The working life of a mining worker isn’t for everyone: 12 hour days underground in the middle of no where with nights spent in confined rooms, sometimes for three weeks at a time. A week off to recover and catch up with family is book ended by a long day of travel to get off and back on the mine site so it is little wonder that when a fly in fly out (FIFO) worker IS at home, the state of their finances is not front of mind.
Here at Paradigm Strategic Planning, we’ve noticed a surge in FIFO clients recently and they all seem to have the same problem: a lack of time to manage their finances which results in negligible savings despite their high salaries.
We might all wonder how this is even possible with many mining workers earning around $150,000 a year so let’s break it down.
In general, mining workers operate in a single income family due to the nature of their travels and time away. They don’t have the income splitting flexibility of a family business so many are paying a very high rate of tax.
As the table below shows, a worker earning $150,000 per year might have a surplus of $500 per month which should lead to $6,000 in savings. But Rich says most of their new FIFO clients are finding that instead of saving this money, it is generally spent on entertainment with little consideration given to the family’s future financial security.
|MONTHLY COSTS FOR TYPICAL FIFO WORKER with a family of 4 ON $150,000/year|
|Take home pay (after tax/levies)||$8,629|
|Home Loan Repayments||– $ 3,000|
|Groceries||– $ 1,500|
|Other living costs||– $ 3,000|
|Holidays||– $ 625|
|Remaining pay packet||$ 504|
So what’s the solution? Time poor FIFO workers need to sit down with a Certified Financial Planner to establish a clear plan that takes into account the family’s current AND future lifestyle goals. A good planner can significantly reduce financial stress and ensure that FIFO workers get to truly relax and enjoy their family when they are off the site!