A Guide To Banking Rituals, Superannuation, Insurance & Your Mortgage.

The reality finally hit me: as a university student in my final year of study, the world of adulting awaits. But the anticipation of freedom from academic deadlines, comes with the daunting world of navigating personal finances. On the surface, it may seem straightforward, but there are a lot of hidden traps, so equipping yourself with adequate financial literacy can add more efficiency and maximise your capacity to achieve financial security. Enter: Canna’s Mindful Money to the rescue!

Last week I outlined 5 of the most important lessons from Mindful Money. As I gradually finished the book, it became clear that seemingly ‘perfect’ financial rituals and products can have underlying problems and risks we must be aware of. She unearthed the key factors that often go unnoticed and can impact our finances…


Whilst superannuation is generally considered retirement savings it is just another form of long-term investment that cannot be accessed until later. Canna advises people to consider a range of fees that supers charge such as administration, investment, indirect, advice, buy/sell, and insurance fees when choosing superannuation providers. This is because a small change in fee percentage will be compounded over decades and cause a drastic change in the resulting super fund balance. The general rule of thumb that she provides is that fees should not exceed 0.8% per annum excluding the cost of
financial advice allowing fund members to prevent the deterioration of their balances from excessive fees.

However, choosing the lowest fee-charging fund is not enough as investment options of the super fund must be considered with low-quality investments that may end up costing more money in the long run. As such Canna provides requirements when it comes to super investment options such as direct equities and index-based ETF to ensure the quality of the investment remains high.

The Importance of Insurance

Another factor to consider in a person’s financial wellbeing would be insurance. Canna briefly explains 4 popular kinds of insurance that people should take to protect themselves. Firstly, and most importantly Income protection provides a percentage of your salary if you are unable to work due to medical conditions. It is recommended you take a longer waiting period before your payments to reduce the premiums. Furthermore, you should always insure yourself up to age 65 in case of accidents or emergencies that may impact your employment outcome and opportunities.

The second type of insurance would be life cover which pays a lumped sum on your death. Choosing a life cover is tricky because you do not personally benefit from it but rather your loved ones do. Hence it is advisable to insure for the amount that would cover your family’s living expenses and even potentially provide them with enough passive income for the future.

Total and permanent disablement cover pays a lump sum if you are injured to a point where you cannot ever return to work. Because everyone’s circumstances are unique there is no right level of cover, but you can choose to provide enough so that the investment loans would be paid off as it would be difficult for banks to loan to you without an active level of income. Finally, trauma cover which is insurance for major medical conditions that might not stop you from working but is enough to cause huge medical expenditure and lifestyle changes such as cancer or strokes for instance. Again, there is no correct level of cover however a recommendation would be to have enough to cover for any loans you may have or a certain number of years in salary.

With all four levels of cover, you can account and pay for unexpected circumstances, protecting your financial future.

Mortgage Tips and Tricks

If you have a mortgage, then having your emergency funds sitting against your mortgage will save thousands of dollars off and more importantly time off the home loan, however, the redraw facility must be switched on. The option of a redraw facility allows for extra repayments towards your loan as payments will be pooled in a fund that you can withdraw anytime you need it.

Another tip that Canna gives is to make sure when refinancing your home loans to avoid the bank from restarting the loan period. The allure of lower loan repayments means nothing if you are paying off the loans well into your retirement age, in a sense, you would be extending your loans. Therefore, Canna advocates that you must insist the loan term remains the same.

Banking Rituals

Financial habits are equally important to the actual management of your finances. Some more general advice that can be obtained from Mindful Money would be to use cash for everyday purchases with the idea being that spending physical cash makes you more aware of the absolute value of your purchases, allowing you to reflect on the necessity of what you are buying.

Likewise, opening multiple linked internet-based savings account with the same bank under the name of different financial needs and goals such as an emergency savings account or a holiday destination. Every time you get paid it is advised to add money to each of these accounts. By doing this you can clarify your goals and allocate enough each pay cycle to obtain these things on time.


By following and understanding the above advice readers can utilise the power of compounding interest in their attempts to generate a steady stream of passive income. In doing so everyone reading this is empowered to take their financial freedom into their own hands. 

PS: For international readers Mindful Money is available here with free shipping worldwide!

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