Rick and Heather

Learning money skills over time

The Mawby family makes sure their money goes a long way. With a combined income of $50,000 they are doing more than just ‘getting by’ – they have plans in place to take care of their future and are passing on their money smarts to their children.

Using careful money management skills, Rick and Heather Mawby ensure their income provides for them and their two children, Rebecca and Hadyn. Self-employed builder Rick is the main breadwinner, while Heather chips in with the occasional day of relief teaching. Their money management skills have been honed by years when they lived on a lot less than $50,000.

Staying focused on their goals

Hadyn was born at the beginning of the recession, just as Rick began to struggle to find work. Their income dropped significantly. And while times are better, they have continued to practise their habits of financial discipline.

Despite lean times, the Mawbys live well and remain focused on their medium and long-term goals.

‘In the medium term we’ll be deciding whether to sell or extend the house. Eventually we hope to retire comfortably with $250,000 in Rick’s KiwiSaver and about $300,000 in my teacher’s retirement scheme. We’ll also be selling the business which will provide an extra lump of income,’ says Heather.

Their financial philosophy is to keep things simple but fun.

‘It’s not all doom and gloom. The children have a huge toy selection, thanks to the toy library; I have a gym membership; and we put money aside for socialising. Neither of us likes being in debt or owing money so we live within our means. We always pay our credit card off on time and keep tabs on everything we spend,’ she says.

‘I do a monthly budget as our bills and income come in on a monthly basis. I put aside $200 for fruit and vegetables. I aim to spend under $700 for groceries, $60 on meat from the butcher and $240 for power. We have a great source of free wood that anyone can access via a forestry block in Upper Hutt through the Wellington Regional Council. This really helps keep our power bill low.’

Tracking spending is important

All expenditure is noted down. Bills are dated so that Heather can refer to them the following month, monitoring any changes and making adjustments to their budget.

‘Writing down expenses rather than recording them on a spreadsheet makes it seem more real to me. I can work out how much we will really need each month. I also don’t have to go searching for receipts,’ she says.

‘I get our fruit and veges cheap from the local market and keep an eye out for specials at the supermarket. I also do lots of baking and belong to a supermarket Christmas club. These are just some of the ways we save money.’

Staying on top of debts by paying more than the minimum

The Mawbys have $120,000 left to pay on their mortgage. And they keep their mortgage repayments high even when interest rates drop.

‘We don’t know how long any drop will last, and we want to pay the mortgage off as quickly as possible, so when it does go down, we keep paying it off at the same rate rather than saving in the short term between $6 and $10 every fortnight. This difference over 20 years of our mortgage plus the added interest is actually a significant amount,’ says Heather.

Teaching money skills with the kids

Heather and Rick are passing their saving skills on to Rebecca and Haydn, who have their own savings accounts even at their young age.

‘Their great-grandfather puts money in and we put a bit away as well,’ she says.

By making careful choices, the Mawbys ensure their children are well cared for and the future looks secure.

‘I believe you need to live with what you’ve got and make the most of it,’ says Heather.