Written by kōura
Follow our seven-step guide to help you achieve your financial goals
We’re looking at a pretty bleak economic outlook at the moment. This means now is a great time to give yourself a much-needed financial check-up.
Here are seven things to think about while giving yourself a financial check-up.
Create a budget
Budgeting lets you create a plan for your money. It makes sure you’ll have enough for the things you need and the things that are important for you.
Budgeting exposes exactly what you spend your money on. Far too many people spend without thinking about the effects of that spending. You might be surprised at how much those daily trips to the supermarket add up to.
We’ve found a step-by-step budget process we quite like from My Money Coach. Make sure you review your budget often. See My Money Coach’s budget process.
KiwiSaver account review
Many of us think our retirement is sorted because we ticked the box to sign up to KiwiSaver scheme. Unfortunately, this means you’re likely in the wrong type of KiwiSaver fund. You’re unlikely to get the retirement you expect or deserve. Don’t worry, you’re in the same boat as 50% of all New Zealanders, and there’s a way to fix it!
Have a look at your KiwiSaver fund selection. Does it match your objectives and your risk tolerance? What will your KiwiSaver give you for your retirement or first home? Do you need to change your contribution rates?
Kōura has a unique set of tools to help you understand your KiwiSaver account and make sure it suits your needs. Review your KiwiSaver plan here.
Plan for an emergency
Almost 40% of New Zealanders have no savings to fall back on. If they lost their job or were hit by a sudden expense, they would need to go into debt.
It’s hard to save, and setting up an emergency fund isn’t easy. But if you ever need it, it will be an absolute lifesaver. We recommend having at least a month’s worth of expenses saved and accessible for emergencies.
The best place for those savings is a bank account or term deposit. They’ll be accessible at any point in time and the value won’t change with the markets.
When was the last time that you reassessed your mortgage? Over the past two years, mortgage rates have fallen by more than 2%. Make sure you’re benefiting from these lower rates.
The quickest bang for your buck will be reviewing your interest rate. Many people are sitting on a variable rates mortgage. This can cost them 1-2% more than a one- or two-year fixed-rate mortgage. You lose some flexibility but can save a huge amount of money.
If you want to test the market and get the best out of your mortgage we recommend you talk to a mortgage broker. They’ll be able to give you a look at the best options for you. The team at Vega Lend are a good set of people to go to for a little help and advice on your mortgage. Learn more about Vega Lend.
Debt and savings consolidation
One of the biggest money-makers for a bank is apathy. Their ultimate customer is someone with a mortgage, a large everyday bank balance, and a credit card.
In reviewing your debts and savings, think about what each piece of debt is costing you. How does it compares to any savings/investments you have? A credit card will incur an interest rate of 10-20% per annum. A mortgage will have an interest rate of 3-5% per annum. A savings account will earn you between 0.5-2.0%.
If you can, consolidate all of your debts under your mortgage. If you have savings and a mortgage, you might find you’re better off paying down the mortgage. You’ll save more in interest than you’ll earn in interest from your savings.
Review some of your household bills
You might be shocked at how much you can save by checking some of your annual power bills. Changing your broadband provider can save you up to $300 per year. You could save a similar amount if you review your power provider, too.
If you’re worried about the hassle, don’t be. Power and broadband are extremely easy to switch. It can be done from your couch in a few minutes. That’s potentially $600 a year that can go toward your retirement or emergency fund.
To help you, we suggest you review your broadband using Broadband Compare. Go to Broadband Compare
You can find the cheapest power provider using the Government website Powerswitch. Go to Powerswitch.
Talk about it
Money is a taboo subject for many. Having open and honest conversations about money helps us set and achieve our goals. Talk about your financial check-up with your partner. By talking about your check-up you can keep yourself honest about how you’re getting on with achieving your goals.
The kōura difference
We understand that choosing the right type of KiwiSaver fund can be hard. It’s important you spend a bit of time comparing what’s out there because not all funds are made equal.
kōura is unique, we will build you a personalised portfolio to match your personal objectives and profile. Whether you’re looking to buy a house or save for retirement, our tool will give you honest and impartial advice to help you make the most out of your KiwiSaver fund.