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.

How do New Zealanders see their retirement future?

This survey of 15,519 adult New Zealanders was carried out from 2018 -2019 by the CCFC (Commission for Financial Capability - which was the Retirement Commissioner).  The Key Findings are: 1. MostRead more

The value of working with an adviser - new New Zealand research

The value of financial advice - Money & You research The Financial Services Council 2020 research project looked at how New Zealanders think about money and how it affects their decisions andRead more

Ethical Investing – how do we know what our fund managers are doing?

There are a number of factors that we take into account in our process, which will be built on over time. 1.    Are the Fund Managers Signatories to UN PRI and or/RIAA 2.    What publishedRead more

Ethical Investing – the different terminologies

Ethical Investing is the short hand for many different types of approaches to understanding what and how the companies that you are investing in are carrying out their business. Since the IndustrialRead more

Ethical Investing – Moneyworks approach

Since 2017 Moneyworks have been analysing the ‘ethical investing’ approach that the fund managers that we recommend take.  Having investments that don’t ‘do bad’ is important to us atRead more

Lost’ Australian Super – first steps to change legislation so that this can be transferred to a New Zealand KiwiSaver (thanks to Chapman Tripp)

Australian ‘unclaimed super’ money gap to be plugged (10th June 2020 – Brief Counsel) The Taxation (Annual Rates for 2020/21, Feasibility Expenditure, and Remedial Matters) Bill, introduced toRead more

Changes to KiwiSaver this year

There have been a number of changes to KiwiSaver this year.  Some of these changes took effect on 1 April 2020: · All members aged 65 years or over can make a retirement withdrawal ·Read more

Things you may not know about KiwiSaver

1.    Get regular withdrawals from your KiwiSaver to fund your retirement spending When you reach the age of eligibility for New Zealand Superannuation (currently 65), you can access yourRead more

What does the ‘KiwiSaver Retirement Projection’ on your KiwiSaver Statement mean?

If you are aged between 18 & 64, from this year, you will receive some more information on your annual KiwiSaver Statement.  This ‘Retirement Projection’ information is a legislativeRead more

It really isn’t possible to ‘time’ the markets – investors with $1.4 billion in KiwiSaver funds learned this in March

When we meet with our Membership Fee clients on an annual basis, we consider the risk profile that their investments are invested in.  As your life changes, this may change.  We encourage our nonRead more

Coronavirus world, economic outlook and investments

This is a newsletter that was sent out on Monday May 11th 2020, to Moneyworks Financial Planning and Investment Clients that we work with on an ongoing basis.  It has quite a lot of interestingRead more

FIF/FDR Tax Regime on Overseas Investments

If you are liable to this tax regime (Your adviser will have told you, and your tax report will have a section with calculations on it as shown below), it is IMPORTANT that you read this guidance.Read more
 

This product has been added to your cart

CHECKOUT