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Browsing tag: money

  • December 17, 2010

    20 financial milestones for your 20s – how I stack up

    # 1 – Finance a dream vacation…in cash
    Working towards it, as you all know!

    # 2 – Pay off your student loans
    N/A

    # 3 – Automate paying your credit card bill in full
    I’m a big believer in automation, but my version of automation involves a lot of manual transactions. What can I say? I’m a control freak, and I like flexibility. I pay mine every week, by the by, except expenses incurred by mystery shopping, and extra large purchases (usually wait til the end of the month and keep the money in savings)

    # 4 – Get rid of all bad debt
    I’m debt free. BF has some debt but it’s non-interest accruing (some of it’s to me!).

    # 5 – Build an adequate emergency fund
    Done, although I wonder if $10k is enough sometimes. To some it may seem excessive, to others, puny. /shrug

    # 6 – Make your first, and last, investment mistake
    I’ve joined Kiwisaver, and have a couple grand in term deposits, but that’s the extent of my investing so far.

    # 7 – Develop a statement of cash flows
    Y’all have probably seen my monthly spending posts, yeah?

    # 8 & 9 Max out a Roth & Contribute to your 401(k)
    Bloody Americans. I contribute 4% to Kiwisaver, with a 2% match.

    # 10 – Get a degree or certification that increases your earning power
    Just graduated. More training is not out of the question later on, although it would probably be pretty practical, say, learning more about the Adobe suite.

    # 11 – Take a career risk
    Hmm. I don’t really think I’ve done that. But plenty of time still!

    # 12 – Negotiate something
    Oh god. Haggling is up there with public speaking for me. Even when JB Hi-fi had a sign saying “Ask for a deal!” I made T talk to the salesman. One day…

    # 13 – Earn your first side grand
    Done!

    # 14 – Start a sub-savings account for an upcoming financial goal
    Also done! Travel fund now over a grand.

    # 15 – Set a target retirement date
    Meh. I’m not really too fussed. I’ll just go with the default, 65, shall I?

    # 16 – Monitor your credit
    NZ only introduced proper credit scoring this year. But yes, I have looked at both of our reports. They’re okay. Time and longevity are the only way to improve them.

    # 17 – Say no to a financial salesman
    Aside from fundraisers? Oh, what about pushy bank staff trying to sell additional products?? Hellz yeah.

    # 18 – Give just enough to make it hurt
    I give, but not enough to make it hurt. Unless you count presents I’ve given T, which sometimes do hurt a little (the girl who never got presents growing up is apparently willing to spend a couple hundred on her SO’s birthday)

    2 Milestones for the Over Achiever

    # 19 – Invest $1 for every $1 you spend
    Wow. We’re sometimes able to save nearly half of what we make, but that’s not the norm. Yeowch.

    # 20 – Start a 529 College Savings Plan
    Again, these damn Americanisms. Nope. Have no equivalent and no reason to (tuition here is not as astronomically expensive and loans are all given by the government to absolutely anyone).

    * And thanks to Mighty Bargain Hunter for hosting this week’s Carnival of Personal Finance! Apparently I’m in there talking about lifestyle creep. *

  • December 16, 2010

    Money lessons learned from my friends

    An antique Indian purse used to hold coins. Th...

    Image via Wikipedia

    They say there’s nothing like living vicariously. Well, there’s nothing like learning vicariously, either!

    I’m kind of the go-to person in my circle for info when it comes to, you know, navigating the real world. Things like bonds and tenancies and job rights and whatnot. I gotta admit, sometimes I just have to gape at how out-of-touch people are. People who think I’m well on the way to buying a house (hello, I have been supporting myself for five years! You have had a car bought for you and are having your wedding paid for. I have to foot the bill for all those things, plus I want to do some serious travel before even thinking about settling down and saving another $60k or so.) Who have no idea what it takes to get a mortgage and embark on a rambling discussion about buying for $400k, then upgrading in a few years when it’s appreciated to $550k and so on. ARGH!

    But the learning isn’t all one way. Nope, I’ve learned three valuable lessons from my friends.

    1. Be frugal, not cheap. It’s not too much to spend $20 on a dinner out every few months. It’s not like we go to expensive places – we’re talking restaurants where mains are as low as $15 a head. We’d rather all pitch in to cover your meal than miss out on the chance to catch up.

    2. Whoever holds the purse strings has you by the balls. It’s lovely that your parents are paying for your wedding, but if they pay, they get a say. Headaches ensue.

    3. Never, I repeat, NEVER, go into debt to appease your gold-digging partner. Your psychotic, selfish ex will drive you away, eventually, leaving you with nothing but a bulging overdraft.

    Yep, there’s nothing like learning from others’ mistakes.

  • December 14, 2010

    November challenge and budget breakdown

    Remember how, in theory, we should be able to get by on $2500 a month?

    Well, we did! $2582 was the final number…okay, so a tiny bit over, but granted, we did buy a couple of Christmas presents early, which I decided to include here, and ate out a little more than usual. (What’s not included is our contents insurance, which was due this month, and the cost of our “new” car and associated expenses. They’re not in here because while one is budgeted for regularly and one was not so much so, neither are things we pay for in the course of a usual month.)

    But it proves my maths skills are not totally hopeless and that yes, this is a realistic number for a four-week month without major special occasions, ie, birthdays, etc.

    NOVEMBER SPENDING

    Also, I made an extra $630 this month aside from my regular job – that’s from regular freelancing, a focus group and editing some rather dry economics essays. All of that went to my travel fund, which is currently sitting at just about enough to take us both to a tropical island for my birthday next year, or one flight to either California or London. Ahem.

    Now, to the next order of business. While I love my monthly spending recaps, they don’t provide a full picture of what’s happening. They don’t include my regular savings. They don’t include T’s own fun money. It is simply a picture of (almost all) of our spending, and the percentages are relative. Er, by that I mean the percentages are the percentage only of our expenditure, not our total budget/income.

    So, after much work, this is a more accurate snapshot. I don’t feel the need to start doing this regularly, but I did want to do it at least once.

    TOTAL

    As you can see, this incorporates savings, debt repayments (which is just T paying me back for some costs I covered for him once upon a time, that pesky insurance, and his spending money. My only real concern is that his allowance is larger than our eating out costs!

    Anyway, the main reason I wanted to do this was to see if we were totally out of whack with our proportions. Here are some relevant links. The one I went with about as simple as you can get – the 50/30/20 budget.

    • Basically, it posits that you should be spending:
      • 50% on needs
      • 30% on wants
      • 20% on savings

      In comparison, here’s ours:

      • 44% on needs
      • 11% on wants
      • 45% on savings (granted, this got a hefty bump from my side incomes this month)

    As T says, we spend more on, well, living, than the few of our friends who support themselves. We also have regular internet (which more than pays for itself through the side work it affords me) and eat real food (ie, not just beans, mince, noodles and pies). I would argue, though, that our lack of drinking more than makes up for it. But let’s not get me started on that…Proportionally, I think we’re doing all right.

    And just for fun – here’s the breakdown of where his money went this month.

    Which actually seems quite reasonable in perspective…although I wonder if we can negotiate for his spending to come down a little bit more.

  • December 10, 2010

    On (possibly) succumbing to lifestyle creep

    MySky HDI

    Screengrab from the MySky site

    Among the cardinal sins of personal finance: Buying too much car. Too much house. Spending more than you earn. And that other disingenuous trap, lifestyle creep.

    It began when I picked up the phone (in itself, that is quite something – our landline doesn’t work half the time; I think it’s to do with the battery not charging properly, or something.) On the other end was a woman from SKY TV offering us free MySky for six months. Because I pretty much never sign up to anything on the spot, I asked her to call back.

    But really, it was a done deal. The boy has been angling for MySky for a while; we just didn’t want to pay for it. Not for the installation, not for the ongoing costs. This way, we got it totally free, and after six months, we’d just pay the monthly fee ($15, if I recall correctly).

    Then the other night, he came out with this gem: “You know, I think we’re spending more on pay-per-view movies than we would on Sky Movies.”

    ???!!!!!!!!!!

    What’s this WE stuff? Excuse me? You’re the one who books all the damn things; I have better things to do. Like bake. And read. And play guitar. And freelance. And run.

    Except for those, er, once-in-a-blue-moon occasions when I DO sit down and watch one with him. Hmph.

    While our early bills started out with maybe one movie a month, now it’s crept up to three or even four. Plus we already pay $10 a month for two movies from Fatso (love the no late fees) and sometimes rent even more from the video store up the road.

    So yes, at $20 a month for a bunch of movie channels – which we can record and keep indefinitely with MySky – it probably was a better deal.

    I hemmed and hawed, but the thing about technology these days is that it’s just getting harder to put off decision-making! There was the Upgrade Channel, on the telly screen, staring us in the face. I couldn’t use the excuse “oh, I’ll ring them tomorrow and set it up” – nope, all we had to do was push a button to confirm the subscription.

    Realistically, this is more of a tactical move to save money (the movies subscription that is; can’t really argue the same for MySky) but I can’t help thinking now we have MySky and video recording, it’ll be hard to go back. Never will I miss an episode of Glee again!

    Ever fallen into the lifestyle creep trap? Where do you draw the boundaries? Do you have MySky, TiVo etc?

  • November 30, 2010

    Adventures in car buying: Insurance

    Okay, so New Car brings with it New Insurance Costs.

    If you’re just tuning in, this wasn’t a case of lifestyle creep; it was a case of knowing when to let go of the last in a string of beaters, and upgrading in the hopes of getting something more reliable and efficient with a bigger initial outlay. (Also, you may recall that every single one of our other cars died before we got the chance to replace them. I figured we should try and beat that this time around.) I’d never call a car an investment, but the idea is we are investing in terms of, theoretically, coming out ahead by reducing the cost and headache of ongoing maintenance and repairs.  Our $1500 hatch was a steal (I’ve got a nostalgic post brewing) but the constant upkeep…ouch.

    Nicer cars also mean higher insurance premiums. According to this Liz Pulliam article on MSN Money, 10 per cent is the most you should pay for full coverage.

    Problem: That doesn’t work for us. Full cover is about $1200 annually – way more than 10 per cent.

    Meanwhile, third party, fire and theft cover is  only $500 (it was $300 on our old car).

    That’s a difference of $700, or just over double. And yet, is that really all that much extra for total peace of mind? I don’t mind a few dings and scratches, but what I am afraid of is a total wreck. After all, you can’t control the actions of others, and it’s not inconceivable that it could be totalled through no fault of our own. That would mean putting away $23 a week for insurance, as opposed to $6.

    In the worst case, I could afford to replace it, even now…but that would put a massive dent in my savings.

    So, it’s a gamble. Pay that $700 (our excess payable on claims is $500, by the way), or attempt to self-insure? It wasn’t even an option previously; none of our cars were ever worth the cost of full cover. Not even debatable.

    But this is a car we want – need, even – to last years.

    What would you do?

  • November 29, 2010

    Adventures in car buying

    Familia wagon

    The same model, courtesy of a Google search

    You know what they say…the best laid plans of mice and men…

    But circumstances forced our hand. Our old  car had its registration paid up till March, which I was loath to give up, but  was a lot less than what it would have cost to get it up to warrantable standard – and we didn’t want to go through the expense and hassle of getting the damn thing fixed, especially since we were planning for a possible replacement so soon. This really was the tipping point – know when to cut your losses. Urgency arrived in the form of a cop who pulled T over on his way to work one morning for not having any rear lights, and warned him that the next time he wouldn’t get away with it.

    We’d had a few cars on our watchlist but in the end we only ended up seeing and test driving one. Result? We basically have the same car – a Familia – but in a five door wagon not a three door hatch, and nearly a decade younger. Guys, we’re talking 1998 – at only 12 years old it is by far the newest car we’ve ever owned! It’s also the most solid – that’s something you can definitely feel about it.

    You know what else this means (especially in a wagon)? Yay road trips! (This solves the question of whether we’ll drive or rent a campervan when we do the South Island). And I’ll be able to help ease the driving load. (Ironically, I’d finally come around to the idea of getting a manual  – better odds of gearbox not crapping out, and finally learning to drive manual in a decent car – but it wasn’t to be.)

    Actually, I’m not so sure about those long trips; BF has already filled up the boot with a sound system (sigh) which means even groceries go in the backseat. Careful shopping plus his work discount meant we got a lot of bang for our buck; still, it was difficult for me to bite my tongue. $600 on car audio???!!! But it’s his money and if that’s what he gets pleasure out of, fine.

    And the main thing is, we came in under the $5000 budget, sounds excluded, even after buying and getting an alarm and immobiliser installed.

    The one spanner in the works: insurance. Apparently this model/year is a high theft risk. And that sets the stage for the next post: the insurance dilemma…

  • November 4, 2010

    October roundup

    These roundups include mine/joint expenses, but not any of T’s blow money, which also includes any work lunches and the odd work expense.

    Clothes and grooming – Mostly my new Trilogy Everything Balm – a godsend and my new holy grail of skincare. Packed with natural oils (including rosehip), it’s totally transformed my parched skin. It’s also good for the rest of the body – dry spots, eczema etc. I’ve heard people compare it to Elizabeth Arden eight-hour cream, even.

    Debt repayments – T trucking along with repaying me, albeit slowly as his hours fluctuated this month.

    Dining and bars – A little higher than usual; we had some wicked Indian food at Diwali, dumplings and soup at hidden gem/diamond in the rough New Flavour restaurant; wonton soup when I was sick; and other miscellany.

    Entertainment – Two ridiculously overpriced drinks at Vector Arena on Metallica night, our Fatso subscription, and a rogue $20 withdrawal I can’t quite place.

    Groceries – We shop on weekends. It was a five weekend month. Amazingly, we’re right on target taking that into consideration.

    Holidays – T’s charter fishing trip I booked for his birthday.

    Home expenses – Replacing our TV/laptop.

    Mystery shopping – This month included purchases of a meal and drinks out and a long necklace from Max (reimbursed, obviously).

    Savings – as usual, only counts T’s and “extra” savings on my part, not regular savings (44% of my net, woot!)

    T fun – Xbox subscription, which had to be paid by credit card.

    Utilities – ever so slightly lower than usual thanks to our AECT dividend which was credited to our power account, but almost made up for by higher cellphone/Sky TV bills.

    Vehicle and transport – $100 new car battery, $101.40 bus, leaving less than $200 on gas which is nothing short of primo.

    So far, frugal November isn’t off to the best start. We’re talking $50 on clothes – I found the perfect pair of summer sandals, and T has to buy some shirts for work. Also, our quarterly contents insurance payment is due. It also looks like some car expenses will be rearing their ugly head – necessary but painful.

    Still, who can dwell on the negative when the weather is this glorious???

  • November 3, 2010

    November challenge…

    is pretty simple.

    1. Track everything. Again. For some perverse reason, I’m dying to see how we stack up against the 60 per cent solution budget.

    2. Keep it minimal. We should be able to get by on around $2500 in a month. We haven’t been, for many reasons. Three-fortnight months (rent and groceries, yowch). Birthdays and special occasions. Car repairs. Concert tickets.Work expenses/clothing. Replacing stolen goods.

    BUT, I’m pretty sure November is not a long month. We have no birthdays or anniversaries. So hopefully rent, groceries, gas and a bit of fun and we can keep it frugal.

    In other news…thanks to Consumerism Commentary for including me in this week’s Carnival of Personal Finance 🙂

  • October 29, 2010

    It’s all about timing.

    John Harrison's famous chronometer

    Image via Wikipedia

    Office discussions recently revealed that while the majority of us are paid fortnightly, there were an unlucky few who had to live on monthly. That minority, of course, felt shortchanged. In one case, they were urged to talk to HR and ask to be moved to a fortnightly cycle.

    Sounds reasonable enough. Right?

    But it’s never that simple. I could’ve told you that. The time for negotiations is BEFORE you start the job. Before you sign on the dotted line. Once the contract is done and dusted, they are not going to be very receptive to making changes.

    The company policy is for monthly pay (I guess it’s much easier for payroll to only have to deal with paychecks 12 times a year). All new staffers have this in their contracts, and it’s up to them to speak up if they want that condition changed.

    So this coworker tried. She asked HR to switch her over. They were not very receptive. They wanted a reason. “Changes in personal circumstances” wasn’t deemed good enough – they didn’t see how being paid more frequently would help her out.

    This is not a judgement on HR in any way. I can totally see their viewpoint – you’ve managed this long on monthly and it’s going to be a headache to alter that.

    What I’m actually trying to get at is that it’s up to YOU to negotiate at the appropriate stage. It may seem HR is being unnecessarily difficult or stubborn, but you signed over your power a long time ago.

  • October 26, 2010

    The cost of hobbies – how expensive are yours?

    Ledge Bungy, Queenstown, New Zealand

    Image via Wikipedia

    Sometimes, reading or hearing about other peoples’ hobbies make my stomach ache a little. bt. $3000 on bungy jumping? $2500 for Bathurst? Season ski passes? Dance shoes/costumes/competitions?

    I guess I’m quite lucky that my hobbies are cheap. (T’s…perhaps not so much; eventually working on cars will probably be one, and I’m thankful that that’s still years away unless we happen to find a million bucks lying in the street one day.)

    Reading: I love books, always have. But for a bookworm, I don’t actually own many. All my books have been freebies of some sort, and I don’t actually like all that many of them. Instead, I’m a total library whore; at a dollar per requested book, it’s not free, but it’s a long way off $30+ for a new paperback.

    Guitar: Initial outlay, around $650 for guitar, amp and associated accessories. Otherwise, basically free.

    Photography: I can’t really call this a hobby yet, but hopefully in the future I will. I can’t justify the expense of a dSLR, but at the same time, I feel ridiculous with my little point-and-shoot camera. Still, it’s not like I’m doing all that much with my camera at this point anyway. What do you snappers shoot photos of?

    And then we get to the expensive vices…food and travel. We both love eating out, and love going to new places. Dining out is our main form of entertainment,

    What about you? Are your hobbies big-ticket ones?

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