Welcome back to start here, the very special mini series within Sugar Mamma's Fireplay, where I answer your real life money questions with practical, empowering guidance to help you take action, but most importantly, get started.

Today's question comes from Jessica.

Jessica wrote, I can't.

I'd love for you to do an episode on staying on track with debt reduction and rebuilding your super in your forties.

My husband and I moved to Australia twelve years ago, so our superinnuation only started then.

We have three kids under eight, I've had three maternity leaves, and during COVID I withdrew twenty thousand dollars from my SUPER to put towards our mortgage so that we can move into a bigger home.

Whilst it felt right at the time, I regret it Now my husband super is about sixty thousand dollars higher than mine.

I'm also working hard to pay off sixty thousand dollars worth of student debt from overseas.

This year, I've paid off twenty five thousand dollars, but it's been tough.

Mortgage rates have risen, daycare fees are ongoing, and we're just trying to stay focused.

I'm forty four and sometimes i feel like I'm playing catch up.

My supersit eighty thousand dollars, and I've started salary sacrificing seven hundred and fifty dollars a month to rebuild what I Withdrew.

I just want to feel financially independent and secure, to know it's not too late to build a comfortable retirement.

All right, Wow, I have so much to say, but before I do, let me just get compliance out of the way.

Everything in this episode, of course, is general in nature and for educational purposes only, and of course, always go and get personal advice from a financial planner.

All right, let's get back into this because this is a really important episode.

I have so much to say, and I'm gonna get a little bit passionate in this episode.

First of all, Jessica, you are doing actually so many things, perfectly paying down twenty five thousand dollars in one year whilst raising three kids in a cost of living crisis.

That is incredible discipline.

And on top of that, you're salary sacrificing into super and not just a small amount of money.

You're salary sacrificing seven hundred and fifty dollars per month into super That is amazing, you know, and I would say that is long term financial vision at its absolute best.

All right, now that I've made you aware of how well you're doing, and also for everyone else listening to this, please take a moment to give yourself a pat on the back for how hard you are trying.

Let's unpack your questions and actually show you and everyone else listening right now why I personally think your forties and for the record, I'm in my forties as well, my mid forties can actually be I think, your most powerful decade to actually create that financial transformation that you are worthy of.

So let's get cracking, all right, Okay, let's hit the ground running and waste no time at all.

Step one, Please know this, you are definitely not behind.

You're actually building from experience.

And I say this to everybody in their forties and even in their fifties and beyond.

It is so easy to feel like you are late or behind when it comes to building wealth.

But the truth is you're not starting from ground zero here.

You're actually starting from a huge amount of experience, and you have survived thirteen interest rate rises the painful cost of childcare, and you've got three under eight, so imagining you probably had at least two, maybe even three in daycare all the same time, you've had three major career breaks, and you're also juggling the emotional load of parenting and as a mother of three, it is full on and it is really hard.

And you've actually made some really smart wise choices in your life around money, and you know you've moved into a bigger home that hopefully has grown in value with the crazy property prices we're seeing right now, and you know you're clearly prioritizing paying off debt in your life as in an aggressive manner.

I mean, twenty five thousand dollars in one year is huge.

So can I just take a moment to say what I love about what I've read in this message and what makes me feel really happy and so proud and excited for you is clearly you are not motivated by guilt.

You are motivated by purpose and by goals and having a sense of direction.

And you've seen, you know how financial struggles can impact people's lives, so you've made it a priority to make sure that you are not a victim that cries poor or wallows and self pity.

You're getting on and doing something you've already got started, and you're also creating a very important pattern.

Example raw molls to your children as well about being financially resilient.

And I think your mindset is a really strong foundation of financial independence that you're already working on and building right now, whether you realize it or not.

Now the neck is step.

Your superbalance isn't the whole story of your financial situation, Okay.

It is very easy to compare superannuation with your partner, with your other family members, with your friends, with your colleagues, with your peers, or even those ridiculous averages or benchmarks that get published in the media every now and again, and you can it's normal to feel down if someone's balance is bigger.

But you know, comparison is the thief of joy and it really doesn't actually shed any light on the big picture here.

So I wanted you to remember this superannuation is just one piece of your wealth puzzle.

You also have a home.

You also have seven savings, perhaps in your redoal facility or offset account, and you know you're building your income through working and your career path and when it comes to SUPER, time and consistency is actually what matters far more than what you've got in your superannuation account balance.

And of course you know where that money is actually invested.

And whilst you may not necessarily have investing right now, which will come to in a second, there might be some investing for you further down the track, especially once that student deb's paid off perhaps, but I'm going to talk about that in more detail.

I also want to say this to you.

If you contribute seven hundred and fifty dollars per month over the next twenty years, and you're earning an average of say seven percent, and you can stick to that with increasing it with the CPI, you could pretend to have an extra three hundred and ninety to four hundred thousand dollars in your super.

Now that's not even factoring in your employer's twelve percent contributions.

And the reason why I haven't included that into your nums because I don't know you know what your salary is, and I don't know where that money is actually invested.

But you know that does even take into consideration, you know, super that might get paid on bonuses, pay rises or any other additional contributions you may make, so you actually this strategy of salary sacrificing could actually help you exceed your husband's super.

But guess what, don't go and compare.

This is not a competition.

If you start competing with other people, it's a bottomless pit of unhappiness because you'll never feel like you're good enough.

The only person you're competing with is yourself, the person you were yesterday, the person you were financially last year.

So even if you have started later, and I say this to everyone right now, the key is consistency.

Consistently can contributing to your super from your forties all the way through until your sixties or even seventies if you can, because that is what can actually really transform your retirement Outlook, all right, Step three, rebuilding your super strategically.

You know I'm tackling this because you've mentioned it so much in your message to me.

You are already doing the most powerful strategy that is salary sacrificing.

It is tax effective and it significantly helps accelerate the compounding effect.

But there are actually a couple other strategies that are worth considering under the advice of a financial planner, and I know, yes I'm a financial planner, but I'm not giving you personal advice here.

You need a statement of advice.

So here's a couple of ideas for you catch up contributions.

This may not be right for you right now, but if you haven't used your full concessional caps in past years, which is currently thirty thousand dollars per financial year, you might be able to carry forward the unused portions for up to five years.

And this is a really good way to turbocharge if you like your superannuation.

But obviously when your cash flow improves.

So this may not necessarily be a priority right now, but it's food for further down the track.

And of course, please keep in mind the legislation changes the rules of you know all the fine prints, so get advice.

The other thing worth considering is your spouse contribution.

Now your partner potentially can contribute it into your super and potentially receive a tax offset.

It's not a huge tax soft set, but it's better than nothing, and this can actually help rebalance the Super between two people.

Not that it's a competition, but you know, particularly if someone has taken a career break and then of course there's the co contribution, so depending on what you're earning.

If you're in a certain income bracket, you might be able to put some money into your superannuation and get the government to put up to five hundred dollars into that to help, but again it depends on your income levels, which I don't have.

The other important thing to consider is the investment mix.

If your super is in say a balanced or a conservative option, you might want to consider reviewing this and getting some advice to make sure that your investment mix matches your risk profile and your time horizon.

With a twenty plus year time horizon and your super which would take you through to your mid sixties, making sure that you have some growth exposure such as international shares, Australian shares and property could actually work in your favor, but of course it does come with risk and volatility, so I would highly recommend going and doing a risk profile and then speaking to your superanneration company and asking them where is my money actually invested.

Is it in a balance fund, a growth fund, a high growth fund, and whether you need to actually look at changing that you want your money working as hard as possible for you.

The other thing that can take into consideration is your super fun Now, advice is expensive and the cost of running a financial planning firm is expensive, which is, you know, there's a lot of risk involved, there's a lot of compliance involved.

But this is why advice costs a lot.

And that's not to discredit the value, because I think getting advice is some of one of the best things you can actually do right now, it's something I'm going to strongly recommend, but it may be worth seeing from a financially friendly point of view if your superannuation company offers free general advice, or whether they can actually create some limited advice purely around your super and your superannuation strategy in a cost effective way, so at least you've got your superannuation sorted whilst you're focusing on paying down that debt.

I also want to say this something that is important that you take a moment to feel proud of the reason why you could afford to upgrade the family home is because you're the one that took twenty thousand dollars out of your super, not your husband's.

And I'm not saying that to undermine or disrespect your husband, but take a moment to go, wow, I may that financial sacrifice so that we could be in a bigger home and think about, you know, well has that home grown in value?

You know, what intangible value have I given to my family, my children having a bigger home.

You can thank yourself for that.

I wouldn't be regretting this necessarily because there's lots of ways that you can make up for it, and it's actually added hopefully a lot of value to your life.

And that home has hopefully appreciated and value significantly beyond the twenty thousand dollars that you took out.

Even think about the opportunity cost lost.

Well, we can get that back up again.

I'm sure of it.

Now.

I want to talk to you about, you know, which is my step four?

You could say, is managing this debt without losing I guess, motivation and momentum.

So you talked about a student loan and you've already paid twenty five thousand dollars off that, which is incredible progress.

And it is okay to feel like things are tough right now, but it is only temporary.

Nothing is forever, and you have a finish line, but you just don't realize it yet.

So what I want you to do is look at your debt repayments and you can use an extra payment calculator to help this, and there is one on the sugar Mama website which you can use for free, and you can plug in the loan, the interest that you're paying, and the extra payments, and you actually see that you are going to be debt free in maybe twelve months, eighty months, twenty four months, you know, thirty eight months, whatever it may be.

But the point is you will actually see that there is light at the end of the tunnel and this debt repayment journey is going to end.

And the moment you can see where and when this date is that this student debt will be completely paid off.

I want you to make a note in your calendar because that then gives you something tangible to count down towards.

You know, if you like, print off the calendar and put it on your fridge and cross off the day so you can see you're getting closer and close to having this debt paid off.

And here's the exciting part.

Once that loan is paid off, that student loan, all those money, the money that you've been using to pay that off, that extra twenty five thousand dollars a year that is actually money that you can now put towards your wealth building journey, or perhaps helping pay off your mortgage sooner, or perhaps even budding more into super or starting to look at debt recycling and things like that.

This is money that's actually going to really efficiently supercharge your wealth creation journey.

You know, can go onto the mortgage if you like, and you could start to see your mortgage significantly shrink, particularly an extra twenty five thousand dollars a year on a mortgage.

Wow.

Or perhaps you want to look at a debt recycling strategy where you convert some of that home equity that you've been building into income producing assets where you don't just own a home, you also own an investment portfolio as well.

That's creating passive income, and that debt recycling strategy is also giving you and your husband some tax efficiency as well.

Or if you prefer, you know, you might want to just look at paying off your home loan and having some liquidity through your offset account or redraal facility, you know, building up every single day, Or perhaps you just want something really simple, You just want to top up your super, and you're happy with the fact that you know you can't actually touch your super until you can meet a condition of release.

But for you, your financial goals are about that retirement, having as much money in superannuation as possible.

These are all of the things that you can start really working on and hone in on and amplify and see amazing rewards and returns once that debt's paid off.

But you've got to see that there is light at the end of the tunnel, and you've got to know that date is coming.

So calculate with everything that you're doing right now to what that date is.

And that might even actually spur some ideas to actually make extra payments to bring that date in sooner, whether you do some ad hoc things like extra work or extra financial challenges or selling things to help bring that date.

Every time you make an extra payment, though, make sure you update your calendar and see whether that's saved you a month and you're going to be debt free a month sooner or even a year sooner.

Just make sure you're fixated on this end date to keep that motivation going all right.

Step five, and that is the expensive family years.

This is something I think a lot of families, young families like myself, we can get really stuck in because it can feel really draining, overwhelming and even depressing at times.

But please know this where we're at, you and I and all the other young families listening to this is it's temporary.

I want to remind you to just take a moment and deep breath and pause.

Can I remind you that you are raising three young children under eight.

That is incredibly expensive.

Daycare is painfully expensive.

Food.

Oh my gosh.

I go to the supermarket and I come home and I think, Wow, I just bought all these groceries and that's it, And I find myself, you know, a few days later, I've got to go back again.

Clothes.

I just bought tigers some new clothes the other day, order to you, about three months ago, and they've already too small.

I already going got to get there some new pieces as well.

And then there's activities the weekends, you know, going to kids' birthday parties, making sure they've got a gift, the school likeivities, costumes, book week like all of these things.

And yes, we all try and do these things in financially friendly ways.

But there's sometimes there are just costs, doctor's appointments, specialists, medicine.

You know, my son Rocco knocked his tooth out the other night and he had to go and have an emergency dentist appointment to have the tooth extracted.

These are just part of life.

But it's it's not forever.

But I do get that it can feel relentless, but know that this is a season.

It's not forever.

And we are lucky to have children, and we are lucky to be able to have a family and to be able to give these kids unconditional love and support.

And I also want to show you, I guess identify some key turning points when your youngest child starts school and you're not paying daycare anymore.

I'm eighteen months away from this myself, and I will be doing cartwheels across the school playground knowing that I never need to pay daycare ever again.

The moment you stop paying daycare, you know your financial landscape will change again.

There'll be another shift, another breakthrough.

And this is a real amazing opportunity, a golden opportunity to take that money that you've been using towards daycare and childcare and redirect it again.

You can do the same thing again.

You can redirect it towards your SUPER if that's what you want.

You can put it towards mortgage repayments, increasing the mortgage of payments and seeing the time and interest you'll save on that.

Again, use this Mama extra payment calculators to see how much interest and time you can save.

Or perhaps it's time for you to start building your own investment portfolio.

You know, look at say five hundred dollars per month or a thousand dollars a month, even if you can afford to and redirect that into an investment portfolio for say ten to fifteen years, and you can see that compounding effect impact in your investment portfolio away from SUPER.

That can help supplement your SUPER and your retirement needs.

No one ever regrets investing, and I definitely think your future self will thank you for doing this.

It can be something you're doing for yourself to help fill your cup, particularly if you're still holding onto that idea that you know your SUPER is behind.

And finally, I want you to look at defining some financial freedom goals.

I understand that you are feeling a little bit drained, a bit flat, perhaps even a little bit stuck.

So I really want to recommend that you create some really clearly defined financial freedom goals.

Instead of thinking only about the superannuation balances or the you know what your mortgage is or what your debt is, I want you to start thinking about creating some income based financial goals, that is, passive income based goals.

So ask yourself this one question, how much passive income would I need personally or my family need to make sure that we are safe, secure and independent.

And then you'll come up with a figure.

It might be eighty thousand dollars a year, or one hundred thousand dollars a year, or one hundred and twenty thousand dollars a year.

But that number should sit with you and actually make you feel confident and strong and resilient, and you can then go and set a goal for yourself.

It might be something like, okay, forty thousand dollars a year in passive income that I want to create.

I want to create that forty thousand dollars a year by age sixty.

And I want that income, that pass of income to come from dividends or I want that passive income to come from an investment property, or I want that passive income to come from, say my superannuation.

You need to get some clearly defined goals to work on, otherwise your financial journey is going to feel meaningless and leave you feeling constantly empty, like you are working so hard but not actually getting anywhere.

When you have a goal, you can then compare and see your progress and go, okay, well, I had a goal of forty thousand dollars a year.

So far, I've built two thousand dollars a year.

I'm five percent of away in that journey.

It may seem small, but seeing that first five percent start is an amazing rush of motivation that can build that momentum so you keep going.

And once you start, it does compound.

It's not two thousand dollars in passive income one year, the next year it's four thousand, three hundred, and then the following year it's seven nine hundred, and the following year it's eleven thousand, eight hundred.

You're getting closer and closer to that goal because you can can see that actually the hard work is paying off.

It inspires you to keep going.

So you've got to track your progress.

Track the passive income that you're building, and if you like, include the passive income within your super obviously knowing you can't touch it, but it's part of that financial freedom number that you're working towards.

Look up some projections if you like, to see what you can do to help build more income.

But my point is you want to have some goals to be working on, including debt goals, and you can then turn your focus around network.

You can then change your focus around the debt and the balances to actually a net worth figure and a cash flow freedom number, which is much more tangible in my opinion, and far more motivating, and it's you'll see how you start to actually measure your financial independence in a more tangible way, which gives you so much, many more reasons to actually stay excited and stick to the game plan and financial journey.

And then finally, I want you to build a plan for the next five to ten years.

To bring this all together.

You really do need a roadmap for the next decade.

Seeing a financial planner would be the best option.

There is no doubt about it.

And you are definitely at a crossroad or a point in your life where it is time to invest in a financial plan you know, a f influencer is not going to help even listening to these podcasts.

Yes, they're going to help a lot, but they're going to educate you.

There is so much more that you could potentially be doing.

We are not even scratching the surface here.

So yes, I would highly recommend you go and see a financial planner.

But in the meantime, if you want keep salary sacrificing and review your superannuation, keep working on that student debt.

It is your first major milestone and an important, proud goal to tick off as quickly as possible.

The moment that debt is gone, go see a financial planner and speak to a financial planner about what to do in redirecting those payments, what is best for your goals, because you now have goals, clearly defined goals, and they will talk to you about a combination of different stores rategies, or which one you should focus on first as a priority, which ones you can think about later.

Way a way of like efficiently creating all such as recycling could be something really powerful for you.

They can discuss this with you, or even just setting up a regular investment plan, and of course never stop revisiting your super and if you start investing, you're investing portfolio.

And another thing that I haven't mentioned by will just put it in now because it's not the focus of this episode, but make sure you've got some personal insurances in place, protecting your mortgage, protecting your income, protecting your health and well being, and of course protecting your financial stability, particularly as three young children and two working parents.

You know, a licensed financial planner is going to model all of these for you and actually help build a really clear path for you to follow to retirement, including the super including investing, including the debt reduction strategy.

Your forty is a really about momentum here, and every decision you make right now, every repayment and every investment, every contribution, and every time you review your strategy, you know it compounds into that financial security and freedom that you are going to enjoy with so much relief and pride later in life.

So Jessica please know this, and everybody else listening to this it can relate to what Jessica's asking and what she's talking about.

What's I guess pulling her down right now is you are definitely not behind.

You are building and I think you're building beautifully.

I think you're doing really well.

You've got clarity, you've clearly got discipline, and hopefully now you have purpose and that's far more valuable than superinnuation, account balances and timing.

And the truth is the forties can be your financial power decade.

You're earning more, you're wiser, you got more experienced, and hopefully now you've got a financial vision with some passive income goals.

So to keep going, get that debt cleared, grow you're super as you're doing, and redirect that cash flow and let compounding do its magic for you.

You're not catching up, you're actually, in my opinion, catching fire.

All right, everyone, thank you so much for listening to today's episode.

If this episode resonated with you, can you please go and share it, Send it to five friends who need to hear this right now, who are in their forties and feeling a little bit down and frustrated at the moment.

I think it will really help them.

And if you would like me to answer any of your questions in a future episode of Start Here, please send me a DM on Instagram at Sugar Mama TV or Canna Campbell Official Law.

You can send me an email in the podcast notes.

I'll see you next time on Sugar Mamma's Fireplay every Monday morning at five am, and of course start here every Friday morning at five am.

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