Money Week takes off today (5-11 September) and is run by the Commission for Financial Capability aiming to get people thinking about putting a financial plan in place now to pay off in the future.
As part of Money Week, the New Zealand Bankers’ Association (NZBA) encourages people to set a financial plan by following a few tips to get started.
“Making a financial plan prompts us to understand our current financial position and think about how we will use money in the future, it also helps us to focus on what we want to achieve,” said New Zealand Bankers’ Association chief executive Karen Scott-Howman.
“The benefit of having a plan is that you can make better financial decisions for the short and long term, and it sets you up to deal with anything unexpected that happens along the way.
“There are many online tools and resources to help you make a financial plan – we all just need to make it a priority to take time to do it. Your bank’s website is a great place to start, and if you need personalised financial advice then you can talk with your bank,” said Scott-Howman.
Canstar also released a snapshot of savings people could make by spending time on planning their financial future and choosing their financial products wisely.
On a $400,000 home loan over 25 years, the monthly repayment difference between the average and minimum home loan interest rates on CANSTAR’s database equates to the following:
|Table: Residential Home Loan Market - Snapshot of the current market (05/09/2016)
||1 Year Fixed
||2 Year Fixed
||3 Year Fixed
||4 Year Fixed
||5 Year Fixed
|Difference in monthly repayments
|Source: www.canstar.co.nz, the search results do not include all home loan providers, and may not include all features relevant to you. Calculate is approximate only and based on a $400,000 home loan over 25 years.
Here are the NZBA’s tips included in a release this morning to help those looking to create a financial plan:
• Set short and long term financial goals. Think about what you want in life and how your money decisions can support you to achieve that. Write down your short and long term goals.
• Plan a budget. Take time to review how, when and where you spend your money. Tracking your expenses allows you to set a realistic budget and identify the areas where you can make changes to get ahead. Stick with it and you will soon see progress toward your goals. You can find budget planning tools and information on your bank’s website or at www.sorted.org.nz.
• Grow your savings. Set short, medium and long term savings goals like saving toward a holiday, a deposit for a house, or KiwiSaver for your retirement. Talk to your bank or another trusted financial advisor about investment strategies and how to make your money work for you.
• Manage debt. Take time to review any debt that you hold and make it your goal to be debt-free. Talk with your bank about how to be debt-free fast. Avoid ‘dumb debt’ and only ever borrow what you need and plan to pay it off as quickly as you can.
• Protect your money. We all need to take responsibility for protecting our financial security. Consider speaking with a professional financial advisor, such as your bank, about ways on how best to protect your money, such as insurance or a contingency plan.