Ngā Take Pūtea
nā Diana Clement
Saving is empowering. It can also be hard. That is until you know how. Even low earners can put a few dollars a week aside for emergencies or their future.
It’s not impossible. Some whānau just manage to make ends meet. They have to pay rent or mortgage just like everyone else. The tamariki need new shoes and school uniforms what feels like every second week, and there’s the ever-present prospect of huge dental or car repair bills.
How they do it is by budgeting. They plan for the bills, set aside money for food, and know where every cent goes. That helps them prevent leakage of money. Good budgeters also plan their time to avoid spending money. They think twice before having an extra beer at the pub or buying takeaways on Friday night when they could cook up some kai at home.
It is important to save regularly, says Lisa Kahu, budget advisor for Te Korowai o Te Tai o Marokura health and social services in Kaikōura.
“It is so important for whānau to save even a small amount regularly. To watch their pūtea grow and know that they have some savings put aside for emergencies can be very empowering. Often by working with someone and finding out where their money goes from week to week, we are able to start a savings plan immediately.”
Some iwi have budget advisors who can help you get started. It costs you nothing to visit them and get advice. Or you can find a free local budget advisor on the familybudgeting.org.nz website. These advisors understand what it’s like to live on a low income, and have tricks up their sleeves to help you survive financially.
Budget advisors can negotiate with your creditors to spread out payments and stop you being hit with penalties and fees. They can also advise on both local and also government grants you might be entitled to.
Best of all, they can help you set up a budget, and show you how to manage your money and track your spending.
Step one is almost always to help you start a spending diary where you note down everything you spend for a month. This can be a real eye-opener. They may also suggest restructuring your banking, so that money for bills and saving are paid into separate accounts at the beginning of the month.
Chances are that the budget advisor will find ways for you to have a surplus at the end of each pay period, which you can use to reduce debt or begin to save.
You can also sign up for a money management course. Whai Rawa, the iwi-based savings scheme of Ngāi Tahu, aims to build the wealth of Ngāi Tahu whānau by encouraging and assisting savings for home purchase, education and retirement. Whai Rawa can run these courses for groups, or you can contact organisations such as Christians Against Poverty that may have a course running in your area. Visit capmoney.org/en_NZ/findacourse for more information.
Once you do start to save, the money adds up quickly. Even $5 a week saved at 3% interest adds up to $536 over two years. Keep it up for 10 years and you’ll have $3,031. Or if you save into Whai Rawa or KiwiSaver you’ll have your savings boosted with extra payments such as tax credits or annual distributions. If you want to use your savings as a deposit for a first home, you might also qualify for subsidies that boost your savings by thousands of dollars.
There are many reasons to save. They include:
Building an emergency fund. This fund can cover unexpected expenses such as the car breaking down, or taking time off work to look after the whānau.
Saving for retirement. New Zealand Superannuation doesn’t pay a king’s ransom. It’s currently $348.92 a week for a single person living alone or $536.80 for a couple. If you want more than that you’re going to have to save, or keep working in retirement.
Buying a house. If you can save a deposit and buy your own home (or build on your Māori land), you’ll be able to ditch your landlord and get ahead financially. The bigger the deposit, the easier it is to get a mortgage. If you don’t think it’s possible, read about how Ngāi Tahu wahine Ondine Grace bought her first home at age 20 using KiwiSaver and Whai Rawa.
Getting a new car. If you can save enough money to buy a car with cash, you can say goodbye to interest payments and free up money for something else.
Pay for an education. Savings give you more choices when it comes to education for your whānau.