Tag Archives: money

How homeownership saves me money

The surprising ways home ownership saves me money

Over the past decade I’ve wasted thousands of dollars renting (not even counting rent payments – those would be in the tens of thousands and at least I got shelter in exchange for those).

There are costs that come with home ownership – some unavoidable, some totally up to you – but those are covered extensively elsewhere on the internet and I’m not getting into those today.

No, what I’m talking about are the surprising ways home ownership has saved me money here and there.

Power

A poorly insulated house is less efficient to heat. We’ve lived in iceboxes half the size of this house that cost the same in power bills as this one. And in the case where we’ve lived with flatmates, well, other people often don’t care about saving power the way you do.

Related: I’m probably saving a small fortune on tissues. I no longer have a constantly blocked or runny nose – it’s the exception rather than the norm now.  Rental standards in NZ are pathetic (and here’s even more skin-crawling stuff).

Now don’t get me wrong. This is still an older house and we’ll need to add more insulation to the roof, which will be in the realm of $1500-2000 if we DIY and more if we get in the pros to install it. On the very coldest nights this winter the roof has gotten down to single digit temperatures overnight, with the rest of the house plunging to low double digits, which isn’t ideal. But it’s noticeably drier and warmer than the many rentals I’ve endured.

I’m sure winters are getting colder (either that or I just feel it more with age) and T agrees. We experienced some record low temperatures this year and last, so I don’t think it’s entirely my imagination.

Insurance

My content insurance dropped to a third of its former cost once I became a homeowner. I’m deadly serious. Car insurance also decreased by a tiny bit. Just another way renters get ripped off.

Going out

Home is a haven now. Not a cramped, damp place to escape. Not a place with flatmates who grate on your nerves. I love my house so much, warts and all. I’ve always been a homebody and at last, after so many years, I have somewhere I can honestly nest and settle in for real. I feel an unbridled sense of joy and serenity every time I  step out onto my  sunny deck or sit down in my dining nook.

As you can probably guess, I have had zero regrets about buying a house. Home ownership has been everything I dreamed of and more.

brokeGIRLrich

PSA: Check your credit!

It’s that time again: time to check up on my credit report!

As a commenter wisely pointed out, my recent drama with collections (over $50, of all things) means I should definitely check and make sure that it has been fully withdrawn and isn’t on my credit record. If it is, I’m seriously going to go ballistic.

If you’re not sure how to check your credit report in NZ, here’s how. There are 3 reporting agencies. Below are the current links to request your free credit record:

You can do it all online – just enter your details and request a copy to be emailed or posted to you. They ask for your name/s, address history, and employment info. You will need the details of your ID (eg driver’s licence info) and may need to upload a scanned copy as well.

NZ credit reports include your personal details, a list of credit enquiries, any default, judgement or insolvency details, and repayment history. The repayment history isn’t exhaustive – not all credit is reported. For example, my 2015 report included my credit card history but did not include my car loan history at all.

Although I was able to obtain my credit score for free back in 2010 when they were first introduced, it seems you can no longer see your credit score unless you pay for it. Not like in the US – where you can easily get your free credit scores in a jiffy.  I have no idea what mine is now!

Unpopular opinion: Money CAN buy health

When money CAN buy health
“Go spend some money,” a nurse once told me when I sought out advice.

Thinking about that incident still pisses me off, even though I’m a long way from being that broke student. But to be fair, she wasn’t wrong.

Lack of money has caused many physical problems for me over the years, and money has in turn also fixed them. Full circle.

On the skin front

Know what disappeared once I solved my money problems? My intense eczema. It was a horrendous cycle – financial stress led to eczema that required expensive cream that didn’t exactly help the financial strain and made everything worse until the core money issue was dealt to. My stress eczema got so bad I couldn’t even wear a bra for some time. Now I just have to deal with the scars, and rosehip oil (again, thank you money) is helping with that.

Know what else disappeared and reappeared accordingly? My period. Not that I missed it from a practical perspective, but I knew its absence was a bad sign.

On the respiratory front

I quite like breathing. Unfortunately it can be a struggle sometimes. Years of living in cold damp New Zealand rentals will do that to you. Buying a house is the only thing that’s made a real difference in this area.

On the intimacy front

Okay, maybe a bit of a cheat here. A good sex life isn’t a requirement for health and wellbeing but it’s nice to have. Post-dinner bloat is a mood killer. A dirty house is a mood killer. But for me, money stress is the biggest turnoff of all.

Disease Called Debt

When sanity > principles

Money or sanity?

I have a strong sense of fairness and justice (which sometimes makes it hard to exist in this world). But I’m also quite pragmatic and getting more ruthlessly so over time.

Which is why I’ve made the conscious choice to write off certain sums of money over the past few years. To move on and look forward. Let go of the expended stress and energy, and devote that time and headspace into productively making that money back even quicker. And of course, to not get into the same situation again.

Let it goooo

Heinous flatmate (approx $1000)

Blood from a stone. He was a terrible person to live with and is terrible with money/being employed/adulting in general. I’ve written off the money he owes for bills and damage and moved on.

Tax refund

Can’t really remember the amount – maybe $500? Anyway, T was due a tax refund a few years back that went into limbo somewhere between the IRD and his bank account. Endless back and forth never resolved it and we’ve moved on. (Subsequent refunds have made it through fine.)

Work expenses

Again, the exact amount has faded from memory and I’m certainly not going to check and dredge it up, but a couple hundy? Suffice to say toxic boss #2 in this post was a nightmare from start to finish. T chatted to someone from the labour department but ultimately, not enough proof of the context and it being a work expense. Live and learn.

Unpaid freelance invoices (approx $1000)

Loved the work. Hated the chasing of payment. I did a series of features and was paid for about half. Struggling magazine, new editors, tardy accounts … just one big clusterfuck.

Unrefunded bond (approx $700)

Our last tenancy was a nightmare. Anything to put that memory behind me.

I know lots of you mentioned in the comments on this post that you’d written off small amounts in the past – what about bigger ones?

Disease Called Debt

Call me mercenary, but…

More money, more options

There’s no nobility in poverty.

No romance in being broke.

No joy in struggle.

I really really really like being able to afford to:

  • Heat my home
  • Visit the dentist
  • Eat dinner out
  • Wear real leather
  • Buy 3-ply TP
  • Donate to charity

Call me mercenary, but in my life, money has directly correlated to quality of life and happiness without exception.

Literally every area of my life has improved thanks to money. Not saying I’m on a never-ending chase for more above everything else (especially since I hit the so-called ideal salary for happiness) but earning more is certainly a goal. As long as I can grow my income while maintaining enjoyment in what I do, why wouldn’t I?

Fewer dollars = fewer options. Life has only gotten easier as my income increased.

I eat better. I am healthier (because I live in a house that isn’t damp and cold). I have a reliable vehicle. Pets. I’m a hell of a lot less stressed and feel less vulnerable to the bottom falling out of my life.

When you’re going through a period of life that’s defined by scarcity, it’s incredibly stressful. You’re panicked and constantly worried, living on the edge. You make poorer decisions because you’re just not in the best frame of mind and/or have fewer choices available to you. You simply don’t think about the long term future because you have to focus on getting through today, tomorrow and maybe next week. How can you possibly think about retirement when you lack decent housing today?

Whatever the reasons for money being tight (and they can be oh-so-complex – acute, chronic, unfortunate, deliberate) the outcome is the same. And in the moment, that’s all that matters.

Money stress has a way of keeping you up at night, not to mention tainting your waking hours with its sneaky way of spilling into every moment. 

The first day in 2016 that I felt truly free from financial stress – for the first time in, oh, just about a full year – was amazing. There are no words for the lightness that brings.

I’ve spent far too much time in misery for lack of money. On the other hand, I’ve never been miserable with money.

I cannot relate to the ‘broke but happy’ brigade. YMMV.

I’ve lived through times where I’ve had enough, and times without enough – and I’d take the money every single time.

Link love (the fees-will-get-you-every-time edition)

NZ Muse link love roundup

Indulge me, if you will!

I remember the first time I learned that banks could charge you for the privilege of holding your money, when my ex’s mother spoke about the $10 monthly fee on her day-to-day account.

More recently, I got to hear about some of the stuff that regulators are involved in within the consumer protection space. Changes to the law last year put a much bigger onus on lenders to disclose, disclose, disclose – to be upfront about fees and costs associated with credit contracts, as well as be more responsible and ethical about how and who to lend to. Noncompliance can apparently result in borrowers not being liable for fees/interest if lenders don’t play by the rules. And one finance company has been caught out charging excessive and irrelevant fees – eg high loan establishment fees due to building in overheads beyond the scope of any work involved with actually setting up a loan. The view is that lenders shouldn’t be making huge profits off these kinds of fees, to which I say amen.

Another much more mainstream topic of late has been KiwiSaver fees. On average KiwiSaver fees are 1.3% per annum and now that the scheme has been going for a few years, balances are getting higher and thus providers are getting an ever-bigger cut each year. There’s a new provider, Simplicity KiwiSaver, launching soon that will be totally passive – the international part will be handled through Vanguard. Given that I might be paying up to $40k in KiwiSaver fees over my lifetime, I’ll be keeping an eye on this to see if it’s worth switching. Maybe other KiwiSaver providers will up their game and sharpen up.

This week’s links

Still not quite sure how to answer this: What are you proud of?

The best financial advice

What’s harder: saving or repaying debt?

8 financial commandments

Finally, I’m feeling this post on first home ownership so hard right now.

What I believe about money

3 things I believe about money

I spend a lot of time thinking about money, between work and my own personal interests neuroses. Here are some conclusions I’ve recently reached.

I don’t believe in hopes and wishesBut I do believe in setting your sights on a target. 

I work at the exact organisation I once imagined would be an ideal place for me, in a newly created role that perfectly suits my skill set, at the salary I was determined to reach.

There’s something to be said for knowing where you want to go – how else will you be able to get there?

I believe in plans. But I also believe in taking little leaps of faith.

The two biggest financial decisions I’ve ever made – taking a six month leave to travel, buying a house – were not airtight. The general plans were pretty rock solid; I’d been working toward them for awhile.

But I didn’t have quite enough saved by the time we left the country. I was pretty confident I could make it up while freelancing on the road (and I did, almost to the dollar…) and at the worst, I knew I had a job to come back to.

And in many ways I bought a house at the worst time, my accounts having been decimated due to circumstances beyond my control. But I felt secure in my job and was earning a reasonable income, and a down payment that met requirements.

Life is fickle and while we can – and should – do our best to plan and prepare, nothing is ever 100%.

I believe your pay is not necessarily reflective of your worth.  But I believe in negotiating for what you believe you’re worth.

As above, I honestly never thought I’d earn what I’m making now. If I’d stayed in journalism, I wouldn’t be. But out of it, my skills are marketable enough to justify what seem like insane pay rates in comparison. (Not that these go all that far in NZ or Auckland, or impress mortgage brokers, but it’s a huge step up from before.) I look back on the jobs I’ve done and the call centre and hospitality work I once did was so much harder and so poorly compensated.

Whatever you do for work, do it to the best of your ability, and remember that nobody else will fight as hard for your best financial interests.

What do you believe about money?

Disease Called Debt

CYA: Revisiting my insurance coverage

Although insurance isn’t a huge line in my budget, the peace of mind it provides is invaluable. While my car insurance is pretty sussed and doesn’t require much thought, a couple things have got me rethinking some of my other insurance cover.

Contents insurance

I stumbled across a TradeMe thread the other week in which people were discussing how much contents insurance they had. $100k for a three bedroom house seemed to be the consensus. This was my reaction:

WTF?And then I followed one of the links through to a contents insurance calculator and whizzed through quickly. By our standards, their allowances were a teeny bit insane. $7k for two laptops? A $1500 dryer? $4000 of shoes per person? An expensive china cabinet full of antiques? Nuh uh.

I’m not sure we count as minimalist, but we don’t have a ton of stuff realistically and most of it isn’t worth very much.

To be fair, we probably are a little underinsured (I can’t even remember exactly how much cover we currently have) but hopefully come next renewal, we’ll also have redone the kitchen and may as well roll all those changes up at once. Very little we own was obtained new, but I am definitely aware that should we need to replace it all at once it would be expensive. That said, should we lose everything in one fell swoop, we would still replace things gradually in order to get more for the money. It took about 3 months for us to buy a bedroom set after moving in here (dresser and bedside tables).

A kitchen with a dishwasher, a decent fridge, a gas stove and cabinets not from the 1960s will probably add a significant number to the amount we want to be insured for. Still, the annual premium dropped to around $400 when I became a homeowner, so hopefully it will still be pretty affordable even after increasing the coverage and updating the policy accordingly.

Health insurance

Previously I’ve had a bit of a look into private health insurance – where previous employers offered discounts through Southern Cross (my current one does not) and when I needed my wisdom teeth out. And maybe now once again, since a friend is undergoing expensive dental work after an accident which is only partly covered by ACC.

Every time I’ve reached the conclusion that for me it’s a waste of money, my needs are around optical and dental and the cost of policies just don’t stack up against what I would get back. T might benefit from policies that cover physiotherapy, being both accident and injury prone.

What I would give for a comprehensive health insurance comparison site! Maybe this is an instance where an adviser would actually be worth it.

But I suspect this is something I’m going to put aside yet again. Maybe when kids come into the picture (my two bosses who have kids reckon they’ve got their money’s worth and more from health insurance).

When did you last reconsider your insurance coverage?

What to do if you have champagne taste on a beer budget

What to do if you have champagne taste on a beer budget

No judgement if your tastes skew a little more extravagant than your budget indicates. I think most of us know what it’s like to not have everything we want.

It’s an eternal struggle. Our money is limited but the list of things we can potentially do with it is not.

Spend less

The quickest win is to cut expenses where possible. A dollar saved is a dollar earned (and won’t be taxed!). Trimming the budget = instant savings.

For most of us the three biggest expenses are housing, food, and transport. If you can cut down on any (or all!) of these big ticket costs you’ll be saving money every week/fortnight/month on these regular expenses.

While renting I always endeavoured to keep rent as low as possible, but now that I own I’m making extra principal payments with the aim of eliminating the mortgage outright earlier than scheduled. We’re a one-car household, which saves an untold amount of money, and while we could easily spend much more on groceries and eating out (and would love to) we keep it in check as much as possible.

Other recurring categories to look at are all your utilities and subscriptions – internet, phone, power, water, TV, gym, etc. I have a fear of commitment when it comes to these things and have no contracts for any utilities. That said, I do have a Spotify subscription, mainly for music on my commute!

Earn more

Sometimes there’s no way around it – you just need to bring in more money.

The most basic existence in today’s world costs money, and the kind of life you want almost certainly costs more than that.

If you can’t achieve what you want on your income, or at least make progress towards it – even after cutting back and ruthlessly prioritising – you may need to grow your income.

Whether that’s by diversifying your income and making money on the side, learning to negotiate or change jobs to make more, or even retrain and upskill in order to increase your earning potential, there are options.

In my experience this has made the biggest difference. Even when I was first starting out I was constantly side hustling to earn more money to squirrel away for my goals.

Making more has seriously supercharged my ability to get ahead. With that extra money I’ve been able to save and invest, buy a house, stop buying clunker cars. Quite simply, I could not have gotten this while making $40k, because there’s only so far you can trim expenses. I increased my income $15k overnight, and almost $30k in under 2 years – no amount of frugality could have achieved that same impact.

If you want to get right back to basics, the key thing is to spend less than you earn. And thus there are only two ways to improve your financial standing are: spend less and/or earn more.




Disease Called Debt

How much does it cost to get chickens?

Meet Betty White and Helen Mirren #suburbia #chickens

A photo posted by egesther (@egesther) on

I suspect having chickens won’t actually save us money overall (because, uh, I don’t actually buy free range eggs). But it’s fun to have chickens around, and we’ll have truly free range eggs once they start laying.

Here’s a breakdown of the cost of getting set up with chickens.

Buying a chicken coop – $220

Originally we’d planned to build a chicken coop, but after looking at the cost of kitset coops online and the cost of raw materials, we decided to buy one premade. It came in pieces, with (largely incomprehensible) instructions and we put it together ourselves.

The high end ones go for around $500-600; at the budget end, you might find homemade tiny coops for $50. The ones that are around $100 or less on TradeMe are often also billed as being for bunnies, for what it’s worth.

Water dispenser – $12

From the local pet store. We didn’t buy a special feed container; we just use a small metal bowl we already had.

Feed – $15

Our first bag of feed was a small one from the pet shop and didn’t last very long – a week or two? We now buy chicken feed from the supermarket and a $10 bag lasts maybe a month.

Hay – $10

There’s a local-ish lady who specialises in all things rabbit-related. She offers heaps of stuff for small animals, including fresh hay she packages up herself and sells online.

Two chickens – $50

I wanted to get chickens from a nearby farm, but the one I contacted never responded. (Similarly, I still haven’t heard back from a local dog daycare dude who runs a service on his farm around the corner … I want to give you my money, seriously!) So we got our birds from our local pet shop. It has an entire bird barn – this part is bigger than the normal pet store part – so I didn’t feel too bad about this, as it’s actually a specialty of theirs.


We also recently built a big run for them, which cost about $180 in materials (though we didn’t use all of them). For a while we let them run around freely but they seriously crap everywhere and it was getting a bit much. (At one point they were even drinking from the dog bowl, which I found amusing.)

ETA: Right after I published this post, they finally laid their first eggs! Here’s hoping they get the hang of it fast – so far they’re averaging one each every other day.