I try to be as structured as possible when it comes to organising my finances, and automate as much as I can. I track every dollar I earn, spend and save using Quicken, and have done so for the last 2 years, and this gives me a great amount of information about exactly where my hard earned dollars are going and where I can plug leaks or increase efficiency.
My salary is paid fortnightly into my current account which has zero interest, but also zero fees for all automated or electronic transactions. Before I even see my salary there are a few deductions apart from the obvious tax. I have 6% of my salary diverted into a retirement fund and this contribution is matched by my employer. A further 4% is diverted into my Kiwisaver fund - this is a recent Government initiative to promote retirement savings and has some tax benefits. Compulsory student loan repayments also come straight from my paycheck - this amounts to 10% of every dollar over $18,148 earned per annum.
On the same day as my salary is deposited into my account, I have automatic payments which divert a further 10% of my gross salary into a combination of retirement funds, and an investment cash account. I also divert $125 into my Bill savings account which is the account I use to cover all predictable expenses - car registration, insurance, health insurance etc. I keep these accounts with Raboplus - a bank offering online on-call savings accounts with no fees, no minimum balance and 8.35% pa interest. Rent is paid weekly by direct transfer to my landlord's bank account.
So once all the above deductions have been made (tax, student loan repayment, 20% gross into retirement savings, bill savings and rent) the rest of my money is for living expenses, entertainment and short-term savings goals. I try to use my credit card to pay for all other expenses including bills where this is possible. I have my current account set up to automatically pay the full outstanding balance of the card each month to ensure that I never pay interest. I use cash as little as possible, but usually have $20 or so in my wallet in case I need it.
I have a master savings account (also with Raboplus) which is where I transfer all excess money after payday - I try to keep as little as possible in my current account to maximise the funds earning interest in my online savings accounts. At the moment most of my master savings are earmarked to become my emergency fund - I'm aiming for $10 000 and should have this amount saved within the next couple of months.
So that's how my week-to-week finances are arranged. I'll talk a bit more about my investment choices, my job and my student loan shortly.
My salary is paid fortnightly into my current account which has zero interest, but also zero fees for all automated or electronic transactions. Before I even see my salary there are a few deductions apart from the obvious tax. I have 6% of my salary diverted into a retirement fund and this contribution is matched by my employer. A further 4% is diverted into my Kiwisaver fund - this is a recent Government initiative to promote retirement savings and has some tax benefits. Compulsory student loan repayments also come straight from my paycheck - this amounts to 10% of every dollar over $18,148 earned per annum.
On the same day as my salary is deposited into my account, I have automatic payments which divert a further 10% of my gross salary into a combination of retirement funds, and an investment cash account. I also divert $125 into my Bill savings account which is the account I use to cover all predictable expenses - car registration, insurance, health insurance etc. I keep these accounts with Raboplus - a bank offering online on-call savings accounts with no fees, no minimum balance and 8.35% pa interest. Rent is paid weekly by direct transfer to my landlord's bank account.
So once all the above deductions have been made (tax, student loan repayment, 20% gross into retirement savings, bill savings and rent) the rest of my money is for living expenses, entertainment and short-term savings goals. I try to use my credit card to pay for all other expenses including bills where this is possible. I have my current account set up to automatically pay the full outstanding balance of the card each month to ensure that I never pay interest. I use cash as little as possible, but usually have $20 or so in my wallet in case I need it.
I have a master savings account (also with Raboplus) which is where I transfer all excess money after payday - I try to keep as little as possible in my current account to maximise the funds earning interest in my online savings accounts. At the moment most of my master savings are earmarked to become my emergency fund - I'm aiming for $10 000 and should have this amount saved within the next couple of months.
So that's how my week-to-week finances are arranged. I'll talk a bit more about my investment choices, my job and my student loan shortly.
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