix something that isn't broken. Careers and jobs, aren't unlike relationships, in that it's hard to know sometimes whether they are in fact broken. Over time we become so habituated in our daily patterns that we can become impervious to the uncomfortable reality that they have become nothing more than work. That may be just fine for some folks although my personal view is that it is better by far to be engaged, challenged, and inspired by your work so you don't live your life punching a clock and counting the days till holidays. Naturally all jobs have their boring bits and obviously it's unrealistic to be in love at all times with your work, however the good times most definitely ought to outweigh the bad.

For those contemplating a career transition, here's some practical advice to make sure you're well placed financially to make the leap. 

3) Retirement reality

Next week my father and his wife arrive from Canada for a visit. For my pa, who just turned 70, it's a working visit. His extensive international connections include the transportation department at the University of Auckland. After years and years of bugging him to retire, I finally gave up. I realised he loves what he does for a living too much to ever stop and will therefore continue to work until he is no longer able to do so. 

As I've written several times before in past columns, working past the traditional age of retirement is something that is being forecast for the masses worldwide. That relates to depleted Government pensions, improved longevity and reduced public resources caused by an aging population with astronomical related health care costs. For some like my father, working into their '70s will be a labour of love. For others, most like the majority, it'll be a financial necessity given the prospect of living till 100.

New York Times writer Steven Greenhouse looks at our new retirement reality in greater depth here.

4) Premiums risk

Working past the traditional age of retirement is one option to padding the retirement nestegg. Investing is another. In an upcoming series posted by Monevator, The Accumulator, discusses the potential to earn more money through return premiums.

5) Economics of divorce

The emotional bloodshed involved in a divorce isn't pretty. I know of what I speak. The financial part of breaking up is no less difficult however amid the guilt, grief, shame, anger and angst, it's critically important not to lose the plot. Some tips here from on how to properly manage your finances during divorce.

And because I hate ending on a down note here's some vintage The Cure to kick off the weekend. Check it out; 18 million views. I'm off to buy some hair spray.


To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter @amandamorrall or at


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#3 I read a book about 5 years ago by a couple of Aussies I think that talked about The Great Retirement Myth and how the concept of retirement was outdated. It seemed a little 'out there' at the time so it's interesting to see now that more and more people are discussing the concept of retirement and how it's becoming less and less feasible.

The NY Times article is interesting. Of course there are a couple of glaring problems with the idea of not retiring - you have to be in good enough health to keep working every day, which a lot of my generation are not, and you either have to start your own business or have an employer who is keen to keep you on in some capacity past age 65-70.

And of course it causes higher youth unemployment because the elderly are keeping those jobs that would otherwise become vacant.

Higher youth unemployment because the elderly are keeping those jobs - it's a very common view, but there's actually no evidence for it despite people looking.  You might be interested to take a look at this

Well that's certainly an interesting viewpoint. I'd be interested to know if that's really the case. I mean, if I need to work longer to build up my retirement pot I don't really care if I'm depriving a school leaver of a job.

But the logic of older people moving out of the workforce and everybody moving 'up' a notch leaving openings at the bottom for young job starters just seems sensible. If there are only so many jobs in an economy, certainly it's the only logical conclusion.

So the question is: do older people working stimulate the economy enough to create new jobs for graduates and school leavers, and more new jobs than all the jobs they are 'holding onto'?

But it's not the case that "there are only so many jobs in an economy".  Google "lump of labour fallacy". 

In Nz there is no retirement age so if you have a job and can do it Im not aware that working past 65 is a problem.
Youth unemployment, well no 20 year old or very few can do my job, so actually my employer loses capability if I retire or re-hires someone else for the same or probably more money.  So sure shelf stacker, road sweeper maybe that is true, professional / trade no i dont see it.
Personally I think retiring for me will not be possible (and indeed many 50 somethings), the GFC will I think destroy our pensions and Im not sure how much state pension there will be. So at best I and many others will probably cut back to say 3 days at 65 which I think my employer would be reasonably OK with....time will tell.
And of course you dont have any children do you? so you dont see that cost/expense of Uni etc...

old system indeed.
How many companies actually train apprentices these days? few.  They all assume they can just go into the market and ppl with the skills are there at a bargin price, uh prehaps not.

@steven well no 20 year old or very few can do my job

Clearly. But the usual progression is that senior staff retire, leaving a senior position open that is then taken by someone slightly further down the ladder than them who is ready to take on that extra level of responsibility, and so-one down the chain until there is an opening at the bottom for a new grad or school leaver to come on board as a trainee.

If more senior staff stay on for longer then (with no other variables included) there will be less openings for junior staff opening up because everyones not moving a notch up that ladder.

Eventually of course once the *average* retirement age has settled on a new age (say, going from 65 to 70) then the job trickle-down effect will resume, but there would have been a few years there when there were a lot less openings at the bottom.

But there are other variables ie lets not assume that there is no growth or an equal number of ppl coming through, when actually there are less. Or that my work has enough ppl (actually there isnt) So given that there are actually less ppl coming through and indeed we seem to think we can grow for ever...
So I'd like to see what the NET effect really is.

#4 "Have you begun to fret that slow growth could stall your escape from work like custard in a jet engine"

Unfortunately I couldn't really relate to this metaphor - I guess I'm just one of the few people in the world who have not experienced the application of custard into a jet engine.

Speaking of matters finance and brains...the Cabinet table cloth is stained with soiled energy...tisk tisk...
The real question not asked in the media...since this is an example of the mismanagement and political filth that pervades the economy...what other dirty little secrets remain under the table cloth?

"In a departure from previous Euro bail-outs - the small Mediterranean country is the fifth country to have turned to the eurozone for financial aid - the country’s savers are being asked to make sacrifices in a move which critics say has dangerous precedents for future bail-outs".
Your savings are safe in a bank...ha

"Cypriot President Nicos Anastasiades explicitly promised in his election campaign, only a few weeks ago, that depositors were safe"
Lies, dam lies and political promises...hahahaaaa