Being good with money is hard and learning about financial planning can be hard. It takes a lot of learning, a little practice and massive self-discipline. But once you crack it, you’ll feel a weight come off your shoulders, and, with the right tools, you’ll be able to work towards financial freedom.
For you, financial freedom might mean travelling, retiring comfortably, buying a home, setting your kids up or something else entirely. Whatever your goal is, Money Empire’s team of financial advisers are here to help!
To get you started, we canvassed the team for their top money tips to help you through this year.
New Zealand households have close to a quarter trillion dollars in debt, a number that’s too big to even imagine. And while certain types of debt can help you reach your goals, high-interest short term stuff like credit cards, car loans and payday loans will only hold you back.
Kayne Wahlstrom, Manager and founder at Money Empire says it’s always better to avoid getting into debt if you can:
“If you can’t buy it with your hard-earned money (cash), don’t buy it at all. Buying on consumer finance can not only cost you a lot of interest and fees but can also affect your credit score. Long term, this may prevent you from buying that dream home of yours.”
Senior Financial adviser, Goran Loncar, reckons if you do have debt, the key is managing it well and reducing it quickly:
“Always pay off your credit card each month. If this isn’t possible it could be a good idea to hammer away as much as possible or consider a 0% interest balance transfer to a different credit provider.”
Being good with money is about rewiring the way you think about it and creating good habits. Lisa Barton, Senior Financial adviser at Money Empire, clued us in on a habit she’s found worked well in the past for renters:
“It may be an idea to save the difference between the rent you’re paying and the amount your mortgage repayments would be if you bought the home you want. That way you can show the bank that you can easily cover your mortgage repayments when you’re ready to buy.”
Jess Wahlstrom, Money Empire’s Director, says having a few accounts can be an easy way to organise your finances:
“An account for your monthly bills, an account for your everyday spending and a savings/reward account that you can use on anything you like.”
Goran, one of Money Empire’s senior advisers, reckons that planning is the key to increasing your wealth. He says there’s a few easy things you could do right now:
“If you’re not enrolled in Kiwisaver, get enrolled …Get a budget spreadsheet, input your after-tax income and fixed expenses. This will show you how much disposable income you have and help you make adjustments to reach your goals.”
Reviewing your mortgage and insurance with an adviser that you trust is another good way to protect yourself and save money. Keeping your accounts up to scratch and avoiding arrears, unarranged overdrafts, and dishonours are key at keeping a good credit score. Financial planning requires you to think strategically and prepare for the future, whatever that may be.
We mentioned earlier that being good with money is hard, and we mean it! Almost everyone has financial struggles at some point in their lives. This is why it’s so helpful to incorporate financial planning into your yearly plannig. Jess says the key to solving your problems is to ask for help and be open and honest with those close to you:
“It always pays to be open about your financial situation and ask for help if you need it. Share the load – have open communication about money with your partner, family or friends.”
Isa Nacewa, Registered Financial Adviser at Money Empire says it’s important to remember you’re not alone:
“It’s hard to ask for help but you’d be surprised how many people there are out there that are willing to lend a hand.”
If you need a hand with paying off debt, buying a home or building wealth, remember there’s plenty of help available if you need it. For free, impartial financial advice tailored to you give the team at Money Empire a call today.
The information in this article is of a general nature and has been prepared without considering your objectives, financial situation or needs. Before acting on the information, consider its appropriateness to your circumstances.