Make it a date
The New Zealand Federation of Family Budgeting Services recommends you schedule a regular date night… with your calculator, bank statements, budget and cashflow.
Federation CEO Raewyn Fox says it’s essential to make a regular time to talk with your partner, if you have one, or yourself to track how things are going.
“If you start with a balanced budget and cashflow forecast, you will be able to project a year’s spending, and regularly compare progress against the plan,” says Raewyn.
“For example, you might be saving up for something, or paying off debt. The key is to monitor things so nothing slips away or piles up.”
Make a budget
If you haven’t already, it’s time to sit down and write a detailed budget. In order to achieve financial stability, you need to have a clear picture of where you are spending money and what your commitments are.
There are many free services available, such as sorted.org.nz, which will do the hard work for you, or speak to an advisor for free at familybudgeting.org.nz for advice on how to better manage your money.
Be careful with Credit
Avoid cash advances. It’s a very expensive way to get cash. Use a credit card to buy something and you’ll get up to 44 or 55 days’ free credit (depending on the terms). But use it to withdraw money and you’ll be paying interest from that same day.
If you want access to cash on the card for an overseas trip, deposit money on the card and use another card for purchases. Even if your card is in credit, you’ll probably be charged an overseas ATM fee.
If your credit card is out of control, seek help. If you abuse the convenience of a credit card, you can end up bankrupt. If you find you can’t control the debt, take prompt and serious action.
First, stop using your card. You should then speak to your bank about restructuring the debt. One option is to set up an automatic payment to pay it off. Another is to add it to your mortgage.
If you do this, make sure you repay it as soon as possible, or your gains through a lower rate of interest will be undone by the longer time it takes to pay off the mountain of debt.