That's a lot of money and it's only for a few basics. So Money Week might just be the time to do something about that future you've been putting off.
I've checked out the public events for Money Week. At one end they focus on financial basics such as giving up smoking or learning to cook on a budget. One such community event is GFIT's Making Sense out of Cents event. For the record, GFIT stands for Growing Financial Independence in Tamaki, and teaches what it calls a Warrant of Finance programme.
There are other grassroots community groups running similar money management events.
At the other end of the scale there are people who make ends meet, but know they could do better on the investing front. Juno magazine is offering a Great Debate: Is Property The Best Investment? panel event at the Stamford Plaza on Thursday, and elsewhere Craigs Investment Partners has seminars covering the fundamentals of investment. There are also events for children such as the GirlBoss Leadership Day today in Albany.
If you're in downtown Auckland on Monday, take in the giant tower of toilet paper, teabags and Weetbix that the commission plans to build in Britomart.
"Doing something" for your finances doesn't need to involve going to an event, even though it can be motivating to do so. If you can't go , here are some other "somethings" to attempt this week:
• Have an honest conversation with yourself. We all tell ourselves all sorts of porkies day in day out. In fact, they can stop us getting ahead financially.
Tell me about it. I take to the cafe two or three times a week for a quick coffee.
I know logically that this is crazy, but the little voice tells me I "deserve it", or I work from home and "need to see people", and so on.
As well as the little fritter chit-chats, there are big conversations we need to have with ourselves. Is that bathroom renovation really going to add value once you've paid the additional interest over 15 years? Really? Have you done the numbers that take into account the rising market?
Not many Kiwis are willing to admit that house renovations may be eating their savings, not growing their wealth.
The starting point for honest conversations shouldn't be finding ways to justify what you've chosen to do. They need to take a contrarian view to what you're doing now. And try to seek out some second opinions.
• Do the same with your loved ones. Talk to your partner, your kids, or your parents about whether you need to spend less or take a more systematic approach to investing.
I know parents hate to share their budget with the kids in case they tell the whole playground. If that won't work, at least put them on a budget covering their clothing, treats, entertainment and possibly after-school events. They can manage this and it takes away the stress of the "I wants".
This conversation with the whanau requires a truthful discussion about needs versus wants. Whether you're on $200,000 or $50,000 a year, plenty of your income will be sucked up by wants dressed up as needs.
• Reorganise your bank accounts. Super-expensive financial fitness coaches will do this for you. Or do it yourself. Work out what you need to spend each month and have your income divvied up into accounts. One for fixed bills, another for saving and a third for spending.
It doesn't matter whether you're on the Prime Minister's salary or a benefit.
The same approach works. It won't give you more money, but will ensure the money you have is spent more effectively, especially if you're inclined to keep spending each month until the credit limit is reached.
• Write a plan. This really is financial magic.
You need a goal and baby steps showing how you're going to get there.
That goal could be retiring at a certain age, having a particular amount of income in retirement and so on. Sorted's calculator at sorted.org.nz/tools/retirement-planner will help you work out the details.
I'm a great fan of some of the more complex-made-easy calculators at websites such as Calcxml.com/calculators, Financial-Calculators.com and Dinkytown.net. Just be aware that these calculators are from overseas and not all will be relevant to New Zealand. But numbers are numbers and most are relevant. Using one of those calculators could be your "one thing" for Money Week.
The alternative is to do nothing and wonder what happened to all your income when you turn 65. When I think about the things I do without considering, like spending $1100 on a new water pump and related repairs for my car, it doesn't bear thinking about how some people survive on NZ Super.
I was chewing this over this week. I'm having some minor work done on my home, by my reasonably priced handyman. That he's been in my house for nearly a week, however, is going to add up to a big chunk of money when the bill arrives.
I can see why retired people's houses so often fall into rack and ruin. They may not have $1000 here or there to do maintenance, let alone home improvements. And when the washing machine breaks down, as eventually it does, what happens?
John and Jenny's story, which is oft told by the commission, is typical. John lost his job at the age of 60 and never found another one. The couple had counted on his earnings, which dried up probably a decade before he would ordinarily have stopped working.
The couple's $27,352 annual budget is modest by anyone's standards and is calculated down to tiny numbers, including I noted, $43 a week for medical costs, which isn't a lot when you're 72 and 68.
What happens if there is a whopping unexpected expense such as the hospital losing their hearing aids, as happened to a contact of mine recently?
