Debt Consolidation, is it worth it?  What are the pitfalls?  Is it too good to be true? This subject comes up time and time again.  People ask me "Should I put all my debts into one simple payment"  Banks and Finance Companies rely on the fact that, if they make things simple, it doesn't matter how much it costs. There are a number of things to consider: what are the debts you are wanting to consolidate? why are you wanting to consolidate? will it mean you are paying less? will it help you get ahead? When we look at the first question, think about what debts you have and ask yourself:  Are you paying interest on them now?  Are they growing?  If the answer is no to either of those questions then you shouldn't get a debt consolidation loan to pay them.  You will be more in debt than you are now. If you are being charged interest on an existing debt, eg. car loan, personal loan, store card, that means most of the interest is paid at the beginn...

  I hear a lot of people complaining about a lot of things, but one of the ones they seem to constantly complain about is rubbish, left on the beach, around town, in the park.  We all expect someone else to do something about it, during the holidays I had the privilege of my beautiful granddaughters in my presence, they were no different in their attitude ("look at all this rubbish, SOMEBODY should do something about it").  So we decided WE would do something about it. After a few trips down the beach exploring it became very apparent that the rubbish was becoming a massive issue on our beautiful beach.  Those that know me, know that our beach is magnificent and often isolated, however, after each long weekend, or after any floods there is so much rubbish lying around, that doesn't (and can't) break down. There are a lot of people in our town that give money regularly to charity, usually because they have been signed up, under pressure, to a direct debit payment by t...

  The first and only rule in my classes is "This is a sorry free zone". What does this mean?  Surely we should be polite and apologise.  I can hear you asking this to yourself.  Let me explain. Firstly, understand this: the words that come out of my mouth are heard by those around me, but only after being sorted out through their individual filters, the only person who hears and listens to ALL I say is ME!     My brain learns from my senses, one of the major senses is hearing.   Thinking about this, every time I say I am sorry, I blame myself, and hear myself blaming myself, for something that, almost always, requires no blame to be placed.  By saying sorry I am feeding my brain the idea that I am to blame, I will believe myself. For example, when I have a finance class, people often apologise for their debts.  They often elaborate on how they got into debt and how sorry they are for all their wrong choices.   The truth is...

This week I have come across a lot of people in my classes who have a plan to purchase a home in the next five to ten years.  Great goal!  Today I am going to give you an example of a young lady who had just this plan in place.  I asked her "Why wait?  What is the worst thing that could happen?" During the 3 hour class, we looked at her finances, we went through, as a group, with a fine toothed comb. This is how things looked for her, the reason I share this is, I am sure there are many others in the same position. Kiwisaver balance $45,000 Paying rent $450/week Wanting to use her Kiwisaver to purchase a campervan rather than a house. Been in Kiwisaver for 10 years or more So we crunched some numbers, as of today.  This is what we came up with: Kiwisaver balance $45,000 plus $5,000 first home buyers grant Keep paying the same amount as current rent $450/week There is no way to use your Kiwisaver to purchase a campervan, but as another student in the class said, ...

Should we claim on insurance when it is only a small thing?   The above happened to me a week ago.  I was not sure whether it was worth the claim on the ute.  The guy who hit me was very apologetic and actually just lovely.   We were parked at the red light and he momentarily lost concentration and drove straight into the trailer full speed.  Luckily no one was hurt.   He came to my house afterwards, taking full responsibility and organised to fix the trailer.   I had thought about not contacting the insurance company, however, it is better to contact them sooner rather than later. You may think, its just a bent towbar, just get a new one and carry on.  I priced up a new tow bar and ball and that came close to the excess on the insurance.   This truck is used to tow a substantial boat so we need it to be back at it's pre-hit best. If there is any further damage done by the impact, any further accident or problem with ...

Have you been told to borrow to invest?  Do  you have any idea of what that looks like?  I want you to have a good zoom in and look at the above two graphs, this is an actual situation someone was in. This person, let's call him Bob, has a $25,000 investment, fixed term cash account.  Great!  We are all envious of him.   Bob also has a $25,000 credit card that is maxed out, so -$25,000, he is paying $500 per month on that card. I went online and found the above calculators, the credit card on is at www.sorted.org.nz  and the other is at www.calculator.net  both of these are reliable and you can pretty much punch in any numbers you want to check out your own debt and investment.   This is a really important exercise to do at any time to see how you are tracking on your goals. The comparison for these two appears like this: Investment of $25,000, in this incident I was looking at paying $500/month, into this account, (same as credit c...

  Do you worry about taxes?  Considering Benjamin Franklin came up with this beautiful quote in 1789, you are not alone if you do.  People have been "freaking out" about tax for the longest possible time.  There are a few things that I can broadly advise you in this space that may just help.  I have had the most spectacular week helping people understand taxes, there are a lot of dos and don'ts but once you understand you can make tax work for you.   Here are a few examples: GST, most of us are happy not to register for GST until we earn a lot of money, at that stage we have to.  However, when you are building your business, chances are you are spending far more than you are earning, therefore you are running at a loss.  A lot of the time during this stage, you are also working elsewhere and having PAYE deducted from your wages, as your business is not earning enough to keep you going YET! Declaring income from a "side hustle", if accounted f...

  Have you ever looked at a fixed interest rate that was slightly lower than your one and wondered if you could get a better deal?  Did you wonder if it was worth the hassle?   Today I am going to share with you one of my mortgages and the exact figures of what happened when I looked at breaking a fixed rate and refixing it.  This is the exact figures from the bank, not embellished or exaggerated in any way.  Numbers don't lie! The mortgage was a small one of $43,477 It was fixed at 6.44% I was paying $350/fortnight It had 13 years to go There was an advertised rate of 5.99% for three years.  I wondered if that small difference in rate would make a difference.   The bank advised there would a break fee (it almost sounded like a threat and that it would make a really big dint in my bank account).  I asked them how much and they went away to find out and it was $72.94 The new mortgage looked like this: The mortgage was $43,477 It was fixed...

  Most of us get our tax back automatically thanks to the new system where IRD calculates the tax you have paid versus the tax you should have paid.  This system came in in 2019, however, if you had tax owed to you prior to that it may still be sitting there waiting for you. Normally when you are on wages, you are taxed at the correct rate of tax and so there should be no need to "catch up" at the end of the financial year. Provided all is as it should be, you remained in the same employment, your family circumstances didn't change and you are not in a business of your own.  These, and so many other things can have an effect on whether the calculation is correct or not. For example, if you were in a high paying job, say $150,000 gross then the tax would be deducted (incl ACC) at $42,414.  However if you were only in that role for 6 months and earned $75,000 the tax that would be deducted is $16,713(including ACC), but you would have paid half of the amount due for th...