balance
We sat down with Jen Harding, HESTA's General Manager of Advice, to hear her financial goals for 2023.
1. Jen, every day your team talks to members about their financial goals. What are yours for 2023?
My teenage daughter has just started to do some casual work, so she has control of her own money for the first time. My goal this year is to help her create some good financial habits! We’ve been talking about the bucketing approach — where you set up different bank accounts for different expenses — so she is spending but also saving and we’ve also recently navigated the contrived urgency of shop “drops” on social media!
2. Markets have been volatile. What’s your philosophy to stay focussed on your retirement in the long term?
I don’t look at my investments daily, in fact the more volatile the markets, the less I look at it. It’s actually a time I might ask myself, “Can I add a little extra?” because I think about the potential for long-term growth. Having studied behavioural finance, I know about temptation and the hazards of making financial decisions when emotional. I often think about the rule of thumb that 40% of your income paid by your retirement income account could come from the investment earnings on your account balance alone. Retirement savings really is a long-term concept.
3. What’s the best piece of general advice (financial and personal) you’ve ever been given and who gave it to you?
The most impactful personal advice was from my parents when I first started working full time. I was saving up for a backpacking holiday in Europe, and they advised me to get a debit card, not a credit card. So, once I’d paid my airfare and train tickets, I worked out how much I could afford to spend daily, and made trade-offs — for example, I spent 3 days in Paris eating brie and baguettes so I could afford to climb the Eiffel Tower. When the money ran out, I came home. But I wasn’t in debt and paying off car loans like all my friends! I do this even now, I’ll stock up on the shampoo I like when it’s 40% off, and my kids are only allowed to get ice-cream on special because it’s a want not a need! So really the advice was, don’t spend what you can’t afford - but you don’t have to miss out either, just get creative.
From a professional perspective, I heard this expression many years ago from an old work colleague “The best time to plant a tree was 30 years ago, and the second-best time is now”.
I think one of the great challenges in super is how to help people empathise with or even imagine themselves in the future. One of the most challenging things for me to hear is the voice of regret. What I like about this saying is that you can reap the rewards from early action but at the same time, don’t spend time regretting it if you haven’t. Start now, take action, you will still be better off.
4. And finally, what does your dream retirement look like?
It’s hard to see myself retiring completely, but I think my dream retirement would be “healthy and active”. We’ve been doing some work recently with Humphrey Armstrong, a psychologist and author, exploring retirement mastery. So, it includes travel, being physically and intellectually active, connecting with family and friends, and having time to give back to our community. I think finding purpose will be really critical to having a happy, well-adjusted retirement.