Forget avocados, smash the big stuff first
Avocados have gotten a bad rap lately. The real reason millennials can’t afford to buy their own homes, commentators said, was not sky-high prices or the banks requiring 20 per cent deposits, it was young people’s insatiable hunger for the creamy green goodness of smashed avocado on toast. And even if you don’t like avocado, the finger-pointers would point out (with their fingers) that while our parents got by with a cup of Choysa made from a tea bag that was usually good for three rounds, the young’uns were tossing back fancy coffees that cost more than former Reserve Bank Governor Don Brash might spend on dinner.
(The next step in this battle of the generations was almost inevitable: cafés began offering, with more than a hint of irony, lattés served in a half avocado.)
So is saying no to the pear-that’s-not-really-a-pear the path to financial freedom? Well, simple maths tells us that scoffing a $14 brunch every other day isn’t going to help your bank balance grow. But the occasional breakfast out is a treat, right?
It makes more sense, we reckon, to save money on the stuff you pay for but don’t enjoy.
Power to your pocket
Take electricity. You can buy the stuff from lots of places these days (last time we counted there were two dozen power retailers choose from around the country). And does Mercury electricity makes your lights come on faster or glow more happily than Meridian? Of course not – it’s the same stuff.
So why do power companies charge different amounts for it? Because they can. It’s over to us to hunt down the best deal and switch when we find it. Luckily, Consumer NZ has crunched the numbers and has a website that makes it easy to do just that.
Take it to the bank
Credit cards and mortgages are big expenses for many New Zealand families. And just like electricity, an interest rate is an interest rate. ASB’s one doesn’t smell minty fresh, and Westpac’s one won’t kill the germs that ordinary brushing can’t reach.
So it’s well worth comparing and switching if it’s worth it.
This site makes it easy to compare cards.
And this one does the same thing for mortgages.
Bonus: if you find you can get a cheaper mortgage somewhere else, don’t switch right away … give your existing bank a call and tell them you’re looking or a better deal. Banks hate to lose customers, so there’s a good chance they’ll give you a rate cut on the spot.
Insurance: why pay a premium?
You hear a lot of scare ads from insurance companies about how many families are under-insured (and lots are). But plenty are over-insured too. Does the contents policy you took out when you had three kids at home cover more stuff than you need? Talk to your insurance company about the effect of reducing the sum insured. Is your car still covered for teen drivers who aren’t teens anymore? Excesses are worth looking at too. If you hardly ever claim, and you’re happy to cover the first $500 or even $1000 of a whoopsie, then see if upping your excess can help tame your premiums.
Spend a little while doing your homework on the boring stuff … power, money, insurance and so on … and you could surprise yourself with how much you save. And that, of course, means more money for avocados on toast.
Um, we mean, for prudent financial planning and retirement savings.
Vaughn Davis is a smart cookie who lives in Auckland and has a goat farm. An actual goat farm. He also has The Goat Farm, which is an ad agency and doesn't involve any actual goats. He writes monthly for Credit Simple and you can find him @vaughndavis.All stories by: Vaughn Davis