How I turned my finances around and you can too

Sorted user Kelly (Ngāpuhi) – a practice nurse and mother of one who lives in Tāmaki Makaurau Auckland – says she’ll never forget being a broke, single mum on minimum wage, living hand to mouth and stressing about being in debt and how she was going to fix her car. Starting an emergency savings fund was a critical step in turning her financial situation around, and here she explains how it works for her, plus some other game-changing tips that have helped her on her money journey.

Tip 1:

I focused on clearing debt one bill at a time. I started with the smallest, then worked my way up until it was all cleared.

Result:

I became debt free, with money to save.

Tip 2:

Once debt free, I focused on building an emergency fund of $1000 to $3000, which I use for things like car repairs, tangis, etc. It’s been so worth it! If I need to use the money in this fund, I focus on replenishing it ASAP.

Result:

Having access to emergency money is better than stress, or worse, getting into debt from borrowing for these things. An emergency fund seems like a no-brainer these days – I can’t imagine not having one.

Tip 3:

After building an emergency fund, I committed to long-term savings in a high-interest savings account. I save a set amount each pay cycle, without fail. Sacrifices like zero takeaways, no coffee and treats, homemade lunch, not wasting food and cutting my own hair are worth it, and the savings build up fast.

Result:

The peace of mind of knowing that I can cover three to six months of bills if I lose my income, and that I’m getting closer to a mortgage deposit. Now I just need to get schooled up on long-term investments.

Tip 4:

I avoid impulse buying by following the ‘three-day rule’. I wait three days after the urge to impulse buy hits, then reassess to see if I still really need or want the item.

Result:

The urge is likely to pass; I save the money and avoid buyer’s remorse.

Tip 5:

I have a reward budget. For every $1000 I save, I give myself $25 for whatever I want. I tend to save it up for jewellery and wait for a sale.

Result:

I get to enjoy the fruits of my labour, so there’s balance.

Tip 6:

FOMO is a complete and utter waste of money. Your friends may look cool, but they’re probably broke.

Result:

You’re not!

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