by Betsy Westcott of Ladies Finance Club
‘Tis this the season to be jolly. Jolly well haemorrhaging cash, that is. There’s the obvious expenses such as buying gifts for the kids, family, neighbours, teachers, colleagues and, maybe, your favourite barista for keeping you caffeinated all year.
Then there’s the groceries to ensure everyone is well fed and watered on Christmas Day, Boxing Day, New Years Eve. And finally, the outfits, cabs, and bar tabs at all the various Christmas parties.
By the time January 1st rolls around then only thing looking slim is your wallet.
By the time January 1st rolls around then only thing looking slim is your wallet.
Let’s not judge ourselves too harshly on the spending spree that is the festive season. Even for the most money savvy among us the spike in spending that hits in December (and November and January) is inevitable.
What if we told you there was a way to take the sting out of the end-of-year-bling-fling? A way to make your shopping a force for good times in retirement? ‘A way to shop and boost your retirement fund at the same time?!’ well keep reading.
We’ve seen the emergence of round ups on purchases boosting your super balances for a while now. Effectively, applications that round up your purchase to the nearest dollar and credit the difference to your superfund to incrementally boost your retirement savings. So, you buy a coffee for $3.50, the app rounds up the purchase to $4 and the extra $0.50 is credited to your linked superfund. The concept is that the ‘spare change’ from you everyday purchases is added to you superannuation fund to boost your balance through the effect of compound returns to lead to a more comfortable retirement. Longevity App provides a superfund agnostic solution whilst superfunds like Grow Super and Raiz Invest Super. So you take small amounts of money from your pocket and put into your future-self pocket.
What’s more exciting is a new Australian company that’s taken the concept a step further. Enter Super Rewards who have teamed up with all your favourite retailers (Zara, Apple etc) so that when you do your everyday shopping you are rewarded for it by paying money into your linked superfund. So effectively, taking money from the retailers pocket and putting into your future-self pocket. It’s kinda like free money!
It’s kinda like free money!
Super Rewards have negotiated with retailers to pay anywhere between 1-10% of your purchases into your superfund. The average payment is 5%.
So let’s do the math on this with some hypothetical shopping:
- Handbag from Mon Purse with Monogram Engraving. Cost $499. Reward 5.5%. Amount contributed to your super fund: $27.45.
- Apple AirPods Pro. Cost $399. Reward 1.50%. Amount contributed to your super $5.90.
- Lorna Jane Tights for. Cost $116.99 . Reward 3.75%. Amount contributed to your super fund $4.39.
- Timberland Boots. Cost $269.99. Reward 6%. Amount contributed to your super fund $16.20.
- Christmas Groceries bought from Woolworths. Cost $425. Reward 1.75%. Amount contributed to your super fund: $7.40
- Wine, Beer and few Spirits from BWS. Cost $220. Reward 1.75%. Amount contributed to your super fund: $3.85.
- Table cloth, napkins and decorations from Bed, Bath and Table. Cost $289. Reward 5.5%. Amount contributed to your super fund: $15.90.
- Edible Blooms delivery. Cost $179. Reward 9.9%. Amount contributed to your super fund: $1.88.
Based on this shopping list, you would boost your super by $77.07. For a 35 year old today who will retire at 67 thanks to the effect of compound returns this figure could be worth 6-10 times as much by the time they retire. Furthermore, if an individual were to do this with all their everyday shopping, the benefits to their final super balance could be significant. All for spending money they would have spent anyway.
It’s convenient, seamless and someone else is paying for it.
Naturally, when it comes to building enough savings for retirement nothing beats making regular contributions through the superannuation guarantee (the 9.5% your employer pays) but as a way to make extra, additional contributions this is pretty much the bees knees. It’s convenient, seamless and someone else is paying for it.
Yes that right ladies, it seems the Gods have been listening, you can now boost your super while shopping! #ChaChing!
