Habits can be both good and bad when it comes to your money, here are a few positive ones to kick off 2023.
When I think of the word repetition three things come to mind:
Repetition is not the most exciting way to learn but it does, over time, really help with developing a new skill. I’ve often wondered how many kids went home after watching the Karate Kid and asked their mum and dad if they could wash and wax the family car. Wax on, wax off; wax on, wax off; repeat again and again and boom, over time, Daniel-san learned two major defence techniques in karate.
The trick with repetition is to develop a habit, which takes time and perseverance. Hence why I’m not a karate expert, however my parents car was the cleanest on the street for at least a month. Developing new skills in personal finance is just the same. If you put in some time and effort, and keep repeating the activity, it becomes second nature pretty much for the rest of your life.
By way of an example, I got very good at answering the multiplication questions because I repeated the times tables in my head over and over again (and out loud), backwards and forwards, and then got my mum to ask questions for hours until they were burned into my brain. I forgot all about this until recently when I was asked a multiplication question and the answer came out so quickly it even surprised me. After all those years it was still there.
When it comes to managing your money the same applies. Developing those skills early can really pay huge dividends when you get to your retirement years. But, even if you haven’t got those habits in place now, it’s never too late to start, no matter what your age or stage is. The key is believing the work will make a difference and is worth the effort.
So, with the new year just kicking off, what better time to start some of that positive repetitive behaviour? Look at the things you could be doing now, with a little perseverance, that could positively change your financial direction for the future.
Write your personal and financial goals down at the beginning of each year - review and repeat
Make a list, then think about the activities that will help you to achieve the goals. They don’t just have to relate to the year ahead either: they might be short, say the next three months, then medium at one to five years and then longer term after that.
Split the list into two sections, personal and financial goals; decide the date you would like to have them achieved, and away you go. It is quite amazing, once you do this every year, to look back and see what you have achieved. The key is writing it down. If you are in a relationship, do one together. Do it today.
Create a budget – review and update as your personal circumstances change
My dream, when I was at the Retirement Commission, was to create an app that would instantly tell you where you were at financially and what your future financial position could be once you decided to stop paid work. It would collect all your financial data and show you at a glance how you were tracking.
Trouble is, there still isn’t a simple way to get data feeds from banks and other institutions to feed into one personal central hub. That said, I am sure it will happen and there are already a number of different apps and services that are trying to deliver something along those lines.
I think the next best thing is here at the Sorted website. You can log on, set up a personal account, put in your current data and see where you are at. Your data is kept safe, secure and protected so you can update your information at any time as your personal circumstances change. More importantly, the Retirement Commission has no hidden agenda to sell you anything but financial goodness.
Save as you get paid – pay yourself first from each pay day
To highlight just how important each pay day is try this exercise. Count how many paydays you have until you reach 65. I get paid monthly so I only have 84 pays left. No more, no less. You can never get one back so it’s important to treat each one as something very special. KiwiSaver is a great way to do this automatically from your salary or wages and, as repetition goes, it’s a great way for most Kiwis to get ahead. This is because, for those on salary or wages, your employer will generally match your contribution of 3% and the government even kicks in some free money each year of up to $521 if you are 18 years of age or over.
If for some reason KiwiSaver isn’t for you then saving or investing in managed funds by way of a direct debit is a good option. There is plenty of choice out there and a good diversified fund could be a great place to start. The key here is repetition: the direct debit ensures you keep paying in on a regular basis.
Regular maintenance checks – not just for your car or other prized assets but yourself as well
Getting into the habit of having regular maintenance check-ups is essential for all assets. Any early preventive work required for your car or other assets, like a house, pay big dividends in the long term. More importantly, you need to get a regular warrant of fitness for yourself as well. I mean, what’s the point of all the other stuff if you are not around to enjoy the rewards later on in life?
This is where I need to practise what I preach. While I get regular check-ups for my car, make sure the maintenance of our house is up-to-date, and see my doctor for an annual warrant of fitness, the dental clinic has not been on my to do list. Why? Because I was terrorised by the school dental nurses as a kid and any mention of the Murder House or buzzer leaves me in a cold sweat. But, this year, I am adding it to my goals, which will hopefully help me beat that fear once and for all and keep a healthy set of chompers long into retirement!
Last but not least keep telling yourself “if it sounds too good to be true it probably is.” Repeat daily
Preying on other people is a full-time job for thousands and thousands of people around the world. Every morning they wake up and go to work to steal your cash and savings. Netsafe have a great list here on what to avoid. Interestingly the three biggies are romance, investments, and invoice scams.
I had a call while I was writing this article about my Amazon Prime account: I was told they needed my bank account details so they could repay an error that was made with my account fee. The only problem with that was I’m not a subscriber. I then asked for their details but before I could finish speaking they had hung up, ready to call their next victim.
All the best for 2023, have a go at trying something new, repeat it regularly, and you might just end up a little better off than you were last year. If nothing else, if I take up my own challenge hopefully I will still have my teeth in the years to come.
Disclaimer: David Boyle is Head of Sales and Marketing at Mint Asset Management Limited. The above article is intended to provide information and does not purport to give investment advice.
Mint Asset Management is the issuer of the Mint Asset Management Funds. Download a copy of the product disclosure statement.
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