Helping your school-leaver with ‘life admin’

Have you ever taught a 16-year-old to drive?

Were you surprised by how little they actually knew about the basics of driving a car, even after all those years in the passenger seat?

You might assume that after so many years of being in the car, they’d have made some simple observations – learning through osmosis. For many new drivers, it doesn’t work this way, and the learning needs to start from the very beginning.

Leaving school and joining the workforce can be the same. For a start, there’s a new language to learn – terms such as tax file numbers, income tax returns, superannuation, industrial awards and National Employment Standards. And, like learning to drive, you might just need to go back to basics. These concepts aren’t typically taught in school, and our young adults can be a little clueless initially.

Sharing knowledge and wisdom about all things employment-related may not be the easiest of tasks. Mainly because it can seem rather boring. At 18 years of age, retirement is too far away to be relevant, let alone interesting. Your young adult might not be wondering if they’re being paid consistent with the relevant industrial award, because they’re being paid!

There’s a lot to absorb and you might find that the ‘drip method’ yields the best results; imparting small building blocks of knowledge, which will eventually come together into something more concrete and complete. Keep the conversations brief, but come back to them regularly.

If your child welcomes support from you as they navigate this new world, there’s a number of practical things you can do to set them on their way.

1.  If they haven’t already done so, help your child obtain a Tax File Number.

2.  Help them set up a MyGov account so they can access government online services, including the ATO and Medicare.

3.  Encourage them to check-in on their super regularly and review investment performance. Are they happy with their investment strategy? Their fund might default to a balanced strategy, but they might prefer a growth option for longer-term returns. ASIC’s MoneySmart website has a handy guide for people beginning their super journey. You can access it here.

4.  If they have more than one job, look at consolidating small super accounts. It’s easy for people working across a number of casual jobs to end up with multiple super accounts. Pulling everything together avoids having those small account balances eroded by paying multiple fees and charges. It keeps the task of overseeing and managing super easier. Consolidating super accounts is a lot easier now using myGov.

5.  Review any life insurance held within the super fund. It’s likely that the super account will include default cover. Explain what it is, and what happens to the super balance (‘death benefit’) when the member dies. Talk about whether a binding death benefit nomination should be put into place, so that the he or she decides who would receive their death benefit.

5.  Review any life insurance held within the super fund. It’s likely that the super account will include default cover. Explain what it is, and what happens to the super balance (‘death benefit’) when the member dies. Talk about whether a binding death benefit nomination should be put into place, so that the he or she decides who would receive their death benefit.

6.  Encourage your young adult to put in place an Enduring Power of Attorney. This is really important. None of us knows what lies ahead. By making an Enduring Power of Attorney (EPOA), there will be someone who can legally look after their financial and legal affairs if they become unable to do so.

As they officially enter adulthood, you might find that your young adult needs parental guidance more than ever before. Navigating the transition into becoming a fully-fledged grown-up isn’t completely straightforward, and your child will look to you for guidance, knowledge and insight.

Yet another new chapter in the parenting journey. It’s nice to be needed! 

General disclaimer

This content is intended only to provide a summary and general overview of the subject matter covered. It is not intended to be comprehensive nor does it constitute advice. We attempt to ensure that the content is accurate and current but we do not warrant the content nor its currency. You should seek professional advice before acting or relying on any of the content.

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