SunLive         

New year, new me: revamping your finances for 2022

File photo/SunLive.

  

For New Zealanders ringing in the new year with financially focused goals, Consumer NZ has some helpful tips for fine-tuning finances.

Avoiding bank fees is the first tip for Kiwis with financially focused goals for 2022. 

Take a look at your banking setup to ensure you’re not needlessly losing money. It can be as simple as asking about fee exemptions and haggling with your bank to see what they’re prepared to offer to keep you as a customer. 

There are a number of ways to avoid bank fees including opting for a day-to-day transaction account that has no base or transaction fee. These accounts require you to keep a minimum balance of typically $4000-$5000.

Prioritising online banking, branch transactions can sometimes come with hefty fees

Checking your age – if you’re over 65 you shouldn't be paying monthly base fees or transaction fees. 

If you're under 19, in tertiary study, or you've graduated within the last two years, you should be able to find a fee-free bank account from most banks.

Fees provide a lucrative income for banks. In 2020, banks earned $2.3 billion from fees and commissions they charged to customers.

The next is to consider switching banks. Consumer NZ head of communications and campaigns Gemme Rasmussen says you don’t have to use one bank for all of your financial needs. 

“You can have one bank for your everyday account and another for a low-interest rate for a credit card. Consumers can use our guide to find out what works best for them.

“When looking at your personal finance set up, ask yourself - is there a more attractive interest rate elsewhere? Can my bank change my account to a free-fee option?”

The next tip is to set a budget. “If you want to fine-tune your finances, understanding your incomings and outgoings is crucial. Whether it’s an excel spreadsheet or a budgeting app, there are a number of ways to track your spending. 

“Having transparency over where your money is going can help you optimise your spending and enable you to meet your financial goals,” says Gemme.

“An important part of personal budgeting is how you categorise your spending. There are generally three types: needs, regular expenses, and wants. Your regular expenses and wants are where you can make the most savings.”

The Consumer NZ Sentiment Tracker found 15 per cent of New Zealanders had no savings, and a further 27 per cent were anxious about their level of savings.

The new year also brings a busy shopping season, but consumers should think twice before racking up interest-free purchases, and should focus on shopping smartly.

These purchases can be a debt trap, with consumers having to pay setup fees and service fees that add between five and 16 per cent to the final purchase price.

Before signing up, get out your calculator to ensure your deal isn’t a dud. As well as a fee to set up the contract, most interest-free finance deals sting you with a yearly service fee. Annual fees mean the longer you take to pay off your purchase, the more you’ll pay overall.

“To offset the rising cost of living, review your plans for the coming year. You can potentially save hundreds by switching providers. 

“Staying static with energy, insurance and mobile plans can end up costing more in the long run. There isn’t much to gain by being a loyal customer.”

Data from the Consumer NZ Sentiment Tracker revealed that household costs such as electricity are one of the top financial concerns for New Zealanders. To keep household costs manageable, consumers can use Powerswitch to find the cheapest electricity and gas plans. 

Data from 8000 switching results from Powerswitch has shown households can save an average of $380 in energy bills.

A recent Consumer NZ survey on home and contents insurance found there was a difference of more than $2000 between the cheapest and most expensive comparable insurance policies for a standard sized house. 

“We recommend New Zealanders don’t ‘set and forget’,'' says Gemme. 

“There are large savings to be made if you shop around. It can take a few hours to sit down and review various plans and accounts, but the beginning of the year can be a good time to ensure your finances are optimised, for a smoother financial year ahead.”

More on SunLive...
0 Comments
You must be logged in to make a comment. Login Now
There are no comments on this article.