Kiwis Thinking Ahead About Managing Money
Kiwis Thinking Ahead About Managing Money
As Money Week begins, a majority of Kiwis are thinking about savings with retirement the top reason for saving money, according to the latest research from MasterCard.
MasterCard’s biannual research on money management found 88% of New Zealanders plan to save more or the same in the next six months, at an average of 15% of their income. Retirement (40%), international travel (33%) and buying or renovating their home (31%) remain the top three reasons for saving, with buying or renovating home down 8% from the last survey.
“New Zealanders have a good foundation for financial literacy, with initiatives like Money Week encouraging Kiwis to think more about managing their money to empower them in meeting their savings goals,” says Peter Chisnall, MasterCard New Zealand Country Manager.
The research found New Zealanders had increased their use of mobile applications to manage money, with 40% of people surveyed currently using them and 13% considering using them in the future.
“Kiwis are quick to adapt new technology, and our latest survey saw a significant increase in the use of apps. Smartphone apps are making it easier for people to manage finances easily and on the go, and can help people set goals and put money aside for big purchases or emergencies.”
In the event of income increasing, the first thing New Zealanders would do is pay off debt (36%, first priority) or putting it into savings (25%, first priority). In contrast, if income was to drop, dining out (28%, first priority), overseas holiday (22%) and regular savings (12%) would be cut.
“Money can be difficult to manage, and at MasterCard we promote having a healthy understanding of money to enable people to manage their finances with confidence,” says Chisnall.
During Money Week 2015, MasterCard encourages New Zealanders to take advantage of the resources on Money Week’s website at http://moneyweek.org.nz/, including the fighting fit quiz, to see how healthy their money habits are, and get advice on how they can improve.
Below are MasterCard’s recommended tips for reducing and managing debt.
Tips for Managing Money and Reducing your Debt from MasterCard
Actively manage your money:
• Set a monthly budget with incoming and outgoing spend
• Pay back charges on credit cards in a timely fashion to avoid interest charges on the remaining balance
• Always check your credit card statements carefully in order to spot any irregular transactions
• Using your prepaid, debit or credit card to pay for purchases and make payments will help you to keep track of all your spending in one location
• Update your personal details if you move address. This will help to prevent your financial information from falling into the wrong hands
• Formulate a plan: Put the plan for reaching your goal down on paper. Set targets for monthly expenses, such as transport, utilities etc. Then try to spend less than your set targets. Make the difficult decisions about how to squeeze more of what you earn to reduce your overall debt, but always remember to leave some budget for unforeseen expenditure (e.g. replacing a car battery, calling in a plumber) so your plan doesn’t fall down on something unexpected
• Assess debt levels: Understanding how much debt you’ve accumulated is the first step towards reducing it. Determining your total amount of debt can be difficult, but it’s important to have the complete picture if you are going to overcome it.
• Track spending: Keeping a spending diary online or in a journal will help you identify ways to reduce expenditures and allocate more money to paying off your debt.
• Pay more than the minimum: Charges on credit cards should be paid back in a timely fashion to avoid interest charges on the remaining balance. Paying more than the minimum repayment amount can be a critical first step in reaching your goal.
• Monitor your prepaid, debit and credit cards: Always check your card statements carefully and on a regular basis in order to spot any irregular transactions as quickly as possible. Using a MasterCard card can protect you from any nasty surprises as liability for an unauthorised charge is limited.
As a customer, you do have the responsibility to inform your financial institution if you become aware of or see an unauthorised transaction on your card, or if your card is lost and stolen. Policies do vary depending on the card issuer, so make sure you read the small print. However, most providers do offer some extra level of protection on purchases. For example, MasterCard Zero Liability policy protects against unauthorised transactions in store, over the phone and via the Internet.