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Browsing tag: money

  • March 16, 2016

    Adventures in first home buying

    Buying a first house in AucklandThis was not how I pictured myself buying a house.

    I imagined being blissfully married, with two reliable incomes, a solid savings history, starting to think about a family, maybe.

    None of this was true in 2016.

    But the main thing is I now have a stable place to call home. It means the world to me to have a house of my own, after two years of living in a holding pattern. The last few months in particular have been the textbook definition of ‘transitory period’ and I’m so ready to put them behind me.

    A few false starts

    I lost track of how many houses I saw. Dozens upon dozens. But here are the ones that came close.

    The first one I saw was a cute early 1900s bungalow with a country feel, hardwood floors and nice outdoor flow. But conversely, there was no available information upfront about what updates (if any) had been done to bring it up to code, the kitchen was cramped and there was only one minuscule wardrobe (this was a tiny place with barely two bedrooms).

    The next one I liked was a similarly country-feeling house, except this one was actually semi-rural, with a septic tank and all! Again only two bedrooms, but it was the location that gave me pause – it was just a little too far away. Plus, it was on a unit title, something I’d rather avoid.

    Then there was an unassuming duplex that dropped my jaw once I stepped inside. Perfection in every way. There was even an adorable spiral staircase. The buts: it was two stories rather than single level, attached to another unit, parking was limited, and it was cross lease.

    This one ticked basically all the boxes. Liveable off the bat, solid bones, sunny and cosy. Of course there are things I’d like to do but they can be tackled slowly and aren’t major or urgent, and there’s room to renovate.

    But how do I actually do this?

    I have yet to find ANYWHERE a brutally detailed, step by step guide to buying a house in New Zealand. I had basically no idea what to expect at each stage. There are bits and pieces of info online but what I desperately wanted was a thorough walk-through. I hope to never ever do this again in my entire life … but just in case, I’ve recorded the process for reference. Here’s my experience of buying a house by negotiation in Auckland.

    Apply for mortgage preapproval

    Meet with broker, do paperwork, gather supporting documentation.

    COMMENCE STRESS AND WAITING.

    I was applying for a Welcome Home loan, which takes quite a long time to process – two weeks in this case. It was an immense relief when it finally came (I was half convinced I would be rejected, given my usually stellar records had taken a big hit thanks to the whole unemployed partner debacle) and I had a wee lie down on the floor after opening that joyous email.

    Start going to open homes

    Graduate from stalking listings online to actually going out and seeing properties.

    SO EXHAUSTING.

    Endless viewings every weekend; scrambling to view new listings after work before they get snapped up. And then emailing my broker about every individual listing that I was seriously considering. Bleh.

    Negotiating/Making an offer

    AKA welcome to Stressville.

    This house was listed as ‘deadline private treaty’ – aka get your offers in by a certain date. That date was about a month out and I could tell it wouldn’t get anywhere near that point. Indeed, after one look around I knew it would go like hot cakes; we got there about 10 minutes into the first open home, and there was already at least one offer in.

    Getting mine in apparently involved signing a non binding  ‘offer to purchase’ form, which looked ridiculously informal. Scribble in your offer amount, desired conditions … and then text a photo to the agent. I wish I was kidding.

    We popped back the following day for the second open home, which confirmed my first impressions. There were even more offers by this time. After this viewing, the negotiation commenced that same evening. It was an exhausting and inefficient round robin over the phone, slowly whittling down the eight bidders to one.

    You know, I had all these grand notions about crafting an emotive personal letter to submit with my offer that would dazzle the sellers and help secure my bid … but this didn’t happen. In the end it had no bearing on the situation, and it was only money that talked.

    Getting the call to say I’d gotten the house was pretty surreal. Then came a congratulatory text from the agent, and a bit of emoji-heavy banter back and forth.

    Sealing the deal

    Forget Stressville, now we’re in Stress City.

    Hurrah for long weekends. On Auckland Anniversary, I went in to sign the sale and purchase agreement and organise to pay the deposit. The contract was a super daunting document in some ways and yet so underwhelming in others. It wasn’t totally unfamiliar to me, as the agent for the very first house I went to actually gave us an S&P agreement to take away. Then the contract was sent to the broker and lawyer, and the wheels set in motion for the next phase.

    Working through the conditions

    No rest for the wicked.

    The agent provided a LIM report, so I just had to confirm finance and organise a building inspection. Seriously – the longest five working days of my life. And as if I didn’t have enough on my plate already, I had to contend with daily calls/texts from the agent nagging me for updates and reminding me about all the backup offers on the table. Duuuude.

    More paperwork than you’ve ever dreamed of

    So much you could drown in it, if the papercuts didn’t kill you first.

    KiwiSaver first home withdrawal forms.

    More bank forms (including a terrifyingly huge number called Priority Sum. I’d never heard of it. Still couldn’t explain it to you, really. Thank god for Google).

    Confirming mortgage structure and interest rates.

    Getting house insurance.

    And income/life insurance.

    Organising account setup with the new bank.

    The land transfer form.

    More bank forms (these ones signed in person at the lawyer’s office) and title form.

    Waiting for the vendor’s lawyer to send through the final settlement statement with sum to settle.

    A minor panic when it came time to transfer the balance to the trust account, and the lawyer’s deposit slip seemed to have some extra digits at the end of the bank account – as if my nerves weren’t already shot enough!

    (I accept no responsibility for any inaccuracies in the naming of the documents listed above.)

    Settlement day

    AKA the most nerve wracking day of all.

    My lawyer had told me not to worry if I didn’t hear anything from her during the day. That would probably be a bad thing – it means something’s gone wrong. Just hang tight.

    The first person I heard from was the agent. About 11.30, he texted saying they had the all clear to give me the keys, and could he drop them off to my office? (Um, YES.)

    A couple hours later the lawyer emailed to wrap things up. And boom, hello homeownership.

    * * *

    A garden, a dog, compost, chickens (well, eventually). Farms and bush around the corner, the beaches not too much further.

    This is everything I have been dreaming of.

  • February 19, 2016

    The best money I’ve spent lately

    Bliss - calming sunset

    I’ve got half a rambly post brewing about how much I love money and how much better it makes life. But you’ll probably get the idea if I just tell you about the best things I’ve bought in the last few months.

    New bras

    I’ve seriously had a total awakening on this front (look out for a whole post on this in the future)!

    Electric toothbrush

    Game changer. Life changer. My mouth is so much happier.

    Decent shoes

    My feet are just too damn sweaty for synthetics.

  • January 25, 2016

    When life gives you lemons, buy lipstick

    Have we decided if the ‘lipstick index’ is for real, or not? (That’s the idea that people keep splurging on lipstick in times of recession – little luxuries, yo.)

    Well, on a micro level at least, it’s certainly rung true for me of late. I literally never buy makeup except to replace the one lippy I wear. My annual beauty budget is probably under $200, including skincare and haircuts. But some months ago I got a weird fixation with finding this particular shade that I was absolutely convinced I needed in my life. Sort of a dark vampy red, with maybe a bit of a plum/berry twist. Along the lines of Mac Diva, for those who care.

    I spent hours online in the name of research, and far too long in stores lurking around counters and fiddling with the testers. Once, a strange man even peered over my shoulder just after I stepped out of a shop – I had probably close to a dozen swatches smeared on the back of my hand and was eyeing them up in the natural light – and hissed ‘they all look the same!’

    I wound up buying probably around four (that’s a massive spree for me) and now I actually wear different colours on different days, sometimes. Crazy.

    And at the same time, I dug out some stuff that had been sitting around forever (throwbacks to my days of magazine freebies) like amazing pore-blurring primer powder and electric blue eyeliner (turns out to be a nice pop when you have hooded lids, or in my case, one normal and one hooded). For the first time in probably 15 years I started spending downtime at home playing with makeup for no reason other than I wanted to, even watching YouTube tutorials and stalking beauty reddits.

    Related, and possibly also a  reaction to the whole forced austerity thing, I’ve almost grown a little bit of a shopping addiction – at least by my normal standards. I haven’t bought much – a dress here, a pair of pants there – but I can definitely now understand how people might get out of hand.

    I think this probably stems from a deep-seated need for control. Not having it in other areas of my life, having my sphere of influence drastically reduced, has manifested itself in a new obsession with my appearance.

    I’ll never ever be the kind of person who puts on a full face every day. (Or any day. My wedding being the one exception, and that wasn’t by my own hand…). Yet there’s something weirdly calming about being alone in front of a mirror, going through the ritual of making yourself feel a little more beautiful.

  • December 16, 2015

    The intersection of capability and circumstance (in personal finance)

    financial capability nz

    A few months ago I accepted a new position that perfectly suits my nerdy, money-loving heart – one with the overarching aim of helping people get ahead financially.

    Very early on, I got to attend a particularly enlightening conference (the video below comes from that) and also a community workshop in a lower socio-economic area of Auckland. Let’s just say the challenge is huge. More than ever, I’m coming to understand the complexity of the issue: it’s not just about individual efforts and bootstrapping, it’s about human nature and psychology – and of course, the wider system.

    In a country like New Zealand, where the cost of living is pretty astronomical, budgeting can only take you so far. Where housing costs are out of control, home ownership is spiralling out of reach, the rental market is squeezed and the condition of rentals is a public health issue. Where public transport is pretty abysmal, and low-income households often lack access to a vehicle, and therefore, supermarkets and healthy food options. Where certain cultural norms mean that family can either be a boost or a drag, holding individuals back from getting ahead. Where high burglary rates mean frequent setbacks, unless you can afford excellent insurance. Where people being locked out of the property market today is going to have huge ramifications when this generation reaches retirement.

    True, some people don’t have huge lofty goals and aren’t particularly interested in ‘getting ahead’. But we can’t get away from the fact that we live in a capitalist society, and you need money to exist in it. Inflation is a fact of life; things are only ever going to get more expensive. We’re already a low-wage economy, and if your income remains stagnant, you’re going to wind up at the wrong end of the inequality gap – a yawning gap that’s only growing. I for one don’t want to wind up being a burden on society. So I was really happy to see a session on upskilling and increasing your earnings as part of that community programme, because spending is only half of the equation. It doesn’t matter how good you are at budgeting, if you don’t have enough money coming in, you’ll never get ahead.

     

    Sure, let’s build financial capability so people are better equipped to deal with whatever circumstances life may throw at them. (Pretty much everyone can and should be doing better, to varying degrees.) But it’s about more than that. Health, family, educational, church systems – all contribute to financial wellbeing. IMO so much hinges on those early years; if you start out behind it’s a lot harder to catch up and overcome setbacks. And the worse that things are for you now, the harder it is to think about the future.

    (For one of the best posts I’ve read on this topic, head over to Frugalwoods.)

    I’ve been fortunate on the health, employment, family fronts. Not everyone has the luxury of that kind of head start. You need to be able to get ahead of yourself in the first place, to get ahead of your paycheck, build up a buffer, get a reliable vehicle, secure your housing situation.

    And yet, I came on board at a personally tumultuous time, financially speaking. By the CFSI’s reckoning, I was probably a bit closer to Financially Tenuous rather than my usual Financially Striving. It was so, so hard to come into work every day, think about personal finance, listen to coworkers’ tales of buying houses, all while shit was falling apart in my own life. Despite that, I’m so happy to be doing what I’m doing. I feel like it’s the perfect time to join the fray – financial capability is on the political agenda, recent legislative changes have improved consumer protection around credit and disclosure, and we’ve only just begun.

  • November 4, 2015

    When borrowing for a car is the smart thing to do

    Getting a car loan was the smartest thing I ever did

    Taking out a car loan when your partner is basically unemployed and you’re living on one income. Sounds like the worst idea ever and the start of a judgey Reddit thread, right?

    Yet that is just what we did.

    I kept trying to hold out until T got a steady job, but eventually both the safety and reliability of our car deteriorated to alarming levels. We’re a one-car household and public transport will never be a viable option for BOTH of our commutes so it’s vital that we are able to rely on our vehicle. T needed to be able to get to job interviews and to start work at the drop of a hat.

    It was a bad catch 22 – needing a car to earn money but needing money to pay for a car. I’ve said before that our strategy of buying cars we can afford in cash has not worked out well in the past – thus, the loan, despite the terrible, terrible timing.

    A photo posted by egesther (@egesther) on

    Our car-buying process

    The last (and only time) I discussed our car issues with my mother, her advice was succinct: go for something in the $10k plus range, as cheap cars have always turned out to be money pits for us. Both her and my dad did and I don’t recall them ever having issues with their cars growing up. The difference of course is they had the cash to do that, and we don’t.

    Much as I’d like the peace of mind of a brand new car, there just weren’t any good finance deals around (Subaru had 0% and 3 lump sum payments, Mitsubishi had some good driveaway prices, but not for models we had any interest in). So we took a punt on the used market again, just higher up the price ladder. The one small comfort was that we know more about cars than ever before and T knows car sales from the inside out now.

    Looking in the $15k range (give or take) we were looking at cars falling roughly along two lines: 4 to 6-year-old cars with 80,000 to 100,000 plus km through to 10-year-old cars with 50,000 plus km, and everything in between. Basically, the best case choices split between newer model, higher ks and older model, lower ks. The older cars are usually Japanese imports, while the newer ones are occasionally New Zealand new (and thus with a full history).

    T zeroed in on a few different specific models; narrowing down our choices made things easier in some ways and harder in others. He loves driving, does 99.9 percent of the driving, and needs to be happy with whatever car we have (and let’s face it, it’s really the only decision he gets majority say in – I’m the boss on everything else). It’s got to be big enough and hardy enough to handle him – a little 1300cc is not going to work for space or engine power.  Being a gearhead he’s very specific about particular models and year ranges and knows all the little differences – features and problems alike.

    In the end we set our sights on a Mazda – possibly an Atenza but ideally a 6 (the Mazda 6 is the NZ version).

    The Subaru Legacy was another contender, but it’s difficult to find a lightly used Subaru without ridiculously high mileage, and being the most stolen cars in NZ, insurance is higher on them.

    (Toyotas are famously awesome for reliability but expensive as they don’t tend to depreciate as fast. Also, he doesn’t like any of their current models – last time we were car hunting he would have killed for a Caldina wagon but apparently the later years are definitely off the list.)

    Random thought aside: I feel like I don’t seem to see many Hondas or Nissans around Auckland anymore. Growing up there were tons of Civics, Integras,  Accords, Pulsars, and Primeras on the roads – these days the models have changed of course, but anecdotally the makes just don’t seem as common.

    Closing the deal

    So, what did we have to compromise on? In the end, we went for newer with higher mileage – a 2011 wagon with a little over 100,000 km. It’s an ex-lease car with a full service history that’s had regular maintenance, all documented.

    (I gotta say, it took a while to get used to the quiet engine. None of the rougher rattling, shaking or ticking kind of sounds we’re used to.)

    I’d read a little bit about negotiating with sales people at dealerships online, but it was truly bizarre sitting through the process. It actually happens – writing down the price you want to pay on a sheet of paper, then sitting and waiting for the rep to take the offer to the manager. I was super tense the whole time, convinced they were out to get us, but it really wasn’t that bad. I’d even go as far as to say that the rep didn’t really seem into it – maybe their commissions are small. He was definitely not overly pushy.

    If I recall right, we got a little over 10 percent knocked off, paying $16,000. Compared to what similar cars, even private sales, were going for, it was a very good price.

    Getting finance

    It’s funny how things work out. I was determined to shut down any attempts to sell me on dealership finance, and yet…

    1. The AA completely disappointed me. In their pre-approval email they gave me absolutely no details beyond the fact that I was pre-approved for a loan. I had to hit reply asking what my interest rate would be, and it wasn’t the best one they advertise.

    2. My bank was the complete opposite – what a great experience! I was actually almost excited about the whole thing. A banker called me up, went through every little detail with me, took the time to make sure I understood everything, and was incredibly patient.

    3. But the dealer in fact bettered the offer through their finance company. (There was slightly less flexibility around making extra repayments – however, given our situation, it was highly unlikely we’d be in the position to make extra repayments any time soon.) Also, going through them meant the whole process would be quicker, which was a bonus.

    Incidentally, I had to laugh at this:

    For every instance of a car loan “horror story”, how many people have no trouble or regrets about financing their car? You aren’t going to have a bunch of threads titled “Two years ago I bought a nice car, negotiated a good deal on it, put down a sizeable down payment, had excellent credit and secured a low interest loan and I couldn’t be happier!”.

    (Yes, I have become a Reddit addict. Reddict?)

    Plenty of my PF blog friends have borrowed for cars in order to get something reliable and on the newer side, and done so responsibly. Ideally nobody would ever take out a loan for a car, but we don’t live in an ideal world.

    I won’t say it’s the best financial decision I’ve ever made, but it’s definitely far from the worst one.

    I set the car loan up as an 18-month loan, so payments were rather high with the aim of killing the debt all the quicker. But halfway through, thanks to my new job, I decided to pay it off. That monkey is now off my back.

    It’s the best vehicle-related decision I’ve made to date. Our car hasn’t given us any trouble and will hopefully give us many more stress free motoring years.

    BONUS: having a car this new reduces our annual registration costs by heaps.

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  • October 28, 2015

    How blogging made me a better negotiator

    Blogging taught me how to negotiate

    Let me tell you a little story about how blogging gave me the confidence to negotiate my worth.

    I remember the first time I ever made any money off my blog. I was astonished that somebody would pay to place content on it. Blogging – still the easiest yet hardest thing I’ve ever done to earn money.

    From then on, it was a slippery slope, I admit. There was a time when I accepted way too many sponsored posts.

    But despite that, I still didn’t say yes to everything. I was reasonably picky. There were some compromises I just didn’t want to make.

    I started negotiating, somewhat regularly, with potential advertisers. It was easier than I thought. Faceless people behind an email address. A business transaction. If they didn’t want to pay my rates, that was fine. No deal. There are plenty of other advertisers out there who can, and do. I don’t need your money.

    “Hоw dо уоu make mоnеу blоggіng?” I get thаt ԛuеѕtіоn аll thе time. Thе аnѕwеr іѕ ѕіmрlе: Emроwеr Network. But I wаnt to explain it іn more detail tо bе сеrtаіn thаt you аrе clear.

    A “blog” іѕ асtuаllу shortened frоm thе words, wеb log. It started as a place that the оrіgіnаtоrѕ of thе internet posted a log оf thеіr асtіvіtіеѕ еасh dау. When blogs ѕtаrtеd everyone аѕkеd thе ѕаmе ԛuеѕtіоnѕ, “Hоw do уоu mаkе bank blоggіng?”

    Tоdау, blogging іѕ a multi-billion dоllаr іnduѕtrу thаt іѕ аn accepted раrt оf the news сусlе аnd іntеrnеt buѕіnеѕѕ. If you are looking for the make money as a blogger, visit us here.

    I mаkе a full-time lіvіng frоm blogging. I gеt asked еvеrу day аt least twісе a dау, “Hоw dо you make money blogging?” And іt’ѕ nеvеr just a ԛuеѕtіоn; іt аlwауѕ ѕоundѕ lіkе I fоund a way to wаlk on thе сеіlіng. Evеn funnier, is whеn реорlе ѕау, “I tried thаt. Yоu саn’t make a lіvіng that wау.”

    Rеаllу, wеll, I аm. Lоtѕ оf іt. Enough to be аblе tо take vасаtіоnѕ аnd hоmе-ѕсhооl my сhіldrеn. I аm mаkіng mоnеу frоm blogging.

    Well, there are the extreme cases, like Arianna Huffington, who sold the Huffington Post for millions or Perez Hilton, whose blog about Hollywood made him a star (and wealthy).

    There are also those who write blogs for other people. This really doesn’t make sense to me. Why would you want to work for someone else? This provides an easy answer to our question, “How do you make money blogging?” Not writing for other people.

    For most of us, making money from blogging involves making connections and getting lots of traffic from Internet search engines.

    Do this all by yourself – making the connections, getting your blog highly visible by all of the search engines and getting lots of inbound traffic can be very difficult. For many people, it can be a full-time job, with not a lot of pay… for years. Still not the answer to the question, “How do you earn money blogging?”

    Join a blogging network – Empower Network is the largest and most effective of these networks. Their blogging platform sets up that blog automatically with search engines and places your blog in a network.

    So exactly how do you make money blogging? Well, when people land on your blog, there are advertisements and pay per click ads that can generate money.

    The best part of it all is that there really is no ceiling to the amount of money you can make blogging. The more great content you write, the more people will come to your website. Then you’re making money from blogging, lots of it.

    I don’t know about you, but I would rather start making money with my blog today rather than spends months or years trying to get it noticed.

    I’ve lost count of just how many email threads with stingy lowballers I closed off with ‘if your budget increases in the future, feel free to get in touch’.

    And if my blog is worth more than that, then I’M certainly worth more than that.

    Turns out that was really good practice for real life.

    And that is how blogging helped boost my confidence, leading to my first actual pay negotiation.

  • September 8, 2015

    3 pet peeves of a freelancer

    3 pet peeves of a freelancer

    I know a few people who’ve struck out on their own in recent times, one of whom has gotten through the honeymoon phase and has now lost those pretty rose-tinted glasses about being self-employed.

    It got me thinking about all the things I detest about doing freelance work (aside from chasing payment, obviously)! Bad clients are rife, especially when you first start out. And as a rookie you often don’t know the traps to avoid.

    If you’ve ever freelanced, odds are you’ve come across your fair share of bad clients. Here’s three pet peeves I have that I imagine are pretty much universal:

    The client who doesn’t actually have a clue what s/he wants

    You know the type. Wishy-washy, lots of back and forth over email. Potential clients who won’t tell you what they have in mind, are super vague on the details of a project, and ask you for a quote without giving enough information to go on, probably don’t know what they want. And clients who don’t know what they need are prone to scope creep, blowing out projects way past budget and timeframe.

    The cheapskate

    There’s always a client who wants you to cut them a discount because they’re a small startup, or threatens to go elsewhere because they can get the work done for half the price. Whatever the reason for their stinginess, it doesn’t bode well for your working relationship.

    The needy one

    Like a clinging partner, an overly demanding client expects you to be at beck and call, all the time. Last-minute changes and deadline shifts are all to be expected.

    The single worst client I ever had ticked all of these boxes. I found myself groaning every time her name popped up in my inbox, and putting off responding to her emails as long as possible. Reluctance to even open emails from someone is a pretty good sign that all is not well. Unfortunately, since this client was a referral from another client – a GOOD one – I was reluctant to cut her loose.

    But here’s the thing. If you don’t value your own time, how can you expect your clients to?

  • August 29, 2015

    Talking about money – sometimes other people will surprise you

    What is 'real' savings anyway?

    I love talking about money. I mean, you already know that, but in real life it’s even more awesome.

    Asians don’t shy away from money talk, but I was always raised to remember that it’s a taboo topic in wider society here.

    And so, I’ve been ridiculously stoked to be part of honest conversations with various colleagues about money over the past year or two.

    Day to day we talk about the cost of housing, cars, travel. But pay is always a sensitive area, and one I’ve never felt safe broaching unless it’s around the time that I’m leaving that job – just before, or just after.

    Every time it’s started with general discussions, tiptoeing around the subject and talking in percentages or just very vaguely. And then, the other person has come out with a number first. (Cue reciprocity.)

    I’ve been surprised at how happy others are to disclose numbers, but in a good way – more transparency FTW.

    Also, two thumbs up for the rad female bosses I’ve had who have encouraged me to negotiate pay.

    Shameless plug: Next week is NZ Money Week, a campaign that I’ve been involved with through work. There’s a number of events – workshops, seminars – happening around the country (see moneyweek.org.nz) and if you take this quick quiz you can enter to win a Les Mills gym membership plus some time with an authorised financial adviser. 

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