Grabbed One.
Filed under: Avalon's Money Thread, Cost of living, General Budgeting
Theres a new (ish if you are in Auckland) money saving website thats come to New Zealand, and so far – looks good. Its called Grab One, and I found it via Facebook (fount of all things time wasting) via some friends.
So what’s the deal?
Well, you sign up to Grab One, and then when they have a deal – you can choose to accept the deal if its something you like the look of. Now usually, theres going to be a minimum number of people required to sign up for the deal before it becomes “live”, but if you are one of those first people, you will need to give credit card details, and if the deal goes live, you will have bought the deal. After that, if there are still some places left on the deal, you can buy or not as suits you.
Is it worth it?
Well, today was the first day that Grab One had a deal in Wellington, so its the first time i got to try it out.
As we are intending to go to the cinema at least every other week, and as the Embassy Cinema is 5 minutes (slow) walk away – I though this was well worth a try. I mean $3 for a cinema ticket??? Even on Cheap Tuesdays its $10! The downside is that you can only buy one deal per person, but this did allow me to buy a second ticket as a gift – which I thought I had better send to hubby. So that’s 2 tickets to the Embassy for $6, saving us at least $14.
Now there are some conditions: you can’t use it Friday or Saturday evenings, you cant get Platinum seats at the embassy ( those are the bigger leather couch like seats) and you cant use them for deluxe seats at the Lower Hut Cinema (which have reclining backs). But all those conditions were clearly laid out – in normal sized print, and were really easy to understand – so top marks for not trying to hide anything.
So I guess if you can get money off something you were going to buy anyway – this looks absolutely brilliant. But as with all “money saving deals” it only actually saves you money of you were going to buy it anyway. If you start buying things just because they are on offer – then its actually not saving you money – its making you spend it.
How do you find out about the deals?
There are two ways: sign up for email alerts when there’s a deal in your area, or join the Facebook group and get the alerts as posts on your Facebook newsfeed.
This is currently running in Auckland, Wellington, Christchurch and Waikato Region, and looks like they are expanding across New Zealand.
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Briscoes: You’ll never buy better?
Filed under: Avalon's Money Thread, Cost of living, General Budgeting
It’s a really annoying jingle and an even more annoying tagline – more so becuase it’s highly dishonest. Briscoes is a chain of homeware stores across New Zealand known for its permanent sales (advertised as “get in quick – 2 days sale”).
The thing with Briscoes is that from what I have seen – the sale price actually brings it in line with the retail price in most stores. We found this when I bought a coffee machine. They had it “on sale” for $499 down from a supposed RRP of $899. Except when i was doing my price checks, I couldnt find any other store that sold it for for more than $499. We ended up buying it at Moore Wilsons.
We have done the same price checks today, and out of 10 separate items, only one of them came out cheaper at Briscoes – a Tefal frying pan which would normally have been the same price as in Moore Wilsons, but had 40% off in Brisoces, and this time Briscoes weren’t exaggerating the price before discounting.
Just be aware of this kind of thing. I have found time and again that “sales” “bulk buys” and “special prices” of all descriptions are a con over here. Why the commerce commission allows it I have no idea – but it really will pay you to check your prices before buying.
Today we saved about $50 on three items where there was a cost difference, and will save another $150 on a few items that I know are cheaper in Wellington stores. Its a start.
Unfortunately I cant actually spend that on coffee!
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Arghhh – having to pay interest on the credit card!
Filed under: Avalon's Money Thread, Cost of living, Interest Rates, Credit Cards & Mortgages in NZ
Well, for the first time in five and half years – I cannot pay off the whole balance on our credit cards, and we will be paying interest.
This is quite depressing.
I guess I should be happy that its only likely to be a few months where we have to pay, and that we have been able to organise our finances so well for so long that we haven’t had to do this thus far while we have lived in New Zealand. But still – its damned annoying.
Especially since the interest rate is a whopping 19.95%
So – from here on in – hard nosed budgeting and spending restrictions to get us back on track as fast as possible.
Why has this happened?
Some really big bills I’m afraid. Despite the emergency fund, which I still have some left of, we have had some really big expenses come through and no income. The emergency fund is coving our living expenses and top ups on the rentals, but it cant cover:
- Some large medical bills.
- Set up costs for Hubby’s contracting business.
- Legal fees
- Buying furniture for an apartment in the city. (and yes – even though we have 2 houses worth of furniture – it still turns out we need a few things – that was a depressing moment!)
Hubby has income coming in now, but almost all of it is paying the setup costs: new computer, travel, phones, internet bills, city pad – it all adds up.
And at least this time I actually know what I’m doing. I know how to work through the budgets, I know how to cut costs, and I know how to stick to the harder decisions. One thing I am sure of – that debt is not going to be there long. Ill be paying money into it as soon and as often as I can.
I’m just not sure how to cut my coffee budget
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Cheques – not quite as you know them.
You know – I haven’t actually written a cheque in over 5 years. I just don’t use them here. With most people taking Eftpos, or direct credit via Internet banking – its actually quite rare for most people to need to do it. On the odd occasion that cheques are needed – I get cash instead (I don’t even know where my chequebook is!)
However, there is something you need to bear in mind if you do choose to use them here. Apart from for some really bizarre reason there’s a tax applied to their use, and you have to pay the bank for the privilege of getting a chequebook. Ok, that last bit’s probably not a huge shock.
Cheques in the UK are automatically “crossed” by the bank. That’s those 2 lines that you find with the words “AC Payee” or “Account Payee”. In New Zealand, they don’t have that. Now this is a basic security detail. As basic as it gets. That note on the cheque means that it can only be paid in to the account of the person you wrote the cheque to. It can be paid into someone else’s account.
The Banking Ombudsman has just highlighted this issue in an article in the Dom Post. It seems that people are crossing their cheques “Not Negotiable” which does not offer the same protection “Account Payee Only”.
The ombudsman notes that Banks could just sort this out by pre-printing the phrase, but stops short of telling them to get a grip and actually do it.
So be aware: NZ banks are failing to operate one of the easiest security measures they could use, and they charge you for the chequebook. If you do use them when you get here, make sure you cross them properly, because apparently the banks aren’t refunding funds that go missing.
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Seriously- pay off your credits cards!
Filed under: Avalon's Money Thread, Banks, Cost of living, Economics, General Budgeting, Interest Rates, Credit Cards & Mortgages in NZ
From Credit Cards on Cracked.com
You will find a very good explanation of who this works on the website. Although this refers to the US, its a cautionary take in any country. I believe in the UK the minimum payment has to cover the interest and charges, and your statement should now tell you how long it will take to clear the card if you just make minimum payments, but that does assume that stop spending. And not many people do that!
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Kiwisaver Problems: keep your eye on your provider.
Filed under: Avalon's Money Thread, Cost of living, General Budgeting, Property & General Investing, Retirement, Pensions and Kiwisaver
I always thought putting the Inland Revenue in charge of Kiwisaver was a daft idea. Seems I may have had a point. The IRD passes on your information to one of the default providers, and then thats the end of what they care about. It seems that a lot of the default Kiwisaver providers (these are the ones you are automatically enrolled with if you don’t make your own choice), have got the wrong information, and cant get in contact with the people whose funds they are running.
It worries me that there appears to be an awful lot of people who are completely unaware that they have a Kiwisaver fund. There are 200,000 people who cannot be contacted by their fund managers.
The problem means people may not receive the letter telling them who their KiwiSaver provider is or the annual statement on their Kiwisaver balance and annual report explaining the returns of their fund.
McAllister [from ASB Group Investments - the larges Default provider] said some people could be in KiwiSaver for more than a year and still not know because it was new and they did not know what to expect from their provider or Inland Revenue.
“It appears it’s an IRD problem. It raises questions about how accurate IRD’s information is.
You need to be aware about Kiwisaver. You are automatically enrolled into a fund, whether you like it or not, and have to opt out if like us you think Kiwisaver is crap.
Make sure you understand what is at stake here – as immigrants you will face this the minute you start a job,a dn you have 2 weeks to make up your mind about staying in Kiwisaver forever or opting out. Do your homework.
More information on Kiwisaver can be found in Avalon’s Guide: 13 things you need to know, and 17 things you really need to know!
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The UK State Pension – what happens to it when you emigrate.
Filed under: Avalon's Money Thread, Cost of living, Retirement, Pensions and Kiwisaver, The Book and Website
This is something that I’ve actually had a lot of emails about recently, so I thought I would write a little about it and there seems to be some really whopping great misconceptions out there.
The main thing you need to understand is that you cannot double dip on your state pensions. You do not have the right to take a UK state pension and add it to any New Zealand superannuation you may be entitled to.
You just can’t.
If you choose to take the UK pension you are entitled to – it gets taken straight off any Superannuation you would get. There is a chapter in Avalon’s Guide explaining the nuts and bolts – but this is the bit you need to understand.
- If you are currently receiving the UK State Pension, the amount of pension you will get is frozen at the level it is when you become a resident of New Zealand.
- If you emigrate, and then later become eligible for the UK State Pension, the amount is frozen at the level it was when you left the UK.
- Any UK State Pension that you do get will be taken off any New Zealand state Superannuation you may be entitled to.
- This means that you cannot claim the UK state pension and add it to the New Zealand Superannuation.
- You can continue to contribute to the UK State Pension while you are resident in New Zealand if you wish.
- Any contributions that you make will increase your UK State Pension.
- Remember though that any increase you do gain will simply decrease the amount of New Zealand Superannuation you are entitled to.
As far as I’m personally concerned, I have not been expecting a state pension for the UK government since I was about 20 years old. The pensions system in most western countries is bankrupt, and there just isn’t the money to keep paying it.
You should also be aware that the National Insurance you pay in the UK is not being used to fund your retirement. It’s paying for the pensions of the people currently receiving a state pension. Your pension needs to be paid by future taxpayers. Thus the problem – there aren’t anywhere near enough people to pay it. The number of pensioners is growing, and the number of taxpayers isn’t growing anywhere near as fast.
And it’s no better here in New Zealand. As Gareth Morgan (an investment provider and somewhat annoying “guru” and “commentator”) says in his book Pension Panic:
If you think the government is going to keep you in the style to which you have become accustomed once you’ve retired, think again – unless you’re on the breadline now.
I just wanted people to be aware that this information is out there, and while I probably wasn’t able to think of everything that should go in a book about finances and emigrating to New Zealand, I really did think of most things. If you want to be prepared and not face these shocks, then read it. It may not always be fluffy – but it will mean you are prepared.
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“Made to make your eyes water” Life Insurance Premiums.
Filed under: Avalon's Money Thread, Cost of living, General Budgeting, Retirement, Pensions and Kiwisaver
We are still on the hunt for decent life insurance, given that we had to pull the cover from ING, and would like to pull the cover from ASB as well.
If you are moving here from the UK – whatever else you do – make sure you have Life Insurance and Critical Illness Insurance in place before you leave and make sure you will be covered once you emigrate.
Because I can almost guarantee you will die of a heart attack one you see what you are expected to pay for it here. Its outrageous – a bloody rip off.
I explain this in more detail in the book, but basically – in the UK the premiums are set according to your age when you take it out.
Here they just go up and up and up. And up some more. And then just when you really need it – from about age 65 onwards – you would need to be a multimillionaire to afford the premiums.
We are currently looking for about 1.4m in cover. Now I know that sounds like a lot of money – and possible you might thing it’s a bit arrogant to think that Hubby would be worth this much (I am worth considerably less which is a bit depressing). But this is because we have rental properties, with mortgages on, and they need to be paid off if Hubby croaks).
If we get stepped premiums – which go up every year – then we pay about $1500 a year for the premiums ($125 a month). If you get level premiums (which stay level till age 65 and then “wallop” you with a hike you just would not believe) then we have to pay over $6000 a year ($500 a month). The stepped premium hits a truly bewildering $44,000 a year by the time you get to age 64.($3600 a month).
Compare this to my UK life insurance (which includes Critical Illness cover) costs £10 a month, and will do until the day I die. Even if I’m 127 years old.
We worked out that till age 65 – the difference in payments in level and stepped over that time makes nearly $60,000 more to get stepped premiums.
However our Insurance Broker sat me down and told me I should revisit my views on this – and look at the cost NOW. With our budget being squeezed to within an inch of its life because IBM is too tight to give even cost-of-living pay rises (but can pay $80,000,000 for a new data centre) we simply cannot afford $500 a month on premiums.
So the plan now is to take stepped premiums, and as we pay down mortgages – reduce the cover and thus try and offset the rise in premiums each year. Still – it annoys me that Kiwis so easily get ripped off.
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Avalon’s Money Thread: Working out our net worth.
Filed under: Avalon's Money Thread, Banks, Economics, General Budgeting, Interest Rates, Credit Cards & Mortgages in NZ, Property & General Investing
We’ve done the budget, we’ve made some decisions, our personal Fixed Rate mortgage comes up for renewal in January, and we have decided to rejig the way we pay our mortgages.
All that was left to do was to track what our Net Worth was – which given the economy was a highly daunting task to be honest.
Your Net Worth is basically the value of what you own (assets) minus the value of you owe (debts). Unlike a Budget, which tells you what you are going to do over a month or year – your Net Worth tells you how much you have right now. Today.
It’s not difficult (especially if you have your accounts in order and your paperwork filed)– just a bit depressing at the moment. Because I like spreadsheets, and I’m lazy, I just copy the same spreadsheet from last year and fill in the numbers – its quite straightforward. In fact the only difficult bit to be honest is grabbing the bits of paper that contain the info you need.
On one side I have a list of all the assets: property, banks accounts, savings accounts, shares, pensions, car, and household goods (Insurance value is the best way to determine that).
On the other side are the mortgages, credit cards and any loans.
Take one from the other, and what is left is how much you are worth today.
In our case – about $250,000 less that we were 2 years ago.
I kid you not.
So why am I not crying into my coffee right now?
Well, Net Worth is a really good indicator of how you are doing financially. But it has to be taken in context. Most of that “wealth” is paper money. It doesn’t really exist. I don’t have $250,000 less dollar coins than I had – it’s just that my properties have gone down in value. In time – the value will go up again, and so will my “wealth”.
It becomes an issue if you want to borrow money and maximise how much money the banks will lend you – as they want to know the value of your assets. When I spoke to the valuer to get ours revalued – he said that he’s never been busier with banks insisting on clients getting up to date values on all their properties. While this can be annoying – I have to say I think I’m actually with the banks on this one.
I spoke to ANZ the other day about the possibility of refinancing a rental (the funds to be used to reduce personal mortgage – so no extra lending overall). They won’t lend more than 70% of the value of a rental, and my mortgage was for 75% already. The thing is, while doing this is defiantly for the banks good – it also prevents us as buyers from over extending. I think we personally got lucky that the recession hit so fast just after we bought our 3 rentals and couldn’t buy any more. It prevented us going mad, getting caught up in a storm and going belly-up which has happened to an awful lot of people.
We have “protected” as much as we can of our net worth by paying down as much debt as we can as fast as we can. So while our assets are worth much less, so are our debts. There is actually a lot you can learn from a recession, and if you can get through this and come out the other side – then just think what you will be like when the economic climate improves.
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Watch those Direct Debits in New Zealand.
I need to cancel a Direct Debit. No problem you would think? Hmmm, not so fast – this is the New Zealand Banking system, and so of course it just ain’t that simple.
In Avalon’s Guide, one of things I stress is:
And something which is vitally important: once you have closed down all your utilities in the UK, like gas, electricity, internet, and you have told them not to take any more money from you via Direct Debits – also tell your bank! You should always cancel your Direct Debits with the bank, and then if any company “forgets” that they shouldn’t be charging you anymore, they can’t get your money.
So I figured (I think rather sensibly) that I would do the same thing here. Cancel the Direct Debit at the bank just in case the company I’m dealing with (which so far has shown itself to be run by a bunch of bone idle morons) “forget” and try and take another premium.
But the bank wont do it.
Apparently, the only way to cancel the DD at the bank is to cancel my Credit Card and get a new one.
What???? 
Are these people for real?
This is despite a clause on the DD form that says:
2. The Customer may:
(a) At any time, terminate this Authority as to future payments
by giving written notice of termination to the Bank and to
the Initiator.
(b) Stop payment of any Direct Debit to be initiated under this
Authority by the Initiator by giving written notice to the
Bank prior to the Direct Debit being paid by the Bank.
Apparently, I cant.
So I contacted Direct Debit New Zealand, who were also as effective as a wet paper bag. Although they have said:
At directdebit.co.nz we are looking to increase the visibility of these
processes to ensure the “customer” controls the direct debit process more.
Which is nice.
So be warned. Here in New Zealand the Direct Debit system, which is supposed to offer us all sorts of protection, doesn’t.
The banks are ignoring their duty under the agreements we signed.
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