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Browsing tag: personal finance

  • March 5, 2014

    What we spent: February 2014

    Click here for more info on my monthly spending roundups – your question will probably be answered there.

    what we spent feb 2014 nzmuse 

    So, some big medical expenses last month!

    Financially speaking, it was not the smartest to have my wisdom teeth out right now. But the pain was getting bad, and T being off work meant he could help look after me while I recovered.

    Physically speaking, it really wasn’t anywhere near as awful as I’d imagined – details here. And financially, it wasn’t as bad as I’d worried, either – only $1050 for all four out, the rest of it being for the initial checkup, clean and x-rays, plus the meds I had to get afterwards. (White Cross Dental New Lynn, highly recommended!)

    I’ve considered applying for health insurance a few times over the years; Southern Cross has a partnership of some sort with many workplaces, including my current and previous employers. But the numbers just don’t make sense. We are pretty healthy – our  issues are generally accidents/emergencies on T’s part (the ER is free; the time off work not so much) and optical for me. Basic health insurance plans in NZ don’t tend to cover optical and dental; those add-ons cost more and aren’t worth it, and none of them ever cover the cost of wisdom teeth extraction.

    In other less wise moves, we also went out to a late Valentine’s dinner after the layoff – we’d been putting it off until the week after the day because of work, which turned out to be … interesting timing. But I’m pretty happy with our dining out spending, and totally stoked with our grocery spending (we’ve definitely been spending less since we returned to NZ, thanks to our new eating habits and smaller appetites).

    Seeing as T was laid off halfway through the month, his spending is definitely on the high side (that’s more like a full working month allowance…) But there’s no point going on and on about it. It’s always going to be a point of contention, which is the whole reason for a don’t-ask-don’t-tell allowance.

    Thinking about the future … I veer between extreme optimism and hopelessness. Right now, it’s definitely skewed towards the latter. I keep thinking we’ll never be able to save for a down payment (previously, there were moments where I was thinking that given the money some of T’s colleagues make in a year, it might actually be within reach in a couple years! So much for that).

    I honestly see no way for house prices here to fall unless something is done to stop both investors and nonresidents/citizens buying property, which isn’t going to happen. So I guess we wait until the next recession – and hope we don’t lose our jobs in it.

  • March 3, 2014

    Women’s Money Week: Kids. Who’d have ’em?

    This post is part of Women’s Money Week 2014.

    They say you tend to most regret the things you don’t do, rather the things you did. (That’s one of the things that convinced me I had to take time off to travel in 2013.)

    Does that apply to having children?

    (Potential TMI ahead in next paragraph)

    I freaked myself out a while ago when I noticed I had unusually sore, full boobs (by my standards. I have NO idea how women with actual chests exercise comfortably. Going running that week was frickin’ agonising). It was coming up to that time of month, but not quite. Naturally, I was half-convinced I must be knocked up and went into minor panic mode.

    That made me realise – with a jolt – that if I was, we would most probably have it. I guess you’d say I’m at the stage in life now where having a kid would only be slightly disastrous (say, 8/10) as opposed to deliriously disastrous (10/10). Two of my friends are apparently already in debate about who is going to be the better uncle to my future offspring. Bless their wacky little hearts.

    But the one thing I really, truly want to accomplish before having kids is buying a house. I want the stability, I want the quality (if it’s a damp house, at least we can insulate it), and I know if we have a kid first it’s going to be virtually impossible to save what we need for a deposit.

    And then there’s all the finances around actually having one – I’m not fussed about THINGS for a baby as such, like clothes and car seats and cots … but rather leave from work, childcare, etc. I’d really like for T to have a more established career. We can live off my income for now while he job hunts, but it’s certainly not the ideal, and neither of us earns enough that it would be easy for one of us to stay home with a kid.

    Unlike a lot of people who grew up in a family where money was tight, who as adults are determined to be financially secure before they have a family, T thinks I’m overly conservative on this front. (It may also have something to do with the fact that he has worked with/socialised with so many less well off people who’ve had kids in their teens/early 20s – who certainly don’t have it easy, but get by nonetheless. His younger brother, for one, is about to join that club.)

    Financial stress SUCKS. Been there, done that, with T right there alongside. And adding a tiny human being into that kind of toxic mix is one hot mess I never want any part of. Money buys peace of mind, and a LOT of things that bring happiness.

    No, he’s generally more concerned with being too old to ‘enjoy’ our kids rather than being able to comfortably provide. I sympathise with this sentiment on the surface but try as I may, I just can’t empathise with it. My parents had me in their 30s, and their age never had any impact on my upbringing, which no doubt plays a large part in that.

    As with a lot of things, there’s never a perfect time. There sure are some better and some worse times, though, and we haven’t gotten into the territory of the former yet.

    How do you think your childhood/family environment shaped your thoughts and feelings about having kids of your own? Would you be ready to have one right now (if you found yourself in that situation?)

  • February 4, 2014

    Guest post: The Urgency of the Emergency (fund)

    Today’s post is courtesy of Jacob, Ph.D. student in finance, frugal master, and one half of the Cash Cow Couple. Along with his wife, he enjoys living, laughing, and teaching others how to save and intelligently invest their money so that they can achieve financial freedom.

     In the blogosphere, it’s common to see recommendations for emergency funds. I’ve seen some who claim an emergency fund is unnecessary, and others who’d prefer if you kept one the size of Texas. There isn’t anything inherently wrong with either choice, but you should probably understand time constraints and liquidity before you decide on an emergency fund or any other short term investment need.

    Let’s first define an emergency fund. It’s typically a highly accessible chunk of money stored in a checking, savings, or money market fund. It’s there for what? That’s right, emergencies.

    But what does highly accessible mean, and why does it matter? Well, we’re speaking of liquidity here.

    Liquidity is often defined as the ease with which a portfolio can satisfy an investor’s needs. Easy enough. But what comes next is frequently confused by investors, popular media, and everyone in between. Liquidity is comprised of two parts – marketability and price volatility.

    1. Marketability is an attribute that measures an investor’s ability to readily convert an investment to cash at prevailing market prices. This would be a function of fees, trading volume, and bid-ask spreads. In other words, the greater the cost of finding a willing buyer, the less marketable, and therefore less liquid an asset is.

    2. Price Volatility is very different. Even if you can sell an asset quickly at market price, you must still be concerned with the current market price. Stocks are a great example because they are volatile and therefore not liquid. Sure, you can easily sell a stock after it falls 50%, but you’ll be locking in huge losses.

    A great example is a story I heard about a lady who was advised to put her million dollar portfolio in an easily accessible S&P 500 index fund. She was under the assumption that it was liquid. Sadly, one of her goals was to purchase a $500,000 boat in just over one year.  Of course, 100% equities is a terrible decision if you need half the principal in a year. The market fell nearly 40% and she was then in a terrible position deciding between the boat and almost no remaining savings.

    The point of that story is simple. Don’t put your emergency fund or short term goal funds into the stock market. Doing so defeats the entire purpose of planning ahead. Keep the funds in a liquid account like the American Express high yield savings account that we use.

    A matter of size

    The next thing to consider is the size of your emergency funds. You’ve probably heard the rule of thumb that says 3-6 months of living expenses in your emergency fund. Maybe you heard 3-6 months of income. Whatever you heard may or may not be applicable to your financial situation. (Ed: No matter how much I have saved, it never feels like enough…)

    There are several considerations here. First let’s consider employment and income fluctuations. If you are steadily employed, you probably need a smaller emergency fund than a traveling freelance writer with a variable income. Any variability requires an increased cushion.  The reason is simple; you must cover baseline expenses, and if your income doesn’t show up for 2 months, you’ll probably appreciate the protection that accompanies an emergency fund.

    Likewise, if you spend far less than you earn each month, you’ll need less than someone who is living paycheck to paycheck. It’s just basic math. You have much more freedom and flexibility when you have excess funds coming in once or twice a month. You can quickly adapt to the situation at hand.

    If you’re a young or old retiree, things are much different. Because you are living on your investment portfolio, you have much more concern with price volatility in the stock market (if you own equities).

    Consider someone who must sell $20,000 in shares of stock each year to cover basic expenses. If the market falls 50%, they’ll be forced to sell twice as many shares to get the same dollar amount. This can destroy a portfolio.

    Instead, consider holding several years of living expenses in a liquid account that can be accessed during bear markets. Additionally, keep the funds required for short term goals set aside in liquid funds to avoid a situation similar to the one I mentioned above. Ordinary bonds in a portfolio can provide an extended cushion if the market is still low when these funds are depleted.

    What are your thoughts on emergency funds?

     

  • January 31, 2014

    Drafting up a 2014 budget

    nzmuse 2014 budget

    At last, it finally feels like we’re back on an even keel! T is bringing in an income and now that the random payroll snafu that resulted in me missing my December paycheque (I got it in January) is sorted, we’re basically all caught up financially.

    So, his new job. It involved a big initial outlay; that happens when you go from the kind of jobs where you have a uniform or can wear your normal casual clothes to a white-collar environment – particularly in face-to-face sales. As much as I hate to say it, those shirts and pants and ties and shoes were an investment.

    The hours are long, though – 9-10 hour days and only three days off a fortnight. (Whether this is sustainable long-term is another matter – time will tell, I guess.) Now he’s past the training month, it’s entirely commission based, so his income is 100% variable.

    The big bonus is the near total elimination of car expenses. Company car, a certain amount of fuel per week, not to mention the savings on insurance, registration and maintenance. I’m super stoked, because car expenses are ALWAYS what kill us.

    The most logical way to manage our money seems to be to live off mine (the regular) and save his (the irregular) – even if that makes me feel a little uneasy. There is room to still save a little from my pay, which makes me happier. Here’s my projection for our weekly expenses (yes, we pay rent weekly in NZ, for any newcomers).

    • Rent – $280
    • Groceries – $130
    • Bills – $120 (I put this amount into my ‘bills’ account for power, water, bus fare, insurance, and all those boring things)
    • T’s allowance – $80 (spending money plus lunch money – their $6 subsidised cafeteria meals look amazing and are good value – this is a small luxury of convenience for the both of us)
    • Fun money – $80 (generally consists of us going out to eat, plus room to spend $20-30 on petrol for our own use)

    The big hairy goal is saving for a house, but I’ve come to realise we probably first need to save for a second car, because we won’t be able to afford a house in a convenient suburb. Much as I would like to be able to save a 20% down payment, 10% is more realistic, and can be done through a Welcome Home loan.

    Finding a house for under $485,000 isn’t easy (but at least they’ve updated their price threshold – they previously classed affordable houses as under something like $300,000, which was so far off the mark it wasn’t even funny). As for the income criteria, unless T turns out to be a total ninja sales star, or some flush-with-funding startup decides they need my wordsmithing skills like I need my weekly fix of Scandal and shower me with buckets of cash, we should be safe. I try not to think about one of my old classmates, an accountant who would’ve started out making roughly the same income as me, but then doubled that in her second job (I bet she’s into the six figures now) and is only going to go up from there. I try not to think about the fact that I will probably never crack $90k in my working life, and focus on the fact that I have the dream job that I actually enjoy going to every day. But why, oh why, couldn’t my talents and interests have had more lucrative leanings? Don’t answer that.

    Femme Frugality
  • December 20, 2013

    Investing in furniture: is an expensive bed worth the money?

    sealy posturepedic bed nz

    I always thought that buying a house would be my catalyst for buying grownup furnishings. Quality kitchenware, a lounge set that cost more than $10 … and a new bed. (Everything else – the aesthetic stuff – I could take or leave.)

    See, our old bed was actually a secondhand bed. I bought it back in 2006, when I thought I would only need it for a few months. The plan was to move into the student dorms when I started uni in 2007, which would be fully furnished. But then I changed my mind, stayed in the suburbs, and kept that old bed. Fast forward to the current day, and I’ve had that bed for seven years … and I’m not sure how old it was before that. (For what it’s worth, it’s a Sealy, which is about as good as it gets brand-wise.)

    After six months in a garage, that old bed wasn’t really in the best shape. Rather than waiting until we buy a house, it seemed like a good time to replace it. Plus, my mother had given me $2000 just before we left (ostensibly a wedding present – she told me to spend it on a new bed).

    Now, there are plenty of beds going for about $600/700. I’ve even seen bedroom packages for the same price, with dresser included. Heck, I actually saw a queen size bed advertised for the tiny sum of $250. But at some point, frugal becomes cheap (we didn’t go to check out that one as the retailer was really far away and T was skeptical that a $250 bed could possibly be any good).

    We ended up buying a new queen size Sealy. The damage: $1000 (ouch) down from an original price of $1700 (yay!). Expensive bedroom furniture, TICK.

    Personally, I can sleep on anything. I mean, I don’t love sleeping on the gap between two mattresses (which I had to do far too often in Europe, where a double bed is usually code for two singles pushed together), but I cope. I can sleep on couches, floors, hard beds, soft beds, in cars, on trains … you name it.

    On the other hand, T likes a firm mattress, and has chronic back pain, though it’s eased a lot since he stopped working hardcore trade jobs. Our nightly ritual usually consists of him muttering about how he can’t find a comfortable position and eventually sinking into a fitful sleep, while I halfheartedly scratch his back for a few minutes before being overtaken by a wave of glorious unconsciousness.

    If it wasn’t for him, I would probably have gone way cheaper. WAY cheaper. But his comfort is important, and a bed is not a purchase to be made lightly. Also, our new mattress is so darn cute – though I don’t get the point of putting fun prints on mattresses, since you’re never going to see them! There’s that fleeting moment when you change the sheets, but I’m generally concerned with getting that tedious task over as quickly as possible more than anything else.

    ETA in 2016: Okay, so glad we splurged back then. I GET IT NOW. Expensive mattresses are totally worth it. Or I’m getting old. Or both.

    What’s the most expensive item of furniture you’ve ever purchased?

  • December 14, 2013

    Confession: Our finances are a mess right now (and I’m okay with that)

    I haven’t felt on top of our finances for at least a couple of months – a feeling that I don’t usually like, but have come to a weird sort of peace with for now.

    First, our iPhone died randomly in California, taking with it all our US spending data (I tracked all our spending with Trail Wallet, and since we hadn’t backed up the phone in awhile, all our info was lost within the app). I have a pretty good handle on our average daily spend though, so at some point (hopefully over the Christmas break) I can finally tally up the total cost of our entire trip.

    Then we got home, where I went straight back to work and T started job hunting. We stayed with my parents for a few weeks, which saved us tons (shelter, food, even some transport). But then we found a place and moved in, which meant shelling out a bunch of money, plus more spending on replacing a few household things we badly needed. With all the upheaval, plus a lot of busy weekday evenings for various reasons, we spent more than we should’ve on eating out.

    With T not working, funds were tight and I dipped into our emergency fund, since my first paycheck was eaten up by all the moving expenses.

    Then this week he got a job (!!!) which I will elaborate on later down the track, once he’s started and has a few weeks under his belt, and when we have a clearer idea of how it’s going. This means that we have to go shopping for basically a whole new wardrobe for him this weekend, which I imagine will cost about $1000. Ouch.

    Also, my glasses broke in a Cheech and Chong-esque incident (where we literally butted heads) and will need replacing – that’s probably another $500 or so because I’m blind as a bat and need to buy the thinnest, most bankrupty lenses available so that my face can actually support my specs without collapsing in on itself.

    Basically, money has been OUT OF CONTROL and I haven’t been tracking any of it. When things are in flux, it’s always terrible for our finances. But I’m okay with our slight overspending, for sanity’s sake

    I’m hoping to get on top of things over the holidays, assess where we’re at and make a plan for 2014.

    Going forward, my income will be the only steady one and T’s will be entirely variable, which is something entirely new for us.

    Action plan: once I finish work for the year, it’s time to stop being an ostrich about things and take stock! I’m quite excited about that, nerdy as it sounds. Fresh starts always feel good.

  • December 3, 2013

    Loyalty pays … or does it?

    Sometimes it pays to be a loyal customer

    Shopping around is one of THE cornerstones of frugality. Taking a little time to do your research in order to get the best deal … it’s a no-brainer.

    But when do you draw the line?

    I wasted far too much time early on in Europe trying to save money on accommodation. Hostels and hotels were so expensive in Brussels and Amsterdam that frankly, I may have saved a few euros, but it was a poor payoff in proportion to how much time I spent searching countless websites looking for the best price.

    My go-to sites for booking accommodation are Agoda (in Asia) and Booking (Europe/North America). I also used Hotwire, Priceline and Expedia once each in the US, but by and large, Booking.com is where it’s at for me. Unlike other sites, it’s always upfront about taxes and other charges that individual places levy. And while I don’t ALWAYS check against other sites, I can’t think of any instance where I’ve found the same room for cheaper elsewhere.

    (As for hostels, I always play off both Hostelworld and Hostelbookers against each other, though Booking also includes some hostels in its database.)

    The convenience of booking through the same site can’t be understated, particularly if there’s a good mobile app. All your details are saved, so you don’t need to enter them every time. You know how to navigate your way around instinctively to get the information you need. And your loyalty starts to pay off – you start to get emails with special subscriber deals and exclusive discounts. I’ve booked through Booking.com so many times I now have a 10% Genius lifetime discount, although it applies to certain hotel deals only.

    Loyalty pays in other areas, too. You’re more likely to get fees waived if you’re a long-time customer. You get discounts for staying with the same insurance provider after a certain number of years. You get a free coffee if you rack up enough stamps at your favourite cafe. And so on and so forth.

    Personally, I’m pretty loyal when it comes to banking and insurance, but I’m a personal finance nerd. Nothing is totally sacred.

    When do you go with the easier option, and when do you hunt down the best possible deal?

  • April 29, 2013

    How we travelled the world without going into debt

    Funding our RTW trip - How we travelled the world (without going into debt)

    I know a lot of you have been waiting patiently for this long-expected post! Here it is – how we’re funding our RTW trip without going into debt.

    How to travel on a budget (long term)

    Travel on a budget often involves housesitting, a mainstay of RTW travellers. We won’t be staying in one place for very long, though, and we’d need to crack the market first – getting that first gig without experience is probably the toughest part.

    Saving money on accommodation

    Instead, we’ll be backpacking, hostelling, and looking for apartment/room rentals. In lots of cases, private rentals seem to be cheaper than hostels in big cities. There are sites like AirBNB and Roomorama, which have large databases but also high prices and hefty fees. There’s also plenty of others, like Wimdu, 9flats and Housetrip, which I prefer due to the no/low fees. These range from shared apartments to full private apartments, but at the very least you’ll generally at least get a futon to yourself. Some rentals may charge huge deposits/bonds/cleaning fees, or extra fees for extra guests. I would just browse listings on all the sites and see what catches your eye on a case by case basis. Most of them are easy to use – you can search by date, area, sort results in list format or view on a map, and some display reviews on the page and even an availability calendar.

    Then of course there’s Couchsurfing, though I’m aware that as a pair we may find it difficult. New Zealand is a land of houses, but I know tiny apartments are the norm in lots of cities around the world. In scouting out potential hosts overseas, it became obvious that many, many hosts can only accommodate one guest. That said, we’re also open to staying further out in the suburbs – that’s just an opportunity for another experience entirely. (You can read about my experiences as a Couchsurfing host here.)

    Finally, there’s volunteering. Hosts shelter and sometimes feed you in accommodation for your labour, which could range from helping out on a farm to cleaning or even more creative pursuits like graphic design or photography. Look on sites like HelpX, Workaway, WWOOF, GlobalHelpSwap and Staydu. To sign up as a member, you’ll usually be charged a fee that gives you access for a year, and freedom to contact as many hosts as you want.

    There’s also always the option of teaching English overseas; travel blogger Nomadic Matt has a whole guide on teaching English abroad!

    Budgeting for a RTW trip

    I read a lot of RTW blogs and have looked at a lot of travel budgets (Legal Nomads has a large list of links to various bloggers’ travel budgets here).

    I’ve also combed through Budget Your Trip, a super handy website that aggregates costs from real travellers. Obviously, any crowdsourced data is only as good as those who partake, so costs are likely to be more accurate in cities that are well trafficked. On Budget Your Trip, you can see budget, mid range and luxury budgets based on real data, in local or other currencies.

    Costs are going to vary a lot by region. Asia will be the cheapest and Europe probably the most expensive. I’m hoping we can average out to $100 a day over the whole trip, though I’m also accepting of the fact we’re very probably going to blow through that at times.

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    Funding a RTW trip

    There are two parts to this equation. (Depending where you live, there may be a third option – see Nomadic Matt’s e-book on travel hacking.)

    Savings is pretty self-explanatory. You’re all grownups; you know how to save money (at least in theory, even if you’re not quite as good at it as you might like to think). Savings = income – expenses. To break that further down, you can cut costs, increase income (which I tend to be better at), or both, in order to maximise that gap.

    Expenses so far have been about $10k. Thankfully, we got a killer discount on our backpacks and some other gear (nearly 50%) this month due to T’s staff discount at Fishing Camping Outdoors. There are probably more I haven’t included below (eg travel adapters and other bits and bobs).

    expenses pre RTW trip

    That should, more or less, be it for the initial outlay, though.




    At this stage, there should be enough in the kitty to cover a $100/day budget, once I get my leave paid out, given that we’re spending a month volunteering. Odds are we’ll spend more than that in some places, so…

    Income is the other half.  I’m aiming to keep some money flowing in while we’re on the road, which hopefully will have the added bonus of keeping my skills sharp. How?

    Blogging

    Where print ads typically cost more than a month of my salary, online advertising is absolutely buggered. For all that digital offers (interactivity! measurement! mobile! targeting!) I don’t know if it will ever catch up. Ideally, ads would flow in and help fund this blog, with me only needing to worry about editorial and keeping you guys interested. Unfortunately, traditional advertising just isn’t working anymore. Advertisers want more integrated and sophisticated solutions. THEY WANT EDITORIAL. That means rather than being relegated to banners and sidebars, they want in content links, for example. Sometimes this is more lucrative than a plain ad but it’s a lot more work for us. At a company, you can generally leave that to the ad sales guys; as a blogger you have to be much more involved.

    Er, my point? Online advertising is tough. That said, where possible, I will continue to try to monetise the blog – without selling out, that is.

    I never wanted to make blogging a business. I have no desire to get to the point of bringing on staff writers – this is and always will be my personal blog – paid speaking gigs (shudder – I can’t think of anything worse than public speaking), or coaching (again, no desire to be a life coach). But I am grateful for the opportunities that it has brought. Which leads me to…

    Freelancing

    Yes, there really are jobs where you can travel the world and work from anywhere – the kinds of jobs where you can earn an income as long as you have a computer and internet connection. Technically, I can work remotely, but the reality of my particular workflow and daily local deadlines means keeping up my workload while constantly on the move would be, er, challenging. And I’m more than happy to take a bit of a break.

    So I suppose I’ll be joining the hordes of out there … to an extent. The plan is to do *some* work while on the road. Exactly how much I am not sure, but less than full time.

    Want a piece of me? I’m available for select content-centric work, so if you’re in need of a kick-ass freelance blogger, freelance ghostwriter, or freelance editor, drop me a line.

    One last note

    I’d be remiss if I didn’t mention a couple of things that make this possible:

    • No commitments. That means no mortgage, no kids – living in a crappy house with hand-me-down furniture (not that I care about that, but I’m MAKING A POINT here!)
    • No/minimal debt. That means no student loan, no car loan, etc.

    I’m a big believer in keeping your fixed costs low and committing to as little as possible. That’s allowed us the flexibility to do this relatively painlessly. Figure out the puzzle pieces and set yourself up for success.

    Whatever your goal – travel, buying a house, having kids, moving to another country – it’s doable if you truly want it and commit to making it happen.

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  • April 18, 2013

    Credit card perks – when are they worth it?

    It’s easy to get disheartened about your finances when you’re an avid reader of personal finance blogs. Like some people might read fashion magazines and quietly compare themselves to the models they see on the pages, I read money blogs and compare myself to people who are either way behind me – the debt bloggers – or, in most cases, way ahead.

    But you know what always cheers me up? A chat with my bank.

    I remember paying a visit to my local branch years ago toward the end of high school. I probably only had about $4k in my accounts (I never cracked $10k until after graduating university), yet the teller was apparently amazed that I’d saved that much, and asked me what I was saving for.

    “Ummm, uni?” I offered, stumped.

    You work at a bank, for goodness sake. Is saving for the sake of saving really such a foreign concept?

    This month I applied for a second credit card, thinking it would be good to have a backup while we travel that can be carried separately just in case I get mugged or my wallet gets lost. The online process took just a couple of minutes, and was followed up by a call the next day with a few more questions – so you don’t have a student loan? car loan? hire purchase? store cards anywhere? – along with acknowledgement of my strong savings history. Way to boost the ego. (I’ve been with my bank for over a decade, so they’re all up in the intimate details of my financial history – which is pretty vanilla.)

    The bank rep also tried to upsell me to a Gold or Platinum Visa. Now that’s something I never thought I’d hear in my life. Say what?

    If I booked my flights with one of these premium cards, I’d get free travel insurance. Righty-o. Pity I’ve already booked both – and don’t really want to pay hefty annual fees for the privilege of a shinier credit card.

    This got me thinking, though. Putting aside the fact that I just don’t see myself as the kind of person to own a gold or platinum credit card, would it ever make sense from a financial standpoint?

    Well, at $80 to $130 a year in annual fees, I think not. In comparison, my humble standard Visa only costs $24 (bank credit cards without annual fees don’t really exist here). According to interest.co.nz, I have one of the best credit cards in regard to annual fees. Given my lifestyle and spending habits, the credit card perks of free travel insurance and the ability to earn reward points marginally faster don’t really appeal.

    My needs in a credit card are simple, really: enable me to buy stuff online, rent vehicles, provide an imprint at the odd hotel, and be widely accepted, so I can use it to pay for as many things as possible in order to rack up points. As well as the $24 a year I pay for the privilege of my bank credit card, I also pay $20 to partake in the rewards programme, which earns me more than enough to cover all the fees, as well as pay for a few trips to the movies or a few meals out.

    What, if any, perks do you get through your credit cards? And what do they cost you?

  • March 22, 2013

    Paycheque frequency: what’s your preference?

    Ever known anyone who, upon getting a new job, freaked out after finding out the company works on a monthly pay cycle?

    I get that budgeting is a deeply personal thing and managing your finances when money is coming in on a relatively infrequent basis can be tough. It seems that as a rule, most of us would prefer to be paid more frequently (in smaller amounts, obviously) whenever possible.

    At a previous job, one colleague learned that most of us were getting paid on a fortnightly basis, and after finding out, tried to negotiate with HR to get on the same cycle. Given that this was months and months after said colleague had joined the company, the answer was unsurprisingly no (if you’ve coped that long, you can keep coping!). I’m not sure how this works as a general rule – most companies, especially smaller ones, operate on one single pay frequency, but this particular organisation had a lot of unionised employees and as a result, pay cycles for different staff ranged from weekly to fortnightly to monthly.

    I’ve been paid on pretty much every kind of cycle there is over the years (including monthly in arrears for mystery shopping assignments – always fun) and I’m pretty confident I could cope with any pay frequency today.

    Here’s a little rundown of my pay vs rent (my biggest expense) history

    • Weekly pay / weekly rent
    • Fortnightly pay / weekly rent
    • Fortnightly pay / fortnightly rent (on opposite weeks!)
    • Monthly pay / fortnightly rent
    • Monthly pay/ weekly rent

    Every new adjustment took a little bit of work. But eventually, I got used to it and made it work, largely because I like to operate on a weekly cycle. Even when rent wasn’t weekly, groceries, petrol, etc still were. Every pay day I transfer my money into my savings account, then transfer out money in weekly increments to cover that week’s outgoings. (And because rent is pretty much never paid monthly by anyone in New Zealand, I don’t get these ‘bonus’ paycheques in the two five-week months of the year that you Americans always go on about. Sadface.)

    If I had the choice, I honestly don’t know what my preference would be today. Ideally, I guess it would be one that matched up with my rent payments – aligning your income with your biggest expense is always handy.

    How often do you get paid?

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