Should I get a personal loan or a credit card?  What is the difference?  What is the better option? This is a subject of confusion for many people.  It is a bit like the difference between a direct debit and an automatic payments:   https://draft.blogger.com/blog/statspost/all_time/1922579775687278317/5890095679920893730   Until anyone explains to you the difference you have no way of knowing. Today I am going to explain the difference between credit cards and personal loans. When it comes to repayments there are a number of issues at play.   A personal loan has set payments for a set amount of time.  Payments remain the same (provided they are made ontime each month) regardless of if you are at the beginning or end of the loan.   A credit card has minimum payments that differ each month depending on interest rates, how much is owing in total and a number of other issues. Early repayments A personal loan...

  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...

This photo is of the most amazing group of people, who recently completed my class.  Some of them have come onto a "graduate" class in order to keep refining their skills in finance. This week one of them saved over $1,000,000  let me share with you what we did in order for that to happen. They had two mortgages, one on their home and one on their rental, they also had their own business and earned wages as well, working every moment God gave them.  They had a long time left to pay on their mortgage. Their mortgage was with, what is called a Non-bank Mortgage Provider.  If you are with one, please do all you can to move away from them.  They often get you signed up to "interest only" deals in order to get you your first home.  For those who don't know what an "interest only" deal is, it is when you, literally, only pay the interest on your home loan, this results in your home loan never reducing!  Ever! These Non-bank Mortgage Providers, also have thei...

No matter how hard we try, we always have more to do.  I hear it all the time in my classes.  People feel overwhelmed so give up, or believe they can never do, so many things.  I am in Southland this week and I looked at this signpost at Bluff.  Have I been to all these places??  My answer ordinarily would be NO!  Imagine if I changed the answer to "Not Yet."  That way, I can keep all options open, no matter how old or broke or sick or busy I am. I remember as a young mother, I couldn't drive.  People would asked me, "can you drive?".  My answer was always NO.  I got to the point where, even though I had four kids, I was stuck, stuck in the belief I was a non-driver!  The change in my attitude by saying "not yet"  would have helped me immensely.  I was, I thought, happy in the knowledge I was a non-driver.  How ridiculous.  I never even attempted to rectify it, I was always too busy, scared or uninterested to do ...

  Most of my life I wondered what it would be like to buy a new car!  I never had one up until recently, I could never justify it, ever! Like most of you, my parents told me "If you buy a new car you have lost $20,000 just by driving it off the lot"  I believed it!  Not sure why, but I did.  Not even sure why they said it!  They had little or no experience with buying a new car so how on earth did they know?  They were the only person who I ever spoke to about buying one so I had nothing to compare their comment to. You all know by now, I am big on numbers.  Numbers don't lie, they have no emotion.   I also know that, like the picture above, when you buy a second hand car, you never know what is under the bonnet, in this case, a big tree!!!  I love this photo, if has a lot in it, the car even has an AA sticker on the window, I wondered what would happen if we rang the AA for a tow! Let's have a look at three different car buying opt...

  The importance of physical interaction with people, family, friends, strangers, just people as opposed to online!! Due to COVID and all sorts of other events, like cyclones and difficulties getting around on our roads, there have been a lot of cancellations and times where we haven't been able to interact with those we love.  Communities have been missing out on vital physical social interaction.  Sure, everyone is on social media and in contact through their phones and the internet, but not in the same room. It has been a tough last week in my local community.  I have had people in tears in my classes, over a very special young person taken way too soon.   As a community we gave him the most beautiful, sad, incredible send off, his friends and family were amazing.  Of a town of around 4000 people there were about 2000 people in attendance.  What a beautiful community, we needed to get together to grieve.  It made me think of the importance...

It is interesting that when we are children, unaffected by other things, we have the ability to keep on trying, no matter what gets in the way.  However, as adults we have all sorts of things in our way and the ability to keep on trying seems to wain. On the weekend I watched my granddaughters playing hockey.  Watching children play sports really gets you back into what is important in life.  They have no fear.  They don't have the same fear of failure, they are willing to try and then try again. All they want is that "player of the day" award so they can show it off with pride. If we put this attitude into our homelife and what we do with finance, we start to see how negatively we have been affected in life by a lot of different variables, people, experience, failures and influences. The truth is, all of us can be good with money.  All of us can make our money work for us.  All of us can improve our quality of life.  All of us can be rich.  We ju...

  Do you need life insurance in order to have a home loan?  How long do you need life insurance for?  Why get it?  Who needs to have it? I get it, life insurance is recommended to you by the bank when you buy a house.  They are responsible for making sure you don't get yourself into too much debt.  They have a duty to make sure you and your family will be ok should something terrible happen.  There are a few points I would like to make with regards to this. One of the main reasons that people get life insurance when they get the mortgage is, they don't want their family to be left with their mortgage.  Well, as a mother or four and grandmother of many more, I can tell you this for free:  My children will inherit my property, and the property will always be worth more than any debt against it.  They will end up with money if they sell everything up, a substantial amount of money. If they don't want to sell my property they have done nothi...

  Do you know enough to decide which products/insurances/payments are necessary to buy?  Do any of us? Today I have a couple of tips to help you.   I have spent a lot of my life being advised by people that are a long way from being impartial or intelligent about anything. In order to advise you on any financial product, the person advising MUST BE a Registered Financial Adviser.  I am a Registered Financial Adviser and my business is a Registered Financial Advice Provider.   This blog is not meant to be Individual Financial Advice but more to let you know some of the lessons I have learnt from a lifetime of experience.  A lifetime of being ripped off and led down all sorts of pathways that I should never have gone down. One of many little gems I have learnt is:  People who advise you are one of two things: Someone who has no idea, but doesn't want to admit to it.  (Friends, family, people at a barbeque or the pub just chatting) Someone ...

Do you worry about what will happen if you are suddenly removed from the picture?  Remember my blog about making a will?  If you haven't read it them please read it prior to going through this one, here is the link.   https://granniesarahssolutions.blogspot.com/2023/04/do-you-have-will-do-we-need-one-what-if.html   We often think about lots of things to protect ourselves, should something awful happen.  Remember all of these things are easier for your whanau to get if you have a will!  This whole blog is dependent on the fact you have a will, so please get one. Enough about that, let's compare a few options: ACC If you die at work, or on the sports ground or from some form of accident.  ACC will pay.  ACC will pay up to 80% of your wages for up to 5 years to your family. You are automatically paying ACC levies so there is no need for opting in or out. ACC premiums change according to the type of work you do and the danger involved. If you sto...