Win an all-expenses-paid trip for two to Europe (Part 2)
Posted by Faith, 26 February 2009
In last week’s blog I proposed that all of you could win a fabulous trip – return business class airfares to any European capital, accommodation at top hotels, a luxurious rental car and lots of spending money!
At the end of that blog I asked you all to start dreaming about your favourite travel destination or another longed-for dream, if travel wasn’t your first choice.
Did you decide to jet off to Italy for a stroll through a vineyard and a perfectly chilled pinot grigio or did you dream about cruising down the Rhine? Maybe your plan is to step out on the Giant’s Causeway in Ireland? Perhaps instead you’d prefer to zoom off on a road trip around New Zealand in your new ‘spicy’ car, or redecorate the house with the brand new furniture you’ve always wanted.
On 1st April this year, at least 630,000 New Zealanders will receive an increase in their pay as a result of a tax cut. Most of us will receive between $10 and $20 per week. This might not sound much but, from dreams to reality, it only takes a few small steps from here. Your first move will determine whether you are one step towards or away from making your dreams come true.
So, which step do you need to take?
While the prize is personal, the way to achieve it is a universally accepted way to grow your wealth. It’s like having your own money tree.
You’ll need a pen, paper and two important websites to start a money tree that will bear the fruit (your dreams) that you want.
Go onto the sorted website at www.sorted.co.nz and follow these simple steps:
- Click on “Calculators” in the row of grey menu buttons at the top of the page.
- Once the page opens up look for the heading “Saving”, and click on “Regular saving”.
- Put in your weekly, fortnightly or monthly savings amount (match this to the frequency you receive your pay or salary). For example, a tax cut of $15 per week would translate to $65 per month, if paid monthly.
- Pick a start date of 1 April 2009
- Select an end date at least 5 years into the future. Why not have it coincide with a significant event, like a big birthday or wedding anniversary, or the day you plan to pay off your mortgage (as a reward for your hard work), or when you want to stop working (retirement)?
- Pick 0 for the amount you have saved already because this is your special money, which is in addition to KiwiSaver or other investments.
- Leave the return at 2.5% pa. This is conservative and allows for inflation and taxation. We are not trying to do anything too tricky here. You want an honest, comfortable return that is possible, even in the slowest economic times.
- Hit the orange “calculate” button to see how much your money has grown.
For example, saving $15 per week ($780 per year) for 25 years will add up to just over an amazing $26,600 – just the right amount for an all-expenses paid trip to Europe.
The table below shows different amounts saved from $10 per week ($520 per year) through to $20 per week ($1040 per year). If you are a couple, you can double the final total if you each save the same amount. Imagine what you can do with this money!
(Return of 2.5% pa after taxation and inflation was used for these calculations)
We’re now at the point where you need to take the first, vital step. It is much easier to save the extra money you receive from 1st April if it comes straight out of your pay packet and into a separate bank account (before there’s a chance to fritter it away elsewhere).
Don’t leave your computer until you complete this essential step:
- Log into your bank account via your bank’s website
- Click onto the section that creates a new automatic payment
- Arrange your weekly, fortnightly or monthly saving amount now, but set the start date for the first pay you will receive in April
- Don’t put in an end date.
Don’t hesitate, do this right now! This is THE crucial first step. Miss it and you run the risk of just wasting the extra money your will receive in April. If you don’t use on-line banking, ring or visit the bank tomorrow and set up this regular saving.
Begin with this first step in the right direction, stick with it every pay day and you will become a dream maker!
“What about the mortgage, Faith?” I hear you cry. Repaying your mortgage is definitely just as important as any long-term savings plan. However, as I said earlier, saving your tax cut is for a special fund, which needs to be in addition to mortgage payments.
While some might claim that all spare money should go into mortgage repayment, we all need something to sweeten our lives and to keep us going while slugging it out with the mortgage. That’s why having this extra, special fund is so important.
That said, you should also be planning to pay off your mortgage in 10 to 15 years, rather than the usual 25 years. If so, you can sleep easy knowing that you have both your dreams and your mortgage taken care of.
Living your dreams and debt reduction go hand in hand if you make the most of the all the opportunities open to you. Next week I will talk more about these opportunities and what can happen if you delay or ignore them. This can be scary stuff, but also exciting.
Tune into part 3 next week – if you dare!---ends---
Always set goals and work towards them, but never make New Year resolutions. Want to know why? Read more...
Achieving your goals means Keeping the Faith.
Want to know more about how to make better choices about money? Check out Faith’s Fact Sheet.
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See previous blogs:
Don't sweat the small stuff.
Can you grow a money tree?
What's holding you back?
Money or your life - which has more value?
The seven secret thieves
Five questions to change your life
Find that spark
Switching lives - what would you choose?
Who can I trust to help grow my money?
How to swim in a sea of money
Life can be unfair
The rule of happiness
No way to live
Anyone can be good with money
Best ways to warm up winter
Who wants to be a millionaire?
The secret of wealth
Keeping your money safe
Having it all
Win an all-expenses-paid trip for two to Europe (Part 3)
Win an all-expenses-paid trip for two to Europe (Part 2)
Win an all-expenses-paid trip for two to Europe (Part 1)
Make a change for good
A recipe for a happy Christmas
Nothing else matters
Rage, rage against the dying of the light
Make a wish come true
Buying or Selling a House – Those that care least, usually succeed
When is a good time to buy a house?
Sleepless Nights in a War Zone
Transitions - more life or more of the “same old, same old” boring stuff?