142. Financial Wellbeing at Work - Planning for a Family with Aadil Abbas and Prina Shah

SPEAKER_01 0:07

Hello and welcome to this episode of Ways to Change Your Workplace with myself, Prina Shah, where we uncover ways to make your workplace a much better place to be.

SPEAKER_02 0:20

Hello, hello, and welcome to this very interesting episode of the Ways to Change Your Workplace podcast. With me, your host, Prina Shah, and I am bringing back my wonderful friend Adil Abbas, who is a director of own financial planning in Sydney. All of Adil's details are in the show notes. And Adil is a repeat guest, which you probably know by now. He has been on my podcast a number of times. The link to all of his past episodes are in the show notes as well. So historically, Adel has talked about financial well-being and making career changes, financial well-being and planning for your retirement right now. Financial well-being and supporting the sandwich generation. Financial well-being and work itself with Adel and his concept of work. And now, today, Adel is talking to us about financial well-being and another crucial part of most people's lives if you choose to do this thing. And this thing is to have children. So Adil is talking to us about family planning and how you can consider that from a financial well-being perspective. And he's linking it to the workplace as well. So if you're in that zone, if you're in that phase of life, get your pens and paper out. This is a super practical episode. Over to Adil. So, Adil, welcome back. I want to talk to you about a very important life event shortly. How are you, Adil? First off.

SPEAKER_00 1:58

I am wonderful, Prina. Always great to be here. And thank you for the opportunity, as always, to have this conversation with you and your audience. And I think we are getting, as you said, a lot of questions from our previous from our previous from our previous conversation. So keep it coming.

SPEAKER_02 2:12

Adil, one of the questions I've had, and I repeatedly have this, but especially for you, is this one I want to bring to you about is planning a family. It is one of the most significant life events that you know people go through in life. And then we have work to deal with that as well. So planning a family is huge, Adil, as we all know. For women, they're going to be out of the workforce for at least six to 12 months. And that's significant from a career perspective. So I guess I ask women to consider the sacrifice that that's going to have on their career and what that will mean for them in the future as a leadership coach. The other thing I also ask my clients to consider is their finances, which is why I want to talk to you today, their knowledge, and then their return to work as well. Are you going to return full-time? Are you going to return part-time? All of that kind of stuff. And then when you do return back to work, men, women, anyone, any gender, you know, after you've had a child, you are going to be seriously sleep deprived. So you're not going to be that person that you are when you left the workforce. Um, and you're going to have other priorities as well. So be prepared to have the conversation about your new needs within the workplace. And that work-life mental separation has to be even more after you've, you know, had a child because you've got so much more on your mind. And you have to reset your and your colleagues' expectations. So these are the kind of things that I talk to my clients about from that planning a family perspective, Adil. But I don't have the money talk. And I think this is a significant factor that impacts every single person who is planning on having a child, Adil, which is why I wanted to have you here today for you to share your concepts and thoughts in relation to this topic. Adil, planning a family.

SPEAKER_00 3:58

Let's talk money. Let's talk money, Trina. So a couple of things I'll start off with in terms of just probably money talk and just stats, essentially, if you want to like to call it that, and some of these things. And then maybe I'll I'll leave your viewers with some tips or planning tips around this as well. So so happy time, very happy time starting a family. In my experience, working with clients. Happy time, we talk about it a lot of time. Clients, we work with clients across, as as viewers may, listeners may know, work with clients across the different age groups. Uh, families are always part of it, part of that conversation, starting a family, growing a family, part of the conversation. Very happy time, but my God, very stressful from a finance perspective as you're dealing with the reduced income potentially and increasing cost. The total cost of raising a child to age 18 today in Australia is hold on, is anywhere between three quarters of a million to a million dollars over that period.

SPEAKER_02 4:50

Can you just can you just say that again, please?

SPEAKER_00 4:53

Three quarters of a million to a million dollars in today's dollars to raise a child to age 18, total cost. Kids are expensive. Very so best to plan ahead because for a very long period of time it's going to be a very expensive bundle of joy in your hands. Uh so because yeah, start putting aside money from the time you start planning to grow your family, I say to my clients, not just when actually the baby arrives, start in advance because the baby might still be a year away, but your exponent expenses and emotions will both rise from the minute that bundle from the minute that bundle of joy is in your hands. The money starts, the money starts going out of the bank account from the world from the minute it's out of the world. Make a budget for the planned expenses. Nappies are expensive, as we know, with a buffer for the unplanned emotional purchases. A lot of people just talk about the yeah, we know we're gonna spend money on a Pram and nappies and this and that, but as parents, we make unplanned emotional purchases. So be honest with yourself around keep a buffer at least. You may not know what you will spend on, but make a buffer. If you're planning to uh no, the other thing being stress test your lifestyle costs. I go back to my one of my very basic concepts, which we've spoken about previously, the spending plan. Make a spending plan on a single income this time and determine the trade-offs you're willing to make for your family. Uh get help from the wider family if you're lucky to have them live near you and to keep the childcare cost under control because childcare is expensive. So have conversations with your with with parents or family around you who can support. Uh if you're planning to get into the housing market potentially, which happens a lot for clients, is like when we talk about their goals. A lot of people do want to think about because when they're going to have a family, they start to think about their housing needs. These conversations actually go in parallel. And family and housing ends up being a parallel conversation. But if you're planning to get into the housing market, do it prior because reduced income will impact your borrowing and your repayment, I would say, capacity. So do the planning is required in that sense as well to meet that life goal. And finally, this is now this is going to be general advice, and I want your viewers to listeners to be very clear that I'm not giving any personal financial advice here. But I would definitely encourage them to talk to a qualified financial advisor about investment structures such as investment bonds or education bonds to save for the big ticket items such as private school fees for the kids. And these investment structures have significant tax benefits versus investing or saving the money in your own name for your kids.

SPEAKER_02 7:25

Okay. Adel, again, you have shared so much. Um, I'm gonna try and summarize. Okay. Okay, okay. Let me try and summarize. Okay. Adil, wow. Okay, so budget plan for your expenses that you have. Yes, yes. Yeah. However, the really important point plan for your unplanned emotional purchases. Because my gosh, there are many. I am sure after your bundle of joy arrives, you're gonna be surprised with so much more. That is a point that I hadn't even considered. Um, this is a really interesting one. So you're talking about that budget or the spending plan. Look at it and change it on a single income and determine the trade-offs now before you've had the child, even right. So we're planning, we're planning way ahead before we've even had this wonderful bundle of joy. If possible, get help from your family. And that that's definitely in relation to childcare and whatever else, because childcare costs are very important, uh expensive, as we all know. So let's not ignore that reality as well, Adil. You make a really good point. Um family and housing. Buy a house or get your finances ready before having a child, and that's in relation to the reduced income that you're gonna have once you have a child, so your borrowing capacity is lesser, and therefore that's gonna impact you entering that ladder of the property ladder.

SPEAKER_00 8:45

Absolutely.

SPEAKER_02 8:46

Ah, uh-huh. Because usually, you know, we nest when we have a child, blah, blah, blah, but we need to nest prior if we're talking from a financial wellness perspective. Right. Let's look after ourselves and plan ahead while we've got the two solid incomes change. And now, investment structures, plan now rather than when your child is at university age or at private school age, and you think, shit, okay, now I've got to get up, you know, 30,000 this year. How are we gonna do it? If you plan at the beginning, it's gonna make your life so much easier. So you can have, as Adil always says, the lifestyle that you want to create. And this is financial wellness, it's all about the lifestyle that you want to live, right, Adil?

SPEAKER_00 9:23

Absolutely, absolutely. Financial planning is all about designing the dream life, using money as an enabler to design your dream life.

SPEAKER_02 9:30

Yeah, and this is Adil, me on my high horse. And this is why we really need to have financial wellness as a new arm in the workplace that we need to talk to. This is a conversation that never ever happens. The conversation is okay, you want to have a child, these are your entitlements in terms of paternity, maternity, parental leave, whatever you want to call it. I think that's where the conversation ends. From a HR perspective, you have keeping in touch days, which are, you know, like kick in the box days, really. You need to maximize them as well. But the money conversation is the biggest factor that impacts your employees' emotional and financial well-being. That is the missing conversation. Adel, I cannot thank you enough for another wonderful, wonderful episode full of so many tips.

SPEAKER_00 10:14

Until I was great to be here, Saprina, and thank you for the opportunity.

SPEAKER_02 10:19

My pleasure. Thank you, Adel. How good was that episode? If you liked it, be sure to share it with a couple of other people. Also, in the show notes are details about my newsletter. Keep in touch. I send a newsletter out around once a month. It won't be spammy, it will be very practical. And if we're not connected on LinkedIn yet, we must be connect with me on LinkedIn. And on Instagram, I am prina.shar. I will see you somewhere else or in the next episode. Until then, goodbye.