Personal Spending
What is a budget?
An estimate of income and expenditure for a set period of time.
Name the voluntary, work-based retirement savings scheme we use in NZ: K___ S______
KiwiSaver
At what age do most people in NZ choose to retire?
There is no set retirement age in New Zealand. However, many people choose to stop work at 65.
Every Wednesday and Friday, I spend $9 at the canteen. Every second Friday, I end up buying one of my mates a can of coke for $2.
How much do I spend in a month?
$76
Buy secondhand, try to work extra hours, take out a loan, etc.
What should you do on a regular basis to make sure you're saving enough to meet your financial goal?
It involves logging into something
Check your bank account / savings balance!
What is an investment?
Something you put money into, expecting it will grow in value over time and earn you money. Some examples include buying property, buying shares in a business or buying gold.
I earn $800 (after tax) each week.
How much will I earn in a month (12 months per year)?
$3466
One thing you can do to help you save more when you look at the list of things you spend money on is....
Sacrifice some "wants" like snacks, streaming services or gym memberships so you can save more.
Which is better for an account that you want to save money in: A high interest rate, or a low interest rate?
High interest rate
What is the name for a way of managing risk in your life? Unexpected things happen in life and ___________ helps protect you from financial loss if something happens to the things you own, to your health or your ability to earn money.
Insurance
I earn $800 (after tax) each week.
How much will I earn in a year (52 weeks)?
$41,600
Explain the impact of high-interest loans on personal spending.
High-interest loans have a negative effect on personal spending - people can't afford to take a loan out as frequently and so may have to save up for longer / not spend their money straight away.
How would a high-interest loan over five years for a $10,000 car affect my life if I'm working part-time on earning minimum wage, and go to school?
Name two effects.
It could make it tricky! High-interest means I'm paying waaaay more than $10,000 for that car - is it actually worth that much? Or can I find a better deal?
If I really need a car though, maybe it is worth it? Or can I get a cheaper, more basic car that will do the job?Could I walk, bike, or take public transport? It might take more time to get to school / work!
Fill in the blanks:
___________ _________ is the amount of interest you earn on both the money you have in your savings and on the interest you’ve already earned.
In other words, you earn interest on interest. Over time, ___________ _________ makes your money grow faster!
Compound Interest
How much will I pay in bills each month?
· Rent is $1400 per month · Power averages $250 per month
· Cellphone and broadband plans average $150 per month
· Insurances average $300 per month · Groceries average $800 per month
· Petrol averages $200 per month
$3100
How can inflation affect your personal spending decisions?
If inflation is high, things generally cost more and you may not be able to afford them. However, your wages may be higher or the economy might be doing well in general.
If inflation is low, you should be able to afford them but it might mean you're not working / earning as much due to wages being lower or industries not working for as many hours.
A SMART goal is important for budgeting. If I wanted to save money to go to a concert in January 2025, what would I need to plan out to help me go to the concert?
Specific details: Amount of money I need to save in total and why.
Measurable: How much am I saving per week / month until January?
Achievable: Based on what else I spend, can I do it? Do I need to make adjustments?
Realistic / Relevant: If I make those adjustments to my spending, how will my lifestyle change?
Measurable: I'll have to keep track of / monitor my spending and savings carefully and make more adjustments to make sure I meet my goal.
What do you need an IRD number for?
An IRD number is like a fingerprint that keeps track of the tax you pay and helps to ensure you pay the right amount and get the right entitlements.
You need an IRD number when you:
• Earn money (for example, from a job, benefit or superannuation)
• Open a bank account or join KiwiSaver
• File a tax return
• Apply for a student loan, ACC payments, child support, or any benefit
• Purchase or sell property in Aotearoa New Zealand.
I have $366 left over from my pay ($3466) each month after paying all my bills. I want to save 10% of my pay each month. Will I have enough money to do this?
Yes, 10% is $346 ($350), and I will have $366 leftover from bills.
DOUBLE POINTS IF YOU ALSO SAID: I will not be able to do this if I have unexpected bills or costs of more than $20 each month.