Three money black spots women need to avoid

1. Super

I get the frustration surrounding super. There are probably a million other pressing money issues you have to deal with right now before you can even think about the future and of course the government keeps making changes to the rules.

But here's the thing, women on average live longer than men and around 90% of women will retire without enough in their super account to fund a comfortable retirement.

Now there's a very good reason why we have less super than men. Women tend to earn less than men (I still can't believe this happens), we take time out of the workforce to raise children or care for aged parents; and may run a single-income household after a divorce.

The Association of Superannuation Funds of Australia says the current average super balance at retirement is $292,500 for men and $138,150 for women. While women may have to work harder to boost their super it's not impossible and there are strategies to overcome the shortfall.

Whenever I become disillusioned about super though I always take it back to square one.

Is it still tax-effective and do I have time on my side? Despite the changes super still offers amazing tax breaks for most of us.

While I don't intend super to be the only strategy to fund my retirement it does play a major role. The tax perks are the reason.

On a 39% marginal tax rate (including 2% Medicare) you'd pay $390 on $1000. However, if you salary sacrifice that $1000 into super you'd pay just $150 in tax because contributions are taxed at 15%.

Why give the tax office an extra $240 when you can "pay yourself forward" by putting it into your super fund?

2. Investing

There have been plenty of reports that suggest that women are better investors than men because we tend not to have an ego and are happy to seek investment help. We also tend to think long term and don't take unnecessary risks.

Having said that, sometimes risk is good especially when interest rates are this low. Right now money in your bank account is going backwards that's because the return from your cash after tax just isn't keeping up with the cost of living. You can either earn more by dipping into your capital - which means earning less income in the future should rates continue to remain this low or dial up the risk.

It's worth getting some expert advice to discuss your options. If can make sense to take on some extra risk and invest in high-yielding shares - you can do this either directly or through managed funds or exchange traded funds (ETFs). Not only are the returns far greater than, say, from term deposits but you've got the tax benefits too.

That's because the tax office allows you to claim franking credits, which recognise the 30% tax paid on company profits. So if your personal marginal tax rate is below 30% you generally won't pay tax on franked dividends - you may even have the excess franking credits refunded to you.

3. Debt

One of the first money lessons I learnt was that it's not what you earn that counts but what you spend. So true! If you're funding an extravagant lifestyle remember it's probably the reason why you're not in a position to build some serious wealth.

Let's say you owe $5000 on a credit card and you stick to the minimum monthly repayments.

At 17%pa interest it would take you 29 years and 2 months to clear the debt. Plus you'd pay a whopping $10,015 in interest. If you're expecting a tax refund this year, the average amount is around $2000, then whack this onto your plastic ASAP. On a $5000 balance it will almost halve what you were going to pay in interest.

Get this money off your back and you can start saving without the added stress of having to pay back bad debt.

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