I worked and lived in the UK between 2012 to 2015. During this time I found a really helpful credit card which allowed me to travel through Europe without worrying about transferring my Sterling to Euro.
This was always an issue prior to getting this credit card. Do I use a money exchange company, a bank, an airport travel exchange or just use my own debit card? All of these options charge extortionate rates and fees which are incomparable to the normal exchange rate which I find on XE.com.
Airline currency exchanges have a particularly bad rep with this headline coming from a UK newspaper:
Compare this to the exchange rates provided by holiday firms or airports.
So, there you have it. Another easy way to get around travel exchange rates and fees. My own philosophy is that I do spend my money, and when I do I want to get bang for my buck. There is no point in paying for administrative fees or charges that don’t benefit me at all
Since moving to New Zealand we have had to take several flights to see the surrounding countries. Europe was cheap, quick and convenient to get around.
New Zealand is a lot more isolated than you would think. It is over a 3 hour flight to Sydney from Christchurch. I think the world map distorts our perception of how close countries are to each other.
Anyways, this has got me thinking of ways I can lower my (and your) travel expenses.
Use Comparison sites
I use Skyscanner to see which flight times and prices are best. 90% of flights on the site are cheaper, however I do always have a quick look on the airlines official site, just to be sure.
Pro tip: If you are booking a cheap flight with a third party, my advice is make sure the same airline is involved. Two separate airlines can result in delays and/or cancellations. This leaves you with a big struggle to catch a connecting flight.
Set up alerts
Price alerts are easy to set up. Each time your flight prices increase or decrease you will receive and email and this will allow you to pick the cheapest flights available. This is very handy as certain airlines stagger how far in advance you can book flights.
Days of the week to fly
Flying at the weekends are by far the most expensive times of the week to fly. Can you travel on midweek dates?
A handy trick is when you are searching for flights is to avoid being specific. Check the whole month tab in the calendar and you will see prices from every day of the month. Often the savings can be in excess of $200.
So there are some really easy tips and tricks on how to save money with travelling.
I recently seen a post on twitter from a Frugalist going snowboarding. Some of the comments underneath were of jealousy whilst others were critical of the spending involved with snowboarding.
As someone who has started boarding in the last year, I can understand the large costs involved with boarding. However, there are some easy tricks to get to enjoy the powder on a budget.
Second hand gear
I see so many posts about the depreciation in value of a new car off the showroom floor. The same is true (not quite as expensive) for snowboards, boots, helmets and clothes. A brand new snowboard can go for between $500-$900…….Not quite the FIRE purchase.
So sites like Facebook marketplace and local online trading websites are really helpful when looking for cheap, second hand gear. It does not take much either to spot bad equipment from quality ones……Just look for scratches and bumps.
Buy out of season
We go to Mount Hutt in Canterbury, New Zealand. This is a short drive from my apartment meaning we can get up most weekends. Mount Hutt run an early bird full season pass for $350. Whilst this sounds expensive, a day pass costs $104 and a regular pass costs $749. So the early bird is a no-brainer.
Clothes and boarding equipment are really cheap in the summer months too. People are looking for extra cash and the demand for snow equipment is low so you can often find yourself a bargain. This is not just contained to trading sites either, a lot of shops will have mid-summer sales for the previous seasons stock.
Bring packed lunches
I am the first to admit, a blue-sky sunny day is better with a bottle of beer on a mountain, however prices are high at ski resorts. Constantly eating out up there and having a beer or mulled wine will really eat into the budget.
We make sandwiches and rolls the night before and bring along some crisps and dips. We can even bring up a few bottles as the snow keeps them cold. Barring a few tumbles these should all be in pretty good shape by the time lunch comes around.
I understand snowboarding is definitely an elitist sport and it does cost money, however simple tweaks and changes can have a real impact financially. This can be said for anything in life. If we are more careful with our finances we can stretch the dollar a long way.
I thought , since I am beginning my financial blog and also a Physiotherapist (Physical Therapist) I would provide some free Physio advice today for my viewers.
Tip 1: Back Pain – something is better than nothing
Regardless of the severity of the pain you need to get moving. I understand that someone with a slight twinge may be able to continue running whilst someone with stabbing pain and leg symptoms may only be able to deal with walking for 5-10 minutes.
Both are equally important!
Movement will not damage your body; your bones, joints and muscles are resilient. If you stay sitting or lying in bed all day you lose muscle mass and this will make it harder to get better.
Get moving as much or as little as you can. Pain is OK, listen to your body and gently challenge it.
Tip 2: Posture – slouch on
Research has revealed there is no correlation between slumped posture and pain.
If you try to sit bolt upright for 8 hours a day vs slouched for the same time you will likely be in just as much pain.
The important thing to do is change your position regularly. Stand up, go make coffee, have a gentle stretch. I meet people in my clinic who don’t get up from sitting for 2-3 hours. This is the main issue not slouching. Your next posture is your best posture
Tip 3: Build some muscle
In this Instagram day and age we think of muscle building as six packs or steel buns.
However, strength work can be so much easier. Cardio is simply not enough unfortunately. Strength training improves our bones, muscles and can tone our bodies.
People think muscle weighs the same as fat, however this isn’t true. We are better off increasing or muscles to reduce our fat to become more healthy for the future.
We are all aiming to retire early, well then we need to be healthy to enjoy it Strength challenge – Do once daily:
The New Zealand dollar has dropped to a 2 year low versus the US dollar following the central banks decision to keep interest rates low, amongst other global changes such as Turkey’s diminishing currency and the ongoing US trade war.
There is an acceptance that New Zealand is heading towards an economic slowdown and here are some things we need to know about the possibility of a recession.
First of all, understanding why the central bank has decided to keep interest rates low.
What are interest rates?
Interest rates are a way for the central banks to try keep control of the economy.
Low interest rates are put in place to stimulate the public and businesses to spend more money to kick-start the economy. Low interest rates mean you can borrow money and pay less back to your bank/credit card.
Low interest rates are not just helpful for Joe Public but also for the economy. A low interest rate encourages investors from overseas to fund business.
However, low interest rates also result in people borrowing more than needed and people also avoid saving and this can lead to a boom bust cycle.
A boom-bust cycle is explained in this video from Investopedia:
When the economy is doing well high interest rates are implemented. The aim is to discourage spending which can lead to inflation and rising prices. This encourages Joe Public to save more due to higher savings rates. This also ensures people live within their means.
The recent decision to maintain low interest rates in New Zealand comes on the back of a slowing economy. This has been caused by a cooling housing market amongst other factors.
So what should I do with a weak currency/slowing economy:
I recently followed ElementumMoney on Twitter. They offered a free 5 day intro to learning about money and getting a little more serious about certain aspects of your finances.
I found this right up my street. It was fairly basic information, but we all need to start somewhere. The information is provided by Aparna a financial planner in India who has kindly put in effort to help people like me.
The overview of the course was:
Day 1: Basics of managing your money
Day 2: Basics of Insurance
Day 3: Basics of Investments
Day 4: Basics of Loans
Day 5: Basics of taxation
Day 1 focused on income vs. expenditure. It was a 101 into what other options you had to increasing your income and decreasing your spending. This touched on making your money work for you.
Day 2 went into the murky world of Insurance. To buy or not to buy? This section was good at highlighting when insurance was really needed. This focused on life, health, car and travel insurance. I realised the former are most important when you have loved ones depending on you. The latter were good reminders as to why these are needed but not at all times
Day 3: Investing! This is a new avenue for me. I have never invested before and recently joined Sharsies as part of a mutual fund investment. This broke down important information on investments ranging from bonds to stocks. It also gave me a springboard to reviewing my current investments
Day 4reviewed loans. Loans are important for being able to afford those high cost purchases in your life such as vehicles or a house. This section had a link to a good Home loan guide too and pitfalls to avoid
Day 5 discussed taxation. This reviewed the importance of filing taxes, reviewing tax exemptions and what items can be reimubursed.
Overall, this was a helpful news letter which went through the basics of 5 key pillars of financial areas. You can follow Aparna at ElementumMoney
Well here is how much a bank savings account rate can offer you in New Zealand via the comparison site Finance.co.nz:
These rates are similar worldwide (via Halifax in the UK):
For example, If you put $10,000 into your savings account which had a 2.10% interest rate and then added $100 per month for 30 years this would be how much you could earn:
Initial Deposit: $10,000 + $100 per Month over 30 years = $46,000
30 years Interest Rate: 2.10% p.a.
Deposits Plus Interest After Tax: $61,253
Interest gained: $15,253 (Free money)
This is a marvelous blog post by Passive Income who has done some great work and calculations to review how much of a return you would receive investing in the NZX 50 Index (The top 50 companies in NZ).
Over the last 5 years the NZX would have returned, on average, 8.85% on your investment.
Remember that calculation above, well here it is for an investment in the NZX 50 for 30 years:
Initial Deposit: $10,000 + $100 per Month Savings Period = $46,000
30 years Interest Rate: 8.85% p.a.
Deposits Plus Interest After Tax: $168,570
Interest gained: $122,570 (Free money)
If the markets were to continue as they have done for the last 5 years you would make a staggering $107,317 gain if you had invested in the NZX 50 rather than placing the money in your savings account.
But aren’t stocks risky
People do lose money on the stock market. However, these people tend to be in it for the easy, fast money (which rarely works).
Historically, stocks have increased greatly since their beginning. We just have to look a the S&P 500 (Similar to the NZX 50 which tracks 500 US companies) which on average since 1928 returned 7% per year (adjusting for inflation).
As you can see there have been several times when the markets have dropped. These include the Wall Street crash in 1929 which lead to the great depression and most recently the 2008 crash due to the financial crisis. However despite all this there is still an average return of 7%. Compared to that 3% we may receive via our bank accounts.
The best way to begin investing is to be in it for the long haul. There will be some downs, but the ups far outweigh this.
Don’t expect to get rich quickly, this is not a lottery ticket, this is an investment.
So where do I sign up?
I recently started with a company called Sharsies in New Zealand. They allow investors with even small amounts of money to begin investing with them. Sharsies allows you to lodge an initial deposit and then contribute what you can, when you can.
Sharsies invest your money into an ETF (Exchange traded fund). So rather than investing in each company individually, your money is pooled together with other investors into a group of companies. If you wanted you, would be investing in all of the NZX 50 companies combined. (There are may other investment opportunities available such as investing in the Top US, Australian, European and Asian markets)
Sharsies blog has a really helpful analogy for how ETF’s work:
“Imagine you go to a market (NZX) and buy some fruit. Buying individual fruit is like buying shares. You pay the price for each piece of fruit.
An ETF is like buying a basket of fruit. You get all the different types. These can be grouped by theme, like a colour or a season. In short: An ETF is a pool or basket of investments that trades on an exchange.”
This is really helpful for investors starting out with little knowledge of how trading really works (Like me).
The benefit of this type of trading is that your investment is steady. It would be unheard of for all 50 companies in the NZX 50 to fail, therefore you have much more security in your investment.
If you are not from New Zealand, there will be similar companies available to you too such as Vanguard in the USA.
Stupidly, I went from winter/spring in the UK to spring/winter in New Zealand.
New Zealand has lovely, warm summers.
New Zealand has bitterly cold winters.*
The houses in NZ are not well renowned for their central heating or insulation (this is slowly changing). NZ houses are primarily heated with “heat pumps” which are air conditioning units.
Our (my partner & I) first winter here was in a large open plan apartment with NO HEATPUMP and SINGLE GLAZED WINDOWS. We had some electric heaters to use but these were of no use and regularly we could see our breaths as we shivered.
Admittedly, this was our decision to move into this flat but we were not well informed especially after leaving the UK with their glorious (under appreciated) radiators.
We moved earlier this year to a similar sized flat with a heat pump installed.
We also moved to a different energy company called Flick Electric.
The company advertised “Join Flick between 17 May and 10 August 2018, and we guarantee you’ll save money on power with Flick until 31 August 2018. And if you don’t? We’ll pay you back.”
We joined in April, and I have been very happy with the service we have received. My current bills during these cold winters are down by between 5-10% and our house is nice and toasty with a fairly active heat pump.
The app Flick have designed is also very helpful in tracking the cost of the electricity. At high peak times I receive a notification and this allows me to pause my dishwasher, washing machine or switch off my heat pump.
I really enjoy this control over my own finances. Especially, when it comes to utilities. It also measures my Co2 usage in goats……
This is one step towards reducing my overheads and having more revenue to spend on investing and saving
I am new to the process of improving my financial position.
I am keen to learn about improving my passive income through blogging and increasing my investments (This will take time).
One thing I was good at from my university days was managing my expenses vs. income. I would recommend this as a starting point to any young person.
It is really easy to do and you can see the benefits immediately.
Take control of your money
I started an excel spreadsheet to take stock of my income and expenditure when I was at university. This was an attempt to make sure I wasn’t spending random amounts on eating out and I was keeping track of my bills.
I was able to budget how much I would have to socialise too, therefore avoiding huge blowouts leaving me struggling for the rest of the month (This still happened at times).
My current spreadsheet looks like this:
I get paid fortnightly (I find this much better than monthly) and as you can see I track my income and my usual expenses. Once I get paid I immediately transfer my savings into my savings accounts. You can also see a $50 sum goes straight into my investments with SuperLife.
My aim over the next few weeks is to try and cut down my expenditure after reading this blog, which was a real eye opener.
My first port of call is switching energy suppliers and changing my phone package to reduce my costs.
There is a rule called 50/30/20 which suggests you should spend 50% of your income on living expenses such as rent and food, 30% on non-essentials and 20% should be saved.
I am currently saving around 25% but I feel there is more to be gained.