Author name: 2 Ezi

Talking about money, setting goals together, and collaborating as a team can boost your financial compatibility and lay a strong foundation for your relationship. Key points: Everyone enjoys payday, but what do you do with any surplus earnings? While being a “saver” or a “spender” might seem like a personal preference, in relationships, financial decisions, both everyday and long-term, are not solely individual. When romantic partners merge their lives, their financial choices become interconnected as well. As couples become more acquainted with each other, they may uncover hidden financial details about one another. They might observe their partner’s extravagant spending habits and realise it mirrors undisclosed family wealth or escalating credit card debt. They might also notice deliberate frugality and come to understand that their partner is diligently repaying loans, living paycheck-to-paycheck, or steadily growing a savings account, while battling a persistent fear of scarcity. While much of our true financial narrative remains concealed from the public eye, romantic partners often have a front-row seat, and they may or may not see eye-to-eye on each other’s money management approaches. When couples struggle to establish financial harmony in their relationship, such as compatibility and comfort, their overall relationship well-being can be compromised. Opposing financial approaches often attract each other While we might assume that spenders naturally gravitate toward spenders and savers toward savers, empirical evidence suggests otherwise. Despite the common belief that similarity draws individuals together, research indicates an intriguing trend: individuals inclined to save money frequently partner with those inclined to spend it. On the surface, savers and spenders appear to complement each other, potentially benefiting both parties. Indeed, it’s often individuals classified as “tightwads” (who spend less than they’d ideally prefer) who find themselves in relationships with “spendthrifts” (who spend more than they’d ideally prefer). Perhaps they anticipate influencing each other’s financial behaviours, fostering greater moderation and achieving a balanced approach to money management. However, the prevailing outcome tends to lack compromise. Despite hopes for gradual adjustments from both partners, marriages between “tightwads” and “spendthrifts” frequently encounter financial discord. Financial compatibility encompasses a broad spectrum of monetary choices It isn’t solely determined by earning similar incomes or sharing similar financial backgrounds; rather, it hinges on individuals’ attitudes towards money. Consider the myriad joint and personal financial decisions that individuals in relationships must navigate. Couples who are highly compatible tend to have fewer disagreements about money, while less compatible partners often find themselves in more frequent disputes. How well do you and your partner align? Assessing your financial compatibility involves reflecting on how you both approach significant financial matters, such as: Additionally, it involves considering smaller financial choices that partners must make together, such as: Reflecting on these questions can shed light on your financial compatibility as a couple. Partners who effortlessly find common ground on such matters typically exhibit greater financial alignment compared to those who frequently disagree. It’s important to recognise that discussions about money can evoke strong emotions, and financial incompatibility may pave the way for significant conflicts within a relationship. Relationship instability often stems from financial incompatibility While romantic partners may engage in disputes over various topics, disagreements regarding finances tend to have a particularly detrimental impact on the health of a relationship. Longitudinal studies have revealed that a higher frequency of financial conflicts is a strong predictor of divorce. Surprisingly, the level of financial well-being individuals enjoy doesn’t necessarily correlate with the stability of their relationships; rather, it’s the presence of conflicts related to money management that largely determines whether relationships endure. The spectrum of differences between partners in terms of their saving and spending habits can vary widely. Partners may exhibit similarities, slight differences, or significant disparities in their financial behaviours. Interestingly, research indicates that marital satisfaction tends to decrease as the gap between partners’ saving and spending tendencies widens. Greater disparities in financial approaches can lead to more frequent disagreements, potentially weakening the foundation of a relationship. Partners can develop a financial approach that fosters the well-being of their relationship Research indicates that marital satisfaction tends to decline when spenders and savers form unions, particularly when significant differences in financial behaviours exist, leading to more frequent arguments and lower relationship quality. So, what strategies can couples employ if they find themselves in love with someone whose financial habits are incompatible with their own? Financial transparency Preliminary evidence suggests that relationship outcomes are better when couples opt for joint accounts over personal ones. Having a clear understanding of each other’s financial situation promotes healthy relationship dynamics, potentially fostering more open discussions about financial matters. Acceptance While the question of whether partners influence each other’s financial behaviours over time remains debatable, individuals can choose to accept and embrace their partner’s financial tendencies, whether frugal or inclined toward luxury. By adopting an accepting attitude, individuals can mitigate feelings of anger or frustration, reducing the potential damage to the relationship. Specialisation In many long-term partnerships, one individual often takes on the role of the relationship’s primary financial decision-maker, gaining more financial expertise over time. This division of responsibility may help alleviate conflicts surrounding money matters, as one partner assumes the role of overseeing financial decisions. Communication Discussing spending habits, addressing financial stress, creating financial plans, or determining savings goals can be challenging conversations for couples. However, recent evidence suggests that engaging in financial communication can mitigate the negative effects of financial stress on relationship well-being. Money holds different meanings for different people, often symbolising safety, power, and success. Understanding the underlying significance of money for one’s partner can facilitate a deeper understanding of their financial decisions and serve as a foundation for constructive discussions about financial compatibility. DISCLAIMER:  This article is for informational purposes only and does not constitute official financial advice. Please consult a financial advisor or relationship counsellor.

This article evaluates land as a property investment, analysing its pros and cons to ascertain its financial viability. Investing in real estate has long been considered a sound financial strategy, offering both stability and potential for growth. In Australia, the prospect of buying land, in particular, has gained popularity in recent years. Investing in Land Investing in land, also known as land banking, is a strategy where individuals or organisations acquire parcels of land with the expectation that its value will appreciate over time. The rationale behind this type of investment is multifaceted and includes the following factors: Land is a finite resource, and it cannot be manufactured or created. In Australia, urbanisation and population growth have placed increasing pressure on the available land supply. This limited supply can potentially drive up land values, making land an attractive long-term investment. Over the years, land has historically shown the potential for capital growth. As demand for land increases due to a growing population and urban expansion, the value of land can rise. This capital growth can lead to substantial returns on investment, making it a compelling option for those willing to hold land for an extended period. Investing in land can also generate passive income. Some landowners lease their land for various purposes, such as agriculture, grazing, or mining, earning a regular rental income. This income stream can provide a stable source of cash flow, contributing to the overall profitability of land investments. Diversifying one’s investment portfolio is a common financial strategy to mitigate risks. Land investments can be an excellent addition to a diversified portfolio, as they tend to have a low correlation with other asset classes like stocks and bonds. This can provide stability during economic downturns and market fluctuations. Benefits of Investing in Land as Property Investing in land can offer several advantages for property investors. Tangible Asset Land is a tangible asset, which means it has intrinsic value and is not subject to depreciation in the same way that structures or buildings are. This tangibility makes land a stable investment that can withstand economic turbulence. Potential for Capital Appreciation Land values tend to appreciate over time, especially in high-demand areas. As the population grows and urban development expands, land in strategic locations can experience substantial capital growth. This potential for appreciation can result in significant profits for investors. Tax Benefits Investors may benefit from various tax incentives when holding land. These incentives may include deductions for expenses related to land management, depreciation on improvements (if applicable), and even potential capital gains tax exemptions under specific conditions. Low Maintenance Costs Compared to other real estate investments, land typically has lower maintenance costs. There are no structures to maintain, repair, or renovate, which reduces ongoing expenses. This can enhance the return on investment. Diversification Land investments can provide diversification to an investment portfolio, reducing overall risk. They often have low correlation with other asset classes, making them a valuable addition for risk management. Drawbacks of Land as Property Investments While land investments offer various advantages, they also come with their fair share of disadvantages. Illiquidity Land investments can be illiquid, meaning they cannot be easily converted into cash. Selling land can be a lengthy and complex process, and it may take a considerable amount of time to find a suitable buyer. Holding Costs Owning land can be costly due to holding expenses such as property taxes, insurance, and maintenance. While these costs are generally lower than those associated with developed properties, they can still add up over time. Lack of Income Unless you lease the land for various purposes, it doesn’t generate regular income. This can be a drawback for investors who rely on cash flow from their investments to cover expenses or fund other projects. Market Volatility The value of land can be subject to market volatility. Economic downturns, changes in zoning laws, or shifts in demand for specific types of land can affect its market value. This can lead to periods of stagnant or declining property values. Uncertainty Investing in land involves a certain level of uncertainty, as it relies on factors beyond an investor’s control, such as government policies, infrastructure developments, and changes in demographics. These external factors can impact the success of the investment. The above five factors were given further detailing by Richard Wakelin in the Australian Financial Review. Mr. Wakelin stated that Victoria’s plans to raise more taxes on vacant properties have raised attention in light of issues of land banking exacerbated by the housing crisis. He took note of a recent Prosper Australia study which indicated that land banking practices resulted in home buyers being forced to pay $5.9 billion for the properties. An accounting of public land parcels the government made available to developers also found that only 23 per cent of that public land was eventually sold to private homebuyers in the end. Conclusion Investing in land in Australia is a strategy that has gained prominence due to its potential for capital growth, limited supply, and diversification benefits. However, it is essential for investors to consider the advantages and disadvantages carefully. Land investments may not be suitable for everyone, and their illiquidity, holding costs, and lack of regular income should be taken into account when making investment decisions. The decision to buy land should align with your long-term financial goals and risk tolerance. DISCLAIMER:  This article is for informational purposes only. 2 Ezi has no relationships with any landowner or property agent.

In the face of the cost-of-living challenges, Australians persist in their dedication to bolstering their savings, as indicated by an NAB report. On average, Australians maintain approximately $34,000 in savings; however, this amount varies considerably based on factors such as age, gender, location, and income, as revealed in the report. “Nearly three quarters (73%) of Australians are trying to build their savings…” the NAB reported. In pursuit of this goal, many Australians are opting for savings accounts that facilitate faster growth of their savings, whether through a term deposit or a high-interest savings account. Let’s delve deeper into the range of savings accounts available. Types Of Savings Accounts Many savings account options are accessible to Australians, each offering distinct advantages and terms. Outlined below are the primary types of savings accounts. However, it’s important to recognise that banks and financial institutions vary in their offerings and terms and conditions (T&Cs). Therefore, thorough research into the product is essential before choosing an account. Online Savings Accounts An online savings account operates primarily through online channels, exclusively accessible via web or mobile devices, thereby eliminating the option for in-branch transactions or inquiries. Typically, these accounts offer a fixed interest rate, disbursed monthly irrespective of deposit or withdrawal frequency. Online savings accounts function as low-maintenance options where funds can grow passively. However, they often impose minimum and maximum deposit limits. Bonus Interest Savings Accounts Bonus interest savings accounts share similarities with online savings accounts, but they offer an additional “bonus” interest rate contingent upon meeting monthly requirements. These requirements vary among accounts and financial institutions but typically involve a minimum number of transactions, growth in account balance compared to the previous month, a specified monthly deposit, and similar conditions. Meeting these criteria results in the receipt of both the base interest rate and the bonus interest rate, resulting in the total interest rate. For instance, the base interest rate might be 0.05%, while the bonus interest rate could be 5.10%. Consequently, if the bonus criteria are fulfilled, the total interest earned for that month would be 5.15%. Failure to meet the criteria results in receiving only the base interest rate for that particular month, often significantly lower than the potential total interest rate with the bonus, as illustrated in the above example. High Interest Savings Accounts As per a separate report from NAB, over half of Australians (55%) are allocating their funds into high-interest savings accounts. “New NAB data released today reveals nearly two thirds of younger Australians between 18 and 29 years old have placed their savings in a high interest account, compared to just half of Australians aged over 30,” the March 2023 report indicated. “High interest savings accounts can be a safe, smart and stable way to manage your money, providing ready access to funds if they’re needed as well as a rewarding interest rate,” Kylie Young, the Executive in charge of Personal Banking at NAB, commented. Maya McIntyre, a 22-year-old resident of Victoria, maintains her savings in a high-interest account, enabling her to steadily increase her balance due to the elevated interest rates. “It’s really important to me to be able to save money now and put it away for the future, whether that’s a house, a holiday or money for a rainy day,” McIntyre said. “I want to be able to see my funds and access them easily if I need to, and at the same time get the interest paid monthly.” High-interest savings accounts resemble bonus interest rate accounts because of their elevated interest rates. However, the primary distinction with high-interest savings accounts lies in having a single interest rate that doesn’t necessitate meeting monthly criteria to earn interest. Interest Savings Accounts An introductory interest savings account provides a considerably higher interest rate compared to the market average, albeit for a limited duration typically ranging between four and six months. While this initial offer attracts customers, it might not be conducive to long-term savings growth. My preference is to have visibility and easy access to my funds while also receiving monthly interest payments. Following the expiration of the introductory period, the standard interest rate offered by the account often diminishes, falling below rates available elsewhere. For instance, Macquarie Bank presents an introductory saver account with a 5.55% interest rate for the initial four months, which then reverts to 4.50% after this introductory period concludes. Additional conditions, such as deposit limits or age brackets, might also apply. For those prioritising long-term savings, it’s advisable to explore other options beyond the initial four-month period to sustain high-interest savings rates. Round-Up Accounts Round-up accounts enable Australians to bolster their savings while engaging in daily transactions using their eligible transaction cards. These accounts function by establishing a link with your transaction card and, based on your predetermined amount, rounding up each transaction to the nearest dollar, $5, $10, and so forth. Subsequently, this rounded-up amount is transferred to your designated savings account. For instance, if you make a $17 purchase and opt to round up to the nearest $10, the purchase amount would be rounded up to $20. The additional $3 would then be transferred to your savings account, while the $17 would be allocated to the merchant. Many of Australia’s major banks offer round-up features, which can be activated or deactivated at your discretion. Term Deposits As per NAB, term deposits are significantly more favoured by older Australians (aged 65+, 29%) compared to younger counterparts (aged 18-29, 7%), primarily due to their capacity to provide a “guaranteed, set income.” In essence, a term deposit represents a form of savings account inaccessible for a specific duration, offering a fixed rate of interest disbursed at the end of the term (or periodically, monthly or annually, depending on the bank). Early withdrawal typically incurs a financial penalty. Opening a term deposit usually necessitates a minimum deposit amount (often around $5000-$10,000), with terms typically spanning from one month to five years. The interest rate earned typically increases with the duration of the term. Compare

Financial planning is a well-regulated industry in Australia, where one distinct category is the fee-only financial advisor. When it comes to financial management and building your financial security, finding a trustworthy and skilled advisor is crucial. In Australia, financial planning is a well-regulated industry, and there are various types of financial advisors available. One distinct category is the “fee-only financial advisor,” whose services are sought after by those seeking unbiased financial guidance. In this blog, we will look further into the roles, advantages, and drawbacks of a fee-only financial advisor, and explore how to find an accredited fee-only financial advisor in Australia. Roles A fee-only financial advisor, as the name suggests, charges clients solely for their consultation services. They do not earn commissions, kickbacks, or any other form of compensation from financial products or services they recommend. This unique structure creates an environment where the advisor’s interests are more aligned with those of the client. Their primary roles include the following. Financial Assessment and Planning Fee-only financial advisors start by assessing their client’s current financial situation. They analyse income, expenses, assets, and liabilities to understand the client’s financial health. Once this is done, they help create a personalised financial plan that outlines the steps the client needs to take to reach their financial goals. Investment Recommendations For clients looking to invest, fee-only financial advisors offer recommendations based on their objectives and risk tolerance. These recommendations are often based on an objective analysis of market conditions and available investment options. Retirement Planning Planning for retirement is a common concern for many Australians. Fee-only financial advisors can provide guidance on retirement savings strategies, superannuation, and other financial vehicles to ensure clients can retire comfortably. Tax Planning Effective tax planning can save clients a significant amount of money over the long term. Fee-only advisors assist in optimising tax strategies to reduce tax liabilities while remaining compliant with Australian tax laws. Insurance and Risk Management These advisors also help clients assess their insurance needs, including life, health, and income protection insurance. They analyse various policies and recommend the most suitable options. Advantages of Working with a Fee-Only Financial Advisor Objective Advice Fee-only financial advisors have no incentive to recommend financial products or services that may not be in the best interest of the client. Their advice is driven by what’s most advantageous for their clients’ financial well-being. Reduced Conflicts of Interest Since they don’t earn commissions, there are fewer conflicts of interest when it comes to investment recommendations. This makes fee-only advisors more transparent and trustworthy. Impartial Investment Guidance Fee-only advisors provide investment advice based on research, analysis, and the client’s financial goals, rather than the commissions they would earn from specific investments. Custom Solutions The focus of fee-only advisors is entirely on the client’s unique financial situation. This leads to personalised financial plans tailored to the client’s needs and objectives. Fiduciary Duty In Australia, many fee-only advisors are held to a fiduciary standard, meaning they are legally bound to act in the best interests of their clients. Disadvantages of Working with a Fee-Only Financial Advisor While fee-only financial advisors offer many benefits, there are also some drawbacks to consider. Cost Fee-only advisors charge for their services, often at an hourly rate or a flat fee. This can make their services more expensive compared to commission-based advisors, especially for those with limited financial resources. Limited Product Access Fee-only advisors may not have access to a wide range of financial products or services. They may recommend only those available through their firm or partners, which could limit the client’s options. Lack of Incentives While the absence of incentives can be an advantage, it can also mean that fee-only advisors may not be as proactive in managing the client’s investments as commission-based advisors, who have a financial stake in the outcome. Finding an Accredited Fee-Only Financial Advisor If you’re considering working with a fee-only financial advisor in Australia, it’s important to ensure that you’re partnering with a qualified and accredited professional. The following are some steps to help you find the right advisor: Conclusion Fee-only financial advisors offer several advantages, including unbiased advice and a focus on clients’ best interests. However, the cost and limited product access are disadvantages to consider. To find the right fee-only advisor, perform due diligence, check for necessary accreditations, and make sure their approach aligns with your financial goals and values. Working with a qualified fee-only financial advisor can be a significant step toward achieving your financial security and objectives. DISCLAIMER:  This article is for informational purposes only and does not constitute official advice. 2 Ezi has no affiliations with any financial advisor.

Here are money mistakes counsellors see couples make, to help ensure that money doesn’t sour the atmosphere. Discussing finances with your partner can often feel uncomfortable, awkward, and even scary, amplifying the vulnerability in such conversations. Being in a relationship inevitably involves making mistakes, but allowing financial matters to fall by the wayside shouldn’t be one of them. Lack of Money Communication When did you last broach the topic of finances with your partner? Amidst the hustle and bustle of daily life, couples might neglect these crucial discussions. However, it’s vital for both parties to synchronise their understanding of their financial situation, both joint and individual, to avoid surprises later on. Establishing a structured approach to these conversations can help. Set aside dedicated time and space for discussions and agree on the topics to cover regularly. The goal is to transform these conversations into constructive exchanges rather than burdensome tasks. Our counsellors recommend scheduling a “money date” to alleviate tension, foster mutual learning, and infuse enjoyment into managing finances once more. Failure to Collaborate as a Team In a committed relationship, it’s imperative to unite financially. This entails making joint decisions and ensuring both partners are fully involved in financial matters. No one should unilaterally make financial choices without consulting the other, nor should one person bear sole responsibility for managing finances. Both individuals should possess a comprehensive grasp of their financial inflows and outflows, bill due dates, passwords, organisational systems, and so forth. Consider the worst-case scenario: if something were to happen to one partner, the other must be informed and capable of managing the situation seamlessly. Overlooking Money Personalities Are you familiar with your and your partner’s money personalities? Various money personas exist, such as spenders, savers, risk-takers, security seekers, and more. Understanding these dynamics is pivotal for financial comprehension. Identify stress triggers and seek equilibrium. Each personality boasts strengths and weaknesses, presenting an opportunity for mutual growth within your partnership. Neglecting Budget Construction Prior to merging finances, crafting a collaborative budget is imperative. View each other as equals in this process, irrespective of individual incomes, ensuring both voices are heard. Utilise your next “money date” to assess income and expenses (maintaining a money diary aids in this), debt management, savings, and discretionary spending. Determine how to divvy up financial responsibilities—whether pooling funds, splitting 50/50, proportionate payments, etc.—and formulate a budget accordingly. Continuously seek opportunities to optimise and adjust the budget as circumstances evolve; budgets are dynamic and should reflect changes in income, lifestyle, or situations. Failing to Adapt to Single-Income Living Life’s unforeseen events can disrupt finances, such as job loss or illness impacting household income. Therefore, maintaining financial resilience is crucial. Avoid overextending finances to ensure the ability to sustain living expenses on a single income for an extended period. Make prudent financial decisions toward this objective — opting for more affordable housing, purchasing generic or bulk items, prioritising durability over trends, exploring thrift stores, and curbing recurring subscriptions, among other strategies. Failing to Establish Financial Boundaries in Dating How often have you and your partner indulged in extravagant date nights on a whim? How frequently have you exceeded your budget limits for the sake of trying a new restaurant or planning a weekend getaway? Once you’ve established a budget, ensure mutual agreement regarding date nights or shared experiences. It’s easy to surpass allotted funds when seeking to foster romance. Before scheduling a date or getaway, scrutinise your budget rigorously to verify affordability. Remember, maintaining the spark doesn’t necessitate monthly splurges; sometimes, the most cherished moments involve nature exploration, cosy evenings at home, or tapping into your creative side. Lack of Honesty Transparency is vital in every aspect of your relationship, including finances. Don’t hesitate to inquire about your partner’s financial background. Are there undisclosed debts? How’s their credit health? Do their habits—such as smoking, gambling, excessive shopping, drinking, or drug use—affect your financial well-being? Equally important is being honest with yourself. Address any concerns or red flags regarding your relationship and finances. Avoid secrecy from the outset; delaying honesty only complicates matters. If transparency is needed, schedule a “money date” for an open, non-judgmental discussion. Neglecting Shared Financial Objectives As a team, it’s imperative to establish common financial aspirations. Envision your future together and outline SMART (Specific, Measurable, Achievable, Relevant, Time-bound) short- and long-term goals. Hold each other accountable and celebrate milestones, fostering mutual encouragement even during challenging times. Pursuing shared objectives strengthens your relationship in the long run. Delaying Action on Your Finances Who hasn’t succumbed to procrastination at some point? Yet, when the persistent refrain of “Let’s start next month” impedes your financial progress, it’s time to discard those excuses and dive in wholeheartedly. Monthly distractions may always arise, tempting you to overspend or neglect your financial responsibilities. Consider this a cue to stand firm, reject costly temptations, and refocus on your financial objectives. Failing to Seek Assistance Have you ever deferred seeking help until it’s too late? Avoid repeating that error with your finances. If uncertainties about your budget, lack of trust, difficulty expressing concerns, or navigating joint finances leave you feeling overwhelmed, don’t hesitate to seek guidance. Even the most financially astute individuals require assistance occasionally. Schedule a free appointment with one of our accessible, impartial counsellors to guide you through this financial journey. It only takes one person to initiate action, so don’t hesitate to book an appointment independently and involve your partner when they’re ready. DISCLAIMER:  This article is for informational purposes only and not meant as official financial advice. 2 Ezi has no relationships with any organisation mentioned. Please consult a financial advisor and relationship counsellor.

After examining the correlation between wealth and happiness, Harvard Business School professor Jon Jachimowicz concludes that while affluent individuals do encounter challenges, possessing wealth enables them to address and resolve issues more expediently. Jachimowicz’s study involved 522 participants spanning income brackets from $10,000 to over $150,000, who were tasked with maintaining a 30-day emotional diary to document their reactions to various events. Increased financial means grant individuals greater command over their daily affairs, potentially enhancing overall happiness. Jachimowicz’s research yielded several key findings: In their influential 2011 paper, “If money doesn’t make you happy, then you probably aren’t spending it right,” American scholars Elizabeth Dunn, Daniel Gilbert, and Timothy Wilson outlined strategies to optimise spending habits, such as prioritising experiences over material possessions and cultivating anticipation prior to purchases. Moreover, there exist additional evidence-based methods to maximise the utility of existing expenditures. Invest your time and resources in others instead Research conducted by Dunn and her fellow happiness researchers, Lara Aknin and Michael Norton, indicates that allocating money to benefit others brings greater happiness compared to spending the same amount on oneself. In their study, participants were given a $20 note and instructed to either use it for personal expenses or to gift it to someone else before the day’s end. Those who chose to spend the money on others reported experiencing a more significant increase in happiness that day compared to those who kept the money for themselves. Fortunately, reaping the benefits of this phenomenon doesn’t require a substantial financial investment. Nurture your relationships If you’re on a tight budget, explore ways to show generosity and enhance your relationships without jeopardising your financial goals, such as getting out of debt or building your emergency fund. This could involve inviting friends over for coffee instead of going out or using your time to assist a family member in assembling furniture. Such actions also contribute to enhancing the quality of our relationships, which, according to the Harvard Study of Adult Development, is a major determinant of our happiness. Running for over 80 years and spanning four generations with more than 2000 participants, this study, overseen by director Robert Waldinger, challenges the notion that fame, wealth, and external markers of success lead to happiness. Instead, the accumulated data suggests that prioritising our most significant relationships is paramount. Reclaim your time Studies indicate that the more control we have over our time, the happier we tend to be. While we all have the same 24 hours each day, how we experience that time varies based on our circumstances, obligations, and values. Ashley Whillans, a researcher at the University of British Columbia, discovered that individuals who prioritise having more time over accumulating more money generally report higher levels of happiness. Taking her research further, Whillans examined the effects of using money to delegate undesirable (and time-consuming) tasks such as household chores or meal preparation. She provided 60 participants with $80 over two weekends, instructing them to spend half on a material purchase for themselves and the other half on a time-saving service. Interestingly, investing in a time-saving service resulted in a greater increase in participants’ happiness levels compared to spending on material goods. However, there’s a caveat to this trade-off. Whillans’ findings suggest that there’s a threshold beyond which outsourcing tasks can undermine our pursuit of happiness. Finding the right balance can be challenging. So, what are the key takeaways from research on using money to boost happiness? Spend your money intentionally on activities that resonate with you, bring joy to others, and create lasting positive memories, both in the present and the future. DISCLAIMER:  The content provided in this article is solely for informational purposes and does not constitute formal advice. It is recommended to seek guidance from a qualified financial advisor and mental health counsellor for personalised assistance.

What is Net Worth? Net worth is the value of assets owned by an individual or corporation after subtracting liabilities. It serves as a crucial indicator of financial health, offering an overview of the entity’s economic standing. Also referred to as net wealth, this metric plays a key role in financial assessments, determining eligibility for specific investment options such as hedge funds or structured products. It has permeated popular culture, with rankings showcasing people with the highest net worth alongside that of celebrities. Key Points: How is Net Worth Computed? Net worth is calculated by subtracting liabilities from assets. Assets include possessions with financial value, while liabilities comprise commitments that consume resources, like loans, accounts payable (AP), and mortgages. Net worth may be characterised as either positive or negative, where the former denotes assets surpassing liabilities, and the latter indicates liabilities exceeding assets. A positive and escalating net worth signifies sound financial well-being. Conversely, declining net worth warrants attention, potentially indicating a decrease in assets relative to liabilities. Enhancing net worth can be achieved by either diminishing liabilities while maintaining or increasing assets, or augmenting assets while liabilities remain constant or decrease. The concept of net worth is applicable to individuals, businesses, industries, and even nations. The Significance of Net Worth in Business In business, net worth goes by various terms, including book value or shareholders’ equity. The document that encapsulates this financial metric, the balance sheet, is also referred to as a net worth statement. Essentially, a company’s equity is determined by the disparity between its total assets and total liabilities. It’s important to note that the figures documented in a company’s balance sheet often reflect historical costs or book values rather than current market values. Lenders meticulously assess a business’s net worth to gauge its financial well-being. If total liabilities surpass total assets, a creditor might harbour doubts about the company’s capacity to repay its debts. A consistently profitable company should witness a steady increase in its net worth or book value, provided that these profits are not entirely distributed to shareholders as dividends. In the case of a publicly traded company, a rising book value often correlates with a rise in its stock price. Understanding Net Worth in Personal Finance An individual’s net worth is essentially the remainder obtained by subtracting liabilities from assets. Liabilities encompass several financial obligations, such as mortgages, credit card debts, student loans, and car loans, as well as recurring expenses like bills and taxes. Assets, on the other hand, encompass items such as balances in checking and savings accounts, the value of investments like stocks and bonds, real estate holdings, and the market worth of vehicles. The net worth is what remains after liquidating all assets and settling personal debts. Those with considerable net worth are often referred to as high net worth individuals (HNWIs) and represent a key demographic for wealth management services and investment advisors. Dealing with a Negative Net Worth Having a negative net worth occurs when an individual’s total liabilities exceed their total assets. For example, if someone’s cumulative credit card balances, utility bills, mortgage payments, auto loans, and student debts surpass the combined value of their cash and investments, they will have a negative net worth. A negative net worth serves as an indicator that an individual or household should prioritise reducing their debt. Implementing a stringent budget, employing debt reduction tactics like the debt snowball or debt avalanche, and potentially negotiating with creditors can assist people in escaping a negative net worth situation and initiating the process of wealth accumulation. In the early stages of life, it’s not uncommon to have a negative net worth, particularly due to student loans, which may lead even financially prudent young individuals to owe more than they possess. Also, familial obligations or unforeseen health issues can push individuals into debt. When other strategies have proven ineffective, declaring bankruptcy to discharge certain debts and halt creditor collection attempts may be necessary. However, it’s important to note that certain obligations, such as child support, alimony, taxes, and often student loans, cannot be absolved through bankruptcy. Furthermore, it’s important to recognise that bankruptcy will remain on an individual’s credit report for an extended period. FAQ What amount should be saved? How much you should aim to have saved varies based on factors such as your age, profession, lifestyle, and personal situation. For instance, a financial planning firm suggests targeting three times your annual salary in retirement accounts by age 40. Conclusion Examining net worth provides a clear insight into the true wealth of a person or enterprise. Solely focusing on assets may present a skewed picture, as it often involves balancing against liabilities, such as debts. Thus, increasing assets and minimising debts and other liabilities can increase one’s net worth. DISCLAIMER:  This article is for informational purposes only and is not meant to replace official financial advice. 2EZI has no affiliations with any company mentioned in this article. Please consult a financial advisor and wealth planner.

Achieving a zero-waste lifestyle on a limited budget is definitely possible with some strategic planning and creative thinking. Australian households generate approximately 12 million tonnes of waste annually, placing the sector nearly on par with manufacturing or construction activities. However, there is potential for change. With proper support, households can alter their consumption habits and adopt a zero-waste lifestyle. Our recent study delves into how Australians are embracing this concept. We conducted interviews with residents to understand their current waste management practices. Subsequently, we encouraged them to devise and implement their own six-week household experiments. Their initiatives varied from home gardening and DIY repairs to embracing zero-plastic cooking and patronising bulk stores. We then facilitated discussions with policymakers to exchange their insights. The findings indicate that while householders are enthusiastic about experimenting with change, transitioning to a zero-waste lifestyle poses challenges. Accountability for Recycling For years, Australia relied on shipping waste materials overseas for recycling. However, when China implemented a ban on these imports in 2018, Australian authorities were compelled to expedite the development of improved waste management strategies. In a genuine circular economy, every resource holds value and is consistently reused as it circulates within the system. Yet, during this transitional period, the emphasis has predominantly been on recycling as a means to decrease the volume of waste destined for landfills. Recycling bins placed at Kerbside often contain non-recyclable general waste, resulting in the accumulation of unsortable materials at waste management facilities. Soft plastics, predominantly packaging, have posed significant challenges. Recent efforts have urged households to return soft plastics to supermarkets. However, the REDcycle initiative faced overwhelming demand, prompting Coles and Woolworths to halt collection on November 9, 2022, due to its failure to meet recycling commitments for months. This setback followed the collapse of SKM, a recycling company in Victoria, in 2019. Warehouses became burdened with unprocessed waste, while some recyclables ended up in landfills. Various Australian states, most recently Victoria, have banned single-use plastics, yet the effectiveness of these measures hinges on the accessibility of viable alternatives. In 2018-19, households accounted for the majority of Australia’s plastic waste (47%) and food/organic waste (42%). Addressing these figures necessitates shifts in societal norms regarding lifestyles and consumption habits, alongside changes in retail practices, bolstered by regulatory measures and enhanced collection infrastructure. Past studies have underscored the intermediary role of households, positioned between individual and community levels. Nonetheless, there’s a notable lack of recognition regarding the potential contribution of households to sustainability transitions. Transformation through Experimentation Transitioning to a zero-waste lifestyle necessitates alterations in household consumption habits and waste management approaches. The lockdowns enforced during the Covid pandemic in Victoria offered both an opportunity and motivation for numerous individuals to adjust their consumption habits. Nevertheless, as life gradually returns to a semblance of normalcy, many encounter difficulties in sustaining a zero-waste lifestyle. A series of household trials were conducted involving participants from Melbourne. One mother of two aimed to achieve a 100% waste-free existence for six weeks, while another mother concentrated on eliminating plastic from her cooking. Some individuals opted to explore bulk stores, while a solo resident initiated a gardening project. Another woman living alone sought to acquire skills in clothes and bicycle repair, while a part-time sales associate, residing with his spouse, endeavoured to devise a three-week challenge promoting zero-waste practices among his peers. Insights Gained Participants expressed that they encountered considerable difficulty with household adjustments. They conveyed that the experiments demanded additional mental effort, time, financial resources, and determination. Moreover, they emphasised the necessity for increased guidance and assistance to accomplish and sustain desired behavioural changes. Some individuals found the process motivating, prompting them to explore alternatives like opting to walk further to a bulk food store instead of resorting to the convenience of a supermarket. Bulk food stores promote the use of customers’ reusable containers or environmentally-friendly packaging, such as paper bags, to eliminate the use of soft plastic packaging. Not all changes were enduring. Transitioning to shampoo and conditioner bars necessitated thorough research and proved too challenging for one individual: “Just that one switch was so intense … it was expensive as well.” Supermarkets caused significant frustration due to the prevalence of unwanted plastics. “The packaging is such a big problem. It’s just ridiculous. It should be stopped … There are very few items that you can buy that don’t have some sort of packaging.” Social connections played a significant role in adopting a zero-waste lifestyle. One individual mentioned that her family expressed reluctance to fully commit to the zero waste journey, while another shared how her husband and children offered unwavering support throughout the process. The issue of minimising food waste while having children at home was also raised. “It’s challenging to reduce how much food gets wasted with children. I have reduced how much I cook … I’ve tried to do stock takes of my freezer, my pantry, the fridge … to really focus on meal planning … But it’s really, really challenging … I think if it was just me, I would have a lot more success.” Facebook groups proved to be a valuable asset “because it does make you realise that there are other people who are trying to save every piece of plastic from going in the bin.” Homeowners expressed suggestions for facilitating easier adoption of zero-waste lifestyles, encompassing policy adjustments and systemic reforms. These suggestions involved enacting legislation targeting high waste producers, prohibiting polluting products, enhancing recycling infrastructure, fostering markets for recycled goods, promoting innovation, disseminating comprehensive information, and refining product labelling. Their awareness of zero-waste practices worldwide contrasted with their dissatisfaction with Australia’s systemic shortcomings. “We need support and systemic change from the government (policy) and businesses (innovation) to drive down the amount of plastics associated with our everyday products,” one participant remarked. The waste crisis escalated in 2019 when China decided to cease accepting Australia’s contaminated waste for recycling, leading to protests. Making Zero-Waste Living Accessible Significant changes are necessary to facilitate the zero-waste lifestyle. Conducting experiments

Avoid the money mistakes new parents commonly make by planning, communicating, and adapting to your family’s evolving financial needs. New parents often find themselves overwhelmed by a sense of falling short in different aspects of parenthood. As if their plate isn’t full enough, parents might also be committing significant financial blunders. Rafael Rubio, a partner at financial firm Oray King Wealth Advisors in Troy, Michigan, notes that there are mistakes commonly made by parents with children of varying ages. He emphasises that while the mistakes may be universal, the window for rectification dwindles as children grow older. Bearing this in mind, there are prevalent pitfalls to steer clear of, ranging from neglecting retirement savings to splurging excessively on holiday gifts. Being a Bad Influence One common mistake new parents commit is overlooking the potential impact of their present behaviours on their child’s future financial well-being by being a bad influence. Mark Henry, CEO of financial firm Alloy Wealth Management and host of Living Large Radio, remarks, “Children often emulate their parents’ actions.” If children observe their parents living from one paycheck to another and indulging in unchecked spending with credit cards, they might be on track to replicate these patterns throughout their lives. Instead, it’s necessary to allow youngsters to witness responsible financial habits, such as budgeting, saving for purchases, and waiting for opportune time to make purchases. Failing to Create a Budget Creating a financial plan is important for everyone, especially new parents who can leverage from having a budget. Without careful planning, expenses like new clothing, party gifts, and sports gear can quickly deplete a budget. Dan Routh, a certified financial planner, often observes parents wasting extra income simply because it wasn’t allocated in their budget. “It’s common to see bonuses being spent on gifts and trips, instead of being allocated towards retirement, emergency funds, or other significant financial objectives,” he says. Do Not Prioritise Saving Due to financial constraints and the constant stream of children’s wants, new parents often do not prioritise saving. Nevertheless, it is significant for parents to establish an emergency fund, given the unpredictable nature of children and their many requirements. Henry emphasises that unforeseen challenges can arise for everyone, making it a mistake for parents without a financial reserve to cover unexpected medical costs, school excursions, or repairs for the family car. Indulging the Kids John B. Burke, CEO of advisory firm Burke Financial Strategies understands the inclination of parents to shower their children with clothes, gadgets, and toys. “We all desire the best for our kids,” he observes. Burke rejects the notion that today’s parents are uniquely prone to spoiling their children, suggesting that previous generations would likely have done the same if they had the same level of wealth as many families today. While parents may wish to be generous, it’s unwise to fulfil every whim. Teaching children the value of delayed gratification is important for their future financial independence. Keeping Up With the Joneses Feeling pressured to match the lifestyles of others, new parents might believe they must sustain a particular standard to ensure their children fit in with their peers. “Their aim is to ensure their kids’ satisfaction,” Rubio says, which might prompt them to opt for extravagant vacations or enrol their children in pricey travelling sports teams instead of more affordable community leagues. Setting spending preferences according to others’ actions is likely to have negative consequences. It may lead to purchases of items a family doesn’t truly need and could strain the budget, potentially resulting in credit card debt or even bankruptcy. Favouring College Funds over Retirement Savings Opting to save for college funds instead of retirement savings is a prevalent financial oversight among new parents. It’s advisable for parents to allocate funds towards a 401(k) or IRA plan before focusing on a child’s college fund. Insufficient retirement savings could leave parents with no financial support for their retirement years, whereas, students have options like scholarships, loans, or employment to finance their education. Considering a 529 Plan as Optimal When thinking of college funds, a 529 plan often emerges as the favoured choice. Funds invested in these plans enjoy tax-free growth and can be withdrawn penalty-free for qualified educational expenses. Many states provide a deduction for state income tax on contributions. Nevertheless, there are alternative strategies for a college fund. Burke suggests diversifying investments across several accounts. Apart from a 529 plan, it might be better to allocate funds to a custodial account permitted by the Uniform Gifts to Minors Act. While parents may enjoy tax benefits with these accounts, there’s a potential downside. Burke says, “Once (children) reach the age of majority, they have unrestricted access to the funds, and you can’t intervene.” Consulting a financial expert can aid in determining the suitability of a custodial account for your situation. Misconceptions on Future Life Insurance Requirements With life insurance, new parents often commit two distinct mistakes. Firstly, they may underestimate their coverage needs. Many working parents rely solely on the life insurance provided by their employers, assuming it to be adequate. However, such coverage often amounts to only one to three times an individual’s salary. For many households, a policy with a death benefit equivalent to 10 times the annual income of a breadwinner might be necessary to adequately replace lost income, settle debts, and finance their children’s education. The second mistake involves misusing life insurance for purposes beyond its intended scope. Routh’s firm encounters many instances of parents purchasing life insurance for their children with the belief that it will accumulate cash value to cover college expenses. However, Routh emphasises that they have yet to come across a scenario where this strategy has proven effective. He notes, “The fees associated with these permanent insurance policies gradually erode any potential growth.” Providing Assistance to Children Endlessly One common mistake new parents often commit, according to Burke, is failing to establish a clear plan for when to stop providing assistance to their children. “It’s a frequent occurrence where