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