New Year spending hangover? A budget plan
By Retirement Commissioner Diane Maxwell
Some of us went a little crazy this Christmas Eve (actually we may have done many crazy things, but the bit I’m talking about is the spending.)
Paymark figures show we set a new record for the number of times we swiped our credit and debit cards through EFTPOS machines in stores all over New Zealand.
Across the country we clocked up more than 157 transactions per second. On a normal day it’s around 50-60 per second.
So did we all just wait to the last minute to do our shopping or did we spend more overall?
It seems we spent heavily throughout December, not just on Christmas Eve, clocking up $5.49 billion of sales, which is 8 per cent more than the same time last year.
The number that really got my attention was the amount we popped on our credit cards: $2.5 billion, which was nearly half of the total spent and 10 per cent more than last year.
That works if we’re using credit cards just as a payment tool and have the money to pay it off before the interest kicks in but we know that 4 out of 10 of us don’t, and then end up paying interest on the outstanding amount.
And remember credit cards can have some quite feisty interest rates, usually between 13-22 per cent.
Take a close look
At this stage you may be smiling quietly and congratulating yourself on not doing any of the above.
Many over 65s are better at managing money day-to-day than anybody.
If that’s the case, read this on behalf of some of your younger family members who aren’t, and who may benefit from your wise words.
I’m not a big fan of New Year resolutions because they often have a shorter shelf life than the Xmas ham.
But I think now is a great time to consider a few small, regular changes to the way we handle our money, which could make things better over time and prepare us for next Christmas.
First things first:
Some of the retirees I know say they’re busier than ever since they stopped work, so give yourself one less thing to think about by setting up automatic bill payments for things like your power bill.
It’s usually free to do through your bank and saves you money by cutting out the risk of late fees.
On the subject of fees, many banks have ‘fee-free’ accounts for over 65’s. If you’re not getting that already: ask!
A final thought: start practising saying ‘no’ now and again.
Children and grandchildren can put big demands on retirees financially.
You may decide you’re ok with that and you’ve planned for it, but make it an active decision not something that just happens.
We’ve got low interest rates, and they’re going to be low for a while.
That’s great if you’ve got debt but not so good if you’re relying on your savings to provide an income.
So don’t be shy about giving a gentle reminder that retirement income doesn’t stretch as far as it did and offer them your wealth of financial experience instead.
Editor's note: Views expressed by contributors are not necessarily those of the Office for Seniors.
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