personal finance | NZ Muse

November 5, 2012

How I’m dealing with the rising cost of necessities

You’ve probably felt the pinch of the price of basics going up … and up … and up.

The cost of living can only ever really go one way (and unfortunately cost of living raises don’t always follow).

But I’ll admit that I don’t go too far out of my way, as a rule, to save here and there.

Lately, though, I’ve been rethinking that and upping my efforts a little.

Burning Money is Financial Crime and Waste in ...

(Photo credit: epSos.de)

Saving money on utilities/bills

There’s not a whole lot we can do to conserve water, really, but I’ve become a stickler for turning things off at the wall. Power prices just keep on rising, and there’s no sign of them abating. It looks like this summer prices per kilowatt are going to be close to 30 cents. Ouch. As for internet, we have a pretty good deal that was possible with a credit repair company called New Day Credit. It could be better, in that we could get more for what we currently pay (or even slightly less money) but at the moment I’m not willing to commit to a 12-month contract with a new company.

Saving money on groceries

Somewhere in the past couple of years, we’ve gone from shopping together to me doing most of it. (Part of that is that I’m more confident in driving now, though breaking a wing mirror on a rubbish bin that was on the road rather than the pavement threw me a bit this month.) That means less of T throwing snacks into the trolley (I am bad at saying no) and more of me taking the time to shop for fresh meat and produce at the local Asian supermarket as well. That alone has really helped us keep the grocery bill in check (static, rather than increasing in line with food prices as a whole) because items can sometimes literally be as much as half the price compared to Pak n Save.

Saving money on petrol

We only have one car, and T drives it to work. He also drives around a LOT in his spare time. But he’s been cutting that down lately, with one friend in particular exiting his life, and doing a bit more carpooling/sharing of the driving burden rather than always being the one driving. It helps immensely. Seriously, the difference at the end of one week where T had come home every day straight after work and not left the house was half a tank’s worth.

Are you feeling the pinch of rising costs? What, if anything, are you doing about it?

October 26, 2012

Dichotomies and contradictions: Putting your money where your mouth is

Now that I don’t work in the CBD, and don’t walk down Queen St every day, I can’t get used to not seeing the iconic Borders bookshop below the cinemas.

“I can’t wrap my head around the fact that it’s just not there anymore!” I lamented to T on Diwali weekend as we passed the dark, hollow building, plastered with ‘For Lease’ signs.

“You know why they had to close? Because of people like you, who go in there and read for hours without buying anything,” he replied without missing a beat.

Ouch.

While that’s not the whole truth – the book and CD industry is in near terminal decline – people like me didn’t exactly help stem the demise.

In fact, when it comes to putting my money where my mouth is, I fall so far short it’s not funny.

I love books, but I’ve never been a book buyer. I’ve had a library card ever since I can remember.

I love good writing, full stop, but I don’t pay for it. Given that this is how I earn a crust … yikes. I don’t have any magazine subscriptions, and I’ve never donated to, say, Longreads, though I adore what they’re doing. In short, I grew up in the age of free content, and wound up in the heart of that industry. I’m part of the problem.

I love music, but hate to pay for it. I spent most of my childhood first taping songs off the radio, then pirating music in my teens. Now I pay to attend concerts, but we’re now well and truly into the age of streaming music, which costs nothing as long as I’m connected to the web.

I love good food, but am loath to pay for good ingredients. We do from time to time – good cheese, good meat, good ice cream, good olive oil… but eating quality is not cheap. In fact, I love food but don’t enjoy cooking. (I’m mired in a MAJOR food rut at the moment. A spot of Food TV revived a bit of interest the other night, but not nearly enough.)

Do you walk the talk when it comes to your dollars and cents?

October 15, 2012

Hybrid cars: a week in the electric lane

T and I have just spent a week driving around a new Honda hybrid, all in the name of journalism (he also recently enjoyed some Xbox 360 review games; long may that continue. Gaming is not a cheap hobby).

General observations about modern cars, from the three new vehicles I’ve had cause to be in over the past couple of months: all the bells and whistles, buttons and levers, that they now slap on steering wheels, are kind of distracting. However, I definitely like the move to put the speedo up top above the rest of the dashboard – it’s incredibly hard to miss that way, and hopefully will help if you’re prone to careless speeding.

We did nearly 400km on $50 of petrol (!!!) though most of that can probably be attributed to the difference between our 15-year-old car and a new model vehicle rather than electric-specific savings. With fuel prices the way they are (and only going up), having to return the Honda IMA definitely stung.

Hybrids are still new enough that they’re not even on our budget radar, but when we’re older and wealthier, then WHY to THE HELL NOT? It does remain to be seen, though, just how well the technology ages – a more complex system is more prone to things going wrong.

Of course, the pipe dream would be for a real full-electric option. HaloIPT is one neat Auckland company spun out of the university (which has since sold to a UK firm) working on inductive power transfer technology that would overcome some of the barriers around charging car batteries. Now, if only industry would stop dragging its heels on mainstream electric cars …

Would you buy a hybrid? Why or why not?

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 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.

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?

June 27, 2012

The true cost of owning a car

There’s a truly irritating ad that’s currently doing the rounds on TV here that bleats on about the true cost of owning a car. Basically, it’s a public service message urging us clueless consumers to factor in the cost of petrol, and to check fuel efficiency ratings to see how much car X might cost to run vs car Y.

Automobile (Photo credit: A*A*R*O*N)

You want to talk the real cost of car ownership? Fine.

Registration

There’s a good $430 gone, if you’re in New Zealand. Every year. More, if you have a larger car.

Insurance

Varies wildly, of course, by location, gender, vehicle, driving history. But that will account for another few hundred dollars, at least. For us, that’s $1000 every year.

Maintenance

Oil. Filters. Tyres. Other miscellaneous fluids. I know we generally have to replace our tyres every 12-18 months, and our filters are not only pricey but annoyingly fiddly to replace. Another few hundred a year.

Repairs

On top of the normal things that need topping up or replacing. Parts give out or break, over time. You misjudge the distance between your rear and that wall, and tear your bumper loose. Some asshole swipes your side mirror clean off while passing you on the road (it’s happened to us twice. Steer clear of other motorist on Hillsborough Rd, yo). And be sure to consider – especially when buying a car – whether parts are going to come cheap, or even be easily available. I know someone considering buying a BMW but the matter of parts is proving pause for thought.

Plus we could always go into potential parking costs, driving fines, or even venture down the path of depreciation, assuming you plan to sell your car eventually. But these are the unavoidable, non-negotiable realities. (Excluding, of course, non-legit running of a car. I’m more than familiar with people owning absolute clunkers that haven’t been registered or warranted for months or years.)

Have I missed anything?

Browsing tag: personal finance