21 March 2019
A Music Playlist to Get Your Finances in Tune
For many readers March can be a slightly traumatic month. It’s getting near the end of the financial year when there’s a scramble to get the books in order and your personal finances may also be looking a little shaky as the Christmas and holiday spending catches up with you.
While you sit down and contemplate how to deal with the extra zeroes on your credit card, it might also be a good time to review a few other things to make sure you are financially healthy.
And because there’s a song for every occasion, I’ve developed a playlist to help you enjoy the last days of summer, before dark clouds of despair cover you like a well-worn blanket. Who knows, if you do a little work now on some of the areas below, the winter might be warmer than you expect. Plus, you get a unique money playlist to remind you of what you’ve achieved.
Slice of Heaven – Dave Dobbyn / Under Pressure – Queen David Bowie
We all want that slice of heaven and many of you may already have it. The question is when will you pay off the home loan and what happens if mortgage rates go up? You could be under pressure. Spend some time reviewing your loan now and throw a little more on it if you can. You might be very surprised at what just a little extra a fortnight might do to reduce your mortgage term.
Wouldn’t It Be Good - Nik Kershaw / Highway to Hell - ACDC
Good debt and bad debt. Credit card debt is B.A.D (a great 80s band) so if you pay your credit card debt off before interest is applied, all good. But if you just pay the minimum then ACDC know where you are going. By all means give the credit card a good slapping and maximise the rewards, but keep away from that high interest cost by paying your card off every month. Or at the very least, find a way to get the balance down.
Dancing in the Dark – Bruce Springsteen / Sweet Dreams Are Made of This – Eurythmics (bonus track Don’t Stop till you Get Enough - Michael Jackson)
This is all about building your savings and investments from each payday. If you don’t want to be worrying about your power bills when you decide to finally stop work, then review what you can save today so you can enjoy tomorrow. KiwiSaver is the easiest place to start but the 3% minimum contribution isn’t going to get you there. 10% is the rule of thumb so check out other investments, like managed funds, that can allow access to your money if needed but still get it working harder for you than the bank. Michael is bang on with this one: if you don’t it will be BAD.
Independence Day - Comsat Angels / Livin’ On A Prayer - Bon Jovi
I have snuck these bangers in to help you focus on why you need to have a budget. No one likes a budget but without one you won’t be able do much of what we have already talked about. Own it and stick to it. It’s more fun than going to the gym.
Celebration – Kool and the Gang / Money’s Too Tight To Mention – Simply Red
Yes, this relates to the dreaded R word being retirement. Many say they won’t retire but what if you don’t have a choice? Having a plan and getting some good personal financial advice from an Authorised Financial Adviser to make it happen is incredibly important. If you can’t afford an advisor then check out https://sorted.org.nz/get-sorted/run-your-retirement-numbers/
I bet you spend a heap of time whenever you plan a holiday, rather than just hoping it will be alright on the day you go to the airport, the same goes for your non-working years. Don’t underestimate just how long you are going to be around.
Heroes - David Bowie / 2 Out Of Three Ain’t Bad - MeatLoaf / Give a little bit – Supertramp
Having a savings buffer to deal with life’s challenges is essential to your financial wellbeing. From the car breaking down to more serious issues like losing your job, poor health, and accidents can all impact your finances. If you don’t have a buffer then you will need to most likely borrow money at a higher cost of interest rate or put it on the mortgage (if you have got one) which can add up if it’s over a number of years. As a Heroes benchmark, aim for three months of your salary as a minimum. That said, two out of three ain’t bad, but even just having a little bit set aside, say a month’s salary, is a good start.
Bridge Over Troubled Water - Simon and Garfunkel / The Gambler - Kenny Rogers
How many times have you heard on the TV or news that a house has burned down and the owners didn’t have any house or contents insurance? It’s incredible and can have a massive impact on your financial future. Simply put, having insurance is a bridge that gets you over the event to a new beginning, anything else is just plain gambling.
Hallelujah – Leonard Cohen / Don’t Leave Me This Way – Communards
Death is rarely a popular topic of conversation around the BBQ and if it’s yours well that’s not so cool either. However, life insurance is there for the loved ones who will need your financial support even after you have gone. The songs say it all, but it is important you have the right cover! Get a review and check you are insured based on your personal circumstances.
Bonus Track - Money for Nothing - Dire Straits
For goodness sake make sure you contribute enough to KiwiSaver every year ($1,043) to get your $521 Member Tax Credit (MTC) from the Government. Dire Straits couldn’t say it any better!