The salary ceiling, it's not just about the money

Posted on 15 March 2019
The salary ceiling, it's not just about the money

(Money and Life)

Thinking of a new job? With wage growth staying low, better benefits and work-life balance could be something to look for in your next role. Find out about the latest workplace trends for supporting employees with their health, finances and work-life balance.

The salary ceiling

While the wage growth rate in Australia for 2018 may be up on last year, it's still very low with second quarter figures putting the wage price index at 2.1%. What this means is we're seeing salaries rising only a fraction faster than inflation, with just 0.3% growth in real wages. If you're in the market for a new job, this doesn't bode well for pay negotiations with potential employers.

That doesn't necessarily mean a new job has no new rewards to offer. Perhaps you're looking for the challenges and opportunities to learn that a different role could bring. And at a time when companies are under more pressure to innovate and grow, it's becoming more common for employees to look at new ways to attract top talent and keep their workforce engaged.

Flexibility is key

When it comes to choosing a place to work, flexibility is something many people value. Whether it's the option to choose their hours, work remotely or more variety in the type of work they do, employees are often on the look out for an arrangement that suits their lifestyle better than working nine to five in the same office every day. According to the Mercer 2018 Global Talent Trends report, 51% of employees would like their company to offer more flexible work options and 71% of people who are thriving at work say their employer provides flexibility at work[1].

It's good news for Aussies that the flexible working trend seems to be catching on. In their latest report summarising five years of data collection, the Workplace Gender Equality Agency found more employers are making a commitment to flexible working arrangements.

Almost a quarter of employers (70.7%) now have a policy or strategy for flexible working, compared with just over half (57.5%) in 2013-14.

By the time a job offer is on the table, the topic of flexible working arrangement may something you've already discussed. But if it hasn't and it's something you're looking for, be sure to bring it up, particularly with your future boss. The Mercer report also found that while flexible working may be more common these days, it often happens in an ad hoc way and at the discretion of a manager[2].

Support for wellbeing

Flexible working is one of many ways employers can support health and wellbeing in the workplace. By allowing people more freedom to balance work and their other commitments, it's thought that flexible working can reduce stress, boost productivity and improve health outcomes for employees[3]. And it's definitely in the best interests of any business to invest in the wellbeing of their workforce. The 2017 Willis Towers Watson Global Benefits Attitudes survey reports that employees in poor health take more than twice as much time off work, and their rate of presenteeism is 25% higher too[4].

It's not just physical health problems that lead to this significant drop in productivity. The same report reveals almost a third of employees have suffered from severe stress, anxiety or depression in the last two years. So it's not surprising to learn that half of companies surveyed have introduced workplace programs to reduce stress or are planning to do so[5].

Financial stress is on the rise

Research from the report also shows financial stress is becoming one of the biggest factors in employee health and productivity. With almost a quarter (23%) of Australian workers being unable to raise $2,000 at short notice[6], financial insecurity seems to be a significant threat to health and wellbeing. Employees with money problems are twice as likely to be in poor health and also report higher levels of stress, absence and presenteeism.

So what can employers be doing to support their workforce towards a more stable financial position, less stress and better health? When surveyed by Willis Towers Watson on preferred financial support services from their employer[7], spending tools were the number one choice for workers. These would provide ways for workers to track spending, review their finances and set goals, giving them some practical solutions for addressing the immediate causes of financial insecurity and stress.

The second most popular choice of service is access to a financial adviser. While budgeting for their current situation and lifestyle may be more important, advice from a professional to secure their financial future is a big priority for employees worldwide.

Looking to reduce your financial stress levels? Get tips from CERTIFIED FINANCIAL PLANNER® professionals on how to plan ahead with your finances so you can worry less, here and now. 

[1] Mercer 2018 Global Talent Trends Study, page 16

[2] Mercer 2018 Global Talent Trends Study, page 20 "Most companies have pockets of flexibility based on individual arrangements with a manager, but only 3% consider themselves industry leaders when it comes to flexibility"

[3] Workplace Gender Equality Agency, Workplace Flexibility Strategy, page 4, "Flexibility is not only a beneft to businesses, it also benefts employees who can experience reduced stress, improved job satisfaction and better health outcomes through access to flexible working arrangements."

[4] 2017 Willis Towers Watson Global Benefits Attitudes survey, page 11, "Employees who are in the poorest health report more than double the number of absences and more than 25% higher presenteeism than other colleagues."

[5] 2017 Willis Towers Watson Global Benefits Attitudes survey, page 6, "Mental health issues are widespread around the world, with around three in 10 employees reporting they have suffered from severe stress, anxiety or depression in the last two years. Around half of employers have either introduced initiatives to reduce stress or are planning to do so."

[6] 2017 Willis Towers Watson Global Benefits Attitudes survey, page 8, "Comparable percentages of workers in Australia (23%), Canada (29%) and the U.S. (37%) could not quickly raise $2,000 (local currency)"

[7] 2017 Willis Towers Watson Global Benefits Attitudes survey, page 26, "If your employer were to offer the following to help you manage your finances, which would you mostly prefer?"

Posted in: News  

Aged care spots for 13,500 approved

Posted on 8 March 2019
Aged care spots for 13,500 approved

(Australian Associated Press)

An extra 13,500 spots will be made available at residential aged care centres across Australia in the coming years, with the federal government set to spend $907 million each year on the fresh places.

The new spots have been approved through a process in which aged care operators vie for public funds.

Australians with financial challenges, who are Indigenous or from the lesbian, gay, bisexual, transgender or intersex communities will have priority access to almost a quarter of the places.

When they become available will vary, depending on the time taken for aged care providers to undertake necessary constructions.

The Morrison government will also spend $60 million on such construction projects, to build new aged care homes and extend others.

More than 5,000 of the new places are based in regional areas, in an effort to tackle challenges faced by those communities.

"Every one of these new places will mean senior Australians can age with more confidence, knowing they have future care options in locations as close as possible to their families and communities, whether in the city of the country." Aged Care Minister Ken Wyatt says.

The announcement comes after the government announced last month it would spend an extra $662 million on aged care, including rolling out $320 million to residential facilities by June to boost services.

Posted in: News  

Living longer, women could invest more

Posted on 7 March 2019
Living longer, women could invest more

Greta Stonehouse
(Australian Associated Press)

Women need to look at making their money work harder to help offset the double impact of earning less than men while living longer.

Funds manager Fidelity International says women are grossly underestimating how much money they will need to retire comfortably.

Ahead of International Women's Day on Friday, Fidelity has found men estimate they need about $1.5 million in retirement, while women cite a figure closer to $1 million.

But the survey of 1,222 people with a minimum of $20,000 in investable assets outside superannuation, found that women are still more prone to worry about their financial future despite investing less than men.

Of those surveyed, 73.5 per cent of men said they felt they had the right level of knowledge regarding investment compared to only 58.8 per cent of women.

Managing director of Fidelity International Alva Devoy says, with many falling behind in seniority and super savings because they take more career breaks to raise children, women need to maximise gain later down the track.

"If women's ability to earn and then save during their working lives is less than men's, then it's more important than ever that they have access to the tools to make their money work hard for them," Ms Devoy said.

The report pointed to an example showing $10,000 invested in cash in S&P/ASX200 in the year 2000 would be worth $45,000 today, while the cash would be worth $21,780.

The research suggests not having enough money, a lack of confidence, and being more risk-averse as factors holding women back in this area.

More women said they were interested in paying off their debt, before investing and capitalising on interest.

"Having enough money to provide for their families, paying off their mortgage and having enough money for the lifestyle they want in retirement all ranked as top priorities", Ms Devoy said.

Ms Devoy said unlocking women's financial power would not just benefit women, but society and the economy as a whole.

Posted in: News  

Pensioners set for income threshold boost

Posted on 15 February 2019
Pensioners set for income threshold boost

Rebecca Gredley
(Australian Associated Press)

Pensioners will soon be able to earn $300 a fortnight without it hurting their welfare payments under draft laws which passed the first hurdle of parliament.

The proposal cleared the lower house alongside two other measures means testing pooled-retirement-income products and allowing more older Australians to access the pension loan scheme at an overall cost of $258.6 million over the forward estimates.

"Overall, this bill gives retirees greater choice and flexibility when it comes to managing their finances in retirement," Social Services Minister Paul Fletcher said on Wednesday.

Posted in: News  

5 money mindsets that hold you back

Posted on 4 February 2019
5 money mindsets that hold you back

Money and Life
(Financial Planning Association of Australia)

What's holding you back from taking control of your financial future? Discover the five mind tricks that can stop you from achieving financial success and what you can do to avoid them.

Fear of failure

Earning and saving money from your salary is all very well. But setting up an alternative income stream from an investment portfolio can help you make the most of your personal wealth potential. So what is it that holds people back from taking their first steps into investing? According to recent surveys, 70% of millenials would rather keep their savings in cash1 instead of investing it and getting the benefit of compound interest. And one of the main reasons for their reluctance is their fear of losing what little money they have.

Fear is certainly one of the biggest reasons for avoiding the risks, large or small, that come with investing money. And no-one has a magic wand to eliminate these risks altogether. But with advice from a professional who understands your financial circumstances and goals, you can get off to a successful start in investing that builds your confidence as well as your wealth.

Waiting for wealth

It's all too easy to just wait for someone else to sort out your financial future. You might keep saying that you'll start building your savings and wealth when that golden goose lays its egg for you. And that egg you're counting on whether it's a higher salary, bonus or redundancy payout for your employer or a gift or inheritance from your family may never arrive.

If this is the fairy story you've been telling yourself, it's time to rewrite it with yourself as the hero. By sticking to a budget, coming up with your most important goals and creating a financial plan to help you reach them, you'll soon become your very own golden goose.

The high price of inertia

We're all busy people and we all have a comfort zone. And that's why inertia can so often stand in the way of spending less and saving more. In fact, inertia is seen as such a big problem for personal financial security in the UK that a new Institute of Inertia has been established at the University of Sheffield to study behaviour that's estimated to cost the nation £7.6 billion2.

Inertia can mean spending more than you need to on your energy or grocery bills. It could also be stopping you from tracking down lost super and/or bringing together all your super savings in a single fund to save on fees. Or it could mean sticking with the same mortgage when you could be saving thousands in interest by switching. Whatever it is that you're not getting around to doing to save money, having a financial coach personal or professional can keep you accountable in taking small steps towards big savings.

The lifestyle inflation trap

The "earn more, spend more" phenomenon has been dubbed "lifestyle inflation" and it's something that can really get in the way of preparing for a better financial future. The dangers of behaviour that comes from lifestyle inflation are twofold. The first is what's known as the Diderot effect3. This happens when you buy something new, stylish and beautiful and it makes all your other stuff seem shabby and old. So you start to replace everything else as well.

The second issue is your new level of wealth can't last forever. Even if you keep earning more a time is going to come when you'll stop. We call it retirement and if you're not saving and planning for it, the fall in your spending and standard of living is going to be very steep indeed. So if you're finding it hard to save even when you're earning more, try looking into the future and imagining how much you'll be enjoying life when you have to budget carefully to pay for food and other essentials, let alone buy anything new.

Winging it won't work

Leaving your finances to chance won't bring you the peace of mind that comes with prosperity. Having the money to back future choices for your career, family and lifestyle isn't going to happen by accident. People who make it look easy have probably put in quite a lot of time and effort to ensure they're in a good place financially.

If you're naturally a happy go lucky kind of person you're probably well-liked for your carefree generosity. Especially when you're the first among your friends to open your wallet and pay the lion's share of the bar or restaurant bill. Sticking to a budget doesn't have to mean being stingy. It's more a case of picking and choosing your generous moments so you can still cover your day-to-day expenses and put some of your money towards providing for your future.

Whatever obstacle you're trying to overcome on the path to financial success, a CERTIFIED FINANCIAL PLANNER® professional can offer valuable advice on making changes to get you in control of your finances.

For more tips and tricks on how to manage your money, avoid mistakes that can derail your financial future, and secure your financial freedom, download our free eBook.


  1. Nerdwallet, "Fear keeps millenials on investing sidelines", Brad Sherman, 2 August 2016,
  2. The University of Sheffield, "Britain's psychological inertia contributes to 'financial hardship'", 23 September 2015,
  3. Lifehacker, "The 'Diderot Effect' Turns You Into A Weak, Mindless Consumer," Kristin Wong, 16 September 2015,
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