Control Spending and Eliminate High Interest Debt

2. Control spending and eliminate high interest debt

When you first start earning money, or get a big promotion, it is exciting to be able to spend money that you didn’t have before. And part of Moneyworks philosophy is that you should always celebrate.  But it is important to know when to stop celebrating and get back on track to achieving your goals.

Controlling spending doesn’t mean never spending.  But it means being aware of how much you are spending and on what.  Of course you should have luxuries and even the odd vice or two, but if you really do want to have control over your finances, you should set rules for yourself about how much you can spend on those vices and luxuries.

One of the best ways of controlling your spending (and a number of our clients do this), is to have different ‘jam jars’ – well actually, bank accounts for different reasons.  Now that there are bank accounts with no monthly fees available – this is a very achievable solution. 

Put aside a certain amount each pay for travel, or for a particular goal.  If you have to ‘raid’ that account, it means that you don’t have the balance of spending quite right yet, or if it really is an emergency, try and replace the money as soon as possible.

Eliminating high interest debt should be the first step when you are developing your financial plan.  You should not owe any money on your credit cards past the due date.  The high interest rates that are charged can keep you in a cycle of having no money, if you don’t repay the balance in full each month.

Borrowing money on high purchase to buy a vehicle or TV is also a trap. The best way to buy new things is to save up until you can afford to purchase the item.  But if that is not possible, look around for interest free cards and finance. 

Make sure that you read the fine print, once the interest free period ends, you could end up paying very high interest rates, so make sure that you repay the loan before the interest free period ends.

Why bother with company visits when you are investing?

In 1987 I was fortunate enough to have the opportunity of working for a huge American Fund Manager, Fidelity Securities in their Australian Office.  It has set the ground for my understanding ofRead more

Spending one bitcoin = 330,000 credit card transactions

Bitcoin (based on Blockchain) and other crypto-currencies have the potential to change the world, but at present are still most useful as a speculative investment tool.  However, to created aRead more

Money Mules and Money Laundering

As a financial adviser, we have responsibilities under the Anti-Money Laundering/Countering of Financing Terrorism legislation.  You will see this when we require proof of ID, residential address aRead more

Our new look

The Moneyworks logo has been in lower case since 2005, and was green and orange from 2005 - 2015.  From 2015 we changed the logo up, adding the circular logo and swapping green for brown. With the Read more

Some comments on those 'wholesale investor only' property syndicates advertised in NZ.

It has been difficult to get investment returns from 'income' investments, with term deposit rates being so low (and virtually no returns on ordinary bank accounts.  Although interest rates areRead more

Corporate Controversies that Defined 2021

ISS ESG is the acronym (or brand) for Institutional Shareholder Services and its ESG (Environmental, Social and Governance) arm. ISS a large international company that provides services toRead more

More changes for landlords - under the Privacy Act

Owning a residential investment property is a common way to growing your wealth in New Zealand.  However, over the last few years the obligations on landlords have increased significantly, withRead more

Do you really need $809,000 to retire on?

Every two years Massey University carries out an analysis of how much people need to have invested/saved to be able to retire.  The guidelines are based on various assumptions, and as usual, it isRead more

Climate Laggards and Leaders - the poor performance of listed companies

In our big Ethical Investment Analysis project we have found that it is difficult to get information on Carbon emissions from our fund managers that are in a consistent format.  This is a good exampRead more

Sustainable investing, Climate Change and Sea Level Rise

Climate change threatens 1.1 meter sea level rise before 2100 unless climate change is tackled. Analysis by the International Panel on Climate Change (IPCC) makes the prediction in its ‘Special RepRead more

Flood risks and insurance being withdrawn

Fire & General insurance (or house, contents, car, boat insurance) is different to life insurance cover.  Life insurance (trauma, income protection etc), are a contract that you enter into and itRead more

Insuring your e-bike

Well, I did it. Having heard from my clients about how much they loved their e-bikes I bit the bullet and purchased my commuter e-bike.  The plan is to use it to commute to my lectures in HamiltonRead more
 

This product has been added to your cart

CHECKOUT