Spring has always been the perfect time to take stock. Whether that’s clearing out your wardrobe, decluttering the garage or giving your bathroom a deep clean, it’s also a time for people to reconsider their personal finances too. So if you haven’t checked your credit card interest rate, insurance policy fees or KiwiSaver plan for a while, spring is a great time to get your personal finance affairs in order.
This month why don’t you take an evening to review your household budget and ensure your estimated spend is in line with ever increasing living costs. What adjustments might you need to make, and where could you make some cutbacks? If you don’t have a budget, spring has never been a better time to make one. Heading into summer, the hectic Christmas period and hopefully a well deserved holiday, the end of the year can be an expensive time of year, so spring is a great time to get your affairs in order and plan ahead.
Spring can also be a great time to ensure your paperwork is in order. Organise your receipts for important assets and warranties, take photos or scan documents and upload them to the cloud or a back storage hard drive. Gone are the days of filing cabinets full of paperwork, but we still need easy access to insurance documents, birth certificates and tax returns. Choose a system that works for you and ensure your partner knows where everything is stored too! If you’re getting rid of old paperwork, receipts and financial documents consider shredding these to avoid identity theft.
Some people are closer to their financial goals than others and may review progress on these every month. For most people though, it’s useful to set these at the beginning of the year, or the beginning of the new financial year, and review them halfway through the year – for many, spring will be the perfect time to do this. Are you on track to meet your short, medium and long-term financial goals? If not, why not? What changes can you make to get things back on track between now and summer?
Financial goals may include an emergency savings fund, a Christmas present budget and summer holiday budget. As well as checking on your progress on these financial goals, you may also want to reprioritise which goals you want to reach or kickstart over the next few months.
This will be a common question coming out of a personal finance spring clean – or perhaps it is “how can I spend less?” They say knowledge is power so if you know exactly where you’re spending your money, you’ll be able to assess what expenditure is necessary and unnecessary, and consider which items you might be able to negotiate a better deal on. It also comes down to prioritising your financial goals.
If your primary goal for the year is to save up for a house deposit, then you may need to look at how you can make significant contributions to your savings accounts or other investments to hit your goal. Could you move from being a two car household to a one car household? Could you exchange renting a house for house sitting? Are you paying for subscription services you don’t use? Are there cheaper ways to get your fashion fix, such as buying second hand clothes or on sale items only? Start eating in and socialising at home rather than paying for restaurant, cafe and takeaway food. Significant savings can also be made by negotiating your utility bills – think power, phone, internet and insurances.
If you’re lucky enough to have a little extra in your back pocket each month, you might be interested in moving away from the low interest rate you’re earning on your bank’s savings account and consider a longer term investment. Short term investing options include options like a Term Deposit where you have certainty around the interest rate you’ll earn and how long your money is tied up for. This can be helpful for a lump sum amount that you might want to access in the next 3-6 months, but are keen to earn more interest than a regular savings account.
For those with a medium-term to long-term investment horizon, a managed fund provider could be an appealing option (there are many options from finance companies to KiwiSaver providers to access these). A managed fund has less certainty around your likely return but as your money is pooled with other investor’s savings, you tend to access better interest rates and returns, and don’t have the pressure of having to manage these investments yourself.
Another option for the medium to long-term investors is kicking off your share portfolio. Options such as Hatch and Sharesies allow beginner investors to invest small amounts of money whenever they like, or larger investors to access a wider range of funds without having to pay fees to a share brokerage to manage the buying and selling of these for them.
There are many online personal finance resources and personal finance books that can help you make the most of your income. Check out Money Hub, Sorted and Barefoot Investor as a starting point to kickstart your personal finance education journey.
Alternatively, you can access free services (https://www.moneytalks.co.nz/) or pay to see a personal finance adviser for professional advice.
Do you need a personal loan to reach your financial goals? With Nectar you can borrow unsecured up to $30,000, or as little as $2,000. Use our loan repayment calculator to find out how much you could get.
Do you need a great rate on a personal loan? We’d love to help with your personal loan requirements. Find out how much you could borrow and learn more about our personal loans. You can get started with Nectar and get a personalised loan quote online which will include your interest rate, maximum borrowing amount and repayment options. Borrow better, faster today!*
*Nectar’s lending criteria and responsible lending checks apply.
