Real-life read: Gemma

What’s the best money advice you’ve ever been given?  

Only use a credit card if you can afford to pay the money off before it earns interest (generally 30-45 days after the spending). Interest rates on credit cards are shocking and once they compound, it can be a hole which is hard to get out of – such as only being able to pay off the interest but never the debt. 

Are you a spender or a saver?  

A bit of both. I’m fortunate enough to own my own home, so for me savings is done by paying down my mortgage and making additional contributions where I can. The interest rate on my mortgage is higher than the interest I’d earn if I kept those funds in a savings account – so I somewhat see paying down my mortgage as saving. 

What’s been your proudest money moment?  

Reducing the term on my home loan. The day my husband and I purchased our first home I cried, not from excitement but worry about how much debt I was in. I was working full time and studying so I knew that eventually my studies would help progress my career and I’d be in a better financial position. 

I eventually paid off my student loan and not having that money deducted from my pay felt like receiving a pay rise. Instead of keeping (or spending) the money that would have gone towards my student loan, I put it towards my mortgage. My husband did the same when he paid off his student loan.  

This helped move us into a better equity position [meaning we owned more of the house and owed less on it], which enabled us to access discounted mortgage rates. When the rates dropped, we chose to keep our repayments the same, therefore reducing the length of our loan. I recently looked at our progress and in five years we had moved from a 30 year loan to 15 years remaining! That gain of 10 years, and saving on interest was such a proud moment. 

What makes you feel sorted when it comes to your money?  

Having an emergency fund to fall back on if the unexpected happens. 

What money beliefs have you inherited from your whānau?  

Not to live beyond your means. Growing up my parents both worked modest jobs and raised four children, so money was tight. My parents put a lot of time into creating nice things to save money. Mum made our clothes and spent a lot of time cooking and baking. Dad had 101 ways to re-use an old plastic real estate sign – my favourite was as a sled for sliding down the hill. Now when I enjoy activities such as a beach day, it’s always a great reminder that a fun day out doesn’t have to come with an entrance fee! 

My parents also encouraged me to get a job young, so I understood the value of earning money and how far (or not so far) it went. I’ve been working since I was 13 and that really helped once I got to adulthood and needed references. 

If your bank account could talk, what would it say to you right now?  

Well, I just got married so my bank account is looking very sad. It’s time to start re-building the rainy-day fund! 

When you think about your retirement, what do you see?  

I imagine a happy retirement where I can draw down the funds I’ve grown from my personal, employer and government KiwiSaver contributions over 30-plus years. Those savings can support my living costs while I spend my time outdoors and volunteering to help others.

If you’d like to join the conversation and share your own experiences with money, we’d love to hear from you. Fill in this form and we’ll get back to you. Ngā mihi!