She's On The Money - Health Insurance 101

Episode Date: October 27, 2020

Health insurance: is it all hype or do we really need it? Today, we decipher it all including the tax implications and some other tricky things to be mindful of. Plus, we discuss an exciting new project heading your way, we celebrate Victoria’s recent award win and we wade through the other usual bits like money wins, confessions and of course, oat milk. Predictable but cute.Love the podcast sick and want more SOTM? We had a feeling that was the case. Join our Facebook page to share your money wins and money confessions, follow us on Insta for daily inspo to keep you on track and absolutely subscribe to our newsletter, the written recap of the pod’s key takeaways, including some bonus bits you won’t want to miss. Finally, if you’re in a money mess and need help untangling the muddle - we’ve got you sorted – simply record your question and send it through to us at [e-mail] and you may just end up on the podcast! Your hosts are Georgia King and Victoria Devine. The advice shared on She’s on The Money is general in nature and does not consider your individual circumstances. She’s on The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. Victoria Devine is an Authorised Representative of Australia Pacific Funds Management Proprietary Limited ABN 34 132 463 257 - AFSL 339151.See omnystudio.com/listener for privacy information.

She's on the money. She's on the money. Hello and welcome to She's on the Money, the podcast for millennials who want financial freedom. My name is Georgia King. I'm a copywriter and journalism student, and every Wednesday I sit down to chat cash with millennial money expert Victoria Devine. Hello, Georgia King, my friend. Hi, Victoria Devine. Now, today on the show, we are going to be diving into health insurance. Do we really need it or is it a little overrated? We'll also be getting into the bottom of a money

question from someone deciding if they should choose income protection or health insurance. And we have a money diarist who suffers from serious comparisonitis. Before that, though, and before we head into our money wins and confessions from the week, Victoria, there's been a little bit going on for you this week my friend oh yes there has been just namely exactly namely that you were announced as being in financial standards top 50 financial advisors of the year across the country that was pretty cool right like that sounds cool that sounds important i like it i'll take it thank you financial standard my friends very exciting but the other thing which everyone will also well we saw it in the facebook group people are going

off about this you've announced your new venture the property playbook tell us everything oh my gosh yes I'm so excited about this and I'm the worst like my team will know this Georgia you've known about this for a very long time it is absolutely no secret internally and it has it has taken everything in my will to not share this publicly just because I'm so excited about working on it but the property playbook is essentially going to be the end-to-end journey of finance when it comes to property and I'm so excited I've partnered with Amy Lenardi who is a property whiz she has had more than eight years experience in the real estate industry she's a buyer's advocate and essentially her job is to help people buy houses like you have her and this

isn't a plug for Amy but like she's a genius so her job is literally buying houses for other people and through that eight years that she's worked in there she has learned so much and i'm so excited to kind of welcome her to our team and welcome her to the she's on the money squad in the property playbook we launched our facebook group over the weekend and georgia oh my gosh i thought maybe we'd get a couple of hundred people because like the she's on the money community guys is nearly at a hundred thousand people so i was like oh you know some will transfer over same day six thousand of you have joined I could not be more grateful for the support that you guys have for us and like here I am being like oh the property playbook has launched you guys are supporting us and you don't

even know what we're doing with it yet I just I cannot tell you how grateful I am that you guys are in our court and on our team like we have so much to share with you and you know actually help you with in 2021 with the property playbook so keep your eyes peeled for everything that we do have to announce about that. But yes, Georgia, you are right. We have had some very exciting things happening this week. Massive week. Is there, are there any spoilers you can give us for you? Like, is it going to be a podcast? Is it going to be a course? Is it just going to be a Facebook group? Like, can you give us any little tidbits? Maybe it's some of those, maybe it's all of those. Maybe you just have to keep in the loop and sign up to the Property Playbook website and

just see where we're going with this. Cause it'll have everything. I promise everything you need when it comes to property. Fabulous. Love it. Keep the people guessing. Okay. Well, let's move on now. The money wins confessions from the week. What have you got for me? Okay. So another thing that was very exciting from this week, albeit not nearly as public, I had a money win and I've already told you about this Georgia cause I was genuinely excited about it. But last season there was a dress online. I think it was from the brand steel and I adored it and it was like $450. I was like no I'm not gonna get it expensive gorgeous dress but like if you know me personally or have me on socials you will know I'm a very big fan of a white dress usually a white cotton based dress

it's my go-to casual outfit so I was like I don't need another one of those but I found one online last one in my size from the style from last season that I really want so if you guys were thinking do you Victoria put 24 hours between you and your spending no my friends I put at least six months so this dress was actually marked down to 77 and then I got an email from the website which had a 20 discount code because I'd never ordered from that website before so I ended up paying like 50 bucks for this dress that I know I'm gonna get epic wear out of this summer and I'm just really excited and I just feel like that's a massive money win because it is something I wanted and to quote myself shots guys for those of you who read our newsletter that was in line with my

goals and values but georgia king moving on from my white dresses have you got a money win or a confession for us um loved that doll and i'm excited to see that dress on you like not sure what you're gonna wear it this summer maybe you know to the it's very casual so i think that i could wear it to like the park or even just like supermarket shopping like i feel like i've been obviously this is tangent but i keep buying dresses that are for going out yeah and i didn't have enough everyday casual wear dresses so i'm very excited about this love it love it um you're Welcome to She's on the Fashion. She's on the Fashion.

Okay, so mine is a confession and it's quick, it's fun, it's painful. On Friday. So drag it out. Yep, cool. What is it, my friend? On Friday, it was a public holiday here in Melbourne, guys. Twas indeed. Grand final weekend, you know, all of that.

Go Tigers. Anyway, I bought a coffee for myself and for my boyfriend. Two oat lattes, two large oat lattes. and the lady was like have you got your boyfriend on the oat milk as well he loves it he loves it he was a soy boy and now he's not a she's on the money episode unless you mention exactly take another shot everyone uh anyway the lady was like that'll be 13.50 please love and i was like no no no i didn't get a croissant as well just the two coffees and she was like no no that that is what you're paying for 13.50 two coffees what yeah so you just have to tap and get out of there and like

they were good coffees but good lord I feel like no coffee is worth that much money Georgia it did sting but like cafes are doing it tough are they I don't know I guess everyone's getting coffee at Georgia King like I know where you live and uh I'd just like to ask which suburb you purchased those coffees in well I don't live there but we did no you don't live there but I know that you're it's within your five kilometer radius and it's probably now in your 25 kilometer radius so uh where'd you purchase those uh overpriced coffees from portsy guys um yeah of course yeah but it's not my usual stomping you called me a rude word last podcast i believe you called me an entitled b word yet here we are buying coffees in portsy anyway moving on friends facebook group uh there

are more down-to-earth kind of people i don't know if i can say that the facebook group b what was your favorite from this week all right all right i've got one from laura and i pulled this out because I am so excited about it I started a side hustle during COVID and it's a knocky home delivery service and Georgia she's called it knocky knocky I love that and she said first week we had a couple of orders but now it's really taken off with weekly orders and now we are back at work she's just trying to work it around her whole life but she said last night and this was like a couple of hours ago so like last night being this weekend friends she had a pop-up restaurant which apparently went great and it was booked out and a ticketed event so she said thanks

to the side hustle episode i made my partner listen to it and it gave us the best motivation we really needed to figuring out tax and accounts and everything like that so oh my gosh our community has a company in it called knock and knocky i am so excited i wonder if they're in melbourne because knocky is my second favorite food after cheese for cheese knocky is my favorite food laura and your partner congratulations that is so exciting and the photos look it up in the group guys look incredible mouth-watering all right georgia have you got a money win from the group that you would like to share with us i do mine's from rebecca and hers is a money win about ikea guys so i know a lot of people saw this in the group it racked up almost 2 000 likes i think

but she's just moved into her own apartment and decided it was time to change some of her furniture up and she noticed while reading a news article recently that ikea have a buyback program for their products as part of their sustainability initiative so that gives um items a second chance at life and avoiding landfill which i didn't know was a thing but i love it i i didn't know that this was a thing at all actually until you are now telling me about it how awesome is that it's really cool so she had a desk and a bedside table in pretty close to perfect condition she took them back um to be assessed and received 129 for a store credit um also she bought that furniture over 10 years ago and still got that much, which is amazing.

Oh, my gosh. I don't think you could have sold it for that much on Facebook Marketplace, could you? I honestly don't think you could. Like, that seems pretty impressive. I mean, we don't know what you sold, but it seems amazing. Even better, IKEA has an As-Is section filled with secondhand goods returned through the buyback program, as well as other discontinued items, which are all heavily reduced. So, how cool.

IKEA are doing amazing money-savvy things, which I was not across, but now I am. So, that's a bit of a PSA for everyone. Yeah. yeah massive Ikea PSA like I love Ikea still one of my faves I'm excited to go back when we can oh my gosh one day yeah everybody gets down to Ikea I remember years ago I used to head there you know I was at uni and the meatballs I don't know I don't eat them anymore but like I just remember the meatballs being bomb yeah they also have one dollar hot dogs which I mean gee whiz that's yeah look money I don't know how that's sustainable or um look processed meat

terrifies me please move on a little bit okay okay uh on to the main topic of today's show guys is health insurance all hype or is it something we truly need now before we drill down into this topic we want to flag early that our advice today is very general in nature and is broadly catered towards millennials without existing health conditions so as always please do do your own research be on this podcast to find what is right for your circumstance the public health care system in Australia is quite an enviable one on a global scale. We have access to a free in quotation marks system that covers us for most things like access to GPs and hospitals when we need them and we can also claim cash back via Medicare when visiting a private doctor's clinic. Most tax-paying Australians

will pay a two percent Medicare levy which helps fund that system but in Australia we of course also have private health insurance. Now interestingly figures released in 2018 revealed almost 34 000 australians aged between 20 and 29 can't their private health insurance which we can kind of assume had something to do with the rising premiums and young healthy people questioning whether this is actually something like they need to be spending money on valid question so victoria let's get straight into it what is private health insurance and do we need it or do we not need it Look, great place to start, I think. Harder question to answer, though. Let's start here. So, private health insurance in Australia. I know we have now some international listeners,

which I'm so excited about. So, this episode might not actually be all that helpful for you, but for our Australian friends, absolutely valid. But here in Australia, it allows you to be treated in a hospital as a private patient, and it can help pay for healthcare costs that Medicare doesn't cover because Medicare isn't like an end-to-end system. So these are things like optical and dental and physio. So how much and what exactly it covers really depends on the policy that you select. So some of them have a really high level of cover and some of them just have a lower level, you know, base level, but we get into that. In June 2019, which is the most recent data recorded by APRA, 11.2 million Australians, so Georgia, that is 44% of our population had some form of

private patient hospital cover and 13.6 million, which is 53% of the population, had some form of general treatment cover. Interestingly though, the segment of the population covered by health insurance was the lowest for the age bracket. A lot of our listeners between the ages of 29 and 25 are, which kind of makes sense when we talk about the tax implications further along in this show. So it's interesting as well because there are two different types of cover here in Australia. we have hospital cover and extras cover you can also have both and choose to combine cover or you can choose to have separate policies that fit you and your wants and your needs slash take a shot your goals and values and depending on what state you live in there is also ambulance cover but that

is often additional because this isn't free for a lot of states like it is in Queensland and in Tasmania so the main benefit of private health insurance is that it gives you greater cover and greater choice and you can choose your hospital and your doctor and stuff like that and you won't have to pay as much should you require the services of one of those extra services that are on your policy. It is different for everybody though in terms of needing it or not needing it. It really just depends on who you are, how old you are, how healthy you are and if you're pregnant or not or if you're not, if you're planning on having a baby in the future and there's actually no right or wrong here. However, I really hope that today's show is going to make it really clear for our

listeners to help figure out if it's right or wrong for them. Because Georgia, we see this question pop up all the time in our Facebook group. So it was definitely time that we addressed it. Yeah, exactly. It's a pretty big topic. My next question for you here, V, is how expensive is health insurance? Okay. So again, it really depends on how you choose your cover and how you're assessed by the company in terms of risk, but it is widely regarded as quite an expensive thing. It's definitely not cheap. It's not like five bucks a month, I wish. The average in Australia does differ state by state, but for basic hospital and extras cover, it averages out to be about 120 bucks a month, which is definitely a very significant fee for most of us, especially

over the course of 12 months. This does vary though, depending on the type of cover that you have, if it's just extra, if it's combined, or if it's just basic hospital cover. And as you said, lots of young people are turning away from having private health insurance because essentially it's really expensive and our incomes aren't increasing at the same rate that the insurance premiums are let's be honest off the back of that v i've read that insurance premiums have risen 30 over the last decade which is crazy given the quality of the cover hasn't necessarily enhanced in any way like it's still what it was 10 years ago no and that's crazy because our incomes haven't increased at that same rate like I understand when insurance premiums increase so essentially insurance

premiums are going to increase because the level of risk needs to be you know controlled for and it means that you know they just need more money to cover the costs and the treatments that are happening so I kind of get that but does that then raise another question about whether it actually is something that becomes an essential or like a super luxury to have whereas you know 10 years ago, it wasn't as luxurious as it is today. Yeah, exactly right. So moving on, if we were to opt for private health insurance, what would you say we need and what don't we need? Oh my gosh, this whole episode is me being like, oh, it's a lie to your goals and values, friends, take a shot. But again, it is so dependent on your circumstances. A really good way of figuring out what you do need and what

might be worthwhile for you is to have a really good think about how much money you need to fork out to pay for services that aren't covered by Medicare during the year. So for me, it might be a few physio sessions a year, which maybe is around like 250 bucks. And then maybe dentist, which costs me around $400 a year, because I like going a couple of times. And then you'd add that amount to the lifetime healthcare loading and the Medicare levy surcharge that you have to pay if you don't have private health insurance. And then if that total is less than what you pay for health insurance, then probably it's not worthwhile to have private health insurance for you. But obviously that's just a roundabout way of kind of working it out and it's going to be really

personal here in Australia we are so so lucky to have the healthcare system that we do have and a lot of what we do really need access to is covered but for lots of people who can afford to do you know private health insurance it's a luxury that affords us a number of different benefits um also love that you go to the dentist a couple of times a year that's very um I feel like that's very adult and like you're very on top of thank you I'm I'm definitely someone who likes to look after my teeth your teeth are beautiful thank you for showing me that by zoom and I think I told you guys recently four hundred dollars a year is probably average like what is that like maybe I go once a quarter maybe I go to the dentist once a quarter to get like a d scale and a clean

because I really like clean fresh teeth but more recently money loss I did start Invisalign which is probably costing me around $6,000 guys, which is insane. But again, aligned to my goals and values, take a shot. Yeah. Yep. Love it. So you mentioned their lifetime healthcare loading and also the Medicare levy surcharge. So can you talk us through what these are and what the tax implications are when it comes to having or not having health insurance? Sure can, my friend. I think that these two things make us feel really overwhelmed when it comes to private health insurance and actually looking at it and pondering it. So let's break it down. The lifetime healthcare loading is a government initiative that encourages you to choose private healthcare insurance earlier

on in life. Just like how we promote getting insurance earlier, it's because you haven't experienced a number of different health issues and it just makes sense to get it then so that you don't have it excluded from your policy in the future. So if you haven't got private healthcare cover from the year that you turn 31, you will be made to pay a 2% lifetime healthcare loading on top of your premium for every year you are aged over 30 if you do decide to invest in health insurance down the line. So you can kind of see that it makes sense to get it beforehand because that can really compound. An example would be if you took out private healthcare cover when you were 40, you'd be having to pay an extra 20% on the cost of this cover per year for 10 years. The

maximum does cap out at 70% though for those of you playing along at home and once you have paid the loading for 10 years of consistent cover the loading wraps up so it's not forever but 10 years is a long period of time and you don't have to pay the loading if you're under 31 or if you're new to Australia and are 31 or over and purchase hospital cover within the first 12 months of you being registered for Medicare benefits here so the loading only applies to hospital insurance rather than like all the general extras as well just for the record comparing that to the medicare levy surcharge you might see this written down as the mls this exists to encourage australians to invest in private health cover and to use the private hospital system to take like the load

and the pressure off the public system because obviously if we're all using it we'd have to have more comprehensive facilities than we do so there's a lot of benefit for the government to kind of push us into private healthcare purely because financially it makes the most sense for them. Those who can afford it should pay for it and, you know, kind of take the load off. So those who can't afford it can actually get access to better healthcare systems and also get access to like shorter waiting periods, et cetera. So if you earn over $90,000 and you don't have private healthcare cover, you're going to have to pay the Medicare levy surcharge. Don't worry about it if you earn less than $90,000 though, it doesn't apply to you. Depending on what you earn, you

may actually have to pay up to an extra 1.5% of your annual earnings to the ATO for every year that you're not covered by private health insurance. So that's something that you guys should look into too, because I know a couple of people have been like, oh, I just pay it. And it's kind of like, well, if you're just paying it, wouldn't it be more economical to get the cover? And at least, you know, you are losing the money here or there, at least you've got the cover like and at least you have some level of benefit whereas there's literally no benefit you don't get anything out of paying this surcharge it's literally a surcharge because you don't have it but this also comes into effect if you and your partner have a combined income of

more than $180,000 a year but you don't have to pay it if within your family unit you earn less than $22,801 so like the combined thing only happens if you earn more than that right but very important to take into consideration so some people do take it out because it saves the money and then they don't even use their private health insurance but you know at least they're covered for something it just kind of makes sense it's the way our world works so if you don't need to worry about this and you're earning less than ninety thousand dollars it's just something to keep in mind if and when you do go over that bracket and something that a lot of people just don't think about when their boss calls them in and says congrats you've got this pay rise or you

take on a new job like health care is not the first thing we think about because this is not america we don't think about health care when taking on a new role but it's something that we really should think about if you're going to go over that bracket so protect yourself you said there that these certain things happen when you approach the age of 30 is that the age we should be really seriously considering uh getting private health insurance definitely if you are close to turning 30 like yours truly or if you are earning the larger amount of money it's definitely something to consider. But from a health perspective, there are some other instances that I would probably want you guys to be considering it. So the first point here is

if you're planning on starting a family, like of course you can have a baby through the public healthcare system. It is a very well regarded system, but private means that you are going to be able to have your own room and have your own obstetrician and, you know, just have a bit of a different experience. You'll be more in control of it. And also I think it's really important to point out that if you are planning on starting a family and want private health insurance you cannot leave it till you are pregnant because often you need to have that cover for 12 months before the baby is born so it's you know it would be nine months if you got private health insurance when you found out you were pregnant therefore you're not actually covered

for the maternity stuff associated with your policy so really important to know that if you are planning on starting a family maybe review policy and make sure it's there because something that I've done personally, because I do have private health insurance, is I'm not covered for anything to do with maternity because I had no intention of having a baby. But when I do decide to go down that route, it's definitely something I will go in and change before actually making the decision to get pregnant. So, you know, if you're in the fortunate position where you're planning a pregnancy, then it's one of those things to just take into consideration. Also, if you're someone who's very athletic or like an athlete of some description who really utilizes the extras like

physio and chiro and all of those fun things then it could be actually more financially savvy to go down the avenue of having private health insurance you just need to make sure that you weigh up the cost against the savings before doing it because sometimes it doesn't actually end up being more beneficial for example if you just went and got cover because you're like oh i do go to the physio but you're paying 150 bucks a month but you only see the physio once every quarter and you're spending like maybe 400 on it a year and you earn less than 90 000 maybe it's not something that is of value to you and you're actually just better off paying in full for those physio sessions because it actually just is more economical. Whereas often you and I, Georgia, might look at

it and be like, oh, of course I want money back. And it's like, well, actually money back is only good if in the grand scheme of things you are saving. Also, if you're in a situation where you do not want to wait for elective surgery, waiting times in the public system are significantly longer. So, you know, if you need your tonsils out, for example, you might go onto a waiting list in the public system. And that might be, you know, nine, 10, 12 months plus, like there are some pretty scary stories out there of people having to wait for surgeries that, you know, you would want to take into consideration. Whereas in the private system, if you want your tonsils out, you kind of just find a surgeon and book it in and get it done at a time that suits you. So

it's really important to understand that. And also if you have a chronic illness and you kind of like are in hospital often, or you are potentially going to be in hospital because of your chronic illness then health insurance is probably a very good idea for someone like you because you rack up those fees absolutely and it's also georgia a bit about risk management as well like if you're chronically ill and you haven't been in hospital before but you know that that illness is just going to you know compound over time and you will have that maybe it's an important thing for you to have in the beginning so that when that starts happening those costs aren't as crippling for you as what they could have been if you didn't have the cover so i think it's just about forward

planning and really understanding your personal situation if I'm honest. Yeah for sure in terms of elective surgery say I did need my tonsils out would I need to have private health insurance a year before making that decision like the same as having a baby or is it a different kettle of fish? No so it's it's a different kettle of fish not necessarily for all policies and I obviously can't speak to all policies because every single policy is different but often the wait times are different. So for example, I changed my private health insurance at the start of this year. And because I already had private health insurance, but was kind of like upgrading it and like side stepping to a different insurer, they actually waived my wait periods. So that's something to

ask about on the phone and just go, hey, cool, like I'm getting this for this reason. It's not that they won't let you have it. They'll just say, oh, well, there's a three month wait period on tonsil surgery or something. Obviously, that's a really generalized example, but I think it's important to understand that for most things like general dental and optical and physio you can't just call up and be like hey i want private health insurance and the next day go to the dentist often to get the rebates you actually have to have been a member for a certain period of time before that happens that makes sense um okay so it sounds like for the most part for people like me health insurance isn't really something we are needing like our younger listeners especially

but for those who have listened today and are thinking maybe it is the right move for them maybe they're planning one of those things you just mentioned what words of wisdom would you leave them with wise words of wisdom or another unnecessary ranch do you have to have a shot for that or is it after i go on the ranch i think it's after you go on the ranch for those of you playing along at home georgia king made a drinking game about us and put it in last week's newsletter unbeknownst to me I just started seeing people post on Instagram about it kind of just slipped that one in there Georgia King back on my rant so important just pay for what you need if you're young you probably don't need to be covered for a potential hip replacement I'm not gonna lie

maybe you do but I think it's really important to understand your situation and the cover that you are getting when it comes to extras just don't pay for things that you might not need but like reflect on what you have needed over the last 12 months and consider whether you would benefit from having those covered. I know when I was changing my healthcare, like I looked at it and I was like, oh, shiny. I'd love to have access to a naturopath. Don't get me wrong. I've seen a naturopath historically, but the additional cover was like 40 additional dollars a month. Like I'll just pay for my $80 naturopath session once a year outright, because it just made more sense to not have that on board. Also ignore glossy signup perks. Like there are so many of them

going around at the moment. You're going to end up paying more for things you don't need. And this is probably topical because people have this, but personally, I would say steer away from combined couples cover. The reason for this is couples health insurance is surprisingly not cheaper. If you do choose this route, you're both going to be covered and paying for things that you might not need. So if you're in a relationship with a male and female, like that male does not need to be covered for maternity or gynecological issues, but it might be on their policy. If you're a same-sex couple, maybe you do need gynecological cover, but you probably don't need prostate cover on your couple's cover. So I think it's just really important to have a look into the policies

and get something that works for you. I think it's important here to also just share a bit about my experience because that's a really good way to learn. My partner and I have our own cover because he plays a lot of sport. I do not. We both just have really different health concerns and things that we see as attractive in a healthcare policy. So for us, we just have things that are different. So I'm with one provider, he's with another. It's a non-issue. We just make sure that it includes the things that are valuable to us. Another thing while I'm mid-rant, Georgia, is compare your options and policies. And don't just settle for the first one that you find on Google. Like do make use of comparison websites to speed the process up for you. But please be aware that

most comparison websites are actually an advertising platform and they are paid to rank things in a certain order. Literally private health insurance companies will pay to come up at the top of that list when you go on one of these websites. So I think that's really important to take into consideration and do your own research. Georgia, we're going to have a thread in the Facebook group this week of policies that other people in our community have and what they like and dislike about it, which I think will be really powerful and a really good tool for you guys to help choose something that actually fits with your goals and values, because what a better a way to learn them from people who have a non-bias opinion like I don't want to go straight

to the comparison website where someone's paying for it I want to go to the Facebook thread where people like oh my gosh I tried to claim this and it didn't work and you know you read this and go but I need my tonsils out well okay well that's not the policy for me like I think that'll be really powerful but also be sure to check on your rates every single year because rates fluctuate so like they increase their policies often every year just like car insurance call them up have a chat with them, see what you can negotiate. The worst thing they can say is no. And then last on that, I mentioned it before, but do not be afraid to use different providers. It's often really easy to have everything clean and all in one place, but you often might get some better value by splitting

your policy up between different providers. So that's the wrap on my little rant, Georgia. Take a shot, friends. Absolutely stunning. I feel like everyone would be pretty tipsy after today's show based if you're not i'm disappointed listen harder um but i guess the moral of the story today guys is to really do your research figure out if it's worth it for you depending on your circumstance and then just make the call from there absolutely georgia king and also make use of the phone numbers i know as a millennial lots of us don't love picking up the phone and having a conversation but the people in the call centers are often incredibly well versed in what's included and what's not included call them ask them grill them find out what is actually a value to you and

what's included and what's not included because sometimes these policy documents can be really overwhelming so don't hesitate to just give them a buzz and be like hey I've got some questions is this covered isn't it like what's the best option here what do you guys recommend what do you think like they're never going to be able to give you a straight recommendation so keep that in mind but you know what you can do use them to understand it and you know if you're paying for a service you better get good service bloody oath I reckon it's on to the listener question now V hey girls I'm 25 I work in the beauty industry and I know Victoria's huge on income insurance but I'm wondering am I better off to get health insurance thank you Victoria what do you make of

this one you are huge on income insurance this is a question that comes up all the time Georgia and I'm so glad they have asked these two things are not the same they are not comparable at all I can understand how there is confusion around health insurance and income protection insurance, but they have very, very different reasons for existing. Health insurance exists so that you are able to get access to health care when you need it. It's actually not in existence to help you save money. Yes, you can save money by doing it because, you know, some of it will be covered.

And like, you know, it is of a massive benefit, you know, if you're going through a very significant health crisis and you need help in that aspect and you know treatment is covered so absolutely financial in that aspect but income protection insurance exists to replace the income that you would lose because you are going through that health crisis so if you know let's say something awful happens and you end up with cancer you're going to go through this really traumatic period of chemo maybe radiation and be off work and not be able to provide income for your family because if you work in the beauty industry, I'm assuming that you go to work most days, you're not going to have that income. Income protection is going to replace that. It's the same

as trauma insurance. So trauma insurance is a lump sum payout when something bad happens to you to pay for things like changes to lifestyle because you need to change your life to this serious health condition. Like maybe you need to move into the city for a little while because you live regionally and you need to lease an apartment because it's closer to the hospital that you're getting treatment at. A trauma policy is going to allow you to do that without adding to financial stress at the same time as you're going through a serious health crisis, compounds it and makes it awful. So for me, income insurance and health insurance, like health insurance is negotiable and, you know, optional. Whereas to me, income protection, every single person in Australia

should have this. I could get on my high horse and I do on this podcast. That's my thing. I don't mean to, but I just do. But income protection is arguably more important than any other insurance that you will ever hold. Like if you said to me, Georgia, Victoria, get rid of every single insurance policy that you hold. And Georgia, there's a fair bit of insurance in my life at the moment and keep one. Income protection would be the thing that I keep because let's compare it to car insurance. If you've got car insurance and you're paying 1200 bucks a year on that and you lose your job, you know, is your car going to start supporting you? No. But if you have income protection and you lose your car and you need to pay for a new one, your income is going

to help you create a new one. So income and cash flow is king because it's the one thing that will be that consistent that can actually help you create the life that you deserve. So for me, income protection, income insurance, whatever we want to call it, is the most important thing to me. So that's my high horse. No, they're not the same. It's not better to get health insurance instead of income protection. They are completely separate entities and I'll wrap my wrap there or whatever we're going to call it. Take a shot friends. I think that's really interesting Vee and I know I, and probably a lot of our listeners would have thought the same as this listener question that they kind of are in the same bucket, but they are completely different things. And once

again, income insurance is number one, which is what we learned in our insurance episode back in I think it was so you know I'm not surprised by your answer but yeah I think it really drives that message home so thanks for no problems tune in next week for another rant by V now let's take a sneak peek into the financial lives of perfect strangers it's time for money diaries I am 23 and I'm learning the game and this is my money diary What does she do for work? How much does she earn? And how much does she have in her bank account? So I'm a casual receptionist working about three days a week. I make around $60,000 post-tax a year. I'm just about to finish university and I just got a graduate role at an accounting firm

in Melbourne. And currently there's $16,000 across several bank accounts and a $15,000 share portfolio. What happens to her money once it arrives in her account? So when the money first comes in, I put the first portion to rent for the half of the month. And then I put 40% of what's left into savings. That's between my shares account, ready to buy more, or my savings account in my bank account. And then I put about 10% into bills. And then the rest is sort of just whatever I have left over to use for the week. What are her investment plans?

what are her attitudes towards investing? My interest in it started with my uncles they've all been very into the stock market for as long as I can remember and I think sometimes I saw the struggles that my parents had that their brothers and sisters didn't have so that was probably from where I went that that's where my independence with money sort of I just wanted to live comfortably I guess so yeah my take on investing is that yeah definitely for the long term and I'm hoping to contribute about five thousand dollars um yeah I'm only 23 now so by the time I retire um it should be hopefully a nice portfolio sitting there and I hope to yeah use I guess that income as passive income to fund holidays or just life um later on in life

And currently I have three shares and two ETFs, which the ETFs probably make up about 70% of my portfolio. One, a high growth ETF here in Australia, and then one actually tracks the NASDAQ over in the US. Does she have any debts? Just my HECS debt at the moment. It's sitting at about $31,000, but I've sort of already made the choice that I'll just pay that off as it comes around. yeah, I'm not really too fussed in paying that down too quickly. What is her best money habit? My best money habit was what I enjoy spending money on and I no longer feel guilty about it, even if other people would tell me that that's probably a waste. I like nice food. So yeah, if I want to go out for a night at Chin Chin, I will and I won't feel bad about it.

And what is her worst money habit? I'm very, very bad at comparing myself to other people. I think having left regional Victoria to move to Melbourne to study, you always see people that yeah either younger than you or the same age as you are definitely ticking off a few life events a bit earlier so I think one is yeah a bad money habit is comparing myself what's her big money goal um I think I would definitely like to own my own home eventually I think I have also made my the choice that I probably put more value into my share portfolio at the current time being just because if anything was to ever happen in the near future like you can't sell off a bathroom, but you can sell down shares if it comes to that. So yeah, I think the

long-term goal is just, yeah, to have enough passive income to create a lifestyle or sustain a lifestyle. What grade would 24 and learning the game give herself? Probably a B plus. I think I have the right foundations in place, but I really need to stop comparing myself to other people because if I keep doing that I'd probably never be happy with my own situation so that's got to stop. Vicky D, 23 and learning the game, more like 23 and nailing the game but has too much self-doubt and rates herself B+. Talk me through your thoughts on this money, Darius, because I have some of my own but I want to hear what you think. I'll talk you through my thoughts if you promise to never call me Vicky D again, Georgia King. But I loved her. It sounded like, you know,

she's doing an incredible job. She's a casual receptionist. What casual receptionist can say that they make 60 grand after tax? Like that's incredible to begin with. She's got a grad role at an accounting firm. Amazing. Congratulations, gal pal. She's got 16 grand in savings and $15,000 in a share portfolio. Like if that's not the definition of killing it at 23, I don't know what is. I actually loved it. Like I love, love, loved it. I loved that she was talking about passive income as well, because that seemed really important to her. And that's something that I want all of our listeners to start aspiring to. And I just really liked that she kind of already had a plan. She was like, oh, from memory, she said, I want to contribute $5,000 a year and, you know,

create that passive income. Like it wasn't just aspirational. It was a plan that she'd kind of created. And I'm sure that'll change and grow over time as her income does. But like, I loved that that plan was there and the reason she had that plan. But I don't know, it sounded also a bit like she was feeling guilty for her money habits. Like she said her worst money habit was comparing herself, but then she also said she doesn't feel guilty spending money. And I just think that maybe she still feels a little bit guilty spending money, but she shouldn't. And like, stop comparing yourself to the journey of others. Like Georgia King, how many times do we say this on the pod? Comparison is the thief of joy. Is that what you were going to say?

Thank you, Roosevelt. That is very inspirational, but it's true. And I just think that too many of us compare ourselves to a journey that somebody else is going on or have these really false aspirations of, you know, you look at an epic money win and please don't get me wrong. The money wins in our community are incredible and I'm so grateful for them. You guys are an absolute inspiration, like not just to other community, but like to me, like I read these and I'm like, oh my God, killing it. Like I'm so grateful and so lucky that I'm on this journey with you guys. I think it's really important to just preface this with She's On The Money listeners and the She's On The Money community. Last year, we did a general census. So I asked you guys some perfect

questions about your savings habits and you know, what you want to see from She's On The Money. And we are about to launch that again. So you can give us some really great feedback. So we'll put the link to that census. We'll put that in the show bio below if you would like to contribute to that, which we would adore. But to give you guys a little bit of insight, the average She's On The Money community member has double the amount of savings of the average Australian. So to break that down a little bit more, because I think it's so important to understand this stuff. Like if you're listening to a finance podcast, you are miles ahead of anybody else that still has their head in the sand. Our money diarist this week, Georgia, was 23 years old, which makes her a Gen

Z. And the average savings for a 24-year-old Australian is only $10,116. She's killing it. She's more than double that with $16,000 in savings and 15 grand in a share portfolio and plans to save and invest five grand a year. Like she's doing amazingly. And I think she needs to give herself more credit to give that a little bit more context for listeners who aren't 24 years old, Gen Y, Georgia King, like yourself and I, people born between 1980 and 1994, so 25 years old to 39-year-old friends, they have an average amount of savings of $19,752. Gen X, our friends who were born between 1960 and 1979, they have an average savings of $34,257 and they're aged between 40 and 59. And for our baby boomer friends who were born in anything earlier than 1959, so

they're 60 years old and plus, they on average have savings of $42,043, which let's be honest, is not nearly enough to save for investment and retirement. And I just think that we really need to keep those things in mind when we are comparing ourselves. Honestly, stop comparing yourselves to the success that other people in our community have had. Like they are inspirational. They are incredible. I don't want to see those stories stop coming in. But I also think it's really unreasonable to see somebody else's success and assume that you're not successful because they're succeeding. Like we don't look at flowers and go, oh my gosh, that flower's not as good as that one. That one's a daisy and that one's a rose. Like they're completely different, but they are so

beautiful in their own right. And I think that we just need to stay in our own lanes. Like just stay in your own lane, be happy that other people are successful, but remember that other people's success does not hinder yours. In fact, the more inspired you are by other people's journeys, usually the more successful you're able to be. And I think this tall poppy syndrome thing that we've got in Australia just needs to shut down. Like we are a community, we are here for each other. And if one of us is succeeding, we are all succeeding. Like the greater that we are, the greater the community is. And I'm going to stop the rant there because honestly, it's something that I'm so passionate about like we are a community we are not individuals like

you know if you're saving or you're in debt or you know something's going on like the she's on the money community is thousands of women who have your back how cool is that like it's not just you on your own journey post in the group say you're having a hard week like we're here for you we're like the ultimate hype girls we've got you like I love it like it's it's literally my favorite thing in the entire world also let's acknowledge that you know when I was doing a little bit of research to answer this question and give you those stats. The average savings for someone in metro areas in Australia is $31,489, whereas regional friends, they are obviously a bit more disadvantaged. So our regional friends have an average savings of $19,470, which is obviously

pretty significant. And I just want to point that out because we are all working towards equality and everyone being able to be on equal footing. But equal footing means equal access to opportunities as well. And I think that, you know, our community is all about facilitating that kind of stuff. So maybe let's wrap it there.

That money diarist was incredible, Georgia King. Do you have anything that you want to add or are you just sick of hearing me talk? No, I just had a couple of things. Pretty much second everything you've said there. Thank you, sir. Comparison is the thief of joy. We'll pass that notion.

Get it out of your life. Absolutely. And just, yeah, keep in mind that with comparison we really only see the end result for a lot of people's success we're not seeing all the struggles they've gone through on the way so keep that in mind georgia's hot tip um also amazing that she doesn't have any debt only her hex debt she's using all of your buzzwords fee passive income etfs nasdaq you know yes queen i love her um the other thing was that she loves chin chin and little known fact vicky d uh used to what have we said about that georgia king don't

hit me um she wouldn't because we're on a zoom call and you wouldn't do it anyway um workplace violence what uh chin chin you used to work there that's my story I did used to work there back when I used to hustle my butt off in hospitality I'm not gonna lie I loved hospitality oh I was the best waitress I'm not gonna lie I was such a good waitress no I'd be terrible now I feel like everybody who's worked in hospitality and has left hospitality wouldn't be good at going back but I'm really impressed at past me's patience that she had when she worked in that industry. I just don't think I'd be able to put up with much now.

Oh, absolutely. So shout out to all my hospitality friends. One, I've been there. But two, you guys are doing it pretty rough in Australia right now and I just want to send you all my love. Love it. Bea, should we wrap the show? Yes.

Gee, let's wrap our show. How about that? All right. But before we wrap our show, one of the most important things on this podcast is this. We'd like to acknowledge and pay respects to Australia's Aboriginal and Torres Strait Islander peoples, the traditional custodians of the lands, the waterways and the skies all across Australia. We thank you for sharing and for caring for the land on which we are able to learn. We pay our respects to elders past and present and we share our friendship and our kindness.

And now on to the boring stuff. The advice shared on She's on the Money is general in nature and does not consider your individual circumstances. She's on the money, exists purely for educational purposes and should not be relied upon to make an investment or a financial decision. And we promise Victoria Define is legit. She is an authorised representative of Australia Pacific Funds Management, Proprietary Limited, ABN 34132463257, AFSL 339151.

And a big thank you to Ryan John, our editor, for putting together today's show. And, guys, we would so love it if you joined our Facebook group. where our community shares money tips and tricks every single day free of judgment so she's on the money on facebook and join us if facebook's not your thing you can also find us on instagram we're at she's on the money aus and friends just to like subtly brag we have a new facebook group and it's all about property and if you're interested in that search the property playbook and join us there's 36 000 of you and the conversations in there are wild and i'm so

here for it see you next week though friends see you guys see you friends