Regular bills and subscriptions become background noise in our financial life. We rarely check for a better price, and sometimes even stop using the service entirely, yet keep paying for it.
It’s worth going through your bank account once a year and checking all the bills that have gone out that month.
First of all, check that you’re still using the service at all. If not, cut it.
Then check if the company is offering a sign up special to new customers, or if competitors are offering a better price. Power and phone companies are particularly notorious for offering special sign up deals to new customers, while not bothering to offer them to existing customers.
Once you’ve checked the lay of the land, it’s then a matter of calling up your existing provider and asking if they’ll match the deal. If not, put your money where you mouth is, and move to a better deal elsewhere.
Powerswitch estimates that the average user saves $300 a year just by changing power provider.
Now imagine that level of saving with every bill.
Leaving KiwiSaver in default
A worrying number of New Zealanders are in default KiwiSavers, which could be costing them hundreds of thousands of dollars, for the sake of changing a few settings on their account.
Figures from the Financial Markets Authority show there were 298,381 default KiwiSaver members, as of March 31, 2022.
This means they’re in a Balanced account, which may not be the right choice for them.
The problem with default accounts is that they were designed as a holding pen for your retirement funds, while you decided on the best place to put your money. They’re not meant to be permanent.
So if you signed up to KiwiSaver, then never picked a provider or did anything else, you might be missing out on easy wins to boost your savings.
As a general rule of thumb, if you’re not planning to use KiwiSaver for retirement or a house deposit for at least five years, changing to a growth or aggressive fund could double your money by retirement.
However, if you’re planning to use it sooner than that, a conservative account will protect your money from any short-term market dips.
An easy way to compare options is by using the Sorted Fund Finder.
Thinking ‘I’m just not good with money’
If someone had never been taught to swim, they wouldn’t blame themselves for not understanding it. It would simply be time to head down to the pool and learn.
Yet we often blame ourselves when it comes to money, thinking we should somehow magically have the answers, even if school or parents weren’t able to teach us about it.
This cycle of blame can stop people from even looking at different options for their money, as they assume the reason they don’t already know about it is because they’re not good with money, or numbers.
Yet many money solutions are quite simple to change and require no maths knowledge at all.
The confidence to even do a quick Google search is sometimes all that’s needed to find simple money solutions.
• Frances Cook’s course Money Made Simple is open now for new students, and covers goal setting, creating a spending plan that works, mastering debt, starting to invest, and understanding your KiwiSaver. You can learn more here francescook.co.nz. You can also use this link to gift the course to someone else.
• Frances Cook is qualified as a financial adviser, and has published two best selling books on personal finance. She is best known for hosting the Cooking the Books podcast, and is a regular commentator and speaker on financial issues.
