Money can be confusing. And when things are confusing, we may as well be looking at a scramble of words. No wonder it doesn’t make sense!

This is especially true when you’re just starting out with your career, heading off to uni, moving away from home or managing your own money for the first time. It’s hard to know where to start, even when you have made the decision that you want to get your money sorted.

So, we get caught up living in the now (I do anyway – it's fun!) and thinking we’ll sort out our future money selves... in the future. But honestly, the thing about money is that getting it sorted earlier really pays off in the long run. Here’s a list of what I wish I’d known.

1. Joining KiwiSaver is so worth it.

When you start your first job (or a new job), you’ll be automatically enrolled in KiwiSaver. You can opt out, but I think it’s worth sticking it out. Why? For everything you put in, your employer and the government also add to it.

Your employer will match your contributions with at least 3% of your salary and the government will give you 50c for every $1 you put in– up to $521 every year. So, putting in just $20 a week ($1043 a year) gets you the full government contribution.

When I started my part-time job during uni, I remember thinking I couldn’t possibly spare 3% of my already limited wages, but doing it from the start meant I never missed that money. After I graduated and started my first full-time job, I kept those contributions up and watched my KiwiSaver balance grow! Read more about how KiwiSaver works and why it’s worth joining.

2. KiwiSaver can be used for buying your first home.

It's not just for retirement, which really does feel (and is) a long way away! But I know when it came to buying my first home, being able to withdraw my KiwiSaver and get the First Home Grant made all the difference for my deposit.

If you’re looking to use it for a first home, once you’ve been contributing for three years, you’ll be able to withdraw almost all of the money in your KiwiSaver (you’ll need to leave $1000). So, that’s the contributions from you, your employer and the government, and any investment gains you’ve made.

You may also be able to get the First Home Grant – up to $10,000 for your first home. Who wouldn’t want some help getting their foot on the property ladder?

3. Making a spending plan is more fun than it sounds!

I know having a budget sounds a bit restrictive, and not at all what you want to do when you first start earning money, but it actually lets you spend money on the things that are important to you.

For me, that’s maintaining full but perfectly groomed brows (which reminds me I need to make an appointment!), time with my best friends and trips to the cinema. Without a spending plan, I quickly run out of money and have to say no to Friday night takeaways with my friends, but with a spending plan, I know I’ve got it covered. Use our budgeting tool to create your spending plan.

4. Paying yourself first is the best way to save.

Even with a carefully planned budget, I’d often get to the day before payday and realise there was no money left from my last pay to put into savings. That’s because I was trying to save after all my expenses had come out.

The best way to save is to put away money before you pay anything else. It’s called paying yourself first. Now I know that even if I blow through my spending money quicker than usual, at least I’ve already put some savings away.

5. The sooner you start saving, the better!

It’s all thanks to compound interest – that's when the interest on your savings or investments earns more interest and grows exponentially. So, the sooner you start, the more money you’ll make.

If you save $1000 each year and earn 5% interest, you’ll have $1050 after the first year. Then, in the second year, you’ll earn interest on the whole $1050 rather than just the $1000 you initially saved. So at the end of the second year, you have $1102.50. And so on and so on. Here’s more about compound interest.

6. Debt can add up very quickly – especially if you take on more than one at a time.

Now you’re earning money, you’ll probably be eligible for credit cards, overdrafts or other forms of debt. It can rapidly spiral out of control.

This is something I learned very quickly when I was at uni – after turning 18, my bank offered me a $1000 credit card. I didn’t even hesitate to say yes! After all, I was an adult now, and adults have credit cards. Plus, I knew I’d always keep up with the payments... right?

Well, I didn’t, not always, and even when I did, I was spending beyond my means. I’d have to make a payment to my credit card as soon as I got paid (barely meeting the minimum payment). Then, by the end of the month I was out of money, so I’d use my credit card to get me by.

I’d then get paid and have to urgently make another credit card payment, and the loop just went on and on. It can be tempting to take on debt when you’ve got loads of new costs you’re responsible for, but make sure you read this before you start borrowing.

7. Always make more than the minimum repayment on debt.

Just making the minimum payment on debts means you’re paying too much interest – so make it a goal to pay more than that. Plus, you’ll want to avoid late payment fees which you’ll be charged even on interest-free debt like Afterpay. See how you can shop smarter using “buy now, pay later” options.

8. Tackle one debt at a time to get it paid off.

If you’ve got a few debts you’re wanting to get rid of, channel any extra money into just one of your debts at a time.

There are two methods for picking which debt to focus on first. The snowball method says to pick the smallest balance first, whereas the avalanche says to pick the highest interest rate first. There are pros and cons to each.

When I found myself with a credit card and an overdraft, I chose the avalanche method – sending all spare money straight to my high-interest credit card until it was paid off, then to my interest-free overdraft.

9. You can make your KiwiSaver work harder for you by adjusting the settings.

KiwiSaver is an investment account that can go up and down, and different funds will perform differently. So it’s important to find the right type of fund for you. How long you have until you want to withdraw your KiwiSaver and the level of risk you’re comfortable with will determine the type of fund that will work best for you.

In the couple of years leading up to buying my home, the Sorted fund finder suggested I keep my money in a balanced fund, so that’s what I did. Now that I’m 35+ years away from withdrawing my KiwiSaver again, I’ve switched to a growth fund.  

See how you can get your KiwiSaver on track.

10. Investing in shares is easier than ever, but you need a plan.

Thanks to some innovative new platforms, it’s easy to start investing beyond KiwiSaver with just a few clicks. With interest rates so low, it can be a good way to grow our money.

There were a few things I made sure I got sorted for my own peace of mind before I started investing – my KiwiSaver was growing, my mortgage was under control and set to be paid off early, I didn’t have any debt besides my mortgage and student loan, and I had an emergency fund. That’s not to say you need to do all that too, but I’d suggest working your way through the Sorted 6 Steps.

I got started by using some of the apps out there, where I’d pick mostly ETFs (exchange traded funds) and a few individual companies that I wanted to own shares in. But I found myself checking the balance at least once a day and feeling the stress of the ups and downs, so I’ve now switched to a managed fund, where a professional manages the investments for me and I don’t check it nearly as much. It just works much better for me personally.

Read this before you have a go at investing in shares.

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