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Getting ahead financially in New Zealand is really very simple, though that statement in itself probably makes you want to grit your teeth and yell. But it is true. The really tough part, is recognising your own destructive behaviours – no matter how benign they seem to you now – and changing your habits accordingly.
We always have a reason for why we need to spend money. When you catch yourself saying “I need…” make yourself think about alternative things you could do to fulfil that need without actually buying the object of your desire.
As for the practical part of getting ahead, there are only two strategies you have to consider.
1. Increase your revenue
2. Decrease your expenses
You might be thinking that it’s all very well to say that financial improvement is simply a case of increasing revenue, and decreasing costs, but each one of those will require sacrifice.
Increase your revenue
Here are some simple actions you can take to increase your revenue:
Decrease your expenses
There are a number of reasons why you might have more debt than you are comfortable with, including your income level, work and life opportunities – or lack of them – money management skills, impulse control… What is important, however, is that you get to the bottom of the problem with some careful self-analysis.
1. Study yourself, learn what makes you tick, note it down and investigate possible solutions.
2. Pay your highest interest rate debts off first.
Some say you should pay your smallest debts first, which is a good strategy if achieving small wins is psychologically important, but mathematically it’s best to go after the high interest rate debts first.
And those interest free deals, like Gem Visa’s six months interest free on purchases over $250? All well and good, but make sure you pay it off on time. Interest free does not mean free.
Finally, substitute luxuries for more cost effective alternatives e.g. shifting from a Sky TV subscription to Netflix, which is much cheaper, gives you a little extra cash to pay towards your credit card bill.