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sense of your dollars
- 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.
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.
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.
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
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
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
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.
- 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. -
- 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.
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.
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.
- If you
use a credit card, and many people are nowadays to collect
reward points, make sure you make prepayments in full and on
- 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'
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,
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
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.
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.
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.
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
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
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.
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.
- 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.
- 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 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,
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.
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