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.

Money

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