Financial Success Group | Remove the roadblocks to your financial success
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Remove the roadblocks to your financial success

29 Aug Remove the roadblocks to your financial success

A common theme I am hearing from clients is that one of the biggest road blocks to creating their definition of ‘financial success’ is the ever increasing cost of living; with petrol price increases, new Auckland City rate demands and water charges to name just a few recent examples.

It can seem like tough times, but here are a few ideas to help you ease the financial pressure and get to the end of the month with some income surplus…

Mortgage Rates

Is it time to fix? The NZ Herald on 26th of August says: “Short-term interest rates are now noticeably cheaper than floating in some cases, so bank economists suggest it is time to fix at least part of your home loan. ANZ chief economist Cameron Bagrie said buyers were unlikely to lose out if they locked in cheap rates now.”

As an example, a floating loan of $200,000, if fixed at an interest rate of 0.3%pa less than your floating rate, will save you $600 a year in interest costs. It adds up!

Household Power

A client recently advised me that her last two power bills were over $600 for the month, for a family of five.

Where is all that power being used?

The accompanying graph from Energywise shows the average split of energy use in the home.

avg_family_household

Things you can do now, to save money on your powerbill, include:
•Switching off your second (beer) fridge. This could save you $100 to $300 per year
•Drying your clothes outside rather than using a dryer, at a saving of $200 a year
•Only using heated towel rail when required, saving up to $120 per year
•Washing your clothes in cold water rather than warm, for a saving of $50 to $80 per year
•Using a lower temperature setting on your dishwasher, if available
•Switching appliances off at the wall, as opposed to leaving them on ‘standby’
•Wrapping your electric hot water cylinder in a thermal blanket. This could save you $80 per year

Fuel Costs

There are numerous tips to help reduce your fuel costs can be accessed by clicking here.Others practical options include:
•Negotiating with your employer to work from home to save the fuel and travel time to get to work
•Considering getting a lift sometimes with a workmate/neighbour
•Using public transport, if this is an option
•Eliminating unnecessary trips, by planning your vehicle use

Insurance Premiums

Options to reduce the cost of your insurance include:
•Electing a higher excess on your house insurance
•Reassessing the benefits of the optional extras on your policy, eg: roadside assistance
•Increasing the excess on your medical insurance. Typically a $500 excess (compared to nil excess) could save you 25% in premiums
•Reassessing your level of income protection insurance and adjusting the wait period and/or timing of when benefit is paid
•Considering whether you have a premium loading for previous health issue, that is now not an problem. If this is reassessed it could lower your premiums
•If you are paying premiums as a smoker and now you can declare that you are a non smoker, this will save you money
•Grouping your policies together to obtain discounts and save on policy fees, eg: one life insurance policy of $250,000 is going to be cheaper than two policies that provide $250,000 of life insurance

There is nothing worse than having ‘more month than money’ or getting to the last week of the month and finding the money pot is empty. Now is the time to plan to fill it up.

The list of savings is endless and is only limited by your imagination, so I wish you all the best in getting your financials out of the red. If you have any questions or think I could help, give me a call.

This information is of a general nature and is not deemed a ‘Personalised Advice Service’ as defined by the Financial Adviser Act (FAA) 2008.

Barry Day

Authorised Financial Adviser – FSP 76241

A copy of my latest Disclosure Statement is available free of charge on request.