In the face of rising interest rates and the increasing cost of everyday items at the supermarket, more and more households are finding it harder to get by.
Many New Zealanders are finding themselves back at square one, redesigning their personal budgets in hopes that they can free up some funds. While this task may appear daunting, it also provides an opportunity to weed out some unnecessary spending and shed a light on areas where improvements could be made.
So, what do you do about it? – A good start is to take a deep dive into your personal finances.
A personal financial plan is insightful and often holds answers to help bridge an income and expense gap in challenging times.
The ABCs of Budgeting
The first step would be to start drawing up a budget to understand your cashflow. It is crucial to look at or revisit the numbers. A personal budget should be as simple as ABC…
Household income per fortnight (check your payslip for your pay cycle).
Minus all fortnightly necessities (food, bills etc.).
Minus all fortnightly luxuries (coffees, Netflix, gym etc.).
A bank statement dating back three months is usually a good starting point to check various spending items.
This exercise helps take back control over your money; weeding out any overspending and prioritising expenses, which helps to create emotional security and much-needed communication about money in the household.
Optimising Your Personal Insurance Plan
The next step would be to check any personal insurances you have in place (life, income cover, trauma, and health insurance etc.) Personal insurance provides you the much-needed financial protection in times of various life-changing events like death, untimely ill-health, and subsequent disability (off work long-term). A robust insurance plan is an essential element of your personal financial plan and should be reviewed along side the insurances you may have in place via the Judiciary Insurance Scheme.
Harnessing Your KiwiSaver Scheme
The third step starts with the essential task of prioritising your expenses and fostering open communication within your household, laying the foundation for emotional security.
To safeguard against unforeseen circumstances, securing a personal insurance plan and the options available for that plan becomes paramount. Alongside this plan, take a closer look at your KiwiSaver scheme and/or your Judiciary Superannuation Plan, examining options that may be available. Keep in mind that seeking guidance from a financial adviser will provide invaluable insights as you navigate these decisions, ensuring a well-informed approach to your financial journey.