October 11, 2012

How to plan a trip around the South Island

How to plan an NZ road trip around the South Island

I’m totally an expert after a 2-week campervan road trip around the South Island, right?

Part 1 – Christchurch, Dunedin, Milford Sound

Part 2 – Queenstown, Wanaka, Mt Aspiring

Part 3 – Glaciers, Punakaiki and Kaikoura

Here’s how we planned our South Island road trip, and what it’s like to be travelling inside, well, your house.

PLANNING

Stalk one-way campervan relocation sites.

A free campervan rental! What could be better? Some even throw in free fuel, free insurance or a free island ferry journey.

Wrong.

Eventually scrap that idea. Relocations come up on very short notice (hard to play along with when you have two full-time workers), only go for about 3-4 days (not enough time to see or do anything particularly when one entire day will be spent driving up the North Island alone) and run from Christchurch to Auckland (coupled with the time limit, this means you can’t see any of the good stuff in the south). If you’re going to be stuck paying last-minute airfare prices to fly down to Christchurch to pick up your campervan, it better be worth it.

Stalk campervan rental websites and comparison websites.

Nearly pass out at the daylight robbery rates.

Argue with partner about when to go. Weather will be infinitely better in summer and roads safer, but the costs are astronomical and that means no skiing in Queenstown on the trip. He’s angling for winter – after all the South Island is all about snow. We settled on spring, right on the tail end – in time to catch the end of snow season, avoid the school holidays, be away on his birthday and still take advantage of off-peak prices.

I feared the cold, to say nothing of bad weather (but one thing I didn’t consider is that I’d be much more likely to get sick in winter – in fact I caught the flu the week before we left). But it was glorious. We had better weather during those whole two weeks than I swear we’ve had in Auckland for the last two years. This happens to be the rainy season in the Milford sound, but apart from a slight drizzle when we first arrived, our time there was all we could have asked for – it was so bright I wore my sunglasses the entire Saturday from when I woke up through to the drive back out.

There were only two miserable days on the west coast, true to its reputation. To be fair, they were pretty shit. Cooped up in your damp camper, with wet gear everywhere that has no chance of drying, was ever so slightly unpleasant. Once the sun finally came out, the next time we came back into the camper after being outside, we both choked on the thick, wet, smelly air, and threw every door and window open to freshen it up.

In regard to temperature, it wasn’t really all that cold – not nearly anywhere what I expected. The camper was warmer than our house, which may as well be made of paper, and was certainly more insulated and weathertight…

I imagine the weather can be dicey when it turns, but I’d definitely recommend going in shoulder season. We must have seen a couple hundred campers on the roads and in holiday parks just during our journey, so I can’t imagine the crush of the summer crowds.

Book a campervan.

Using campervanhiresalefinder.co.nz, we chose an Apollo 2-berth with shower and toilet, a 2.4l litre turbo diesel manual transmission (T’s choice). It was surprisingly grunty. While we had our fair share of overtakers, we passed many other campers, trucks and even some cars. Seriously. And the seats are unbelievably comfortable; you can drive all day and not wind up with a sore ass or back.

It’s much cheaper to book at the last minute, especially in winter, I think (and as for summer I imagine you’d need to get in early if you want to secure a vehicle; I’m not sure what the optimal time to book is). However, T and I both had to arrange our leave from work in advance and I also didn’t want to be at the mercy of last minute flight bookings, which can cost a fortune.

We opted to pick up and return our campervan in Christchurch, which was cheaper than Queenstown. We could have rented one in Auckland but that would mean we’d have to drive down the whole country – it takes a day just to get to Wellington and the fares crossing the Cook Strait with a vehicle are outrageous.

After scouring both Webjet and Mix and Match, I found the best deal on flights there and back (Air NZ), and on insurance (1cover) at comparetravelinsurance.co.nz.

Make sure your credit card can withstand the weight of the bond you’ll need to pay when you pick up your campervan (in the thousands). I increased mine online, and found ASB has a handy tool right there in Fastnet with a slider showing your pre-approved limit. Score! I thought. No messing around on the phone. I’d originally thought I might double my limit to $6k before thinking that might be a bit much – $5k might be more reasonable. But my approved amount was, lo and behold, $6k, so I ran with it. All done, instantly and painlessly.

Outline your must-dos and your like-to-dos.

I was pretty flexible, with most of my itinerary in the latter category. I kept an eye on Bookme for South Island tourism deals (it’s a bit like a daily deal site specifically for that sector) and picked up a Milford cruise for stupidly cheap, $22. So cheap in fact that I figured if we didn’t make it there by that date, I didn’t mind eating the cost. And if we did, then we’d just have to book the second person’s spot when we got there (the deal was limited to one). We didn’t end up getting there on the day, and paid full price for a combo deal that included time on the water in kayaks.

One thing I absolutely wanted to do was ski. But seriously, the amount of information and options available is dizzying. There’s Coronet Peak and Remarkables. Cardrona and Treble Cone are not far away. (Or we could even hit the snow in Canterbury…) There’s Mypass and Onepass and who knows what else. In the end I basically threw in the towel. “Bugger it, let’s wing it.” And we did. And it was totally fine.

Research some places to stay beforehand.

You can pick up free booklets outlining accommodation options at visitor information centres, but it’s probably a good idea to do a little preparation in advance as well.

Rankers is invaluable as a resource for finding safe places to free camp. In the more built up areas, no camping signs are everywhere. Out in the country, you won’t just want to stop on the side of the motorway or outside the fence of someone’s farm. Before leaving, I made a list of both paid holiday parks where we could use the facilities (try nzcampsites.co.nz, holidayparks.co.nz, nzcamping.co.nz), and free sites from Rankers, in roughly the order we might need them as we drove around the country. And of course, there were a few nights where we simply found a handy spot and made it ours for the night, which is the beauty of campervanning it.

Holiday parks are expensive – you’re looking at about $40 a night for a powered camper site – but they do provide a place for you to empty your waste, fill up on water and recharge your power. The Department of Conservation has cheap campsites all over, but they generally don’t have much in the way of facilities. (We did see a large sign on the way out of Hokitika advertising $20 camper sites – so you may find some off-the-radar bargains.)

We found ourselves rising with the sun and going to sleep early – which is hard to avoid when you’re so out in the open – just like nature intended.

Bring a GPS, guidebook, and also, pick up free maps that will be available for the taking along the way.

Do not rely solely on your guidebook, however. (Obvious.) From research stage to on-sale stage a lot can change. I actually bought mine on deep discount a year or two ago in anticipation of eventually making this trip, so it was well out-of-date, really. I mean, the Catlins and the Southern Alps aren’t going anywhere anytime soon, but prices change and businesses change or close, as we found out in Greymouth. I’d marked down to visit the Railway Hotel for a down-home dinner (apparently they did a standout BBQ where $5 got you sausages and all-you-can-eat salad, with steak add-ons available) but when we walked in, the pub food was moved into a separate fancy-pants restaurant. Sigh.

I also got a copy of the Great Kiwi Motorhome Guide from the library before we left and photocopied some of the pages. You may find the information on things like how to empty the wastewater and toilet cassette handy later on when you’re staring all the gear in the face.

Other things to bring on your campervan trip…

Car charger for your phones – we alternated between recharging our phones and having the GPS plugged in. It all worked out well

Playing cards – you’ll need to entertain yourself in the evenings, and even if your camper has a TV, odds are you won’t get reception. I also loaded up my iPad with ebooks (yes, I gave it a try, at last) but didn’t end up using it much as I didn’t want to drain it too much

Jandals/slip on shoes – never go amiss

ON THE ROAD

Shop for food frequently.

The campervan’s tiny fridge didn’t hold a whole lot, so we were shopping every couple of days. Down south I saw lemons for 80c a kg, via a sign on the side of the road. And we picked up a huge box of grapes in Invercargill for only $2 (Thursday night is apparently sweet deal night at Pak n Save). But in Queenstown we saw tomatoes going for $20 a kg (even in Auckland they never reach those prices at the height of winter, and tomatoes were back to $7 a kg when we got back). Beef was also more expensive than chicken or lamb, for some reason.

And prepare to pay for water – drinking straight from the campervan tap may not be the best idea. After all, you’re literally filling your tank through what’s more or a less a garden hose, though I definitely had more than a few swigs through our kitchen tap toward the end of the trip and didn’t feel any ill effecs. We went through a ton of 2 and 4 litre bottles from the supermarket, and I once filled up my bottle at Milford Lodge (glacier water is pure as it gets, right?).

Fill up your tank strategically.

Fuel was also pricier. Somewhere in the centre of the South Island between Greymouth and Kaikoura, we passed a petrol station where the price boards for petrol and diesel read, respectively, ARM and LEG.

It’s always cheaper in the larger centres, and can vary between stations – in Greymouth alone we saw a range of about 3c difference. And opt on the side of safety – you don’t want to risk running empty in the middle of nowhere.

Aside from that, go with the flow and have fun!

There’s a nice culture around campervans. A lot of people wave from their oncoming campers as you drive past one another.

Yet you’re self-contained, so that privacy is lovely to have. We really only interacted with two Hawaiian women, who were on our cruise and kayak tour in Milford Sound (both work on cruise ships, one as an engineer and one as party planner, and were also driving around in a camper like us) and three young Aussie guys in Kaikoura (who were amazing enough to immediately offer to cover our costs when it came time to pay the charter skipper and we didn’t have cash on us. Their website had Visa plastered all over it, in my defence! We then drove straight to an ATM in order to reimburse them. Trust between travellers…).

I imagine you could make a pretty sweet life for yourself with a camper. I could definitely have done it for a lot longer. (I may have enjoyed the wearing of the same clothes for three days in a row/the non brushing of the hair a little too much, and taken it too far.) There are some free dump stations around (and I don’t mean rubbish, though that’s pretty easy to dispose of) and most, or all, also have free potable water taps.

That really only leaves you with electricity to worry about, and we went up to four or even five days once without plugging into a power point to charge up. You only need to power the fridge (though if you want to use the microwave or any power points, you do need to be plugged in at a powered site at a park or, I don’t know, somebody’s house using a very long extension lead).

It definitely took a little while to get used to the toilet. In all honestly, I didn’t eat much while away – I wasn’t working out body or brain – and was probably dehydrated to boot (except for in Southland, where I was gulping water every few minutes. SUCH DRY AIR). I normally have what’s politely referred to as a ‘healthy appetite’ so I was probably on my equivalent of a starvation level diet. Eventually, though, you get used to excreting into a tank that lies below the camper, and to emptying it every few days (T shouldered that burden unflinchingly). As for the shower, I only used it once. It’s easiest to sit on the loo while showering – that’s how cramped the cubicle is – and the pressure is ridiculously low. All my other showers were taken in the facilities of holiday parks.

A breakdown of our NZ South Island road trip costs

What you really want to know: The cost of a campervan trip around the South Island of New Zealand!

Our campervan cost less than $60 a day (not much more than a rental car would’ve!) However after hearing more info when we arrived to pick it up, we paid for the Value Pack, which was about $30 a day on top of that. Sounds like a rip off, right?

It was the right decision for us. Here’s why.

We needed to carry snow chains (luckily we didn’t end up needing the, but we well could’ve). Those would’ve been $50.

They also would have nickel and dimed us when we returned it, anyway with diesel road taxes, registration costs, etc. That would’ve probably been another $50 or more.

And as it turned out, the driver needs to be the person whose name is on the booking, and any additional driver incurs a charge. I only have a restricted licence, and it’s for automatic cars. T was always going to be the sole driver. I’m not sure what the charge is for that, but I think it’s also at least $50.

But most importantly, which I didn’t extract from the original fine print, is just how limited the insurance is. If anything, anything at all happens, you are liable upfront. Even if it’s not your fault. Even if it’s an Act of God (you’re on the hook for those, too, and on the off chance another big Canterbury quake struck…). And each incident is charged separately. So the $2700 bond/excess would be doubled if there were two instances of damage, and so forth – and my travel insurance only extended to $5000. Honestly, I was quite rattled, so paying the extra money to reduce our liability to zero for any and all incidents was worth it for peace of mind. Some random marks did appear on our hood toward the end of the trip, but luckily they scratched off with a little effort – I think they were branch scrapes.

Anyway, to the numbers!

I set a budget of $3000, but didn’t end up tracking our spending closely – or at all, to be quite frank. Once you add in our flights the total came to: $3649.

Here’s a more detailed breakdown…

Transport – flights, campervan and fuel – made up half of that. But that also included accommodation, seeing as we were living out of the camper (we stayed at three paid holiday parks which cost us a little over $100). Food and groceries cost a little more than if we’d been at home (about 10% of the total) and the few activities we did (Milford cruise/Queenstown skiing and snowboarding respectively/Wanaka museum and activities) added up quickly to roughly 25%.

Any questions?

September 28, 2012

Guest post: Living a rockstar lifestyle on a shoestring budget

How to live a rockstar lifestyle on a shoestring budget

I’m taking a brief blogging break at the moment. For your entertainment, a few awesome guest bloggers are stepping up to fill in the void. Today’s is David Bakke, who enjoys finding new ways to save money while expanding his lifestyle. He shares his insights and tips on Money Crashers Personal Finance.

During my professional career, I’ve never earned a high salary, yet I’ve been able to travel internationally multiple times and have plenty saved for retirement. I bought a new car late last year and paid for it in cash. I even walked away from my day job a few months ago to make money from home full-time.

How was I able to afford all of these things? It’s simple: by living on a shoestring budget. And my method is by no means difficult. While there’s nothing wrong with climbing up the corporate ladder to earn a larger salary, you can learn to live the life of a rock star on any paycheck. Here are some tips to get you started:

Reduce the Cost of Needs
Examine all of your regular expenses, and trim the costs wherever possible. Call your cell phone provider to see if there’s a cheaper minutes plan that still meets your needs. Slash your TV channel package and paid movie services to only those you actually watch. Adjust your thermostat to reduce home energy costs, and eliminate your home telephone service. It’s all these small expenses that add up over the course of the year.

Some providers (especially cable TV and Internet) may even offer you a small monthly discount just by calling and inquiring. They’d much rather cut you a deal than risk losing you as a long-term customer.

Eliminate Unnecessary Purchases
If you could afford a trip to Paris by taking a brown bag lunch to work every day for a year, would you do it? You can save about $1,000 a year by taking your lunch to work rather than eating out.

Learn to distinguish between “wants” and “needs.” Many purchases, such as lottery tickets, newspapers, excessive wardrobe items, and small electronics are all wants and should be reduced or eliminated from your spending. If an item from this list is something you’d like to include in your rock star lifestyle, just cut back on the other unnecessary purchases.

Change Your Spending Mindset
A major aspect of living a high-quality life comes not from earning a large salary, but rather from adjusting your spending habits. Whenever you go to spend money, ask yourself if you truly need the item. That usually eliminates about half of your potential purchases. Then, ask yourself if there is a way to get a better deal on it. Research the price online before making your decision.

Never Stop Saving
Saving money is a never-ending process. I had always thought I was doing quite well with my bare bones cell phone plan at $30 per month. However, after I did further research, I found that by switching to a pay-as-you-go plan, I could reduce my monthly expense for a cell phone to just under $20 per month. This saves me $120 over the course of the year. You should continually be on the lookout for new and different ways to save money.

Sell Anything You Can
I started an impromptu reselling business a few years back by selling my wife’s unneeded college textbooks. Once I searched my closets and drawers, I found a wealth of additional items to sell: an old digital camera ($25), a globe ($45), a large stuffed animal ($35), and a digital photo frame ($40).

You’d be amazed at what people are willing to give you money for, so set up an account for free and start selling on eBay. In addition to creating income, this also helps you to declutter your home.

Final Thoughts
Living a rock star lifestyle by no means requires a rock star salary. If you can effectively manage your spending choices and reduce your monthly bills, you’ll have the money you need for more lavish expenditures.

What other ways can you think of to save money so you can live like a rock star?

September 26, 2012

Guest post: Ways to save your wedding dollar – whatever your budget!

Blogging isn’t as big in New Zealand as it seems to be in the US, so I’m stoked to have a fellow Kiwi blogger on here today! Sweet Mama M lives in Auckland and blogs about her life as a newlywed and her love of books, food and travel at sweetmamam.wordpress.com. She’s also on Facebook and Twitter.

According to New Zealand Weddings magazine, the average cost of a NZ wedding is $30,000 and that’s a figure from 2008! Wedding funding can be a tricky minefield and it can often feel awkward as adults to negotiate whether your parents are contributing at all – or maybe that’s just me, fiercely independent since 2003. My first tip is to make sure you HAVE a budget. Big, small or somewhere in the middle, know how much you have to spend! With the first big step out of the way, here’s a few ways in which you can make your wedding dollars stretch further:

Get married off-peak

Papa M and I got engaged in May 2011 and decided to get married in a year, on the 1st of June, 2012. We didn’t want a long engagement but planning for a winter wedding gave us the entire year to save. In addition, many vendors are willing to consider a discount for using their services in the off-season – we managed to negotiate with our reception venue, our photographer and our videographer.

There was an added bonus in this choice of date – people genuinely seemed really excited to have an event to go to in the middle of winter. If you are anything like us, your summer season is usually packed and everything goes into a little bit of hibernation in the cooler season. We selected indoor venues for both ceremony and reception so we were prepared for the worst weather eventualities – turns out that June 1st was one of the finest weather days New Zealand has had this year!

If you have your heart set on marrying under cherry blossoms or on a particular holiday or anniversary then marrying off-peak may not work for you. It definitely is something to consider, however, especially if you can find the right venue – ours had an open fireplace! Don’t be afraid to ask if there’s leeway on prices, the worst they can say is no.

Caring communities

(Accent Photography.co.nz)

Papa M and I are Christian and are lucky enough to attend services at a beautiful stone church. Once we’d ruled out having our ceremony at the reception site (the onsite chapel being too small) the most obvious choice was the church that we attend. Being members of the church community was a huge boon for us – we had free use of the church, a free celebrant, a free sound tech and use of the church portable PA system and no shortage of hands to help us to provide an informal afternoon tea while we took formal photos.

Church might not be your particular cup of tea and that’s cool, each to their own. Think about other communities that you participate in that might be able to assist. I’ve been to a reception in a school hall that had a beautiful view of a lake. My cousin was married to an Air Force man and was subsequently able to have free hire of chairs for their outdoor ceremony. I’ve also known of members of classic car clubs being able to utilise other members’ vehicles as wedding transport. This is a case in which it is truly who you know rather than what you know.

Decide what your priorities are and then be OK with “Good Enough”

Our wedding budget wasn’t small but it definitely was finite! Funding about two-thirds of the wedding ourselves meant that we had to be judicious about where we spent our money. We bought Papa M a proper suit (although we hired the groomsmen’s suits) as he didn’t own one but is getting to the stage in his career where it made sense to invest in formal attire. On the other hand, I spent hours on a local auction site trying to find a second-hand dress as I didn’t want to spend huge amounts of money on something I would only wear once. Foiled in this plan only by the fact that I am giant and all these dresses had been altered to fit people 5’4″, I ended up going for a simplistic but beautiful dress from the basic line of a local bridal salon and plan to sell it on to recoup some of the cost.

Decor wasn’t a huge priority and we had no additional decor in the church. Our afternoon tea was served on purple plastic plates purchased from the supermarket and you know what? I don’t think anyone noticed. They were far too excited about getting a cup of tea and a cookie. On the other hand, we spent about a quarter of our total budget on photography and videography – with a terminally ill parent, having a great visual record of our last big special occasion was really important.

Looking back now, I don’t regret a single one of those “Good Enough” decisions that we made. Our guests had a great time and we have great photos and video memories of what was a day that we will cherish for the rest of our lives. Remember that it is your wedding and your priorities – as long as you provide the basics (food of some kind, liquid of some kind, somewhere to sit), your guests will be happy!

Think outside the box

(Accent Photography.co.nz)

Thinking about the cost of flowers in midwinter was giving me a little bit of a heart attack. So we did without! Don’t get me wrong, I love flowers! We have a bunch of them on our dining room table right now. With the cost of centrepieces, bouquets and corsages, however, the costs definitely start adding up. Thinking outside the box, we decided that the bridesmaids would carry lanterns and that the groom, groomsmen and father of the bride would adorn themselves with a simple pocket square. I carried a bible down the aisle, which was used by my mother for our bible reading in the ceremony, and this left my hands free during the ceremony to hold my darling husband’s hands. While brainstorming and throwing around ideas for centrepieces I came up with something that was peacock-coloured (colour theme), wintery and faux-floral – our yarn pom pom centrepieces were born! Our guests loved the scattered little poms as well – many a bracelet was made and many fun games played with them throughout the night. Don’t be afraid to go a little different, it can totally work!

We also felt that we couldn’t justify the additional cost of getting our rental cars to come and fetch us at the end of the reception but we both wanted to be relaxed about how much we had to drink. After hearing horror stories of taxi pricing in our area, we contacted a companion driving service to see if it would be something that they would possibly be able to do. BEST DECISION! They made the end of our night so special because they were so excited to be involved. Our sweet getaway driver arrived with tin cans attached to the back of his little Mazda, an ice bucket with bubbles in the back seat for us and we drove up the drive and away from our reception with Bruno Mars’ Marry You on the stereo. The night could not have ended more perfectly and I’m so glad that we thought outside the regular options.

When you are coming up against costs that seem way too high (or that you are just not willing to pay), think outside the box for creative solutions. Both of the above saved us a significant amount of cash and ended up being a couple of the entertaining highlights of the evening. Don’t be afraid to take your time and come up with a solution that works for you – and employ your family as slave labour to get those pom-poms done!

What wedding planning tips have you got to share? Any novel ways you’ve seen people personalise their weddings?

September 18, 2012

Guest post: The perils and pitfalls of online shopping

Multiply the sentiment in this post by about 1000 and you get an idea of what it’s like in NZ. Vanessa writes about (mainly) money and personal finance over at Vanessa’s Money.

As a lover of bargains and fashion, I just have one thing to say – living in Canada sucks.

{via}

It wasn’t bad enough that, as a kid, I was never able to enter contests that ran on TV or in Archie comics (because I was not an American resident) but now, as an adult with disposable income, I can’t even spend my money on all the cute dresses and shoes that I see online!

I know, I know. The logical solution would be to just buy stuff online and return it if it doesn’t fit. Simple n’est ce pas? Wrong. Have you any idea how much it costs to ship to Canada? A quick example that I just pulled up… A pair of $348 shoes from Nordstrom will cost me $23 to ship and $110 in taxes and duty. And if they don’t fit? It will cost me another $23 to return and I will have to fill out a ton of paperwork to get my $110 refunded. Basically, I’d better be 100% sure of my shoe size or else I’m out $46.

Alternatively, I can have my shoes shipped to a P.O. Box near the border and drive down right? Um, no because most stores have caught onto that little gambit by now and don’t deliver to P.O. Boxes. Also, it would probably cost me $46 in gas anyways and if the shoes didn’t fit, I’d still have to return them on my dime.

Trip to the States? Sure, I’d love that but again, the money.

Buy Canadian? No. I want my LK Bennett pumps and my cheap ASOS clothing. Canadian clothing… pfft.

I’m sure that people from other countries can relate but seriously, I can see America from my backyard (not really, but I couldn’t resist a reference to Sarah Palin…) and yet I can’t find a cost effective way to just give my money to their economy. And this is why living in Canada, is like being the younger sibling that is never quite old enough to do anything fun.

Is online shopping a thorn in your side or do you enjoy all the perks involved?

September 11, 2012

On sunk costs and cutting your losses – a beginner poker player reflects

By and large, I’m a risk averse kind of person. I drive cautiously. Analyse choices to death. That kind of thing.

In going along to my first poker night, though, I learned a thing or two about myself.

I’m terrible at cutting my losses.

The boys play Texas Hold’em, so every round two people put in blinds to start off with. There’s a sunk cost to begin with, and my general philosophy is something along the lines of ‘I’ve already put in this much; what’s a little bit more?’ And as the round progresses, I’m loath to cut my losses. After all, that last card just MIGHT be my saviour. I’m already down by this many chips. Just see it through to the end…

I’m apparently also really, really bad at gauging the quality of my hand. When do you decide to play? When do you fold before even betting? I underbet when I had a killer hand, and overbet with a good (but not amazing) hand a few times, resulting in once scaring everyone else off, and once bringing it down to the wire and losing by the tiniest sliver of a margin. I actually played kind of riskily – something I didn’t expect of myself – much like I didn’t expect myself to really push it at all when I got to drive a new BMW on snow last month, yet I did (guess there’s something about a vehicle that a) can take it b) isn’t yours and c) is there for that exact purpose).

In real life, I am much better at writing off sunk costs. Have done it many times.

What about you? What’s your poker style?

September 3, 2012

Review: The Perfect Balance

Today marked the start of NZ Money Week! I thought it was timely to review this book.

The Perfect Balance: How to get ahead financially and still have a life
By Hannah McQueen, Allen & Unwin,

First things first: I like Hannah McQueen’s approach. Early in her book, the chartered accountant/financial trainer gets straight down to it: you are never doing as well as you think you are, but it’s never too late to change your ways. I’m also totally behind her argument that to be money smart is to be socially responsible – let’s face it, everything comes back to money in this world.

But for anyone up with the basics of personal finance, there’s nothing groundbreaking here. Establish an emergency fund. Spend less than you earn. Avoid lifestyle creep. Consolidate debt at lower rates. Brownie points, however, for taking time to discuss the psychological aspect, because in reality finances are just as much rooted in emotion as they are about logic. Think money personality types and triggers for spending and saving. (You may well get a bit uppity, fellow 99 percenters, at the mention of some of her uber-earner clients who can’t seem to get ahead despite pulling down low to mid six-figure incomes.)

When it comes to talking property, she gives negative gearing a bit of a slap. Many investment properties have a shortfall between rent and the actual mortgage (what does that say – that as ridiculous as our rents are, house prices are even more insanely high?) For every dollar you top up (covering the shortfall between rent and mortgage/other property costs) you get up to 33 percent back in tax. In what universe is this actually a good thing? Sounds about as logical as buying 5 cans of tomatoes just to get a free one, when you know you’re not actually going to use them all up (something I nearly did this week). Relying solely on the property value to go up is risky, especially as we don’t have 30-year fixed rates (the longest term is five, to this renter’s knowledge). And as McQueen writes, over a 30-year mortgage you could well be facing double-digit interest rates at some point.

(I recall, as an intern, being tasked with compiling a piece comparing mortgage rates around the world a few years ago. It was difficult to pin down true apple-to-apple comparisons, particularly in the US, what with balloon loans and their fixed rates being higher than floating rates, the opposite of here. Nonetheless, our interest rates are always going to be higher than those in many other countries, and as a saver without a mortgage, I am grateful for this right now.)

The most interesting part of the book comes toward the end, when McQueen finally addresses what is apparently her patented super-mortgage-paydown formula (the catalyst for her starting her own financial advisory business, EnableMe). When she got her first mortgage, she was horrified at how little principal was actually being paid down for the first two decades. So, as you do, she rung up a calculus lecturer at the University of Auckland. The outcome of that was an eight-page equation that apparently will get you out of debt ASAP based on structuring your mortgage on an optimal mix of rates and timeframes, assuming of course that you have spare cash to make extra payments. I’d be interested to know more about how that works, but I guess that’s what her clients cough up $200-plus an hour for.

August 19, 2012

Let’s get literate

Financially literate, that is.

(Don’t get me wrong, though; I’m also a massive proponent for general literacy. A unicorn dies each time you confuse homophones or indulge in casual apostrophe abuse, you know.)

Apparently September isn’t just about welcoming the advent of spring – it also marks NZ Money Week. This makes me happy. (It also brings to mind a memory that still irks me – that of responding to a former colleague’s bemoaning the state of the housing market by telling her that interest rates can’t rise infinitely. In short, the response I got was “are you stupid?” Sigh.) There are a handful of events/seminars being held during that week, and I’ve put my name down to attend one on investing for beginners. As well as the intro to investment basics, there are also events on women’s wealth, budgeting and other general money management issues. Sign up or take a gander here.

On that note, I was reading Mary Holm’s weekly personal finance column in the Herald this morning and noted her response to a couple who worried they were behind on retirement saving. With $50k cash savings, $30k in Kiwisaver and a nearly paid-off house not long off in the future, they were doing well, though my first impression was that perhaps their Kiwisaver balance seemed low (they didn’t go into specifics about their contributions, though the scheme has only been around since 2007). Holm’s response didn’t berate them for not having saved enough, but rather took the tack that they were still ahead of the majority of Kiwis nonetheless.

That spurred me to click over to Sorted (which just got a revamp and is much easier to navigate now) and calculate just how off track I am. At 4% contributions, I stand to amass $250k by 65 and receive $335 (adjusted for a lowly 2% inflation) a week over 20 years, assuming I live till 85. Definitely gets you thinking. I’d plan to have a paid-off house by then, and if NZ Super is still around, that’s extra cash to take into account (though not something to count on). But it doesn’t sound like a whole lot – which is why I do want to up my contributions to 8% sooner rather than later. Maybe the people who chase the money in well-paying industries, then retire after 15-20 years with their fortune to follow their passion, have the right idea.

August 15, 2012

In for the count: A Sydney tally and a new manifesto

Like Mochi and Macarons, I tend to let a bit loose when I’m travelling.

Over five days in Sydney (plus travel to and from the airport) I spent about $400. Given more than a third of that was on shopping, I’m happy with how it worked out. I didn’t pay for any attractions, so the rest went on transport and food (almost all meals were provided, but you didn’t expect me to visit Sydney and not sample any local fare, surely?).

I started out with $100 cash, which translated into about A$75. $30 bought me two pairs of ballet flats (much needed), while the rest went toward food, and bus fares.

Then there was $38 at Red Lantern for dinner, $130 on a handbag and wallet (bag was much needed, wallet not so much), $51 (aka A$40 I took out from an ATM) for food.

Other stuff: $7.50 bank fee, $9 parking that we had to pay in order to get out of the airport when T collected me (no idea what was going on there), the $17.65 I dropped on a travel pouch before leaving so I could carry my passport and credit card safely on my person, $40 for the taxi to the airport for my departing flight, which I nearly forgot about (the bus is cheaper at $25 but doesn’t stop anywhere near my house, so I was willing to pay extra for the convenience), and about $30 for insurance, because I’m paranoid like that.

I’ve been pretty lax about tracking our spending for a few months (though I doubt anyone missed my spending recaps). On one hand, it was great – sometimes I get too extreme about things, and I was definitely spending too much time poring over figures. We’d also hit one savings goal and were tracking well on the wedding fund, so I’ll admit, I took the chance to let up a little and pay a bit less attention to things.

On the other, I swung too far to the other end of the spectrum, NOT spending enough time looking at the numbers. Around this time, we swung back to more integrated finances, running everything out of one bank account. We got hit with a string of expenses. And T has, during this time, been spending too much on little transactions here and there, which add up.

Suffice to say it’s not disastrous, but it’s not a pretty picture. So it’s time to get back into eagle eye mode and really crack down, not least because I’ve decided on a 2013 wedding and honeymoon (HALLELUJAH! the crowds cry. A decision one way or another at last!). Therefore, more than ever, it’s crucial to crack up the saving.

August 1, 2012

What to do if you’ve been burgled (plus things to check RIGHT NOW)

Being burgled sucks. Here's what to do next

By: AndreasS

The first thing the police officer said upon stepping into our house was: “I think I’ve been here before. A couple of years ago. How long have you lived here?”

We don’t really know anything about the previous tenants, but I guess we now know they got hit by burglars, too. And our neighbour in the back, who’s lived here for about 10 years, reckons this place has been robbed twice during her tenure

That’s not really any comfort, but you know what is? Being prepared

Just for reference, if you ever get robbed:

Don’t touch anything
Call the police and report it
Call your insurer, and fill them in
Pull out all your documentation, and begin the tedious process of paperwork

Expect to fill out a list of missing items for the police, including identifying numbers and details, which is really to no avail because the odds of your stuff being recovered are minuscule. Expect them to come and dust for prints, and to take your fingerprints, too, as part of the process of elimination. Expect a wait at the insurance office, and to have to fill out multiple forms, including an exhaustive list of missing items, complete with model and serial numbers, receipts, and/or photos and details of date and time of purchase.

Be sure to act quickly to deal with any security issues. T had to contact Microsoft to remove my Visa details, which were linked to his Xbox Live account. (He does get to keep the games he downloaded to that account, luckily.) I panicked when I logged into Dropbox on my work computer and found my folder empty. I guess whoever has my laptop wiped it, thus clearing my Dropbox at the same time. I restored my files and made sure to delink that computer from my Dropbox account.

We’ve had our claim processed, and expect to get a cheque next week. We had lower-tier insurance that doesn’t account for initial purchase value, but value with depreciation deducted, which was a decision made to keep premiums down. And I’m okay with that. I’m actually not sure that we’ll replace our instruments any time soon – there’s no major urgency in my view, especially as getting a good deal is paramount, and I hardly do mine any justice.

The good thing about electronics is they depreciate so fast that we don’t really lose out – in fact we’ll be getting better items, probably, for our money. The one thing that’s bugging me is that I really want a laptop with full numeric keypad on the right. It’s not a must-have .. but it’s something I’d really like to have and never have. Thing is, all the laptops out there with keypads either have huge, weird, awkward spaces between the keys, or the keys are super high off the board, and ergonomics aside, I just know all sorts of debris will get in under there and annoy the hell out of me.

As to what to do afterwards, when you’ve replaced your gear (and you might want to do these things too if you haven’t already, with your current belongings), I recommend:

Scanning all your receipts so you have a digital copy
Taking pictures of all your valuables
Record items, model and serial numbers, descriptions and value in a file (you could try downloading a form like this one). If in New Zealand, you could use this site to store those details safely and freely online.
Back up receipts, photos and info to the cloud (I have a Dropbox folder for insurance stuff)

For the diligent, if you have been robbed, it may be worth listing your items on StoleMe (though it costs a fee for every item, which is why I didn’t. I’m also sceptical about how useful that site can actually be, especially for common goods) or keeping an eye on TradeMe in case someone tries to offload your stuff through an auction.

Any other suggestions?

July 15, 2012

Moving house the cheapskate way

How to save money when moving house!

My property manager is on my case right now about renewing our lease. If there’s anything to make you hark back to the horror of moving house, it’s the prospect of, well, moving house. We’re planning to stay here for at least the rest of the year, but beyond that, who knows?

I have moved house many times in the seven years I’ve lived on my own (holy shit, has it really been that long?). Moving can be an expensive exercise, but I’ve pared down on many of these things because I am a cheapskate.

Double rent

The most potential to save comes in being strategic (and lucky) enough to perfectly align your move out and move in dates. I think I’ve only paid double rent once (WOOT) and one week of double rent is not too bad (rent is usually paid weekly in NZ). This may lead to a bit of a mad scramble to move in the space of an afternoon or a day or two, but it’s worth it IMO to save the moolah.

Moving costs

I’ll admit I have a burly dude on call, and not only does T willingly lend his muscle, he also manages to provide boxes from his workplace. During our early moves, we utilised the vans/utes of people we knew. More recently, I’ve borrowed a company van after hours, and twice used James Blond to hire a truck ($75 for two hours), which I would definitely recommend. In these seven years, I’m pretty sure that $150 is all I’ve spent on moving.

Property fees

Property managers take their initial cut from renters – a week’s rent plus GST – and because hardly anyone wants to manage their own rental houses these days, these fees are getting harder to avoid. I’ve always sought out private rentals in an effort to get around agency fees, but haven’t always been successful. Boo.

Cleaning up

Upon emptying your old place of all your crap, you will invariably notice weird spots, stains, scratches. This will result in a panicked trip to procure all kinds of products to clean up the mess. There might even be a visit to the supermarket to borrow a Rug Doctor. Or, if it’s a big house, you might just give in and pay for a pro to come give it a proper once-over scrub. And all those blown lightbulbs you never bothered replacing? It’s time. Prevention is better than cure. Don’t slack off on maintenance like me.

Furnishings

I was talking to a friend once about how out of reach home purchases are for Aucklanders today. She said something about tacking on another $20k for furnishings when considering the cost. I nearly choked.

In moving from smaller places to bigger ones back to smaller ones then upsizing again, we’ve done plenty of both purging and acquiring. My bed is one of the few items of furniture I paid for. Our TV was originally nabbed for a few bucks from someone T knew as it wasn’t working (he fixed it, and voila, a nice flatscreen). Our lounge furniture is all free – donated by friends and family, and once, picked up off the kerbside during inorganics. My desk, I admit, was pinched from the first flat I ever lived in. And I’ve never owned a dresser in my life, though I’d like one when we eventually own our own place.

Key cutting

One of those costs that really grates, but one you can’t avoid. Even if you live alone, you’re gonna need a spare set (funny how they never hand over more than one set; surely the previous tenants also had multiple copies?).

How do you keep costs down while moving?

Browsing tag: money

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