Your retirement funds – KiwiSaver

Hey Guys,

KiwiSaver seems to be the go to retirement fund in NZ mainly because the NZ Government has pretty much forced anyone who doesn’t opt out of the forced savings for retirement within the 8 week time frame to be simply locked in until retirement (65).

I joined my KiwiSaver back when it first came into existence. I joined with Westpac and had a conservative scheme with them, the scheme returned a fairly little amount. I changed my scheme to a half an half with one half being balanced and the other being growth. Changing my scheme to half balanced and half growth dramatically increased the returns and I recommend looking into splitting your risk to provide diversification if your not completely sold on putting all your investment with a scheme that’s above your risk level.

So what is KiwiSaver? Maybe a silly question because it’s pretty commonly used but if you don’t know it is a scheme set up to supplement your income when you retire. Although the NZ Government provides the pension, the pension more than likely won’t cover ongoing costs like food, dining, travel, rates, home repairs, fuel, and these are just to name a few of the many many costs that one could have.

Why bother with KiwiSaver? My retirement is forever away!!! While this is true, you will get to some stage in your life and you’ll realise “Hey, i’m nearing retirement”, you’ll freak out, and you’ll be forced to work hard and come up with some way to provide a means to some extra cash when you get there.

Kiwisaver is made up of contributions plus investment gains, minus fees, withdrawals and taxes on any investment gains.

Your contributions are set at either 3%, 4%, or 8% of your income. Government contributions consist of a tax rebate of up to $521.43, this will be paid at $0.50 per $1.00 that you invest up to $1042.86. If I made that unclear, to get the whole $521.43 in tax credits you must contribute at least $1042.86. Employer contributions are mandatory for employers and are set at 3% of your income (Minus employer superannuation contribution tax).

Because KiwiSaver is an investment you will get a positive or negative return on your investment. Ideally you will get a positive return.

Fees each month may be charged. Taxes on any investment gains will be applied.

Well done, you have some savings!!! Cheers KiwiSaver for those colourful pictures!!!

You are able to withdraw part or all of your savings (So long as $1000 remains – so really not all of your savings at all) and put this towards a first home. On top of being able to withdraw a possibly handsome sum towards a first home, you also have the ability to apply for a first home grant!

Let me tell you a little about this KiwiSaver first home grant… There are two grants available, to be accepted there are a few rules like income brackets and balances in your savings, however this is more just to point out that there is an awesome grant scheme setup to subsidise first home buyers. These grants are given out by Housing NZ, paid to your solicitor, and are as follows:

1. $3000 to $5000 for an existing home based on $1000 per year of contributing.
2. $2000 to $10000 for a new home, or purchasing land for a new home to be built.

These grants effectively double in amount if you are purchasing with another person ie. Partner. That’s up to $10000 for an existing home, or up to $20000 for a new home to be purchased!

That’s pretty much the bulk of what having a KiwiSaver account is all about? But there is so much more to know about when it comes to selecting the correct fund!

Currently there are 25 scheme providers, as follows direct from the KiwiSaver website…

Provider	URL	Phone Number
AmanahNZ KiwiSaver Limited	www.amanahnz.com	0508 262 624
AMP*	www.amp.co.nz	0800 808 267
ANZ Investments*	http://www.anz.co.nz/personal/	0800 736 034
Aon New Zealand Ltd	www.aonkiwisaver.co.nz	0800 266 463
ASB Group Investments Ltd*	www.asb.co.nz	0800 ASB RETIRE (0800 272 738)
BNZ*	www.bnz.co.nz	0800 269 5494
Civic Assurance	www.supereasy.co.nz	04 978 1250
Craigs Investment Partners Limited	www.craigsip.com	0800 878 278
Fisher Funds Management Ltd	www.kiwisaver.fisherfunds.co.nz	0800 FF KIWI (0800 335 494)
Fisher Funds Management Limited*	www.ff2kiwisaver.co.nz	0800 20 40 60
Forsyth Barr	www.forsythbarr.co.nz	0800 367 227
Generate Investment Management Limited	www.generatekiwisaver.co.nz	0800 855 322
Grosvenor Financial Services*	www.grosvenorkiwisaver.co.nz	0800 336 338
Kiwi Wealth Limited*	www.kiwiwealth.co.nz	0800 427 384
Medical Assurance Society NZ Limited	www.mas.co.nz	0800 800 MAS (0800 800 627)
Mercer (NZ) Limited*	www.mercerkiwisaverscheme.co.nz	0508 542 578
Milford Funds Limited	www.milfordkiwisaver.co.nz	0800 662 345
New Zealand Funds Management Limited	www.nzfunds.co.nz	0800 NZF KIWI
NZ Anglican Church Pension Board	www.koinonia.org.nz	0508 RETIRE (0508 738 473)
SBS Bank	www.lifestages.co.nz/kiwisaver/	0800 502 442
Smartshares Limited	www.smartshares.co.nz	0800 808 780
Staples Rodway	www.staplesrodway.co.nz	0800 446 499
SuperLife Ltd	www.superlifekiwisaver.co.nz	0800 278 737
Taupo Moana Iwisaver Limited	www.iwiinvestor.co.nz	0800 IWI 123 (0800 494 123)
Westpac*	www.westpac.co.nz	0508 WPAC KIWI (0508 972 254)

If you do not select a KiwiSaver scheme provider when you join or are automatically opted in, you will be provided with  one of nine from a default list  (* after provider name in the table above).

Each provider has their own schemes, the default scheme titles seem to be something like the ones BNZ have (We’ll use BNZ as an example of selecting the correct scheme shortly).

So what’s the best way to decide what scheme is for you?

In my opinion just like if one was to go looking for a mortgage, it’s probably best to do a wee bit of shopping around on the internet.

We’ll start by having a look at BNZ’s list of schemes on offer.

So here’s what to do when trying to find the best scheme!!!

1. Decide what scheme is best for me! I’ve had a look on BNZ’s website provided on the table above and their are six schemes to chose from:                                                          
2. I doubt this means a heck of a lot to someone who’s only looking into KiwiSaver for the first time but this image above from BNZ’s website shows what each of the six schemes or funds invest in (There is further information on what investments each scheme invests in if you look at the disclosure statement of the fund). Fortunately for us there is another picture that explains who the funds best suit and how long they are best suited to be investing in that fund for?                                                                                                     
3.  Take into account the data for each fund (Disclosure statement)! The provider is required to provide information generally in chart form of the funds performance, this is a key indicator on how the selected fund has performed in recent years. Although this does not guarantee a similar return as the past year, it gives an idea into how the fund has performed and an average overview of where it may potentially be returning? Again this information is available on the providers website.
4. Be aware of the risks your taking with funds, there may be some sketchy funds in the list of 25 providers, it’s your job to be sure you don’t get sucked in! Check out the data for previous years and be sure that your happy with what the fund is investing in and where it is performing?
5. Since joining KiwiSaver I have actually moved my funds over to BNZ and invest in the Growth Fund as I am planning on having KiwiSaver until retirement (Obviously) and because of this I am willing to ride out the bumps and reap the rewards when they pay off. BNZ’s Growth Fund for the last 3 years has had an average return on 7%, however last year returned 0.86%, scary I know! I guess what I am trying to point out is that there may be ups and downs but that’s to be expected with any investment (Just to different extents depending on the risk).

If anyone is wondering why I moved from Westpac to BNZ? I didn’t really like the lack of access with my funds (In general). I signed up to YouMoney. You money gives you access to a drag and drop GUI (Graphical user interface) making it really easy for budgeting (Access to 10 or more accounts). With YouMoney also came the ability to add an account that was directly linked to KiwiSaver and let me see the real time  balance.

If you do want to move schemes or look into a little more about KiwiSaver, there is a huge wealth of knowledge on KiwiSaver’s website.

In my opinion saving up using the KiwiSaver scheme doesn’t actually save up that much in the grand scheme of things. If you take my income being $48k, that’s  $151000 saved (48000*0.04*(65-20)) before interest and fees etc (my contribution plus my employers contribution, and that’s not taking into consideration that i’ll be withdrawing for a first home). If you add on the $19000 (On the low side) being the pension, it’s looking fairly do able with a budget in place but i’d definitely like a little more than $30000 P.A (If I were expecting to live to 80) when I retire (I’d expect some other form of supplementary income like a few rental properties). Hey its definitely a start but just food for thought there guys!

If you have any questions or comments feel free to comment below.

Thanks for reading.

 

 

 

 

Budget like a pro!

Hey Guys,

Sorry I still haven’t talked about the most obvious way to save money. Let’s talk about creating a budget!

Before I start ranting on about how I save money and what I spend my money on, I need to make it clear that I’m a full-time worker with no debt, children, or a house to maintain (Rates etc). I do rent on the other hand. This doesn’t mean that you can’t budget if you have a student loan, debt, or on a part-time income. Everyone has a unique situation, don’t be discouraged because of that, even if your situation seams dire there are always small steps you can make to make budgeting work for you.

In my opinion budgeting will help you grasp control of where you are spending money and insure that debts and payments are made on time. It will greater your chances of success and freedom in the future.

Let the rant begin!

A brief overview of how I made my fairly in-depth budget.

• Income per fortnight before tax
• Income per fortnight after tax
  • Tax make-up
• Income per week
• Expenditures
• Where can I save money?
  • Petrol
  • Food
  • Phone
• Weekly Excess
  • The importance of having a rainy day fund

Income per fortnight before tax

This is important so that you understand how much tax you will be paying throughout the year?  If you do not have the correct tax code you will find you will be either under or overpaying tax. This can be a pain because you may find that you owe money to IRD at the end of the financial year.  I was recently caught out because I was using the tax code ME as opposed to the tax code M, although still unsure whether that was actually the reason I owe $400 to IRD,  it was probably a contributing factor. Note I use per fortnight because I get paid per fortnight, really I could just use per week.

Income per fortnight after tax

This is important because like above it insures  you are paying the correct tax code. I also believe that everyone should know how much of their money is tax?On top of tax is the ACC levy. For myself this is charged out at 1.45%, my employer automatically deducts this along with income tax. Head to http://www.paye.net.nz for a big colourful chart that shows how much you earn after tax, kiwisaver, and student loan. Simply input income and tick a few boxes and all the maths is removed from the equation.

Income per week

This is the income minus taxes, it’s a starting point to start deducting expenditures for your budget. Along with taxes you will find KiwiSaver deductions and potentially other deductions have been made before you see your money in your bank account. KiwiSaver deductions will be either 3, 4, or 8% (That’s if you have opted in). You can see these on your payslip.

Expenditures

Knowing and acknowledging your expenditures is a very important part of having a budget. Find all expenditures possible, this is very important that you dont leave any out.

My expenditures include internet/power/phone, car, holiday, house, petrol, rent, Christmas, and food.

Now what?

Now that we know what our expenditures are? We can now deduct this from our weekly income. Budgeting is all about saving for the future. One example of budgeting is saving for my car. I have to pay insurance, registration, WOF etc. To ensure I don’t have to pay out in lump sums I add all together and divide by 52 (This gives the amount I must put aside each week for my car else I will be out of pocket). Do this for all your expenditures.

Note the following is fictional and potentially not realistic but gives a rough idea of how to go about budgeting.

Income $700
* Internet/power $50 per month or $12.50 pw.
*Car $80 per annum WOF, $200 per annum registration, $50 per annum service materials, $100 per annum. All costs added gives $430, divide this by 52 and we have $8.30pw
*Holiday rough guess of wanting $500 for a weekend getaway is $20 pw.
*House $100 pw.
*Petrol $50 pw.
*Xmas $20 pw.
*Food 100 pw.
*Rent 100 pw.

Once you have all expenditures you can now add them. Minus this from your weekly income and we have excess money. Excess is money we do not need and is extra, put this in a rainy day account for emergencies.

The importance of having a rainy day account is high. It is there to prevent you from running out of money temporarily. If you are made redundant, are fired, or simply stop being paid for any reason it is there to help supplement your lack of income but only temporarily. The rainy day fund can be used for unforeseen expenses but should not be used for day to day expenses because that is not it’s purpose!

How can I save even more?

After finding how much you can save/use always look for ways you can be more frugal. In my own budget I can save $10 per week by doing only one trip to the supermarket instead of multiple trips. Another way to save on groceries is to use coupons but only if you would buy the discounted item regardless of whether it was on sale or not. It’s fair to say buying discounted goods is saving you money but if you were not going to buy them in the first place your simply spending more money.

There really is alot more to budgeting than meets the eye. I have not talked about using finance but I can imagine it is widely used in NZ and budgeting would affect whether or not it was required. Stay tuned for a post along those lines. Hopefully I have covered enough on how to budget but if there is anything else feel free to ask…

Thanks for reading, be sure to check out my blog later on in the week for another awesome post.

Braeden.

 

 

 

 

 

 

 

Are you owed money? Save money on your taxes!

If you have never filed a tax return you could be sitting on a gold mine!

Inland revenue allows for tax returns to be filed for the past 5 financial (ending March 31) years.

There are no hidden catches as the tax department is not made aware of you owing money unless you apply for a personal tax statement (I’ll get to that later).

Until recently I found myself paying to get a tax refund because I didn’t have any desire to bother learning how to do it myself. The sad thing about my logic is that it’s not a mission to do, in fact I think from memory it took roughly 5 minutes.

If you are using a company to file your return, here is a rundown of what you could potentially be paying. Woohoo (Or as you probably don’t know them NZ Tax Refunds) charge 14% on their smartphone app or 19.5% on their website. TaxRefunds.co.nz  charge 18%. MyTax.co.nz charge 12% on their app and 15% on their website. Mytaxrefund.co.nz charge a flat $39 fee for anything above $70 and a $10 fee for anything less than $70.

Essentially you grant these companies the same powers that you hold by signing on the dotted line, they then so exactly the same thing you will, and then charge you up to 19.5% of your refund to claim it.

So let’s get down to business!

3 Steps!

Step 1. Go to the website www.ird.govt.nz  and register. To register click register under MyIr (Refer to image below). To apply you need your IRD number which you can find out how to locate under the FAQ section of the IRD website. Once you have registered you can mange all IRD matters online, including changing your address,  bank account details, tax codes and so much more.

Step 2. Use the annual tax calculator to determine whether you could be owed a refund? You could be owed a refund if you worked part of the year, had more than one job, earned less than $48,000, or know that you were charged at a higher rate than normal for part of the financial year. The good thing about this tax calculator is that it is NON-OBLIGATION meaning if you owe the tax department money but are currently lacking funds to repay them then you can let time pass until the tax department chase you up (Not recommended). The tax calculator is located at the home tab under money back? (Refer to image).

Step 3. Now that you know you are owed money, go ahead and apply for a Personal Tax Summary. This sends your tax return data away to be finalised. To do this select Request PTS in similar fashion to when you selected Money Back. Select the tax year, tick the declaration box and click request.

Congrats! I did say there were only three steps however you still have to wait for your PTS to be finalised. Once finalised in will appear in your to do list in the sidebar of the website. You need to acknowledge this. When acknowledged you should get your refund within 5 working days.

Unlucky for some I never got a tax refund, instead I owe $300. In my opinion I should have been aware that I was under paying my taxes and should have put aside what wasn’t mine. Lessons learnt but now I know I can better prepare myself for next time.

If there is anything you’d like to know just comment below.

Thanks for reading,

Braeden.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Smart investment options!

Hey guys,

I’m looking to invest short term however before beginning to write this post I wasn’t too sure what the best way to go about investing was the best for my risk and return expectations?

After doing a little research there were a few different types of investment that I could potentially see myself looking into.

I’ll talk about these and a few other options out there that I think are not the best in terms of investing.

Five in total
Term deposits.
Bonds
Shares
Pie funds
Peer to peer lending.

Term deposits

Term deposits are when you give the bank a lump sum of money to hold on to and for a locked in time frame. The time frame is usually between 3 months and 5 years. Term deposits give a better return than simply keeping your money in a standard everyday bank account. Banks are able to give a bigger return because they invest your money and make a profit for themselves. If you would like access to your money the bank requires you to pay penalty fees because your money is still invested and they cannot simply give your money back. In my opinion term deposits are very low risk and are a guaranteed return on your money. The best term deposit rates can be found at http://www.canstar.co.nz/

Bonds

Bonds are essentially an IOU with an interest rate attached on the term of the loan. The entity you are lending to is known as the issuer. Bonds are issued to raise money for a government, company, corporation or other entity. The issuer promises to pay the interest rate set out and also promises to repay the face value of the bond when it reaches maturity. The interest on bonds are generally paid semi annually. http://tradingeconomics.com shows the bond returns from NZ govt bonds from 1986 when they returned 19.2% to May 2016 where they are returning 2.6%.

Bonds could be seen as medium risk due to the potential that if interest rates rise then the face value of your bond will fall therefore payout at maturity will be less than you paid. There are also a few more risks that you can look at on the website
http://www.investopedia.com/ask/answers/05/bondrisks.asp

Shares

When a company needs to raise money it creates shares through an initial public offering (ipo) on the stock market. The company keeps the money to invest and the purchasers of the shares can sell or hold these shares. The shares will go up if the company is doing well or when the market prices rise (Stock analysts follow market trends to buy and sell at the right time). The shares will go down in worth if the company is selling less product, receives bad publicity in the news, or when the market prices go down. When shares are bought or sold this can push the share price up or down if there is enough volume. With some larger comanies dividends can also be a part of the package. A dividend is essentially returning a portion of the companies profit to its investors. In my opinion shares are very risky as the market is easily affected and this was evident in Febuary when the Chinese market crashed vastly affecting global shares. This blog talks about the Chinese market crash and how the market is still suffering doom and gloom. http://theeconomiccollapseblog.com/archives/tag/china

Pie funds.

Pie funds are a group of investments that work together to provide protection from fluctuations in whatever market is being invested in (Diversification). PIE or portfolio investment entity is a portfolio of investments. You may already be using PIE funds in the form of a superannuation plan ie. Kiwisaver.
In my opinion PIE funds provide a steady return over a long period but not necessarily a short period. This article gives an insight to how bumpy the ride can be when investing in pie funds and how it can be very successful on the other hand. http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11472827

Peer to peer lending.

Peer to peer lending is essentially that! Loaning money to your peers.
Peer to peer lending seemed very appealing when I read up on their returns however the minimum investment term with a peer to peer lending platform that I liked the sound of was three years, a little longer than I’m prepared to invest in at this stage. https://www.squirrelmoney.co.nz/investment/ sounded like a good investment with a return up to 8% and the extra bonus that if your peer defaults on their loan repayments whilst loan shield (A fund in which a portion of repayments are deposited) has funds, it will be used as an insurance like feature to somewhat protect your investment. There were no loans available to lend in the 2 year bracket so in terms of short term this is not feasible. Another peer to peer that has taken off recently is https://www.harmoney.co.nz/

In conclusion I’ve decided that the best in terms of security for me right now is the short term deposit with some paying in between a 3-4% return. If I had more time to invest (not so short investment) I think that peer to peer lending could be a fairly low risk investment because you have the ability to like pie funds diversify your investment by splitting your lending up between multiple borrowers thus reducing your chance of having a borrower default.

Thanks for reading and be sure to check in for more great reads,

Braeden.

Save money on electricity!!!

Hey guys,

The other night I went around to my parents’ house for a weekly catch up and I overheard my Mother complaining about her monthly power bill.

Her bill was around $300 for the month, $100 more than the average electricity bill of $200 per month in her area (She also has a solar water heater so doesn’t need to pay too much for hot water).

Sure it is now winter but was her bill really as high as it should have been?

The answer is no!

Turns out the reason why her bill was so high was that many electric blankets had been left on in unoccupied beds during the day. This not only worked out to be fairly expensive but could have also caused a fire to errupt in her home.

This leads me to my question? How can the average electricity user save on electricity costs?

I’ll have a look at five different ways.

#1 The best time to use electricity

Having a look at the plans that Genesis Energy provide, there are nine different ones to chose from, these range from plans that are aimed towards low usage and high usage, and also plans that aim towards customers who use electricity at a certain times in the day.

The electricity companies in NZ split the cost of electricity into two categories, day rate, and night rate. Day rate is more expensive because there is higher demand for electricity during the day. Peak hours are generally breakfast, lunch and dinner.

So how much do you actually spend on power at different times of the day?

Using data from http://www.powershop.co.nz, the average price for day time electricity is $0.2877kw/h compared to the night rate which comes in at $0.1265kw/h.

This data shows the best time to use electricity is night time, obviously annoying because we are all sleeping.

To take advantage of this cheaper rate be sure to have your showers at night rather than in the morning, put washer/dryer on at night time, and be sure to turn your electric blankets off when you get out of bed.

If you think you may be over paying your electricity bill you can compare your electricity plans with all the other NZ electricity plans on http://whatsmynumber.org.nz

#2 How economic is your lighting?

Lights don’t use as much electricity as big appliances but the amount of power they use sure does add up when every light in the house is on.

Lights probably not even ten years ago in NZ were mainly incandescent (Average 50W) bulbs which produce a lot of heat and require a lot of power to do so.

If we take 10 incandescent lights and leave them on for an hour they use 1KW of power per hour (10x50W). Using our average day time rate that’s $0.143 to keep 10 lights on per hour.

$0.14 isn’t a lot in the grand scheme of things but it all adds up, remember that’s just an hour of leaving your incandescent lights on. If your out of the house for 7 hours that’s a dollar in electricity, if you do that every day, that’s $30 you could spend on something else.

One way we can save money is by using LED light bulb (Standard Edison screw or bayonett cap). These are extremely efficient and produce little to no heat. LED light bulbs can be purchased for as little as $10 from your hardware store. According to http://www.consumer.org.nz an LED bulb comparable in lumens to a 50W incandescent is only 5W, that’s a 10th of the power usage and they last up to 10000 hours.

The downside to LED bulbs is their price, however their price far outweighs the cost in time that it takes to replace the standard bulbs time and time again.

#3 Use less power to keep your freezer/fridge cold.

The fridge and freezer are both fairly large and require a lot of electricity to keep them cold, however if you keep your fridge/freezer fully stocked then there is less warm air that has to be removed from the fridge.

#4 Recycle the heat generated from your dryer and other appliances.

A year ago I talked to an electrical engineer who designs heat pumps. He explained that to make a room colder the heat is extracted, the same goes for a fridge. So could we theoretically harness the heat from the back of a fridge?

The answer is yes, but it would be quite tricky.

I did however find an article written by Christopher Supprock at http://hackaday.com/2011/10/06/reclaiming-waste-heat-from-appliances/

The article talks about how he recycles the heat from his clothes dryer and pumps it around his house during the winter.

#5 Insulate your hot water cylinder.

By insulating your hot water cylinder you decrease the cool down rate of the water in the cylinder, decreasing the time between turning off and turning on the element thus saving electricity.

An article I read written by Condo Blues, claims that the insulation jacket around the hot water cylinder can save up to 10% on power usage. http://www.condoblues.com/2009/01/easy-way-to-save-energy-how-to-insulate.html?m=1

That’s the last tip on saving electricity for this post, that’s only five tips and there are just so many more to share with you!

Thanks for reading guys, keep an eye out for more awesome posts,

Braeden.

Eat out for cheap!

Hey Guys,

Eating out can often be pretty pricey, so I thought i’d share with you today a few ways to save cash when going out for dinner.

#1 GrabOne:

Grab one offers discount deals on food, travel, services, and products all over New Zealand. Grabone offers awesome food deals most being half price during quiet hours or days of the week for businesses. Recently I purchased a $40 voucher for $20 to Winnie Bagoes. There are so many options from fine dining to take aways. https://www.grabone.co.nz/login

#2 The Entertainment Book

The Entertainment Book is an awesome way to support the community and pickup awesome deals from both local and out of town businesses. The Entertainment Book gives a huge variety of deals at popular restaurants, attractions, and shopping malls throughout the country. The latest 2017 book is out now however because it is run as a fundraiser for schools, kindergartens, charities, sports teams etc, you will have to contact your local office to find out who is selling them?The book works out to be rougly $60 and gives the potential for thousands of dollars worth of savings. http://www.entertainmentbook.co.nz/about/how-to-buy-an-entertainment-membership

 

#3 First table

The last deal breaker i’ll talk about today is First Table. First Table believe that the early bird diners should be able to get a discount for beating the mad rush of customers. For $10 a pop, you will recieve a whopping 50% off your dining bill for 2 to 4 people early in the evening. First Table has a few restrictions on their bookings however. One restriction is that if you are more than 15 minutes late you miss out on your booking and your $10 is not refunded. The second restriction is that drinks are not discounted by this offer. The third restriction is that you may not bring any more than four people to dine with you otherwise the deal is off. https://www.firsttable.co.nz/

If you have any questions feel free to leave a comment.

Hope you enjoyed reading! Keep an eye out for more awesome reads,

Braeden.

 

 

Where to start?

Looking at myself I’m at the very beginning of my journey to becoming financially free.

A little over a year ago I hadn’t the clue in the world how to budget. When new things arrived on the shelves I saw myself saying “I’m getting that!”. When I wanted something it would go on credit and I would pay it off at a later date or over time.

Although paying over time works for some people,  had I lost my source of income I would have been pinned to the ground with tons of interest due on the unpaid bills.

Living paycheck to paycheck made me realise I needed to make a change in my life. Too often I wanted to purchase flights home or go out for dinner and the money wasn’t there. Then it hit me something needed to change!

I will talk about having a budget.

The basic budget is essentially taking your paycheck and finding your limits to how much you can spend. Take note of what you earn, take note of what you need to save, and take note of what you need to spend.

For example: You may earn 500 a week, out if this comes your weekly expenses (Food, rent, and utilities), this leaves a remainder,  this you can spend and ideally keep a portion to save.

A good budget identifies what expenses you have, and allows you to prepare for then in advance.

I’m aware that my example is very basic and doesn’t take in things like clothing, car upkeep, donations, holidays, etc.

You can have a look at how to create a budget a little more in depth at this website:

How to Make a Personal Budget – 5 Steps to Get Started

If you’d like me to write anything in specific, feel free to comment.

Thanks for reading,

Braeden