Our Top Tips For Budgeting And Saving Money in 2023
Start Of 2023 Wrap Up
What has the new year brought in terms of finance and property news? Here is a quick recap of the highlights: Home Loan Rates While home loan rates have certainly risen in the last year, it could be worse! They are not keeping pace with the OCR increases. In the last year, the OCR has increased by 4%, but on average, the one year fixed term rate has only increased by 3.68% [source]. The Reserve Bank is predicting further OCR rises, but they may not have to raise it as high as first thought [source]. But, any increase will impact home loan rates, so now is the time to review your current lending before any further increases are implemented. Cost of Living The news is not great when it comes to the current cost of living. Inflation has remained stubbornly high at 7.3% which is contributing towards increased costs everywhere. Food prices are up 11.3%, household utilities are up and so are rent prices. Plus, there is the added worry of when the government might remove the current fuel subsidy. It certainly is getting harder to cover the cost of everything each month. So, we have assembled some money saving and budgeting tips that may help…Budgeting Tips
The reality is, with New Zealand’s rising living costs, your dollars might not be going as far as they used to. So, we’ve put together some handy tips for budgeting:- Track your spending: Keep a record of all your expenses for at least a month to get a clear picture of where your money is going. Then, you can assess which of those costs are necessary and if there are areas where you can save some money.
- Set a budget: Once you understand your spending and your necessary costs, set a budget for each category of expenses (e.g., housing, food, transportation). Ensure this stays within your monthly earnings and try to stick to it as closely as possible.
- Prioritise expenses: Decide which expenses are necessary and which can be reduced or eliminated. You may also choose to spread some costs throughout the year, like spreading the cost of your Christmas shopping by getting a gift each month to put away.
- Reduce unnecessary expenses: Is there anything that you aren’t using any more but are still paying for? Even cutting back on unused subscriptions, excessive dining out, and some entertainment expenses can make a huge difference.
- Save automatically: If you wait for there to be extra funds in your account before saving, you’ll probably be waiting forever! Instead, set up an automatic savings transfer (when your wages come in) from your main account to a separate account each month. Even if it’s a small amount each month, it will add up over time.
- Avoid impulse purchases: Make a shopping list and stick to it to avoid impulse buying. Also, if you have the impulse to buy something, sleep on the decision to see if you really need that item or not.
- Use cash instead of credit: When your wages come in, take out a set amount of cash that fits within your budget and use that for your spending. Paying with cash can make you more conscious of the amount of money you are going through and can help avoid overspending.
- Seek help if needed: If it feels like your finances are getting on top of you, consider reaching out to a financial advisor or budgeting service.
- Assess your mortgage payments: Interest rates have been steadily climbing and if you need to refix, chances are, it’s going to be at a higher rate than your current fixed term. Speaking with an experienced mortgage advisor can ensure you get the best rates and mortgage structure for your situation.
- Make your lunch, rather than buying it every day
- Buy a keep cup and take a coffee to go from home, rather than stopping in at a cafe daily
- Plan your meals for the week and only buy the ingredients you need to make them
- Use public transport if possible
- Carpool or ride share with colleagues to work
- Regularly review your insurance costs to ensure competitiveness and confirm you aren’t over insured