Do you find it difficult to keep track of your finances, or keep a stable savings account? Or are you finding your money just doesn't seem to go as far as it once did 12 months ago?
Covid19 has caused more disturbances than we can count and many people have had to change life plans for more security during the pandemic. What continues to be important, particularly while Covid is hanging around, is making sure to keep on top of our personal finances and ensure we have a safety net for ourselves and our families.
Let's take a look at petrol prices this year; prices have soared in recent weeks to $3 per litre at one point. Even though these prices have dropped slightly, it still costs a lot more to fill your car - which has caused problems for many families. In the past 12 months, rising inflation has hit us all. Increased petrol and that final number at the supermarket checkout are just the start. and we're starting to feel the effects of it.
The question is, is this a crisis, or just a new sense of 'reality'? It depends on how well we can take care of our finances, be careful with our budgeting and find ways to create a buffer for emergencies.
If we rely on credit cards or Buy Now, Pay Later for everyday expenses, things may get worse.
Looking at the latest FSC. Financial Resilience Index report, there are increasing concerns about inflation with most of us either somewhat concerned (37.3%) or very concerned (42.2%) about inflation.
We are here to help; the team at Tremains have put together our top tips to make your money go further, and help you with budgeting through the current lifestyle we are in.
1. Rework your budget to suit the times
A budget is basically a plan for your money, and it's important to adjust our budgets to fit this new world of inflation.
Thankfully, creating a budget is a great way to see what you actually spend your money on, and to make sure you still have some left over once your major expenses are paid.
Here is how to create a simple budget for each week, fortnight or month: - Write down in a diary, or somewhere accessible like on the fridge, your salary/pay for the week/fortnight/month/ - Next, write down all of the essential payments that need to be made that week/fortnight/month. Eg. rent or mortgage repayments, utilities, debts etc - Budget your grocery spend, focusing on the essentials and products with a longer shelf life, then things like meat and produce - Put some money aside for petrol for the week/fortnight/month so you can still get around - Pop some money into a savings or emergency account to keep for later (this is money that you won't touch unless its an emergency) - The final number is your "play around" money - this can be held onto in savings or is backup money for that coffee with your friend, or a treat for the kids
Once you have your budget, stick to it as much as you can to keep on top of your finances. Budgets can also be a good discipline tool for you to focus on what is more important, and make sure you have a plan if prices continue to inflate in the coming months.
2. Focus on the essentials, but include a few treats where you can!
Budgeting shouldn't all be strict and no fun - we only live once, right!?
However, cutting costs where possible is a great way to have a bit of flexibility with your budget, or a chance to put more away in savings for a rainy day. Things like day to day home and utilities expenses, petrol and food are things that need to stay, but do you really need Netflix AND Neon subscriptions?
Try this challenge with your family: - For one week, make a note of everything that you spend your money on. That coffee on the way to work, treats in the groceries, or those new Lululemon tights for the activewear collection - everything. At the end of the week, tally up just how much you've spent on expenses versus treats and luxuries. You might find that you're spending a lot more than you realise on luxuries, where that money could be budgeted to protect your future financial situations.
After the challenge, take a look at your budget versus your spending, and see what small changes can be made to increase your savings or budget flexibility - while still keeping a few treats to keep enjoying your lifestyle.
3. Make the Switch on Utilities wherever it makes Cents!
Phone bills, power and broadband internet all vary in price - and you might not even realise that you're overpaying until you check! Take advantage of having the internet at your fingertips, and take the time to compare prices between your current provider and other providers out there. Chances are you may find something cheaper than what you're currently paying to suit your lifestyle.
When you're moving into a new home or rental property, be sure to shop around to find the best deal to suit your needs.
Here are some quick links to compare various providers:
With the cooler months upon us, we can expect that some expenses may increase over the next few weeks (eg. Power and Gas for hot water and heating).
Planning for the future (even if only a few months in advance) is a great opportunity to set yourself up for financial success. Try starting with an "emergency fund" bank account that you deposit $20 per week into, or find a way to keep money aside for increased expenses. Another idea is collecting the cash that people give you when they pay you back for things or odd jobs, and keeping that in a safe secure place for emergencies. Whatever works best for you, in a way that you can keep it safe and untouched, will pay off in the long run.
5. Know the difference between essentials and treats
It's a great feeling coming home after work, knowing we have a tub of our favourite ice cream in the freezer for after dinner, right?
A common tip we tend to use in the supermarket, is bulk buying things when they are on special. For things like eggs, butter, milk and bread - this makes sense, as we tend to use these more often than others. However, sometimes this can extend to treats like icecream, chocolate or snacks, and can cause us to spend more than we really need to on groceries.
Generally speaking, the more snacks and treats we have in the cupboards, the more we tend to eat! To cut costs (and have the added bonus of a healthier lifestyle as well) try to cut back on how many tubs of ice cream or blocks of chocolate make it into your trolley, so these items really are "treats" rather than "regulars", and save yourself some coin at the checkout each week.
6. Refocus your attention at the supermarket
Some of us have got into the habit of shopping online for groceries, rather than going in-store with all of the added temptations.
When you shop online, you can focus more on what you need. With the total cost staring you in the face as you "add to cart", it's much easier to focus on what you really NEED and not what you WANT or worry about temptation.
We're not saying to completely stop going to the supermarket, but focusing your attention to what you actually need in your home, rather than just popping to the store and picking up bits, can save you a lot in the long run.
Some tips we use to save dollars in the supermarket are: - Write a list on your phone or on a piece of paper throughout the week with things you're running low on, and are key essentials in the house. - Where possible, shop the specials to get lower prices, and try to pick up cheaper brands as much as possible - Bulk-buy things that last longer in the pantry, such as rice or pasta. Bulk-buying makes things much cheaper (by average) and you can buy them less-frequently
Another tip is to repurpose leftovers or freeze meals where you can so you always have something to grab in the cupboards, and reduce how much food goes to waste.
7. Take back what you're paying in Interest
Did you know, if you're carrying high-interest debt from credit or store cards, you could be paying an extra 25% in interest alone - costing you a lot more from borrowing those smaller amounts. Things like Laybuy and AfterPay also have charges and interest if you miss payments, or they're late, which can end up costing you a lot more than the original order.
By prioritizing debt repayments in your budget (as mentioned earlier) you can free up more of your money, and reduce your interest costs at the same time. If you are struggling with paying off debts, there are services available to chat to you about your situation, and help you find a suitable solution to pay these off and save more money down the line.
For quick help, there is a live chat with the MoneyTalks team (available Monday–Friday 8am–8pm, Saturdays 9am–4pm, and Sundays 10am–2pm) to chat with you directly and help you get back on track.
As inflation continues to cause issues among several households in New Zealand, it's time to tackle our finances head on and think about our future. Our team hopes that you found this information helpful, and are here to support you with your property financials and needs. Contact your preferred sales consultant for advice to get into your next home.