In my work I get to work with all types of people from every part of Central Otago. I may be in a boardroom in Queenstown to a Stock room in Cromwell. All types of people from all walks of life. But when I burrow into their financial lives at some stage we get down to basics. How much do you earn and how much do you spend. To start a financial plan you really need to get down to these basics. And regardless of their roles and financial situation the majority of us don’t have a strong handle on our spending habits. Lifes just too busy to keep track as to where the money goes.
Like most things in life it is worth keeping things relative simple. But to understand how much you can afford to invest you need to know how much you spend.
The classic old school solution is to open two bank accounts. Put into one account the money you believe you should be spending per month. If you don’t make it to the end of the month before the money runs out, you know you have the numbers wrong.
But like most things in life there is an app that can do a lot of the heavy lifting for you. I don’t have any particular bias so I don’t want to recommend a particular one. But I have noticed in my research that many will not connect to a New Zealand Bank account which to a certain extent takes away much of the benefit.
These apps that will automatically add up where your money goes. It will tell you how much you spend eating out, groceries petrol etc etc. And as they say knowledge is power. Regardless if you want to start investing $5,000 a month or $200 its tough to get started if you don’t understand how much money you have spare and how much you could afford to invest. A large part of that is understanding what you are spending your money on.
Please do your own research but the two apps I hear mentioned most often are Pocketsmith and mybudgetpal. These will connect to your NZ bank account and give you a monthly breakdown to your spending habits.
Knowledge is power. Financial planning goals make no sense unless you understand how much you are spending and how much you can invest. If these apps help you take that step you will be making progress.