10 Money Week answers Kiwis are chasing

With hundreds of questions pouring in for Sorted Money Week, it’s not hard to see the common answers we’re after. Here’s what we’re wondering.

We can’t stop wondering about: investing!

So many of us have been piling into platforms like Hatch, Sharesies, Kernel, Stake or InvestNow – investing FOMO is real. But it’s also driving questions on why invest and how to do a good job of it, which are great to see.

1. Where do I start with investing? How do I start investing with little money? 

Instead of depending on a broker or investment adviser to pick shares or a fund for us, these days we can DIY – sign up to a platform with even just a dollar. Yet like any DIY project we get up to at home, it can help to turn to the professionals to get a few tips before we start. There are a few important things to keep in mind, like setting your goals and deciding how much risk to take on. Here are six rules for investing as you get started.

2. Should I invest or save or do both?

Both, ideally. Saving – setting aside money regularly – works best for your short-term goals, like a new phone or a holiday next year. But for longer-term goals, your savings need to be invested (which is buying assets like shares, bonds or property) so that they can grow enough for a house or retirement. So the more you save, the more you can invest, and the better results you can potentially get in return. Here’s our guide on how to save, ‘Paying yourself first’, so you can then invest.

3. I’ve got money in the bank getting next to nothing in interest. But I have no idea about investing – help!

We feel your pain – everyone goes on about compound interest and all that, but if there’s not much around to compound (and it’s still getting taxed), you get nowhere. The way to start investing is to learn some basics and give it a go. Now we’re not encouraging everyone to take too many risks (no sense losing sleep over this), but investing can help your money keep growing so you get something back into your pocket.

What we’ve started wondering lately: buy now, pay later!

During this year’s Sorted Money Week, views of our ‘How to shop smarter using buy now, pay later options’ guide was off the charts – up 3964%! It’s more than a thing. But pay-later options also bring up heaps of questions.

4. How many pay-later deals can I have going at one time?

Ideally not too many! The problems come up when people juggle too many at once. It can be super tricky when you have more than one of these going at a time, particularly when they’re all due on different days. Here’s how to shop smarter when using BNPL.

5. What if I miss or can’t pay an Afterpay payment?

You’ll be charged a late fee, which is typically a flat $10 or $20. But if you continue to miss repayments, the fees can grow as high as 25% of the amount you’ve borrowed. So if you have a purchase of $1,000 and are unable to repay, it could cost as much as $250 in penalties. Here’s how to avoid this happening.

We’re continually wondering about: budgets, saving, KiwiSaver

There are always questions about these – and we’ll keep chasing those answers to build our confidence with money decisions.

6. How can I make a budget that I can stick to?

Budgets need to breathe! They need to have some flexibility so they’re doable. Tracking your expenses and seeing how well you’re following your money plan for your spending helps. You also want to make sure that your budget includes some fun stuff, small luxuries even, so you don’t feel too deprived and give up on it entirely. Here’s our budgeting tool and money tracking guide.

7. How much money is needed to retire? Do I really need $1 million?

Pay no attention to headline numbers aimed to shock you into saving! Think of it this way: every $100,000 you save typically equates to around $100 a week throughout your retirement. And that’s on top of NZ Super. So how much you need depends on what your lifestyle goal is. It also helps to have a look at what retirees are spending today, based on surveys. You may find your retirement number is lower than you think.

8. Do I pay my debt off faster or put that money aside into savings?

Check out our 6 steps to get your money Sorted. The first step is to save a starter emergency fund of $1000, and the third is tackling your debt. They’re in this order so if something unexpected happens, like a car repair or trip to the vet, you don’t need to borrow even more. But once you have a bit of a buffer, you definitely want to go after whatever high-interest debt you’re carrying. Here are some strategies for paying it off.

9. How does KiwiSaver work? Is KiwiSaver taxed?

When you put money into KiwiSaver, it is joined by three more flows of money: from your employer, from the government and from the market (where that money is invested). That makes it so much more powerful than just regular saving. Employees are automatically opted into KiwiSaver, and money is generally available for a first home or at age 65. Your KiwiSaver money earns returns from being invested, so it gets taxed as it grows. This means when you withdraw for a first home or retirement, there are no taxes to pay. Here's how to get the most out of KiwiSaver.

10. Should I increase my mortgage payments or my KiwiSaver contributions?

Happily, we've got some simple calculators that you can use to compare your two options. Here's our KiwiSaver calculator and our mortgage calculator. When you run your numbers, which option will see you better off in the future?

If you find yourself still wondering about money, Sorted is here for you! Feel free to drop us a line, or if you need personalised help creating a budget and tackling your debt, the great team at MoneyTalks is at the ready. Let’s keep chasing those answers.