‘Chunk of change’ creates wealth

Kapi-Mana News - - FRONT PAGE - ROB STOCK

The small-change jar is a fea­ture of many homes. Into it is tum­bled the shrap­nel from purses or wal­lets that have got too bulky to carry.

The small bits and bobs of cop­per and small sil­ver coins can add up over a year.

What were in­con­ve­nient lit­tle discs of metal sud­denly add up to a very de­cent ‘‘chunk of change’’.

The chunk of change is a con­cept I have found key to mak­ing advances in my own per­sonal fi­nances.

I like to iden­tify op­por­tu­ni­ties to save big by mak­ing small changes to my life­style.

In essence, I look for the $10 a week sav­ing that means I spend $520 less a year.

That’s money avail­able to save, or pay off debt, nei­ther of which sound very in­ter­est­ing, but re­ally add up to ex­tra peace of mind, and an in­creased abil­ity to sur­vive the slings and ar­rows of out­ra­geous for­tune.

The great thing about pay­ing off debt, or in­vest­ing, is that the $520 takes wings.

An ex­tra $520 a year paid off a $200,000 mort­gage you were go­ing to pay back over 20 years saves around $9000 in in­ter­est, and gets you clear of the debt two years sooner.

The ques­tion for peo­ple is: Where do you find your chunks of change?

Be­ing a mar­ried man, there’s only so far I can take my search.

I can ab­so­lutely in­sist on a healthy sur­plus for sav­ing at the end of the month, but fam­ily fi­nances are ef­fec­tively run by com­mit­tee.

While the com­mit­tee is happy for me to cur­tail my con­sump­tion, other com­mit­tee mem­bers have their own opin­ions about how fru­gal they can bear to be.

In my book, the best chunks of change to go look­ing for are the ones that don’t in­volve ru­in­ing your standard of life, or ac­tu­ally serve to make it bet­ter.

A week back I met the global spin doc­tor for Im­pe­rial To­bacco. It was fun. He was un­be­liev­ably slick. As an ex-smoker (fif­teen years clean), I can tell all smok­ers that the chunk of change on of­fer there is huge, and you get not to die ear­lier too.

In the case of giv­ing up smok­ing, I not only started get­ting richer faster, but I fu­elled my re­solve by get­ting fit.

Self-de­nial ac­tu­ally im­proved

Money mat­ters

my life.

It was the same in the more re­cent in­stances when I sold my car and started to cy­cle to work, kicked a soft drink habit, stopped buy­ing a cou­ple of bought lunches a week, and tem­po­rar­ily banned my­self from buy­ing any more books un­til I’ve read the ones on my book­shelves.

So look for your re­peated small ex­pen­di­tures that add up to a chunk of change in a year, and de­cide if the money is bet­ter spent, or saved.

No mat­ter what you earn, find­ing chunks of change can im­prove your fi­nances.

GOLDEN RULES

Small changes in habit can pay div­i­dends

Sav­ings of just $10 aweek add up to $520 in a year

Cut­ting spend­ing of­ten im­proves hap­pi­ness

Sav­ing small over a pe­riod of time can lead to big ben­e­fits.

rob.stock@fair­fax­me­dia.co.nz

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