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Making sense of your dollars

Automatic payments

  • With Telecom people often pay about $15 per fortnight directly to the company via automatic payment to cover their bill before it comes in. Paying a little more than the monthly rental will cover a toll call or two that they might make. This way, when the bill comes in you donít have to worry about it as it is taken care of. Itís the same with your electricity supplier. In the meantime the company has your money sitting in their bank account collecting interest from yours and everyone elseís money! Just look at the annual profit they make! Isnít that enough to tell you its time to put your money into your own high interest bearing account? I have an account set up with the BNZ, which I call my bills account. I get 5% interest annually with a bonus of 2% if I withdraw only once a month. The bills are paid once a month so I am getting 2.5% interest because I draw enough money to cover all the bill sat one time. With my system I pay $60 fortnightly into my account to cover my electricity for the year. When the bill comes, I only draw what is necessary to cover it, the rest stays there to cover the increased winter charges. At the same time I am claiming my interest back out of their pockets and putting it into my own pocket. Ė K.B.

  • For the past few years I have worked out the average monthly amount I pay on all of my bills and set up an AP to come out each pay day. I always slightly overestimate to be safe. ALL of my accounts are in credit with variable bills such as power gaining so much credit that I can stop the AP over the Christmas period and have that money to spend on other things. Just remember to restart the AP after Xmas! This also means that in times of hardship you may be able to scrounge some money from the money allocated to your bills to cover unexpected expenses without fear of being cut off or getting in further debt. - Sam, Auckland.

Bank charges

  • My banks cheque account is fee free if you deposit a minimum amount each month. This amount can be a little short of my wages for the month, so on pay day before I pay my bills I withdraw money from the cash machine out side the bank and walk into the bank and redeposit it. I save $5 a month but thatís $60 a year. - Ross, Rotorua.  

  • Bank charges of automatic payments. My grandmother pays 25 cents to the bank each time an auto payment goes out. 25c for rent, 25c telephone, 25c HP, 25c electricity, 25c doctor, 25c insurance; plus anything else she may pay. Why? Theyíre small amounts - it doesnít bother her. It does bother me! All the 25cís add up to $91 a year. Iíd rather have this money in my account earning interest. Ė K.B.
  • Donít bounce cheques. Itís bad for your credit rating and costs heaps in bank fees.


  • Pay bills on time and if there is a discount for early repayment then take advantage of it. Donít get behind on your power and telephone to avoid disconnection and reconnection charges.


  • As a Kiwi settled long-term in Melbourne, here's a budgeting tool I find extremely helpful. You will need to change the odd government allowances term. Just fill in the details and hey presto! Ė LP, Melbourne moneysmart >>>  

  • I keep two coin jars, one which all the family knows about and contributes to. They also take money from this jar for garage sales and the like. A second sort of secret jar contains mainly 2 dollar coins. This is my Christmas fund.  There is already about one hundred dollars in this jar. We are a small family and we have a simple, humble Christmas but I do send quite a few cards so this money will come in handy. By Christmas, there could well be 250.00 dollars in this special fund. Ė Erina, Christchurch.

  • Set up an excel spreadsheet to record monies going in and every bill going out weekly, we do this over a 3month period so we can see what we can realistically put into savings every month with whats left over. We do this on one wage and still manage to put $600+ away in savings a month and treat ourselves to a weekly takeaway!! We are lucky enough to be debt free, partner is on a small wage and I really believe this system has also helped keep our credit rating up as kept on top of bills etc and helped get us a mortgage with only the one wage and a small deposit. - H.N., Christchurch.

  • Mike from the Pakuranga & Howick Budgeting Service Inc writes, ďAs a Volunteer Budget Advisor, I act as a free source of advice to many clients who are finding it difficult or impossible to make ends meet. There is not always an easy solution, but independent advice can often provide a solution. If the weekly budget is in deficit, there are only 2 possible solutions Ė either increase income or decrease spending. But there are many ways to achieve the right end result Ė why not talk it over before the debts become unmanageable? Just phone the local Budget Service Ė they are listed in the phone directory!Ē  

The national body to which most budgeting services belong is the NZ Federation of Family Budgeting Services Inc. According to their website (www.familybudgeting.org.nz) the Federation has 148 member organisations with about 1200 mostly volunteer staff who field 280,000 enquiries each year (one call a minute!). Last year 28,000 clients saw a Federation budget adviser and more than 17,000 families were provided with help.

  • Like others we have been finding it tough and I have found by viewing a daily balance of my accounts I am able to save better.  I use my diary (a day to a page) for this as well as other things. The top of each page is headed

    Item    Saving   Visa    Cheque
    B/Fwd +2,000.00 -25.00  +40.00
    Countdown   -20.00
    Deposit   +30.00   +120.00
    +2,030.00   -25.00 +140.00

    I hope I have explained this well enough. At the end of each day I write in each transaction (doesn't take long if you do it on a daily basis) and write in the B/fwd amounts. Keep all eftpos receipts until such time as this is done. Don't forget Automatic Payments or Cheques written. I paper clip each account that arrives in the page it is due, sometimes an earlier date. I write in appointments near the bottom of the page and highlight them. At the bottom of the page I write an "I am grateful today for whatever. It may well be simply a sunny day.." - Robyn, East Waikato

  • When my hubby & I were on a tight budget, we came up with the idea that we would not  spend over $29 without receiving the other person's approval first.  We usually gave permission when asked by the other, but it gave us time to think if we really needed the item before getting it.....a sanity check.  We saved a lot of money in this way. -L. Dustin, Oamaru.

  • To make budgeting easier for our family, I calculate ALL bills for the year (including car warrants, regos, insurance, rates, power, phone, etc). I then divide the full yearly amount by 52 weeks, and deposit that amount to a bills account. I have all automatic payments and direct debits set up to come out of that bills account, so you always have the money to pay the bills and you know they will be paid on time. - Tracy Smith

  • Save all change given to you at shops that is under $1. Our family of three adults has made this a habit. We use an old glass vase and all the 10, 20, and 50 cents pieces get dropped in after each shopping trip. We only dip into it if we need parking meter money. It is mounting up slowly. - Sande

  • Always include some sanity money in your budget as it means you are less likely to spend other money that you need for something else. Get this money out in cash each pay day and when it is gone it is gone-NO SWIPING!! - Sam, Auckland.

  • I think the only way to prepare for each Xmas is to put some money away each week, fortnight or whatever and try NOT to use it during the year.  It makes things so much easier and not so stressful. Buy presents during the year but it this doesn't happen put a limit on each present and stick to it.  The same goes when buying groceries - stick to a limit and look for specials ALL THE TIME!!!!!  If you haven't got the cash on hand for Xmas items then the credit card nightmare begins and the start of the New Year is one big nightmare!!!  Don't go there!!!! - Peter & Robyn.

  • Last year we ran some budgeting and cooking classes for those on low incomes entitled ĎLiving on the smell of an oily ragí. I took the budgeting one which was quite successful and had requests to speak on the subject. The base line most found challenging was my statement that shopping for $40 per week per head would allow one to enjoy not only the basics but some luxuries like chocolate, ice-cream, ginger beer... Actually we do more than just fine as we shop only once a month and draw out $340.00.......$320.00 for ALL our groceries and $20 for petrol for our van. -- Lynda, Wanganui.

Credit cards

  • If you use a credit card, and many people are nowadays to collect reward points, make sure you make prepayments in full and on time.

  • To focus on your goals it can be a good idea to print out a picture of the things you are aiming for (eg house) or that are important (eg kids) and either glue this onto your credit card or print it as a sticker and stick it on. That way every time you take out your card you'll see the thing that you really want. If you still want to use the card you'll have to peel this off! I saw this used very effectively on a BBC programme called 'Spendaholics' - PK


  • Make the most of the recession with interest rates for floating mortgages low at present, if you are able to keep paying the same amount you were before the interest rates dropped. This way you will be paying the difference straight off your principle loan amount. You can save thousands of dollars in interest in the long run. - Shirl, Napier.

  • Avoid the temptation to buy on tick. This applies especially to motor vehicles, furniture, clothes, holidays and hobbies. Itís bad enough that things like cars and household items lose value. Donít add to your problems by paying interest as well.

  • If you must borrow, make sure you get a good deal. Just because a money lender wears a suit doesnít mean that they are not a shark. Seek advice before you sign on the dotted line. Most cities have a free budget advisory service. They will give an unbiased opinion about financial contracts.

  • If you have a mortgage, and other debt like hire purchase finance or credit card debts, look at the possibility of combining all of the debt into a single mortgage. Because mortgage money costs less than other debt, you may be able to cut heaps from your mortgage bill.

  • Be very careful about acting as a guarantor  for other peoples debt. Being a guarantor means the lender has every right to claim repayment of the debt from you as though you were the borrowers and they will certainly come knocking if the borrower fails to meet their obligations. Being a guarantor has nothing to do with being a character witness.

  • Beware of hire purchase. This is where the customer makes a down payment on a purchase and agrees to repay the balance over a period of time (usually 2 to 3 years) by making regular payments (usually monthly). Hire purchase may look tempting because it seems to make things easy to buy. But donít be fooled. It is a very expensive way to buy stuff.

  • A retired oily ragger from Tauranga says they have a lot of fun entering free competitions. They reckon they do well winning cash and goods. All of the winnings are used for debt repayment.


  • Can't save money? Try this to end up with $1,368 in 1 year. Think 1 year is a long time-- it moves fast and then you think I could have saved such and such. Hint: Week 1 save $1, Week 2 save $2, Week 3 save $3 and so on until Week 52 you will save $52 and have a grand total of $ 1368 Another Hint: Want to save $1000 -  all it takes is 1000 $1 coins or $500 $2 coins. Final word on buying lottery tickets: Better $10 in your savings container than $10 lost. - K Silvester, Morrinsville.

Hours worked

  • I have worked out the hourly rate I earn compared to a cafe coffee... in my case it is three quarters of an hour to pay for it! Thatís the fastest way to convince me not to buy a coffee and cake. Ė Reader, Masterton.

Interest rates

  • Interest rates are the lowest they have been in decades. Use the money you are saving on interest to repay the debt principal. You do this my telling your bank to keep the repayments the same. - Ali, Nelson.


  • To teach our kids about saving on the outside of their money box we write down how much is inside and a target to be saved. Each week we count the coins and figure out how much needs to be saved to reach the target. Once reached we then put it into their KiwiSaver account. Our kids got pretty excited when they saw the government add $1,000 and then top it up each year with the 50% subsidy. They think itís pretty cool. - Dee, Whangarei.

Purse, note in

  • Put a note in your purse - "The easiest way to make money is by not spending it." And put a note on your credit card - "Are you sure you want to do this?", and a P.S. on the note: "Are you really sure you want to do this?" Ė O.R.

Spending contract

  • One method is to question yourself as husband and wife several times before buying anything. Do we both agree that we really need this? Can we borrow it? Hire it? Get it on special? Is there an alternative? Give it the ten-day waiting test Ė if the need remains go ahead, get it and enjoy it. Weíve been needing more furniture but itís amazing what has turned up from family members in the meantime. Ė A.C.

Savings plan

  • Savings first! I make it a rule to buy one Bonus Bond for 20.00 every time a regular payment arrives in my account. This builds up quickly and produces some income through prizes some of which can be a quite decent amount. This can be done online and the amount deposited is always available if needed - with a bit of planning - but not as readily as a bank account so you tend to leave it there. - Pamflitt, Hawera.

Saving tips

  • We bought a TV/HiFi unit at Harvey Norman in Whangarei last year but nearly didn't - the reason? When we asked the price it was nearly $700.  We told the salesman this was way outside our budget and then he said "Were you planning to buy it on our pay-later scheme or did you want to pay cash now?" We told him we'd be putting it on our credit card (which we always pay off each month, come hell or high water) and he then said in that case the price was $350!!!!  In your Northland Age column today (12/04/09) you mention asking for discount for not taking  'pay later' deals but we didn't even have to ask. - Reader from Mangonui. 


  • Donít get on the sucker list. Some people are suckers for anything new and anything peddled by high-pressure sales people. These seemingly charming gents and ladies have been trained in selling techniques. They receive a commission on everything they sell. Donít let them talk you into a major commitment (that is, anything over $10!) without first taking advice from others (others who are not already on the sucker list!). Ask someone who knows, such as a budgeting organisation.

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