1. Review your finances
If you haven’t actually reviewed your finances recently, perhaps your goal for this year will be to sit down and get into the nitty gritty of your money. You don’t have to do it all at once, but it’s important that you get a clear understanding of what you’re earning and what you’re spending so you know where you might need to make some changes. Maybe you can try to spend a bit less on takeaways, or hold a garage sale to make a bit of extra cash.
2. Create a budget
Many people believe a budget is restrictive and unrealistic, but it doesn’t have to be. Alongside setting aside money for your bills and other outgoings, also set aside some money for spending on whatever you like. If you’re saving for a holiday, you could make it more engaging by creating a visual representation of where you’re at (like the fundraising thermometers) to remind you of your goal.
3. Reduce debt
Taking control of your debt is one of the best goals you can make for your financial wellbeing this year. Plan to get rid of your most expensive debts, or ones with the highest interest rate first, like credit cards and overdrafts. Then work your way down to long term debts like your mortgage. If that seems too daunting, you can start with your smallest debts first, and then you’ll feel a much better sense of achievement at getting them out of the way fast.
4. Sit down with an adviser
If you’ve never had a chat with a financial adviser before, now’s the time. Make one of your financial goals this year to get in touch with an adviser you trust to help you get a handle on your finances. If one of your goals was to attend the gym more, or lose weight, you’d likely call in the professionals and get a personal trainer to help. Think of a financial adviser as a personal trainer for your finances!
Whether you want to create a budget, review your finances, or reduce debt, we’re here to help! No matter your financial situation, we’ll get you and your family set up for a brighter future.
1. Learn to say ‘no’
This is something that many people feel they struggle with, especially when it comes to friends and family. To help preserve your mental wellbeing and ensure you avoid burnout, try to practice saying no more often next year.Think about what boundaries you might like to put in place – whether that’s less time on social media or more time spent enjoying your favourite hobbies instead of running around after everyone else.
2. Book time off
We all fare much better when we have things to look forward to. By planning out any holidays or time off you’d like to take throughout the year in advance, you’ll not only be able to have more time to plan, but you’ll also have something exciting to think about as you get back into the swing of things. Think about what you’d like to do with your time off and get it locked in early so you can start planning.
3. Practice mindfulness
When life gets busy, as it often does, it feels as though time is just flying by. We could all do with stopping to smell the roses once in a while and being mindful about what we are doing. Try to cultivate a mindfulness practice into your everyday life next year. When you’re with family or friends, or even by yourself, practice being present and noticing the sounds, smells, and sights around you.
4. Be intentional about your finances
Many people who set goals for the new year usually have some kind of money-related aspiration. This is great, but in order to reach your goal, you’ll need to find ways to make it stick. Being aware of exactly what you’re spending your money on is a good start – create a budget, or review your existing one, and book in regular finance check-ins to see if you’re still on track.
If you need some help setting financial goals for 2023, come and have a chat with our friendly team. We can get you on track to achieving financial success and set you up for a brighter future.
Make it fun
It can be hard for younger children to grasp the concept of saving so turning it into a game is a great way to introduce the concept. Small supermarket toys are a great way of doing this, they can play shopkeeper and practice exchanging money for items. You can also let them play with the different coins so they can learn how much each one is worth. Once they get the idea, they will learn that more coins mean they have more money in total and this will introduce them to the practice of saving.
Give them the opportunity to earn money
Getting your kids to earn their own money by doing chores around the house will teach them that money needs to be earned and once you spend it you’ll have to earn more. Encourage them to save up for a purchase they have had their eye on, such as a toy or a game. Saving up for a short-term goal will help them later on with long-term goals.
Get them involved
It’s important to set a good example of how to spend, manage and think about money. Openly discuss how you spend and save with your child such as budgeting for a holiday. You can work out how much you need to save if they want to do certain activities and get them to contribute some of their pocket money. You can keep a visible tally so they can see their progress.
Let them make mistakes
It can be tempting to take control of your child’s money so they don’t overspend on toys or treats, but this won’t teach them good money habits. Mistakes will happen and they may spend all their money at once. Let them learn for themselves that if they spend all their money then they can’t add anything to their holiday savings or something they have had their eye on for a while. This will teach them the consequences of poor money management. Make sure you explain this in a calm way so they don’t start feeling guilty around money and hopefully, they will get the idea and weigh up their options better next time.
If my business is only small, do I still need insurance?
Small businesses can be more vulnerable to risks as a single event can have a large impact on their ability to recover. You may think that having your business set up at home will mean it’s covered by your contents insurance, but this is usually not the case. It may cover your home office set-up, but it won’t cover any stock you have or your liability if something goes wrong. It’s best to check with your provider to make sure you’re covered where you need to be.
What if I already have house insurance?
If you already have house insurance, let your provider know you are running your business from home. Some providers will continue to insure your home, but it does depend on the level of risk. They will need to know if clients are entering your home, the materials you keep on the premises that could increase the risk of fire or theft, and what type of business you’re running.
What cover do I need if I have stock?
If your business involves storing stock at your home address, your normal contents insurance won’t cover this. While your stock is at home awaiting sale, you’ll want to make sure you’re covered in case it gets damaged or stolen.
Do I need vehicle insurance?
If you’re using your personal car for business purposes, such as running work-related errands or meeting clients, you need to make sure you have a commercial vehicle policy. On a standard private vehicle policy, if you damage your car while on business errands, your claim would most likely be denied and you would need to bear the cost of repairs.
Do I need liability insurance?
In the event of any legal proceedings resulting from damage or injury, it’s important to keep yourself protected. Let’s say you’re a hairdresser and you used a product on a client that resulted in a severe skin reaction, you might need to provide a refund and pay for any medical bills. Similarly, if a client comes to visit you at your home and has a fall, you could be liable.
Not sure what cover you need in your small business? Get in touch with our friendly team today – we’ll get you sorted!
Even if you offer a registered superannuation scheme and have an exemption from the Financial Markets Authority, you can’t just ignore KiwiSaver.
As an employer, you must:
When you bring on a new employee, you are responsible for checking whether they are eligible to be a KiwiSaver member and if they should be automatically enrolled. You can check their eligibility on the IRD website.
If they aren’t already enrolled
You’ll need to give them a KiwiSaver information pack within 7 days of the employee starting work. This information pack includes a KS2 KiwiSaver deduction form which the employee can use to let you know whether they want member contributions to be deducted at 3%, 4%, 6%, 8%, or 10% of their gross salary or wages. If they don’t advise you of their preferred rate, you should deduct member contributions at the default rate of 3%.
If they are already enrolled
If your new employee is already a KiwiSaver member, they need to give you a completed KS2 KiwiSaver deduction form, and you must deduct member contributions from their first pay, unless you are given a valid savings suspension notice.
A new employee who is an existing KiwiSaver member must:
Existing employees aren’t enrolled automatically into KiwiSaver, but they can join as long as they meet the eligibility criteria by contracting directly with their chosen KiwiSaver scheme provider or joining through you as their employer if they are 18 or over.
If an existing employee has told you they’d like to join KiwiSaver, you need to check if they’re eligible and:
If a new employee wishes to opt out of KiwiSaver, you need to:
KiwiSaver members can take a break from saving 12 months after they’ve made their first contribution to their KiwiSaver – this is called a savings suspension. It can be for a minimum of three months, up to a maximum of one year.
An employee can apply for a savings suspension by calling the IRD, and if approved, either your employee will show you a valid savings suspension notice or the IRD will notify you. You can stop deducting member contributions and making employer contributions once you’ve seen a valid savings suspension notice.
An employee can give you notice that they’d like to restart their deductions but they can’t ask you to start and stop deductions too often; the minimum period before requesting a change is three months.
You aren’t required to pay compulsory employer contributions if an employee is taking a savings suspension, but if you choose to, you can continue to make employer contributions.
Doing your own accounting:
Hiring an accountant:
If you’re tired of trying to manage the business accounting yourself, get in touch with our friendly accounting team today. With our comprehensive knowledge and expertise, we can offer you advice and solutions that are right for your business now and in the future.
You’re overbooked
While it might seem great that business is booming, a sign that you’re undercharging is when you have no more room for new clients or you feel that the work you are doing is not worth the money you’re making. You could look at increasing your prices so you have more time to take on projects that give you a better return.
You’re not taking home a salary
Business owners usually make sure everyone and everything is taken care of first. Bills, marketing and your employees. You should make sure there is enough after these payments to bring home a reasonable salary for yourself. If you find there’s not much left at the end for you, its time to charge more for your services
Your prices have stayed the same for years
In most industries, prices increase slightly each year. If you can’t remember the last time you raised your prices, then it’s time to increase your rates. The cost of living is constantly on the rise and so is the cost of running your business – your charge-out rate needs to keep up with your business.
Finding the right charge-out rate can be difficult and may take some time. Do your research, ask around and find out what your competitors are charging. If this seems daunting, start small and set higher prices for your services for new clients. If you’re worried about existing clients, raise those prices incrementally, giving them plenty of notice.
Understand your money
The key to getting rid of your credit card debt is to get familiar with your spending habits and create a budget. Take a look at your bank statements and track your incomings and outgoings. List your essential and ongoing expenses so you can then budget for what’s due. This should be reviewed weekly to see where under or overspending occurred.
Cut down monthly expenses
Now that you understand where your money is going, you can aim to reduce your spending and allocate more of your income to paying off your credit card debt. Although it’s important to stay on track, you should still make time to enjoy yourself. Try to have dinners and drinks with friends at home instead of going out, use free streaming services instead of paid, and go on local walks on the weekends.
Create a payment plan
With more money allocated to paying off your debt, it’s time to create a timeline. Depending on your balance, you should determine what monthly payments you can afford. Now that you know how much debt you have to repay per month, you can work out what you can spend outside of your essential budget.
Doing the hard yards
Committing to paying off your debt can be challenging. It will take willpower and discipline, but the freedom that comes with it is priceless. As you make serious contributions towards your credit card debt, some months may be harder than others. But by sticking to your regular repayments and cutting back on costs you’ll see things moving in the right direction.
Celebrate your win!
Once you start reaching your repayment milestones you’ll be even more motivated to continue, and eventually, you’ll make your last repayment. This will be a massive achievement so don’t forget to celebrate this win and treat yourself to a celebration.
Choosing sole trader or a company
It can be tricky to get your head around the different business structures when you first start a business. What’s your long term plan?
If you plan on staying small, you could set yourself up as a sole trader. It’s one of the most accessible options if you are starting out. A partnership is a good option if you plan to run your business with someone else. A company is a legal entity separate from its owners and is responsible for assets and debts. If you have growth on the horizon, incorporating your business as a company can provide some great benefits.
If you want to know which business structure is best for you, check out this helpful article.
Registering for GST
If your business is earning (or expecting to earn) over $60,000 per annum, you are legally required to register for GST. If you are earning under $60,000 per annum, it is your decision if you’d like to register for GST.
If you are registering for GST, you will need a GST number – as a sole trader, you can use your personal IRD number, and as a company, you can register for a company IRD number.
Insurance
There are many different types of insurance you might need for your business, such as vehicle, building or liability cover.
It’s a good idea to sit down with an adviser to make sure you’ve got everything that’s important to you and your business covered.
Income tax
Keeping up to date with your bookkeeping and accounting systems is important. It’s a good idea to have an accountant on hand to see how you’re tracking throughout the year and to help you determine how to meet your tax obligations.
Putting aside 30% of your sales into a separate bank account during the year will mean you can pay your annual tax bill without worry.
Employing people
Employing staff can be a huge help when you start a business, but it is important to remember that you have responsibilities as an employer.
You will need to have a contract ready before they start, register as an employer with IRD, and sort out any resources you may need including wages, insurance, tax levies, computers etc.
COVID-19 wage subsidy
If you’re eligible to claim for the COVID-19 wage subsidy, it’s necessary to have all of your financial records in order to prepare evidence to support your claims.
You need to be able to demonstrate how the lockdown has had a declining affect on your revenue.
As an employer, you can also apply for The Leave Support Scheme & Short-Term Absence Payment for when employees must miss work due to COVID-19 isolation or testing and cannot work from home.
Starting a business is an exciting venture, but there’s a lot to consider. If you’d like to sit down and make sure you have everything sorted, get in touch with us today!
Here’s why now is the best time to seek help from the professionals to make sure your insurances, your KiwiSaver, and your general finances are working as best they can for your current situation.
Insurance
It’s not something that people like to think about often, but for those who have had the right kind of cover in place, it’s been a welcome support in times like these. If you have an insurance policy in place currently, it’s important to review it often to make sure it will still work for you the way you need it to.
You might think that you’re paying quite a bit for your premiums, so perhaps you need to take a look at what you’re covered for and whether you still require that cover. If you want to know whether you’re covered for specific things like income protection or medical procedures, it’s important to check that out too and add it in where necessary if that’s a priority for you.
If you don’t have insurance in place, now’s a great time to see what’s out there to protect you, your family, and your prized possessions.
KiwiSaver
You’ve likely seen your KiwiSaver balance fluctuate a bit in recent times, but if you don’t already know, KiwiSaver is more of an investment than a savings pot. And as with any investment, it will have its ups and downs.
To make the most of KiwiSaver and ensure you have enough for a comfortable retirement or to help you purchase your first home, it’s important that you are in the right fund for the type of risk you’re willing to deal with. A KiwiSaver adviser can help you to understand the different fund types so you can decide which one you think is best for you.
Mortgage
If you own your own home, you might have been worried about your mortgage payments recently, especially if you have had reduced income. However, if you’re looking to refix, refinance, or purchase a new home, now is a great time to do so as interest rates are still quite low.
A mortgage adviser can help you every step of the way and make sure that you’re getting the best rates possible. They can explain how it all works and the different types of mortgage loans available. If you’re not sure whether you have enough for a deposit, or whether your application for a home loan will be accepted, an adviser can take a look over your situation and let you know what you need to be approved.
Accounting
If you own a business, the lockdown period may have been especially hard on you. Now is the ideal time to crunch those numbers and get some forecasts in place to see how you might be able to recoup some of your losses down the track. There have been some additional funding options made available for businesses during this time – our expert accounting team can give you the details and make sure you’re receiving everything you need to get your business back on its feet.
Even though you might not be doing so well now, setting the right goals and working on a plan to achieve them puts you in good stead to build yourself and your business back up, fast.
If you want to know more about how your insurance, KiwiSaver, mortgage or business finances can be working better for you, our friendly team of expert advisers can help. Every review we undertake is completely free and there is no-obligation for you to take action.
Even if you just want to check out your options or get some good solid advice, you can get in touch with us for a chat – we would love to help you!