Why paying yourself super boosts your self-esteem and brings value to your work
When you’re self-employed the concept of ‘value’ is an important one. But what is value, really?
In the traditional sense, we think of value as something that applies to day rates or the cost of products and services. But what about the value you bring to your clients through your years of experience? The value of all that hard work you’ve put into growing and running your business?
When you widen the lens, this concept of ‘value’ becomes so much more. And when you apply it to something like your superannuation, it can be a real game-changer.
It’s common knowledge that women generally retire with less super than men. But the gutwrencher is that self-employed women retire with a super balance that’s, on average, only 30% that of an employed man.
Yes, the gender pay gap plays a part in this, but there’s also something else. When women go out on their own they often underprice themselves. And in not one, but two ways:
- they set their hourly/day rate lower than it should be, and
- they forget about their super – that extra 9.5% their employer was stashing away for them when they were employed.
And we get it. Small business budgets can be brutal. Plus, because making super contributions when you’re self-employed is generally voluntary, when the cash flow slows down, it’s easy to justify neglecting your super.
But what if you thought about it differently?
Instead of thinking about super as your future money, what if you thought about it as a way to bring value to the work you’re doing today. Every time you factor in your 9.5% super contribution into any pricing enquiry, service or invoice, you’re increasing the value of the work and all that experience you bring to the table.
In fact, your super just gave you the bargaining power to turn down the next person who’s fishing for that 10% discount. Simply say “Would you like me to do that at the expense of my retirement?” and watch them squirm.
What’s the magic number to retire with?
It’s the ultimate question and the realistic answer is – nobody knows. Yes, there are plenty of numbers out there, but they tend to be based on being an employee rather than being self-employed.
Plus, those numbers can often be paralysing.
When you realise that there’s no magic number and that, really, it all comes down to how much super you can afford to pay yourself right now, it can be liberating.
How much you put away is really up to you. Can you afford $10 a week? That’s amazing. Land a big client? Squirrel away a bit more.
Whether you start with 5% of your income or even 2%, the idea is to choose an amount you’re confident you can commit to. Anything extra is a nod, wink, and tip of the hat to your future self.
And if you ever need some gentle encouragement or feel like you’re finding it hard to put yourself first, just remember this – no-one ever got to retirement and thought ‘I wish I had less super.’
About the author
GigSuper is Australia’s super fund for self-employed people. We believe that you shouldn’t have to be a financial expert to do super properly when you’re self-employed. It should just work. So we built a product to automate all those bits of saving for the future that are otherwise hard to do. Come and say hi.
This message is being provided to you by GigSuper Pty Ltd (ACN 620 862 053), a corporate Authorised Representative (number 1276569) of APP Financial Advisers Pty Ltd (ACN 132 958 591), the holder of Australian Financial Services Licence number 412302.
Any financial product advice provided is general in nature. We have not taken into account the objectives, financial situation or needs of any person, or purport to be comprehensive or constitute investment advice and should not be relied upon as such. You should consult a professional adviser to help you form your own opinion of the information and on whether the information is suitable for your individual objectives and needs as an investor. Where necessary, you should obtain a Product Disclosure Statement relating to the product and consider it before making any decision about whether to acquire the product.