Get more back from your bank

Banks make billions from us. So why not get a bit back by using their services more effectively? Start by opening subaccounts and earmark them for mortgage/rent, utilities/ fuel, groceries, emergency fund, short-term savings, longterm savings, and fun.

Arrange with your bank to have your pay divvied automatically between those accounts, or switch to a bank that can do it.

Next create automatic payments from relevant accounts to pay your power, phone, mortgage, debt repayment, insurance and so on.

If your bank offers budgeting tools, use them. They help you channel your money where you want it to go.

As Westpac once said in its marketing: “We all know how great fries taste at 2am.” But are those fries being paid for out of your holiday kitty?

Generally New Zealand banks’ budgeting apps are poor, although Westpac’s Cashnav is the exception.

Once upon a time both Kiwibank and BNZ had great budgeting tools. Kiwibank’s was called Heaps, and BNZ offered Xero Personal. Both were discontinued.

The ASB’s brand new spending tracker looks nice, but is a downgrade on previous budgeting. The old tracker aggregated transactions from all accounts to give an overview of total spend in each category such as groceries or utilities. Now you can only see spend from individual accounts.

Back on the subject of useful tools, some banks offer sweep facilities. They allow you to set up triggers to sweep money into or out of savings when you go over or under certain pre-set limits. The result is increased interest on savings and less cost by avoiding tipping into overdraft accidentally.

Overseas digital banks are champing at the bit to eat our cumbersome big banks’ lunches. There are already ways in New Zealand to “bank” with digital alternatives such as UK-based fintech giant Revolut and local startup Dosh, which offer debit cards and current accounts.

These businesses don’t offer lending, and are not regulated as banks. But they do need to belong to Ombudsman services in New Zealand, which means you have an independent organisation that can adjudicate and ensure you’re recompensed if something goes wrong.

Revolut launched quietly in New Zealand last year. It’s similar to the money transfer app Wise, which has been here a few years already. But Revolut offers more features and its accounts could be used for simple banking.

Instead of sub-accounts, Revolut has pockets that can be set aside for saving or other specific purposes, although they don’t earn interest, Revolut’s head of New Zealand Georgia Grange told me last month when we met up.

Revolut has a basic spending tracker / budgeting tool built into the app. Grange uses it to control her spending in certain categories.

“I have a setting in my budgeting so that if I spend over $30 on coffee a week I get a notification.”.

Common overseas is a feature called round up, where spending is rounded up to the nearest dollar and deposited into savings. ASB’s Save the Change does this.

Better banking isn’t just about digital tools.

If you want your money to go further then you can ask your bank for personalised help. You’re not going to get this from the digital banks.