What’s it like switching Kiwisaver providers?

Have you ever moved your retirement savings? I recently switched to new kiwisaver provider Simplicity and here’s how it went.


I first started thinking about switching kiwisaver providers when I wrote this post about kiwisaver fees. New Zealanders don’t have many options for super low fee retirement funds. My current provider Kiwiwealth while very open and transparent still charged 1.17% in fees. This is (shockingly) below average. Many providers are charging a lot more than this!

Last month a new kiwisaver provider started showing up in the local newspapers. Simplicity claimed very low fees of 0.31%, they are owned by a charitable trust and a 1/3 of their management fees are donated to charity. Its an easy sell, sounds great on paper. Oh and they mostly use index funds, so nice and diverse.

Simplicity Kiwisaver provider

The Switch

I was intrigued, a low fee fund finally on offer in New Zealand! After reading a bit more information on their website (including the product disclosure statement) I boldly decided to make the switch. Simplicity makes it easy to switch, you have to provide your IRD number and upload some identification (scanned my passport). Painless and after that it’s all in their capable hands. Like all good decisions it was made on a Sunday afternoon. I’d been with Kiwiwealth since I first joined kiwisaver, leaving was hard, for the most part they were pretty good but in the last year my balance had flat-lined. I also learned that they don’t invest in New Zealand shares at all. Which didn’t sit well with me and maybe that’s not very rational, but I like to think we have a few companies here in New Zealand doing exciting things. Show a little faith in your home economy!


Patience and Denial

The days dragged on, I paced, I checked my emails constantly. I logged into my old provider most days to see if the balance had been transferred. I got a reassuring email from Simplicity letting me know that yes things are happening but it might take some time, apparently your old provider has 35 days to transfer the funds! That’s working days, so its 7 weeks to get their arses into gear.  Finally on day 13 something actually happened, I was LOCKED OUT of my Kiwiwealth account. Now I know my money is (likely) no longer with them and I’m no longer a client but it seems just a little passive aggressive to delete my login credentials. There wasn’t a “Sorry to see you go email” or even a plea for me to stay. No communication, apparently I’m dead to them now.

What the hell

At lunchtime on working day 15 I got notification from the IRD that they will be forwarding money from my paycheque to Simplicity, yay things are moving along. Meantime no idea where my money is. For 2 days my money has been in the ether, drifting. How do they transfer it anyway? Send a check, money order, bank transfer? Its a mystery.


Anyway I got home after work and there was a letter from Kiwiwealth, finally communication! It was a statement of my accounts letting me know how much money would be moving over to Simplicity and that they were sorry to see me go. Thanks guys, I was really hurt when you locked me out. I missed the chance to down load my historical info and how can I geek out on my savings numbers now? Thankfully I had loaded some annual info into a spreadsheet so I can make graphs to my hearts content.

Later in the evening I got an email from Simplicity announcing that my account was active! I logged in and all my cash was there. They did let me know that the deductions from my paycheck were not occurring just yet, but I had the notification from IRD so I know its in the process of being sorted out.

So overall not too painful, 3 weeks of limbo and then bam, all done. Although they legally could take up to 35 days it only took 15, so not super speedy but not terrible either.


September Spending

Graph of September Spending

Ah September, I attempted to be more mindful in my spending and reduced the grocery spend considerably. However beer expenses were up up up!

What I do like about looking at the graph is that our expenses after mortgage and savings are roughly a third of total expenditure. So once the house is paid off we’ll be able to really ramp up investing and our retirement expenses probably aren’t going to be as high as we think.

The Good

I managed to save a bit more money this month, I transferred money out of my checking account most days into my savings so I wasn’t tempted to spend it. Grocery expenses were down helped by more careful spending and a $100 voucher I got in exchange for taking part in a nutritional study.

The Bad

Spending money category or I may as well call it, the beer category. I bought a delicious amount of beer. Not only for drinking at home but I also went to my favourite bar’s 3rd birthday celebrations (free food and lots of special brews on tap for the occasion). Then there was my husbands album release party. Yep, my husband is among other things a musician and in his spare time he has been recording this album. He plays all the instruments, sings all the song, writes all the songs, does all the recording and he designed the cover! He doesn’t have a record deal or anything but we threw a a big party for all our friends and gave away loads of CD’s. I spent about $250 on the party. Worth it, it was the best fun we’d had in ages. Other spending money includes Netflix $12.99, Steam $5 and $80 booking a food and craft beer matching evening. I’m starting to think I should break down the spending money category a little further, but I don’t think I want to admit to myself just how much money I spend on beer.

Spending breakdown

The not so bad

Giving – It’s way down, I’ve only donated $174 so far this year, but I usually give more around Christmas. I don’t have an amount in mind that I want to give, its kind of ad hoc at the moment. I would like to be a bit more consistent with my donations.

Household goods – I bought two rugs online, we have hardwood floors and the rugs were on sale. They certainly make the place look more inviting but it was hardly a necessary spend.

Holiday spending – I booked a bus tour of craft breweries North of Auckland. It’s organised by my local craft beer club.

Transport – I used the bus a bit more last month and I had 2 Uber rides (both from events with beer consumption so I wouldn’t have to drive).

So many beer related expenses.


Credit Scores – Now With Instant Access

In New Zealand you’ve always been able to see your credit score, however you had to be prepared to wait a while and fill out some tedious forms and watch the mail box. I never bothered because I’ve never been denied credit so I just assumed it was OK.

Credit simple have come along and they make checking your credit score really easy, like just type in your drivers license number easy. In about 3 minutes I had my credit score, a respectable 740 putting me in the top 4% of people my age (and beating my husband by 8 points which he is absolutely gutted about). Nice I guess. Actually I’m kinda proud, I wanna put it on a t shirt! However New Zealand doesn’t do too much in the way of adjusting your mortgage rate based on your credit score so I’m not going to be offered a super low mortgage rate tomorrow despite my brilliant score.

New Zealanders on the whole don’t really understand credit scores that well and hardly anyone knows about them.

– 92 per cent of Kiwis don’t know their credit rating
– 72 per cent don’t know what a credit rating is
– Only 13 per cent have ever ordered their full credit file
– But when asked 84 per cent of people said they were “interested” to know theirs

Credit simple have done a pretty good job of promoting the new service and all of a sudden my social media feeds are filled with people checking out their credit scores, some are bitterly disappointed and others still not quite understanding what its all about.

The comments on twitter and Facebook would have been hilarious if they didn’t show up how ignorant we are of credit scores. So far I’ve seen it assumed that..

  • your star sign affects your credit score
  • your gender affects your credit score
  • the score is calculated based on the information you give to the website to identify yourself
  • that credit simple is using the website to track down people for debt collectors
  • its a giant social experiment to see how many people will put their identity details into a website

star sign does not affect your credit score!

I guess its nice to see a bit of skepticism when it comes to divulging information online. That is some small consolation.

Check your credit score online NZ


Credit simple are also coping a bit of flak for adding links to credit card and loan offers. Some are seeing it as preying on those with bad credit, but advertising is advertising. I expect to see adverts everywhere and when you are getting free instant access to your credit score then of course there are going to be adverts to offset the cost of running the site.


Instant access to your credit score (with no penalty) is long overdue. I think its great that this company was forward thinking enough to get rid of the ridiculous delays.

Most Kiwi’s only find out they have a bad score if they get denied for consumer debt and now there’s a little bit of a buzz around it. Anything that gets people to take a more active interest in their finances is a good thing in my book.



Burned by the $100 Pizza – A Split Bill Tale

Social outings can be disastrous when you’re trying to watch your spending, especially restaurants and bars. Most of the time I am a happy little introvert who likes staying in anyway but sometimes there are occasions you just don’t want to miss.

My family asked us out for dinner last week, I had been watching my spending so I did have some money left in my checking account. I was delighted that I could afford to go. Spending time with people I love and eating yummy food is a favourite activity.

My aunt chose an affordable restaurant, a gourmet pizza place. We checked the menu ahead of time and decided we could share a grilled duck and onion relish pizza (OMG yum) plus a glass of wine each. The total would come in well under $50 if we didn’t get tempted by any other tasty dishes (or the second glass of wine!).

At the end of the meal my Aunt announced that we will split the bill equally amongst the adults. I’m astounded as she often talks about her finances and I thought maybe she was watching her budget too. Even worse I feel too shy in front of my family to say anything. I caved and paid my share of the bill which came to ~$95 and some change. I have just paid $100 for a pizza and 2 glasses of wine and I feel terrible.

$100 Pizza split between 2 people
The most expensive pizza meal I’ve ever had. Ever.

So whats the solution? In this instance I will let it go because whats done is done, it was a special night out with some pretty amazing news being announced. (So I want to remember the night as a celebration!) Certainly I don’t want to be remembered as quibbling over the bill. However I learnt some important lessons.

For any transaction, know how you will be charged and don’t let others decide how to spend your money for you.
Lesson learned.

In future I will call ahead to the restaurant and see if they allow individual bill. Some places have let me order at the counter and bring my meal to the table with the rest of the group or pay separately at the end. I’ll also be upfront with family at the beginning of the meal. “Hey I’ve only got $50 for eating out tonight so I’m just going to split a pizza.” A little communication goes a long way.

It did get me thinking, what if I have been guilty of doing this? Have I ever put someone in the position of spending more than they wanted to? Perhaps I could be more sensitive to my friends and the social activities I suggest. For example I plan for spending some money every month on craft beer. I love it, I brew it, it makes me happy but I possibly have friends who get a little annoyed when I recommend going to the latest craft beer place, the beers are way more expensive than standard brews.

We all have different priorities for spending money and my must do craft beer experience is someone else’s $100 pizza.

OMG the Sky is Falling – Useless Media Panic

Our national newspaper is kinda sucky. Since the digital age they are all about click-baity headlines and celebrity gossip with a few bastions of journalistic integrety trying their hardest to break through garbage. It seems like most editors have been fired and fact checking is now a relic lost to the golden era of newspapers.

This recent dip in the market was covered by the business sections with new articles during the day, oh crap sky is falling, oh wait don’t worry we’re bouncing back, NO ACTUALLY PANIC because this afternoon investors sold everything!

Sharemarkets! everybody Panic screenshot-2016-09-13-21-46-24

“Fear returns” and “relief rally” are highly emotive and even in someone like me, who has been investing in shares since before the GFC, it still elicits a stirring in the gut.

My strategy is to just keep on keeping on. I’m investing in the sharemarket for the long term i.e more than ten years. I mostly hold index stocks and the companies I have bought individual stocks of seem solid enough (well nothings set in stone I guess) and I’m not worried about any of them going bankrupt overnight because of jittery markets. I still make my monthly contributions and if its gets too depressing looking at the share prices, I just stop looking so often.

Being well diversified keeps the panic at bay and helps me sleep at night. My investments are in multiple type of index funds and in multiple countries. I also have other types of assets like property, P2P loans and forestry.

It helps to be mentally prepared for dips in the market, imagine your net worth falling, imagine losing 10%, 15% 30% 50% of your net worth! And then think about what you would do in those scenarios. By thinking through worst case scenarios you’ll be emotionally prepared when they happen and less likely to make a gut reaction. You’re more likely to behave logically because you’ve “practised” how to react.

Another way to protect yourself from these sky is falling articles is to gain some insight into the way these sites work, they want clicks so the headlines are deliberately shocking. Brent Sheather wrote an insightful piece on the half truths and outright lies that appear in media finance commentary and that might help immunise yourself against being swayed by “expert opinions” in news media.

Of course maybe the best solution is just to just stop reading the business section?




How to be an Effective Saver

We all want to be super savers, but how do you get “good” at saving? Practise is a big part of it, you can’t help but get better at what you do often. Until the savings habit becomes a deep ingrained part of your psyche I thought I’d help you out by sharing some of the strategies I’ve used over the years to help me be a better saver. They’ve worked well for me but everyone has a different savings mojo.

Computers are our friends, let them do the work for you.

Automate – We already have so much to think about so make life easier on yourself and automate your savings. Have a portion of your paycheque go straight into your savings account. There’s no chance that you’ll forget some weeks and it won’t become a chore you have to remember to do every time you get paid.

Why are you even saving?

Save with purpose – Set savings goals, you might need an emergency fund, long term savings for retirement an short term savings for big ticket items, house deposit or a holiday. Keep emergency funds and long term savings separate. Savings for retirement need to grow so never dip into that stash of money. And how about taking it a level deeper, yes retiring early and establishing an emergency fund are excellent reasons for saving. But why do you really want an emergency fund? Why do you want to retire early. Take some time to think over the kind of financial situation you want for yourself and why.

You are your own worst enemy

Keep those dollars at arms length – If a nice fat bank balance is too tempting for you then open a savings account that is a bit trickier to access. Try another bank or an online only account. You don’t want to be able to flick money over to spend instantly when you are faced with temptation. If it takes a day to transfer over hopefully that will dissuade you from some impulse purchases! Don’t link the account to any cards.

 Bank your windfalls

Add pay rises to your automated savings – you won’t miss what you’ve never had. So don’t let pay increases lead to lifestyle inflation. Instead up the automated savings amount to match the pay increase.


Grow cash GROW!

Money’s got to have a job, no lazy money! – Once you’ve built up some savings put those dollars to work. Don’t leave tempting piles of cash around as you might start to feel those dollar burning a hole in your pocket. A huge balance might make you feel wealthier but you can’t spend those dollars just yet, you need to grow them even more! Invest the cash into income producing assets, shares, index funds, property, bonds etc.

Squeeze out a few more dollars, you can do it!

Save everyday – Did you skip buying your lunch, did you negotiate a discount on a regular bill? Transfer those day to day savings out of your transaction account and into your savings as you go. Not only do you get the great feeling of scoring a deal your savings balance goes up as well. Twice the rewards!

Saving gets easier the more you practise, but one final thought. Saving can also become exhausting. A little mad money for guilt free splurges will help keep you sane and keep your savings on track. Good luck!


August Expenses – Prepaying a Future Holiday and Eating all the Foods!

At the end of month I started to feel like my spending wasn’t really in line with what I wanted for myself. I slipped back into buying a lot of lunches and drinking in bars on weekends. Living large baby! I was also putting some of these purchases on the credit card and come pay day I was transferring way more than I was comfortable with to get the credit card balance back to zero. Time to be real with myself. I cannot afford to live like that and have the financial secure future I imagine.

There is $500 of easy money that could have gone into investments this month. Instead it mostly went in my mouth. (It was all delicious stuff to be honest). Between that and the grocery bill I do believe I can find an extra $600 next month to go into savings. It’s hard being focused all the time and its easy to just slip into the buy “whatever you think you need in the moment” mindset. With a little more thoughtfulness I’m sure I can do better.

I spent a lot on Fuel last month but I still have 3/4 tank as I’ve been catching the bus a few days a week.

I prepaid a trip to Nelson for the New Zealand Homebrewers conference in March next year. Even using airBnB accommodation costs are so high! Still it was 30% cheaper than a motel.

Still throwing money at the rental property to pay for a $2,400 heating unit.

And my last thought is thank fark I earn a decent wage and my extravagant spending habits don’t get me into trouble.  I often worry that New Zealand is becoming a low wage economy and I see lots of big corporations paying their workers very low wages, not even a living wage. They all do it and slowly but surely they are eroding the middle class and therefore their own consumer base. Companies want their workers poor and their customers rich, well guess what, your customers are your workers.

Screenshot 2016-09-04 15.09.07


Screenshot 2016-09-01 17.31.02

Small Time Dividends – Don’t let them Escape!

Today I got my Abano Healthcare dividend. It was approximately $29 or enough to buy a 6 pack of craft beer and 500ml bottle of something special on the side. Yum! But drinking my profits was never the plan (well one day maybe).

Abano Health share price graph
Its been a fun 6 months or so, I bought in around $6.70, thanks Abano

So no beer for me because I have the dividend re-investment plan activated. My money has automagically turned into 3 more shares. Every 6 months the dividends are used to purchase more shares on my behalf and any remaining money is rolled over till the next 6 months.

Dividend re-investment plans work really well in New Zealand for a couple of reasons.

  1. We currently  have no capital gains tax. This means that these small amounts of money aren’t going to become a pain in your ass years down the track when you need to calculate your capital gains on all the small share buys.
  2. Brokerage fees here are really HIGH! It costs a lot to make a trade so anytime you can buy shares for free is a win in my book.

So if you’ve been wondering what to do with all your little dividends get online and check if the company has a DRP or Dividend re-investment program. Its way better than receiving a cheque (argh so inconvenient!) or having the measly $29 sit in your account doing nothing and not earning its keep. Dividend re-investment is already happening for most of you in your kiwisaver accounts and probably in your index funds as well (unless you checked the dividend pay out box!).

Out of sight out of mind, it happens with out any extra input and that tiny dividend is no longer tempting you to buy some craft beer that your waistline doesn’t need! Make sure your money makes you more money by keeping it invested. It’s the aim of the FIRE game and it will get you the the finish line faster.


Frivolous Investments

I guess I must be feeling pretty flush because I just dropped $500 on a share in a craft brewery. As far as frivolous investments go this is pretty high on the list.

Parrotdog put out the call for 2 million dollars to upgrade their brewery to a new location with a taproom and takeaway sales. Being the craft beer lover that I am how could I resist? I love craft beer! Owning part of a brewery is like a dream come true. My share doesn’t quite entitle me to drink for free but I do get 10% off all online and takeaway orders.

However after looking over the share offer I found myself feeling a lot less optimistic about their projected growth than Parrotdog brewery. Their projected sales seem too good to true even with New Zealand’s exploding craft beer scene.

Consider this graph for instance, projections like this usually have me running of the hills! Which hills? I dunno, the safety hills?

Screenshot 2016-08-20 18.21.05

But I still made the purchase because craft beer is a hobby and it brings me joy. The creativity and camaraderie in the New Zealand industry is inspiring and its becoming less fringe and more mainstream by the day.

The investment was made knowing that it might never be worth more than $500 and it might even be worth less! I am at a point in my life where I can afford to throw $500 at a pet project, its like lending $500 to your brother in law to start a business….lets just call it a donation and not worry about ever seeing that money again.

Screenshot 2016-08-20 18.35.50

$500 is currently 0.083% of my current net worth but if I was only just starting the journey to FIRE and $500 was 1% of my net worth I don’t think I would risk it.

With crowdfunding platforms the world over becoming more popular these kinds of private off market listings are a lot easier for everyday folk to find and throw cash at. While its exciting to be part of these smaller businesses and start-ups the risks can be a lot higher and there seems to be less regulation. Its my first time investing in a company off market like this, so I’ll let you know how it works out. In the meantime, please purchase ParrotDog beer!

I’ve Paid off my Maxed out Credit card – Twice!

Some lessons in life are hard to learn. So hard that you have to learn them twice. Credit card management is definitely one of them.

The first credit card I got was handed over to me with little ceremony when I was a student. It was my second year and I’d moved out of the halls of residence and into my very first flat on Cook st.

My campus had a branch of the National bank down by the (man-made) lake (full of huge eels that would eat the baby ducks) and students were eligible for an interest free $1000 overdraft and a credit card with a $500 limit. For a broke student it was just free money, I figured it would be easy to pay back once I graduated and started earning my kick ass amazingly high wage. (Yeah right, turns out science graduates aren’t nearly as in demand as I thought).

Some of the $1000 went on text books, I bought a woolen electric underblankets (it was a cold town!) and heaps of beer, takeways and …….. well I can’t really remember where the rest of it went. It just went! I probably bought CD’s and cool posters for my room.

Poster- Picasso Print

It wasn’t long before everything was maxed out. Each week my student allowance came in plus a little side income from working in a lab downtown. I paid my rent and everything else went into the overdraft but before the next pay day the overdraft was maxed out again. It wasn’t till a I finished university and finally got a full time job that I was able to pay it all back. Each fortnight I had to call the bank and ask them to reduce the overdraft by a measly $50. I learned the overdraft lesson and never used one ever again. The weeks dragging by and the embarrassing calls to my banking manger left a lasting impression.

The credit card however had no such lesson, the payments to visa were to this vague external entity. I never met anyone from visa and I never had to call. In fact I think they even increased my limit once I started working full time.

Fast forward to 7 years later and I was still always carrying a credit card balance. I thought it was normal. By now I had a limit of $3000 and things were getting dangerously close to that limit. The first hint that I wasn’t exactly managing things was when I made my first call to visa. I wanted a limit increase for a trip to vegas “just in case”. Just in case what I’ll never know because they turned me down. I had made a large cash withdrawal the week before. I mistakenly paid too much off the card that fortnight and hadn’t calculated enough reserves to make rent! The bank wasn’t too impressed with my money management skills.

After the trip added even more debt to my card I decided I had to tackle the debt. Each pay day I paid the bills that had to be in cash (e.g rent) then every single left over dollar went on the credit card. No cash left in checking, everything was now on the credit card. It was a huge payment and each payday bought the promise of progress. But I still had groceries and petrol to buy so I would use the credit card. It was a 3 steps forward 2 steps back kind of deal but I got there in the end.

The second time I maxed out my credit card was way worse. It involved spending money on family, spending more than I earned on day to day expenses and having nothing to show for $12,000 worth of debt. Yep twelve grand. It happened over several years. I didn’t buy myself clothes or gadgets or things like that. But I bought movie tickets, takeaway pizza’s, groceries, dinners out and a trip to the Gold coast for my partner and their children. So in the end I had massive debt and no assets to show for it. Deeply ashamed I hid my debt from everyone. I carried on as if everything was normal with this huge debt anxiety in the background.

This time I transferred the debt to a credit card with 0% interest for the first 6 months. After 6 months I transferred to a card with the same bank with a low interest rate (about 1/2 the standard rate). It took me about 3 years to get it under control. During those years I paid my mortgage and invested in kiwisaver. I bought shares but I didn’t mange any cash savings. Once I got the balance down to $1000 I started to save cash. Actual cash reserves. Looking back I was lucky to have a good paying job and to manage the rest of my money so I never got behind in repayments. It never became an “issue” or stopped me from being able to afford rent, power, food etc. It could have been a lot worse.

Now I pay the balance in full on my card every time I get paid. Transfer over enough money to zero that balance and sometimes it hurts the checking account a little because I’ve spent more than I thought. Even now spending on the plastic doesn’t trigger the feeling of spending my own money. Its a future me problem not a today me problem.

So thats my consumer debt story, going through the painful repayment process taught me a lot about money and how I interact with with it. So for that I am grateful. (Obviously I would rather not have spent the money and have it investments but we’ve always got to look for the silver lining).