Don’t wait for New Year’s to be better off
Money resolutions can be easily broken. Martin Hawes has an easier approach.
Chances are that over the last few weeks you have seen (if not read) articles about New Year resolutions.
You may even have acted and resolved to do (or not do) a few things.
Well, congratulations on your intentions but sorry to say, for most people, intention is as far as it goes: surveys tell us that less than 10 per cent of New Year resolutions are actually achieved.
That’s because it is not easy to change long term habits, whatever they may be.
Good or bad, what we habitually do becomes engrained and these automatic responses are notoriously difficult to break.
Therefore, instead of resolving to do things over the next few weeks, you should just get on and do them – now.
Fortunately, when it comes to finances, there are some important things that you can do as ‘‘one-offs’’ that can make a great difference to your finances.
At the start of a new year, we often feel motivated to do the right thing and, even though we may not be able to maintain the effort, we can set and forget important parts of our finances until at least next year.
For most people, there are only three big things in finance that will pay handsome dividends – and they can be done quickly without a lot of effort or fuss.
First, look at your income and expenditure. If you appear to have a surplus on paper but you usually have more month than money, try the pay yourself first approach.
That means swiping some money out of your pay check as soon as you get it and putting it into the mortgage or to savings.
This works on the basis that you won’t miss what you don’t see, and even with some amount taken out, you will live happily on the rest.
Second, have a look at the mortgage. This is probably your biggest cost and there are big savings to be made.
These savings come from two main things: the most important is to make the repayments as big as you can; the second is to get the best interest rate available.
You should shop around and switch your mortgage, if you are not getting the best deal.
Third, consider your KiwiSaver account. For many people, this will be their biggest asset after the house and, therefore, deserves a little time to make sure that you are in the right fund and with a good provider.
Just three things. Not time consuming or hard but with an enormous payoff for a bit of attention. Don’t resolve to do them – just do them.
Martin Hawes is the Chair of the Summer KiwiSaver Investment Committee. The Summer KiwiSaver Scheme is managed by Forsyth Barr Investment Management Ltd and the Scheme’s product disclosure statement is at www.summer.co.nz. Martin is an Authorised Financial Adviser and a Disclosure Statements is available from him on request and free of charge