Money management is essential for a happy and secure life. It can help you avoid debt, save for your future and reach your goals. There are many different ways to manage your money, but there are some general principles that everyone can follow.
Below are some of our favourite general money tips to help you get started with good money management:
Disclaimer
The information contained in this article is for general information purposes only and does not constitute financial advice. The author is not a financial advisor and is not qualified to give financial advice. Readers should always seek the advice of a qualified financial advisor before making any financial decisions.
Money Tip #1: Create a budget and stick to it.
According to Sorted, “tracking spending is important as it shows where your money is really going." But, creating a budget and sticking to it is sometimes easier said than done. Still, generally speaking, a budget can help you keep track of your expenses and ensure you're spending appropriately, whatever that means to you.
Unsurprisingly, 60% of Kiwis fail to stick to a budget. Setting up a budget can take a lot of work. Even with specialised software, the additional cost of a subscription might still not be intuitive or customisable to suit everyone’s needs.
To build a budget, Sorted NZ recommends building a record of your day-to-day spending, listing your annual costs, income and any savings and investments. (Sorted)
Debut is building advanced budgeting tools directly into its next-generation banking service to help Kiwis track and categorise day-to-day spending, identify spending patterns and set and stick to budgets based on automated recommendations. Please register your interest below to get notified when we launch.
Do you have a different technique for budgeting? Let us know about it.
Money Tip #2: Put some money aside regularly.
To secure your future financial stability, it's wise to start saving early whether it's for a home, emergency fund, or a major purchase like a car or holiday. Even small amounts saved regularly can accumulate over time. Remember, setting aside a small amount is better than not saving at all.
According to Sorted, saving is like paying yourself first before paying others. It's also important to have an emergency fund to cover unexpected expenses like car repairs or medical bills. It's recommended to save at least three to six months of living expenses.
At Debut, our goal is to help Kiwis save smarter and put $1 billion back into their pockets. Our core banking service with next-generation savings tools will launch later this year to help New Zealanders grow their money and establish a solid financial foundation.
Money Tip #3: Live below your means.
Living below your means means spending less than what you earn, which allows you to get through a typical month without having to borrow money. However, it can be difficult to know when we're spending too much on a daily basis, especially with rising inflation.
If you’re reaching for your credit card to pay for groceries, it could be a warning sign that you may be living beyond your means, according to Become NZ. Consider speaking with a financial planner or finding ways to reduce your expenses.
Debut is building next-gen Kiwi banking to help New Zealanders take control of their finances by providing smart tools to track spending, identify trends, and plan for future expenses.
Money Tip #4: Invest your money.
Many people looking to grow their wealth over time look to investing. The New Zealand Financial Markets Authority FMA, reported that 83% of New Zealanders hold some form of investment. With so many investment options, it's essential to do some research to find what works best for you. The earlier you start investing for retirement, the more your money can grow. Even if you can only invest a small amount each month, it can add up over time.
It's generally good advice to research and understand the risks of different investment options. Managed investment funds and government bonds are often lower risk than buying shares. FMA provides a comprehensive guide on how to start investing and the risks to be aware of. It’s also best to consult with a qualified financial advisor before making any significant investment decision. The right investment option can help you grow your investment sustainably and gradually.
Debut is building a banking service like no other to help Kiwis save and grow their money on autopilot. See related article: Kiwis Keen to Grow Passive Income and Cut Costs.
Money Tip #5: Ask for advice.
If you're struggling with your finances, don't be afraid to get professional help. Financial advisors can help you create a budget, pay off debt, and save for your future.
Debut is building next-generation financial products with advice from some of the industry’s brightest minds, including you. In addition to experts in finance, business, investing and regulation, we want to hear from Kiwis that use these types of products every day.
Register your interest in Debut and join the conversation here.
Did you already know some of these tips? Do you have some money advice you’ve received that’s been particularly helpful? Let us know.
Remember that everyone's financial situation is unique, so there is no one-size-fits-all approach to money management. What works for one person may not necessarily work for you. The most important thing is to find a plan that fits with your financial goals and abilities and that you can keep up consistently.
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Please note, Debut is not a registered bank under the Banking (Prudential Supervision) Act. This is about our future intentions. Investments with us are not supervised currently by the Reserve Bank of New Zealand.
