Your financial wellness plan for 2023

Living from month to month because you overspend – or having unexpected expenses popping up that leave you short, is no fun. And having little to no super? That’s something that’ll keep you up at night, especially if retirement isn’t far off.

Stress around finances for New Zealanders is nothing new: a whopping 80% of women rate their financial wellbeing as moderate, low or very low, according to a recent 2021 Financial Services Council study.

The solution? Putting a financial wellness plan in place will help you to budget, prepare for the future and meet your expenses – and it can be hugely empowering.

Here’s how to create your financial wellness roadmap for 2023.

Start with your super

It’s something we don’t tend to think about much until retirement age is in front of us – but if there’s one thing that’s easy and useful to harness from an early age, it’s compound interest. And that’s where a KiwiSaver account can come in. 

KiwiSaver is open to all NZ citizens (and to anyone who’s entitled to live in NZ indefinitely under the age of 65). You are automatically enrolled if you are aged between 18 and 65, starting work with a new employer, or otherwise eligible to be enrolled. 

Your employer can choose from different contribution rates, the minimum being 3% and you can also make personal contributions via automatic payments or one-off payments, using online banking.

Create a budget

Yep, it involves sitting down, going through your bank statements and seeing just how much you spend every month. Streaming services? Gulp. Coffees and lunches out every single work day? Double gulp. As you’ll find, it all adds up.

Doing a budget can be confronting, but it also gives you a valuable snapshot of where your money goes – and helps you monitor your incomings and outgoings. Once you see the income you have coming in, you can create a budget for rent, bills and necessities and see what you have left over.

The good news? There are heaps of tools out there that’ll help you not only create a solid budget, but also set savings goals and stay on track with your spending. This includes tools provided by your bank, or third-party apps and online trackers that can assist during this journey.

Create an emergency fund

A nest egg or buffer of money that you can dip into for unexpected expenses could be essential. This could involve working out what your monthly expenses are and some experts suggest aiming to save three months’ worth of expenses for an emergency fund. Then you could leave it until you absolutely need it, like if the fridge breaks down or your car needs a new alternator – not that fantastic deal for Fiji that you just spotted.

Look at ways to whittle down your debt

No one wants debt hanging over their head. So taking steps to manage yours – whether it’s a university debt or a mortgage – is one of the smartest things you can do for your financial wellness plan.

If you’ve borrowed funds or have loans, payment plans can help chip away at debt slowly but surely. Some examples of strategies to assist in chipping away at debt could include: consolidating high-interest debt (like credit cards) into a lower-interest option or when it comes to your home loan, paying over the minimal repayments if you can.

Review what insurance you may require 

Insurance is a tool used to manage risk and can provide peace of mind and financial protection for your assets and your loved ones. Reviewing what insurances may be suitable to your personal situation can be part of your financial wellness plan.

Your financial wellness recap

Getting into the habit of saving small amounts early and consistently over a long period of time is a great way to prepare for a solid financial future when you do come to retire. And making sure you get there with a solid emergency fund, a good budgeting habit and zero debt can also help enormously, too.

Here’s a helpful checklist of what you could think about when putting your financial wellness plan in place:

  • A budget to follow
  • Reviewing what insurance you may require
  • An emergency fund
  • Debt reduction plans
  • Regular contributions to a KiwiSaver or super scheme.

Plan ahead

If you need help setting achievable savings goals or creating a budget that’s realistic for your circumstances, don’t forget you can always talk to a financial planner.

Getting your finances in order, could also mean reviewing how your family would cope financially if the unexpected happens to you. OneChoice life insurance can help protect your loved ones financially. 

Disclaimer: This article is an opinion only, provided for general information purposes and shouldn’t be considered or relied upon as professional or personal advice. If you have legal, tax, or financial questions, you should contact an appropriate professional.