Ask Paul: My husband died, I'm a single mum and I'm exhausted

Hi Paul, I've been through a roller-coaster of unfortunate events, with my husband taking his own life after living a double life.

My kids were six and three at the time. We've relocated to Brisbane to be closer to family.

I sold the family home as the event occurred there and I believe had we returned home that day we would all not be here. Drug addiction is very scary and he hid his other life very well. 

I bought our family home in Brisbane and have no mortgage. I have three investment properties: 

1. My original apartment in Surfers Paradise has $195,000 owing at 5.94% variable. I've switched to principal and interest. The tenant pays $700 a week and repayments are $810 per fortnight. This loan is with ANZ.
2. A property that has $270,000 owing with the same loan set-up. Repayments are $1019 per fortnight with rental income of $850 a week. The loan is with ANZ and I have $120,000 in offset against this, which are my only savings. 
3. A house in Nerang with a loan through RAMS at 6.3%. Rental income is $825 and week and repayments are $1037.20 a fortnight.

My issue is that I'm paying almost $3000 in PAYG, have a tax debt of $2000 and a Centrelink debt because my income was more than $100,000.

I have upped my work hours to six hours a day Monday to Friday, but since 'working harder' I have had my family tax benefit A reduced to almost nothing and no further family tax benefit B. I work in government with salary sacrifice benefits as well.

Being a single parent has put pressure on me and I'm trying to plan ahead for the future and be more informed now that the storm has passed.

I'm exhausted and struggling to balance two kids and my job, and still have some time to enjoy life (I love running). It makes me question if this focus on wealth is worth it.

If I drop a day's work and only work four days, I may have better balance and not be penalised as much. I feel like I have just been keeping afloat while moving and settling my kids, which was my main priority.

How can I make better tax savings and should I change my strategy? For example: not have an offset and put into a term deposit so the interest paid will be greater to help my overall position as all properties are positively geared; sell a property; or invest in a fourth with my savings?

I am a hard worker and trusted my husband. I feel a bit lost as a single mum with the responsibility to make smarter choices.

My dad thinks a financial adviser isn't worth the money. I hope you can guide me in the right direction. - Jacqui

Goodness, I am certain you are exhausted, Jacqui. First, I don't want to move onto money stuff without acknowledging what you have been through.

I can't imagine how difficult this must have been, caring for and supporting your two young children. They are very lucky to have you. But there has not been much room for you over the past few years - I can see why you love to run!

A purely technical response is to battle on. You have a good, secure job, a mortgage-free home and three investment properties. We both know the rule here, Jacqui. The more good-quality assets you own now, the more wealth you will have in the future. But at a personal level, I think the 'battle on' approach is nonsense.

I am totally with you when you ask is 'the focus on wealth worth it?'.

Let's consider other comments you have made, such as you are 'exhausted and struggling' and you have no 'balance'.

You certainly are a hard worker, but I have to say, maybe you are too hard a worker and too concerned with making smarter choices.

Let's step back a bit. You are young with two young kids. You have been through a hell of a lot, and I suspect you have not had time to chat to a counsellor about what you have been through - and it is a lot.

On the money side, you are doing incredibly well. A paid-off home, your three investment properties, one with $120,000 in an offset account and a well-paid job with a growing super fund. Frankly, Jacqui, you are overachieving with your money.

So in answer to your questions - if in your shoes, I'd be saying to myself: yes, to cutting out the offset account and having some extra income and absolutely, definitely no to buying a fourth property with your savings.

In terms of selling one of your properties, I would have no hesitation in doing that. I'd look carefully at capital gains tax and seek to sell the property that is likely to perform worst.

In my view the focus should be on you. From what you tell me, going to four days' work would give you a bit of personal space. It might also help with benefits you are entitled to.

I am not you, this is your call, but it is not so much about money. With your properties and growing super, you will be just fine with money as the decades go by. But there is another option. You could drop back to four days and keep your properties with reduced stress.

First, by using your positively geared position not to add to your offset account, but to free money for you and your children. Second, you could cut into your $120,000 savings and draw an amount that gives you breathing space. This might be $10,000 a year or it might be $20,000.

You have a long life in front of you and you already own terrific assets. I appreciate you may feel this is taking your foot off the wealth-creation accelerator, but you have done enough already, your money situation is strong and will get better over time. I strongly encourage a focus on you and your children.

Use your positive returns from property, spend some of your savings, go to four days' work or sell a property. A great Aussie saying is 'how much can a koala bear?' - and you have been through an enormous amount. I and the Money team wish you all the best.

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