Hi, I'm Franchesca Rudkin and I'm Louise Area.

And this is season five of our New Zealand Herald podcast The Little Things.

Good to have you with us, And.

As podcast we talk to experts, we find out all little things you need to know to improve all areas of your life and cut through the confusion and overload of information out there.

Now.

I'm traditionally not great at talking about this topic.

Money.

Yeah, just wasn't in our family culture growing up, and I suffer from that collective frustration as well of the cost of everything.

But you know that's moaning about it is not all that helpful.

I need to know where to start to address what I can control.

So today we're discussing the challenges we face and hopefully get some idea about where we might take a bit of the power back when it comes to our financial well being.

As part of the mental load, many women are responsible for the day to day finances in their home and with the cost of living crisis and an unstable employment market, this has sort of become a little bit more stress, hasn't it for everybody across the board.

So today we're going to get an audit of sorts to find ways to keep rising costs under control, especially as new data reveals financial discomfort among women at an all time high.

So you're not on your own noise, No, I definitely know I'm not alone, because if I go for a walk with a friend of everything, it genuinely comes up.

And I think it's important to acknowledge here that you and I are both very fortunate.

We are not have not we are doing okay, doing okay, and yet we are very much struggling to keep on top of rising costs when it comes to not just those day to day costs at the supermarket, but if you've got insurance.

Or our rates bill.

I'm like, oh, my goodness, the difference in a couple of years that's made.

And you know, I'm quite good at my budgets and things, and I'm really taken back, and I can look back on one of my home budgets and see the increase in just a couple of years across the board with pretty much every utility and everything, and I'm kind of a point on lie, oh my gosh.

If I'm struggling, I'm sure that there is a lot of people out there who are worse off.

Than me.

Who are you know, I really understand.

Oh, they having to make and they're having to make some really significant choices about heating their home or you know, having a meal.

Right, So we're not we're not talking about that today.

We're talking more about that just general of the cost of living for a lot of us.

And I agree with you about the rates and things because I pay everything.

I pay a lot of things fortnightly.

Then I get a message saying that we're in arrears.

I'm like, but I've been paying.

I know what that adds up to.

And then I realize, oh, and of course it's gone up.

I have to put my full nightly payment up and it's just and it is literally everything.

Do you mostly look after the finances in the household?

I do.

I do.

I have taken that additional mental light FRIENDIESCA.

I don't even know when they happened.

I thought an episode you should listen to.

I think it happened when there were a few bills was missed.

I think my husband probably did take the line year of that long time ago.

But with you know, three kids, some you know, we're in private schools, but we still had fees.

All that sort of thing.

I just I just said, you know, I have some time to take this.

It probably was when the kids were small and I wasn't at work full time and I just kept it.

And he keeps a spreadsheet admittedly, but I don't.

But yeah, I do take it.

What about you?

I reckon if I got hurt by a bus tomorrow and a month, my family would have no power, they'd have no ant nee it.

Water water would be okay because there's only one provider in Orckland for water, so they'd nowhere to go to try and find out what our water is.

But I kind of take care of all that.

And I think that's any insurance is like.

And I think they just thankfully I keep some quite good records, but they would probably have no idea is to who our providers even were.

Not that's exactly right.

And I think because we're doing that, and I don't know, i'd be curious to know.

I think that's pretty typical for women to be taking that mental load.

And maybe it was when they were on maternity leave or whatever it was.

I find it quite stressful.

Yeah, it is, and increasingly so.

Yeah, And because it's there in front of you, you you're sort of thinking about it a lot, and when other things happen, you're thinking about it a lot.

When all those unexpected things happen that you you know, you really weren't you were really hoping weren't going to happen, like your cat doesn't get a warrant or something like that.

You know.

Yeah, I think, and then you start the juggle.

What can I put off next fortnite?

What can I What should I do now?

I mean every everything, literally everything?

Are you a good savor?

If there's something it left at the end of the fortnight to save, I definitely try and save it.

I have a number in my head because I work out everything, you know, the fortnightly budget and then go there.

That means there will be X.

Do you have an emergency funder?

X?

It waks and wings?

You know you like the way I'm throwing all the Christmas You can see what you say before I have to reveal what I do.

I emergency fund not not nearly as much as we should have.

What about you?

Nah, it's gone.

Yeah, emergency it's just been absorbed over the last few years with various different things.

That's the problem.

You feel really good about yourself.

You guys there, and then it's kind of like, oh, that car's broken down.

Oh this has happened, We've got to fix this with the house.

Oh the kids need this, and it's kind of it's just dwindled over a few years.

And yeah, and I guess that's the thing, right, you can budget for every single thing you think through the year, even if you want to.

There's lots of apps and spreadgets, some things you can do, but you how much should you have to bloody budget for an emergency?

Every single emergence we have emergency we have is seven hundred and fifty dollars plus.

And so people will probably know from what we've what I've just said that when the next topic I know that we're going to have to talk about comes up, which is retirement, I'm also.

That I'm just it's it's not going to be good.

That part of the conversation is not gonna be good.

I'm I'm not prepared for retirement, which is.

As well, lots of people aren't.

That's why they're staying in the workforce.

Yeah, okay, so really does feel like we're ready for this conversation.

So everyone's personal situation, it's going to be different.

We just hope to strike a balance with some practical tips today and advice, because there are things that we can't control, but we're going to try and make the most of what we can.

So I guess today is Nadine Higgins, financial advisor and host of the personal finance podcast The Prosperity Project.

Nadine also writes a fortnightly finance column for The New Zealand Herald.

So Hi, Nadine, thanks for being here today.

Let's start with some generalizations.

Do women back themselves enough with money?

I think a lot of women are good at managing the money they do have, But are we good about thinking about the future and making money and assets work for ourselves.

I think we undersell ourselves.

I think we're really good at worrying about the future, but sometimes we don't necessarily give ourselves the credit we deserve that we can manage it and we can grow it.

I don't know whether that's it starts at school or it is you know, the messages that we're fed through the media that we're good at budgeting and scrimping and stretching a dollar.

But actually the research shows that when women do invest, they get better returns we are good investors.

And look, this is significant research over thousands of people done out of the US.

It was about zero point four percent better on an annual basis, which doesn't sound like much, but you compound that over time and it is significant.

The problem is if you never start, you never achieve those better returns.

So if you don't back yourself in the first instance, you won't know.

Yeah, but sometimes confidence comes from doing, Whereas if we spend all of our time thinking about the reasons that we can't, we don't give ourselves a chance to build the confidence that hey, look I did that thing and actually it worked out, or I tried that thing it didn't work out, so tries something else.

I think we all know that there's a cost of a crisis, and we're all struggling a little bit, and we're all kind of aware that there's pressures coming on and everything's just everything's rising.

I think we're all really aware of that, and I think we take steps to try and minimalize that, or we kind of you know, reduce costs here and cut a streaming service and try, you know, and maybe go to and insurer and get a better deal in things.

But what we thought we would do today with you, if that's okay, is kind of do a little bit of an audit really on our finances and talk about some of just sort of the really good general tips that we can do to try and get on top of our finances.

And I suppose the first thing you have to do if you want to do this is you've got to know where your money's been spent, right.

Yeah, And I think we often chafe against the idea of having a budget.

You know, budget feels restrictive and like you don't want to be controlled.

But I think if you actually dive into it, a really good spending plan, which is what I prefer to call it rather than a budget.

Because of the okay we will refer to it from them, is to.

Give each dollar a job and also just work out where it's actually going versus where we think it's going.

Because often what I will do when I first see a client is we'll make a spending plan and then we'll send them away to test it, and they'll come back and be like, oh my gosh, I didn't realize I spent so much at the chemist.

That's legitimately an area where people constantly go over I think.

You know, you walk into the chemist warehouse and you spend one hundred dollars somehow, and you know, oh gosh, when you add up everything I spent on food and drink, everything I put in my mouth over a week, it's actually way more than I thought it was, because it's not just the supermarket.

It's stopping at the dairy.

It's the extra trip to get a couple of things, and then all of a sudden, you spend one hundred dollars and it's only one bag of items.

And so it's about working out where you want it to go and ensuring that that's where it actually goes, because then we can carve out some space for the things that really mean something to us.

Because if I put you on a diet version of a spending plan, much like a diet, eventually you fall off the wagon because there's nothing fun in there, and you know you're working so hard you feel like you get to enjoy your life as well, and you should.

So if you carve out everything that's fun, that spending plan is not going to be sustainable.

It's such a good way of looking at it.

I mean, I'm sure that's what we think we're doing.

But like you say, unless we're actually going away and auditing that over a couple of pay periods or something, we really don't know because I often think, oh, I in my head, we've got X for the next fortnight, right, and I know that our overall costs are why right?

And then I go, wait a minute, you should have been the grand left you know, where's that?

And then you go through the mutea of your bank account go oh, yeah, that's right.

Yeah, which is where I think.

Look, we're all busy, we're all stretched within ninch of our lives.

There's not a lot of time for the admin that comes with sorting through your finances line by line, and so what I like to do is let's just ring fence those everyday costs into one account, top it up, say weekly or fortnightly or whatever your pay period is.

But the point is when that bank account is empty, that's telling us that we've spent everything we set aside for that period.

And so if you're then saying, oh, we'll just whack that on the credit card, well then you're inflating that amount, which is how that extra thousand dollars ends up disappearing into the ether, whereas if your bank account is literally telling you there's nothing left, then maybe we do have to eat baked beans tonight rather than get uber eats.

You know, that's really interesting.

We've got it the wrong way round our day to day account.

All the money goes in there, and then little bits go out into other little accounts which we're saving for things or you know, having to put you've got side for something.

I've got loads.

Just cracks up at the amount of accounts I've gone.

I've got money going everywhere, so I've got a plan, right, I know where I want this money to go.

But then we leave the majority of it in that day to day account.

Yes, when you're going, well, that's our that's our backstop.

We've got plenty there, that's it.

But you just keep swiping without thinking about it.

Yeah, because the consequence isn't there if you spend a little bit more, because the car doesn't decline, right, And as embarrassing as that is, it is a very firm reminder that we've spent all we had intended to and so we have to make some different decisions.

That's where your emergency fund is living.

I'd move it, I don't want.

If poss access to the Emergency Fund, i'd label it do not touch for emergencies only, like you want to tap into all of the psychological reminders that helps support us with where we want to go, rather than having to rely on our willpower, because that's a muscle and it gets exhausted and you'll get you at a low ebb and be like, oh, by grant, we'll just because there's no consequence to it.

So you need the safety barriers around you to help you support what it is you're aiming for.

We should talk about the Emergency Fund since you've brought it out, But just really quickly it reminded me.

I knew people who used to say to themselves before they purchased anything, do I really need this?

And that Actually I go, gosh, it's a tiring way to live life, but it does work.

A number of times I've put that into play, I've gone, actually, no, what are you doing?

Just put that down?

Look out?

Well, another really good one, and I think this is James Clear who's the US author of Atomic Habits.

So he's really big about how do you get a habit to stick?

Because we've all got great intentions, but what do you actually do when the rubber hits the road.

One of his tips is to think like the identity you want to embody.

So, for example, if you're like, I want to be fit, what would a fit person do each day?

You know?

If I want to be wealthy, what would a wealthy person?

So I guess that's where the question comes in.

Where would a wealthy person buy this top?

Just because it's fifty percent of Am I spending money?

Or am I saving money?

You know?

And then you get to the point where you know you say, I am not the kind of person that Yes, well, I am the kind of person that does this, and it sort of becomes.

Sort of a self fulfilling because that's not just a decision, it's part of your identity.

I could get there.

I mean, I feel like I And that's the thing though, I feel like I live quite a quiet life.

I'm not out spending a lot of money going out for meals and things.

So then I do that game with myself.

So if I buy that bottle of wine on the way home, that's just my trick for myself, you know what I mean?

And what the hell I'm Yes, I'm saving two hundred and fifty dollars on not going out, but I'm still spending twenty dollars that I didn't need to spend, which I.

Don't know if you have to look at every purchase as do I need it?

Because I do think that there has to be room for things that bring you joy, and so having that glass of wine is something that brings you joy.

And it's far cheaper having the twenty dollars bottle of wine than the twenty five dollars glass of.

Saving Louise just saving money, I know, I know it happens a few nights a week.

Your mom is it is within the realm of what you intended to spend and what you can afford to spend, and that we are prioritizing there being some money left over.

Then we put that on Louise's list of non negotiables.

You know, I've got to have a nice glass of wine of an evening.

My husband's gym membership, right, I don't.

Yeah, I had gym membership.

I wasn't using it as much, so I stopped it, went back to working out at home.

But he has this gym membership, which is what one hundred and twenty bucks a month or something.

So I'm sort of like, yeah, everybody's got there not and he does use it right, they've got no problems with that as a non negotiable.

But I think too, even before you start this, do your clients they fearful of what they're going to find when they look.

Yeah, it depends on the person.

Some are probably defiant, and because they're the hostage that's been brought in by the other spouse that you know, one spouse is worried and they think we need help, and the other one's been dragged their you know, under threat of who knows what, And they might be like, we're doing fine and I don't need any help, and the other one is like, yes, we do, please help us.

And often they will be the ones who don't want to be told what to do.

And so I always think when you're looking at couples, especially when they've got different money, personalities, tendencies, which is really common, is flip it on its head.

It's not about don't start with it, you always or you never start with it.

What is it we want to achieve?

Because once you've figured out the what, you can then go back to figure out the how, and once you both buy into that dream of yes, this is what we want.

Well, then maybe you're a little bit more willing to negotiate a little bit more willing to look harder at what you are doing, because what you are doing is not going to achieve the what you want, so let's work out what will.

But yeah, that's such good advice.

Gosh, and I don't even think my husband I have very different attitudes towards money.

But again, the time, poor thing makes you not stop and have these really important conversations.

Yeah, and often it's not necessarily that you have entirely different money personalities.

But it might be that one person goes, I deal with all the finances they don't need to know.

They don't need to know, And I disagree.

I think this is a team sport.

You know, if you're both owners of the assets and the children, you know you both need to be buying into the same destination that you're heading.

I just don't think there's any excuse to not be at least aware of what you owe, what you own, what you spend, because otherwise your behaviors are never going to align with what you can afford to do, because you don't know what you can afford to do.

No, I mean to be fair, even though I was saying at the beginning of the podcast, you know, I kind of take care of all the finances in our house, and if anything happened to.

Me, probably let me sitting there in the dark, in the dark.

But yet my partner and I we both have the same overall goal.

We both know where we're at, we both know where we'd kind of like to be.

You know, he's just sort of the big pictures there.

It's just no worries if one person is dealing with the malucia.

But as you said, you've got to at least be on.

The same page when it comes to the big picture and spin there.

And I do agree, it's no issue if someone's dealing with innuitia as long as they're comfortable that because you know, evidence is showing that women are feeling more stressed, and a lot of women are the people in their family who are taking care of those of those bells and things, and that mental load is just going.

To say, that mental load, and that's very real, which is another reason why your spouse needs to be on board, because otherwise you are going to blow your top at them if they go and spend money on things that weren't in the plan and that you know full well that you're going to have to find from somewhere else.

But if they are aware of the situation that you're in, then perhaps they will think twice about sabotaging what you're trying to achieve.

If if someone's listening, kind of going, actually, we're just kind of getting by.

We kind of know what we need to pay for in the next year or term.

We're paying off a mortgage, and we've got we're raising you got the kids and all these kind of things.

What kind of questions should a couple be asking to think about where they want their money to go and what they want to be saving for, And what sort of conversations should you have?

What questions should you ask yourself to create that big picture.

I think it starts with actually talking about the dream.

You know, we can often get stuck and bogged down in the you know, we're going to pay for this tomorrow and that next week, and those bills, and then the kids are going on and camp and all of those things, and obviously we have to plan for those, But what if we look a little further beyond that maybe we've got a twenty five year mortgage.

Do we really want to spend twenty five years paying it off?

Do we want to take the kids to Disneyland in five years time?

Are we on track for our retirement?

And I think people often don't want to think about that because it's too many summers away until it isn't.

And you see, you often see sort of.

I definitely had clients that I've been trying to coach along the way and then they hit a particular juncture, maybe around fifty or fifty five, and they go, okay, right time to get serious.

And obviously the further you kick that came down the road, the more serious you have to get, because you've got a smaller number of pay packets, a smaller number of years to achieve the same result.

And look, it's a lot if you're raising children, you're paying a mortgage, you're thinking about retirement, which I guess and I would say that because I'm a financial advisor, but that's often where it pays to get a little bit of help.

Oh no, I totally agree, And I was just thinking.

The first thing that comes to mind with that is if you have and I think that's probably why you're in front of us today, because we are between that fifteen fifty five year age group and times are more difficult than they were.

Is it too late to build?

I mean, is we'll get to this, But you know, it's more like I'm going, oh shit, have we left it too late for an investment portfolio other than our Kiwi Saver and any other You know, We've got an investment in the company my husband weeks in.

But or is the key we Saver good enough if you're putting them enough money in?

Typically?

And look, this might be different for those who've started their Kiwi Saver at eighteen, but typically Kiwi Saver isn't.

I don't think going to cover the lifestyle to which you are accustomed because we're only putting in the three plus three eventually to be four plus four.

And so I'm an advocate of having eggs and more baskets.

So that might be the business that you have shares in.

It might be managed funds, which I know Kiwi Saver is, but those ki Saver funds are very much ring fenced until sixty five and there's very few circumstances in which you can withdraw them, whereas if you had your money in a like Kiwi Saver fund, it's a bit more liquid.

It might be investment property.

And look, I say that at risk of being shot done in flames because I know how many people in the country view investment property.

But that could be one of the avenues that you look at and look on the Prosperity Project.

Recently we had a university professor talking about collectibles as a way to invest.

And so there's many ways to look at building what you have, but I guess it starts with having enough leftover to actually invest and having a plan to ensure that that happens exactly.

That brings us back to that.

Let's come back to some sort of some basic ideas of what things that we can do.

If we're looking.

At our utilities, which I mean I seem to get a letter from someone every week, whether it's my internet provider or my electricity or my gas provider or something.

Everything is going up.

So how can we try and you know, make some gains when it comes to things like utilities.

Yeah, and I guess that's where this audit idea that this podcast is looking at this week is such a good one, because you don't want to be doing it all the time.

But they do call it.

They call it lazy tax if you could get something cheaper if you're shopped around, but you don't.

And look, that sounds a little bit judgy, doesn't it lazy tax?

But it's effectively the cost of not shopping around.

And so, yes, swapping providers can often be a really good thing with utilities.

You know, if you go to the powerswitch dot org website that allows you to actually put in who you're worth and what you're paying and gives you a pretty good idea about whether you could save some money by switching.

There's another one I think called limp where you can look at, say your broadband providers.

Often you can save money when you bundle them into one.

You know, it might be your mobile phone, your broadband and your power, or your power and your gas or whatever.

And because it's one of those things that if we're with a different provider and paying less, it's actually it's not going to affect your happiness.

You don't care who gets your money as long as the lights stay on right And look, some of them offer like an hour of free power or free power after midnight or whatever, and so It kind of depends on how you operate your household as to which one might save you more money.

I've done a bit of that pass which looking at it and I just don't ever seem to It doesn't even seem to make the game that I think it's going to make, so I don't do it.

So I feel like I although I would say I am paying the lazy tags to a large degree, particularly with my mobile phone and the added thing of each single child.

I know they're not using the data that they don't need that forty dollars one, but oh my god, the thought of them going, oh, I haven't topped up or you know what what means.

It's kind of the stupid trade off that you do with yourself of I'll keep paying more to avoid any more mental load.

Well, look, yes, I guess there's this trade off between time and money.

Often, right, the busier you are and the more of your time you're using to earn money, the less of it.

You kind of have to find ways to be more efficient with your money.

And we'll often pay a cost, a convenience cost because we just don't have the time.

Some of those maybe money incredibly well spent.

You know, maybe someone to clean your house means that you get to actually spend some time with your children rather than scrubbing toilets at the weekend, and so that might be a perfectly legitimate expense for your happiness.

Or you might be the type of person who cleans before the cleaner comes and then picks holes in what they've done and which case was it money well spent?

I do think there.

I don't think it hurts to call I don't think it hurts to call a few people and say what would you charge me, and then you call your provider.

I've often found that if they can see that I've done a bit of homework and I'm looking to make a move, suddenly they can give me a deal on this, or they can give me a deal on that, or I get sent to free modem to make the Wi Fi work better and things.

So they do try to make it as easy as possible for you to change.

So they say we'll take care of it, but there are going to be phone calls and it is time consuming.

But sometimes I just and I did this.

I've been doing this since the beginning of this year.

Remember I said, yeah, I was going to go through everything, and I'm still doing it.

That's how time consuming it was.

But I made a real inroads with insurances which were just getting out of control, and been able to talk to people and go, how can you make this cheaper for me?

And sometimes the things they were pulling off, I was like, why have I been paying for that up till now or actually making a change or putting a small a large excess on here, or do there are a lot of things actually could do?

And I've ended up saving a large amount of money this year.

Yeah, and all power to you.

I think a little bit of effort goes a long way, but obviously you need a bit of Bandwith eight months, I'm taking.

A lot of effort.

Yeah, But I think the reality is with most providers is that they will incentivize a new customer more than they will incentivize your loyalty, And so there's no need to be loyal to any of them if you're going to get a better deal going somewhere else.

Because I think insurance is someplace that we if you ask someone to tell you that minute details of the insurance policies.

They couldn't, can't, no, And insurance is one of those things that feels like a chore, and we probably don't get them out and review them as often as we should.

You know, you should probably be looking at them when your policy rolls over.

And one of my bug bears with insurance policies, it'll say this is your new premium, and I'll be like, oh, what was my old premium?

And I'll go and look it up and I'm like, whoa, it's up seventeen percent.

And that might be the trigger that makes you want to go and find a better deal.

Whereas if they don't call that out.

And I'm telling you there's an over fifty tags when it comes to stuff like that, like the exponential amount that gets added to your income protection insurance and life insurance and health insurance after a certain age, it really, you know, you go far out.

What can we do without?

I mean I personally, you know, I've had health insurance my whole life.

There'll be no reason for us to get rid of our health insurance now.

And like you say, you can do clever things like exists on surgeries and things like that to bring your premium down.

But I can see a time where we really have to wonder whether it.

Becomes designed I think probably when you need it the most, you know, not by accident.

And then there's you need that's when you need to thirty five thousand dollars for a knee.

What I would say though, is if you do have income protection, you need to talk to your broker about whether it is.

And I don't know whether you're PAYE or a contractor, but what most people who are PAYE employees don't realize is that income protection insurance is a tax deductible expense.

And so when you're an employee, very few things a tax deductible.

Right.

If you're in business, different story, but you know there is a few nuances between how the payout is taxed or not taxt.

But talk to your broker because you could go back several tax years and claim your tax deduction on your income.

Text as a pay Yeah.

Yes, that's the one thing.

My partner.

That's why I always get the tax returned done through my accountant because that's the one main thing that he can claim.

And considerable school donations.

We feel like donations, but they are and so therefore they are texting and then.

Get from the school saying do you think you'd like to just put your rebate back into the school.

I'll do that, right, We never do that, We use it for the next term.

So insurances check them once a yeah, just just just and for any other big life events, you know, you move house, you have a child, you split up, anything that major that happens, you need to be checking who's the beneficiary, what's the excess?

What is the.

Standdown period of my income protection?

Or is my mortgage insurance still commensurate with how large my mortgage is?

All of those things?

Do I still need life insurance?

Do I still have dependence?

There's lots to consider, and a broker is usually if when they're worth the assault, and they're a good one, I'm really good at helping you work through that and challenge them.

If they cannot answer your questions as to what you've got and why, go find a new one.

And actually you make a really good point.

If you can alleviate some debt, like your mortgage, for example, your need for that insurance suddenly goes way down.

Well exactly, And it all depends that who are we ensuring and why are we ensuring them?

And usually it's so that the surviving spouse and the children can continue to exist.

In the absence of that income earner, and so as your debtload changes, then maybe your need for it reduces.

But it kind of it is very dependent on individual circumstances.

We're kind of trained to think we need it.

Like I get really nervous when my insurance broker talks about reducing things.

I get really nervous because I'm like, but what if?

What if?

But is that enough?

You know, and it's not a lottery when it passes away a couple of million times.

My father did.

He said when when the when the insurance broke and said, well, what do you need?

He says, Wow, you know, Francisca passed away.

I need a year off work, and I'd probably need to travel the world, and I'd probably need to do this and this and this and just looking no, just to live.

You know, your year of grief, your a year of grief.

I was thinking, please miss you.

Though currently require quite a lot of recovery.

Look, before we go to the break really quickly paying bills, do you recommend that we should actually have an account where we or that we should be especially if we look at something like our electricity tends to go up in winter, should we be paying a set amounts throughout the year so that we don't have to suddenly try and find a whole lot of money in winter.

You know, should you be assessing how much you annually and sort of paying a certain amount to to your provider fortnightly?

Should you just actually deal with that bill by bill.

I don't like getting in credit with the provider.

I would rather that you set up a separate account where all your direct debits come out of, and we average it out over the course of the year so that there's a bit of a surplus in that account.

We know that your bills will always be covered and always be covered on time, because there's costs, you know, if the account goes into arrears.

There's costs if the direct debit fails.

So we want to make our account structure as efficient as possible, and so I tend to just contribute a set amount every month to that account, and that account handles all the regular things, the broadband, the power of the gas, the daycare, whatever it is.

Yeah, I got six hundred dollars into credit with my power provide at one point, and I was like, wait a minute, that would be better off.

In your account.

Look there's there's a start on an emergency buffer, right.

Especially if you're offsetting, you know, if you've got a mortgage at you're offsetting and things as well.

No, I do that, and that's how I know how much everything has increased yet a year, because all of a sudden, I've got people ringing me, going, oh, your direct debit wasn't we couldn't take the money, Like what do you mean You couldn't take the money?

You know, And that's.

Because everybody just put up their prices and I didn't keep up.

You're listening to the little things, and I guess on the podcast today as host of The Prosperity Project, Nadine Higgins with tips on improving our financial wellbeing.

We'll be back shortly after this break.

Welcome back.

Let's talk retirement.

Yeah, we try not to aid.

Yeah, because yeah, I'm a freelancer in the media.

Unscrewed.

No, let's not get defeated.

And you're an employee, freelancer in the media, and that's a lot better than me.

I'm very, very grateful to be employed.

But I think the reason why I don't like talking about it is because I know what I should be doing and I know what I should have been doing for a long time, but I haven't because there's always just been something else.

Yep.

And that's a common story.

And most of the time, you know, people will give us that old idiom of you know, the best time to plant a tree was twenty years ago, but the second best time is now.

And I made that decision to work part time to be a full time mum.

So you know, I kind of put myself in this situation.

But I feel quite I find that quite uplifting.

I'm gonna plant my tree today.

Yeah, I still got help.

I hope that you know you've you don't regret because you've got some great time with your children, and look, that is invaluable.

I'm in that second position right now, figuring out what work looks like when you want to spend time with your children, because you don't get that back.

You can't buy it back with your nest egg.

You know, wouldn't have it any other way.

You just have to start where you're at and look, hopefully you've raised some excellent humans.

I know I've said this to my mother in law many times.

I think she's raised an excellent human and I'm lucky enough to be married to him, and she is now living in her retirement in a house in my backyard.

And so I'm not saying your children should be your retirement strategy, but I do think that there is a lot of room for intergenerational living in the future, and I am happy to be testament to the fact that it can work.

I think there's I think there's a lot in that.

I actually think even siblings.

You know, I could not live with all my siblings, love you all, but you know there's one who she is single, and I'm always going could you live with us if we lived here, you know, like you know, you can have your wing there, you know, not a big wing.

Or she's like, just buy a house with the poorhouse.

I live in the poorhouse.

Like you know, there are ways of doing it that it would work for everybody.

And I because our kids are going to leave, they're not going to.

Well here's the are they Here's the interesting thing.

So I'm the reason you know that I think that I probably haven't.

Yeah, I've worked part time, raised the kids, and we always said to our children, We're going to give you every opportunity under the sun.

You take them all.

But really when you're hit eighteen, you're then kind of going to stand on your own two feet.

That's not reality, you know.

And to go to university, to go into tertiory study in various different places and things, it's hugely expensive.

And now all I'm doing is instead of going right, now's the time for me and my partner will be thinking about ourselves and getting ourselves planting that frickin' tree.

Actually I'm not.

I'm thinking still about planting their tree, and I don't know when.

And I've got a daughter who is an incredible young woman and terribly bright, but I don't know.

She may require she may be a little bit more depended on us for longer.

And so once again there's costs there, and this is kind of where the money is going.

It's not going into making sure I'm going to be okay.

So I am going to be hoping that one of these kids does well and I can be in.

There as well.

But you know what I mean, Like it's not quite as I think.

And there's always nuances to everyone's situation, but I think the general rule is, once you have got your kids to maturity, you have to put your own oxygen mask on first, because there are no guarantees that the kids are going to look after you, and you don't You probably don't want to be a burden to anyone who doesn't want to, you know, have you not that you're a burden, but you know what I mean?

And so.

There are exceptions, and you know, you've got a child with a disability or special needs or you know, all of those things.

But ultimately you'll focus once your kids are adults, is to make sure you're going to be okay.

And of course we want to help them, but ideally we do both rather than prioritize the fact they'll be okay at the expense of you being.

Over And that is where I think a lot of us I'm speaking from my own experience, I guess, is that that's where we're at.

Like do we keep throwing because university is expensive and people say, oh, the going away for university is such an incredible experience.

It is, well it's pretty rocky actually, but it is neat, But how it's expensive.

So you know, I don't want to scare anybody with younger children out there, but the late teenage years have taken me a little bit by surprise.

And also my own inability to go to say no, what's wrong with me?

No, Look, I'm in no position to be dispensing parental advice.

We're still feel fa we're still working.

We're still working on sleeping and not throwing food.

And you can give us financial advice, but.

Ultimately, I think at some point a lesson it has to be there about the trade offs.

Like we live in a city in Auckland where there is a university.

If you want to go away to university, then maybe you're gonna have to have a student loan because mom and dad could help you with living costs, but they can't cover you know, your university fees as well, or you know, whatever that mix is, because going away to university is expensive.

But equally, when I went away to university, I lived in a town where there was no university, and so I had to go away and I had to get a student loan, and I had to get a job, and I had to, I guess, learn those lessons to stand on my own two feet.

And I can only imagine from the perspective of having very young children that it's really hard to do.

And so I don't have any pills of wisdom other than I think if your kids have a job and they're still living at home, they need to be paying board because you have to teach them that there is such a thing as living costs.

Oh, I totally agree.

Yeah, Nadine, we could trap you in here forever and keep talking about all sorts of things.

There's a couple of things really quickly I want to cover off before we finish, and that is the first thing is if you're a single woman, you know, and I know that you have done a whole episode on the cost of divorce, which I recommend anyone you know, if that's where you may find yourself go and have a listen to that episode.

But if you are a single woman and you're heading towards retirement, it's so much tougher, isn't it.

Well, it is because you face so many of the same overheads as a couple.

Might you still need a place to live?

You know, a head of broccoli doesn't cost any less just because it's feeding one person and not two.

You know, all of those things, insurance and rates, and I guess if you were to look at some of the advantages that you have, it would be that you're not negotiating with anybody else's to what their priorities are.

You're calling the shots and you're in the drivers seat, and that can be empowering.

It can also be scary.

So I think having someone a sounding board, whether that's a trusted friend or relative or a professional, so you don't feel like you're making all of those decisions without being able to discuss it with somebody in sense check it with someone.

Just be careful about who you sense check it with, because sometimes you know, the uncle turning the sausages at the barbie is going to wax lyrical about this or that or the other thing and you should be in bitcoin or whatever.

But yes, it can be scary, and I think that just means you have to be you have to double down on taking the reins.

There's no room for coasting because there's there isn't someone else who's going to carry you.

It's all on you, which, as I say, it can be scary, but it can also be empowering the.

Other thing I just wanted to touch on really quickly as well.

We've mentioned numerous times the emergency fund.

Do we all need an emergency fund?

And how much do we need?

Absolutely, we need an emergency fund.

And I'm huge on this because I had an unexpected I was going to say an unexpected baby.

He wasn't an unexpected baby.

He was an unexpected pregnancy.

So hard on the heels of a longed full baby that would spend years, you know, trying to create.

I suddenly found myself pregnant, you know, within a year of my son's birth.

And that's when your emergency fund gets tested.

Because I was off on maternity leave within six months of going back to work.

So the question of how much does it need to be, it's less about a dollar value that applies to everyone and more about one that applies to you.

The rule of thumb is three to six months of living expenses.

That sounds like heaps, but I'm not talking about enjoying your you know, glasses of wine and coffees out and meals out in holidays.

I'm meaning a bare bones existence.

That'll be the joyless succes storm.

That is the joyless existence, because that is our emergency status.

Right, We're just in vival mode versus continuing on as if everything was normal.

But that said, it doesn't have to be putting huge amounts of money aside we can start small, because anything is better than nothing.

You should also try to clear short term debt, the high interest debt, because they can provide the ultimate backstop, but they can't if you've already maxed out the credit card.

Yeah right, we don't want to rely on debt when it comes to an emergency, but we have no option to use it if we've already maxed it out, you know, buying this, that and the other thing.

And also if we're not spending money on interest, we should have some spare money going around to start putting into an emergency fund.

We can look at ways to actually put that emergency fund to work, for example, against the mortgage via an offset or evolving credit.

But we do want to make sure that it is there for emergency, so it's not for a holiday.

You know, it's not for botox.

I can't have an emergency holiday, an emergency lovell weekend.

We have a separate budget.

Well that's the point though, that's about what, as you say, making the time to budget for everything else.

So the savings, the savings for holiday are not your emergency funds.

Differently, no, and also make sure you try to prepay that holiday rather than just whack it on the credit card and come back and deal with it, because odds are you'll come back and then you'll need a root canal, which is something I'm looking at at the moment.

Oh god, don't even start on dental stuff.

Yeah, you know, when you've still got a credit card to pay off.

And that's the danger of running at debt and paying for things after the fact, is that you don't know what's around the corner.

The car breaks down, the root canal, whatever.

Dog breaks is acl Yes, it was actually thousand dollars or something insane.

Yeah, yeah, yeah, right, brilliant.

Stay off the credit.

Look.

People chafe against the advice not to rely on their credit card for everyday expenses, but I stand by it because all of the research shows that even if you are one of those angels that pays your credit card off in full every month before the due date, never incurs a cent of interest.

The psychology of credit cards is that they are designed to encourage us to spend.

We're willing to tip more, we will spend more readily when our credit card is prepopulated in the online shopping order and we lose track of how much we've spent and then it comes to the end of the month, and sure, you might have enough floating around in your financial ecosystem that you can pay it off, but it's more than you were intending to incur because we're removed from the pain of parting with that money until our fifty five days or whatever it is interest free period is up.

And almost without exception, the clients I've worked with that have stopped relying on the credit card will find them more money left over at the end of the month.

Okay, I'm going to I'm going to.

I've been told I'm going to.

We've got quite a man.

I'm going to keep I'm going to keep it.

But it's going to be an emergency, right, Yeah.

I don't think there's anything wrong with having a credit card.

I have a credit card.

Be aware of what the annual fees are on it.

Don't get too enticed by the air points or whatever.

We can never ever.

Do tap and go if it's going to charge you the surcharge.

I know that's going to be phased out, but it hasn't yet.

So why pay an extra two point five percent for a purchase when you could just insert your card, you know, and take two seconds to put your pin in.

That's not at time saving.

If it you know that that's worth it in terms of what it costs.

You, okay, really quickly.

So we're sort of heading into the end of twenty twenty five.

If people, you know, and it's been such a rollercoaster for a couple of years, what would your advice be to people if they're looking at their mortgage now maybe it's maybe they're being fit and it's coming off.

If a fixed term is coming to an end, what should people be thinking about doing heading into the end of twenty twenty five.

One of the number one things I'm asked is should I keep paying the fixed amount I was paying before when interest rates were higher now that they're lower.

And there's the different strokes for different folks, but in general I would say no, unless you are someone who has extremely reliable income, already has an emergency savings fund, and you're very confident that you can continue to meet those requirements, Because I would rather where you can call the shots on access to those funds rather than giving it to the bank, because yes, it will help you pay off the debt faster, but there are other ways to do that that are more flexible, for example, through an offset or through a revolving credit, but those do require some discipline.

So if we don't have the discipline in place, maybe those structures are not for you, and you might be better off paying higher fixed repayments.

But when you need the money is usually and you have to go to the bank to ask for it, is usually when they will say no, you know, because you're in dire straits and therefore you're not a good bet to lend the money.

Whereas if you have ready access to it, we can use it to pay down debt, but we can also use it as a safety net.

So that's just something to think about without going, oh, yes, that's completely nonsensical not to keep paying at this higher rate.

There's just a few other things to think about.

And look, I think people get really caught up in what the interest rate is, and sure shop round for a better deal.

If you've got all of your mortgages coming off at once, consider whether swapping to another bank and getting a cash back is worth it.

Yes, there's a lot of life admin and paper work, but if you were to work it out on an hourly rate, it is a pretty good return for your energy.

Switching to another bank, and they definitely don't reward loyalty, they only reward new customers.

And if you switch to another bank, get a few thousand dollars.

Maybe that's a kickstarter for our emergency fund.

So just a few things to think about.

It's not a case of the exact same advice works for everyone.

That's not how personal finance works.

But in general, look look into at least those two things if you are in the position where you've got fixed rates coming.

Up on Nadine, Thank you so much.

If you want to hear more from Nadine you can.

You can check out her personal finance podcast, The Prosperity Project, and her fortnightly finance column for the New Zealand Herald.

Thank you so much.

Thanks for having me.

Well, I feel like I've been well and truly told about the credit card.

It's not good with the advantages, I thought, even though I thought I'd nailed the bloody fifty five days.

Now I just have to not use it at all.

Well, the thing is that so much we do is online, Like if you organize the registration for your car and things like that, but you get the dibit card so that the money has to be in the account before you use it, so you're.

Changing all of those.

It's just painful as well.

Well it's just one card.

You go to the bank and go, can you get me a card?

And they send it to you.

Oh, no, I've got a dipit card.

I don't have a dibit card.

Oh I'm useless.

No.

I have one credit card, and I reduce the every year.

It's like, I reduce how much I can have.

It's literally there for an emergency, just a company.

But I still use it all the time because just what Nadine was saying, you think, oh, yep, cool, I'll just order that or I'll book that, and I do everything online and I don't think about it, and yeah, so no, you gotta get rid of that.

Do you know what I really notice?

I do feel like I think Nadine kind of summed up how I'm feeling, which has just been stack trying to cover off all these costs which are kind of the now in the near future, and I'm not we're not kind of thinking about getting excited about bigger plans and ambitions and things a forward.

That this could be a little bit of a time and place because I think I think a lot of us are in that stuck place, and I think we are feeling you know, there was the whole survive to twenty five or survived then it was survived through twenty five.

Thrive.

When are we going to thrive?

You know, I'm not sure.

Yeah, we're not something that we're going to thrive in twenty five, but we're not.

We're still surviving.

Wait, though nothing really what rhymes with twenty six be in the mixing twenty six.

I don't know if you were planty tree in twenty six planty.

Tree, yeah, I think it's yeah.

I mean, obviously I haven't completely ignored retirement.

We have done a little bit of work towards it, but it isn't It isn't first and foremost in my mind.

I think from my partner's a little bit more switched on and in that respect, but I do need to think about maybe just another basket, put some me egs in and look.

I think the thing is, it's not that we haven't thought about retirement.

We may well have thought about retirement, but then there are other there are a lot of other competing things, and that seems heightened at the moment and also some of the things that we thought might have been good for retirement, certain investments and things maybe aren't thriving at the moment either.

So let's just assume things are going to get a little bit easier and a little bit better, and in the meantime, take some of the tips that we've learned today and reduced those every day costs if you possibly can.

I felt I did feel good about one thing.

I do have a bill's account, so I have calculated what everything should theoretically cost annually, and I do put that money into an account and those direct debits come out, and that is how I've kind of, as I mentioned, been able to sort of work out how much more everything is costing.

So I felt good that I'm at least doing that right.

Sorry, but I have not finished in my year of reducing.

I'm going to get back on my get pick up that book again and work and start tackling through all those lists of the list of people that I was going to contact.

See if I'm sorry to my family, but we're going to reduce our streaming services.

We tell at a time say that, how often I say that we get around to it.

I think I'm actually going to do it.

Oh, that'll be an end of the year thing.

How you do something bring your joy this week?

Yes, I have started my little morning yoga routine again.

Now I did the season years ago and I've just used the same old one.

Her name is Brett Larkin.

Morning yoga sequence for beginners.

Fifteen minutes, not every single morning.

It feels gives me the exact same feeling as a really good cup of coffee.

I can't recommend it enough.

So fifteen minutes.

She's cute, she's sweet, she's got a lovely, lovely voice, and she kind of talks to you.

Why A you're doing it?

I am always going to be a beginnering yoga person.

That's just where I'm at.

What about you?

I went and gave plasma nice and this gave me joy because I've never been thanked for something as much in my life as I was for doing this.

They are hugely desperate for blood and plasma.

If you have a moment in time, if you've got a moment, please just got a in zedblood dot co dot in z have a read about what it takes to give blood and to give plasma.

They are absolutely desperate, you know, hopefully none of us or our family or our friends need blood or plasma or anything, but you never know when anything's going to happen, and they are very very low in their stocks.

As I said that, they were so incredibly grateful that I had gotten to do this that I was getting embarrassed.

I was like, please stop, this is getting embarrassing.

But they look after you very very well.

So go give some blood, give some plasma, enjoy the cup of tea in the bickies and being pampered for a moment and certificate after a few Oh no, I've all comes from on the app, which is great.

But I felt really good that I finally got around to doing that, and I'm going to keep doing that once a month, so brilliant if you get a chance to do that.

Thanks for joining us on our New Zealand hel podcast series Little Things.

We hope you share this podcast with the women in your life, so I don't know.

We can for that extra wine, just occasionally, a little bit.

Of a treat or a pair of shoes.

You can follow this podcast on iHeartRadio or wherever you get your podcasts, and for more episodes from us on other topics, head to inzied Herald dot co dot z and

We'll catch you next time on the Little Things