[Avalon]

AKA - How To survive in a Land of 4 Million Sheep Without Getting Fleeced.

I’ve decided that it was worth compiling all the various money / budgeting / finance posts that I’ve made in the past 18 months, especially as when I did the search in order to compile it I had 7 pages of posts to read. This hopefully this will make it easier for others to search.

I need to make a disclaimer (just in case). I am NOT a financial advisor OR a money expert. I have absolutely NO qualifications in anything financial, or even vaguely resembling economics, home or otherwise, not even an NCEA! While I’m at it, I’m NOT a lawyer either. I have a calculator, my brain, a record of where my money is coming and going to and from and time, lots of it, to do this money saving stuff. Time that literally earns me money.

Everything in here I’ve read in books or is my personal experience over the last few years, both as a new migrant to New Zealand and before that back in the UK. It’s all learned the hard way but it’s all my own opinion and should be taken as such – sometimes a sense of humour will also help.

If you have any questions I will do my best to answer them. However, there’s not really much I can add to this lot and I may not know the answer for your circumstances. I’ve added a book and list of links at the end because I’ve learnt all this from books and the Internet anyway and I’ve applied the information I’ve gleaned, to life as a migrant.

Please do not reproduce or copy any of these posts or parts of them. (Unless it happens to be a quote written by someone else – in which case it’s up to them J) These posts remain my property, and one day I may want to use them elsewhere. Whether that happens or not – all members of ENZ are more than welcome to my random mutterings and occasional pearls of wisdom. ;)

I hope this is useful.

:cheers

(This goes out with major hugs to Smiler for correcting, reading and supporting - next coffee is on me!)

[Avalon]

WILL I BE WORSE OFF IN NEW ZEALAND?

Without a doubt, lots of people are. But it’s certainly not written in stone that you have to be financially worse off here than you were back home. We are actually better off financially here in NZ than we were in the UK. It is possible, but for my money (excuse the pun) you probably have to "Think outside the box" most of the time to make the numbers work. We have done this with a mix of watching what we spend so its less than we earn, saving to invest and getting educated about how exactly to invest and how to use the money to our advantage rather than the bank's.

One of the things that attracted us to NZ was the lower taxes and the ability to accumulate assets without being constantly taxed on them i.e. no stamp duty, no capital gains on selling a second home, etc. We had the impression that we could get ahead financially better than we could back home. We already had a fantastic lifestyle in the UK, lived in one of the most beautiful parts of the country and had good secure jobs. Many of the things people do come to NZ for, we had in the UK. But we would have struggled to get a good financial base behind us. It was something we were already working towards, but felt coming here may make the difference.

We now live on one salary, by NZ standards quite a healthy one. We are careful with our money but not tight (well – not most of the time anyway :p ) and that should pay off in a few years. We also wanted my parent’s lousy UK pensions to go that bit further, in NZ they will. They’ll still have to be careful but not as tight. So far it’s working out reasonably well. For all the financial problems there are in NZ (and there are lots) I have never seen the kind of “wealth creation” industry in the UK that can be found in NZ.

So the answer really is - Not Necessarily.

[Avalon]

WILL I HAVE TO TAKE A LOWER WAGE IN NZ?

We had to take a large pay cut when we first came here but it didn’t take us long to find out that OH had been ripped-off because we were not Kiwi's. Apparently the lady who hired OH was dancing around the office because "she had got this really great guy, dead cheap!” It was pointed out to her that if he were that great it wouldn’t take long for him to leave! But their theory is that if they hire a migrant they have got your loyalty for at least a year. So on the basis that we knew the value of his experience; we went shopping for better offers and got 3! These almost reached the old UK rate!

You CAN make a decent salary over here. It’s just not true to say that it can't be done. OK, so not everyone can earn big bucks, but then that’s the same anywhere. We were earning good wages compared to most people in the UK, and we are earning a decent salary here too.

I honestly do not believe that you have to earn less to be happy or that by taking a lower salary you are somehow automatically gaining a “lifestyle”. Why can’t you have both? What you may have to do is spend less than you earn! (Someone on here has the sig line "he who earns $100 and spends $90 is richer than he who earns $200 and spends $205").

I have existed and been very happy without money, and I’ve been miserable while earning a decent salary. However, I also manage to be pretty contented and happy while earning a decent and fair wage. It’s just wrong to pay a migrant less than a Kiwi for doing the same job. The same as its wrong to pay men and women different wages for doing the same job.

Any company will pay its employees the least it can get away with. Sometimes it’s called exploitation; why do we accept it? It doesn’t mean we have to take it on the chin if there’s a better choice elsewhere. I feel and it’s just a feeling - not based on ANY factual evidence, that there’s quite a con going on in convincing migrants that they will have to take massive pay cuts to come here. Whether it’s because you "have no NZ experience" or "we can’t afford high wages here". Fine - we had no NZ experience but hey we had UK experience by the bucketful and by and large Mr. NZ Employer, if you want to be a "world player" you need that experience so pay for it! In OH's job for example NZ experience just means you know the worst way of doing the job. UK experience means you may have some idea of how it’s SUPPOSED to be done!

NZ has apparently got a booming economy and a surplus of cash. Why should the shareholders be the only ones getting a cut? The workers should be fairly and equitably paid. I hope one day that migrants will get paid a fair wage for doing the job and not get talked into "necessarily" earning lower wages than they deserve. Up the migrants :raebanana

[Avalon]

CAN I NEGOTIATE MY SALARY?

I think it’s worth remembering that by and large we are coming out here as Skilled Migrants. Which means we have skills that New Zealand needs? How many of us have skills on the skills shortage list or on an extreme shortage here? Why are we accepting lower wages when our skills are in demand? :confused:

I picked up a piece of advice about negotiating on house prices, which works when you apply it to your salary too. If you tell the company what you will accept they will not pay a penny more (generally speaking - anyway). But say to them offer me what you think I’m worth, then you get to know their top price. Bear in mind if they don’t get you to do the job, who else are they going to give the job to? By definition – there’s a shortage of people who can do that job! It takes a strong constitution to do this but it can be worth it, well it worked for us anyway.

We were looking at comparison wages and we wanted to earn 3 x our total UK package. It may sound like a lot, but many goods here can cost more than 3 x UK prices. We finally accepted way less than that (nearer 2 x), but have now moved up to almost 3 x again. The next move is on the way and it’s not down the scale!

The biggest weapon employers have in keeping wages low is our utter reluctance to tell others what we earn. We seem to think it’s a dirty word or too personal. It takes some “constitution” but it’s certainly worth asking co-workers outright what they are being paid. (So – just to prove I mean – OH earned 90k / yr to start with a 15K yearly bonus (most of which was actually paid, a minor miracle in itself). He then moved onto 125k and a supposed 30k yearly bonus (that one didn’t appear – turns out the company hasn’t paid bonuses for the last 4 years :mad: As the guy offering the job knew that - he was basically lying). This is for working as an IT Security Architect.

We are in the fortunate situation here that OH's job has quite a small "community" of people who do it and they are often having coffee with each other (coffee really is the source of all goodness in life - I'm not joking) so they all know (a) what’s going on among the various employers, and (b) what the salaries are. OH has just been offered a position by a recruitment firm, so his first step was to buy a coffee for the guy who took the job 12 months ago, when it was last offered. He now knows what the guy was being paid and how he earned it. That makes a big difference in deciding whether to go for it or not, and how much you would want to do the same job.

[Avalon]

IS IT CHEAPER TO LIVE IN NZ?

(Comparisons are to the UK - cos that's where I came from)

The cost of living here is (to my mind) very high, given the low wages and the quality of goods. So I think it’s vitally important to bear this mind and take a very honest look at your financial circumstances before you decide where to emigrate to.

This is where we fell down in our research. Although we are coping pretty well now, I did get a shock even though we’d been to NZ twice before. Despite all the prep work we did ( and there was a whole lot of it :wah )- I had a feeling that we would have missed something and it would be big. It was and it turned out to be the cost of living. This coupled with the realisation that we really didn’t want to have to curtail our standard of living "too" much.

Some things just don’t justify the prices, although then the same can said anywhere. It’s odd to find that its often cheaper to ship books in from Amazon for example, than to go to Whitcoulls, who by virtue of bulk shipping MUST be able to get books shipped here a lot cheaper than me as an individual surely?

Some things like petrol still seem really cheap to me and we have had the benefit of a fuel card for the past year, which has still helped enormously. I do feel that for most people - these costs must be prohibitive, although that doesn’t stop people driving gazillion litre 4WDs. However, we have now given up the fuel card and my view on the cost of petrol has therefore become more “colourful” and I’m starting to squeak at the fuel pump. (Note – you can get vouchers for 4-10c off a litre from certain supermarkets. It can be worth buying an extra tin of something to take you up to the next “level” of voucher))


I think people feel ripped off as many of them see New Zealand as a "cheap” place to be. The perception of the land of milk and honey has gone. As have the $3- £1 days.

Hopefully this perception will be dulling a little thanks to forums like this. We felt that with hindsight (that magical ingredient) the information giving at Expo's and online was "massaged" to present NZ as cheap; they just left off the cheerful! NZ stats cost of living figures are not even funny. The problem with the 3-1 is that many goods are still priced at that, if not 4-1 or more, while the actual rate just doesn’t justify it. However, you won’t notice if you get into the rather good habit of not converting everything, it will drive you mad! We are having this problem with flights at the moment. A flight would cost £750 in the UK, but £1000 from here. From what I can see it’s because the 1-3 rate is being applied for the NZ price. That’s $625 difference - which is a LOT of money here. (178 coffees worth in fact :nice1 )

When I actually sit down and look back on how much we have spent on things in the last year, it really is a mixed bunch of whether we feel we are paying more than we would have done in the UK, or less. There are many things we won’t pay for here because we don’t feel the price is justified by what you are getting. Gym membership is a good example. In other cases I’ve found things seem expensive, but then when I work it out, its actually rather cheap, food and entertainment would be a good example. Cheap night at the cinema, decent wines- also not too bad.

It isn’t always wonderfully inexpensive to live in New Zealand, not by a long shot. Even some migrants - for all the money we can bring over from selling our over inflated houses struggle with the cost of living (I mean putting food on the table and a roof over their heads - not going to watch cricket or going to the theatre!) Also bear in mind that if you cannot buy a house outright – your mortgage will be higher than at home, and house prices are still rising in New Zealand - it's not THAT cheap to buy property here.

Its swings and roundabouts. Some will find it laughably cheap to live here and be able to live a wonderful life. Others will struggle and be very unhappy, but it’s so much down to what the individual situation is regarding money. My feeling is be prepared for a high cost of living and learn how to deal with your money while you are in your home country, then when you get here you will have the skills to deal with what you find.

[Avalon]

WHAT ABOUT BANKS AND BANK CHARGES?

I have to make clear at the outset that I do not accept that bank charges are fair at all. I know all the reasons, how can I possibly expect the bank to work for free; they aren’t a charity etc, but banks make enough money out of us as it is and they don’t need to make any more. You don’t pay Whitcoulls $5 a month for the privilege of being able to go in and buy a book – so why should you pay the banks to hold on to your money. They make money by investing your savings, or charging you higher rates of interest than they pay, when they lend you money.

I utterly object to being charged to spend MY money. I don’t care what they charge or why they do it, it’s not THEIR money, its MINE! It’s a principle thing and at the end of the day no amount of justification for charges actually diminishes my feelings on the subject.

Bank fees in NZ are ludicrous and applied for the most spurious of reasons. ASB will charge you for having to ask their permission to spend your money! (The netcode release fee is a charge applied if you wish to spend over $800 over the Internet. This is for “security”, theirs not ours. Apparently the banks got stung by fraud and so introduced net code. OK we all need security but I have NEVER had to ask permission to spend MY money, not even when I was 5. As it’s for their benefit though, why do I have to pay? The online spending limit used to be $2500, but due to a phishing attack I now cannot spend over $800 via the Internet without permission.

As others have said, you can get round this. Everything in the NZ banking system seems to be negotiable, especially once you have a mortgage or an account with $50k in. There’s nothing to stop you asking your current bank to match the best offer you can get elsewhere, we did this with our mortgage.

You can wangle your way round fees, especially service fees such as getting bank cheques and moving large sums of money for bills etc if you get a good “Personal Relationship Manager”. If you cannot do this, careful use of the system can minimise fees even if you can’t stop them.

Firstly be aware that getting small amounts of cash from an ATM is EXPENSIVE. You can get charged upto 50c each time. So when you get cash, get amounts that make it worth it. It always cheaper to get cash back at the supermarket paying usually only 20c. Never get cash from another bank ATM on top of the 50c charge, you get another 50c charge and it really adds up. (Do that 7 times – that’s a cappuccino ) Decide how you handle cash, its different for everyone, but we now use cash much more than we did in the UK, where we thought nothing of using switch (eftpos) for sums as small as £5, now we have a minimum we allow of $25.

It is worth being aware that fee free banking is finally coming to NZ. It’s been here a while with the proviso that you keep minimum balances, often $3k-5k. Now some of the banks are offering no transaction fees on their current accounts. In some cases you can get no monthly base fee by opting out of being sent paper statements. I’m not so keen on that idea, but that’s because for me the statement arriving tells me its time to balance my accounts. You have always been able to negotiate your fees here, but it has tended to rely on having a lot of business with the bank (savings or mortgage or business accounts), but this change means the fee free banking is open to more people not just those of us with a fair amount of money tied up with the bank.

Current ASB charges for a Streamline Account

$3 a month base fee (waived if you have "Statement Stopper".
$1 a month for a Netcode Token
25c every day you need to use Netcode
$2 to set up a new automatic payment or bill payee.
Fastcheque is now free
Credit cards cost from $12 - $40 every 6 months.
The credit card reward program costs $10 every six months per card.

[Avalon]

CAN I GET A DECENT AFFORDABLE MORTGAGE?

I’m a sick puppy; I think mortgages are really interesting once you understand how they work! :o The Anita Bell Mortgage book is really the best thing there is for explaining it all and reading that will put you streets ahead when you have to go asking banks for shed loads of money to buy your own piece of beachfront New Zealand.

Firstly it’s always worth negotiating with the banks over your mortgage. The more you need to borrow the more clout you have, so don’t be shy. The worst that can happen is they say no and they may well say yes!

I got 0.5% off my variable rate on the Revolving Credit mortgage (that’s the ASB orbit account) and I also negotiated a refund on the monthly fee of $10 but forgot to negotiate a refund on ALL fees, so I do still have to pay $2.00 a time to set up automatic or bill payments I’m currently paying 9.05% instead of 9.55%, that’s on a mortgage of 100k. This is variable so goes up and down (I wish) as the bank rate changes, but I stay 0.5% below the advertised ASB rate at all times.

I got 0.25% of the 2 year fixed rate so I’m paying 7.42% instead of 7.67% that’s on 165K.

I also got an agreement to refund all fees payable on my parents and brothers NZ accounts, up to $20 a month on each account.

AND - I got my first year Credit card fees removed, as well as the fee for joining the Credit card reward program. All in all, over the first two years, it is saving quite a packet.

A lot of what reductions you can get depends on the numbers - $265k mortgage is quite high here (and yet so much lower than my last UK mortgage :) ). But my top tip, even if you aren’t looking at anywhere near that much is: shop around and TALK to the mortgage managers. I had 6-7 meetings with the guy at ASB; asking loads of questions about how things work in NZ. I also knew what I wanted to do to save money because I have read Anita Bells books on the subject a few times :o I built up quite a relationship with the guy before we ever signed on the line! If anyone is patronising, or doesn’t give you the time of day, walk and go to the next bank or even another branch of the same bank. With ANZ I never got further than a first meeting with for this reason, that and they will give a measly 0.1% discount on the rate and charge you for it! Westpac nearly got my banking business, except when I was passed on to the "personal Relationship manager" and he was utterly obnoxious! Patronising and arrogant and he spoke to me as if I was 12 years old with a piggy bank! Bear in mind at this point I was well on the way to getting my finances sorted, had budgeted till I was blue in the face and could tell exactly what I had in the bank to the cent. I was not a happy bunny.

One thing I would suggest is ask every bank for quotes, and ask then them all to negotiate. I rapidly took two banks off my list because they wouldn’t move on rates (ANZ and HSBC). You will rapidly get to know what the deal is and get a feel for the best way to structure the mortgage.

The main options for mortgages are:

Fixed Rate Mortgages (fixed for 6 months up to 5 years – some now for up to 10 years)
Flexible rate Mortgages (your bog-standard old fashioned normal type mortgage)
Revolving credit accounts. (See below)


Be aware that you can split your mortgage into chunks, fixing some for different lengths of time, having some on a normal flexible mortgage, or some on a "revolving Credit" (See next note). This is something I found really bizarre, because we just don’t have this in the UK. But to be honest I really like it. I just split mine into 2, but I’m due to look at it again in July07 and I’m thinking of doing a three way split: some on Revolving, a 1yr fixed rate, and a 2 yr fixed rate. It means you have a bit more flexibility to work with interest rate changes, and by splitting the mortgage up you can pay off your mortgage faster by making the overall interest rate lower.


Paying fortnightly instead of monthly is a very smart way to reduce mortgage costs.

Too right! We don’t do this because of the way we have ours set up it actually doesn’t give us an advantage. With a revolving mortgage often at a higher interest rate, you need to keep all your pennies in that account as long as possible. If you don’t have one of them, fortnightly is better.

If you use the "fine tune your loan" calculator on Westpac
Westpac Calculator (http://www.westpac.co.nz/olcontent/olcontent.nsf/Content/Home+Loan+Calculator+-+Fine+Tune)

It will show you exactly how much money you can save between a monthly mortgage and splitting the amount in half and paying that fortnightly.


Plug in the numbers for how much you want to borrow, the interest rate and length of mortgage and hit calculate.
This then tells you the monthly payments, and how much interest you will pay over the life of the loan.
Under "Change Payment Frequency" - Click Option (A) (Half monthly amount paid Fortnightly.
Hit Recalculate
It now tells you in nice friendly red letters just how much you will save overall, and how much time you will knock off your mortgage.


If that doesn’t make Mortgages interesting – nothing will :laugh .

[Avalon]

Taking a break for dinner. Back soon.

Hxxx :cheers

[pieeater]

Like I've said before 'Avalon the Wise' !!!! Good stuff.Spot on.Well done for spending soooo much time to enlighten those not in the know as to how things work down here.Can't wait for the next installment.

[Avalon]

WHAT ON EARTH DO YOU DO WITH A REVOLVING CREDIT MORTGAGE ???

These are sometimes called Line Of Credit (LOC) mortgages, and are very common here. They are most like the One Account in the UK, in that it’s a mortgage and current account rolled into one. Basically it’s a current account with a whopping great overdraft. The benefit is that if you get paid your salary directly into it, it can reduce the amount of interest you pay on the loan. That is good :nice1

However there are some serious downsides especially if you are not too good at looking after your money. They are notorious for not getting paid off, as it’s all too easy to keep dipping into for buying cars, boats, shoes or coffee. That is NOT good :no

Also, because they are usually a few % more than fixed rate mortgages – you need to have a certain amount in there at all times to offset the higher interest rate. There’s actually a calculation you can do to work out how much of a balance you need to keep in (I’ll put that in the next section)

I would say if you are thinking of a revolving credit account you do need to be very good with organizing your money , as it’s all too easy to end up with the OD limit never going down. So you never pay off that part of the mortgage. Some banks have these types of accounts where they do drop the limit each month so if you wanted one, but feel concerned look for that. Otherwise the way I deal with is:

I use Quicken to run my accounts at home. Doesn’t really matter how you do it but have some way of keeping track of your mortgage (don’t rely on the bank to tell you). In Quicken I have set up a “savings goal” and each month I move money into it. This is always the amount of money I “should” have paid on the mortgage if it was a normal one, minus the interest for that month.

So for example:

I should pay a total on $902 a month for a $100k mortgage at 9.05%
My interest for the month is around $300
So I "pay" $602 into the savings pot
When I have $5000 in there, I “move it back out” and ask the bank to reduce the overdraft limit by $5000
I have then paid off $5000

I know this may sound weird because the savings pot only exists in Quicken or on a spreadsheet, but it works.

You also really need a credit card. By putting as much on the credit card as possible, you keep the balance in the revolving credit account as high as possible for as long as possible. But always make sure you know exactly how much you can spend on the credit card without getting into trouble. For this to work well, and not get into debt you need to be able to pay off the CC each month in full. If you don’t think you can do that then it may not be a good idea to have this kind of mortgage. Do not use the CC for buying consumer items that you do not have the money for. That way lays ever-increasing mortgage debt. Maybe just have a very small limit on the credit card. You need the equivalent of 2 months spending as a minimum limit.

What they do not have here is Offset mortgages like First Direct or Woolwich do, where you can have different accounts that are all rolled into one for the purposes of working out the interest. They have them in Australia, so maybe one day. These would have all the advantages of a revolving credit mortgage in that they cut the interest bill, but also allow you to keep your current account separate, as well as having separate savings accounts, so at all times you know how much money you have available and how much you have paid off your home loan.

[Avalon]

WHAT BALANCE DO I NEED IN THIS ACCOUNT THEN?

Sorry – MATHS ALERT!!! :p

This tells you how much money you need to have in a revolving credit account so that it doesn’t cost you more in interest each month than a fixed rate account. That’s because the RC interest rate is always higher than the fixed rate.

(Using my numbers as an example)

So STEP 1
Divide the Fixed Rate by the RC rate
7.42 ÷ 9.05 = 0.8198

STEP 2
Turn that into a %
0.8198 x 100 = 81.98 %

STEP 3
Take that away from 100%
100% - 81.98% = 18.02%

STEP 4
Work out 18.02% of your total RC Overdraft Limit.
18.02% of $100,000 = $18,020

RESULT
I need to keep $18,020 in the account at all times to outweigh the higher interest rate.

So What ?

Well, if you keep MORE than that in the LOC account -then at that point your mortgage is costing you LESS than it would if it was on a fixed rate. Is that not amazing? Or am I truly just losing my mind :laugh

(NOTE – I’m not sure who to credit this too as I cant find the original post – but I’ve taken it from the Property Talk website – with many many thanks)

[Avalon]

SHOULD I PAY OFF MY HOME LOAN AS FAST AS POSSIBLE?

I have always thought that paying your mortgage off as quickly as possible is a 'given'. Not according to these guy's. That did worry us.

I actually heard a rather good explanation of this from the ASB advisor. I had always thought that getting the mortgage off your back was to be our first priority, and for many people it may still be the best option so I wouldn’t discount it out of hand. That really depends as far as I can see on your personal circumstances, finances, and how good you are with money. I fully believed in this principle when I came here purely from reading the Anita Bell books. I had never really appreciated just how much money you actually pay for a house when you take into account the interest payments over 25years.

Our house cost $595k to buy. But over 20 years taking a 265K mortgage will add 269K to the cost so it will actually have cost us $864k to buy!!!!! (Interestingly – if you are me anyway – by paying fortnightly for the whole 20 years we save a whopping $53,000 on the cost of our house- that’s a whole lotta coffee! 15142 to be precise :nice1 )

However where the advisors are coming from is that if you pay off your mortgage and ONLY do that, you still have no savings with which to live on, so you still have to work to earn an income. Whereas if you were to save / invest at the same time as overpaying a bit on your mortgage you get rid of the debt earlier (and save money on interest charges) BUT you also have money set aside that you can now live on (or investments that generate an income). That’s the idea anyway!

Hi, everyone, pardon me if I'm asking a silly question but from reading the forum, I have this feeling that most people take up mortgage loan of about $200K to purchase a house, even though they may have the spare cash. Can anyone enlighten me on the reason for such arrangement? :confused:

Well, I can’t exactly answer that as for a start if I had $200k in cash hanging around - I WOULD have used it to buy the house instead of taking a mortgage :laugh However - there are 2 theories that could explain at least why some people would do it.

Firstly - revolving credit mortgages are popular here. We have one of these, and part of our mortgage is on this scheme. (About $100k) Now we didn’t actually need the whole 100k, as we have some extra savings, so at the moment only about 60k of that is being used. A revolving credit facility is like a big (huge) overdraft limit. So in our case we have an overdraft limit of 100k, but the balance is only about 60k overdrawn. There are 2 reasons that we have done this

we don’t pay interest on the portion of the "mortgage" that we don’t use, we only pay it on the 60k,
If we need that money in a hurry we don’t have to ask the bank for a new loan, it’s already "approved" and that money is available at mortgage rates (though please see post on revolving mortgages for why you need to be very careful of doing this).
.

The other thing that we do that goes against the "get rid of the mortgage fast" is that we are saving to invest alongside paying extra on the mortgage. This money will be used to buy shares to start with and this was a really big thing to get my head round. It’s all very well having no mortgage but do you have any money to live on AS WELL. My parents are a good example of this. They have used $200k to buy a stake in our house. With our money, and our mortgage plus their 200k, we bought 1 big house. They have the money to get rid of at least a huge chunk of our mortgage BUT they would have nothing to live on (as they have very little income).

Something else I did remember if you are buying now, the exchange rate is very poor (2.5 @ time of writing originally), and in some cases it may actually be better to leave some money in the UK, pay an NZ mortgage and then bring the cash over when the rate improves. I can’t remember the numbers, but we worked out that if the exchange rate £-$ went up to 2.85, it would be worth us leaving money in the UK for up to 2 years and paying an NZ mortgage.

[Avalon]

HOW DO I START BUDGETING? (ARGHHHHH)

Or - "Im in a bit of a pickle and havent got enough money. How do I make it stretch so I can live this week?"

If you need to do this (or want to) then pretty much the first step is to look at what you already do. There are lots of ways of doing this. I always keep accounts anyway and this is by far the best method. I use Quicken, but there’s also MS Money, you could use Excel Spreadsheets, or even old-fashioned paper and pen ( if you still remember how to use them :p ). If you don’t keep accounts now, then consider it because if you are in a tight money spot, it’s worth its weight in dollars. But in any case in order to know what you are spending, you need to list all your outgoings for the last year.

Sit down, grab a cup of coffee and some Tim Tams, probably a calculator and a sharp pencil too, and get to it. You can get the information you need from bank statements, any receipts you have, your past 12 months bills, and pay slips (because you also need to check how much you have coming in). If you keep accounts, all the info is there (or print it off if you use Quicken)

There is actually a good spreadsheet you can put it all in at moneysaving expert:
Money Saving Expert Budget Spreadsheet (http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1089226742,17582,#planner)

If you don’t want to use that, list everything under as many headings as you need (there’s a sample list in another post), which shows you how we categorise our spending: things like Mortgage /Rent, Food, Petrol, Cinema, clothes, whatever headings you need.

SO - Now What?
The next step would probably be to "analyse" all the stuff you write down and then look at where and why you spent that money. It’s probably time for a top up on the coffee and some more Tim Tams (I think trying to budget is hard enough without worrying about calories as well). Look for things that are costing you money that don’t need to. Easy ones to start with off the top of my head are: Bank fees (have a friend who was paying $15 a month to take $20 out each time from another bank's ATM rather than walk an extra 5 minutes to the banks' own ATM), papers and magazines (I know they are fun but you read ‘em in 10 minutes and that’s it), library fines (again costing a fortune in some cases as opposed to getting books back on time). Doing this can be a bit depressing - the Tim Tams should help with that- but you may just spot a few things.

Look at your bills, and see if you can cut them. Are you on the cheapest electricity supply? Consumer.org run a comparison site for this:
Powerswitch (http://www.consumer.org.nz/powerswitch/Default.asp?bhcp=1)
Can you get your phone bill cheaper? (I’m just changing to Ihug, which should save me nearly $100 a month!) Are you on the best mobile plan (and if you both have mobiles, are the both Vodaphone or both Telecom because it’s expensive to call from one to the other)? If you are in the UK, use MoneySavingExpert (http://www.moneysavingexpert.com/utilities) to check for cheaper suppliers.

Now you have the bones of a budget.

Use the headings you have from the first bit of this monstrous exercise and look at how much you are overspending. That is, are you spending more than you earn. If you have managed to work out cheaper suppliers for most of your big bills, then what’s left covers your other spending.

If you need to cut spending more, then decide on what is important to you and what you can fairly easily not have without as much pain and suffering. I could probably manage going out to eat less, but if someone took my coffee budget away there would be hell to pay :wah . By this point, you should now be getting an actual “budget” or spending plan (in the way that saying a diet is an “eating plan” is supposed to make it easier to eat a lettuce leaf and a carrot instead of chocolate cake). This is the goal to stick to, what you should aim to be spending on average on all your requirements. Changing habits is not easy but apparently it actually only takes 28 days for something to become a habit. So in my case not drinking coffee for 28 days would get me out of my coffee habit (going a bit far I think).

And for bills: work out your average monthly bills and put that much aside into a savings account each month, so you always have money to cover them (or do this fortnightly if that’s when you get paid as you may do in New Zealand). Make sure there are no fees for your savings account. When a bill comes in, pay it, and move the money from your savings account to your cheque account to cover it.

Next I have to say that I really think the sanity allowance is a must. This is a “Bellism” which gives both of you an allowance each payday. Small but something you can spend on whatever you like, without justifying it to the other person. You want to spend it all on chocolate that’s fine . You each have to have the same amount, one of you cannot get more than the other and until you find your feet, this is where all your treats come from. We can budget for meals out and stuff, but if you can’t, use the sanity allowance for coffees, or cinema. It really up to you to decide what has to come out of that allowance and what you can afford to "Budget" for. If there was one single item that I could credit for saving our financial bacon - the Sanity Allowance is it.

And something about budgets: don’t always think of it terms of "what I can’t afford because I don’t have the budget for it". Use a budget TO BE ABLE to afford what you want. If you want to be able to go out for a meal once a month then think about what you can do to wangle the money from somewhere. For example: if you are paying bank fees, just think what that could pay for if you worked out how to stop it! Don’t see the need for a budget as a bad thing because it really isn’t.

I found the first week was the worst, when you start to look at exactly how much money you spend and what on. It’s incredibly daunting at first but please believe me once you start, you may even find it utterly liberating. Its one thing to buy yourself a jumper and then panic because you don’t really know where the money is coming from to pay the credit card bill, but imagine what its like going out to buy a jumper because you KNOW you have the money set aside for it. You may not buy as many jumpers, but the ones you do buy; you are not going to be in a cold sweat over!

Reading through that makes it sound like I think it’s easy but I do know its not. But it’s possible. We have "Budget days" probably every 4 months where we sit down and look at ways to improve what we do (but then I’m a bit daft in the head when it comes to this ) the last day we shaved about $150 off our spending plan.

[Avalon]

AM I A BIG SPENDER? (Or do I squeak when I walk?)

So in reality, do you just take out a certain amount of cash and try to make do with it? I try to do that, but almost always something unexpected comes up, such as filling a gas tank or topping up my bus card... Something that you can't really delay. So can you tell me how do you control yourself?


Firstly you CAN work on a cash only budget and this works well for over spenders. But that is really talking about people who literally spend spend spend. A cash only budget is where you take out a set amount of money each week and that’s IT, is said to help by making people AWARE that they are spending their money. When you use Credit cards, you never see the real money so for many people it helps when they have to count out $20 bills to buy that $400 coat! This can be really helpful in getting over any “consumerism” habits you may have. Moving to NZ of itself won’t necessarily turn you into a non-consumer ;) .

When you look at what you are spending the money on, ask yourself:

"Do I NEED this or do I WANT this".

If you WANT it, it needs to wait till you have the spare money or it comes out of sanity allowance. If it’s a NEED, then budget for it.

Then when looking at items you are going to buy, look at the PRICE but also look at the VALUE. Ask yourself :

"Is this thing WORTH what they are asking for it?”
"Can I buy it cheaper elsewhere” and
"Would I rather spend that money on something else".

You would not believe how much money I HAVEN’T spent by asking those questions. Except on coffee - which in any universe is worth any amount of money charged as far as I’m concerned especially when a friend and a natter is involved :nice1

How do I control myself??? Well, when we were in debt I woke up and realised just how much the banks were making out of me. And how ill I was getting because I was so worried about how I we were going to pay the bills. Now I don’t remember the last time I couldn’t sleep because I was worried about how to pay a bill. THAT is what keeps me going, and stops me buying stuff I really don’t need, gets the library books back on time and makes me do crazy things like "budget days". After a while I even got to enjoy it!

Just had another thought about this. I got my Moneysaving expert email today and it’s talking about debt. I know I’ve just mentioned credit cards on here but I just need to say that if you are struggling to cope with money, DONT get a credit card. I use one ONLY because it saves me money to do so, I get rewards and it cost me nothing to do so. I ALWAYS pay off the full balance every month, so I pay NO INTEREST. (This makes my Mortgage cheaper because I have a revolving credit mortgage)

If you cannot do that, using a credit card can be VERY bad for your finances. Interest charges are too high and if you cant pay the full balance, your debt spirals out of control way too easily.

[Avalon]

DEBTS – DO I PAY THEM OR LEAVE THEM BEHIND?

Will Big men in trenchcoats chase to to me New Life and break my legs????

Will your debts back home follow you? Too right they will, with enough certainty that I wouldn’t risk it. First off I’m not 100% sure of my facts on this, because we actually found it quite difficult to get answers on this last year. We have a friend in a similar situation and we were trying to find out what happens. So - get help :yes

From what I remember the debt does stay live and will go to debt recovery agencies, from there it goes to lawyers! A problem can occur if you leave a UK forwarding address (for example your parents). If that happens they can start ringing them to find a forwarding address for you. If there is a forwarding address direct to NZ then the debts could potentially follow. If there is no forwarding address - those people in the UK can get blacklisted for YOUR debt problems.

At the end of the day it really is not as easy as just walking away. You may get away with it, equally you may not and the results of that are much more expensive, both in money terms and in stress and hassle.

So, my advice is to speak to the following agencies while still in the UK. All are confidential and will not cause further problems for you.

Citizens Advice Bureau.
Each branch has access to a debt advisor and a lawyer often employed via the local authority. They are experts in the debt side of things and they know where else to send you to for help and advice.

Money Saving Expert
Money saving Expert Debt Help (http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1103204730,72152,)
Look here at dealing with problem debt. Includes how to ask about things anonymously, which is what you really need to do. There is also a forum for debt free wannabies you may find useful, lots of really good advise from people already doing it!

The consumer Credit Counseling Service
(0800 138 1111).
I think this is the most likely place we got the info from last year.

Bear in mind that if you don’t learn to deal with debt now, at some point you are going to have a much bigger problem to deal with. Debt never gets smaller unless you work at it.

So many people are literally crippled with fear at the size of their debts. They can’t sleep, they can’t function and they spiral down in to a very black pit. Hopefully, the size of the problem now is not too big a task to deal with.

I have to say, harsh at it seems, pay off the debt. You spent it. It’s not right to expect others to pay it for you and that’s what happens when you go bankrupt or run away from the debt. Someone has to pay that money and if you don’t, then one way or another it gets passed on to other people in the way of higher charges / costs and that’s not right. Pay it off and I pretty much guarantee you will think REAL hard before incurring that much debt in the future. You will also learn how to cope with money and that will make your life here so much easier.

[Avalon]

GETTING RID OF DEBT IN A NUTSHELL

If you go down this route then the way to do it is to get your interest payments as low as possible: negotiate if you can and swap money onto cheaper credit cards if possible (This is known as becoming a "Credit Card Tart" :nice1 . MSE will have good info about which CC are cheapest. DONT "consolidate" your debt with an agency, it makes matters worse in almost all cases. MSE has links to a "snowball calculator" which can help you determine the order in which you should pay off debts if you have more than one.

Cheapest Credit Card Deals (http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1107182516,76509,)
Snowball Calculator (http://www.whatsthecost.com/snowball.aspx)

In a nutshell pay the minimum on all debts, then find that bit extra and pay that onto the first debt (The one with the highest interest rate). Once that is gone, take the WHOLE of that payment, and ADD it to the minimum on the second debt. Once that is gone take the whole of those payments (2nd Minimum + 1st minimum + extra) and add it onto the third debt, and so on.

Its called snowballing because the further down the debts you go – the faster you pay them off :clap .

If the debt looks like it is going as far as a debt collector, approach the company and ask for a settlement figure, if they come back with a reasonable figure and you have any spare cash or can borrow interest free from a relative, pay them off. While I don't generally think borrowing of your family to pay off loans is sensible - if you get a good settlement, and you know in your heart that you will NOT take advantage of your family and that you WILL pay them back, then it can work.

Finally if you do try to pay it off, still allow yourself and your partner a "Sanity Allowance" each month (see budgeting). It may have to be small but it really helps keep the sanity alive.

[Avalon]

Okay - taking another break. But there is a bit more to go :o So ill be back later.

Hxxx

[Moorf]

:clap Fantastic Avalon, what a star!! :clap

[Smiler]

Okay - taking another break. But there is a bit more to go :o So ill be back later.

Hxxx

A break???????????? Did you get permission????????? :D

Well done Av, brilliant advice. Thanks for taking the time on this, you thought of writing a book? :nice1




P.s.It's a sticky too! Bravo!

[anna_c]

Most of these aren't relevent to me at the moment, but I have to say it's great to see solid financial advice that's easy to understand but not overloaded with gimmicks and made-up buzzwords (my pet hates).

[Avalon]

you thought of writing a book? :nice1

:p

Anyway - on with it .....

[Avalon]

SO - THIS BUDGETING LARK? CAN WE HAVE AN EXAMPLE?

This is a list of our spending when we lived in Central Wellington with a single salary of $90k

Figures are per FORTNIGHT (we got paid every 2 weeks)

Income: 2406 after tax

Outgoings
Rent: 1080 (2 bed apartment CBD)
Electricity: 45
Phone / Sky / Internet: 33 (special deal as OH worked at Telecom, so much of it was free)
Bank fees: 6
Cinema/ Theatre etc: 57
Other events out: 16
Health Ins: 7 (Company cash back scheme)
Southern Cross Health Ins: 32 (not actually paid as we didn’t take it out)
Contents Ins: 7
Petrol: 30 (when borrowing a friends car – we didn’t have one – but this is over the 9 months we did this)
Public Transport: 25
Clothes and Shoes: 75
Toiletries etc / Hairdresser: 54
Household stuff: 70
Postage & Stationary: 30 (mostly sending stuff to Mum and dad)
Gifts etc: 40
Magazines & Papers: 10
Medicines: 7
Trips away: 65 (includes joining OH on some work trips for which we paid my share only)
FOOD: 529 (Split because it’s a biggun!)
Groceries: 307
Alcohol: 15
Evening out drinks: 9
Lunches out: 30
Dinner out: 37
Coffee out (gulp) 64 (yes – I really CAN drink that much coffee) (oh God, yes she can - Smiler:D)
Snacks and takeaways: 25
Breakfast out: 43
Sanity Allowance: 50 each.

Regular Savings:
Christmas: 50
Gym stuff: 50 (in lieu of membership so we could buy equipment for home)
Travel: 100
Misc: Whatever was left over.

Which (if my adding up is correct) comes to 2286 spent. (Excludes SC Health insurance and doesn’t include the savings)

A lot of these items we saved money for in a bill paying savings account, so we always had money when the bills came, the same with travel costs and clothes etc. Sanity allowance included stuff like books and cd’s. Hopefully, this also shows extent to which we catalogued our spending. The more you break it down the more accurate the picture you can get and then the easier it is to find where to make cutbacks (that'll be the coffee then :o ) (nooo says Smiler :no )

[Avalon]

MONEY TRANSFERS (UK TO NZ ONLY)

Well, I found the whole concept a bit daunting. We got caught with the exchange rate in the floor at the time we had to buy our house so it was all a bit depressing:eek:. We only brought over the minimum to start with, and then brought over the absolute minimum to buy the house with. We still have a bit of money in the UK to pay our insurance premiums and stuff over there.

I use HIFX (http://www.hifx.co.nz/index.asp) to do all my transfers. I have found that they are really excellent for explaining this without making me feel like an idiot for not getting it the first time. (This is a big thing for me. It takes me a lot of time and effort to understand Finances, and I don't want someone to make me feel stupid because of it.)


There are no extra charges to pay with HIFX either. No flat fee, payment fees, electronic transfer fees, fees to pay to your NZ bank for the privilege of putting money in. They make a profit but it’s on the difference between the rate they give you, and the rate they buy at. So when you ask for a quote (for example “I want to sent £10,000 to New Zealand” they tell you the rate and what you will get for it at the other end “The rate is 3.5000 and you will get $35,000” (in my dreams!)

Hifx pay the money direct to your New Zealand bank Account - like this:

Your UK account - Hifx UK account (just like paying a bill) - your NZ account.

I haven’t done it the other way but I assume it’s the same, i.e.: Your NZ account - Hifx NZ account - to your UK account.

Coming from the UK to NZ the delay is in getting from your UK account and clearing into their UK account. Again I’m assuming here, but I guess the delay going the other way is from Hifx to your UK account; this delay is because of the UK clearing system.

Whatever happens (and again this is what I know of Hifx only), you will be told when you get your quote and agree to the trade EXACTLY how much money will hit your UK account.

Its worth registering with a few money transfer companies (should be free, if not don’t touch them), and then when you want to transfer, ask all of them for a quote. Get not only the rate but also the total amount in $ that you get at the end. Then take off any fees that are going to be charged at the UK end. And go with the one that gives you the most $$$$ for the least amount of hassle. It’s also worth asking your UK bank for their exchange rates and fees, and comparing that as well.

Hifx have a service where you can set up regular payments from UK to NZ (or vise versa).

From UK -NZ:


The minimum amount is £500 per month
You form a contract for 6-18 months
The Rate you get each month is quoted at the start and FIXED for the term of the contract
You know exactly how many $$$ you will get each month in your NZ account
You set up a Direct Debit from your UK account to HIFX's UK account
Money hits your NZ account about 5 days after your DD leaves your UK account.
NO CHARGES


From NZ - UK

Same deal but the minimum is $1000 per month.



If you are in the UK currently, its worth knowing that if you have a Nationwide account you can use your ATM card to withdraw $$$ here with no charge which can be very handy for smallish sums when starting out. So it may be worth opening an account with them while you still can.

[The Hodges]

Hey Avalon

Top post and very informative. :clap Thanks foir taking the time to post it all.

[Avalon]

GENERAL FINANCE IN NZ - WHAT ON EARTH IS EVERYONE ELSE DOING ????


How well are salaries keeping up with inflation?

My understanding is that salaries are far from keeping up with real inflation (as opposed to the figure put out by the government). Best way I can look at it - is to think in terms of the actual cost of living, rather than government inflation, which seems to ignore a lot of the price increases. In that case, interest rates, local house rates and fuel / transport costs have all gone up hugely in the last year or so :no and wages have certainly not matched it :mad: . Interest rates are pegged to go up again ( to try and stop the housing boom and to stop people going on spending binges - it's not working very well - all its doing is making the debt situation worse).


Do kiwis have relatively good financial habits?
Not really. Household debt is spiraling here as much if not more than in the UK at least (don’t know how that compares with the US. This seems to have been fuelled by the increase in House values, and people spending equity as well as an increase in the "buy now pay later" mentality and constantly spending more money than is earned. Its matched with a lack of saving. The vast majority of any investing is done in the housing market only.


I found this from the reserve bank:

By mid-2006 the outstanding debt of households had increased around five times in dollar terms since 1990, more than doubling as a percentage of households' disposable income. Weighted average interest rates however had fallen from over 15% to about 8.5% per annum (over 90% of household debt is housing debt, at an average rate of around 8%). Interest servicing of the increased debt, as a percentage of incomes, was about a third higher than in 1990. At current levels, the ratio of household debt to income (excluding student loans) is similar to those found in Australia, the UK and USA.


My feeling is that if you are pretty wised up financially and know how to handle money - then you can do pretty well here. But if you aren’t – it can hurt a lot.

I would also caution anyone who feels that coming to live in New Zealand will automatically change your spending habits. New Zealanders are just as likely to spend on credit as anyone else in the western world – so if you want to cut out on consumerism – then you have to do it the hard way. You won’t get it by osmosis from New Zealanders. You may find it easier given that in many ways there is less “luxury” stuff to buy – but that kind of stuff is certainly available here. The hard fact is that if you have a habit of spending too much now, you will still have it when you arrive in New Zealand - UNLESS you do something about it. :nice1

[Avalon]

DEALING WITH $ OR £

I do both! :o

I work in $ for the most part, that is I budget in $, and work out costs as a proportion of Salary in $. This I think is really important especially when looking at possible mortgages or rents, overall food bills etc.

Where I convert, is to determine whether or not I think something is worth the money being asked for it. For example - Books. Paperback novels retail at around $25 here. Unfortunately - even after 12 months - it really didn’t mean that much to me, however if I converted it - £10 (given the then exchange rate) was a hell of a lot of money to pay for a book! So I realised that I was being overcharged and popped to Amazon for a better price.

I also convert when doing price comparisons for online shopping - putting all currencies into £ - so for example if I’m looking at Books (which I do a lot!) I’ll go on amazon.co.uk, and .com and compare the prices in £ to what it would cost me in £ here. (Often I pay my Amazon bills on a UK credit card - so it makes sense to do it this way for me – if I decide to pay on my NZ Credit Card – then I would convert everything to $).

I use X-Rates Currency Calculator (http://www.x-rates.com/calculator.html) to do that.

Another problem I have (obviously I’m a bit dense when it comes to currencies ) is that when I’m in the supermarket and the bill hits $200 I nearly have a heart attack! Every time I hear it - I think its £200!!! And I still need to do the numbers and say to myself - hey that’s only £80 - not to bad for a big shop at all! 2 years down and I still do this. It’s bizarre. :o

Generally - I agree you should try and work in $$$$, but if like me you cant get your head round whether $100 is cheap or expensive for a given item, convert for that. The sooner you learn to work in $ - the better. It’s just taken me a long time.

[Avalon]

BUYING HOUSES & THE DREADED ESTATE AGENTS – :eek:!

Many people find the whole process of buying and selling houses here a lot easier than at home (especially in the UK). In many ways it is but you still need to be very careful. Agents here are not angels and they are just as likely to try pulling a fast one as an agent in the UK. Especially once they know you are a “filthy rich migrant”.

Neil Jenman’s book “Don’t Sign Anything” is a really good book explains a lot of the nasty tricks that agents can pull. It’s a bit of a scary read but I figure forewarned is forearmed and it’s good to know when you are about to be sold a lemon! It’s especially good at talking you through the auction process and what to watch for.
Neil Jenman's Website (http://www.jenman.com.au/index.php)

My main advice is literally “Don’t sign anything” not without a solicitor looking it over. You wouldn’t do it in the UK so don’t do it here. ALWAYS get your solicitor to check the sale & purchase agreement before you sign it. The seller’s agent often draws up the contract and they are less than trustworthy most of the time, they work for the seller, not for you. If you don’t understand something ask your SOLICITOR and not the agent. The solicitor works for you, and will give you the advice that works in your interest.

Be extremely wary of anyone that the agents recommend to you. Whether its solicitors, mortgage brokers, valuers, builders, chief cook and bottle washers or Uncle Tom Cobbley and all. You can never be sure that they are not paying “commissions” to the agent, so they are not truly independent. If you are not the only one paying then they are not working for you.

Always also get a full builders report and valuation done. I want to know of any problems before I buy just to make sure I’m really not buying a lemon. You can get a lot of useful info from websites such as QV and Terranet on local values, but I think it’s also worth paying for a proper valuation done especially if you are buying fairly quickly after arriving in the country.

QV Website (https://www.qv.co.nz/onlinereports/default.aspx?branding=homesell)
Terranet Website (https://www.terranet.co.nz/terranet/realenz/index.jsp?contentPage=../nli_register.jsp?thirdPartyForward=realenz)

Deposits are usually 10%, but you can organise a lesser one if you want. That would go in the S&P agreement as well. We gave a 5% deposit because this was a big house and 10% was a fair whack of money. Bear in mind with deposits, which unlike in the UK the deposit is paid to the Agent, not to the solicitors because they want to be sure they get paid their commission before anything else!

When you have the S&P drawn up, it’s fairly standard to have a condition in there that says "Subject to finance". Basically it means if you can’t get a mortgage, you don’t have to go through with the purchase. But just be aware that it should actually read "Subject to finance satisfactory to ourselves". This can avoid you being forced to take a mortgage out that is going to cost you more than it should including sometimes being forced to borrow off the seller!

My best advice is:

(A) Not to rush into anything and do LOTS of research. Talk to as many people as you can who know the areas you are looking at. It may look great but is it? You need to find out what the specific concerns are in each area, especially any sunlight issues, because if the sun doesn’t get onto your property for part of the day or even year, you are going to be VERY cold! (Big problem in Wellington for Eastbourne, Seatoun, and the Eastern Bays)

(B) Get a valuation on any property you are interested in. It will cost a couple hundred bucks - but it tells you what it’s really worth - from someone who works for you not the seller.

(C) Dont use any companies recommended by an estate agent. Chances are they are paying "Commission" (aka Kickbacks) to the agent and are therefore NOT independent.

(D) Check out some auctions and see what happens. Watch out for "Vendor bids" where the agent bids the price up on behalf of the Vendor. It’s totally legal to do that here. We went to one auction where we had been told the house was expected to go for "top 400's". The bidding started at 600. There was only one guy bidding (and lots of interested watchers). He bidded against the agent only and ended up paying $780K:eek:. I cannot for the life of me work out why he didn’t just stop. But ho hum not my money.

Also, something that has come up recently regarding investors bringing potential tenants round when you SELL a house here. It’s actually quite common and often investors will put a clause in their offer to the effect that they can bring round potential clients during the settlement period. If you are in this position, bear in mind that if it is in the S+P agreement you need to abide by that, but if it isn’t, you don’t. This is another of those things where I think the advice of a solicitor is worth every cent. They should guide you through every item in the S+P agreement whether you are buying or selling.

[Avalon]

WHAT'S ALL THIS FUNNY STUFF ON HOUSE ADVERTS? WHERES THE FLAMIN' PRICE?


“Do agents always list that the price as BBO or BEO in the ads next to the price (if it applies) or do you only find this out when you make enquiries. From reading this thread and the suggested links it seems that most houses have the BBO or BEO and yet we are not seeing it in the net ads, are we looking in the wrong place?”

Many properties don’t have any prices on them. In that case all you really have to go on is the GV/RV (Government or rating values). That’s the value on which the rates are worked out.

The Prices are set as:

Auction
A public sale of property in which prospective purchasers bid until the highest price is reached. (Actually it's not strictly the highest price but that's a whole other story ;) )
BBO / BEO
Buyer Budget Over or Buyer Enquiry Over (sort of a guide but as with a lot of this – often nothing like what the seller actually wants)
MWP
Marketed Without Price (Truly - the most ridiculously unhelpful bit of advertising nonsence I have EVER seen:roll)
PBN
Price by Negotiation (I'm sure that works best over Coffee :) )
POA
Price on Application (always says to me “overpriced” but that’s just me!)
Tender
Make a formal written offer for a property by a set date
GV / RV
well yeah, but how does that help? It may have been from 2-3 years ago, and still doesn’t tell you how much people want for the place. And often the Value is nowhere near the Market Value.
A Set Price eg: $350k
My preferred option. It tells you just what you need to know and I’ve noticed you often get this with lower priced properties - but not always.

If the ad says tender or auction your only way of getting a guide price of what the seller wants is to phone the agent and try and get a number out of them. I found that this was in no way helpful, even if they did tell you a number. Often they are trying to just get your interest with a silly low number which the seller would never accept and is often nothing like what the agent told the seller the house was worth.

To me this is the biggest downside to the system of having agents conduct all the viewings. You don't get to talk direct to the seller, so the agent is in way too much control for my liking.

That’s why we got a valuation before we made an offer. This place was advertised with a price (I stopped going to see houses without prices). They wanted $650K, but the valuation came in at $606. So we knew ahead of time that if we could get it at that price, we would not be overpaying. We managed to wangle it down to $595K :nice1

[Avalon]

Right - I do have a bit more to go (seriously - I have been spending way too much time on here :p ), but I'm off to bed. So I'll finish up tommorow.

Thanks for the kind words everyone. Glad you like it :raebanana

Hxxx

[Caroline and Dave]

Well done Avalon. Tried to give you reputation but once again the dreaded you must spread rep around before giving it to Avalon.Instead of rep will these do?
:clap :nice1 :cheers :clap

[dbonnett]

Wow! This is an amazing compilation of detailed info, great advice and bitter lessons learned! All of the types of mortgages beggars the imagination, since we have nothing like them here in the US of A.

Thank you again for doing this!

[Nienke]

Wow Avalon, you've really outdone yourself! Thank you soooo much for putting this all together, you are a star! :clap :clap

[NeilV]

http://www.emigratenz.org/forum/reputation.php?p=106622
*sigh* seems I can't think more highly of you :D

Thanks for this!
I just recently mentioned on another thread that I thought we should org. some stickys for the main questions [like these], and here it is not 12 hours later.

[you psychic or prophetic?] :)

[Avalon]

CAN I INVEST IN NZ. WHAT ABOUT MY PENSION?

This is an area that I’ve personally experienced a big difference in from being in the UK. I’ve honestly been bowled over by the sheer opportunity available here to invest in a future. This is usually outside what I guess would be considered normal in the UK. Many more people “do their own thing” rather than relying on a “pension scheme”.

The main principle of investing for a future is:

PAY YOURSELF FIRST or SAVE FIRST – SPEND SECOND.

The aim is to set aside 10% of your income for your future. (Add that to your budget!)

Investing (usually in property here) and wealth creation are huge industries here. And something I found amazing was the number of free seminars available. I think you should always be careful about seminars: if anyone is pushy and asking you to sign up for an expensive course, walk out. Not that it’s always a bad course but you should “never sign anything” without sleeping on it first! Some seminars you need to pay for but still be wary. If you are the sort of person who easily gets signed up for stuff, don’t go. Or at least don’t take your credit card or you may end up with that much-hated timeshare in Lanzarote!

Company pensions are available but most companies will not pay contributions into them because they have to pay Fringe Benefit Tax to the government in order to do so. Also, any contributions you make are done after you have paid income tax on the money earned. So you do not even get that tax benefit. Most NZ pensions invest only in NZ/OZ funds, so they tend to not do as well as they could (and are overly exposed to Telecom screw-ups of which there’s recently been a biggun!)

About the only benefit is that when you finally do take the pension out you aren’t taxed on the income from it. Though there is some sort of penalty, which means that any funds you get from a private pension are taken off what you would get from the state pension here.

I’ve put a separate post in about KiwiSaver below.

An awful lot of Kiwis seem to go it alone with investment planning and do it with residential property. Property is big; shares not so much as people got badly burned in 1987 and won’t look again. Besides there are nice tax advantages (at the moment) to buying property and holding on to it while renting it out. If you want to buy property and “do it up” a la Property Ladder you will get taxed on the capital gains (yes - the IS such a thing in New Zealand) but if you “buy and hold” you don’t get Capital Gains tax!

If you want to get into investing in property, the best place to go is another forum called Property Talk because there’s just too much info and they are experts:
Property Talk New Zealand (http://www.propertytalk.co.nz/)

Do be aware that most people “negative gear” property, which means they make a loss week to week. This is because the Government pays you some of that money back if you are a taxpayer. But you do need to have spare cash to “prop up” a property if you are going to do this, and it does limit how many properties you can buy. You can do it another way but it’s a lot harder. Property Talk can explain this, as it’s quite detailed - it's know as Positive Gearing (or Positve Cashflow).

I will be looking at property for this year but I also invest in shares now. I do this by buying Direct Shares rather than what most people do which is to pay money each month into a Managed Fund. The difference is that I save up $5000 at a time and then decide on a company to invest in, and buy shares in that company. Whereas with a managed fund, I would put say $500 a month into a fund, and then the fund manager takes all the other $500 that everyone else paid in that month, and he picks a load of shares to buy with all that money (having taken some of the money out for fees). I read somewhere recently that if you throw darts at a list of shares you would probably pick just as well as the fund managers do!

Is it risky? Well yeah, to a point. But I work with a company that advises me on which shares to buy and they use a method called Value Investing. This means ignoring the share price. Most people buy shares because they are “popular” and this means the price is higher. Value Investing means looking at the company and deciding what the company is worth. Then buying shares in that company when the share price is lower than it should be. Basically it’s buying shares at a sale price. I mean - when was the last time you went to buy a washing mashing and asked the shop if you could pay MORE for it becasue it was a popular make???? Why would you do that with shares???

It does require education, but then to be honest I’m now a firm believer in the fact that if you want a good financial future, you have to get educated about money. I find it odd that we are not allowed to drive a car without some education but we are allowed credit cards and allowed to invest without it!

We work with a company called Wise Planning Wise Planning Website (http://www.thefinancialfreedomcoach.com/)
But I strongly suggest that if you want to look at this, go to an evening seminar first. The program we are doing is expensive and you really need to work hard at it and I wouldn’t recommend it for everyone. Be assured that the one thing Wise Planning wont do is any Hard Sell which strangely is exactly why I joined them, so you can be sure your credit card is safe and you won’t end up with said timeshare in Lanzerote!

The main thing that makes investing risky is ignorance. If you don’t understand what you are doing and the exact risks involved, you shouldn’t do it. There has to be an amount of personal responsibility taken for your future so if this is all gobbledygook, then read some and understand it.

Lastly - many kiwis do a kind of "tax reduction" thing by running a company at a loss and offsetting their income tax against it. (It’s actually the same thing that is used for offsetting losses in property investing, an LAQC)

So for example: you set up an IT company, sometimes in addition to your main job. Both partners work for the company and both get paid the same amount per month cutting the tax bill that would be paid if only 1 of them was earning the full amount (tax on 2x50k is less than tax on 1x100k). You can also offset any expenses in the business against tax, so in this instance IT equipment and in fact anything you can imaginable claim as an expense, all comes out of your tax bill. If you make a loss - then that can come off the tax paid in your main employed job.

You need a good accountant but it IS done and it IS legal. Do make sure you understand EXACTLY how this works though before you set up a company.

[Avalon]

WHAT ON EARTH IS KIWISAVER?

(I wish I knew ;) )

The new "Pension" scheme is KiwiSaver. Don’t know much about it other than charges are high, the Inland Revenue is in charge ( :no ), you have to "opt out" rather than "opt in" :mad: and I wouldn’t have touched it with a barge pole but there are some changes to it, which may make it worth looking at.

KiwiSaver starts running on the 1st July 2007. You get a $1000 start from the Government, and can pay either 4% or 8% of your salary into it. If you start a new job after 1st July, you will automatically be enrolled in KiwiSaver, and have to opt out if you do not want to be in it. With this scheme the money comes out of your pay packet BEFORE tax, so in that regard it may look better than a standard company pension.

Employers can also now make BEFORE TAX contributions to the new scheme to make up your 4%.

Also, after 5 years the government will give first homebuyers up to $5000 towards a home deposit.

Now the weird thing is: there was supposed to be a change which said you could divert your contributions after the first year to help pay off your mortgage. This would be wonderful (or maybe you have to be me to find this exiting, I really need to get out more) because it means that you are effectively paying money off your mortgage with pre-tax dollars.

What this means:

AT the moment, say your overall tax rate was 30%. And you pay $1000 a month on your mortgage payments. In order to have that $1000 in the bank to pay the mortgage with you have to earn $1428. But if you could pay the $1000 into KiwiSaver and then bring it back out, you could pay the $1000 by earning just the $1000. (That’s a bit simplified – but it shows the point) I can’t tell whether this idea went through or not, but it looks like not. :no

The KiwiSaver website is utterly devoid of useful info but it does have a link to a Sorted calculator

Kiwi Saver website (http://www.kiwisaver.govt.nz/ )

if you put in your expected salary and age, it will show you how much you could get at the end of it. It’s worth comparing this with other savings calculators on the sorted website to see what you would have to save with after-tax dollars to get the same result.

[Avalon]

SILLY FACTOIDS ABOUT FUTURE WEALTH.

If you were take 100 young people today, and looked at where they would be when they got to 65years:

24 would be dead (and no – I haven’t a clue how that makes sense – but it does!)
54 would need the state pension to survive.
16 would still be working because they have to.
5 would be financially independent, but still need to be careful
1 would be become wealthy – and not have to worry about how to live.

So to be one of the 6 - you need to start learning about this stuff. I know it may seem hard - but please believe me when I tell you that It really does get easier.

Then theres:
1 in 5 Kiwis run out of money before payday.

And
Despite what most people think - 96% of Kiwis do NOT in fact own investment properties!
Of those that do - 93% own 1-2 properties
7% own 3+

:cheers

[stu70]

You might not be the best (in giving advice) but there is nobody better :clap :clap

[Jenny & Mark]

WHAT ON EARTH IS KIWISAVER?

KiwiSaver starts running on the 1st July 2007. You get a $1000 start from the Government, and can pay either 4% or 8% of your salary into it. If you start a new job after 1st July, you will automatically be enrolled in KiwiSaver, and have to opt out if you do not want to be in it.

Does the $1000 start apply to those who start working after July 1st?

Thank you Avalon for all your work.

Mark.

[Avalon]

TREE HUGGING AND THE CONCEPT OF MONEY

(In hippy Purple)

There is a theory that when you start to respect money and look after it, it kind of decides its likes your company and you get more of it. I now its sounds a bit odd but it really seems to work. Once I got the ball rolling and stopped overspending, the amount of money we had just kept going up. I know that may sound obvious but if it’s really that simple, why are so many people broke before payday?

(not a Hippy bit)

It’s actually the compounding of interest that makes this work (and conversely makes debt spiral out of control so easily).

So you have $100. That earns $1 interest the first month. But if you don’t spend any of it, the next month you earn $1.01! You just got a pay rise! Your money is multiplying because you looked after it.

I’ve been reading a book lately that had something to say about this which kind of had the effect of walloping me round the head and made me look at it a very different way. I hope it helps.

Basically you can have security OR you can have freedom. Seldom do they go together. To see this in action you have only to look at what is happening in the States, the UK and Australia. The book was actually talking about financial security. You can have a good job and the security that comes with a steady paycheck, but it won’t often give you financial FREEDOM. For that you often need to step outside the box. It can mean changing a lot of preconceived ideas about money and that is scary

Mind you, so is emigrating. As soon as you actually decide to do this, you are stepping out of the box. You are daring to actually do something which most people only dream of. But most people live life in an "it’s alright for you" kind of daze, if only they had your money / family / background they could do the same. You are not doing that, you are going for it. If you can do that, why not make a change in your financial “box” as well.

Also, for many of us we really need to change the way we think about money. It’s not an evil thing and having it wont turn you from a nice loving, giving person, into a greedy megalomaniac who would sell their own family for a fast buck. Conversely, being poor as church mice, won’t necessarily make you a decent human being either. Either you are a good person on your own merits or you are not. Your bank balance doesn’t alter that.

But the tree hugging principle says that if you think only evil greedy people have money, you won’t be able to keep it, because it’s going to make you feel bad. If this applies to you, then please just think about it. Most of the people I’ve met on this journey some of whom are seriously good at this all started in the same boat as we did, flat broke and depressed about it. The only thing that made a difference is that they felt they were worth the effort and did something about it. Their wealth has not made them different people – it’s just made them wealthier people. They have been incredibly generous with their time and in sharing their knowledge.

GROUP HUG ?

[Avalon]

HOW ON EARTH DO I GET STARTED?

So, you just got off the plane and you are starting this wonderful new life. Once you have slept a wee bit, grabbed a reviving cup of coffee or two and paddled at the beach, get budgeting.

Yeah right! As they say

Actually as odd as it may seem, if you are still in the UK when you are reading all this then my advice is to start now. I feel that the number one best decision I made before coming here (other than to actually come here of course) was to get my finances sorted and stop wasting money. You really don’t need to wait till you are in New Zealand to get that “non-consumerist” lifestyle.

If you are after a simple life, I think you will find it a bit easier to get one here than say in the UK. But I have to say that if you were to make the same decisions in the UK you would probably be able to live a pretty simple Non-consumer life there too. (Ok, more people may look at you as though you’ve sprouted horns ) But if you start now as you mean to live here, firstly it won’t come as a shock to the system, and as a bonus, you will have more money to start your new life with! :nice1

I’ve never exactly followed the rules so it was relatively easy for me to make the decision to live a little differently in the UK and stop spending. But to be perfectly honest, it’s often the same here as well.

I KNOW how hard it is to turn your financial life around. I’ve done it. Twice. Some people understand all this really easily, but if you are not one of those people – then please be assured that I’m not either. None of this has come easily to me. Its been a struggle to understand where to put my money, how to pay off a mortgage (even to realise that I COULD pay one off early). And the thought of investing used to bring me out in cold sweats.

I started out with over £10,000 worth of credit card debt. On top of a £145k mortgage. We were hemorrhaging money and in a right old pickle.
Now – I have no debt other than the mortgage ($245k now (£98k at the original exchange rate of 2.5)). I have an emergency fund of about $7k just in case, and other savings of a few K for things on the house. I own shares, and I’m looking at property investments. I’ve realised that I don’t just have top settle for “Doing OK” – that I can – If I work at it – do rather well. I didn’t get this far by being lucky – I did it by learning HOW to do it – and then DOING IT.

But you know what – the only way to get there – is to START.

[Avalon]

RECOMMENDED BOOKS AND WEBSITES

ANITA BELL – Your Mortgage and how to pay it off in 5 years
Your Money; Starting out and starting over

Absolute "Must Haves"

These are by far the best books I have read on anything to do with budgeting or money. They are funny, easy to read, and full of ridiculously good tips on surviving on a low wage and doing really well at it. It is these books that turned us from being in a right mess – to being quite comfy. I cannot recommend them enough – I only wish I were on commission.

Unfortunately this book does not seem to be available in the UK. Although it is written for New Zealand so much of the facts and figures don’t relate to the UK – the basis and ideas are amazing. So if you come here on a trip – grab one! In fact grab several and sell them to your friends!

SUZE ORMAN - The Courage to Be Rich.

Its a bit "oddball" in places, but does take you though some very good and sound moneysaving principles. A good background book to help get you thinking a different way rather than a "how to" book. Also, it’s targeted to a US audience so some of the info just isn’t relevant to here or the UK.

And I like the Title - says it all really.

MARTIN LEWIS – The money Diet
www.moneysavingexpert.com

A UK book. He is brilliant, great sense of humour and a real champion against overcharging (especially by the banks – though its widely thought that this led to First Direct starting to charge customers – so not happy from that point of view.)

Website – you can get weekly emails with money saving ideas – but its only useful for the UK. Also has a great forum on there where you can get loads of ideas and help. Especially useful if you have problem debts.

NEIL JENMAN – Don’t Sign Anything.
http://www.jenman.com.au

THE book to read before buying a house in New Zealand – especially at Auction.


ROBERT KIOYSAKI – Rich Dad Poor Dad

A whole series of books – but start with the title one. American books – so lots of stuff not relevant to NZ or UK as such – but good principles. If you want to do more than budget and save – these are good books to help you on the way to investing. Lots of info on Property investing. Rich Dad believes that Financial Education is paramount. A lot of the later books are repetitive – but the first 4-6 seems great.

PETER SIBBALD – Pay zero Taxes
Slash your taxes

Books on how to make the New Zealand tax system work for you by teaching you how to offset business or property costs against your personal income taxes. Neat!

DOLF DE ROOS – Building wealth through Investment Property
Real Estate Riches (Part of the Rich Dad Series)

A kiwi now living rather well in the states and jet setting round the world speaking at seminars occasionally (I heard him recently – he’s a great guy to listen to). This book was written in 1995 when interest rates were 15%+! Scary but a good book on the fundamentals – only talks about negative gearing though.

GEORGE S CLASON – The Richest Man in Babylon

An old book – basically a parable about looking after money. It tells the story of a Babylonian Slave who becomes very wealthy – using a few simple rules such as “Set Thy Purse To fattening”! Love it.

Sorted Webite (New Zealand) (http://www.sorted.org.nz/ )
A sort of one-stop-shop for all things money in New Zealand (and hosted by a cute mouse!)

Property Talk Website and Forums (http://www.propertytalk.co.nz/)
For all things property investing.
Covers all areas of the world, so rather interesting. Has separate forums for the Uk and New Zealand, as well as the US.

The Westpac "Fine Tune Your Loan" Calculator (http://www.westpac.co.nz/olcontent/olcontent.nsf/Content/Home+Loan+Calculator+-+Fine+Tune)
Just the best calculator I've found for showing the effect of overpaying your mortgage. I can fiddle with it for Hours.

[Avalon]

Well, thats about it for now. Theres possibly something more to add about the revolving credit mortages but I need to check it makes sense first.

Ill try and add new stuff as it comes up, and ill add to the book list as I find things that I think are good.

Other than that - I;m off for a coffee and some food :raebanana

[Avalon]

[you psychic or prophetic?] :)
Just a bit odd I think :D

Honestly though - I asked Douglas if he would mind making it a sticky - and bless him - he said he would! I couldnt bear the thought of sorting it all out and then no-one searching for it. This way - hopefully its all there for everyone to see easily.

[Avalon]

Does the $1000 start apply to those who start working after July 1st?

Thank you Avalon for all your work.

Mark.

It applies to ANYONE who signs up for Kiwisaver, whether they are already working on the 1st July or Start work later and are signed up then.

[Trigirl]

seriously good stuff there avalon. we've been following the kiwisaver saga too - and OH is a big fan or that westpac fine tuner!

thanks for all the advice - will read it properly again once we're back in welly

[wanderingoregonian]

WOW!!! thanks a million for doing this! I'll be re-reading this, and then on to the list of books I wrote down from this post (& the reading group one) to put with my brand new Welly library card.... that alone will start saving me some $ - once I get my head around the fee schedule at the library (coming from a no fee library in the states)

[Rabbit]

- Kiwisaver - max 8% contribution, small beer compaired with UK 100% contribution, or the OZ max contribution of $150k (AUS) in any one year. Pensions in NZ are crap, the best game in town has been property, due to the tax advantages aka LAQC.

- The other thing to consider for new residents is the 100% allowance for new immigrants effective from 1st April 2006 e.g. external investments and unearned income are not taxable. So consider holding cash in Jersey, and closing that english bank account with a poor return. Also alot of english bank current accounts e.g. halifax knock you down to a poultry rate of interest if there is not a certain amount flowing in every month. So maximise your money offshore. I suppose one option may be an NZ dollar account held offshore but I have not looked into this - perhaps available in the Cook Islands or Singapore?

Beware of the new FIF (foreign investment fund) rules that are emerging - potentially, there will be a need to pay tax on un-earned income e.g. the growth in offshore pension funds. Could be a bit of a wammy in the future e.g. after four years. Imagine having to pay tax on the growth of your offshore pension fund even though you have not even started to draw it.

NZ needs to introduce capital gains on property dealing (outside of the main residence) and cut the standard rate of tax, why should gains made in property be any different to shares? - thats my view.

Probably also a good way to cool (crash?) the housing market and spread the risk of asset classes held by people trying to provide for an income in later life..

NZ is struggling to compete with AUS on the tax front, and it could get worse or better depending on your point of view.

People might end up leaving NZ because of a better standard of living (and weather) in Australia.

At the end of the day, NZ will need to compete with the rest of the world, it is just a little behind the curve.

You could also consider skimping on motor insurance as it is not a legal requirement in NZ - a bit worrying

[Trigirl]

interesting comments. one thing we found out while looking at the new rules is that pensions funds held overseas will almost certainly be exempt from FIF rules. obviously no-one can be sure until the rules are finalised but thats how it looks now.

[Kathy]

Dear Avalon,

I am a new member and found all the information and advice you have offered quite fascinating to read and very helpful. It really is very generous of you to share your insights and experiences. I was feeling a little daunted by the maze of financial things we need to consider and your post helps a great deal... Your very positive approach is quite inspirational! Thank you :)

[Avalon]

kathy,

Thank you very much, and you are very welcome.

[Avalon]

FOREIGN INVESTMENTS AND NEW TAX RULES



Beware of the new FIF (foreign investment fund) rules that are emerging - potentially, there will be a need to pay tax on un-earned income e.g. the growth in offshore pension funds. Could be a bit of a wammy in the future e.g. after four years. Imagine having to pay tax on the growth of your offshore pension fund even though you have not even started to draw it.

I havent mentioned this because no decisions have been made as yet as to what is happening. My understanding is that (at the moment) managed funds of any type would be exempt (at least that was the idea before the whole thing got canned). So if you hand over your money to someone else to invest - you should be fine. If you do what we do, and invest in individual companies yourself - you are gonna get stung.

BUT - no one knows yet. The policy is getting re-written as it went down so badly. Keep an eye out.

CAR INSURANCE? WHY BOTHER?

You could also consider skimping on motor insurance as it is not a legal requirement in NZ - a bit worrying

Have to say that I work on the exact opposite principle that BECAUSE so many people do not bother with this - YOU should. My thinking is that say someone drives into you with a souped up racer that they can't drive (which lets face it is quite common!). And they total your car. And they havent bothered with insurance. How do you pay for a replacement car??? You cannot claim off thier insurance - cos they dont have any. So you either need to claim of your Fully Comp insurance - or pay for it our of your pocket.

Thats fine if you bought a car for $500 - you may be able to manage a new one - but to be honest - unless you have a good emergency fund behind you - then I feel Fully Comp insurance on your car is a must.

Bear in mind that here (unlike in the UK) you can insure your car for an "Agreed Sum".

What this means is that as long as you keep the car in good nick and regularly service it, the insurance pays out the sum agreed and NOT the book price. A bit odd if you are not used to it - but great in many ways!

Also remember that in New Zealand - you dont need cover for injury to yourself in a car crash, as ACC pays for that.

[andreamatt]

Avalon

Inspired, and inspiring - many, many thanks for taking the time to do this. You've done it for me: I'm off to get a notebook, pencil and my calculator (whilst I'm waiting for paint to dry - trying to get the house ready to put on the market).

Best wishes,

Andrea

[Rusty]

Great information and a lot of it!

I'll definately read it again in a few months.

Thanks for all the effort put in - must have taken a while to do.

[pinkpiggy]

Avalon

What a fantastic thread. As we're moving ever closer to our move to NZ this will come in really handy. I will have to re-read it, possibly several times, to make sure it filters into brain, which seems to have turned to mush!!!

[Big Puku]

Have to say that I work on the exact opposite principle that BECAUSE so many people do not bother with this - YOU should. My thinking is that say someone drives into you with a souped up racer that they can't drive (which lets face it is quite common!). And they total your car. And they havent bothered with insurance. How do you pay for a replacement car??? You cannot claim off thier insurance - cos they dont have any. So you either need to claim of your Fully Comp insurance - or pay for it our of your pocket.


Great thread Avalon!
BTW if you are hit by an uninsured driver (and can identify them) most third party policies also cover up to $3,000 under the "uninsured motorist extension" - so I would only consider comprehensive policies if it's a posher car!

[Velma]

Fantastic thread Avalon - much appreciated. Made me realise how much I don't know. But also that I'm glad I'm reading it here in UK before making the move hopefully in May. :)

[Avalon]

Great thread Avalon!
BTW if you are hit by an uninsured driver (and can identify them) most third party policies also cover up to $3,000 under the "uninsured motorist extension" - so I would only consider comprehensive policies if it's a posher car!
Cheers matt! I didnt know that - one more thing to add to the list of things I dont know enough about :o

[Avalon]

Fantastic thread Avalon - much appreciated. Made me realise how much I don't know. But also that I'm glad I'm reading it here in UK before making the move hopefully in May. :)
You are very welcome.

[KD17]

Wow Avalon, what a most fantastic post, definately couldn't agree more with the cost of living bit that's for sure. I was surprised at this about 18 months ago when I found the Woolworths on-line site and did a "virtual shop" - it truly is not that much cheaper.

You could most definately have made a book out of all of this and sold it to us forumites and made some extra dosh :laugh

Excellent words of advice.

Thank You.


Debby & Keith

[debnjohn]

If you don't want to shell out for a QV report, you can register here for free:
http://nz.helpsellmyproperty.net/
It's a Harcourts website, and only shows details from Harcourt sales, but seems to give the prices only for ALL recent sales

Follow the link 'What's my home worth'
Then zero in on the area you are interested in.
They will also do email updates if required.

Cheers,
John

[HelenandPhil]

Avalon,

What a thread!!!:nice1

I have been using your budget to guestimate our likely expenditure when we arrive and I cant see anything listed for the equivalent of Council Tax in the UK?..... not sure if I have missed it in the detail of your posts but any ball park figures for this would be useful.

Also what would be the cost of a mobile phone on contract for average use?


I realise both these costs can vary widely but we have never been to NZ before so any info would be great

thanks

[jdbob]

I cant see anything listed for the equivalent of Council Tax in the UK?

I believe those are called "rates" in New Zealand, that might help a google search get going.

[IanW99]

For council tax, see rates.

As this is on the property then it varies with the house. If you look at many of the property websites e.g. trademe then a lot of the properties will list the rateable value. So you can see what sort of property you are looking for and hopefully the approximate amount of rates you woud have to pay. You will need to check this out for the area that you are planning to live in as they are different (AFAIK) for each council.

For mobile phone on contract then see the appropriate websites as they are all listed there - Telecom and Vodaphone - and pick the one that you prefer.

Ian

[srivett]

Brilliant! What a generous and inspirational gift of your time and effort. Thank you, Avalon :) I'll definitely be taking all of this into account before and after my move, and referring back to your thread frequently. I can't believe you did all this, and so quickly. I hope you know how much of a lifesaver it is, literally. In one large swoop, you've become the best financial mentor a 24-year-old gal has ever had. I expect your advice will make a huge difference in my life. My deepest thanks.

[txbarb]

As we got a package from Vodafone this week I can give you some info from the literature inside. We had bought a prepaid card over the internet and had it shipped to us. Using the Motormouth plan, calls to the UK/US are .34 USD/.49 NZD anytime and calls to NZ landlines are the same.

They list these other contract plans to give you an idea:
Choose 60 (60 min) $39.95
Choose 120 $59.95
Choose 250 $109.95

You can add on night/weekend minutes at lower rates. So let's say I went with Choose 120 $59.95 + Your Time 100 (100 night/weekend min) $14.95 that would be about $75/month. That's about what we pay here in USD for 450 min, but then we get a second phone for a lot less using a family plan option.

It doesn't seem to save any money to have a plan, but I guess you have the convenience of not having to add time every so often.

[theSingsons]

Great Money thread Avalon. It's a give a great overview on how to manage your cash once you come aboard.

[Philip10]

Wow Avalon, great thread, you have really opened my eyes to “let’s rip the migrant off NZ”. I’m having second thoughts already.

Philip

[debnjohn]

Wow Avalon, great thread, you have really opened my eyes to “let’s rip the migrant off NZ”. I’m having second thoughts already.

Philip

Philip,
I think the thread is designed to give a 'heads-up' on many aspects of looking after your assets.
I don't think the financial matters covered in this thread are designed to exploit migrants or any other group. It is just 'the way it is' here in NZ and is applicable to everyone. There are plenty of financial scams in the UK ready to catch the unwary punter, local or not.

Cheers,
John