money | NZ Muse

July 19, 2016

What to think about when buying appliances

Recently I attended a focus group where we got to talk about shopping. Specifically, shopping for whiteware. Although my experience with buying appliances has been pretty dang limited to date, I anticipate buying a crapload of them in the next 1-2 years as a freshly minted homeowner.

The only new appliance I’ve ever purchased was our Samsung washing machine in early 2015. Aside from that, I’ve only ever bought cheap secondhand washing machines and fridges at a pinch, when our old one died or a house move forced a change of some sort. A new kitchen is in my future at some point – rangehood, stove/oven and definitely a dishwasher. I want a gas stove for sure, but efficiency will be a consideration for the fridge and dishwasher.

In that session, we discussed things like brands, reliability, efficiency, design, functionality, upfront cost and running costs. In particular, when it makes sense to go for the option with a better energy rating, whether it’s worth calculating annual running costs, calculating the break even, etc.

Being a broke student and then a broke journalist for most of my adult life, upfront cost was always paramount. Not only did I have a limited budget, I never knew what the future held or how long I would need that appliance for. Efficiency and the longer term view just didn’t play into it then. The ability to be pound wise rather than just penny wise assumes a certain level of privilege.

Have you renovated a kitchen? What do you take into account when buying appliances?

July 12, 2016

What’s your latte factor?

By: Kenny Louie

I really hate the ‘latte factor’.

We were talking about this at work the other day, and I pointed out that I don’t drink coffee, so it’s an instant turn-off.

‘So what would you cut back on?’ I was asked.

Truth is, I don’t have an equivalent. I don’t regularly spend on anything. I don’t have anything I could easily or obviously cut back on like a daily coffee. Most of my days are no-spend days.

For me, it’s always been about the infrequent but big ticket buys. Mostly travel, with a bit of a concert-going phase.

What’s your poison?

July 8, 2016

What happened when I got my first ever collections call

I don’t love answering calls from unknown numbers, especially now I’m out of journalism and don’t feel obligated to pick up every incoming call. But often these mysterious calls are from one of the market research groups I belong to and HELLO free money!

This was a different kind of call, though…

Debt collections calls … sound surprisingly scammy

I thought it was some kind of weird phone based scam at first.

As soon as I put the phone to my ear, I heard an automated message start repeating itself. This soulless robotic voice told me I had to stay on the line for a very important matter to do with Dun and Bradstreet.

WTF? I was tempted to hang up, but I stayed on hold. After a few minutes that felt like an eternity, a human came on the line. She started asking me personal questions to verify my identity and to be honest, I still wasn’t sure this was a legit call. But reluctantly, I confirmed a few details, trusting that they were who they said they were (seedy automated call aside).

Long story short: they told me I had a $50 ACC debt that had just gone to collections. Except I had literally never received any notification of this at all. Apparently it had gone to a very old address from about 3 years and 3 houses ago. And as I told the rep, I am always careful to keep my details up to date with the government (through IRD, because taxes!) and if I did owe this debt you’d think they’d tell ACC where to find me. Also, I’m not self employed, so I don’t know why I would owe ACC anything at all.

Without proof of this alleged debt, how was I even meant to begin sorting this out? Seeing as I had literally no documentation relating to this alleged debt I asked them to send me whatever they had on file.

A few days later I got a lovely letter full of capitals and red and threats of legal action. Standard template, I’m sure. It wasn’t exactly proof of the original bill, but it was something at least.

Armed with a reference number and a dollar amount, I contacted ACC. A couple of days later they told me they would be withdrawing the debt from Dun and Bradstreet. Sweet, I thought – that puts an end to this saga.

Debt collectors are relentless

Of course it wasn’t that easy. I continued to get calls from unknown numbers during the weekday and in the evenings – many of which I missed, and the rest I actively ignored. Then they started texting… Seriously.

I forwarded my email from ACC to three separate email addresses I found on the Dun and Bradstreet website (two of which immediately autoresponded with out of office replies).

Then, I also emailed ACC back to see what was happening…

Bureaucracy reigns supreme

Dun and Bradstreet eventually responded, only to tell me that a) I needed to call ACC because b) they had just spoken to their contact at ACC, who had said there was no intention to withdraw the invoice and c) it remained outstanding at this stage.

Uh, NOPE. I’m not going to waste time on the phone, particularly when that does not generate a paper (or email) trail. A lack of documentation is what brought this whole mess about.

Then, I heard back from ACC again. Another email saying the invoice had been withdrawn from Dun and Bradstreet…

The calls seem to have stopped, so I am assuming the message has finally gotten through to the right people.

It’s a stressful and dehumanising process

Look, I know Dun and Bradstreet were just DOING THEIR JOB. But from where I’m sitting, their systems and processes suck. I felt thoroughly dehumanised throughout the whole thing. Stalked, even.

I’m probably being oversensitive, but I didn’t like feeling like I’m being treated like subhuman scum. Not a debt dodger. Not even a legitimately decent person who’d fallen on hard times and fallen behind. I was literally someone stuck with a mess because someone in a big agency made a mistake. It’s scary how little power individuals actually have and how hard it is to sort things out that other people have screwed up. Here’s another story from a fellow Kiwi in that vein.

Have you ever had to sort out a mistake on your credit report or deal with debt collectors?

June 30, 2016

I think I have financial PTSD

I woke up the other day with a sinking feeling in my stomach.

There’s still this deep seated fear buried inside that things are going to fall apart.

Nothing specific, just the thought that this is too good to last – the house, two incomes, the dog. Somehow, I’m going to lose it all and it’s going to be taken away.

If there is such a thing as financial PTSD, I think I have it.

From money troubles to money worries

As I work to rebuild from the past couple years and improve my financial wellness, I imagine my emotional well-being will too.

In How To Worry Less About Money, John Armstrong draws a distinction between money troubles (urgent, immediate, pressing) and money worries (emotional, complex).

Going from worrying about the day-to-day and the immediate future to worrying about the distant future is a nice change. I mean, it’s still a worry, but it’s a hell of a lot less stressful.

When you know you’re making ends meet you have the ability to actually be future-oriented – and that’s the only way to really get ahead financially. To figure out where to put your money to work the best for you.

All I can do is wait it out, I imagine. Acknowledge (or ignore) those fears as they rear their heads. Slay them with logic, or contempt. Only time, and money, will heal.

Have you ever felt this way after coming off the back of a financially stressful time?

June 28, 2016

Why you won’t find jam in my house

By: Larry Jacobsen

You won’t ever find jam in my pantry.

The reason goes back to that very first year I lived on my own.

I studied mostly, and I worked where I could, and my budget was incredibly tight. It looked something like this.

$165 living costs (rent and all inclusive bills)
$30 groceries
$20 for bus fare

I had about $20 left over every week. A bag of chips or a block of chocolate was a splurge. (Things like the time I slammed my hand in a door and had to go to the doctor in a rush threw everything off.)

I ate a crap ton of jam sandwiches. I packed them in brown paper bags. I had a sweet tooth, and figured there was fruit in the jam so it must be somewhat healthy.

(Yeah, I relate everything back to food, but what did you expect from me?)

As my budget eventually loosened up my lunches became more varied. I stopped eating jam outright. I’d overloaded to the max and I couldn’t stomach it any longer. Plus, it reminded me of my brokest days.

I don’t eat jam anymore, though the day may come when I buy it again. I might even try making it – I have an overachieving guava tree and more guavas than I know what to do with, though I don’t particularly like the fruit.

What do you associate with your broke days?

June 23, 2016

3 ways that being lazy saves me money

How being lazy saves me money

I kill it every day at work, but outside of the office my middle name might as well be Snorlax.

I hate gyms with a passion

They are a strange and foreign environment. I spent a year in an apartment with a free building gym and spent about 10 minutes in it, total. I know better than to waste money on a membership I’ll never use. If I must exercise, I will run and hike outside.

I can’t be bothered with contact lenses anymore

In summer maybe, but even then, not full time. Between battling dry/sensitive eyes and the hassle of putting on makeup (a necessity to liven up my face sans the visual dominance of glasses) it’s too much work for the sake of vanity.

I procrastinate like it’s my actual job.

I haven’t had a haircut in six months and counting. Haven’t been to the optometrist or dentist for two years. The latter is definitely NOT good and I’m going to rectify that soon, I swear.

June 21, 2016

Life with a mortgage (is surprisingly sweet)

Life with a mortgage is pretty sweet

Living with a mortgage ain’t half bad.

My contents insurance, which WAS around $1200 a year when I was renting, plunged to about $400 when I bought my house. Car insurance decreased by a few bucks too. Unexpected fringe benefits of home ownership! My jaw literally dropped when I heard the new figure and I had to ask the rep to repeat it back to me.

My house insurance is about $1250 a year. And since I got a $1200 cash gift from my new bank when I confirmed my mortgage, it’s basically free for the first year.

Council rates (the equivalent of property taxes in some of your countries) are pretty darn affordable. Mine are just under $1500 a year. This is typical for houses in this range; when house hunting I saw probably up to a $500 variation in annual rates between all the properties, based on their value.

And YES, before all you lovers of renting jump in, I’m prepared for the costs of maintenance – I will be referring back to my pre-purchase house inspection report plenty over the coming years, which was brimming with recommendations around everything from insulation to safety glass.

Replacing the deck and repainting the roof will probably be the priorities – but a new kitchen just might come first. There’s no rangehood, no splashback (both noted in the report as matters to remedy) and everything just generally needs an overhaul. Might even knock through a wall and make the whole living and kitchen area open-plan with an island.

How much am I paying?

My 30-year mortgage is structured in three parts. Here’s what it’s costing me per fortnight:

$77.83 ($30,000 floating loan @ 5.29% – was 5.44% at drawdown but rates dropped since)
$492.24 ($215,000 fixed loan for 2 years @ 4.35%)
$474.30 ($200,000 fixed loan for 3 years @ 4.65%)

So I’m paying the bank $1044.37 every fortnight, plus I’m also repaying my family at $200 on top of that: $1244.37 all up. Or, $2488.74 a month.

Thus far I’ve also knocked another $3,000 straight off the principal with extra lump sum payments but now I need to turn my attention to a few other financial priorities.

Mortgages in NZ

So, if any of that sounds weird, here’s a simple intro to mortgage options.

Or if you’re not much of a video person, let me try to run you through how things work here.

Fixed vs floating: There are fixed mortgage rates and floating (variable) mortgage rates. Fixed rates are typically lower.

The minimum term you can fix for here is generally 6 months and the maximum 5 years. Lots of people (like me) split up their mortgage into a few separate loans, some floating, some fixed. Floating allows you to focus on repaying the loan without penalties, while fixed gives you some certainty around rates (but with less repayment flexibility). And thus, a combo can offer the best of both. Its is not as easy to get a loan in NZ as in some countries like Sweden where you can get a loan via sms or as they call in sweden sms lån.

Then there are a few more types of mortgage accounts available with floating rates:

Revolving credit loans are basically a giant overdraft, with one account acting as your loan, chequeing and saving account all in one. All your pay goes straight into the account and the idea is to leave the money sitting there as long as possible (eg putting your expenses on a credit card and paying them off at the end of the month). By keeping the account balance (and thus, loan balance) as low as possible at any time, you save on interest because the bank calculates interest daily.

Obviously this requires discipline and organisation, though you may be able to set it up so that your credit limit reduces over time, making it easier to stay on top of things and ensure you’re making progress. When it comes to refinance/rollover time I imagine I’ll choose revolving credit for part of my mortgage.

Similar but different, an offset mortgage is linked to your other accounts with the bank. Your mortgage interest is offset by the amount you have in your other accounts. For example, if your mortgage balance was $500,000 and you had $20,000 between your savings and chequing accounts, you would only be paying interest on $480,000. But compared to revolving credit, offsetting is not offered by as many banks.

And in case you missed it: my step by step guide to actually buying a dang house, from getting preapproved to settlement day.

June 16, 2016

5 ways I’m accidentally frugal

5 ways i save money without even trying

I have a penchant for good food and travel, but by happy accident, there are lots of ways in which I manage to save money with zero effort. Accidentally frugal, that’s me. Here’s how I save money without even trying.

I don’t really drink … anything

Alcohol, coffee and soft drinks don’t really agree with my digestive system. I don’t know how much NOT buying any of these on the regular saves me but I bet it’s a reasonable amount. Plus I’m a lightweight so if I do drink one is always enough.

I’m unfashionable

I have no sense of fashion nor interest in it. Every so often I go through a spurt of wanting to be stylish and plan to start accessorising and planning outfits more carefully – which never lasts very long before I revert to my lazy ways. There’s no point trying to fight my inner nature.

I’m kind of antisocial

I have friends, I swear, but I’m hardly swamped with invitations out every week. (Years ago I figured I needed to start making new adult friends and swore to start going to Meetups: then I realised I find it hard enough to keep up with my small circle and if I can’t even maintain my current friendships I shouldn’t add anymore.) My social calendar is sparse and I like it that way. More time to cuddle up with the dog and a book at my cosy place.

I love carbs

Seriously, I could basically live off potatoes, pasta, bread and rice.

I hate driving. And parking

Having a car is a necessity here but it’s also expensive! There’s no reason for us to have two vehicles and being a one car household definitely saves money. It’s occasionally inconvenient but those instances are rare.

*Part of Financially Savvy Saturdays on brokeGIRLrich, A Disease Called Debt and Femme Frugality*

June 14, 2016

How To Worry Less About Money: 3 things I took away

The most refreshing thing about How to Worry Less About Money is the author’s unflinching observation of how money affects relationships. In this book, John Armstrong relates this back to his own marriage.

“My own experience is that money worries can cause terrible conflicts in relationships. I fear I have damaged Helen’s life by not making more money. And there are stylistic clashes: I like being lavish; she’s much more restrained. For instance, I like the idea of going to fancy restaurants; she prefers the modest family-run place round the corner, or chicken soup at home. (And this is all the harder to deal with because our earnings point in the opposite directions to these personal tastes).”

Well, I’m the Helen in my life, and I can vouch for the fact that I have felt resentful many a time. I wish that weren’t true, but I am human, and perhaps not always a very good one. This is us, down to a T, especially the incongruence between tastes and earnings. I would be curious to hear Helen’s viewpoint.

Money and marriage

Armstrong points out that in the world of Jane Austen, having enough money is taken very seriously (and rightly so!) as a necessary condition of happy marriage. Money reduces the fragility of a relationship, and makes people more relaxed. Money buys luxury, privacy and stimulation. Money is for some people an aphrodisiac.

All of these things resonate so hard (perhaps not exactly the last one, but financial stress is a huge turn off and therefore lack of money is definitely a turn off).

Alas, there are no true solutions offered up, despite the practical promise offered in the title. This is a philosophical read about how we think about money, relate to it, the space it occupies in our minds and lives.

It’s a book about money worries, as opposed to money troubles.

Money troubles vs money worries

Money troubles, Armstrong contends, are urgent. They call for direct action and can only be resolved in one of two ways: either you gain access to more money or you go without something else.

Money worries, conversely, are about imagination and motions, not just what is happening now. Money worries often say more about the worrier than the world. They’re about what’s going on in your head not just in your bank account.

The meaning of money

When you strip money right back to the fundamentals, it is just a resource – a means of exchange.

“In other words money is an instrument … Ultimately the task in life is to translate efforts and activities that are inherently worthwhile into possessions and experiences that are themselves of lasting and true value.

“That is the ideal money cycle. Our relationship with money becomes unhealthy when we remove it from this cycle. That happens when we stop seeing money as potential possessions and experiences – but rather see possessions and experiences as potential money.”

We’re all bombarded these days with the reminder to DO WHAT YOU LOVE. Armstrong acknowledges that we need to make enough money to meet our needs and we also need to do things that help us make sense of who we are and contribute to collective good.

“You can escape by not caring about meaning. And you can escape by not caring about having much money. But a lot of people care about both.”

* * *

If you know roughly what to expect going in, this is a great read. I related to so much of it, I was constantly nodding along and found myself bookmarking what seemed like every other page.

If you’ve read it, what did you think?

June 9, 2016

The power of extra mortgage payments

Lots of personal finance bloggers, especially after becoming debt-free, say saving is boring.

I don’t get it.

I love watching my money grow and the numbers tick up. There’s nothing better – except cheesecake, maybe.

I’m a bit of a hoarder in real life, so maybe it’s not surprising that I also like to hoard money (real or otherwise – sometimes I think wistfully of all the Neopoints I had banked back in the day).

I was so resentful of my consumer debt, basically because I didn’t actually get anything out of it. It was all incurred while supporting an unemployed partner – less consumer debt and more keeping up with bills, really.

But now that I have a mortgage, I just might be changing my tune. It’s a different story as I deliberately took on this debt, plus the payoff is so much bigger.

I don’t mind my mortgage as I wouldn’t have a home without it, but I’d like to minimise the massive effect of compounding interest working against me.

The $3,000 in extra lump sum payments I’ve made? Apparently saves over $9,000 in interest over the long run.

I get it now…!

Browsing tag: money

What to think about when buying appliances

Have you renovated a kitchen? What do you take into account when buying appliances?