Blog | PocketSmith

Why There's A Splurge Category In My PocketSmith Budget

Thu, 27 Nov 2025 11:00:00 +0000

I have a problem with spending money.

Most people wouldn’t admit that to a complete stranger (that’s you. Hello.) Most people wouldn’t even admit it to a friend. But here I am, a finance blogger, a PocketSmith user of 4+ years, a generic-budget-spreadsheet user of far longer than that — i.e. someone who is supposed to know better and be better at general money-related stuff — fronting up and telling you the blunt truth.

My name is Rachel, and I have a problem with spending money.

But not how you might think.

See, this week I was on the phone with my good friend Ruth at The Happy Saver. Her podcast was my first introduction to PocketSmith, back in the day. Since then, we’ve bonded over mutual interests like long rambles in the Central Otago hills and bemoaning the lack of financial education in primary schools. How do kids these days learn about bank accounts and saving for a rainy day? I dunno. She asked me what my childhood was like in terms of money.

Yes, this is a normal question finance bloggers ask each other, right after “what’s your PAYE salary?” and “2% Paywave surcharge? Tell him he’s dreaming.”

I thought about her question for a bit.

“Well,” I said finally. “I’m a natural saver, so I guess saving has never been a problem for me. My problem has been learning how to spend money.”

She got it. Not everyone does. Let me explain.

I’m one of life’s instinctive savers. For me, there has always been more inherent satisfaction when looking at $5 in my bank account balance than looking at, say, a $5 coffee or a $5 Lotto ticket. But as I’ve aged, I’ve learned that that $5 in the bank isn’t just about satisfaction. It’s a good feeling, sure. That steadily increasing bank balance tells you a lot about a person. It says: I’m planning for the future. I have an emergency covered. I’m in control.

But along with the peace of mind come other, not-so-great, feelings.

I’ve had to learn how to spend money and what to spend it on. I don’t always get it right, even now.

Like fear

If I spend that $5, it’s gone. I don’t have it anymore. What if I need it for something next week? Or next year? So the bank balance keeps piling up, slow and steady, until I have far, far more than a simple $10,000 emergency fund sitting there. And that’s all it does. It sits there in a bare-minimum savings account. Safe as houses. I don’t put it to work in an index fund or a term deposit to grow, because what if I need to access it suddenly? I can’t afford to lock it away where I can’t get to it. But I’m also not using it. It’s stuck in that dreadful non-space of not being utilised either way. I’m not growing it for the future. I’m not using it in the present. If anything, it’s stuck in the past, devaluing with inflation. So, for fear of losing my money, I’ve created a terrible self-fulfilling prophecy.

Like selfishness

If I use that $5 on someone else, I won’t have it when I need it myself. Never mind that I have much more than $5 in the account. Never mind that I have a steady, well-paying job, that I’ve run the numbers, and I can afford to put ten times that amount into charity or investments for the future. No. Why can’t I be generous with what I’ve been given? There’s always a way to make more money. Failing that, if worst came to worst and I lost my job, I have savings to tide me over and get me through. If I help a friend now, they’ll help me in the future. But nah. I earned it, right? It’s my hard work. My money. Mine. My own. My precious.

Hang on, I’ve heard that somewhere before… it didn’t end well.

Like paralysis

I have all this money stashed away and no idea what to do with it, so I’ll do nothing. That’s the flip side of contentment; when the little voice that loves stability starts to whisper fear of the unknown. Don’t step out, you don’t know what you’re stepping into. Better the bank you know, with its pitiful rates, than the investment fund manager you don’t, with four times the return and low fees. Better the minimum wage job in your hometown than taking a chance and hopping on a plane to new places. Better the comfort of the known than the excitement, growth, potential, and adventure of the unknown.

But taking no action is, in itself, a kind of action. Doing nothing still chews up time, money and resources. It might not grow your money. It might not lose it in a grand crash. But is stagnating really any better?

All this to say…

Yes, I have a Splurge category in my budget

It’s an amount that, every month, I have to spend. After I’ve paid living costs, sinking funds, investments, tithes, and so on, this is an amount that goes purely on me. It doesn’t have to be big. It doesn’t have to be splashy. But it does have to be spent by midnight on the last of the month.

It gets me out of my own head and stops what I call the Saving Spiral.

My answer to the fear is this: I have a $10,000 emergency fund. I keep a healthy float on top of that. I invest. I save. I diversify the risk. And sometimes I drop that monthly Splurge budget on a pair of new trail shoes, just because I can.

My answer to the selfishness is this: Look up and out. My faith as a Christian informs this. If someone else has less than me and I’m in a position to help them, why on God’s green earth wouldn’t I? So I buy someone a coffee. I lend a friend a few thousand (interest-free) so she can replace her leaky roof. I make the effort to smile at a stranger on the street.

My answer to the paralysis is this: There are so many options out there. Out of all those endless options, staying still is the worst one. Pick something. I dropped a chunk of my savings on a one-way ticket overseas. I travelled for six months and made friends for life. I moved back home to New Zealand, landed a new job, and moved to a gorgeous mountain resort town (then got a year-long concussion, but that’s another story.)

Do the prep work, do your due diligence, and then move. You might have to start small. That’s okay. Take a chance. Put $10 into a Kernel growth fund. Watch it for three, six, or twelve months. Compare it to that $10 sitting in your 1.5% savings account. Or take a friend out for coffee and pick their brains about that career change you’re interested in. Give a coin to that busker on the street and tell him you love his music. Why not? What do you have to lose?

I’ve had to learn how to spend money and what to spend it on. I don’t always get it right, even now. Sometimes I splurge on the wrong thing when I should take 24 hours to sit on that decision first. Sometimes the lesson is hard-fought. There are times when a transaction, instead of hitting my Splurge category, gets filed under Regret.

But I still think that a misstep now and then is miles better than never stepping out at all.

Rachel E. Wilson is an author and freelance writer based in New Zealand. She has been, variously, administrator at an ESOL non-profit, transcriber for a historian, and technical document controller at a french fry factory. She has a keen interest in financial literacy and design, and a growing collection of houseplants (pun intended).

A Fresh Look for PocketSmith Web

Sat, 22 Nov 2025 11:00:00 +0000

Since the last update to the user interface released in 2015, we’ve added more options and functionality to each feature, impacting consistency and visual hierarchy. And given that it was released a decade ago, the look and feel of PocketSmith was certainly dated, as mentioned in recent reviews.

Overhauling the UI in a product with so much history is no small task, but it’s also a delicate balancing act between improving usability and aesthetics without inciting a user revolt! This is why you’ll see a real incremental approach to the PocketSmith web app redesign with a framework in place to iterate often. For this first stage, it was essential to laser focus on the areas of the application that everyone interacts with daily — primarily the toolbar and sidebar.

This blog post will discuss our goals in the redesign as well as the changes you’ll see in the application. But never fear, all the old functionality is still there and nothing has been removed or buried behind layers of convoluted menus.

The goals

Jumping back to 2015, Material Design was fresh, and focused heavily on flat design, with bold colours against muted, minimal environments (and we can’t forget the emphasis on real-world elevation!).

A lot has changed since we farewelled Parks and Recreation, and we wanted to bring PocketSmith into the modern era with a look that more aligned with what we like to see in the software space.

Form must follow function though, so more crucial than just a lick of paint, we needed to introduce better organisation of elements on the page. PocketSmith has a lot of options within the user interface, with toggles and selectors appearing throughout. The new design moves us closer to a logical consistency for:

Where you’ll find view options and toggles for a feature
What information sits in the title bar on each page
How you find a summary of a page or report you’re looking at
What action controls sit in the toolbar

There is still more to do though — for instance, the Net Worth report still has toggles in the toolbar. We are working through a plan for the pages that are lagging behind though, and this will enable us to put view toggles in the sidebar where they should be and reserve the toolbar for page actions.

The hierarchy of the page was a crucial factor in the new design — you want to see and interact with your data first without visual interference from buttons and headings! Font weights, colours, corners, shadows, and the layering of elements have been applied with real consideration for their importance and the flow of information and movement.

We’ve also improved how we use vertical space. For example, on the Transactions page you’re able to see more transactions at once, and through a reorganisation of the individual elements into spaces which honour their relationship more accurately, your view is less cluttered.

The changes

Throughout the application, you’ll see a new look for the toolbar, sidebar, and the way that the content is positioned within the page. Everything has a softer edge, and shadows have been carefully deployed to give context and a sense of depth.

All pages that have a graph along the top now expand the full width of the page, no longer being restricted by the sidebar. This leads to a much more comfortable scrolling experience, where the sidebar is always adjacent to the main content, and elements stay more consistent from left to right across the page.

The new user interface — reorganised, clearer, logical.

We’ve also tweaked how the messages appear on the lower left-hand side of the screen. This is often important information that people miss because of their previous design, tucked well away in the bottom of sidebar. These have been pulled out and made bolder so that important notifications about the actions you’ve performed are not missed.

Transactions page

A result of the above changes is that the Transactions page feels much cleaner, with fewer competing angles. We’ve tidied up and consolidated the page title bar, meaning the new beta search bar can sit cosily within.

The Transactions page with the old UI, as of yesterday.

The Transactions page with the new UI, with the exact same things selected. Bliss!

We’ve moved the summary of transactions to the sidebar, where you’ll also find the transaction counts along with the sum total statistics that used to exist above the transaction table. This aligns with the logic of collating view information and functionality together in the sidebar, and creates more vertical space for scrolling transactions!

The graph selection controls have been separated from the search controls as well, giving them a better sense of place and clarity in the toolbar.

Calendar page

The design changes mean that the Calendar has been brought back front and centre. There is now a clear summary of what you’re viewing on the calendar on the top left of the sidebar and all toggles have been moved to the sidebar as well.

The old Calendar UI, forcing your eyes to jump from top-to-bottom and left-to-right.

The new Calendar UI — horizontal calm, and a tidy summary of what you're looking at right at the top of the sidebar.

Grouped account management in the sidebar has also been significantly improved, replacing the obscure three-dot menu popup that was there previously. A toggle appears on the right of each item in the side, which expands to allow easy control over which scenarios and accounts are shown within the calendar. I think there may have been a collective sigh of bliss from the whole team for this change!

The way things were, multi-selecting grouped accounts via an obscure three-dot menu.

And now, with a fold-down and a clear indication that you don't have all accounts displayed in the calendar.

Other pages

Pages now feature a summary at the top of the sidebar that responds to changes when different view options are selected. For example, when you land on the Budget or Trends page, you’re able to very quickly see exactly what you are analysing at any given time.

The Trends report within the new UI.

The Income and Expense Report within the new UI.

Some pages are still undergoing work, however we wanted to ship the improvements we’ve refined so far so we can iterate from a place of real-world experience. For example, the main Budget page has significant space available in the sidebar still, which lends itself well to restructuring how the information is displayed on the page. Likewise, the newer Net Worth page doesn’t yet have a sidebar, which means that the toggles still sit in the toolbar area, which will be resolved in later iterations.

The legacy theme

Before 2015, everything in PocketSmith was brown. This theme still has many, many fans.

And lastly, we couldn’t spruce up the UI without a nod to our fine friends of PocketSmith from the Skeuomorphism era. Our brown legacy theme has been updated to ensure the new sidebar and toolbar changes are consistent throughout.

Overall, this release represents a major step in a new visual identity for the PocketSmith web app, with more exciting work to come. This agile approach to redesigning the user interface allows us the framework to grow and improve alongside the space we occupy without the paralysis of a right-first-time rigidity.

We hope you enjoy using it as much as we do!

Mindy came to PocketSmith from a fashion and print background and has been immersed in digital design ever since. When not fussing over pixels, she can be found sewing, fermenting or trying to convince her daughters to help her in the garden. She loves to use PocketSmith to responsibly enable way too many hobbies.

Bede Compares Life on the Road With PocketSmith

Wed, 19 Nov 2025 11:00:00 +0000

Read how Bede uses PocketSmith to track every trip, compare cities and countries, and enjoy a relaxed, well-funded retirement.

Tell us a little about yourself?

I’m 69 and have been retired for 4.5 years. I had my own company as a consultant in the construction industry, and was a tradie before that. I now predominantly travel in Australia and overseas and have no permanent address, although I stay in Sydney for part of the time. I’m currently in Taiwan and Vietnam for two months.

How would you describe your role in your household?

I’m in full control of my life and finances. I have two grown-up kids, one working and one at university, who are both self-reliant, so I don’t have any dependents, which is freeing.

Now I look after my investments and use the money to live off. I use PocketSmith to provide data on my expenses, both in Australia and overseas.

What drew you to PocketSmith?

I’ve always had a budget, which I feel is crucial to allow tracking of spending, and I have had many complicated spreadsheets that I developed to show my current position and costs broken up into various categories. PocketSmith allows me to analyse this information more easily for all my personal expenditure. My business finances were taken care of with a separate program.

In Australia, I use my credit card for nearly 100% of transactions. PocketSmith allows recording of transactions with bank feeds and for ongoing items that are automatically listed in the correct category. Overseas is a little different. The information is not as detailed, as a credit or debit card is not used as much, and cash is used a lot. Therefore, spending is not nearly as detailed; however, I could list cash spent into the appropriate category if I wanted to. I can see at a glance the amount spent at any time, and this is the most important data I need.

How long have you been with us?

I’ve used PocketSmith since 2014, and I wish I had known of it earlier…

What do you primarily use PocketSmith for?

I use it to keep track of all my spending. While I don’t utilise budgets and many other features, as I don’t need to at this stage of life, I would have when I had a family and it was more critical. Now it allows me to track expenditure, and as I have many categories, I can see how much is spent on almost anything in Australia or overseas.

It has also allowed me to analyse the daily and monthly costs between living in Sydney, travelling in Australia or in various countries overseas. All I need to do is put in the dates, and the amounts are easily seen. This can be broken up into categories if required. I think this is really interesting to see the costs associated with different types of my life. I then easily put these numbers into one of my spreadsheets, which I can then compare as a measure of different living choices.

How has PocketSmith changed the way you do money?

PocketSmith has allowed me to know the amount and where my money is spent, and I can easily and quickly be up to date in seconds. All that is necessary is to put the dates of travel in, and PocketSmith will provide the information broken up into the categories I have chosen.

This critical information I use to put into my spreadsheet to see the amount of money spent on my trips both in Australia and overseas, which I can then easily compare with the actual costs for each trip.

What are your favourite features?

My favourite features include the bank feeds learning, so that categorising is simple for recurring items after being done once, thereafter it’s just a simple click to confirm.

Searching for an item is easy, as are the costs for specific categories. Say if I want to know the fuel costs for a trip in Australia, I simply put in the start and finish dates and search “Fuel” — and that’s it. Simple and quick. I can do that with any category. This allows me to budget if I want to or to just analyse for interest. I’m currently in Taiwan and I’m able to quickly see the total costs up to the day or for various categories such as flights, accommodation, etc.

One of the best things about PocketSmith I’ve found over the years is when I make a significant mistake, can’t work out how to do something or have a problem of some sort, an enquiry to them results in a lightning quick response with exactly what you need, or they just fix it for you. An incredible experience, there’s few companies that can match this service.

Got any tips?

I’m fortunate at this time to not have to worry about keeping to a budget; however, for the bulk of my life, I did. I would have definitely used this feature without a doubt and with a lot less spreadsheets!

Spend the time to set up categories that you want to be recorded, and this will develop over time and is easily added to. You can make this as simple or detailed as you like. Mine is very detailed, which I like as it allows me to find nearly anything I’d like to know about expenditure.

What’s the best money decision you made in the past 12 months?

PocketSmith has allowed me to have a clear understanding of the exact costs over different living situations that I experience, which over the last few years of retirement, has allowed me to relax with money and further enjoy the 50 years of my working life.

Ruth's Two Cents: Budgeting for Charitable Giving

Mon, 17 Nov 2025 11:00:00 +0000

Hi Ruth,

I’ve always believed in giving back to the community, and now that I’m in a more stable financial position, I’d like to incorporate charitable giving into my financial plan. However, I’m not sure how to go about this effectively and tax-efficiently. How can I ensure my donations make a significant impact and align with my values?

Those generous with their money and time are always good people to be around. I applaud you for asking the question because even just thinking about how you can help others makes you an awesome human. Creating a plan for how you will give back to your community is the best way to ensure that you bake some good and long-lasting habits into your generosity and that you direct your time and money where you see value.

Are you in a position to donate money?

Growing up, my family were what you might refer to as “generous to a fault”, meaning that sometimes they gave away too much money, leaving our family struggling. I’ve learned from that example, and it has helped me navigate my charitable giving. Firstly, when money was tighter, I began to give my time. Donating your time can be as valuable in many instances as donating money.

In this busy world, there are a lot of causes and charities that need hands-on help. For example, fundraisers standing outside your supermarket have given their time, a precious commodity. We also readily donated our skills when required, and I’m particularly good at donating my husband Jonny’s skills as a graphic designer! As I was thinking about your question and talking it through with him, he told me he’s just agreed to design the posters, flyers and tickets for a local fundraiser next month. He is donating his time, and they are saving money by not having to pay for a key part of their fundraiser. Think about what skills you can offer to others for free.

Today, we continue to donate our time to various individuals and groups, and as money became more abundant, we also donated that.

Tell your money what you would like it to do

In the past, I have donated to causes as I came across them, such as the collector standing outside my supermarket or the fundraiser who made an effort to come and knock on my door. Although it felt worthwhile to do this, I wondered about all the causes that didn’t have the time to stop me in the street or call in at my home.

I needed a little more structure. Allocating money in your budget to specifically go towards your good deeds is the first step, and once you have created a stream of funding, you can begin to spend it on the causes you support. A few years ago, I added another sinking fund to my list of bank accounts. These are individual bank accounts where specific sums of money are drafted into each account on the same day each week, all with a particular purpose in mind. I have titled one of these accounts “Giving.” Now, without me having to even think about it, money is being set aside for generosity toward others.

How much should you donate?

I see two main ways to determine how much you can safely gift to others without risking your finances. You can allocate a set amount of money each week to a sinking fund, as I do, or you can assign a percentage of your income that will be used for giving. Given my erratic income, I choose the former, an amount I know I can safely set aside for giving. Giving is just another item I can budget for with PocketSmith, except that, unlike paying my phone or internet bill, ‘giving money away’ is much more satisfying and enjoyable.

Over time, we have settled on our sweet spot, an amount of money that feels right to us. We can adjust the figure up or down at any time, but given that we are so used to spending a portion of our income on others now, the figure is increasing slowly over time.

How do you choose a worthy cause?

If you have a person or a group in mind that you would like to support, I’d start by approaching them directly and asking what support they seek. And then build from there. With so much need in the world, you can’t be all things to all good causes. Think deeply about the people, groups, and causes who might have supported you and to whom you would now like to give back. For example, a member of my family is living with cancer and has been exceptionally well supported by one charity; therefore, that is one that I choose to help financially. Choosing a cause aligning with your values makes your contribution even more significant.

Give with an open hand

Given that we have a sinking fund that receives a top-up each week, I know this money must be spent. Therefore, my ears, eyes, and heart are open to a good cause, knowing that I don’t have to think about finding the money before I think about being generous. If I see an opportunity, I don’t hold back, and because I know I can afford to, I’ll give money. And I don’t second-guess my choices. Nor do I hang about for anything more than a ‘thank you’.

I simply trust that the person or charity I’m giving to has the good sense to make the right decision on what to do with the money we donate. Rarely has this “giving with an open hand” backfired on me.

Getting your tax advantages

PocketSmith is well-positioned to help you take advantage of any tax credits you may be entitled to due to charitable giving, because wherever you are in the world, there may be tax credits for charitable donations. In New Zealand, you can go to the IRD to learn about Tax Credits For Donations or to Submit A Donation Receipt. When you upload your receipts and track each transaction in PocketSmith, you also have the correct information and documentation at your fingertips to claim your tax credit. This well-structured system enables you to become more generous in many ways because by receiving credit for a portion of your donation, you free up more money to donate.

Start small and grow

I love your heart, and I encourage you to budget your generosity much like you would any other PocketSmith spending category. However, while paying the electricity bill may be dull, donating time and money to a cause you can get behind is heartwarming for all involved. Incorporate saving up for charitable giving into your budget, pick a cause, get involved, and see where the journey takes you. Only good can come from being kind to others. As I sat to write this, I jotted down all the times I could recall donating time and money to others. Reliving each occasion made me feel kind and useful to society all over again. Thank you for that!

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

Ruth blogs at thehappysaver.com all about how she and her family handle money. What’s the secret? Spend less than you earn, invest the difference, avoid debt and budget each dollar that flows through your hands. She firmly believes that if you can just get the basics right, life becomes easier from there on in.

What Is 'Singles Tax' and How Can You Overcome It?

Wed, 05 Nov 2025 11:00:00 +0000

Being single can be an empowering experience. Living alone, having the freedom to do whatever you want whenever you want, and not having to take on anyone else’s drama or expectations means more people than ever are opting to do life solo. But singles often face a financial burden that couples just don’t, especially when it comes to the cost of living. Here is a guide to the ‘singles tax’, what it means for you as a single person, and tips on how to manage your money effectively in spite of it.

What is the ‘singles tax’?

Don’t panic! The ‘singles tax’ isn’t a literal taxation on single people. Rather, it’s a term colloquially used to describe the additional cost that can come from doing life solo rather than with a partner. That said, some countries do offer tax benefits to married couples, either through concessions or through more favourable tax brackets.

Effectively, the ‘singles tax’ comes down to the fact that many aspects of life are set up for couples and/or families. From food servings in the supermarket coming in twos or fours, to travel packages costing more for singles than twin share, to things like rates and utilities costing the same regardless of whether one or two people are using the services.

Most common instances of ‘singles tax’

Rent and living costs. Sharing a home with a partner usually means you’re splitting the cost of your rent or mortgage. While some countries offer discounts for people living alone, like the UK’s 25% council tax reduction for singles, the cost is still higher per person for singles rather than two adults in a couple. Plus, couples can share a bedroom, unlike two housemates or one single person living in the same-sized property.
Saving and borrowing. Couples have two incomes from which to save for a house deposit, and banks are more likely to lend to two incomes rather than one. So, even though a single person may need less space than a couple, it’s still easier for the couple to buy a home.
Household expenses. You might think that two people use more water than a single person, but base rates and connection charges for utilities often mean a single person wears substantially more than half the cost of a couple.
Travel. Travelling with a partner can be more cost-effective than travelling as a single person. Splitting the cost of hotel rooms can make your money go substantially further compared to footing the entire bill on your own. Plus, many package travel options like cruises or tours charge a premium for a single person who isn’t sharing with a partner.
Gifts. Shouldering the load for gifts is another burden on singles. While it does depend on your friend group and family dynamics, singles who find themselves among a sea of married friends or family members often have to foot the bill for wedding, birthday, Christmas and baby shower gifts on their own, while couples split the same cost between two of them.
Conveniences. Singles may find themselves having to pay out for favours that a partner might otherwise do for them for free. Things like airport pick-ups, help when sick, or childcare support all need to be paid for when you don’t have a go-to partner to call upon.

Why is managing money harder as a single person?

Managing money as a single person is not only a numbers game, but a mental one too. Yes, being single can pinch your bottom line — but there’s also the mental load to carry. Not only can you not split costs, you can’t split decision-making either. The weight of earning an income and paying your living costs falls solely on you, which can be burdensome to singles who may not have other support from close friends or family.

How to slay your money management as a single person

Despite the financial challenges of being single, there’s nothing to say you can’t build a financially secure life for yourself solo. In fact, there’s evidence to suggest single people are often more successful than couples due to their sense of autonomy and self-sufficiency. Here are some top tips on managing money successfully as a single person, from setting yourself up for stability to getting creative with what you spend.

Set yourself up for stability

Managing money solo means shouldering a lot of responsibility on your own. It pays to prioritise setting yourself up for stability by building an emergency fund and considering your personal insurances should you run into unexpected adversity. While life changes threaten almost anyone’s financial situation, it’s even more important when you’re single. Using a tool like PocketSmith can help you stay on top of your budget, plan for the future, and build a strong foundation for your fabulous single life!

Cook once, eat twice (or thrice!)

Many singles find that cooking for themselves all the time takes a toll on their mental health, as there’s nobody to share the load. Try to work smarter, not harder, when it comes to things like cooking, by cooking a serve for two or three people, and storing it to eat another day. This way, you only need to cook 2-3 times per week instead of every single day.

Prioritise yourself and your values

Being single is a lot of responsibility, but it brings with it opportunity. You don’t have to worry about what anyone else is doing, earning, spending or saving — you get to call the shots, so make the most of it! Work out what’s important to you, and use money as a resource to build a life you love on your own terms. Really dig deep and think about the life you want to lead, and then map out a plan to make it happen.

Team up with friends or coworkers

Many parts of the singles tax come down to economies of scale — it’s often cheaper to do something for two people than for one. But these savings aren’t only reserved for couples. Try teaming up with other single friends or even siblings or coworkers, and share the life load with one another like an economic partner. You could trade portions of meals you’ve cooked, share lifts into work, be each other’s emergency call if you need a ride somewhere, or even consider communal living. While your days of cramming four or five people into a tiny share house might be behind you, you might be able to get a better quality of life by splitting the rent of a four-bedroom, two-bathroom home with a friend instead of each paying for a tiny studio or one-bedroom apartment.

Make the most of your freedom and accelerate your financial growth

Being single brings a lot of freedom, and you can use this to your advantage to make big leaps forward on your financial path by seizing opportunities that couples might be unable to access. Consider things like housesitting for free accommodation to turbocharge your savings, renting out a room in your home if you have unused space, or even living abroad in a lower-cost-of-living country for a year to maximise your life experience and boost your savings. Living the same life as a couple but doing it solo will often cost more, but there are lots of opportunities to make the most of your freedom, too.

Check out the PocketSmith money methodologies hub

When you’re single, knowing your numbers and prioritising your savings is critical. If your budget needs a refresh, check out our money methodologies hub to browse different budgeting styles to find one that suits your personality.

Emma Edwards is a finance copywriter and blogger, on a mission to humanize the financial services industry by creating meaningful content that’s accessible and empowering. You’ll find her penning money tips at her blog, The Broke Generation, sharing financial insights on Instagram, or injecting life into content for her business clients.

Good News: Banks Can't Charge for Open Banking in New Zealand

Wed, 29 Oct 2025 11:00:00 +0000

We and many other fintechs were shocked when the draft legislation released in May 2025 indicated that banks could charge per API call for New Zealanders to have access to their data via open banking.

No other open banking regime in the world has a fee structure attached to it. New Zealand was on the precipice of eschewing global open banking norms — making it more closed than open, with financial gatekeeping. New Zealand was faced with low uptake of open banking and significant barriers put in the way of fintech innovation, resulting in worse outcomes for millions of Kiwis.

I was on Radio New Zealand’s Nine to Noon show discussing the good news, the morning after this announcement was made. If you’d like to listen to that (and hear a slightly more rambly version of what is discussed below), you can find the interview here on RNZ’s website.

Quick recap: the fee structure that was proposed

Banks were to be allowed to charge one cent per API call, for access to open banking data, up to a maximum of $5 per month per bank. In this context, a single API call is the secure connection between your bank and PocketSmith to retrieve a single piece of information — what accounts you have, the balance for one or more bank accounts, or a list of transactions in an account.

Most Kiwi PocketSmith users hold accounts at two or more banks, with around five accounts per bank. So the banks could have made between 12 and 40 cents, every time a regular New Zealand PocketSmith customer retrieved up-to-date data for their accounts — even if there wasn’t any new data.

Banks would charge these fees to the companies, like PocketSmith, that gave consumers access to their data. These fees would then need to be passed directly on to the consumer; only in the very rarest of circumstances would these costs be able to be absorbed by a fintech (that is, if the fintech in question made money from selling your data, which is definitively not PocketSmith).

With that background, let’s discuss why this change is good news for New Zealand.

Good news #1: levelling the economic playing field internationally

Australia, the UK and Europe implemented open banking years ago now. Canada is working on their own legislation right now. The New Zealand government falling in line and legislating free access to open banking means that we are on a level playing field with the rest of the world when it comes to financial inclusiveness and consumer data rights.

Allowing banks to charge for access to open banking data would impede New Zealanders’ access to good financial information. This would then put us on the back foot economically, internationally. New Zealand is already a unique economy, being a first world country that is extremely geographically remote from the majority of the world.

If a nation’s people aren’t able to easily obtain access to their own financial data and the financial literacy that this data enables, then it will lead to worse economic outputs for that nation.

Free access to open banking data helps level the playing field for New Zealand and its economy.

Good news #2: removing barriers for consumers

A fee-free approach to open banking ensures that the future is bright for access to tools that help New Zealanders do more with their money. At a time when cost of living is putting pressure on households, open banking should be part of the solution: giving people better insights, tools and control over their money. Free access to open banking data drastically increases financial inclusiveness.

Pay-to-play data access would mean only some folks could afford to use tools that access this data. Those that couldn’t afford the fees would have to make do without, or may end up using services that earn revenue through selling data or earn kick-backs from selling financial products to those consumers.

While PocketSmith is a very comprehensive, in-depth personal finance tool made for home CFOs, free access to open banking data means that simpler tools, such as those provided by the Retirement Commission on sorted.org.nz, could consider bringing your banking data into their tools, helping people even more — for free.

The chance of this happening, if banks were charging for every piece of data, would be near-zero.

Good news #3: removing barriers for fintechs

Overseas, we can freely build, innovate, and compete on a level playing field because there are no artificial barriers to participation. The assurance of free open banking data in New Zealand means we’re operating on the same level playing field locally as we are internationally.

This change encourages more financial innovation. Small Kiwi fintechs can compete, experiment and create products that genuinely improve financial wellbeing for New Zealanders. Many New Zealand software startups test the waters in New Zealand before entering overseas markets — and so lowering the barrier to entry for fintechs means that we’re far more likely to see local fintech innovation going to the world stage.

This all means more financial innovation in New Zealand, more weightless exporting of software overseas, and a more vibrant financial economy. This will all lead to better economic outcomes for our country.

Good news #4: changing the incentives for banks

This change means that banks will focus on efficiency in delivering their APIs. With a pay-to-play structure, they would have been incentivised to increase the number of API requests that are required to perform a specific task, as they’re earning 1 cent per request.

I’d like to illustrate this with some slightly nerdy details about the API spec. The account listing API does not include balance information. Instead, balances are obtained via a totally separate request. Allowing the fetching of all account balances at once is not mandatory, but instead of only implemented at the discretion of the bank themselves.

This means that if you had five accounts at a bank, it could cost up to 6 cents to get a list of account names and balances for those accounts; 1 cent for the account listing to get account names, and 5 cents to get the balance for each account separately.

The optional endpoint for providing all account balances at once is now far more attractive to a bank looking to save costs, than a bank trying to earn money through individual API requests. Not charging for API access means that the banks will focus on efficiency instead of revenue, resulting in a faster, more consumer-friendly API.

Good news #5: for PocketSmith customers

New Zealand PocketSmith customers have a real home-team advantage: PocketSmith is cheaper in New Zealand than anywhere else in the world when you take currency into account. And because open banking data access is going to be free, it’ll stay that way too.

Now that things are looking bright again for open banking legislation in New Zealand, our Kiwi customers can look forward to having legitimate, regulated open banking data being brought into PocketSmith — without the spectre of what financial burden getting access to that data would impose.

Now, we can keep moving forward

All in all, this change means we can all be excited about open banking in New Zealand again. Jason and I started PocketSmith in 2008, and we’ve been waiting for open banking to hit our shores since we first saw the Open Bank Project launch in Germany 2010.

It’s now been made clear to the world, and to all Kiwis, that New Zealand is serious about building an open, trusted, and consumer-first financial future.

And if this decision hurts the bottom line of the banks who are making records profits, while their customers suffer through a cost-of-living crisis… well, I don’t think that’s something that any of us should lose sleep over.

James is the CTO and co-founder at PocketSmith. He loves tech from software to hardware to music, and is passionate about technology being a net-positive in people’s lives. He lives off-grid with three humans, one axolotl, one dog, and too many possums.

Book Review: "Friends That Invest"

Tue, 28 Oct 2025 11:00:00 +0000

The elevator pitch

Simran Kaur is the founder of the popular investing podcast and company Friends That Invest. This podcast has reached over 12 million downloads globally. It focuses on sharing practical knowledge and information with women and other groups who often miss out, improving financial literacy and guiding them along an investing pathway. In this book, Simran shares her experience of, at the age of nine, being told that investing is not something girls do. She discusses the barriers and taboos that surround money, particularly for women.

In the first section, she introduces readers to financial jargon, explaining and simplifying the language of investment and creates familiarity with the processes and systems of investment. Readers walk away with a foundation of knowledge of investing to build on. Section two helps readers to understand different types of investing and to identify the type of investor they want to be. She helps you figure out if you are someone who should invest in more bonds or stocks, if you are a risk taker or like to play it safe, and much more. Simran completes her instruction with a step-by-step guide for developing a plan that gives readers the confidence to start investing tomorrow.

What sets Friends That Invest apart?

Simran’s guide to financial independence through shares and stocks cuts through the complex words, numbers and systems that put investing in a false veil of secrecy — often out of the reach of women. She uses everyday relatable examples to help make sense of the complex investing ‘slang’. An example of this was her comparison of Blended Funds being the ‘forgotten Jonas brother’ of the stock market. Her advice and simple language approach take the fear out of finance. She also shares investor profiles to bring different investors and styles of investing to life. By connecting you with the real-life experiences of others, she creates hope and enables you to imagine yourself stepping into the shoes of a successful investor.

Key takeaways

Simran’s relatable examples and ‘how-to’ approach gave me the confidence to start investing. Let me share three key takeaways that will help me set off on my journey of investing.

1. There’s no better time to start than now

A common misconception about investing is that it’s only for people who have strong knowledge about it and so people put off asking. It is also common for people to think they need to wait until stocks are cheap, but I learned that there is no better time than to start now.

“Thinking that investing is too hard is a popular myth that holds most of us back from getting started.”

2. Investments go down, but that doesn’t mean you should sell them

Investing requires patience as investments need to be able to grow for long periods of time. She used an example of the crash from COVID-19 and discussed how many people panicked and sold their investments. The people who didn’t sell have now seen the rewards as everything has bounced back.

“There’s a popular phrase in the world of investing called ‘buy and hold’, and it’s popular for a reason.”

3. Do what feels right for you

Financial situations are different for everyone, so it is important not to base your investment decisions on what other people are doing. People tend to follow other people because of FOMO (fear of missing out). But it’s important to stick to what you believe in, such as investing in ethical companies. Some people are more open to risk, and others would prefer to take safe options. Everyone needs to see what situation suits them best.

“Female investors are less likely to succumb to peer pressure in investing and are more likely to hold on to their investing strategy.”

Personal anecdote

Prior to reading this book, I felt as if investing was too complex, but I wanted to learn more before taking it off my radar. Immediately on completing this book, I felt inspired to make a start on my investing journey. I feel confident to take the first step and use my new knowledge of the difference between bonds and stocks to build the cornerstone of an investing portfolio. Simran has a simple age-based formula to calculate the ratio of stocks and bonds that I should look into purchasing (minus the decade of your age from 100 to determine your stocks to bond recipe). I also made good use of Simran’s questionnaire to work out that I am best suited to be a balanced investor who is open to some risk but not too much!

Critic’s corner

Although there were great explanations of the complex investor jargon at the start of the book, I think it would have been useful to have reminders throughout the book. For example, lots of the long words were condensed down into abbreviations such as IPO and ETF. I would sometimes lose track of what each of these meant as I got deeper into the book and as it got more complex.

Overall, I recommend this read. It makes you feel like you can start investing as well and that it is never too late to start! This book definitely targets beginner investors who want help to get started. More specifically, it’s a great read and guide to inspire women to give investing a go.

Book cover used in banner image from Paper Plus.

Eliza is PocketSmith’s new marketing intern and is currently studying a Bachelor of Commerce in Marketing and Management. Eliza is an active saver to achieve her goal of having no student loan at the end of her degree. Eliza’s interest involves going on long walks with her friends and family, and she is passionate about photography.

Travis Plans Life's Big Decisions With PocketSmith

Mon, 20 Oct 2025 11:00:00 +0000

Read how Travis uses PocketSmith to forecast life’s what-ifs and make confident money decisions for his family.

Tell us a little about yourself?

Firstly, I’m a dad, an educator, and a bit of a future planner at heart. I work in South Australia, helping teachers and schools rethink how we teach, especially in maths. At home, life’s a mix of family time, work, and figuring out how to make good long-term choices — without losing sleep over money.

How would you describe your role in your household?

Definitely the planner. I’m the one thinking a few steps ahead — whether that’s budgeting for childcare, figuring out if we can sell a property, or making sure we’ve got a solid buffer in place. My partner and I talk things through a lot, but I’m usually the one with the spreadsheet (or in this case, PocketSmith) open.

What drew you to PocketSmith?

I wanted something smarter than a spreadsheet, but not locked into just “tracking expenses.” I liked that PocketSmith could look forward, not just back. Plus, it wasn’t trying to sell me anything — just help me get a clear picture of our money.

How long have you been with us?

Since sometime in 2024. It started as a bit of an experiment, but now it’s part of my regular routine.

What do you primarily use PocketSmith for?

Planning. Forecasting. Playing out “what if” scenarios. Like: “What happens if we drop to one income?” or “Can we still hit our savings goal when our daughter goes to ELC?” It helps us make evidence-informed decisions with actual numbers, not just gut feelings.

How has PocketSmith changed the way you do money?

It’s made money feel less stressful. I feel more in control and less reactive. Instead of panicking about an upcoming bill, I can see it coming months ahead and know we’re covered. It’s also made those big life decisions — like selling a property or adjusting work — way easier to plan for.

What are your favourite features?

The calendar view is gold. I love seeing how our balance changes over time, and spotting when we might dip below our buffer. The scenario feature is super helpful too — being able to test out different plans side by side is brilliant.

Got any tips?

Don’t skip the setup — tagging and categorising properly make everything clearer later. Also, take the time to play with scenarios, even if nothing major is changing. You’ll learn a lot about your money just by modelling different situations.

What’s the best money decision you made in the past 12 months?

Timing the possible sale of an investment property to line up with my wife going on parental leave and our daughter starting early learning. PocketSmith helped us map it all out and make the leap without stressing. It gave us space to focus on family without scrambling for cash.

Fireside Finance: Prashant Mohan, Sharesight

Thu, 09 Oct 2025 11:00:00 +0000

Welcome, Prashant! Tell us a bit about yourself.

Born and raised in Pondicherry, India, I went on to study a double degree in Maths and Engineering at BITS, Pilani. After working as a software engineer for a few years, I studied for an MBA at INSEAD. I now live in Sydney, Australia, with my wife and two kids. I’ve worked across banking, big tech and many smaller startups over the years.

The first amount of money that I ever earned was for singing in my school choir, which went to the local radio station in the city of Pondicherry, India. This led to my parents opening my very first bank account. It was an exciting moment as the bank manager gave me this little light book and called it a passbook. Since that time, my knowledge of money and finance has grown exponentially, but I still recall the memory with great fondness.

Growing up in a household of academics, the need to be frugal was always driven into me. What I learned later on was that investing was going to be essential to growing any amount of wealth. In those days, even though interest rates were high, leaving money in the bank still gave a good return. My first exposure to the stock markets happened at the height of the dotcom bubble.

My first investments were in tech companies already at their peak, and when the crash happened, all of those fell by huge percentages. I worked at a partner company called Nortel, which was a Canadian telecommunications giant. The story that was subsequently told about the dotcom crash was that, instead of buying Nortel shares, if you drank beer worth the same amount and sold the empty beer bottles at the recycling plant, you would still have made more money than what the Nortel shares were worth.

So my first hard lesson was that things don’t always keep going up. They had lost so much value, I decided not to do anything at that time and over the next few years.

Subsequently, my portfolio had more than recovered lost ground. So my second lesson was on patience in the markets. That old cliche of time in the market rather than timing the market felt so true when the recovery happened.

While investing is deeply related to the financial dimension, investing greats are also great philosophers of modern times. Pick up any writing from Warren Buffett, Howard Marks or Ray Dalio — these give a fundamental understanding of life and the frameworks to identify patterns in life.

The funny thing about risk is that not doing anything is the biggest risk. Again, this is something true of investing as it is true about life. Inflation is a thief of wealth, income and lifestyle. This makes it the number one risk of not investing or doing something for your future self.

Once you have crossed that chasm, it’s really important to evaluate every investment on its own merit, and in addition to how it would add or subtract from diversification in your portfolio. Too many investors think that by buying many different ETFs, they have diversified enough. But it’s important to consider overlaps. What if you bought four different ETFs that have roughly the same top stock holdings in them? This is where tools like Sharesight come in. With the Exposure report, you can actually see the underlying holdings in your portfolio.

The other metric of risk is assessing whether you are getting the return that justifies the risk in an investment and across your portfolio. Fundamentally, we have a bias towards loss aversion. If I invited you to take part in a bet in which I suggest heads wins you a dollar and tails wins me a dollar, and the chances are 50/50, it’s likely that you don’t feel ready for the challenge. Now, if I change that to you winning two dollars for every win of yours, and you pay me one dollar for every win of mine, the equation has changed. Your chances of winning are much higher. So that’s what I look for while investing. I need the upside to be at least twice as good as the downside. In investing, I want to lose less first. To quantify this, Sharesight again has a fantastic risk report that I use regularly.

Speaking of investing, it can be intimidating for many. What advice do you have for someone looking to start investing for the first time?

Start small, and do it regularly. If you start with a broad index-based ETF, you will reap the benefits of capitalism. By definition, an index is the weighted average of all the winners in an exchange. I have to give a plug that products like Sharesight and PocketSmith make the whole exercise a lot more interesting and engaging. The eighth wonder of the world, also known as “compounding”, presents itself in numerically rewarding ways to keep you going. The quote, “God made integers, the rest is the work of man,” is attributed to Leopold Kronecker, a 19th-century German mathematician. I remind myself of the beautiful ways in which compounding works when I look back on how basic habits can yield some great results.

While investing is deeply related to the financial dimension, investing greats are also great philosophers of modern times. Pick up any writing from Warren Buffett, Howard Marks or Ray Dalio — these give a fundamental understanding of life and the frameworks to identify patterns in life. So, I would say along with the financial benefit, it’s also a philosophical pursuit.

Investing in assets that grow is the single most important decision you will make regarding your financial goals. Compound interest is indeed the eighth wonder of the world, as Albert Einstein attributed it.

I am going to say something controversial. The biggest non-financial decision I or any of you make is who you choose as a life partner. My wife and I fell in love, got married and had children, which on the surface is something that’s been happening for centuries. But how a marriage and your partner affect your financial life cannot be understated. In our case, we have been very lucky to be completely aligned on so many things related to matters of the heart as well as matters of finance. Bringing up a family and providing for children — their education, experiences and travel — all are financial decisions.

In our case, the biggest financial decision we made outside of buying a home was to go for higher studies in the form of an MBA. As a mature-age student (which most MBA students are), taking a break from a career and pursuing higher education in another country takes some guts and a lot of love. We both had ambitions to study further and use it as a launchpad to change careers. So, she was the smart, hard-working one. I wanted to be with her, so we thought, why not do the MBA together? We ended up doing the MBA together in a top business school, in another country, by taking four loans between us! Has it paid off? 100% yes. Between the two of us, we managed to change three dimensions of industry, function and geography, all reasonably well. But being aligned and together made the journey so worth it!

It sounds like your achievements are hard-fought. How do you define success, and does it extend beyond monetary wealth for you?

Sahil Bloom, in his book “The 5 Types of Wealth,” has developed a good framework for balance. The framework outlines five distinct types of wealth: Financial, Social, Time, Physical, and Spiritual.

While the concepts themselves are not entirely new and have roots in various philosophical and psychological teachings, this framework provides a modern and accessible structure for personal development.

I use this framework to balance the different aspects of life and wealth.

Financial wealth: This is the most traditional form of wealth, encompassing money, assets, and investments. We are all familiar with this, and we work in this area of wealth.
Social wealth: This refers to the value of one’s relationships, network, and social standing.
Time wealth: This is the freedom and autonomy to control one’s own time and pursue passions.
Physical wealth: This pertains to one’s health, fitness, and overall well-being.
Mental wealth: While the user’s query listed this as “Spiritual Wealth,” Bloom refers to it as “Mental Wealth,” which encompasses a peaceful mind, knowledge, and wisdom. The two concepts are closely aligned in their focus on inner well-being.

One of the philosophies I totally believe in is spending less than you earn. This basic principle allows you to define enjoyment and how much it costs

What financial goals do you believe everyone should consider setting for themselves, regardless of their current financial situation?

Investing in assets that grow is the single most important decision you will make regarding your financial goals. Compound interest is indeed the eighth wonder of the world, as Albert Einstein attributed it.

If you don’t invest, you are going backwards in your finances. So, whatever your financial situation is, you must start thinking about investing. A regular payment into an investment account, so that you are set up for regular contributions, is the best way to get started. My team and I actually built this time duration calculator to help with this exact question.

Today, there are many ways to get this going. As Ruth the Happy Saver says, “Behaviour trumps mathematics”. The best behaviour to set yourself up with is to invest on a regular basis through some kind of an auto-invest feature with any of the brokers you use. If your broker doesn’t give you this feature, then switch and open an account with one that does.

How can individuals strike a balance between saving for the future and enjoying the present?

The first step towards enjoying the present is to keep a store of money for when things are not good. The Barefoot Investor calls this the “Mojo” account. Having this buffer gives you the peace of mind to enjoy the present and not be anxious about the future from a financial perspective.

The second bucket I would create is one for investing. Commit a basic amount, even if it is just $50 — invest that amount from every salary you earn.

The third bucket is the spend bucket. One of the philosophies I totally believe in is spending less than you earn. This basic principle allows you to define enjoyment and how much it costs. One could define how much they should spend and actually spend the amount on things they enjoy. Many things we all enjoy might not cost any money at all.

A fun one to end things! What’s the most unusual or extravagant thing you’ve ever bought?

Throughout my life, I’ve always prioritised financial prudence. I’ve consciously avoided the habit of acquiring numerous extravagant items for myself. However, a particular purchase in 2010 stands out as a significant exception to this rule. That year, I invested in a pair of RM Williams boots for a staggering $500. At the time, this was, without a doubt, the most expensive pair of shoes I had ever bought.

I’m incredibly proud to report that, even to this day, I continue to wear those very same boots. Their durability has truly impressed me; despite a single resoling, they remain in excellent condition and continue to serve me well.

Now, with the benefit of a decade and a half of experience and a more refined understanding of personal finance, I’ve developed a clearer distinction between what I consider a “pure splurge” and an “investment.” Looking back at that particular purchase, I would classify those RM Williams boots as a unique blend of both a splurge and an investment. While the initial outlay was substantial for a pair of shoes, their enduring quality and continued utility have, in many ways, justified the cost and provided a long-term return on that initial expenditure.

On a more serious note, when it comes to my spending habits, my tendency leans towards experiences, with a particular focus on travel. I find immense value in exploring new places, immersing myself in different cultures, and creating lasting memories through journeys rather than accumulating material possessions. This inclination towards experiential spending means that a significant portion of my discretionary income is often allocated to flights, accommodation, and activities in various destinations, reflecting a personal philosophy that prioritises enriching life experiences.

What We Learned at Intersekt 2025

Wed, 01 Oct 2025 11:00:00 +0000

What was your top highlight from Intersekt?

I loved seeing the team flourish in what is a fairly intense environment — Jason’s analogy for CDR being like wifi in the early 2000’s, wrapped into a brilliant anecdote about trying to get his friends interest in internet-through-the-air; Chloe’s fantastic round-table discussion on financial inclusion as it related to the CDR; and the rest of the team for managing to avoid eye contact with aggressive salespeople. Also, how incredibly welcome we’re made to feel as New Zealanders within the Australian fintech community — we have a real sense of place in Australia, which is an amazing feeling. — James, co-founder and CTO

One of the sessions that really stood out for me was a panel on workplace inclusion. It explored how businesses will increasingly need to manage five generations in the workforce. Too often, our culture and language frame “age” as negative, whether too young or too old, but every generation brings something unique to the workplace. With advances in our understanding of health and longevity, we may well see the idea of retirement redefined and the time of participation and contribution expanded. Ideally, we can build workplace cultures that can accommodate an 18-year-old working alongside an 80-year-old. — Olav, Head of Growth

For me, it was hearing so many voices align around consumer value. Open banking has always been about data, but at Intersekt, it’s becoming clear how the next phase is about impact. Many founders are actively using the CDR to create genuinely better outcomes for households and small businesses, which is incredibly important in light of today’s cost-of-living pressures. It inspired and humbled me. — Jason, co-founder and CEO

That’s really hard to answer, because it was such a fantastic time from start to finish! If I had to pick, I think it would be less of a specific focal point and more of the encompassing knowledge that PocketSmith, both as a company and as a product, truly belongs in the Australian ecosystem. We have been welcomed so graciously, and we feel like inextricable threads in its fabric, sharing expertise, successes and good old-fashioned friendships. — Chloe, Content and Partnerships Marketing Manager

In marketing, we spend so much time talking about personas, segments, and target audiences. It’s useful, but it also flattens people into categories. My highlight was a reminder that we’re not speaking to segments; we’re speaking to humans. Real people. With complexities, scars, quirks, and contradictions. Especially in personal finance, no two lived experiences are the same. Our values shape our decisions, our families shape our habits, and our cultures shape how we feel about spending, saving, or sharing money. If we don’t start with the human being in front of us, we miss the point entirely. — Dora, CMO

The team looking bright-eyed and busy-tailed for the first morning of the conference.

Did you learn something new about fintech, open banking, or our industry?

The creeping advance of discussions around AI is becoming really apparent. It appears that the conversation has moved on from the fervour of 2024 and is instead now focusing more on the real-world impacts on both people and companies. — James, co-founder and CTO

It was interesting to gain some insights into the legal dimensions of agentic AI, such as who is ultimately responsible for the actions of an AI agent that can take autonomous actions and provide financial advice, for example. — Olav, Head of Growth

I was intrigued by the variety of use cases around the adoption of AI across fintech and banking. What stood out is how far we’ve progressed since last year’s Intersekt. We’re moving past concerns about hallucinations and instead, sharpening AI’s utility in improving efficiencies through the use of agents. For me, it reaffirmed that the real opportunity lies not in letting AI replace craft, but in using it to elevate it. That’s very much aligned with how we think about AI at PocketSmith: as a co-creator and amplifier of human potential, rather than a substitute. — Jason, co-founder and CEO

To no one’s surprise, AI was a very hot topic on the major stages and in those smaller, more personal discussions. As others have already alluded to, the evolution of AI use in the personal finance space in the past year or so has been rapid. We’re moving beyond thought experiments and “what ifs” right into well-defined specificity, and with a large majority of Australians already using AI for money management, the industry has to, at the very least, meet their expectations. — Chloe, Content and Partnerships Marketing Manager

At this stage of life (in my 40s, mum to teenage boys), I was drawn to conversations with women in similar places. Many are the household CFOs, balancing kids, ageing parents, and the financial ripple effects of partnerships, separations, or blended families. These realities don’t always fit neatly into industry models or spreadsheets. What struck me is that open banking can be transformative in Australia if it recognises these messy, beautiful complexities of real life. — Dora, CMO

Was there a talk, conversation, or connection that stuck with you?

The discussion around agentic AI, as it relates to fintech and legalities, really made an impact. We’re at an interesting crossroad — with AI now edging ever closer to being able to perform the actions of a Registered Financial Advisor, where does this software and the companies that provide it stand legally? How would registration work if it were an AI tool which was making trades on your behalf? — James, co-founder and CTO

A theme that resonated across multiple panel discussions was the different approaches to addressing the cost-of-living crisis. Some argued for automation to solve problems on behalf of the customer, and others for education. Beyond automation is the tantalising promise of agentic AI to act for the consumer and do the work of managing their finances and keeping them financially healthy. For me, helping someone doesn’t necessarily mean doing everything for them. It’s about supporting people’s agency to make beneficial choices and understand those choices. I would argue that to safely put any financial technology on autopilot in our lives, we first have to learn to pilot; the same goes for deploying agentic AI. — Olav, Head of Growth

There were many, but alas — Chatham House Rules! I’ll say that there wasn’t a single conversation at Intersekt that didn’t leave me with food for thought. The most memorable moments were in the hallways and at events, chatting with fellow founders about the realities of scaling our fintechs. Those candid conversations reminded me of how much of a shared journey we have. — Jason, co-founder and CEO

Some shameless self-promotion here, but I really enjoyed the Women in Open Banking roundtable that I had the pleasure of speaking at. The opportunity to bring the consumer perspective to the fore is a huge part of the PocketSmith ethos, especially in the context of open banking and the CDR. The power of open banking is that it can be a foundation for personalised experiences, but only if we keep the human context front and centre. The team thought I did a good job, and now my ego is ten times as big. — Chloe, Content and Partnerships Marketing Manager

Those same conversations with women my age weren’t just informative — they were grounding. We spoke about resilience, emotional labour, and money’s role in holding families together. They reminded me that behind every dataset is a story someone carries on their shoulders. And those stories are where the truth lies. — Dora, CMO

The best part of our Australian trips are always catching up with good friends and the good eats, of course!

What did you enjoy about being in Melbourne as a team?

Getting out of the bustle of the conference and being with one another, having conversations and discussions that I don’t usually get to have with people that I work remotely with. — James, co-founder and CTO

It was great to have time out of our normal routines to reflect on our mission and purpose. — Olav, Head of Growth

I loved that it was a collective experience. Each of us came with different perspectives, so we noticed and learned different things throughout the conference, and from the different events we attended. Sharing these insights with one another, along with our observations on Australia as our key market, made the whole trip richer. — Jason, co-founder and CEO

Man, I just love hanging out with my team — they are a cool bunch. We do have a lot of fun, and it was such a good opportunity to have some reflection together on what our mission and values look like for our Australian users. As Kiwis, there is already some intimacy there, but being on the ground and experiencing firsthand the apps they’re using, the adverts they’re seeing, and the prices they’re dealing with really sharpens our focus on how to best serve our Aussie friends. Oh, and did I mention the food? My god, the food… — Chloe, Content and Partnerships Marketing Manager

2025 has been the year of asking ourselves what AI really means for creativity in marketing. So being in Melbourne with the team was the antidote to all that. It reminded me that marketing isn’t just algorithms or analytics. It’s storytelling. Connection. Sparks of inspiration that can’t always be explained — and maybe even a little whimsy. What I loved most was how often this came alive outside the conference. Between sessions. In laneways. Over meals. The energy of Melbourne was infectious. And experiencing that with the team was wonderful. — Dora, CMO

What’s one memory you’ll remember from this trip?

Hitting my record for the number of times going to the gym in a single week! — James, co-founder and CTO

I loved exploring the Nicolas Building, where we had our team photos done with Bree Dunbar. — Olav, Head of Growth

I loved Chloe’s talk at the Women in Open Banking roundtable. She brought a very human perspective to the importance of financial inclusion, both as a cancer survivor and as a PocketSmither. It was one of those moments where the impact and importance of our mission hit home, and I’m so tremendously proud of her! — Jason, co-founder and CEO

I managed to visit the ACMI twice while I was in Melbourne. The first time was for a little Marketing outing with Dora and Olav, and it was actually a pretty amazing place to take inspiration from for Australian storytelling. The second time, I went back with Jason and James to see the newly-opened Games World video game exhibition, and the three of us had a BLAST. It was entertaining, nostalgia-inducing, and we all got a little bit emotional at the transformative power of video games. — Chloe, Content and Partnerships Marketing Manager

The food! There was the unforgettable Spanish mackerel at Elio’s Place. The succulent dumplings at Hutong! The ridiculously delicious BBQ at Fancy Hanks. The shared meal at Chin Chin! And then there was the izakaya night at Postal Lane with Olav, where we demolished every grilled mushroom (the wholesome, not mystical, kind!) we could find. — Dora, CMO

We do quite like a photobooth.

The Best of Down Under: Financial Podcasts From New Zealand and Australia You Should Be Listening To

Mon, 29 Sep 2025 11:00:00 +0000

The Happy Saver Podcast

Starting off strong with a Kiwi classic, The Happy Saver Podcast, hosted by Ruth Henderson, is a fantastic podcast that shares practical examples of actual New Zealanders’ (and the occasional Australian) financial stories. The Happy Saver Podcast will be perfect for you if you want to learn more about how other Kiwis are facing financial challenges and wins. From people who have achieved FIRE (Financial Independence Retire Early) to people on a home ownership journey. A personal favourite series she has is her six-part Financial Independence series helping explain how you can get financial freedom. A perfect podcast to listen to while cooking dinner!

The Australian Finance Podcast

Hosted by Owen and Gemma from Rask Media, The Australian Finance Podcast is a top Australian finance show to get you started on managing your money. Episodes are released twice a week, where Owen and Gemma share their tips and tricks for investing in your future. These episodes provide actionable steps you can take to make a change. They cover topics such as what to do if you receive an inheritance or the best money moves to make in your 20s. If you’re keen to hear a PocketSmith super user and Gemma chat about how PocketSmith is more than a budgeting tool, have a listen to Why every household needs a CFO and a CEO for your money.

Equity Mates Get Started Investing

Another Australian-grown podcast is Get Started Investing, hosted by Equity Mates cofounders Bryce and Alec. This podcast is focused on starting your investing journey. They break down intimidating investing jargon in a way that helps listeners feel confident to take their first steps. A great series to start with is 12 Steps to Get Started, as these episodes share all the investing basics you need. Bryce and Alec also cover other topics, such as budgeting, with a great new series called Boost My Budget, where they invite Get Started Investing listeners to get their budget reviewed. Have a listen if you’re ready to start investing in your future.

The Broke Generation Podcast

The Broke Generation, hosted by Emma Edwards, a certified financial behaviour expert, is an awesome Australian based podcast. This podcast is full of all things money, looking at long-term financial change through setting goals and knowing where to start. Her episodes provide relatable and fun ways to take control of your finances, such as exploring the effects of a year of not buying clothes. She also runs great mini-series like her most recent, Can I Buy a House If series with a mortgage broker, which aims to debunk rumours about the housing market. If you want more beyond the podcast, she has an amazing book we’ve reviewed called Good With Money.

It’s No Secret

Back to a great New Zealand podcast run by the Kernel team: It’s No Secret. This podcast answers specific money-related questions to open the conversation around how to talk about money. Their goal is making the topic of money less taboo, helping more Kiwis achieve financial freedom. Episodes vary from paying off student loans to introductions to shares and ETFs as well as great personal stories from New Zealanders. This podcast is perfect for those wanting the hard money questions answered in an approachable way.

Cheques and Balances

New Zealand financial services company Lighthouse Financial hosts the podcast Cheques and Balances. James and Michael, qualified financial advisors, want to help New Zealanders make smarter financial choices. I recommend this to anyone who wants to take control of their financial future and learn about the housing market in New Zealand. It includes many NZ-specific stories and situations, such as discussions about KiwiSaver and an interview with the New Zealand Finance Minister. The episodes are short and sweet so perfect for busy lives. This is a great podcast if you’re ready to get ahead with your finances.

Scoreboard

Scoreboard is an Australian podcast for all the sports lovers out there. Host Chris Titley chats with different sporting professionals, whether it’s an athlete, coach, or referee. He has conversations with these sports stars to uncover their journeys through life and business. Chris specifically explores their mindset, career choices, and money habits in a conversational way that relates back to their sporting careers. I love how there are many different sports covered such as rugby, basketball, golf, and even aerial skiing. Have a listen to this podcast if you want to see how different sports people manage their success and what their goals in life are in and outside of sport.

Fresh Moni

The Fresh Moni Podcast is hosted by Willie Leota, a qualified Samoan mortgage advisor who is keen to share his wisdom with New Zealanders. Willie has genuine conversations with different Kiwis about their personal journeys with money, with a focus on homeownership. Guests include ex-professional rugby players such as Tim Bateman, as well as CEOs and leaders from across New Zealand. Keep an eye out for the upcoming episode with PocketSmith’s CEO, Jason Leong. Recognised as one of New Zealand’s top business podcasts in 2024, the Fresh Moni Podcast is definitely a great listen if you’re wanting to hear real-life stories and experiences.

Making Cents

Finance journalist and qualified financial advisor Frances Cook hosts the Making Cents podcast from New Zealand. Frances focuses on helping people achieve financial freedom without giving up the things they love. Enjoy two episodes a week, with Monday episodes including interviews with a range of people with different and interesting financial stories. Thursdays are Ask the Experts where Frances gets the inside scoop with finance industry experts. She covers a range of topics such as, side hustles, money guilt, pocket money and much more. This is the perfect podcast for Kiwis who want meaningful financial education.

Eliza is PocketSmith’s Marketing Coordinator and is currently studying a Bachelor of Commerce in Marketing and Management. Eliza is an active saver to achieve her goal of having no student loan at the end of her degree. Eliza’s interest involves going on long walks with her friends and family, and she is passionate about photography.

Financially Thriving in Mexico: An American Expat Love Story

Thu, 25 Sep 2025 12:00:00 +0000

About four years ago, Justin Keltner found himself travelling around the United States, looking for the “perfect” new city to call his forever home. During the process, though, the American who had spent the better part of the past decade living in Latin America realised that he wanted to go back. There wasn’t an American city on the map that was going to have the same open, friendly neighbours he had grown accustomed to and missed.

So he packed up and relocated to Guadalajara, Mexico.

Two years in, he started dating Amanda Abella, a fellow American. She came to visit him for about six weeks and never left. Abella had been considering an international move for some time, but seeing Keltner actually living it convinced her that the process wouldn’t be as difficult as she once imagined.

Plus, they were in love.

Today, the married couple runs Entrepreneur Expat. The company helps potential western expats figure out if they qualify for residency, and assists those who do in navigating immigration systems, real estate quandaries, tax strategies and more. Their team is primarily based in Mexico, but they do also have partners in Costa Rica and Panama, plus a budding network in Colombia.

The power couple joined us to talk all things American-expat, including business and personal finances across borders.

Lower costs of living

Moving to Mexico made Abella and Keltner’s financial lives much healthier. They estimate that the average cost of living is 30% to 40% lower in most Mexican locales than it is in America. This is a big deal as the number one reason Americans have cited for wanting to emigrate over the past seven months is the cost-of-living crisis, followed by political instability.

It’s not just that costs are lower, though. The couple finds the quality of living to be much higher, too.

“Healthcare, food, and general experiences living in cities here with much better urban planning than the U.S. – [it’s] not only more affordable, but you feel like you’re getting much more for your money,” says Keltner.

The spending-to-value ratio isn’t the end of things, either. Abella notes that Mexican savings accounts pay noticeably higher interest rates than American financial institutions. That means that while they’re saving money, their savings account is also increasing their income to boot.

The big asterisk: American citizens pay income tax no matter where they live

Keltner and Abella raise a huge issue that nationals of other countries rarely have to deal with: If you’re an American citizen (or in some cases, resident), you do have to pay American income tax no matter where you live in the world. Expats are not immune.

That said, there are some legal workarounds. If you qualify for the foreign earned income exclusion, the first $130,000 you earn while working in a foreign economy in 2025 is excluded from your taxable income for IRS purposes. There are nuanced rules around this exclusion, though, and the number varies according to inflation every year.

Many expats in 2025 get visas through a digital nomad program, so they’re working across borders for an American employer. Or — like Keltner and Abella — they own businesses based in the U.S., but complete most of their work online while living abroad.

In these instances, Keltner says there are still legal ways to reduce your tax burden, but your earnings won’t necessarily qualify for that foreign-earned income exclusion. You’ll still probably be paying some U.S. income and/or business taxes, even if you don’t breach the $130,000 mark.

Managing finances across borders

Managing your finances in different currencies is tricky business. Abella and Keltner use a combination of PocketSmith and Wise to handle their personal and business finances, as they’re two of the few options on the market that allow for multi-currency budgeting and lower-cost wire transfers, respectively.

“It’s a lot easier than it used to be thanks to technology,” says Abella, “and you get used to dealing with different currencies with time.”

One pro of American finances that Keltner and Abella have noticed is that there are stricter consumer protections compared to Mexican regulations. They often find themselves using their American credit and debit cards in Mexico, both because of these regulatory protections and because it allows them to track their business expenses with fewer complications.

They do have Mexican banking accounts, though, and are working on building credit. On top of those higher APYs in Mexico, they have their eye on real estate and investing opportunities in their new home city.

Cultural differences: The construct of time

Any time you move to a new country, there will be new norms to which you have to adjust. Keltner found the construct of time to be an interesting one.

“People in [‘Western’ countries like the] U.S., Canada, western Europe, etc. have a completely different perspective on time,” he explains. “When someone in the U.S. says that you’ll have a business meeting at 3 p.m., it actually means 3 p.m. But most other places — especially in Latin America — time is more of a human construct, which has its pros and its cons.”

Believe it or not, this does tie into finances. The construct of time as we know it was, in many ways, a direct result of the industrial revolution and wage labour tied to time clocks. These origins have roots in ‘Western’ societies like those found in England and the U.S. When you move to another country, you may find that time and money aren’t as hyper-connected as they are in America.

Advice for other Americans wanting to emigrate

Keltner and Abella say that if you’re serious about immigration, start by building your business or your assets.

Many visa programs require hefty upfront investments or the potential to work remotely at a high enough level that you have a stable, sustainable income stream. That’s why — especially in the era of digital nomad visas — the couple’s business offers a coaching program teaching people how to build a remote, online business that will withstand immigration standards.

But their biggest advice to other Americans wanting to emigrate?

Don’t overthink it.

Prior to dating Keltner, Abella had spent years trying to perfectly coordinate emigration on her own. In the end, while there were some bureaucratic hoops to jump through, she found the process to be much easier than she had been making it out in her head.

“You can’t perfectly plan everything,” she says. “Also, you don’t always have the luxury of time because immigration all around the world is constantly changing.

“For example, we’ve seen a lot of people have the misfortune of now not being able to afford Mexico and no longer having access to a popular visa program because they took too long waiting for everything to be perfect. In that time, Mexico shut down the visa program they were banking on.”

Brynne Conroy is an award-winning personal finance writer, creator of the popular women’s finance site, Femme Frugality, and author of The Feminist Financial Handbook, which was an Amazon #1 New Release across multiple categories including Poverty and LGBTQ Demographic Studies. Her work has been cited in academic texts, and she’s spoken at venues such as Vanderbilt University, the Financial Planning Association and the 529 Conference. Here at PocketSmith, Brynne covers personal finance within American financial systems.

Ruth's Two Cents: Supporting Adult Children Financially

Mon, 15 Sep 2025 12:00:00 +0000

Hi Ruth,

My son, who is in his early 30s, has been struggling financially since moving out on his own. I want to support him, but I also worry that too much help will prevent him from learning to manage his money. I’ve covered some of his expenses here and there, but I’m unsure where to draw the line. He’s working, but his budget is tight, and I don’t want him to feel like he’s failing. How can I provide financial help in a way that supports his independence without enabling dependency?

Given that he has recently moved out on his own, I think it’s fair and kind to continue to parent your son, whether by checking in on him, offering support and guidance when asked, or sometimes giving money. I like your motivation to support his independence and help him succeed.

There’s no replacement for basic financial literacy

My first question is whether you taught him how to manage money before he left home. Leaving home knowing how to budget their income to pay rent, utility bills, food, investing, and entertainment should mean they have most of the needed skills. When a new financial situation crops up, they should be able to adapt their skills to solve the problem for themselves. That’s the goal!

If your son lacks these basic financial skills and is asking for your help, I’d support and teach him now. I know hundreds of people who didn’t start to understand their personal finances until well into their 30s, and the missing piece was basic and straightforward information about money. Since he’s facing real-life situations, he will learn quickly and should be able to stabilise his situation within months. It may also be that you are feeling uncertain about money management, so I suggest you take the time to learn, too. An excellent starting point is my Financial Independence Series.

On the other hand, if he simply wanted money, not the guidance that would come with it to prevent this from happening again, then I would hesitate to support him financially. Before I use my money to help someone financially, I want to know quite a lot about their finances; otherwise, this is the beginning of a long-running financial dependency. Offer help only if they are willing to help themselves by learning more about money management.

Help them take that next step

Supposing he does want to learn, my next suggestion is to help him think longer term so that he is not caught out again, resulting in you having to step up and cover costs. Again, it comes back to basic budgeting and knowing what you earn, what bills you have to pay, and what you have left over. Helping him allocate that gap to sinking funds and an emergency fund will make him feel more in control.

If, after budgeting, he realises that he is simply not making enough money to cover his expenses, then there are two options: Cut his expenses or, preferably, earn more. It may be that he is new to the workforce, and with experience, his income will increase, so again, you go back to budgeting and living below his means until his income comes up.

Or, it may be that he has reached the pay ceiling with this job, in which case, as his parent, I’d support and encourage him to pick up a second job, further his education and, therefore, his employability, and find a higher-paying job.

Parenting never stops — financially, or otherwise

Ultimately, you know that your money is never truly ‘done’. It requires a bit of attention, often. I know many people who have a monthly finance meeting with someone else, whether it’s a spouse, a parent, or a good mate. This is an opportunity for both individuals to review the past month and plan for the one ahead. Inevitably, questions will arise during this monthly check-in, and that’s how we all continue to learn and grow with our finances.

As a parent myself, if I knew that my adult child was trying their absolute best to budget and manage their money, increase their income, etc, yet they still bumped up against some financial problems, then yes, I would consider offering financial support to get them through this sticky patch. Parenting doesn’t stop the day they leave home, including providing financial support from time to time when needed.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

From Cats to Cookbooks, Wendy Uses PocketSmith to Know It All

Thu, 11 Sep 2025 12:00:00 +0000

Read how Wendy keeps everything in one place with PocketSmith, from 29 business components to her grocery plan.

Tell us a little about yourself?

I like, therefore I am. I like George (since high school!) I like to cook (we have 317 cookbooks). I like to read (on my phone, on my Boox). I like gadgets (Supernote, fountain pens, bebird), and people who disagree with me, and scuba, giraffes, and…

How would you describe your role in your household?

George and I are 1 + 1 = 11. We don’t step on each other’s stuff. He does hardware, I do software. When we’re cooking, I do mise en place, he does cleanup. Of course, there are exceptions: we both feed the cats.

What drew you to PocketSmith?

There may not be an accounting platform I haven’t tested. PocketSmith works for me.

How long have you been with us?

Five years.

What do you primarily use PocketSmith for?

I track everything. We have a business, it has 29 components, and I know the income and costs for each of them. We have hobbies, and I know how much we spend on each of them. We have cats — I know what that costs! Recently, I started a new food plan, and I’ve been coding those expenses as a sub-category of groceries. I like to know. PocketSmith lets me know.

How has PocketSmith changed the way you do money?

I used to have a paper backup. Then I had a scanned backup. Now everything is in one place. I keep notes, attach invoices — and voila, I know everything. In one place.

What are your favourite features?

The dashboard is fun — I like to see my account totals, the donut graph, the most recent transactions. That lets me know (I like to know) in just a literal minute.

Got any tips?

We switched banks. For 27 years, we had five accounts at a local community bank. The people were nice, but the bank couldn’t sync with PocketSmith. A client who is a banker asked me where we banked, and George and I started thinking, “What if?” The moving process was just horrid. And worth it. I am so glad we switched banks!

What’s the best money decision you made in the past 12 months?

We changed CPAs. She is a QuickBooks Pro, and she told me not to switch to QuickBooks — it can’t give me the information I need about the 29 components.

Going Local — Part Three: I Spend 50% Of My Take-Home Pay On Rent and Here's Why It's Worth It

Mon, 08 Sep 2025 12:00:00 +0000

“People don’t get it,” my workmate said. “We’re in the news all the time for being one of the most expensive places in New Zealand to live, but people have no idea what that reality is like.”

“They think they do,” I said. “I thought I did before I moved here. But you can’t know until you’ve lived it. I don’t have a car —”

“Standard.”

“Half my income goes straight back out to pay rent —”

“Normal.”

“And absolutely nobody is surprised when I tell them I freelance on the side, because —”

“Yep,” my workmate agreed with a sigh. “Every little bit counts. That’s Queenstown Lakes District for you.”

Which is not to say it’s all bad. Far from it. I live in one of the most beautiful places on earth. There are lakes, mountains, and adventures waiting right on my doorstep. I have a job that is growing me every single day, both personally and professionally.

And yet… It’s interesting, isn’t it, the things we become normalised to?

The priorities of your living situation

As a single 30-something woman with a salaried office job, I live in a one-bedroom apartment. It came fully furnished. That was a good thing because after selling all my stuff to go travelling, I don’t own much of anything these days.*

*Except for an increasing collection of brightly-coloured trail shoes. Look, shoes are just tires for my feet, okay? Walking is the ultimate in sustainable transport.

When I tell my church ladies back in my hometown how much I pay in rent, they nearly faint. When I tell a friend in a city five hours away, she says, “Can you work remotely and move somewhere cheaper?” By contrast, when I mention it at the office, the response is a universal shrug.

One thing I learned while travelling the past couple of years is that you have to decide what’s important to you.

This means weighing up the pros and cons of certain money decisions to see if something is worth it. For me, it meant deciding not to tour the CN Tower in downtown Toronto (because it’s overpriced and not my thing) but happily dropping £30 at Newquay Zoo in Cornwall (because red pandas are my absolute favourite and I will spend hours watching them. In near-freezing winter drizzle. While clutching a coffee and trying not to shiver.)

via GIPHY

So, I’d had some experience with financial cost-benefit analysis over the last year or two. Having my own space is important to me, I know that. You could almost call it the most important factor. But what we want isn’t always what we can get, and expectations crash into reality eventually.

I looked around at what I would have to spend to get my own apartment… and then I did what any rational human being would do in a cost-of-living crisis, and looked at cheaper options.

The dreaded house hunt

Given the chronic housing shortage, there wasn’t much available. Sure, there were a few. Mostly rooms in shared flats, and by ‘room’ that might mean ‘a cheap garage conversion.’ They were all much further away than my apartment. And not that much cheaper. I could get a room for $450/week, but that would mean:

Living in an older and colder house that might get no sun for the entire winter
Sharing a house with flatmates again
Living much further out, with a 30-45 minute commute each way
Potential for Flatmate Drama (we’ve all been there)
Potentially not feeling safe in my living situation (dealbreaker)

Compared to that, paying $600 a week for a one-bedroom apartment was Worth It.

The pros were numerous:

My own space that I don’t have to share with anyone, and where I feel safe.
A 10-15 minute walk to work. That’s phenomenal in any city, let alone somewhere as topographically disparate as Queenstown Lakes.
The supermarket is a four-minute walk away.
There are three secondhand shops within 500 metres of my front door.
Multiple hiking and biking trails in the area.
Oh, and an old friend from high school lives in the same building.

While the cons basically amounted to a single factor:

It’s fully 50% of my weekly pay

When I sat down and made the list, the decision was obvious. Would a room in a shared house 30 minutes away save me $150 a week? Yes. But it would cost me so, so much more than that in the long run: In furnishings, in setup costs, in commute costs and time, in social battery, in stress, in psychological and possibly physical wellbeing.

So, yes, I now spend half my weekly pay on rent…

But on the flip side, look at how much I save

I’m healthier. I have an active walking commute rather than passively sitting in traffic. My sleep hygiene is great since I can sleep longer instead of setting an early alarm to catch a bus. It’s easier to eat well because I walk past the supermarket on my route home instead of fast food places. And I don’t have flatmates running up the power bills or streaming movies 24/7, which means lower utility costs.

Do I spend a lot on rent? Unequivocally yes. There’s no dodging that one.

Do I save so much more on every other aspect of life, including exercise, mental wellbeing, and time? Also yes.

The big one: Is spending that much on rent worth it to me?

If you’ve read this far and you don’t have a concussion with short-term memory loss as a result of passing out and face-planting in a horse barn in the USA (ask me how I know), you’ll know the answer to this one.

Heck to the Yes, it’s worth it.

The Budget-Conscious Traveller's Guide to Booking Flights and Experiences

Mon, 01 Sep 2025 12:00:00 +0000

Travel doesn’t need to be expensive to be rewarding. On the other hand, cheap deals don’t always give you the best travel experience. So, how can you strike a balance between staying within your budget and deriving the best experience?

The secret lies in smart travel planning. It doesn’t matter if you’re eyeing a weekend getaway or travelling overseas for a month-long stay. Getting top value for your next adventure starts by carefully thinking through your travel goals and researching available options.

To help you get started, here are key steps to help you map out a clear travel budget, find cost-effective flights, and choose experiences that offer genuine value.

Start with a total trip budget

Before locking in destinations or dates, take time to calculate how much you can realistically spend overall. Break it down into categories such as:

Flights and transport
Accommodation
Meals and essentials
Activities and entry fees
Insurance and contingency funds

Next, research your itinerary. Find out how realistic your budget is. See how much it costs to travel to that particular area from where you are. Research the best time of the year to visit, travellers’ reviews and tips, and how much daily living expenses would cost. This can be done in a spreadsheet or budgeting app.

When doing your research, make sure to consider your travelling circumstances — for instance, if you need special assistance for a physical condition, or if you’re travelling with kids and older adults. Additional requirements will likely entail additional costs.

Leave room for unplanned expenses. If you need to take out a travel loan, make sure to do it sparingly and do it only when it’s absolutely necessary to borrow travel money. If you do, take advantage of the ability to spread repayments over time. A travel loan repayment calculator can help you understand how much repayment would cost month-to-month.

Be flexible with your timing and destination

Shifting your travel dates by a few days can often mean significantly cheaper fares. Likewise, looking beyond the usual tourist hotspots, especially during the peak season, can yield better prices and a more relaxing experience.

Use a flight comparison tool to compare real-time fares at different dates and routes. These platforms typically offer flexible search features that display better-value alternatives you might not have considered, like when you travel on a different date.

Weigh more than just the fare

Price is important, but it shouldn’t be the only factor you consider when making a final decision. An ultra-low fare might come with hidden costs, such as no baggage allowance or a 12-hour layover, which translates to additional costs, probably costing even more than the mid-level fare.

When comparing flights, consider the total experience: transit times, airport transfers, arrival hours, and inclusions. After all, staying happy and satisfied throughout your trip is priceless.

Make use of filtering tools to sort by layovers, airline preference, and total travel time. A slightly higher upfront cost might save you time, stress, and additional expenses down the track.

The best experience is quality over quantity

The length of your stay should help dictate the activities you can do. However, your final decision on which activities to include should be guided by your genuine interests. You don’t need to pack every single activity to create the best value for your trip, just the ones you absolutely want to do.

If you’re travelling as a family or as a group, make sure to add activities that each member of your party will enjoy. For instance, kids would love the local themed park, while couples might enjoy a day cruise.

Popular tourist attractions aren’t always the ones you should see. Find out about local cafés and shops to get the most authentic experiences that also give you a closer look at the local culture and traditions.

Self-guided walking tours, scenic hikes, or cooking classes are great examples of budget-friendly ways to explore a new place. Book key experiences in advance so you can secure lower rates and take advantage of early-bird discounts.

Track your day-to-day spending

Once you’re on the move, it’s easy to lose track of small purchases that quickly add up. Consider setting a daily spend limit based on your total budget. A travel-friendly budgeting app can help you keep an eye on things in real time.

Some travellers find it useful to split daily funds into digital or physical envelopes (e.g. food, transport, activities). This makes it easier to make adjustments to your budget even as you’re on the go.

Don’t forget to account for fees on currency exchange, credit card conversions, and ATM withdrawals, most especially when you’re visiting multiple countries.

Aim for value over the cheapest option

While cutting down on costs is always a good idea, make sure it does not significantly impact your overall travel experience or rebound to higher costs later.

A bargain flight might mean multiple connections or inconvenient departure times. Likewise, budget accommodation located far from the centre could end up costing more in transport or lost time.

Always check location maps and read recent traveller reviews before booking. Make sure to have a good read of what’s included in the cost, such as breakfast, airport transfers, Wi-Fi, and taxes.

It’s not always about spending less, but spending smarter and knowing exactly what you’re paying for.

Plan your next budget-friendly adventure

Planning smart for your trip calls for making informed choices rather than cutting corners. Setting a clear budget, exploring options with flexibility, and focusing on activities you want to experience are the key ingredients to deriving the best value for your next travel adventure.

Aided by the right planning tools, you can uncover the best deals, avoid common pitfalls, and ensure your money goes towards what really counts to you. Whether you’re heading off for a quick escape or staying for longer, every smart decision adds up to a fulfilling journey that’s undoubtedly one for the books.

Michelle is a strong advocate of making information about money and related tools more accessible to help people make smarter decisions about how they spend, save, and grow their money. She has led finance and travel content marketing teams at Finder, Airtasker, Luxury Escapes and Traveloka. Michelle consults for enterprises and startups to strengthen their brand connections with customers. When she’s not working, you’ll find her chasing her toddler on holidays, patting her cat Alice, and going down pop culture rabbit holes.

PocketSmith at the CDR Summit 2025: A New Zealand Perspective on Innovating With Open Data

Tue, 26 Aug 2025 12:00:00 +0000

In July, members of the PocketSmith team flew to Sydney to attend FinTech Australia’s annual CDR Summit, the country’s premier open banking event. By bringing together the industry’s key players, the growing momentum behind the Consumer Data Right (CDR) can be utilised to drive real change in how people access, understand and benefit from their financial data.

With PocketSmith’s long-standing experience with open banking in multiple global markets, CEO Jason Leong took part in the “Innovating with Open Data — Perspectives from Aotearoa New Zealand” panel to offer his view on what is working, what isn’t and what’s needed next for New Zealand’s own unfolding open banking journey.

Joining him on the panel was Glen Hildreth, Consumer Policy Manager for New Zealand’s Ministry of Business, Innovation & Employment, and Dermot Butterfield, CEO of open banking aggregator Wych. Shannon Rennie, experienced CDR and open banking communications specialist, moderated the panel.

Bringing together voices from government, fintech and industry ensured the panel offered a rich mix of viewpoints on New Zealand’s open banking journey. Hearing from different perspectives made for a fuller, more rounded conversation about open banking in New Zealand.

New Zealand’s Consumer Data Right journey

While inevitably sharing some similarities in approach, New Zealand’s path to fully-fledged open banking has been notably different from Australia’s in one major way. While Australia’s CDR framework and implementation were established by regulation from the outset, New Zealand’s has been largely market-led, left to the discretion of financial institutions via industry bodies like Payments NZ. This approach aimed to create a standardised API system to enable bank-fintech data sharing, without heavy regulation, with the expectation that industry momentum and collaboration would deliver efficient outcomes and innovation.

With the informed insight of being the link between banks and consumer services as an aggregator service, Dermot recalled the encouraging start to a market-led implementation, where all participants were engaged from the beginning with a shared goal of building usable specifications. The Payments NZ-led API Centre produced high-quality open banking API standards, but lacked enforcement power with the major institutions. Adoption was optional, so only one version has been implemented, and even then, not universally. As Jason pointed out, while this model was intended to foster innovation, it has often left consumer outcomes as secondary.

In practice, this has resulted in adoption challenges. Financial institutions have been able to prioritise risk minimisation and commercial benefit, which has limited the scope and quality of APIs. Inconsistent or partial data access, unclear timelines, and a lack of enforceable standards have made it difficult for fintechs to build with confidence. For consumers, this results in fragmented experiences, where full visibility of their financial picture is often difficult or impossible without jumping through hoops.

Glen shared how, over many stops and starts and multiple changes in government, the limitations of this process became clear. He said international experience (such as Australia and the UK) showed that voluntary systems rarely achieve full potential and that regulatory certainty is key to accelerating adoption, which led the government to decide on a regulatory-led designation under the Customer and Product Data Bill.

The road to regulatory-led implementation

Acknowledging Australia’s regulatory route to open banking implementation, Jason echoed how a regulatory-led system for New Zealand should address many of these issues, by offering predictability in the form of deadlines and roadmaps, to raise the quality of data and reduce friction for both fintech developers and end users. For PocketSmith’s New Zealand customers, this would translate into more stable connections, more comprehensive data, and fewer workarounds. Instead of spending time troubleshooting incomplete feeds or waiting for individual banks to open access, our teams could focus on improving the core PocketSmith experience for the benefit of our customers.

Jason also expressed concerns about the recently announced proposal by the New Zealand government to allow banks to charge third parties for access to customer data. While the intention may be to recover costs, this could create significant barriers to entry, particularly for smaller fintechs. It risks making open banking economically unviable for those without deep pockets — an outcome that would limit innovation and reduce the availability of helpful financial tools for everyday consumers.

Dermot likened it to a toll road. He compared the transition to regulation to building a five-lane motorway between major cities. Currently, only one lane exists, and there are many traffic cones representing a multitude of barriers. Numerous tolls are charged before completion, and past delays (7+ years) have eroded confidence in promises to finish.

It’s a sentiment shared by many in New Zealand’s fintech industry, and Glen acknowledged that the kickback was swift and loud, and shared that the government is currently working through a more agreeable solution.

A vision for the future

In December 2025, a regulated form of open banking in New Zealand will become available.

Looking ahead, Jason advocated for a version of open banking that is truly consumer-first and where the ecosystem supports a broad range of innovators, not just the largest or best-resourced players. The hope is for a system that enables better decision-making and meaningful financial outcomes, not one constrained by access fees or institutions fighting to keep the status quo.

While each panellist brought a different lens to the discussion, Glen, Dermot, and Jason were united in their goal of seeing open banking succeed in New Zealand. All three voiced a commitment to working toward a system that’s effective, accessible, and beneficial for everyone, from industry players to everyday consumers. They also looked to Australia’s experience - where both PocketSmith and Wych are present - as both a source of inspiration and a reminder of the importance of balancing innovation with strong regulation, to deliver the best outcomes.

Watch the video below to catch a snippet of the panel:

PocketSmith Family Group Discounts Are Here

Tue, 19 Aug 2025 12:00:00 +0000

Managing money is rarely a solo task. Whether you’re sharing expenses with a partner, running a side hustle, guiding a teen through their first budget, supporting ageing parents, or helping a client build their financial capability, PocketSmith’s new Family Group Discount feature is designed to help you support the people you care about. With 40% off monthly plans for additional members and optional Shared Access, Family Groups make it affordable to help your people with their finances, while respecting everyone’s privacy and autonomy.

For couples: Stay in sync, not in spreadsheets

Every couple is unique, and so is their approach to managing money. Whether you split everything 50/50 or have one person taking the lead on money management, PocketSmith’s Family Group feature makes it easy for couples to stay on the same page financially. With separate logins and personalised dashboards, you each get your own space while you are working toward your shared goals. From tracking joint expenses like rent, groceries, or holidays, to setting individual savings targets, it’s all under one subscription, with the flexibility to manage money your way. No more “Wait, did you pay that?” moments — just clarity, connection, and control.

One subscription, two hats: Personal and business finances

If you’re running a side hustle, freelancing gig, or small business, you may have already realised the value of keeping your personal and business finances separate. With Family Groups, you can now set up a second PocketSmith account at a much lower cost, one for you and one for your business, under a single subscription. This means no need to log in and out of the same account to see different budgets and a clear separation for business income, expenses, and tax planning.

For parents: Raise money-smart kids and support their next chapter

Teaching your kids about money doesn’t have to wait until they’re on their own. With PocketSmith Family Groups, you can give your teen their own account where they can learn how to budget, track spending, and save for things that matter to them. It’s hands-on financial education that grows with them. And as they move into adulthood, whether they’re starting university, landing their first job, or flatting for the first time, you can continue supporting them behind the scenes.

Supporting ageing parents with care and clarity

Helping your parents manage their finances as they age can be a delicate balance — you want to offer support while respecting their independence. PocketSmith Family Groups makes this easier by giving each person their own secure account under one discounted plan. You can choose to activate Shared Access if it works for you both, so that you can assist with budgeting, bill tracking, or financial planning when needed. It’s a simple, respectful way to stay connected and provide peace of mind, for them and for you.

For advisors: Simplified billing with 40% off

If you’re a financial coach, advisor, or money mentor, you know that the best results come from empowering your clients to understand and engage with their finances. PocketSmith Family Groups makes it easier than ever to provide your clients with access to the right tools, all under one streamlined, discounted subscription. Set up separate PocketSmith accounts for each client, tailored to their individual needs, and manage them all under your Family Group. With Shared Access, you can view their dashboards (with their permission), provide hands-on guidance, and monitor progress together in real time. It’s a seamless way to deliver more value, strengthen trust, and scale your practice.

Start your shared money journey today

Whether you’re managing money with loved ones, running a business, or guiding clients toward financial freedom, PocketSmith Family Groups makes billing simpler and so much more affordable — create your group today.

Luan Manages Big Moves and Big Goals With PocketSmith

Wed, 13 Aug 2025 12:00:00 +0000

Read how Luan simplified life’s big moves with PocketSmith’s budgeting tools.

Tell us a little about yourself?

I’m Luan from Brazil, currently living in New Zealand — this amazing island — with my partner Gabrielle. I hold a degree in Business Administration and currently work as an assistant manager in the hospitality sector. I’ve always loved organising and managing things, especially in business, and during my degree, I developed this even further. Learning about tools that help me do this is my cup of tea, especially software like AIs and PocketSmith.

How would you describe your role in your household?

My partner and I share responsibilities. Usually, one of us researches the best option or solution, then we discuss it together to decide if it makes sense for both of us. One of my main roles is financial planning and expense management, which used to take a lot of time, especially because our financial goals are very important to us, and we value being transparent with each other. PocketSmith has made this much easier. It helps me explain where our money is going, create budgets, and visualise everything with graphs.

What drew you to PocketSmith?

When I moved to New Zealand, I was looking for ways to manage my expenses and plan our budget. We were starting our life from scratch again — buying a car, renting a house, and other things — so planning was essential. I also wanted to stop spending so much time working with Excel spreadsheets, as I used to. That’s when I found PocketSmith, and it’s been perfect! It’s a Kiwi company, so syncing it with my New Zealand bank accounts was easy, and it now feeds our transactions automatically, saving me a lot of time.

How long have you been with us?

I started using PocketSmith about a year ago.

What do you primarily use PocketSmith for?

Mainly to track our household finances and project our budget. In the future, I plan to add our investments, which are in other currencies.

How has PocketSmith changed the way you do money?

Now we can easily see where we’ve overspent — usually on delicious food or coffee we love! Every two weeks, we do a quick check-in on our savings and discuss our next financial goal, like buying a car or planning a trip.

What are your favourite features?

No doubt, my favourite features are the graphs and the automatic transaction categorisation. I love playing with graphs, especially when my partner wants to understand something in more detail — they make it much easier to explain. The automatic categorisation saves me so much time. Instead of doing it manually, I just log in, check if everything is in the right place, and then I can focus on the bigger picture and our budget.

Got any tips?

Use the Make this a Category Rule function to save time. For example, if you often shop at the same grocery stores, tag them once and they’ll be categorised automatically. It also works great for recurring expenses like fuel, electricity, or internet.

Another tip is to create a separate profile just to experiment with features and tools inside PocketSmith — it helps you explore its full potential.

What’s the best money decision you made in the past 12 months?

Moving to a new city here in New Zealand and starting a savings plan to visit our family in Brazil next year.

The Best Neobanks and Money Apps in the UK

Wed, 06 Aug 2025 12:00:00 +0000

A decade ago, the word neobank would’ve likely conjured up visions of aliens running around in silver jumpsuits. You know, the way we always envision “the future”. And yet, in 2025, neobanks are challenging the traditional banking landscape across the world with features that help consumers manage money in new and executing ways — all without a silver jumpsuit in sight. Let’s take a look at what neobanks are and what some of the most popular players in the UK right now have to offer.

What is a neobank?

By definition, a neobank is a digital-first financial institution that provides banking services like current accounts and savings accounts to customers primarily through an app or online platform. Generally, neobanks do not have a physical branch location; instead opting to provide customer support online only.

Why are neobanks so popular?

Neobanks have taken the UK by storm in recent years. In fact, UK neobank app users have surpassed legacy banks for the first time. But what is it that makes them so popular?

Younger generations are much more digitally literate than previous banking users, meaning they’re happy to bank online rather than in a branch. In fact, many prefer online chatting rather than speaking face to face! In addition to a more digital-first mindset, neobanks have broken the mold of banking for the first time in years.

Neobanks are able to offer more than just simple deposits and transfers. Users enjoy features like spending categories, automatic round-ups, savings goals and spending analytics that help them manage money better and feel more connected to their finances. Plus, the user experience is often more engaging through the use of graphics, colour and tone of voice.

What are the most popular neobanks in the UK?

Monzo

Monzo quickly became a household name as the uptake of their infamous banking interface grew rapidly. The most popular allure of Monzo is the ability to categorise money into “pots” to help you stay on top of your expenses. You can set money aside for bills, set an eating-out budget, or save for a big ticket purchase, all by using pots. Then, at the end of the month, intelligent spending reports show you where your money went.

Other Monzo features:

Round up transactions to the nearest pound to save your spare change
Get cashback on your purchases
Monzo investments with as little as £1
Split bills seamlessly
Get paid one business day early

Starling

Starling Bank is another popular online bank in the UK changing the personal finance game. Offering business and personal banking, Starling’s app-based banking offers the ability to organise your money your way using “spaces”, put bills on autopilot, and spend overseas with no extra fees.

Other Starling features:

Spending insights reports by category and by merchant
Real-time spending notifications to help you stay on track
Split bills
Set a budget with multiple virtual debit cards for different categories

Revolut

Global banking challenger Revolut is also a contender for the UK’s coolest bank — and that’s not just because they let you choose a debit card design based on your vibe, promise. The app-based bank offers many of the expected neobank features like round-ups, bill splitting and spending trends reports, as well as global capabilities that’ll make any globetrotter drool.

Other Revolut features:

Auto-salary sorting on payday
International transfers made easy
Subscription management and reminders
Savings goal views
Integration with stocks and crypto investments
Business and freelance accounts

PocketSmith and neobanking: The perfect match

Neobanks are getting a lot right when it comes to engaging consumers with their banking habits, and we reckon neobanking and PocketSmith are a match made in heaven. PocketSmith’s bank feeds connect to Monzo, Starling and Revolut, giving you even more control over your finances in one place.

How Neurodivergent Users Manage Their Finances With PocketSmith

Wed, 30 Jul 2025 12:00:00 +0000

We love hearing from our PocketSmith users — whether you need a little assist using the software, or you want to share your stories of budgetary success. In particular, we’ve been thrilled to hear positive stories from our base of neurodivergent budgeters over the years.

Whether you’re autistic or dyslexic, have dyscalculia or ADHD, our software is built to handle it all. You can make your budget as customised or as pre-built as you’d like, and get reminders that serve as environmental supports as you work towards your financial goals.

Today, we’ll take a look at Sarah’s story and how Pocketsmith has served her and her neurodivergent friends across their various approaches to budgeting. No two neurodivergent minds are entirely alike — and your budget shouldn’t have to be, either.

Manage multiple currencies

Sarah has been using PocketSmith for eight years. In 2017, she was returning home from a stint working abroad. Upon her return, she needed software that would help her manage her money at home and the money she held in an old bank account in the other country from her past foreign paychecks. That’s because transferring the money across borders wasn’t the easiest or fastest process.

PocketSmith was the only software that fully addressed this multicurrency need. She could not only set up automated feeds for her domestic finances, but could also link her overseas bank accounts to get a holistic picture of her overall financial status.

She was thrilled to find that in addition to foreign currency capabilities, PocketSmith had the capacity to address many of her other needs as a neurodivergent budgeter.

Customisable personal finances

Sarah is autistic, and for her, that means that she likes to set up her budget in specific, particular ways. Sometimes that means setting up budgeting categories that don’t exist in the default list. Other times, that means eliminating a category altogether.

For example, she went many years without a car. She simply didn’t have a need for one. Other budgeting software would always include multiple categories for vehicle expenses. She’d leave them blank, but they’d still show up on her spreadsheets, albeit with zeroes next to each line item.

With PocketSmith, she could delete them altogether, decluttering her budget and visual charts.

“With the customisation that’s possible with PocketSmith,” she says, “I can configure my budget to work with how I think about my money as opposed to having to change the way I think to fit the app.”

Give yourself permission to spend on wants

Sarah grew up in an extremely frugal household, and internalised this frugality as a ‘rule.’ At times, it can be difficult to convince herself to deviate from that rule, which means that she won’t always splurge on things that fall into the ‘want’ category — even when they would bring her joy without wrecking her budget.

“One of the things PocketSmith has been really useful for is enabling me to set different budgets,” she explains. “I can see that during periods when I have enough income, I can buy a ‘want’ even if it’s not a ‘need’ without being so strict with myself.”

If you’ve also got a hard rule for frugality and against spending on ‘discretionary’ items, remember that it’s okay to have fun with your money every once in a while when your budget allows. In fact, in some cases, spending on special interests can boost your overall mental health, which can in turn support your physical health.

Other people might tell you it’s a waste of money to buy action figures from your favourite anime series or collectable DVDs from your favourite TV show. They might say it’s frivolous to splurge on the Egyptian cotton sheets when they’re more expensive than the basic 100-thread count set you can buy at Kmart — even if you have sensory needs.

But we’re not here for that. The things that make you happy can increase your quality of life, and it’s more than okay to spend on them when you’ve got the cash to do so.

While not all spending is bad, and it is okay to break from frugality every once in a while, you do need to be realistic with your numbers. If you’re someone who has the opposite problem and tends to spend money even when you don’t have it, read on. We’ve got solutions for that, too.

Put up guardrails for impulsive spending or giving

On the flip side of the equation, some neurodivergent budgeters struggle with impulsive spending or overgiving. This often manifests with ADHD, though it can also pop up in other forms of neurodivergence, too.

Impulsive spending or giving can be framed as ‘spontaneity,’ and it isn’t always a bad thing — as long as you have the funds set aside to accommodate those impulses. PocketSmith has tools that can help you figure out where those guardrails are, even when you’re not actively thinking about your budget.

One option is to set up a separate deposit account where you hold your ‘free to spend impulsively’ money. You can also set this up as a separate budget using the bank accounts you already have linked to PocketSmith.

When your free-to-spend funds get close to depletion or the category limit, PocketSmith will send you an alert reminding you that it might be time to slow down until you have more funding in this category.

These guardrails don’t deny you the opportunity to be generous with yourself or others. But they do serve as reminders that if you overdo things this month, it may impact your ability to continue to be generous in the months to come.

Visualise your spending

Another way to approach overspending in any one category is by setting up a visual dashboard. Maybe learning that you spent $800 on clothes, concert tickets, and gifts doesn’t shock you when you see it in numerical form, especially when all those individual expenses are allocated to their own separate line items in your budget.

But a pie graph showing that you spent more on impulse purchases than groceries last month may serve as a wake-up call in a way that numbers alone can’t. PocketSmith gives you all the tools you need to get the type of reinforcement that motivates you best — whether your brain processes things visually or numerically.

Get support during a period of hyperfocus

Sarah goes through periods of hyperfocus, where she’s working on her budget so intensely that she’s getting a lot done. Breaking that hyperfocus is an inconvenience, and you can’t always predict when that mindset will strike again.

For that reason, she appreciates how PocketSmith’s customer service team goes above and beyond to address the rare issues that she has run into quickly and expertly.

“I’ve always been really impressed that the times I’ve had an issue, the customer service approach has been great,” she says. “Stuff gets fixed fast. And as someone who gets into hyperfocus phases and wants to solve a problem quickly, the fact that the staff are very responsive and very communicative is a big plus for me. I don’t see that with other budgeting apps.”

Export data to get a little help from your friends

Sarah loves diving deep into the data. She has friends with ADHD who aren’t as enthused about the finer details, though. Occasionally, she’ll volunteer to help them out with their budgetary questions using strategies like future forecasting.

She loves working with people who also have PocketSmith. Her ADHD friends don’t tend to be as fond of spreadsheets as she is, but they’re easily able to export all their data from all of their bank accounts from PocketSmith into a spreadsheet. Then, Sarah can sift through the data to create budget forecasts, showing them what is and isn’t possible with their finances in the immediate to near future.

As she engages in this process, she notices that by and large, her ADHD friends tend to go for the default categorisations rather than getting super customised like she prefers to do with her own budget. But even with the default categories, the data is rich enough for her to produce accurate projections.

She notes that her experience with her ADHD friends doesn’t mean that all ADHD people budget the same. Nor does her own experience with autism mean that all autistic minds operate in a similar manner.

“If you’ve met one neurodiverse person, you’ve met one neurodiverse person,” she says. “Everyone is different.”

PocketSmith is for every neurotype

Here at PocketSmith, we value and accommodate those differences with the ability to customise your budget according to how your brain works. Whether that’s by using default categorisation and auto-populated budgets, or by using a system that’s entirely unique to you, we pride ourselves on building budgeting software that’s easy to use for each and every neurotype.

And if you ever do run into one of those rare issues where you need a little extra support, our friendly team is here to help you find a quick resolution so you can get on with what matters most: Bettering your financial future.

Want to share your PocketSmith success story? We’d be thrilled to hear from you! Reach out to our team at hello@pocketsmith.com to get in touch today.

Ruth's Two Cents: Downsizing in Retirement

Thu, 24 Jul 2025 12:00:00 +0000

Hi Ruth,

I’m newly retired and thinking about downsizing. The money would make life easier, and a smaller place would mean less upkeep. On paper, it seems like the smart move. But after 30 years in this house, it’s not so simple. It’s full of memories, and the thought of leaving is hard to shake. I’m torn between what makes sense financially and what feels right emotionally. How do I know if the financial benefits are really worth it?

A good question and one that those decades younger than you should also be keen to hear the answer to. With house values rising, and the necessities of life pulling on our take-home pay during our working lives, it’s easy to get out of balance and move into retirement with a home that is worth a lot of money, but not much cash to pay for its upkeep, plus let you have an enjoyable retirement. In blunt terms, you may be asset-rich and cash poor.

Is your home fit for the future?

The ideal is to head into retirement with secure housing that is fit for purpose, plus additional money and investments that you can readily, albeit carefully, use to top up the gap between your pension payment and what it costs you to live. You want this money to last as long as you do.

You can add more balance by downsizing your house to release some equity that you can use to live, but as you so eloquently put it, selling your family home is a huge emotional decision. It is natural to feel torn because your home is where your life happened. It holds your memories and milestones, and when you are surrounded by the stuff you have accumulated, it even holds your identity.

However, you are right in realising that your home is also a financial asset that could be used to finance this next chapter. I’m a fan of creating a retirement planning pros and cons list, and as you contemplate the next decade, now is a great time to reflect on whether your current house will serve you well going forward.

Your retirement planning pros and cons

Pro

A small place would mean less upkeep
The money gained from selling and downsizing would make life easier

Con

Your home is packed full of memories
The thought of leaving is emotionally hard

As you go about your week, I’d encourage you to add notes to your pros and cons list. Once you note down the easy things, such as a smaller property would mean fewer lawns to mow, you can broaden your research by digging into the math of the situation. For example, a pro might be that you work out that your rates invoice goes down by $1,000 a year if you buy a smaller house.

Downsizing can make a lot of sense financially

If done well, you can free up a sizeable chunk of money, reduce your future living expenses such as insurance, and give yourself much more flexibility. For example, if you have a ‘lock and leave home’, you can easily zip away to spend a week with your family and friends. But it is only worth doing if you are sure this significant change in your life will improve your quality of life, which is why I would encourage you to work out and write down what you would do with the money and time you free up by moving house. Do you plan to travel more? If so, what will that cost? Will you worry less about your bills? If so, what are your bills now, and what do you estimate them to be in the future?

Create a financial plan

I’m in the fortunate position to speak with many people who do ‘right-size’ their home in retirement to release some equity. It’s what you do with the money you free up that counts. I’d encourage you to carefully tend to your freed-up cash to make it last as long as you do. It is very easy and tempting to go through the process of relocating your life to another house, and then blowing your cash on doing up that house, or having any kind of YOLO experiences on offer. Ultimately, if you don’t have a financial plan, you can very easily and quickly end up almost back at square one, but this time you have a house that is right for you, albeit worth less than your previous one, and no spare cash. So, my point is, if you are going to go through the effort to change your home, make sure you create a financial plan to invest the money you free up so that it can last the distance.

30 years of connection to a place tie you to that place

Running alongside the finances of your decision are the emotions. Big emotions. 30 years of memories created in and around one dwelling. But where were you before that? In another home. Cast your mind back to those memories too and realise that while the home plays a significant role, it was often the people in it who played a bigger one. You can take all of those memories to your new home. Think positively and take some time to imagine yourself driving out of a new driveway, on a new street, or in a new area. Imagine how exciting it might be to create a whole new set of memories in your retirement years.

Survey your friends and family

If you have children who want the best for you, talk to them about what an address change might do for you. Get their thoughts and insights too. If your hesitation to move is due to the effort of it all, lean on your family for help. In my experience, adult children are relieved and pleased to know their parents are happy and living in the right home for them. They want you to make the right decision for yourself. Plus, in your friend group, seek out their wisdom as I’m sure many of them have downsized or right-sized their home for retirement, are considering doing so, or know someone who has. Ask them about the financial implications of their housing change. What did it cost them, and how much did they manage to add to their retirement savings? Add their points to your own pros and cons list.

While there are few calculators to measure the emotional weight of your decision, there are plenty of retirement calculators to work out how much money you need to have saved and invested to live a happy retirement. How much money do I need to have invested at 65 is a helpful resource, as is Work out your retirement number by Sorted.

Pros + Cons = Decisions

Your question does not have urgency to it, and that is a good thing because it means you have time to consider and run the numbers behind what will give you peace of mind and a sense of freedom as you head into a happy retirement. How do you know if the financial benefits are really worth it? You gather as much financial information as you can. Then you weigh up your options and make a decision. You have worked hard to get to this point, and while you sit at the kitchen table that has nourished you for the last 30 years, take the time to plan out what kitchen table and what view out the window will bring you happiness for the next 30 years.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

Murray Plans for Peace of Mind With PocketSmith

Sun, 13 Jul 2025 12:00:00 +0000

Read how Murray brought all his finances together with PocketSmith to protect his family’s future.

Tell us a little about yourself?

I recently retired at the end of 2024, but it was a year earlier than I originally intended, solely due to ill health. I started in the workforce back in 1981, so some of you may think I was around when dinosaurs roamed the earth, but that’s not true — they came after me.

I’ve worked in a variety of jobs over the years. My most recent position was as a student registrar, advising on courses students wanted to take and generally steering them through their courses, amongst other things.

I’ve been married for just shy of 39 years — not sure how my wife has put up with me for so long! We live in Wollongong, New South Wales, Australia, in a house about the size of a bach on the south coast of NSW. On a clear day, I swear you can see New Zealand…

How would you describe your role in your household?

I take care of the finances, cooking, cleaning and any IT issues that come up — a real house hubby!

What drew you to PocketSmith?

I’d had some issues with the health of my heart, so about a year before COVID hit, I decided I needed to get our finances under control and also to educate myself. I looked around for an app or a website that could help, but then quickly dismissed the ones based in the USA as they were too US-centric, and since then, a number of them have closed down. What I wanted was something based in the Pacific region that understood the local currency and that used more familiar vocabulary.

PocketSmith was the one that matched my wishlist. Signing up was easy, and the cost per year was quite reasonable. I’ll also admit — I’ve got a bit of a soft spot for New Zealand, as my mum and dad met and married in NZ, so that also helped me decide.

Dad was serving in the RNZAF, and Mum was an Australian over there on a working holiday. They married in Blenheim and then moved to Christchurch, where Dad trained to become a primary school teacher. They only came back to Australia because Mum was homesick and she wanted to be closer to her parents. Dad taught for most of his working life, but his biggest achievement was that he was one of the founding members of the NSW Teachers’ Credit Union, formed in 1966. It’s now called Teachers Mutual Bank — but I am very proud of my Dad for having had the foresight to get a Credit Union off the ground, way back in the mid-1960s!

How long have you been with us?

Nearly seven years now, and I’m not willing to leave.

What do you primarily use PocketSmith for?

With my heart being a bit ‘iffy’ in recent years, I wanted to get our finances sorted so that if anything drastic happened to me, things would be in place for my wife and children, so my primary reason for signing up was estate planning. I doubt many of PocketSmith’s users would fall into this category, but I really needed to gather all the disparate threads of our finances together into one centralised hub. That way, we could see how we were tracking, explore ‘what if’ scenarios, and plan out a budget just in case the worst happened.

The decision to use PocketSmith to give us an overall snapshot with real-time updates of account balances was fortuitous indeed, as I had a heart attack and a double bypass at the end of 2024. However, my wife knew exactly where to look if I hadn’t made it through, so I was able to rest in that fact, knowing she could navigate the biggest ‘what if’ a person can go through, by being able to quickly see the big picture. That might sound a bit morbid, but my heart attack came out without any warning, and in hindsight, I made the right decision to go with PocketSmith.

How has PocketSmith changed the way you do money?

Centralising everything that I could with real-time feeds, although some Superannuation numbers I have to punch in manually due to one bank in particular not allowing me to access them electronically. But the beauty of PocketSmith is that it gives me an almost instantaneous view. It also means I can spot any fraudulent activity on any of our day-to-day accounts, so I know where every dollar is and it’s all neatly accounted for.

What are your favourite features?

I still feel like I am only scratching the surface, but the times I do get stuck, I find the help screens inside PocketSmith useful, as well as the Learn Centre. But if I am really, really stuck for an answer, a quick email to the support team is usually answered within 24 hours, and the people I’ve dealt with over the years have been incredibly helpful.

Got any tips?

People may not realise this, but if you have a financial advisor, you can allow them to access your PocketSmith account so they can also see everything in one spot.

What’s the best money decision you made in the past 12 months?

Renewing my subscription to PocketSmith! Seriously though, I can’t quite see how we managed our finances before we started using it.

Going Local — Part Two: What Joining a Team in an Office Again Taught Me About Money

Sun, 06 Jul 2025 12:00:00 +0000

Anyone who says reverse culture shock doesn’t exist is lying. After Going Global and trialling that #digitalnomadlife for an incredible handful of months, I’m back in New Zealand. I’ve had just as many thoughts coming home as I had while travelling overseas:

What do you mean, there’s no Skytrain between terminals at Auckland Airport?

I love that it doesn’t rain all the time.

Why is food so expensive?

OHMIGOSH, our mountains are spectacular.

Why are so many people monolingual? (guilty).

Not for me, settling back into the hometown where I spent the first 30ish years of my life. I’ve uprooted myself once and had a taste of the wide world. Now I’m on the move again.

I’ve quit freelancing and made the big move south to Queenstown Lakes District, land of snow-capped mountains, extortionate rents, and more outdoor adventures than you can shake a stick at. Yes, paragliding is on my list of to-dos. So is the Hydro Attack boat ride. And bungee jumping, thank you, A.J. Hackett.

But first… I’m going to need some money. Moving is expensive, my friend.

It’s a good thing I have a shiny new office job, innit?

So I’m back in an office again for the first time in years. More than that, I’m part of a close-knit team (five people) and a wider department (about thirty people). And I am loving it. It’s teaching me so much, not just about the work and the organisation, but about money.

Let’s face it: I’m a finance blogger. I’m always going to find a way to learn about money, no matter what I’m doing.

1. It’s more fun in community

Sure, the banter is top-tier, and the espresso machine is great. But it’s more than that. After years of working from home, there are things I’d plainly forgotten about office life.

For one, I find it so much easier to focus on my work when I’m surrounded by smiling, whip-smart workmates who are also focused on their work. Do we get sidetracked sometimes? Sure. But there’s always someone to bring the conversation back around to our original objective. We have our individual projects and areas of speciality, naturally. We’re also — all of us — working toward a common goal. We’re stronger when we collaborate. Anyway, things are just more fun in community.

All of which could also be said about phoning up my money-minded mates all over the country. We might be paying off our student loans, or saving for a house deposit, or investing for an early retirement — but we have those common goals, and boy, are we focused on them! We have a few laughs along the way, too. Focus and fun aren’t contradictory. If anything, I find they go hand-in-hand.

2. Identify your mistakes so you can fix them

My team does a lot of pre-launch system testing. As such, a common phrase among us is, “We can’t fix it until we can replicate it. Do it wrong again.”

The first time I heard it, this rang a tower of bells with me. Heck, I wrote a whole blog about recognising and labelling the holes in my PocketSmith setup: Why I Have A Regret Category. Everybody makes mistakes; that’s the nature of humanity. It’s also the nature of humanity to pick ourselves up, dust ourselves off, and say, “How did I do that, and how can I stop it from happening next time?” So, we replicate the route we took to make that mistake. We find the pothole in the road. And we implement a patch.

It might look like staring a credit card statement in the eye for the first time in too long and then sitting down and making a plan to get out of debt. It might look like capping that weekly Dining Out budget and finding time to meal prep. It might, for some of us, look like transferring those just-in-case savings sitting in a dead-end bank account across to a high-yield investment account.

Whatever the mistake, recognising it is the first step. Fixing it is the second.

3. Small, consistent gains are better than giant leaps

As a veteran of the working world, I’ve had all sorts of training and onboarding experiences, ranging from really good to atrocious to frankly non-existent. This has been one of the best. It’s thanks in no small part to something my manager often says: “One thing at a time, okay? We’re not here to overload you, we’re here to make this sustainable.”

It works! I learned an incredible amount in my first month. It stretched my brain and my abilities in the best way possible. Have there been moments where it’s felt like a lot? Absolutely. Which is when I take a step back and say, “I need some time to get this part down first,” or when a workmate says, “I’ll give you time to let that settle, and we’ll come back to this tomorrow afternoon.”

It’s the same with money management. It has to be consistent and it has to be sustainable. Could I dive gung-ho into my latest financial plan, strip my lifestyle to the bone in the name of doing That Thing, and reach the goal faster? Yes, sure. Would it be utterly miserable? Yeah, probably. Realistically speaking, would I burn out before too long, give up, and fall far short of That Thing? Yeah, unfortunately.

If I take one giant leap, all I’m likely to do is overbalance and fall on my face. But small steps consistently? That, I can do.

So, I give myself leeway for the hiccups of life. I give myself grace for the occasional stumble. I take small steps often, and sometimes there’s a lurch backwards, and that’s okay. As long as I’m still heading in the right direction (and I am, thank you, Net Worth Tracker), it’s alllll good, mate.

Four Top Tips for Protecting Yourself Financially While on Dating Apps

Wed, 02 Jul 2025 12:00:00 +0000

Since the launch of Tinder in 2013, online dating has changed forever. What was once a hidden secret that nobody ever wanted to admit to has now become the most popular way of meeting a new partner. But when it comes to money and dating, things can get complicated. From deciding who pays for what, to knowing when to discuss salaries and financial circumstances, there are a lot of question marks. But while many financial factors are personal preference, there’s one aspect of money and dating that’s non-negotiable: Staying safe. Online scams are on the rise, and dating apps are a common place for people to let their guard down. Here are four top tips for financial dating app safety, without killing the vibe.

While you’re probably not going to pop your PIN number in your profile, sharing any kind of personal information can put you at risk of scams. Things like your birthday, names of your parents and details about your pets can all paint a picture of your potential passwords, and/or be used to impersonate your identity. Dating app safety comes down to being careful what you share about yourself and when. Keep specifics private until you’re confident the person is a genuine potential partner.

It’s also important to keep your own financial capacity private until you know you can trust a new partner. Revealing that you have a certain amount of savings, a certain income, or even family money or inheritance can put you at risk of being taken advantage of.

2. Look out for romance scam red flags

Romance scams are on the rise, and online dating has made it even easier for scammers to find victims. Romance scammers will build an intense connection with victims via an online dating app, but usually do their best to avoid meeting them in person. They’ll then use the pseudo-romantic connection to try and get their victims to lend them money for a personal emergency.

It’s important to be aware of red flags when it comes to online dating. These can include:

Early displays of vulnerability or personal stories. Opening up to a new partner is part of the dating process, but if you notice someone you’re chatting to insists on telling you a lot of intensely personal information early on, this could be a red flag for a potential scam attempt down the line.
Love bombing. Romance scammers may profess strong feelings to their victims very early in the relationship, sometimes messaging them multiple times a day to give excessive amounts of compliments. This is to try and get you to form a connection to them too, so they can manipulate you later.
Stock imagery or fake profiles. If something feels off, try a reverse image search of someone’s profile picture to see if they appear elsewhere online. Sometimes people create fake profiles in an attempt to scam you.
Vague excuses for not being able to meet in person. It’s normal to want to take it slow when online dating, but if someone you’re building a connection with is never able to meet, or frequently cancels at the last minute, they could be a scammer.
Contradictory details about themselves. Scammers are often speaking to lots of people at once, and may reveal themselves when they slip up on small details. Look out for changing stories or details that don’t add up.
Any request for money. If someone you’ve built a connection with online asks you to lend them money, say no — especially if you’ve never met them in person. There’s a high chance you’ll never get the money back, and because you’ve willingly transferred it, it can be hard for banks to help you recover lost funds.

3. Don’t click links sent to you in dating apps

Sharing links is a common way to exchange content online, whether you’re suggesting a place to eat, or sharing a funny video. But be extremely wary when clicking links sent via dating apps or in other messaging platforms with people you’ve met online. Links can be used to capture your personal information or even access your devices using malware. Always try to find a way to access the information by finding the website yourself.

4. Get clear on your own financial boundaries

If you’re going to meet offline or pursue a relationship with someone you’ve met online, establishing financial boundaries within yourself is the first step to being able to recognise when they’re being violated. Ask yourself what would make you feel comfortable from a financial perspective, including who pays for what, what kind of financial behaviour is appropriate, and what information you’ll share and when. Then, when you’re dating, you can keep a close eye out for behaviour that violates these boundaries. If someone you’re on a date with is pushing you to share more financial information than you’re comfortable with, or if something starts to feel off about who is paying for what, you can recognise it much more easily.

Staying financially safe when dating is important both in the early stages and as a relationship progresses. While it can be nice for a new partner to treat you, money can be used as a means of power and control, so be sure to trust your gut if something doesn’t feel right.

How to Make Money Conversations Normal in Your Family

Sun, 22 Jun 2025 12:00:00 +0000

When was the last time you talked openly about money with your family?

If you’re like most people, the answer might be “not very often” or maybe even “never.”

Money is one of the last real taboos in our modern world. We talk about everything else — relationships, health, careers — but when it comes to what we earn, spend, save, or owe, the conversation often dries up. And the sad thing is, the less we talk about money, the harder it becomes to manage it well.

At Fresh Moni, normalising money conversations is at the heart of everything we do. It’s why I started the podcast — to make money-talk every day, simple, and empowering, not awkward or shameful. And it all starts at home.

Here’s how we approach it in our family, and a few simple tips you can use to make money conversations a normal (and even positive!) part of your everyday life.

How we make money talk part of everyday life

Money affects almost every part of our lives — from the food we eat, to the homes we live in, to the dreams we have for our future. If we don’t talk about it, we’re left guessing, worrying, or feeling like we’re the only ones who don’t have it all figured out.

Talking about money:

Builds awareness and confidence
Reduces shame and secrecy
Helps families and friends make better, more informed decisions
Passes on healthy habits to our kids and communities

It’s not about boasting or complaining — it’s about learning, supporting, and lifting each other up.

In our house, we’ve made it a habit to talk about everyday costs — not in a stressful way, but as part of life. For example, we’ll say:

“Groceries cost $250 this week — that’s a bit higher than usual because of school lunches and extra snacks.”
“That sports registration fee for the kids is $180 — good to know for next season planning.”

We also talk about income. Between us, we share what we earn as a family to build understanding.

When our kids or extended family know the real cost of things and the reality of our income, it brings a sense of awareness and appreciation. It’s not about creating a deficit mindset (“we can’t afford anything”), but about helping everyone understand how money flows, what things are worth, and why we make the choices we do.

It also means when unexpected costs pop up — like medical bills, school trips, or even fun things like holidays — we can have honest conversations without stress or surprises.

Here are some simple ways you can make money talk feel natural with your family:

1. Start with everyday expenses

Instead of launching into a deep ‘money talk’ sit-down (which can feel intimidating), weave money into normal conversation.

Mention the cost of groceries, petrol, kids’ activities, or home repairs casually, the same way you’d mention the weather or weekend plans.

If you’re saving up for something big or cutting back on expenses, explain why.

For example: “We’re cutting back on eating out this month because we’re saving for a family holiday.”

When people understand the reason behind money decisions, it feels more positive and purposeful.

3. Be open about income (if you’re comfortable)

You don’t have to tell the world, but within your household or close circle, being open about income helps break down unrealistic expectations.

It also teaches kids (and adults!) that money isn’t magic — it’s earned, budgeted, and managed.

Knowledge is empowering.

4. Avoid blame or shame

The goal isn’t to make anyone feel guilty about what they earn, spend, or save.

Focus on learning, improving, and planning together, not on picking apart past mistakes.

Language matters — say things like:

“What’s working well for us financially right now?”
“Where could we get even better?”

5. Teach kids early

Kids are amazing learners. Even little ones can understand simple concepts like saving for a toy or budgeting their pocket money.

Involving them early builds confidence and smart money habits that will last a lifetime.

Talking about money isn’t a one-off event — it’s an ongoing conversation. At first, it might feel a little awkward, but over time, it becomes second nature.

The more we talk about money openly and positively, the better we get at managing it, and the stronger our families and communities become.

That’s why I started Fresh Moni — to break the silence and empower everyday people to have everyday conversations about money.

Because when we get better at talking about money, we get better at managing it, and that’s where real change happens.

Willie Leota is the founder of Fresh Moni and a mortgage adviser with over 16 years’ experience. Raised in a large family with little money, he’s on a mission to break the silence around money and empower Māori, Pasifika, and everyday Kiwis to build wealth. Through his award-winning podcast and financial tools, Willie makes money talk real, relatable, and powerful.

How PocketSmith Can Help Neurodivergent Users Simplify Financial Planning

Wed, 18 Jun 2025 12:00:00 +0000

If you’re neurodivergent, you might struggle with traditional budgeting advice and software. Most of it is written for neurotypical brains, and in the past, that may have left you feeling like a budget failure.

Here at PocketSmith, we don’t believe in one-size-fits-all advice. Our budgeting software is all about customisation so our users can build a budgeting system that works for their own, unique process. Most of all, we don’t believe you’re bad at money. We just think you need a software option that plays to your strengths while also supporting you in areas that may be more challenging.

Today, we’ll take a look at some PocketSmith features that can take your neurospicy mind from budget-adverse to financially empowered.

Budgeting reminders

There are oh-so-many reasons your executive function may be offline. Maybe you frequently procrastinate non-preferred tasks. Maybe you’re in an anxiety spiral that’s got you frozen. Or maybe you’re so busy with everything else going on in your life that it’s difficult to make budgeting a regular routine.

Whatever the reason, PocketSmith can help nudge you in the right direction with the Reminders feature. This is what’s known as an environmental support. Environmental supports can go a long way towards helping you keep your money habits on track.

You can use PocketSmith reminders to prompt you to do something simple, like categorise your expenses or simply sit down to do your weekly budgeting sessions. Reminder notifications can be sent to your phone or your email.

Here’s how to set them up:

Click on the profile menu icon
Select User preferences
Click on Reminders in the sidebar
Click on the Add reminder button
From here, you’ll see a drop-down menu that allows you to select categorise transactions or check budget
Add a day and time for your reminder
Tell us whether you want to receive your reminder by email or the mobile app
Click save

Bill reminders

For a lot of people, automating bill payments is a great way to ensure everything gets paid on time. If you’re lower-income or you have irregular income, though, the thought of automation may add to your anxiety rather than alleviating it. If a bill is scheduled to come out and the money’s not in your account, that could mean dealing with overdraft fees. In these instances, you might feel more in control when you manually pay your bills.

In either scenario, it can be helpful to receive reminders about when your bills are due — whether that’s because you need to manually pay them, or because it’s good to remember when hundreds of dollars will be automatically withdrawn from your checking account.

Here’s how to set up bill reminders in PocketSmith:

Click on the profile menu icon
Select User preferences
Choose Email preferences on the left-hand side of the screen
Look for the Bill reminders section
Select the day of the week and the time of day that you’d like to receive reminders every week
Click Save

Categorise your spending

One of the many PocketSmith features we’re really proud of is our customisable categorisation. While there are lots of default options for categorisation of each line item in your budget, we appreciate that every user has their own way of thinking about and organising their expenses. That’s why we’ve given you the added option of customising your categories for however works best for your brain.

You can add and delete categories by selecting Manage and then Categories. To delete a category, click on the three dots on the right of the screen. Then it’s as simple as clicking delete.

You have a couple of options when it comes to adding new categories. From the category management page, all you have to do is click + Add new in the toolbar. But if you find yourself in the thick of budgeting, you don’t even have to leave the transaction page. You’ll notice a drop-down menu for categories. Type your new category name into that box, and you’ll see a box pop up in the drop-down menu that says Create category: (your category name here). Simply select it, and PocketSmith’s software will handle the rest for you!

Types of categories

Not every line item is created equally. Some of your spending is going to be on bills that occur every month or every week, like your utilities or rent. You pay these all at once in one lump sum. Other categories are going to be spending that you do throughout your budgeting period, like the money you spend at the grocery store or the cash you drop on clothes. Still others are going to be once-per-year expenses, like your vehicle registration.

Organising all of that on your own can be super overwhelming, even for the biggest Type A math nerds. That’s why PocketSmith comes with different types of categories so your budget will automatically populate the right expenses at the right time, allowing you to plan your financial year with far less effort.

Here are the types of categories you can designate in PocketSmith on the Categorisation management page:

Visualise your budget

Just because you’re neurodivergent doesn’t necessarily mean numbers aren’t your love language. But if you do have dyscalculia or are otherwise a visual learner, you’ll likely love that PocketSmith gives you the option to view your spending, savings goals, and budgeting projections in pretty charts rather than straight spreadsheets. You can do this using the Dashboard feature.

You can get as customised with your Dashboards as you like. Whether you want to view your entire financial picture all at once or a single aspect of your financial life, like your spending vs income over the past month, we’ve got you covered. We have 15 different Dashboard widgets to choose from including:

Balance graph widget
Earning & spending donut chart widget
Your accounts widget
Budget widget
Bill reminder widget
Saved search widget
Number of uncategorised transactions widget
Number of unconfirmed transactions widget
Date and time widget
Total balance widget
Balance alert widget
Transactions column widget
Category Sankey widget
Net worth widget
Note widget

You can add or delete any of these options from your main, big-picture Dashboard. But you can also create multiple, separate Dashboards for any category you so choose. We have some templates to get you started, or you can build everything custom from scratch.

Curb impulse spending with category limits

Spontaneity and generosity are beautiful traits some of our neurodivergent users have in spades, but when these traits lead you into impulse spending or over-giving, they can wreak havoc on your budget. PocketSmith has you covered with even more environmental supports so you can still be spontaneous and generous — just with some built-in guardrails.

You can build these guardrails in by setting a limit on each category of your budget. For example, maybe your entertainment budget is $200 per month. Go to the Budgets section of PocketSmith and select the Entertainment category. From there, you’ll be able to enter the amount you want to spend and how frequently you want to spend it. In this case, it would be $200 every month.

When you start getting close to this limit, PocketSmith will send you a notification. These reminders can help you rein in your spending (or giving) before things get out of hand.

Set up savings goals that get you excited

Budgeting doesn’t have to be all drudgery and responsibility! It can be a liberating practice that allows you to set goals for your special interests or other things that you’re excited about. For example, let’s say you caught word that Taylor Swift is going on tour next year. Your $200-per-month entertainment budget probably won’t cut it when it’s finally time to buy tickets. Instead, you decide you want to save up $1,000 so you’re prepared for Ticketmaster’s worst.

The easiest way to do that is to set up a separate savings account for your goal. Use PocketSmith to name your savings account so you can keep your focus on your goal. For our example, you might name the account ‘Taylor Swift tickets’. You want to be prepared for the day tickets go on sale, so you’re trying to save up your $1,000 over the course of five months — or $200 per month.

On the Categories page, set up a transfer category and name it after Taylor. Set your budget up as $200 per month (or $100 per fortnight, whatever works best for your pay schedule). Because your goal is to save this money in five months, you’d set an end date five months out from today. You’ll then be able to see a chart projecting your progress towards this savings goal in your Dashboard.

Do money differently with PocketSmith

Your brain is wired differently, and that’s a beautiful thing. We think you deserve a beautiful budget that supports your lived experience and helps you reach your financial goals. With endless customisation options, bill and budgeting reminders, and automated budgeting visualisations, PocketSmith is a great fit for neurodivergent budgeters who want to achieve financial success.

What to Tackle at the Start vs. the End of the Financial Year

Sun, 15 Jun 2025 12:00:00 +0000

It’s tax time again somewhere.

Happy new(ish) financial year! On 1 April 2025, us Kiwis celebrated the end of the financial year ending 31 March 2025 and welcomed in the new financial year FY2026.

For those who file their own taxes, you will know that the due date for filing is 7 July. If you have a tax agent or accountant who does your taxes, then you will have until 31 March of the next year to file your returns. This means that for the filing of FY2025 taxes, you have until 7 July 2025 if you’re self-filing and 31 March 2026 if you have a tax agent.

Note that the advice in this article is more applicable to self-employed individuals or business owners. If your only source of income is salary, which is tax-deducted at source, you shouldn’t have to worry about this.

With the tax year just started, many of us are busy getting our financial things in order. So to kick off the article, let’s look at:

Things to tackle at the start of the financial year

The start of the financial year will be the time to start worrying about putting together your tax information. Your advice may vary in this section, depending on whether you:

If you don’t have an accountant

You have no accountant? No worries. Taxes can seem intimidating, but once you know what you’re dealing with, you’re all good. I will be writing this advice on the assumption that you have an accounting system of some sort. This can be a handy accounting software like PocketSmith, or a cobbled-together spreadsheet that you really, REALLY love to use.

Get your bank transactions together

Export your bank transactions from your online banking platform, starting from 1 April 2024 to 31 March 2025 (these dates are for FY2025, please adjust the dates accordingly based on your jurisdiction and tax year). Don’t just print off the bank statements. Yikes! We’re living in the 21st Century now!

Ideally, you want to export these transactions in a .csv or Excel format. Once you have your bank transactions downloaded, you can cross-check them against your spreadsheet or accounting software to ensure accuracy.

If you are using an accounting software with bank feeds activated (like PocketSmith), you can double-check that the balance on the account as of 31 March 2025 matches the balance shown on your software’s bank feed. A matching balance means everything is good. If it is off, then you’ll have to investigate why the balances are not matching. It can often mean a missed transaction or a wrongly coded one.

Compile your invoices

Start putting together your invoices. As a rule of thumb, focus only on large invoices worth more than $1,000 (adjust accordingly for your local currency). Smaller transactions are almost not worth keeping receipts/invoices for. Remember that your bank transactions also serve as proof of transaction if you ever (God forbid!) get tax audited.

You should also compile invoices that you’ve paid for using your personal funds for the business. These may not be captured in your accounting system. You can always add these expenses manually to your spreadsheet or software.

If you’ve purchased any fixed assets, you should add them to your fixed asset register. Depending on your jurisdiction, a fixed asset is typically a high-value purchase of a vehicle/plant/computer/machinery/furniture that is used in the business. You can’t claim these as a tax expense, but you can depreciate them for some sweet tax deductions.

As long as you know where your financial information is and you can retrieve those fixed assets receipts, you will be fine.

Claim home office expenses (if able)

If you run your business or work on your business part-time from home, you can claim some home office expenses. Depending on which country you are from, you may be able to claim a portion of your personal living expenses as a tax-deductible business expense.

Home office expense is typically calculated based on the size of your home office. Different countries will have different rules about it, so be sure to check with your friendly local tax office as to what the rules are.

Claim all other eligible tax deductions

Depending on your tax jurisdiction, you may be able to claim additional tax deductions in your personal name before filing your taxes. For example, if you are in Malaysia, you can claim additional tax deductions on:

Simply existing (all Malaysian taxpayers get a one-off MYR 9,000 tax relief each year, as of the writing of this article)
Medical expenses
Education
Lifestyle
Childcare

Unfortunately for us in New Zealand, we’re not so lucky, as any personal deduction we could claim in our name would have already been claimed through the business anyway.

File your taxes

Phewh! Once you’ve done all that, you can file your taxes. Feel free to talk to an accountant if you want an extra pair of eyes to review your accounts.

If you have an accountant

If you have an accountant, chances are that they have set you up on an accounting system of some sort. Once again, we are living in the 21st century, so if your accountant is still asking you to send them a shoebox of receipts, it may be time to change to a more modern accounting firm.

In most cases, an accountant will ask you to fill out what is known as a financial year-end form.

And that’s it. Fill out the form, focus on your business and worry about paying the taxes when your accountant tells you to. Easy.

Depending on how your accountant runs their business, they may ask you for all the fixed asset invoices for the previous financial year at the start of the new financial year. If your accountant also does bookkeeping for you, they may be more proactive and ask for these invoices as soon as they see the transaction come through.

A good accountant will have most of your financial information at their fingertips. If you feel like they’re hassling you for a lot of information and making your life more complicated at the start of the new financial year, then it’s time to get a new accountant.

Things to tackle at the end of the financial year

A lot of the financial work at the end of the financial year will be related to ensuring you start the new financial year as smoothly as possible. For the end of the financial year, this advice is applicable to everyone, regardless of whether you have an accountant or not.

Chase up on unpaid invoices

If you bill your clients using invoices (as opposed to cash sales), you will want to make sure that your invoices are paid up. This will affect the sales value that you report on your tax return (which will affect the overall tax you have to pay).

Since accounts are prepared on the accrual basis (meaning that invoices are recognised as sales when they are issued, not when they are paid). Unpaid invoices will add to your tax payable regardless of whether they’re paid or not. So, it’s better to get them paid!

If you have any old overdue invoices or invoices to clients that you know will never pay up, you need to write them off. Writing off unrecoverable invoices will lower your tax payable and is one of the easiest things you can do to lower your tax bill.

Tidy up your accounts

The end of the financial year is also a good time to tidy up your accounts. If you are using a spreadsheet, you should use this time to ensure good recording of your business transactions. If you are using accounting software, now is a good time to categorise those transactions you get on your bank feed! You may find this easier if you’ve set up rules for transactions on software like PocketSmith.

If you have a bookkeeper who does this for you, you should not have to worry about it. But if you don’t, you should get it tidy before the financial year ends so that you can start the new financial year on a fresh footing.

Forecast and budget for the new financial year

You should run a business forecast at least once a year. The best time to do that is at the end of the financial year. Once you’ve tidied up your accounts, you will have a better idea of how you did financially in the financial year just gone by.

Depending on your personal circumstances, your plans for the business and the economy, you can budget accordingly for the new financial year. For example:

Dee is in the last month of the financial year. She finds that her customer base has tripled in size during the financial year. For the coming financial year, she realises that she will need more staff to help manage the business. In her budget, she accounts for how much two full-timers will cost her. Using that, she sets her business some sales targets to meet to sustain the expenses of two full-timers.

Budgets are a guideline, so don’t feel too stressed about making sure you meet them. Remember to be flexible; things may change during the financial year, and you may need to tweak your budget to reflect these developments.

Bring on the new financial year

For those of you in New Zealand, I wish you happy new financial year! For those of you in other parts of the world, I wish you all the best in tackling your current financial year!

As long as you know where your financial information is and you can retrieve those fixed assets receipts, you will be fine. Be sure to take advantage of the time at the end of the financial year to chase up on overdue debts, tidy your accounts and plan for the future.

You can do this!

Sam is the director of SH Advisory, an online accounting firm for small businesses and startups in NZ. He is also the creator of The Comic Accountant, an internationally-read finance comic blog. With 15 years experience in accounting and finance, he loves sharing quality financial advice with small business owners everywhere. In his spare time, he likes to nerd out over the latest board game launches and great PC gaming deals online. If you need help with your small business and startup, Sam is the person you want to talk to!

Going Local — Part One: Why I Quit Freelancing

Tue, 10 Jun 2025 12:00:00 +0000

Another day, another kitchen table for writing these blogs. The last time you heard from me, I was going global. Likely in Shetland. Or Scotland. Or maybe Canada (hello, January snow and a crisp -14°C.) Today, I’m not in any of those places. I am, in fact, back home in New Zealand.

A few months of the digital nomad life were enough

It’s not that I didn’t love my Hobbit-like adventure, leaving the safety of home to see the wide world. I did love it, for the most part. I fell in love with the silent peace of snow-covered fields in Ontario. With the clarity and depth of light in Shetland. With England’s easy passenger rail network and Tesco’s cheap groceries. Some days, I was elated, bright-eyed, loving every minute of this new journey, but other days, quite frankly, I felt lost, broke, and lonely.

It was never supposed to be a permanent change. Full-time travel is exhausting. Full-time travel as a solo woman is doubly so. I had taken the leap, made the plunge, and given the new lifestyle a solid trial. Now, months later and hopefully wiser, home was calling.

“I didn’t want to not go and then spend the rest of my life wondering if that was it and I’d missed it,” I said to a friend.

“And was it?” she asked. “Was that it?”

I thought for a minute. “Yes. It wasn’t anything like what I thought it would be — but that was it.”

I haven’t just given up the overseas travel and that #digitalnomadlife. I’ve quit freelancing entirely.*

*Caveat: Not 100%, as evidenced by these continuing blogs. But definitely 98.5%. Or thereabouts. More or less.

But Rachel! Freelance writing is sparkle-fingers The Dream!™

What about the flexibility to go for two-hour lunch breaks and never work a Friday ever again? What about the freedom to set your own rates and turn down any projects you don’t like? What about working from home, or cafes, or from the kitchen table in Georgia/Ontario/South Canterbury?

Yes, yes, all very good points. I’m not upgrading from a Bad Thing to a Good Thing here. It’s not about slamming freelancing. Freelancing has a lot going for it. For starters, it let me travel the world for months without once dipping into my emergency fund. It’s how I’ve been making a living for the last few years. I learned a lot about myself and how to advocate for my work, and I’ve worked with a ton of cool people that I never would have met otherwise.

All I’m doing with this move is swapping out one Great Thing for another Great Thing

They’re different, and that’s okay

Freelancing has its pros and cons. So does regular PAYE work. I’m in the rare, fortunate position where I can say I’ve tried both. And not just in passing. Neither of them were token side gigs or weekend hustles. I took a running jump, dove in headfirst… and found myself afloat. It’s a good feeling.

So, having hopped from the office drudgery of PAYE (Pay As You Earn) to the ultimate in creative, flexible BYWAYF (Build Your Wings As You Fall), why am I jumping the fence again and going back to a regular salaried job?

Good question. I’m glad you asked.

The short answer is: I was offered a job that hit the quadruple-gold of role, location, salary, and team.

The longer answer is: When I sat back and took a good, hard look at it, there were too many things about being an employee that I missed.

The people. I missed being part of a team. I had regular clients, and they were great, but it’s not the same thing.
The regular paycheque. Freelancing, by its nature, is feast or famine, sometimes in very quick succession. I missed being able to forecast my income for the next few years without worrying about the endless what-ifs of losing a client or the two-month Christmas closedown.
The routine. By the end of two years, decision fatigue was hitting hard. I was exhausted from waking up and having to decide what to do with every minute of my day — every. single. day. I was sick of being my own manager, my own marketing department, my accounting department, tech support, and more. I missed the automatic routine of get up, go to work, come home. I missed the structure of workdays and weekends. I even missed dreading Monday mornings and knocking off early on Fridays.

And that’s not counting the million smaller things like paid sick leave and annual leave, employer KiwiSaver match, workmate banter and watercooler chats, a walk/bike commute, professional mentorship, career development, an office dog… the list goes on.

I was ready for it. I’d had my big OE, I’d done the digital nomad thing, I’d gotten the itchy feet out of my system for a while. I’d stuffed years of experiences into months overseas and a few years freelancing.

When it came down to it, I was just plain ready for a change

So, I quit freelancing. I sold out. I interviewed for a job, and accepted a job, and went back to working for The Man (or The Woman, in this case. My manager is one epically supportive lady.)

Everybody, at some point in their lives, changes jobs from one employer to another. I did the same thing. The employer I was moving away from just happened to be myself.

A couple of years ago, I was selling up and getting ready to set off on my epic overseas adventure. I was all set to Go Global. Now, I’m doing the opposite. I’m settling down, settling in, and Going Local. See you there.

Ruth's Two Cents: Guiding Estate Planning For Your Parents

Wed, 04 Jun 2025 12:00:00 +0000

Hi Ruth,

My mother passed away a few years ago, and recently, my father’s health has taken a turn. Nothing nefarious; it’s just old age. However, as my father’s health continues to decline, I find myself increasingly anxious about the financial aftermath of his passing. Not only am I emotionally unprepared to have lost both of them, but I’m also unsure about how to handle the financial responsibilities that will come with it. What practical steps should I take to ensure financial stability during this challenging time and beyond?

Talk to him. A little and often. Starting today.

My situation is very similar to yours, and I am happy to share how that has been working.

In my case, I broached the subject with my Mum after my Dad had passed away. Throughout their marriage, he had handled most of the finances. Once he became ill, my Mum started to take over, and this meant she had a reasonable understanding of her financial situation, which was relatively straightforward. I broached the subject of money with her by saying something along the lines of, “I love you, and I want the best for you; I enjoy working on my finances and would like to come alongside you and help you with yours.”

It starts with a conversation

While some parents might say, “Back off, I’m all good, thanks”, my Mum was pleased to be asked and said she would contact me if and when she needed me. This opened the door to further conversation where I said that I understand that money is personal, but I also gently explained that my own family wants to help out if and when required and that my husband and I have discussed how we could help if she needed us to.

I explained that in order for us to position ourselves well to help her and still juggle all the other financial things we have going on in our home, it would be helpful to know what her current financial situation is. And then, we can adjust ours accordingly. I framed it as all of us positioning ourselves financially to face the years ahead.

During my father’s illness, there was a lot of change, including Mum moving to a more manageable house, and my siblings and I all stepped up to do whatever she needed. Therefore, it felt natural that discussing her money was part of a bigger picture and that our interest in it was purely to make sure she had it in hand. It is very important to me that she knows I’m here to help manage her money in precisely the way that she wants it managed. I’ll offer my expertise to help her do what she wants to do, but I won’t tell her what to do, and I certainly won’t be trying to change her habits of a lifetime.

Get all of the documentation in order

The first thought that goes through many people’s minds when it comes to asking a parent about money is ‘inheritance’. The parent doesn’t want people coming after their money, and the child doesn’t want the parent to think they are after their money! But I want you to understand that this is not what it’s about at all. I was able to convey that none of us are waiting to inherit, and none of us want to influence what she chooses to do with her money in order for us to inherit. Instead, much like we help her navigate her health, housing and other needs, we want to help her manage her money too.

The thought of walking in step with my Mum was essential to me, and every time she needed my help, I was straight on it. These days, Mum has settled into a pattern of spending that is gently using up all that she has, and she continues to budget and live within the income she makes, drawing on her savings whenever she needs to. It is her money, and she is in charge, we just help her with it. As time has progressed, we have gone on to learn together about the legalities of how we will support her if she cannot make decisions for herself, and with the help of a lawyer, we have helped get the proper procedures in place.

We have also talked about her will, which is up to date. From a practical point of view, I asked her what her wishes were in her will simply because we each want to carry them out and to have that conversation with her when she is alive makes it far easier to do. Also, my thinking was that if there were going to be any ‘surprises’, speaking to her and getting some context around them would be helpful. But also, at the end of the day, regardless of my feelings about them, whatever her wishes were, that is exactly what we would do.

Open communication with all interested parties is key

From these conversations, my siblings and I have found practical ways to help out in all aspects of her life. We each play a part, sharing the load, none of us having any more authority than the other. I think this works well, as everyone knows what is going on. Anytime she strikes a problem that she can’t solve herself (and she still very much wants to solve it herself), she will call on one of us. I’ll often help her with money problems, such as paying invoices online. This has meant I have access to her banking, but coming back to our original conversation, Mum’s in charge, and only when I’m asked do I engage with her bank.

Another essential consideration is communication with siblings and any other relatives with a very close relationship with your father who are likely to be affected financially upon his passing. I’m aware of issues that can arise between family members when it comes to money, so, with my mother’s permission, I share anything significant with them so that there can never be any question of my integrity. While not shouting your parents’ financial position from the rooftops, transparency is incredibly important, and if there is any hint of scandal or doubt, pick up the phone and talk about it.

As I worked with my mother and my siblings, I relayed the situation back to my husband, and we talked things through. But one thing that I’m aware of, and you might like to keep this in mind too, is that although my husband is my sounding board, and I value his opinion, too many cooks in the kitchen spoil the broth, so he doesn’t get to chip in his two cents directly. No spouse does. The same is true for his parents. One day, when the time comes, I’ll support him, to do what he thinks is best for them.

Start now so you’re ready when the time comes

Above all, I discuss financial matters to let her know that I’m here to help her navigate and manage her money today, as per her directions and wishes. And then, after she is gone, my family and I will help carry out her wishes and see her belongings and estate dispersed precisely according to her will. It gives her peace of mind knowing that there is a plan in place, and it gives me immense peace of mind knowing that I will at least know what to do, financially speaking, when she is gone. Which lets me put all my time and effort into where it needs to go, dealing with my emotions and coping with her loss.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

Building Financial Resilience During Political Uncertainty

Thu, 29 May 2025 12:00:00 +0000

The world has changed a lot in recent years. From a global health crisis to changing political and environmental landscapes, it’s normal to feel concerned for the future. But how does this uncertainty impact our finances, and what can we do to stay on top of things?

Political shifts, like a change in government or a major economic event, can create a ripple effect that impacts our individual finances. Things may become more expensive, interest rates on debt and savings may increase or decrease, and access to national services like healthcare may change. You may also experience changes to the taxes you pay and the level of job security in your industry or field.

While every country faces its own unique political challenges, the geopolitical climate can mean one country’s problems impact another country. For example, even if you don’t live in the US, a new president can have a knock-on effect on your investments and the cost of goods and services, like recent tariff changes.

Unfortunately, we don’t always know what’s around the corner. But with uncertainty, one of life’s only ironic certainties, there are some steps we can take to withstand fluctuations in our circumstances.

Diversify your income

Relying on one sole income source can put you at risk of economic and political changes. If you lose that income, you may find yourself financially vulnerable quite quickly. Diversifying how you earn, for example, with a side hustle or income-producing investment, can help you build security outside of just your job.

This applies to your investment strategy, too. Diversifying where your money is invested, across industry, asset type, and asset location, can help you bolster the impacts of different market conditions.

Prioritise an emergency fund

Never has there been a more critical time to build an emergency fund. If you don’t have one, start one. And if you do have one, consider increasing it. We tend not to think about emergencies until we’re facing them head-on, but having the foresight to save some money when things are good, so you’ve got it for when things are bad, is a wise choice.

Focus on having a minimum of 3-6 months’ worth of basic expenses to give yourself a buffer period to find new income if you lose your job or face unexpected expenses.

Protect yourself and your assets

Economic downturns are a great time to check in on your insurance policies and make sure they still suit your circumstances. Insurance can save you from facing a big financial outlay if you experience damage to your home or car, and may even pay out if you experience illness or injury.

Assess your risk profile

We all have different risk appetites at different times in our lives. During times of uncertainty, it’s important to revisit your own personal situation and look at how much risk you can take on. You might decide to save more and invest less to increase your access to cash, or you might switch your investment strategy to better suit the market conditions. Many choose to do this if they’re nearing retirement age during a downturn.

Plan ahead

One of the best things you can do is to look ahead to your next 3 months, your next 12 months, and your next 2-5 years. What do you expect your life to look like? What’s important to you? What are your responsibilities, and will they change?

Political and economic uncertainty impacts everyone differently, and the way you respond will come down to your own needs. For example, if you’re planning to start a family, you may need to prioritise access to cash and maintaining cash flow. If you’re planning to retire, you’ll likely be focused on protecting your nest egg. If you’re trying to climb the career ladder and invest for your future, you might choose to take on more risk based on your lower responsibilities.

Stay informed

When things are heavy, it can be tempting to bury our heads in the sand and hope it goes away. Unfortunately, while avoidance provides psychological relief, it can have significant consequences.

Try to balance staying informed in a way that doesn’t leave you overwhelmed and powerless. Have conversations with people in your life, and consider expert advice from someone like a financial advisor or a career mentor for another perspective.

Keep your finger on the (money) pulse

Regardless of your own situation, one of the best things you can do is get on top of your finances. Know where your money is going, know what your basic living costs are and where you can trim the fat if needed, and know how many months you can live on your emergency fund should you run into income challenges. PocketSmith is the ideal way to get full visibility over your income, expenses, debts and savings, so you can make informed decisions about how to look after yourself and your family.

Filling in Financial Literacy Gaps

Sun, 25 May 2025 12:00:00 +0000

Financial literacy education is becoming more and more common in public education systems. It’s a beautiful thing to see, but it doesn’t necessarily help the more *ahem* mature among us who didn’t have access to that education growing up.

Today, we’ll go over some of the most frequently asked financial literacy questions to catch you up.

How do you build a budget?

Believe it or not, the basics of budgeting are fairly simple. Ultimately, you’re trying to capture your income vs. your expenses. Usually you’re doing this over the period of a month, but you can technically make a quarterly, yearly or even multi-year budget.

Your goal is to create a budget where you’re spending less money than you bring in. That way you can use the excess to build your savings, pay off debt or invest for your future.

There are several different strategies you can use to build your budget. Some common budgeting strategies include:

Back in the day, you would have done this manually with pen and paper. At a certain point, you were able to start building your own spreadsheets to record your budget.

But in today’s day and age, you can use budgeting software like PocketSmith to build a budget for you. It takes a lot of the heavy lifting out of the process, while increasing your financial literacy skills along the way.

How does my credit report work?

Your credit report is the document that informs your credit score. You can have multiple credit scores, depending on which company is doing the calculations and the type of loan you’re trying to take out.

Your credit report contains both positive and negative line items. Positive line items — like on-time payments or accounts that have been open for a long time — could serve to boost your credit score. Negative line items, like late payments or bankruptcies, could lower your credit score.

The better your credit report, the easier time you’ll have getting approved for a loan or credit card. Those with a more positive history are also likely to get better terms and interest rate offers when they do qualify for lending products.

If there’s an inaccurate line item on your credit report, you can contest it. Just bear in mind that just because an item doesn’t show up on your credit report doesn’t necessarily mean that you don’t legally owe that particular debt.

How do credit cards work?

Credit cards are revolving credit products. That means you have a line of credit open to you, to spend against whenever you want. You don’t have to pay any money until you borrow against this line of credit.

When you make a purchase against this line of credit, you’re not immediately charged interest. If you pay your balance off in full at the end of every statement cycle, you can avoid interest on purchases altogether.

However, if you pay only the minimum amount due or any amount less than your total balance, you will be charged interest on the remainder. Interest rates on credit cards tend to be incredibly high, which means they can get expensive fast.

Let’s say you have a $2,000 balance on a credit card account that charges you 25% APR in interest. Your minimum monthly payment is about $60.

It would take you five years to pay off your credit card debt. When all is said and done, in addition to the $2,000 payment, you would have also paid nearly $1,400 extra in interest.

If you’re late on one of those minimum monthly payments, things can get worse. You can get hit with late fees, which commonly fall around $30 in the U.S.

A note on cash advances

Some credit cards allow you to withdraw cash from the ATM. These are known as cash advances, and they act differently than standard credit card purchases. They come with a separate interest rate, which can sometimes be higher than the interest rate charged on purchases.

Another big differentiator is that interest on cash advances starts accruing right away. You don’t get a grace period that lasts until the end of the statement cycle like you do with purchases. That means you’ll want to pay off these cash advances ASAP — even before your statement comes in.

How do student loans and mortgages work?

When it comes to products like student loans or mortgages, one of your best bets is to get financial coaching at the time you take these products out. That’s because the terms of certain lending products can change over time.

For example, depending on your country, there might be different terms for student loans granted by your government rather than student loans you take out from a lender in the private sector. The laws around government-issued student loans change over time, so your best bet is to seek out this information directly from your government immediately prior to signing on the dotted line.

Mortgages tend to be a little more static in terms of regulations, but things like first-time homebuyer assistance programs, minimum down payment requirements and interest rates can vary over time — or even vary based on where you live.

If you are a first-time homebuyer and you participate in an assistance program, usually one of the requirements of participation is completing a (free-to-you) homebuyers education program. This, combined with working with a trustworthy, experienced real estate agent, can help you figure out how much house you can realistically afford, and which lending products make the most sense for your own homebuying journey.

How can I build my financial literacy skills if I didn’t get it in school?

The fact that you’re reading this article is a great start! You’re seeking out the knowledge you need to better your financial future, and that curiosity is the key to it all. Keep researching the topics that are important to your financial life, bearing in mind that there’s a lot of inaccurate information on the internet. Rather than relying on social media to feed your knowledge base, turn to trustworthy sources like:

Government sites
Sites run by official credit reporting agencies
Content from financial professionals with letters after their name

For example, rather than taking credit advice from a TikTok star, it would be a better idea to seek it out from a credit counsellor who has a certification that’s recognised as non-predatory by your government.

And while you can feel confident turning to the PocketSmith content to build up your budgeting skills, you’d want to go to a certified financial advisor who can evaluate your unique financial situation before making any massive, in-depth investment decisions with your retirement account.

It’s never too late to start learning about money. Building your financial literacy skills is key to building a better financial future, no matter your age.

Building a Retirement Fund When You're Self-Employed

Tue, 20 May 2025 12:00:00 +0000

While this blog post focuses primarily on the New Zealand financial system, there may still be valuable insights and strategies that readers from other countries can adapt to their own financial situations.

Last week, after church, my friend and I were chatting when she frowned into the distance and abruptly turned to me. “I’m glad freelancing is going so well for you,” she said, “but what are you doing about KiwiSaver?”

It’s a fair question, especially coming from the woman who first introduced me to The Barefoot Investor. As a freelancer, I don’t have the security of a steady paycheque every fortnight. I don’t get a minimum of 3% deducted from those paycheques towards my retirement fund. I also don’t get a 3% match from my employer.

What was I doing about KiwiSaver? My thinking around it, as I explained to her, sort of went in three stages…

Your own contributions

Retirement contributions are an easy, mindless tick-box exercise when you’re an employee. It goes like this:

Here’s a form to fill in.
Cheers.
Are you in KiwiSaver?
Sure am.
How much do you want deducted from your pay and siphoned off to your government-administered retirement fund?
As little as possible, thanks, I need every dollar I can get, so… 3%.

(Note: If you are an employee, I am begging you — check that match rate. I was nine months into a twelve-month contract when I found out HR had misinformed me, and the company match rate was in fact 4%, not 3%. I’d been essentially throwing away free money for nine months. It hurt.)

As a freelancer, it’s a bit more complicated. Where KiwiSaver for employees is opt-out, meaning you’re automatically enrolled unless you choose otherwise, KiwiSaver for the self-employed is opt-in. If I want to make contributions, it’s up to me to make them happen.

But when I don’t have an employer matching my contributions, is there really any advantage to locking away my hard-earned money somewhere I can’t access it until I either:

Want to use it as a deposit on a house, which is increasingly out of reach
or
turn 65, which is still more than 30 years away?

Well. Yes. There’s still an advantage… to a point.

Government contributions

See, even if you don’t get employer contributions, you still get government contributions. These aren’t the steady 3% match that an employer makes. Instead, they’re a whopping 50%.

Yep, the government will match you 50 cents for every dollar you contribute to KiwiSaver… to a limit. Government contributions are capped at $521.43, which means your threshold for getting that sweet, sweet government-matched money is $1,042.86 of your own money. Anything beyond that point is no longer matched by the government. It’s all your own money.

So, when you can’t access KiwiSaver until you’re 65 or with the government’s permission, why would you keep contributing beyond the match point?

But that doesn’t mean you should stop altogether.

I contribute $1,042.86 a year to my KiwiSaver, which is currently in Kernel’s excellent High Growth Fund. This doesn’t mean contributing the same amount every month: It rises and falls in line with my monthly income, which I track in colour-coded categories on my PocketSmith dashboard. Then I look elsewhere.

Think outside the box

Many people, when they think “retirement,” think of:

KiwiSaver, or their country’s equivalent retirement fund
Savings or a term deposit in the bank
Passive income from a rental property

The truth is, there are so many more options than these. You don’t need to be a millionaire to enjoy a good retirement — but you do need to start thinking about it.

So you’ve got KiwiSaver. Great. You might have savings or a term deposit in the bank. Good. They’ll be earning stuff-all in the way of interest, but it’s better than nothing. And let’s presume you don’t own a rental property. I certainly don’t.

Now. A savings account might net you around 2% in interest. A term deposit? 4-4.5%. Investing in a broad-base index fund returns, on average, 8-9% over a ten-year period.

So 8-9% a year, averaged out, is a darn sight better than that measly 2% back in the savings account. It’s also easier than dealing with rotating term deposits and far more passive than the so-called ‘passive’ income from rental property. I mean, have you talked to a landlord recently?

Make it easy

As a freelancer, I want to make saving for retirement as easy and automatic as it ever was when I was an employee. Simplicity is the name of the game — no, not that Simplicity, although I did have my KiwiSaver with them previously. What I mean is I want it to be simple. There are endless options: Sharesies, Hatch, InvestNow… but my KiwiSaver is already with Kernel. Why not have my index funds with them as well?

So I do. My KiwiSaver is in the Kernel High Growth Fund. Past that magical $1,042.86 mark, I switch to investing in my own independently-held funds. Currently, these are a 50/50 mix of the NZ 50 ESG Tilted fund and the Global 100 fund, with a minuscule less-than-1% dropped into the S&P Kensho Moonshots Innovation fund for fun.

This gives me the freedom to move my money around as I see fit. With an eye to ethical investing, and a general dislike of industries such as tobacco, I can pull money out of one fund and drop it into another whenever I want. Most importantly, I can access the entirety of that money when I need to — without waiting until I’m 65 or asking the government for permission.

There you have it: My three-step freelancing plan for retirement. 65 is a long way away for me personally. I’m sure the plan will change again before I get there. But the fun is in the journey, don’t you agree?

Ruth's Two Cents: Building Financial Stability with an Irregular Income

Wed, 14 May 2025 12:00:00 +0000

Hi Ruth,

I’ve recently started freelancing, and while I love the flexibility, managing my finances is becoming a real challenge. My income is irregular, and I’m finding it hard to budget or plan ahead when I don’t know exactly what I’ll make each month. I want to build a more stable financial foundation, but feel stuck in a feast or famine cycle. How can I manage my finances better with this kind of Income?

Freelancers often pursue working for themselves because they want freedom and flexibility to do the work they get a kick out of doing at the pace and place they like to do it. As someone who does freelance work, I know firsthand that there is much to love about working this way.

While the flexibility and variability of freelancing are its greatest strengths, they can also be its downfalls. Managing your money as a freelancer requires the complete opposite! You need certainty, structure and good budgeting to make it work. If you can’t find a way to even out the peaks and valleys of your income, then all that lovely flexi-time you have worked into your day will be invaded by stressful worrying about your finances.

With planning, you can create a system that replicates the stability you used to get from your employer when you knew that a set amount of money would be sent to your bank account on a specific date and time. You can pay yourself a reliable income and plan ahead.

I have applied the same PocketSmith budgeting skills that I use in my private finances to my business. This is how I suggest you do it.

Banking structure is essential

Open one to five bank accounts with a new bank. It is important to separate personal and business banking as they are different entities.

Bank account:

Invoices are paid into, and expenses are paid out, of this account
Transfer a small amount weekly into this account to cover future business expenses
Regularly calculate and put money into this account to pay taxes*
Transfer a small amount weekly into this account to cover future holiday pay
Build an emergency fund to cover three months of income and expenses

*I use the accounting software Hnry, and I pay my taxes as I go. This has removed the need to save for tax which makes allocating my income to business expenses, holiday pay and myself so much easier. Most importantly, I can tell if my business is profitable.

Create a new PocketSmith dashboard exclusively for your business. At a glance, you can see your cash position, incomings, and outgoings, and you can also create detailed reports to help you budget better.

Create a cash buffer

Avoid running your bank accounts too lean. Before moving to full-time freelance work, I built up an additional two months of income and expenses in my #1 account. I also created an emergency fund. You will find this particularly useful in the first six months as it will remove the anxiety you currently feel about running out of money. Aim to hold plenty of cash in your business. If you have to use your emergency fund, restock it as quickly as you can. As your confidence in your income and expenses grows, you can adjust the amount you keep in reserve.

Pay yourself a set amount

You were paid a fixed amount when you worked for an employer, so do the same now that you are self-employed. I like to pay myself weekly. Once up and running, create a weekly payment from your business to your personal account and into your business expenses, tax and holiday pay accounts.

Knowing you will have money coming into your personal accounts each week evens out the peaks and troughs of spending and earning, making your household budgeting far easier to manage.

Initially, you will be working hard to build up your emergency fund and cash buffer, so calculate the lowest amount your business can afford to pay you weekly while still meeting those other goals. You can now be confident you will be paid a fixed amount on the same day each week.

Monitor, tweak and adjust

Pay yourself the minimum amount you can for a solid three-month period (longer if you can), as that gives you time to see how much, on average, your business earns and spends. It will help you begin to predict boom or bust periods of work.

Adjust transfers into your tax, expenses and holiday accounts until you have them right. Setting aside a weekly amount will make your budgeting easier. Some months, you may ‘oversave’, but others you may ‘undersave’. But over a tax year, it evens out.

Don’t forget about holiday pay

You must set money aside now for future holidays, and you need to write holiday dates on your calendar. You will soon settle into paying yourself a set amount each week, and you need at least four times this weekly amount set aside for future holidays. For example, if you pay yourself $1,000 a week, you need $4,000 saved. When you take a week off, you pay yourself $1,000 from this account. $4,000 / 52 weeks means you need to transfer $77 a week into your holiday account to ensure you can cover four weeks’ holiday after one year of working.

As long as you never stop setting aside $77 a week, you will always have four weeks of paid leave to look forward to. This will guarantee you never miss out on a weekly income in your personal bank account.

Expect a quieter period at work

Most freelancers find there are periods, such as Christmas and New Year, when all their clients seem to desert them. They wonder if they will ever come back. They will; they are just taking a well-earned break! Try to take your holiday when your clients do and use your holiday pay to ensure no income gap. Keeping a good cash buffer in your bank account, plus keeping an emergency fund acts as a backup plan during quieter periods.

Give yourself a pay rise

If your #1 account balance grows with each month, and you have a lot of money sitting there, increase your weekly pay by a small set amount, e.g. $50 or $100, and then monitor it. Think of it as giving yourself a pay rise.

I would caution against giving yourself a chunky bonus. Instead, try to increase what you can consistently pay yourself. Remember that holding more cash in the business will help smooth out your irregular income and help you sleep better at night.

Are you a freelancing success or failure?

PocketSmith will give you an accurate picture of your net income after taxes and expenses. Regularly review your figures and be honest about whether freelancing is financially viable. Working for yourself can be expensive. All those costs your employer once paid for, well, they are now all on you. After a year in business, and once you understand your income and expenses, reevaluate if you have a business or a hobby.

If freelancing is viable, then permit yourself to relax.

When you work for someone else, your paycheck is no more guaranteed than a freelancer. At any time, you could be let go. By freelancing, you are generating and controlling your income meaning that you can directly influence earning more or less. Instead of feeling threatened, you should feel emboldened and once you put some structure in place I think those financial peaks and valleys will be a thing of the past.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

Open Banking, Closed Doors: How the Government Is Letting Us Down

Thu, 08 May 2025 02:00:00 +0000

We’ll break down what these fees are, how they’ll hurt everyday New Zealanders and stifle local innovation — and ask how on earth we ended up here, in the darkest timeline for open banking. But first, are the banks really the good guys?

The banks: They’ll screw us all because they’re allowed to

In our 17 years building PocketSmith, we’ve seen banks repeatedly act against the interests of their customers. From misleading and overcharging customers, to charging higher fees to New Zealanders and taking advantage of groups of people, we’ve seen it all. All this amid the backdrop of year-on-year record profits being earned by Australian-owned banks, while cost-of-living soars.

The Consumer Data Right gave the banks the opportunity to do something good for New Zealanders. Break out of the mould, and adhere to some of the principles they espouse in their marketing. Give their customers open access to their own data, so that they can improve their own financial lives through tools like ours.

But really, when given a chance to design legislation, can we be surprised they didn’t take the high road?

The fees: $5 maximum per bank, per month

As it stands, each bank will set its own fees to third-party applications for customers to access their data via bank feeds — 1 cent per API request call, up to a maximum of $5 per month.

An API call represents a single data request — so checking your account balance would cost 1 cent, each time, for each account. Check for recent transactions? 1 cent. If you have five accounts at a bank, PocketSmith would hit that 500-request-per-month maximum in less than 15 days.

Tools like PocketSmith are only useful with up-to-date data, so much so that half our customer support team is dedicated to ensuring that bank feeds are working for our users. Up-to-date data means a lot of data update requests, so it’s safe to assume that each connected bank feed would reach that $5 maximum per month.

45% of New Zealand PocketSmith users have one bank feed; that’s $5 extra to their bank. About 25% have two feeds — say a mortgage at BNZ and a credit card at ANZ. For them it’ll cost $10. The 12% with three connections? That’s $15 thanks. And for the 16% of users who have more than three connections… well, you can do the maths — it gets fairly grim for households who have multiple logins to a single bank.

The impact: Banks paywall innovation, Kiwis pay the price

It is hard to see the bank charges as anything but a design to hobble demand on both demand and supply sides.

Small fintechs can’t afford to compete with big banks that might absorb the cost. And those who try to pass it on risk excluding the very people who need it most — the ones who can least afford it.

Back in 2010, we were a bootstrapped startup that could still afford the bank feed license fees that gave us the ability to build a unique product for Kiwis and a global audience.

Today, providers like Akahu continue to open doors by enabling secure access to consumer financial data for a fair price. This has created a fertile ground for innovation and the creation of products and services designed to make Kiwis’ lives better.

The proposed fee structures under the CDR would not only make existing businesses untenable in NZ, but stop further innovation in its tracks. Consumers would end up paying sky-high prices for apps to help them manage their money. Both outcomes defeat the purpose of a Consumer Data Right, which is to increase competition and improve consumer outcomes.

New Zealanders will continue to be worse off than other countries, with a financial system bogged down with antiquated technology and a lack of innovation. We’d be moving into yet another generation where the banks are holding all the cards and sending their hoard of profits overseas.

The ridiculousness: Everywhere else, CDR empowers people, but in New Zealand, it empowers banks

We’ve had a front-row seat to open banking rollouts around the world, through our thousands of customers across the globe. The rubber hit the road in the UK and EU in 2019 with the PSD2, and CDR in Australia was usable for our Australian customers in 2022. We’ve seen nearly all major banks in the United States transition to new open banking data access, and Canada is well underway with their own legislation.

What’s been completely absent from all these rollouts? Per-user access fees.

None of these rollouts have had per-user access fees. None. Even in the United States — the throne of capitalism — banks do not charge fees for access to customer data.

We’re dumbstruck that the government is allowing banks to charge money for what should be a basic consumer right. This is completely at odds with every successful open banking rollout in the western world. CDR is being twisted into a product to be sold, not a right to be protected. And let’s be honest, ‘CDP’ just doesn’t have the same ring to it.

New Zealand is completely alone here. So how did we arrive at the darkest timeline for open banking in New Zealand?

The cause: Banks are leading legislation

PaymentsNZ — an industry body wholly owned by the banks — who has been working with (or, working over) the government to guide and shape how CDR takes form in New Zealand. The result? A predictably bank-friendly model that puts corporate interests ahead of consumers. The Commerce Commission raised concerns about the conflict of interest with PaymentsNZ administering CDR open banking. This looks to be bearing fruit.

It appears that the MBIE are willing to outsource the public policy need of a CDR, to the private interests of PaymentsNZ. There has been a missed opportunity for the New Zealand government to take a stronger role in shaping the CDR regime, as every other Western government has taken advantage of. One perspective might be that this has jump-started CDR in New Zealand, but in fact things are still dragging out over the coming two years. And still, individual consumers will be footing the bill.

Having an entity owned by profit-driven banks to significantly shape the CDR future of New Zealand is akin to giving cigarette companies the power to draft public health legislation.

The solution: Get mad

Change doesn’t come from silence. If we want a fair and open financial future, we need to speak up, and push back. Open banking was meant to unlock opportunity, not pad profit margins. Let’s call this what it is, and call for something better.

If you’re feeling as mad as we are about how the CDR is shaping up, please share this post so that more people know what is at stake.

James is mad, and is the CTO and co-founder at PocketSmith. He loves tech from software to hardware to music, and is passionate about technology being a net-positive in people’s lives. He lives off-grid with three humans, one axolotl, one dog, and too many possums.

How To Attract Clients as a Freelancer

Tue, 06 May 2025 12:00:00 +0000

Freelancing your services can be an empowering decision for your money and your career. You can become a freelancer to earn extra income on the side of your job, develop your skills and experience to further your career, or dive headfirst into full-time self-employment.

Finding clients as a freelancer doesn’t come with the clarity and simplicity of applying for regular jobs, but that doesn’t mean there isn’t a world of opportunity out there waiting for you. Having been a freelance copywriter in various capacities for over 10 years, here are some hot hacks I’ve learned along the way to help you find and attract freelance clients.

Identify your ideal client

Before we go looking for clients, it pays to know who we’re looking for. Spend some time getting clear on who you want to work with and who your skills are best aligned with. If you’re a designer, what kind of designer? If you’re a writer, what kind of writing are you best at? Think about the commercial application of your skills to understand the type of client that can benefit from what you have to offer.

How specific you are with this will depend on your experience, capability, and confidence. Maybe you have extensive experience working with food and beverage brands. Perhaps you write really well for e-commerce companies. Maybe you’re a whizz with email marketing for service-based businesses. Or maybe you’ve got specialist experience in a field like healthcare, and you want to combine that with your love of writing. Digging into the specifics of what you offer helps you identify who can best benefit from your work.

Put yourself in places where your clients hang out

Now you know who you’re trying to attract, you can start putting yourself in places they can find you. Social media is such a great way to put yourself out there and connect with people who might want to work with you. Instagram, TikTok, and LinkedIn all offer their own unique pathways to connect with your ideal clients using content and keywords to help them find you. Don’t be afraid to connect and communicate with people in your desired industry, too.

Build authority and legitimacy

Getting your ideal clients to find you is half the battle. The other half is making sure that when they do, they’re impressed by what they find. Make sure you’ve got somewhere people can find what you do, how to contact you, and why they should work with you. That can be as simple as a website or a social media page, with clear contact details and examples of your work or portfolio. Start with the basics — you can build out other aspects of your online presence over time.

Use your network and tell people what you do

When you go freelance, reach out to ex-coworkers, friends, and family members who might have contacts that can help you. You never know who might be able to throw your name out for an opportunity.

It also pays to be vocal about what you do when you speak to people. My first ever direct client ended up being the real estate agent leasing me an apartment. I told him I was a freelance copywriter and he hired me to write their new website. Tell people about your freelance services — even if it doesn’t result in immediate work, they might remember you for something in the future.

Reach out to agencies or other established freelancers

When you’re starting out as a freelancer, finding work from nothing can take time. A great way to get things moving is to freelance for bigger agencies or support more established freelancers with overflow work.

Research agencies in your industry (for example, design studios or branding agencies if you’re a graphic designer) and share your portfolio. Agencies often take on freelancers on a project basis, which can help you build your experience and help with cash flow in your freelance business.

Apply for postings on freelance sites

Global sites like Upwork, Fiverr, and Freelancer.com connect freelancers to paid opportunities and allow you to be proactive in applying for jobs that suit you. It’s another great way to build up your freelance work while you build up authority and find clients directly.

Estate Planning and Tax Considerations

Sun, 27 Apr 2025 12:00:00 +0000

There are two things that are certain in this world. Death and taxes. At least with taxes, you can take steps to mitigate and (legally) reduce the amount you pay. But there is no avoiding death. It comes for us all. Dying is just part of living (the irony!). Unfortunately, your tax worries don’t go away when you die. Instead, your family will inherit your tax issues for you.

So, while we’re still alive, how can we best manage our tax affairs so we don’t leave our loved ones with a giant tax headache when we pass?

Who will manage your estate tax when you die?

The first question that needs answering is who will manage your tax affairs when you die. Generally speaking, this will be your next of kin. Your spouse, your children or your siblings.

Depending on the complexity of your assets and investments, you may want to consider hiring a professional to assist your next of kin in the event of your passing. When you pass away, your investments continue to generate a return. These returns are taxable income. Hiring an accountant to manage these tax affairs for you is a good idea, as they will have a better idea of how the income will be taxed (compared to your next of kin).

If you have an accountant or lawyer, your next of kin will have to consult with them to sort out your tax affairs when you die.

What happens to your taxes when you die?

These are what you should be doing if a loved one passes away.

Report the passing to the government

Here in Aotearoa New Zealand, you can report the death of an individual to myTrove, which will notify all relevant government agencies that the individual has passed away. You don’t need to provide the IRD with a death certificate once you’ve reported the death on myTrove.

Get proof that you can act on behalf of the person who has died

For IRD to allow you to manage a deceased individual’s estate tax, you need to have written confirmation that you can act on their behalf. The most commonly accepted document is a copy of the will or probate. If you can get a letter of administration or get the family lawyer to confirm your authority, that will work as well.

Why is it important to let IRD know that someone has died?

By letting IRD know that someone has died, you make sure that:

Any refund due to that individual gets paid to their estate
There will be no more penalties on tax owing
Any child support owed is paid
Changes can be made to the Working for Families situation
Student loans are taken care of
KiwiSaver funds are transferred to the estate

Filing a final income tax return

Once you’ve informed the IRD that a loved one has passed away, you will need to file a final income tax return for that person. This is similar to filing an individual income tax return (an IR3). If you have an accountant, you can ask them to file it for you.

If the deceased person is due a refund, you can file a declaration in support of refund for deceased persons to ensure that the refund gets transferred to the deceased person’s next of kin.

Making your estate tax easier for your loved ones

Now that we’ve gotten the technical details of what happens when you pass out of the way, let’s talk about how you can make life easier for your loved ones in the event of your death.

Prepare a list of your investment platforms

The average investor will have at least three to four different platforms they invest on. It is important to list down what these investment platforms are and what assets you have maintained across them.

For example, Joseph maintains shares with FarOut Investments, an overseas investment company, buys NZ shares with Buysies, a local investment platform, and has managed funds with Kiwi4eva, a local fund manager. Joseph ensures that all the contact details of all investment platforms are in an easy-to-find location.

Should Joseph pass away, his next of kin can inform the platforms that he has passed. This allows any income or taxes to be declared in the name of Joseph’s estate.

Have a balance sheet of your investments and liabilities

Investments

Most investment providers will give you a running balance of your current investments with them. You can extract the figure from your investment platform and put in the value of the investment on the list of investment providers you have prepared above.

For property investments, you can obtain their current market value by looking at similar listings online or by engaging a property valuer. You can value crypto and individual share investments by looking at the current valuation of the market using tools like MarketWatch.

Having a balance sheet of your investments means that your next of kin can identify the assets that you’ve held in your name. This also means that if those assets get disposed of, it is easier for them (or your accountant) to work out the taxes that are due on those assets. Crypto assets are especially tricky when it comes to taxes, as there are different tax treatments for them, compared to property and equity investments.

Liabilities

Liabilities are the loans that you have. The most obvious one would be any outstanding mortgages that you have on your own home or investment properties. Other loans include your credit card loans, Buy Now Pay Later schemes, and taxes owed to the IRD.

If you own a company, it would be good to check with your accountant what your shareholder’s current account balance looks like. A shareholder’s current account with a debit balance (overdrawn) means that you owe the company money. This can affect the final income tax return. Your accountant can help explain this to you.

Use accounting software, and make life even easier

Using accounting software like PocketSmith will make keeping track of your investments and liabilities easier. PocketSmith even has a handy Net Worth option that will allow you to see your recorded investments and liabilities at a glance.

Winding up an estate can be a lot quicker if you have a clearly written will. The will should show how your assets will be distributed upon your death.

Pay up any taxes outstanding

Common sense, right? If you ensure that you’re all paid up on taxes with the IRD, then your loved ones will have one less thing to worry about. However, if you have instalment arrangements ongoing, it will be good for your loved ones to be aware that such an arrangement exists.

Please note that tax penalties are written off in the event of your death. However, the principal amount and any interest charged on it will still remain. If you are looking to write off all tax owing, you should be looking at applying for tax relief instead. In some cases, tax relief may be provided in the case of a death, but only if the deceased was the primary breadwinner and the family did not have any income or assets they could leverage/sell to pay off the tax debt.

Gifting and inheritance estate tax issues

In Aotearoa New Zealand, gift duty has been abolished since 2011. So if you want to give a property gift and/or shares with your loved ones, you can do so without worrying about any tax implications.

Same goes for inheritance. Your loved ones will not pay tax on any property that they inherit from you in the event of your passing.

Issues surrounding bright-line tests

The bright-line test does not trigger on the inheritance of a property from a deceased individual. As of March 2025, the current bright line test is two years. Meaning that if you sell property within two years of its purchase, any income you make on it is taxable. The exception is that if you purchase a share of an inherited property, you will pay tax if it is sold within the bright-line period.

Establish the intention behind the original purchase of the assets

While inheritance does not trigger taxation, any subsequent sale of the asset could result in tax liabilities. For example, Wally inherited a subsection from his grandfather, who had originally bought it with the intention to develop, subdivide and sell it. If Wally proceeds to sell it in the future, the proceeds are taxable. This is because the property’s original purpose is for a profit-making venture.

What estate taxes do you have to pay after your death?

Estate taxes have the same treatment as any income tax on earnings while you are alive. Basically, any income earned by your estate is taxable. The most common form of estate tax income is interest or dividends earned on investments. If you earn royalties, then your estate will pay taxes on that income after you’ve passed away.

The main difference between estate tax and individual tax is the tax rate. Individuals pay tax at the individual income tax scale rate, but estates pay tax at a 33% flat rate. This tax rate will apply to all the estate’s income for the next three years — after that, it will be taxed as though it was a trust.

Estate tax implications for foreign assets

In Aotearoa New Zealand, any income from overseas is taxable. Same goes for when you’re dead. If you have shares or investments in overseas accounts, your next of kin or accountant will need to declare these earnings to the IRD. Foreign income adds to the rest of estate income. Then you get taxed on the total. Any foreign tax credits can offset the amount of tax your estate has to pay.

If you are a trustee of a foreign trust, then you can register as a NZ foreign trust with the IRD. This may allow you to apply for tax exemption for foreign sourced income from that trust.

Estate tax matters for trusts

If you have a family trust, upon your passing, the trust will likely hold the majority of your investments. Most trusts own the family home. Some trusts are set up to handle the investment properties of a family. Either way, so long as one Trustee remains alive, nothing changes from a tax point of view.

If you have adult children and maintain a family trust, you should consider making them a full trustee (and not just a beneficiary). This will help keep the transition simple should you meet an untimely demise.

In the event that you have assets in your personal name, you can consider inheriting the assets to your family trust. This helps reduce tax compliance and consolidates all assets into one entity.

Estate tax matters for companies

Companies are unlike trusts, they are investments in your personal name. Shares in a company are assets. When you die, these shares can be inherited by your loved ones. If you have a manager or employees who can run the company without you, then nothing changes (tax-wise) when you die.

If you are the sole shareholder/manager, then the company will likely stop trading when you die. Then, your loved ones (who now hold the shares to your company) will have to file a final income tax return for the company as well. Then they can apply to have it removed from the company register.

Estate tax matters for partnerships

Partnerships are tricky. If a member of a two-person partnership passes away, then the partnership also ends. A final tax return needs to be filed for the partnership and any outstanding tax will need to be paid up.

If there are three or more individuals in a partnership, the partnership can continue with the death of one member. The tax return filed for the partnership will need to be adjusted to account for this, though.

Winding up your estate

After you pass away, if your estate continues earning investment income, it will get taxed at a flat 33% tax rate. This is generally higher than the personal income tax rate. It is important to have all income-generating assets in your name distributed to your loved ones as soon as possible.

Once the assets have been distributed, you can apply to wind up the estate with the IRD. To do so, you will need to first ensure that the estate is no longer earning any further income. This can be done by:

Providing a copy of the accounts to the date the estate ceased
Showing IRD the resolution or minutes establishing that assets of the estate have been distributed
Ensuring that all taxes owing by the estate are paid up and all returns are filed

If the estate no longer earns income but still holds assets, the tax account cannot be closed. Instead, you can tell the IRD to register the estate as being non-active so that it is not required to file income tax returns.

Winding up an estate can be a lot quicker if you have a clearly written will. The will should show how your assets will be distributed upon your death. This reduces the chance of disputes and prevents your estate from being taxed as a trust (where you can potentially pay tax of 39%).

Like death, estate tax is inevitable

It is good to be educated on what happens after you die, tax-wise, anyway. In most cases, a well-written will can do wonders in saving on estate taxes. Note that everyone’s tax position is unique. So if you’re looking for a way to arrange your postmortem tax affairs in an efficient manner, you should get in touch with an accountant.

Remember that there are only two things in life that are certain! Death and taxes.

How to Fight Identity Theft in America

Wed, 23 Apr 2025 12:00:00 +0000

A few months ago, I was categorising my expenses in PocketSmith. I’m someone who regularly reviews their banking statements, so I thought I was familiar with every last line item that could possibly pop up in the process.

But I had missed one.

It was a parking charge for nearly $30, which, while higher than usual, wasn’t an immediate cause for concern. I do pay for parking as a part of my daily life, and because of that, I had missed it in my own review of my bank statement.

When PocketSmith brought the charge up for categorisation, though, it showed me in big, bold letters that the parking charge originated in London — a city I haven’t visited in over 30 years.

It set off all the alarm bells. This was a checking account, so I knew it was particularly vulnerable. I made plans to call the bank as soon as it opened in the morning.

I was incredibly lucky. Before I could dial the bank, they rang me. Apparently, they also thought it was odd that my card was used in England. Once they confirmed it was a fraudulent charge, they immediately reversed it. There was an asterisk — if their full investigation revealed that I was lying and I had actually swiped my debit card in London, they’d take the money back out. But this preemptive refund was more than a lot of banks would have given me.

They also immediately cancelled my debit card and issued me a new one.

Identity theft in all its various forms has been on the rise over the past number of years. If you haven’t had an experience like mine yet, your turn may be just around the corner.

Here are some tips on how to prevent this type of fraud — and deal with it when it does happen.

Preventing identity theft

There are some steps you can take to decrease the odds that you’ll experience banking fraud. Just bear in mind that while these actions are insulating, they’re not a guarantee that you’ll never be a victim.

Use your credit card when shopping online

Shopping with a credit card rather than a debit card is a smart move in a lot of different settings, as long as you pay your balance off in full at the end of every billing cycle.

First, paying with a credit card helps you avoid in-person skimming scams when you enter your card’s PIN at an ATM or POS machine. Skimming — or stealing your card’s number and PIN — requires physical equipment, and it’s a little tricky to pull off. But it does happen.

Online, it’s even easier for scammers to nab your card information and use it themselves. However, credit cards come with a little more protection than debit cards. If you lodge a complaint with the credit card issuer, they’re more likely to offer you an immediate refund while they do their investigation.

Plus, a credit card is linked to a line of credit. It’s not linked to the account where you receive your paycheck. The damage is much greater if the scam happens to an account where you keep your assets rather than your debts.

Keep your paycheck in a savings account

When my spending account was breached, the banker made a suggestion I had never considered before. While they were confident they had taken all the necessary measures to ensure the hackers would no longer have access to my account, there was an additional precaution I could take.

Instead of keeping my money in the spending or checking account, I could keep it in a savings account at the same bank. Because transfers were instant, any time I needed to spend money, I could transfer it over right away. This would mean that my checking account balance at any point in time would be incredibly low, but that was a good thing if the thieves found another way in. There wouldn’t be as much for them to steal.

It also meant that while marginal, the money from my paycheck that I used for everyday spending would earn more interest as it sat in that savings account between paydays.

Considerations

This strategy was especially pertinent as we knew my spending account had already been hacked once. If there wasn’t a known breach, it might have been too much labour to be worth it. If you pursue a strategy like this, you’ll want to check three things before implementing it.

First, if you have any automatic payments or transfers coming out of your account, you’ll want to reset them to come out of your savings account rather than your checking account. If you don’t make this change first, those automations could overdraw your checking account, incurring overdraft fees.

Next, ask yourself if there’s a card associated with your savings account. Most savings accounts do not come with a debit card, but if yours does, it could be just as vulnerable as the checking account.

Finally, check if your bank has any monthly withdrawal limits (or fees) on your savings account. Prior to the pandemic, there was a federal regulation that limited the withdrawals on all savings accounts to six per month. This was known as Regulation D.

Regulation D doesn’t apply to savings accounts anymore, though. However, that doesn’t mean your bank isn’t allowed to limit your withdrawals. It can also charge you fees if you go over any monthly withdrawal limits. While these fees are no longer required by the government, that doesn’t mean your bank won’t still charge them, so read the fine print.

Freeze your credit report

If the American government has any of your personal financial information on file — whether that’s because you file taxes or receive any type of government benefit or pension — your personal data has been breached in a massive way recently, as Treasury data was transferred onto private, non-governmental, external hard drives without Congressional oversight.

For this reason, most financial experts are recommending that everyone freeze their credit report at this moment in time.

It’s not a politically-motivated recommendation. This is a standard recommended move when your personal information has been compromised by any data breach. A freeze prevents anyone from opening a new account in your name or making hard inquiries on your credit report. However, it does not protect the accounts you already have open.

Enacting a freeze is relatively simple. You just need to initiate the process with each of the three credit bureaus:

Getting a tax refund? File your return ASAP

Because of the nature of the information in this latest breach, one particular type of fraud to look out for is tax fraud. It’s incredibly easy to pull off. All the scammer needs to do once they have your personal information is file before you. This is particularly concerning if you’re expecting a refund.

The IRS is understaffed and has been for decades. It’s not particularly effective at combating this type of crime, or at getting you the refund money once the fraud has already happened. The best way to combat this situation is to file your tax return as soon as possible. The sooner you file, the less time the scammers have to beat you to the punch.

What to do if your identity has been stolen

If your identity has already been stolen, there are some steps you can take to lessen the damage. As you make your way through these steps, be sure to keep records of every phone call, email, and physical letter sent, along with the date, time and names of representatives you may interact with.

Close accounts

If an account has been tampered with, it’s best to close it. If it’s just your credit or debit card number that has been compromised, issuing a new card may do the trick, but closing the account entirely and opening a new one is an even more secure way to prevent potential future incidents.

Put an initial fraud alert on your credit

A fraud alert will make it so anyone who attempts to use your Social Security number to open an account will have to go through extra steps to verify their identity. Initial fraud alerts last for one year, after which you have the option to actively renew them.

Unlike a credit freeze, when you request a fraud alert with any of the three credit bureaus, they’ll have to notify the other two. So you should only have to contact one of them.

Report identity theft to the FTC

The FTC doesn’t investigate individual cases of identity theft, but when you report your case on IdentityTheft.gov, it will help them build a database which can be used by local law enforcement. Plus, the FTC will provide you with documentation that may help you as you report to your local police station. You’ll also be connected to educational resources so you can make a plan moving forward.

Report identity theft to the local police

The local police are the people who will actually help you with your case after you’ve encountered a financial scam. They may actually try to find the person and prosecute, or they may not. (If you’re struggling to get them to pay attention to you, you can include the FTC’s memo to law enforcement when you file.)

Whether they prosecute or not, you’ll need the documentation the police provide to fight fraudulent charges on your credit report and fill out other legal paperwork moving forward.

Place an extended fraud alert on your credit

Once you have your paperwork in order after reporting, you can request an extended fraud alert on your credit report through the credit reporting bureaus. An extended fraud alert lasts for seven years.

Request removal of fraudulent line items

Reporting paperwork doesn’t just get you access to extended fraud alerts. It also gives you a fighting chance to remove fraudulent line items on your credit report. You can use the FTC’s template letter as you submit to the credit bureaus to try to get these line items removed.

While fighting for removal isn’t the easiest process, it’s one that can be the difference between a good credit score and a bad one, which can impact things like your ability to rent a home, secure decent rates on lending products or even land employment in some situations.

Get ready for a long game

Being the victim of identity fraud or theft feels violating — because it is. Someone’s gained access to your money or credit, and that can have severely negative ramifications. It’s not the easiest crime to prevent or fight, but if you take steps to mitigate the potential damage, your future self will thank you.

Quarterly Finance Check-In Routine for the Self-Employed

Thu, 17 Apr 2025 12:00:00 +0000

Being self-employed is… unique. If you, too, are running your own show, you’ll know exactly what I mean by that! If there’s one thing I’ve learned since taking self-employment full-time, it’s the importance of staying organised, especially when it comes to your finances. No day, week, month, or year is the same, and we can learn a lot from looking at the numbers side of our businesses on a regular basis. Here’s why you should schedule a quarterly finance check-in for your business and how to get started.

Why do a quarterly check-in?

Chunking your year up into quarters gives you a nice seasonal view of how things are working. One of the best things we can do in our businesses is learn from experience and use those learnings to make better decisions. Spending some time working on your business, rather than in your business, four times a year can help you identify peaks and troughs in your cash flow and better plan your time and operations in the future.

What should I do in my quarterly check-in?

Good question! We want to be using this quarterly check-in to tie up loose ends, get curious, and get organized. Here are four things worth doing on a quarterly basis.

1. Input your expenses

If you lodge your taxes quarterly, you may already be doing this, but even if you don’t, making sure your business expenses are up to date at the end of every quarter can save you a lot of hassle when doing your annual tax return. It’s a great chance to make sure your record-keeping is tight (don’t forget those receipts) and ensure you don’t miss out on any deductible expenses.

I use my PocketSmith transaction dashboard to make sure I don’t miss a single expense across any of my accounts!

2. Check and compare your cash flow, income, and expenses

Check in with how much money has flowed in and out of your business during the quarter, and compare this to previous quarters to see how you’re tracking. You might have had a high-income quarter but also a high-expense quarter, or vice versa. It’s worth doing a sweep of what your expenses are here, too. Are there any subscriptions you don’t need anymore? Are you getting a return on investment in marketing activities? Have you made any big investments in tech or equipment?

3. Review your activities

Then, contextualise your income and expenses against what your quarter looked like for you. Did you make a lot of money but end up burnt out? Or was it a quiet quarter due to lower demand for your product or service? Spending some time with yourself and how your previous quarter felt for you as a business owner can be really valuable here, as it can help you optimise your time or processes better.

Is there anything you could outsource? What felt good and what didn’t feel good? What do you want to do more of? What do you want to do less of? Are any patterns emerging, like off-peak or higher-demand seasons — can you use this information to plan your year better?

Take this as an opportunity to collect data about your business. Over time, as you review quarter after quarter, you may be able to draw conclusions that help you in the future. For example, if Q2 is often much quieter, this might be a good time to take a break or spend time working on behind-the-scenes projects. Likewise, if Q4 is frequently a high opportunity season, you may be able to capitalise on this to boost your income to cover other quieter seasons.

In one of my check-ins last year, I finally connected the dots on the fact that January is a high opportunity time for me. I’d often try to take time off in January as it’s summer in Melbourne and lots of people take time off around the school holidays. Checking in with my business demonstrated that I’m far better to maximise opportunity in January and slow down in December!

4. Set goals

I have to be honest — I don’t always set goals in my business! Some seasons are about just getting through everything, right? But when I’m in a phase of wanting to grow or step up a level, I’ll set goals that I can check in with at the end of the next quarter.

Sometimes it’s an income goal, other times it’s about trying new things, launching something, doing more outreach, or knocking over a project I’ve been sitting on. Quarterly goals are meaty enough that you can make some real progress, but not so big that they get drowned out in the chaos of the year.

Ruth's Two Cents: Navigating Financial Infidelity

Tue, 01 Apr 2025 11:00:00 +0000

Hi Ruth,

I recently discovered that my partner has been hiding significant financial decisions from me by making a couple of large purchases without discussing them as a couple. I’m feeling quite betrayed. We’ve always been open about our finances, or so I thought. How can we regain control of our finances and make sure this situation doesn’t derail our plans?

That’s a big one. Your spouse actively and deliberately hiding significant financial decisions is a red flag for your relationship. You are right to be concerned, as financial infidelity can be reasonably damaging to your long-term relationship if you don’t deal with it now. All is not lost. Let’s try to understand what is going on in your relationship so you can endeavour to rebuild the trust that has been lost.

I’m an advocate of shared finances in general, and one of the reasons is that it’s tough for one spouse to have a financial affair (because that is what financial infidelity is) when you are both open and transparent with your money in the first place. It’s very difficult for one to mismanage money when the other is watching. Shared finances promote open and honest dialogue from the get-go. If you can put some boundaries in place as to how you will handle money as an individual and as a team, it slows down the chances of someone upsetting the other.

What did they buy?

You both need the complete picture of where the financial infidelity has taken place. Immediately set a time to calmly and rationally put all their cards on the table. If the initial disclosure was by accident, which it appears to have been, and they didn’t mean for you to find out, you may have caught your partner off guard, and there might still be some more transactions to find the light of day. A calm discussion will allow them to tell all, so you can compile a complete list of the purchases and decisions they made without your knowledge.

Although it may hurt and cause shame, honesty is the best policy. Face this head-on.

Why did they buy it?

To reestablish trust, they must tell you the truth — no fudging or grey areas. They can talk to you openly and honestly. It can be tough for someone who knows they have mucked up and hurt their partner to face up to the truth, and even though you are rightfully feeling hurt and let down, support them and encourage them to speak openly. Even if the truth means that your actions may have had something to do with them making financial decisions without your knowledge, ask them to tell you about it. Gently find out what financial decision was so urgent that they thought they couldn’t gain your input.

Promise to refrain from ‘fixing it’ or ‘judging’ their actions while they are as open with you as possible about why they made the financial decisions they made in secret in the first place.

Explaining their ‘why’ will lead to more profound questions about how you have dealt with money in your relationship until now. What pushed them to do this? Why didn’t they feel they could communicate with you?

The truth may be hard to hear, as it may point out issues in your relationship, but you may as well go all in and find out. Their actions may go far deeper than money.

Why didn’t they feel they could talk to you about it?

Were they aware they were derailing your shared financial plans? When we were young, single, and independent, we got to make our own decisions. When you enter into a relationship, you give up some of that independence for the greater collective good, and often, there are a lot of grey areas. Are you sure you both understand the direction you are headed in? Were they even aware that their actions were jeopardizing shared goals?

It’s time to redefine and recommit to your financial goals and budget accordingly. If you have always communicated openly about your finances up until now, go back and start at the beginning. What was it like then? And what does it feel like now? What’s changed, and how can you adjust that so that both of you feel like your needs are being met?

Can you budget as a team?

If you have discussed the how and why and worked on where the lines of communication fell apart, then it’s time to create a plan together about how you will fix the financial problems their infidelity caused. I’d be having weekly budget meetings for the next few months.

If you used to work as a team, your goal should be to get back to that point. Therefore, if your partner has taken on debt, how will you both pay it off? If an item has been purchased, can it be sold, or do you both agree to keep it? If you have always shared your finances, this is another hurdle to face together, using some common sense PocketSmith budgeting. Pushing the problem solely onto them by saying they must fix it will only lead to greater friction in your relationship.

This time, they messed up; next time, it might be you. Fix it together, and next time, if you need their support, you will have it.

Go back to your basic budgeting and see what changes you need to make to ensure you both have the money to do and buy the things you want. You are two different people, each with different needs, and you can find a compromise that leads to the greater good.

Financial infidelity cannot happen again

If my husband came to me and admitted to financial infidelity, and it was entirely at odds with the rest of our relationship, I’d be right at his side working through the problem. The trust can be rebuilt in a situation like this. However, if this were just another letdown in a series of letdowns, I’d be seeking some couples counselling to address deeper issues.

However, if after moving heaven and earth to be the best and most supportive spouse I could be and financial infidelity happened a second time, I’d seriously look to call time on my relationship. Financial infidelity is a relationship red flag, and to do it once can be forgiven, but to do it repeatedly, in my view, cannot. They might not be the one for you after all.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

How Words Shape My Relationship With Money

Tue, 01 Apr 2025 11:00:00 +0000

Behind me, my officemate groaned. “Hey. Can I pick your brain for a second?”

I spun my chair around. “Sure, what’s up?”

“I’m sending a project update, but it’s super late. How do I start this email? Sorry for the delay on this… um….”

“Or you could turn the sorry into a thanks.”

He frowned. “I don’t get it.”

“Flip the script,” I said. “Turn a negative into a positive. Don’t apologize for your actions; thank them for theirs. So instead of sorry for the delay, you could say thank you for your patience.”

His face brightened. “That’s amazing, thank you!”

Words are important

As a finance blogger, I talk about money a lot. It happens with all sorts of people, from strangers at the supermarket to clients to my family circle. Every interaction is different. It might be a sentence in passing as we commiserate over the price of milk or an hour in-depth diving into their PocketSmith dashboard. Or it might not even be about money, but about all the other things that impact our finances, like values, attitudes, weekend events, the rising cost of living, or the kids needing new shoes again. Short or long, shallow or deep, one thing’s for sure: These conversations are more important than ever.

Words can change behavior

Some of you will know I have a category in my PocketSmith setup called “Regret.” These days, it gets very little use. Simply knowing that it’s there is enough of a deterrent. Its mere existence is that powerful!

The real beauty of naming a purchase for what it is, I’ve found, is that it flips a money decision around completely. It’s easy to see ourselves as victims of marketing, blame a bad purchase on that, and leave the shop feeling like rubbish (or trash, for our American friends). But stepping up and calling it out brings an element of control. We’re not victims; we’re agents of change. We don’t have to repeat the mistakes of the past. It’s our call to make. And just like that, the decision is no longer passive but active.

That potentially bad decision used to be passive, hindsight-driven, negative, impulsive… and a whole string of downward-spiralling words. Now, just by calling it what it is and sticking a label on it, I’ve turned it into something active, forward-thinking, positive, and mindful.

Words can change attitudes

Changing the way you phrase something can change your whole attitude toward it — as well as other people’s. By changing one sentence, my officemate didn’t just change the way he thought about a work delay. He changed the way everyone else on that email string thought about it, too. It would be logical for project delays to provoke reactions of panic and frustration. Instead, his email turned it into something that called to the good in people, provoking warmth, compassion, and even gratitude.

During money conversations, I tend to gently query people on their wording. A classic example is “I can’t afford it,” compared to my suggested wording of “It’s not in my budget this month.” The first is more passive and negative, focusing on the lack of. Let’s face it, if we’re always looking at what we don’t have, we’ll never be content. The second is active and positive. It says I have a plan. It says I’m taking responsibility for myself, my finances, and my life. It looks at what I do have, rolls up its sleeves, and gets to work.

The words we use have the power to shape us — our mindsets, our attitudes, our relationships to money. And we can change them.

Words can flip the script

I’ll let you in on a secret. I started the #30daysofgratitude challenge because I am, by nature, a sardonic woman with a dark sense of humor and the ability to see the downside of everything. You want a worst-case scenario? I’m your gal. But I didn’t want to always be that person. So I started a challenge based around gratitude, grace, silver linings, and optimism… and 500+ days later, I’m still going.

Ruth The Happy Saver herself, wrote a great blog post about people changing their self-labelled identities from “spender” to “saver” — and completely changing their finances in the process. I could go on. The point is, we can flip the script. Change the words and phrases we use to talk about money. Move from victimhood to agency. Stop looking at what we don’t have and instead focus on growing what we do have. Step away from passive-negative towards active-positive.

If changing one line of an email changes the entire reaction to that project, just think what changing our money language can do.

Tech-Savvy Cibrán Masters Family Finances With PocketSmith

Sun, 30 Mar 2025 11:00:00 +0000

Read how Cibrán has gone from messy money management to structured budgeting using PocketSmith to balance his family’s finances.

Tell us a little about yourself?

I’m from Spain and am settled here again after living in the US and Germany for quite a long time. I’m happily married and have two kids, one 8-year-old boy and a 6-year-old girl. I’m passionate about technology, sports, photography, learning/reading and self-development. Professionally, I’ve started working in IT and have been freelance for the past 11 years as commercial.

How would you describe your role in your household?

Considering myself an overall responsible person, I must admit I’m quite a scatterbrain in general. With money and the household, it is no exception. Therefore I need tools to help me out (e.g. task managers), and PocketSmith is the best in personal finances. I also love analytics and enjoy having everything categorized and budgeted.

My wife is quite the opposite, hating all these metrics and budgeting much more by feeling but being very conscious of “where we are with our money”. In the last year, this translated into telling me at the end of the month we have to add extra money to the common account.

It is a good mix, but it is even better if we can really forecast our spending so that there are no urgent extra transfers.

What drew you to PocketSmith?

One was that we were budgeting very badly, and the other was that I love analytics and think they are the clue for better planning in general and, in this specific case, for budgeting. I also wanted to plan my personal finances for the future.

I had been using a Spanish tool for years, and although it looked great, it was very basic. So, I decided to look for an alternative. I spent two whole months testing different tools and was quite disappointed since I had to give up important features in any of them. When I gave up and chose one available in Europe called Wallet, I came across PocketSmith and saw the light.

It’s not perfect, but almost. It’s by far the most complete tool I’ve ever tried. The support offered for its complexity is lovely. It is from an “outsider” country like New Zealand, and the things that are not available yet are being worked on.

How long have you been with us?

Only three months. I spent the first 1.5-2 months on the migration, classification and study of all the learning material and made use of the very kind and thorough support. Since then, it has run smoothly and very automatically with bare maintenance.

What do you primarily use PocketSmith for?

I use it primarily for improving budgeting and my net worth for the future. For my professional expenses, I use another tool that includes accounting and homologation to the Spanish tax agency, so I use PocketSmith for my personal and family expenses. And although I would prefer to have two separate profiles, I already have a very clear picture using the workaround suggested by the support team.

How has PocketSmith changed the way you do money?

It’s day and night. As I said, I already used an automatic transaction classification tool, so I had a relatively good picture of our expenses, but I had to create two separate accounts (with lots of logging in and out). The automatic classification was inaccurate and not customizable, so I had to do lots of corrections, and the categories were not customizable either, so I had to adapt to names that were not meaningful to me The budgeting was poor too. I checked many alternative tools, and they were all similar. I did find one which was a considerable improvement, but none of them have anything on PocketSmith.

PocketSmith is an extremely powerful tool with any possible finance metric you can think of. The budgeting is unparalleled, allowing you to plan very specific expenses. The customization is awesome and the reports are as detailed as the professional financing tools.

What are your favorite features?

The dashboard pages give you all the necessary information at a glance. I love them. I check on the categorization and the budget on a daily basis. Specifically, the budgeting and calendar are way more powerful than what you regularly find. It allows you to determine punctual payments like a bill, spread payments across the whole month, different amounts for specific months, rollover budgets through the year, specific scenarios like a holiday plan, a big purchase, etc.

I find the reports extremely powerful as well: Income and expenses, net worth, cash flow and the trends. I like the latter one very much for being conscious about the expenses so I can make appropriate changes on the budget if necessary.

Got any tips?

I encourage users to spend a good amount of time learning about all the powerful possibilities that the tool brings, importing past transactions and categorizing and budgeting appropriately. Once you’ve done that, it runs everything smoothly.

What’s the best money decision you made in the past 12 months?

It may sound like I’m sweet-talking, but subscribing to PocketSmith was one of them. With it, I was able to make a detailed savings plan both in my personal and family finances and immediately add to a pension plan last year.

20 Women Who Made American Money History

Wed, 26 Mar 2025 11:00:00 +0000

March is Women’s History Month in the US, and this year we’re going to take a moment to look at some of the women who have made American money history. We’ll talk about some of the most obvious characters like the first woman to serve as Secretary of the Treasury and the first woman to own an American bank.

But money history isn’t always about these institutionalized positions — especially when we’re talking about women. Whether they faced discrimination because of their gender or other aspects of their identity, some of these women made American financial history not by occupying traditional seats of power — but by subverting oppressive financial systems through methods like mutual aid or unabashed self-advocacy.

And we love to see it.

First Woman to Appear on American Money: Pocahontas (1596 — 1617)

The very first woman to appear on American paper currency was none other than Pocahontas. The imagery was political, depicting the leader kneeling as she is baptized into Christianity. But nonetheless, her appearance on the back of the $20 bill in 1865 was a first.

First Woman Investor of Record: Abigail Adams (1744 — 1818)

Whether or not Abigail Adams was the first actual woman investor in America isn’t entirely possible to prove. But she is often cited as the first woman investor of record. In addition to making investments with her family’s money, she ran the farm and the family finances while her husband was off diplotmatting both before and after the birth of the country.

Subvertor of Economic Systems Built on Slavery: Harriet Tubman (1822 — 1933)

America’s early economy was built on the unpaid labor of enslaved human beings. In this context, helping enslaved people escape to freedom was so much more than a protest against an immoral economic system — it was an assertion of human rights that had liberating, life-changing impacts on individuals and communities. Perhaps no one helped more people escape from slavers than Harriet Tubman, who led hundreds to freedom on the Underground Railroad.

The Witch of Wall Street: Henrietta “Hetty” Green (1834 — 1916)

Hetty Green came from whaling money. She didn’t just grow up around mad cash — she paid attention. Sometimes feeling forced into the profession of money management, she nonetheless became an expert in fields like real estate, railroads, bookkeeping, and — most notoriously — timing the stock market.

Green was also ridiculously frugal, while the man she married was not. At all. She took the initiative of insisting on a prenup to protect her own assets, which was a big deal for the day and age. She also got bad press for some legal dealings in a family estate, with accusations of forgery circling around many of her business agreements.

It’s hard to tell how much of the negative portions of the story are valid. She may well have been everything the stories belie. But when you label someone as the ‘witch’ of Wall Street, it’s difficult to discern how much is accurate vs. how much was the social admonition of a woman asserting economic power in a time when it was unusual to do so.

Hetty Green, image via Wiki Commons

First Woman Stockbroker and First Woman to Run For President: Victoria Woodhull (1838 — 1927)

Victoria Woodhull did not come from money, but that didn’t stop her from impacting American culture — especially in the realm of finance. As a journalist, she was responsible for introducing American audiences to the work of Karl Marx and his economic theories. She was also a suffragist, an advocate for divorce for abused women, and the first woman to run for president of the United States. On top of it all, she and her sister Tennessee Clafin became the first woman stockbrokers in the US when they opened their brokerage firm in 1870.

Economic Advocate: Thocmetony/Sarah Winnemucca (1844 — 1891)

Thocmetony — which means Shell Flower — was also known as Sarah Winnemucca. She was Pauite, and her people were forcibly removed from their homelands to a reservation. The violence of this removal wasn’t just physical — it was also economic. Thocmetony passionately voiced these realities to white audiences, including the president. Her economic arguments, rooted in human rights, advocated for a return of lands in the name of economic prosperity in addition to human dignity.

As influential as she was, she was ultimately not heeded by the people in power. She was the first American Indian woman to become a published author, and her works are still cited in modern research around contemporary laws, such as the Violence Against Women Act.

TIP: If you want to learn more about these economic themes, check out Stephanie Cote’s ongoing work at the National Endowment for Financial Education.

First Woman Bank Owner: Maggie Lena Walker (1864 — 1934)

Maggie Lena Walker was the first woman to charter a bank in the United States. St. Luke Penny Savings Bank encouraged economic power in the African-American community, particularly in the Jim Crow South. While other banks collapsed during and leading up to the Great Depression, St. Luke Penny Savings survived through mergers with other Black-owned banks, becoming Consolidated Bank and Trust.

Consolidated Bank and Trust remained Black-owned until 2005. Today, it has been absorbed into Adams National Bank — a homage to the Adams family legacy, though not directly founded by Abigail Adams herself (another woman on our list). In addition to her position in banking, Walker was also a leader in local NAACP and NACW organizations.

Maggie L. Walker, image via Wiki Commons

First Woman Self-Made Millionaire: Madam C.J. Walker (1867 — 1919)

Madam C.J. Walker, nee Sarah Breedlove, was the daughter of sharecroppers who worked on the same land where they were formerly enslaved before the Civil War. Through her own hard work and smart business moves, she built a haircare line and production facilities that made her America’s first woman self-made millionaire.

Madam Walker’s was an international, socially responsible company that encouraged political activism. Madam C.J. Walker herself was known to be a contributor of both her time and money to efforts such as the NACW and the NAACP.

Financial Secretary of the Montgomery Improvement Association: Erna Dungee (1909 — 1984)

Social (and, with it, economic) change doesn’t just happen. It requires coordination and mutual aid. Mutual aid is different from charity in that it doesn’t require its beneficiaries to prove themselves “worthy” and is more focused on empowering community members when other social systems fall short — whether through economic means or the provision of other resources.

Such was the case for the Montgomery Bus Boycott, which was a central part of the Civil Rights Movement. In order for people to stop riding buses and take other social actions that would lead to change, there needed to be a community effort towards financing alternative means of transportation and funding the overall well-being of boycott participants. Sometimes this meant cab drivers reducing their fares. Sometimes this meant community money being pooled to pay for transport into and around Montgomery.

The Montgomery Improvement Association (MIA) handled the coordination of these efforts. The financial secretary of the MIA was a woman: Erna Dungee. Dungee was the only officer of the MIA who was a woman. She was also a member of the Women’s Political Council of Montgomery, which had been laying the groundwork for the boycott for years prior to the event’s initiation in 1955.

Pioneers of Credit Unions: Dora Maxwell (1897 — 1985) and Louise Herring (1909 — 1987)

In America, there are banks, and then there are credit unions. Banks serve shareholders, whereas credit unions serve the members who actually hold deposit accounts. Usually, membership eligibility is relegated to people in a set, local community. The first credit union in America opened in 1909, with the Credit Union National Association (CUNA) being founded in 1934 during the Great Depression.

CUNA has four great heroes and half of them were women: Dora Maxwell and Louise Herring.

Maxwell was in the room where it happened, attending the conference that established CUNA in 1934. She was also a passionate organizer, helping over 120 credit unions get off the ground across the country. Her work involved service and support for lower-income credit union members in particular.

Louise Herring was a little younger but no less passionate. Her pet interest was reforming predatory banking and lending practices, and over the course of her life, she helped organize 500 credit unions across the U.S.

Founder of the Freedom Farm Cooperative: Fannie Lou Hamer (1917 — 1977)

Fannie Lou Hamer was a powerful activist from Mississippi, and one of her most prominent projects was an exercise in mutual aid. She called out the systemic racism that was keeping Black people unemployed and starving in her state in the 1960s. To address it, she bought some land and started the Freedom Farm Cooperative. This co-op provided food — including livestock — to anyone who asked, in addition to providing jobs and housing for the local community.

Organizer of the Free Breakfast Program: Ruth Beckford-Smith (1925 — 2019)

Ever wonder why America offers a free breakfast program in public schools? The Black Panthers started the robust programming in 1968. The FBI, led by J. Edgar Hoover, attempted to shut the free breakfast program down. Congress eventually adopted the Black Panther model in all public schools in 1975.

The success of the free breakfast program can be largely attributed to the mutual aid effort’s original organizer: Ruth Beckford-Smith. She took the program from an idea to serving 135 low-income children in Oakland within a single week. Beckford-Smith made the program so successful that it was rapidly adopted by chapters all over the country.

Again, economic contributions to America don’t have to be measured by dollars and cents. Sometimes you can measure them by a healthy breakfast served to children whose parents may or may not have the economic means to provide that sustenance themselves. Well-fed children are more likely to perform well in school, which gives them a better shot of improving their economic outcomes (and therefore obtaining that elusive American Dream) over the course of their lives.

First Woman of Finance: Muriel “Mickie” Siebert (1928 — 2013)

Mickie Siebert’s college education was interrupted by her father’s cancer diagnosis. She didn’t tell that to the company on Wall Street when she applied for a job as a researcher, though. She lied and said she had a college degree.

She was pretty great at the job but was persistently frustrated by the gender pay gap. Determined to make as much as the men who were her peers, she lobbied both banks and the stock exchange for years to secure a seat on the NYSE — and she got it, making history as the first woman to hold a seat at the organization in its history.

Her financial prowess eventually led to other achievements, like becoming the first woman to serve as New York State’s superintendent of banking and getting women’s bathrooms put on the seventh floor of the NYSE. (No joke — there was just no place for women to go to the bathroom before that!)

Muriel Siebert, image via Wiki Commons

Founder of United Farmworkers of America: Dolores Huerta (1930 — present)

Dolores Huerta has impacted everything from labor organizing to Chicano civil rights to the food on Americans’ dinner tables. Her entry into the field of organizing for social and economic improvements for America’s Hispanic population began when she was working as a school teacher in the 1950s. She noticed many of the children of agricultural workers were coming to school hungry.

Huerta didn’t just notice this alarming socioeconomic trend — she took action to change it. Serving as the leader of many political organizations, the role she receives the most acclaim for is as one of the founders of United Farmworkers of America — which organized agricultural workers to successfully advocate and boycott for the right to unionize, secure better working conditions, and even enact policies that led to safer food through the elimination of harmful pesticides.

First Woman to Win the Nobel Prize in Economic Sciences: Elinor Ostrom (1933 — 2012)

You’re not going to believe this, but it wasn’t until 2009 that a woman won a Nobel Prize in the field of Economic Sciences. That woman was Elinor Ostrom, a UCLA grad working at Indiana University, Bloomington. The research that earned her the coveted prize proved that — despite common economic assumptions — when people share natural resources with each other as a community, they don’t tend to exploit them for their own personal gain over their neighbors. Instead, what we tend to see in these social structures around common resources is that the group establishes rules of use and care for the collective good. And then the group actually follows them.

Ultimately, what this research proved was that individual humans within communities are not inherently selfish. If acknowledged in policy, this revelation could have big impacts on future social and economic systems.

Reason American Women Have Equal Access to Credit: Ruth Bader Ginsberg (1933 — 2020)

Ruth Bader Ginsberg was volunteering her services as a lawyer to the ACLU in the early 1970s. Specifically, she headed up the Women’s Rights Project. This was a series of lawsuits she argued in front of the Supreme Court that altered gender discrimination in the U.S. for the benefit of both women and men.

The biggest win to note in a financial context this Women’s History Month is the Equal Credit Opportunity Act (ECOA). The ECOA meant that you could no longer deny a woman credit on the basis of gender or require a male cosigner on a credit application. This was a big deal as America wasn’t always as reliant on credit as it is today. RBG’s arguments came at a time when credit was first becoming a larger part of navigating daily life.

Ruth Bader Ginsburg, image via Wiki Commons

Obliterator of Welfare Stigma: Marsha P. Johnson (1945 — 1992)

Marsha P. Johnson might not be the first person that comes to mind when you think of personal finance heroes. She was on the front lines at Stonewall and was a public-facing leader for much of her life as a self-advocate and an advocate for the queer community. She wasn’t rich and as a result, was on welfare.

Welfare stigma in the United States rose sharply when Black women began to effectively gain access to it in the 1960s. Johnson faced these discriminatory stereotypes and additional discrimination as a gay drag queen. When a journalist asked her how she thought her activism would affect her job, Johnson responded,

“Darling, I don’t have a job. I’m on welfare. I have no intention of getting a job as long as this country discriminates against homosexuals.”

While welfare stigma still exists, Johnson’s example is a powerful one that reminds America that there is no shame in getting assistance — especially when you need that assistance because the social contract is broken. Together with fellow activist Sylvia Rivera, Johnson also founded the group Street Transvestite Action Revolutionaries (STAR), which provided housing as a form of mutual aid to transgender youth, many of whom had trouble securing traditional employment due to transphobia in the employment sector.

Founder of First Native-American-Owned Bank: Yellow Bird Woman/Elouise P. Cobell (1945 — 2011)

The United States has not consistently upheld its treaties and commitments to Native peoples throughout its nearly 250-year history, and Elouise Campbell — or Yellow Bird Woman — successfully called this behavior out. The Blackfoot leader held many organizations to account over the years, including the paternalistic Bureau of Indian Affairs (BIA) and the Department of the Interior, which mismanaged reservation funds and the trusts of individual Native Americans.

Cobell served as the Treasurer for the Blackfoot Nation in her youth and ultimately opened the first Native-owned bank when no other bank would open a branch on the reservation.

First Woman to Head the Fed: Janet Yellen (1946 — present)

Not only was Janet Yellen the first person to head the Federal Reserve, but she was also the first woman to be Treasury Secretary. To top it all off, she is the first person — regardless of gender — to serve as the chair of the White House Council of Economic Advisors, the Federal Reserve, and the Secretary of the Treasury. These are commonly thought of as the three most prominent positions for an economist in the United States, and hitting all three marks is a big deal over the course of a single career.

First Woman President of an American Exchange: Rosemary McFadden (1948 — 2022)

Rosemary McFadden became the first woman president of an American exchange in 1984 when she took over NYMEX. In this position, she worked a lot with energy markets and commodities. NYMEX had seen 50% gains during each of the three years prior to her appointment. Under her leadership, that growth bumped up to 70% per year.

Top Six Investment Platforms in the UK

Tue, 11 Mar 2025 11:00:00 +0000

Investing has well and truly hit the mainstream, and we love it. Wealth creation is no longer just for dudes in suits — there are now more accessible ways to grow your money than ever before. Easy-to-use apps with lower minimum transactions and more affordable fee structures have paved the way for more everyday people to start investing, so if you’re in the United Kingdom and you want to put your money to work, here are our best investment apps available in the UK.

Note: Investing carries risk, and returns are not guaranteed. Seek professional advice tailored to your situation.

1. Plum

Plum combines saving and investing to become your ultimate companion in planning for your future. You can save for life’s big surprises, organize your money based on what you’re working towards, and grow your nest egg over the long term with the Plum Stocks & Shares ISA.

Plum’s clever automaton features allow you to get playful with your savings and investments, and send money to different places based on your transaction behavior. For example, the “Naughty Rule” allows users to mark certain retailers as “Naughty”, triggering a savings or investment action whenever they spend with them.

Plum operates on a subscription basis, with three tier levels offering different services. Investment options enter the mix in the second tier, where users can invest in diversified funds, while the premium plan opens up the ability to invest in a wider range of stocks.

2. Moneybox

Moneybox is one of the most accessible investment platforms in the UK, allowing you to get started with just £1. Famed for its round-up feature, Moneybox allows investors to round up their spare change from their everyday transactions to grow their investment balance faster and with less effort.

Investors can start with the Moneybox Stocks and Shares ISA, Lifetime ISA or pension, and invest a range of stocks and funds. There are no trading fees, but investors will pay a £1 per month subscription fee, an annual platform fee of 0.45% of their total portfolio value, and an annual fund provider fee.

Despite fee considerations, Moneybox is an excellent option for beginner investors building up the habit of investing for the first time.

3. Nutmeg

Nutmeg is one of the UK’s most popular investment platforms, offering a suite of products from ISAs and Lifetime ISAs to pensions and junior investment vehicles. Owned by JP Morgan, Nutmeg operates on a percentage fee model and is considered a ‘robo-advice’ provider. You can choose one of Nutmeg’s portfolios to invest in, and access the benefit of experienced fund managers without the cost of a direct service. Due to Nutmeg’s personalized service, fees are slightly higher than a more hands-off option.

You can connect and track your investments with Nutmeg in your PocketSmith account.

4. Vanguard

Vanguard’s low-cost investment options include a broad range of index funds and ETFs, with some of the most affordable management fees on the market. With 85 funds to choose from, Vanguard prides itself on offering low-cost solutions for investors wanting to diversify their portfolios.

Vanguard offers stocks and shares ISAs, general investment accounts, personal pensions and junior ISAS, and allows you to choose to DIY your portfolio or be matched to investments based on your investment goals, attitude to investing, and risk profile. Plus, you can connect your Vanguard investment account to your PocketSmith dashboard, either as a bank feed or as an asset.

5. AJ Bell

AJ Bell offers both a full-service investment platform and a beginner-friendly app, called Dodl. Designed specifically for those new to investing, Dodl offers a simple percentage fee investment area and an easy-to-use interface. Users can invest in pre-defined AJ Bell funds, themed investments or individual stocks, under a range of products like an investment ISA or Lifetime ISA.

For more experienced investors looking for a wider range of investment options and a more personalized approach, AJ Bell’s main platform and app has more to offer. Junior ISAs, investing through a business, and self-invested Personal Pensions are all available through AJ Bell. AJ Bell’s main platform can be connected to PocketSmith.

6. Hargreaves Lansdown

Hargreaves Lansdown is the largest investment platform in the UK, with a wide range of investment options including global markets. There are a range of ready-made portfolios to choose from, or more experienced investors can create their own — and yes, you can track your investments in your PocketSmith dashboard.

HL offers a raft of ways to invest, including ISAS, junior ISAs and pensions, and self-invested personal pensions (SIPP) with a minimum investment of £100. Users say the app is best-in-class for functionality and user experience, too.

Minimizing Lifestyle Creep: How to Keep Your Expenses Low as Your Income Grows

Wed, 05 Mar 2025 11:00:00 +0000

Surely the point of money is to attain the things you need and want? Therefore, the more money you have, the further down your bucket list of your needs and wants you can go, ticking off each purchase with a sense of accomplishment. Go you! I get a lot of enjoyment out of watching other people enjoy their money.

There are many positive aspects to lifestyle creep. With a rising income, you can plan more adventures, take more holidays, create more memories, become more generous, and buy the nicer things in life instead of always looking for bargain alternatives. This is the goal of financial success; when you make more, you can have and do more.

You made more money and acquired more of your heart’s desires, whatever they were, all while planning for your future financial well-being. It’s the complete package! You’ve budgeted for it, so go right ahead and maximise your lifestyle creep!

You know a ‘but’ is coming…

If you are financially on track with your goals, enjoy your money. But if you are not, perhaps you are not quite ready to let lifestyle creep start inflating your lifestyle. It’s likely to be hazardous to your wealth.

Before you bank your latest pay rise and book a table at the Michelin-starred restaurant instead of the local takeaway shop, you need to look back from where you once came and ensure you have your financial ducks nicely positioned within a row.

Additional income added to an excellent financial situation where your money management is on point elevates your life. Additional income added to a flimsy financial life can exacerbate your problems. In this personal finance space, I’ve observed a lot of lifestyle creep as people I meet move up the income ladder.

Falling prey to lifestyle creep

I’ve observed two groups of spenders whose lifestyle has a slow upward creep:

One may be out of debt but now spend all they make, and they don’t save and invest enough for their future. These people think that by becoming debt-free, they have reached the financial finish line, and all of their income is theirs to spend, spend, spend.
The other stays in debt and spends anything left over, which stops them from saving and investing enough for their future. They find themselves divvying up their increasing paycheque into smaller and smaller pieces to service all of their debt commitments and ultimately find their increasing income still doesn’t cover all their outgoings.

In both cases, those who have not built themselves solid financial systems and goals yet have some awareness of personal finances and growing their net worth struggle with lifestyle creep. You can remain blissfully unaware of lifestyle creep, but once you become aware of it, it nags at you constantly. They ‘know’ what to do with their money but do the opposite, opting to spend on short-term lifestyle instead. It’s a mental game, and they can see the long-term consequences of succumbing to lifestyle creep, both financially and personally. They know where they want to get to, and they have some goals in place, yet their overspending is scuppering their plans.

They know it, but they feel powerless to stop it.

You know your lifestyle creep is inching out of control when:

You lose track of what you have spent in a day, week or month
You feel guilty about your spending
You redirected money away from one financial goal to spend instead
You can’t say no to yourself

The good news is you can easily control lifestyle creep

The bad news is it is up to you to control it. And it’s up to you whether you make it easy or hard on yourself.

The solution is to create a realistic plan that encompasses your entire financial life, is firmly focused on your future, and allows you to enjoy the excellent income you are currently making.

Step one: Tidy up your budget

You know where it all begins — there are no surprises here: Budgeting. Working out how much you make and spend in a given period is crucial, and PocketSmith easily allows you to work out what you spend in each category. Only once you know where your money is going can you plan where it should be going. You decide how much is enough in each category.

Step two: Work on your debt

For those in debt, the next step is to create automated systems to pay each debt off and give each debt an end date. This will ensure that you become debt-free as quickly as possible. Payments to these debts are non-negotiable. You forbid yourself from utilising this money elsewhere.

Step three: Allow yourself some spending money

Whether you are in debt or not, allocate a budget for spending and enjoying your money. Yes, I want you to enjoy your increased income! But it also comes with limits and rules. Maintaining awareness of your spending habits is crucial as your income increases so that while you have a bit of fun with your money, you are still prioritising your long-term financial well-being, reducing your stress about money and gaining greater freedom and flexibility in life choices.

Step four: Make a plan for your money’s future

Lifestyle creep stops in its tracks when you have a longer-term plan for your money. The whole point of creating savings and investments is to draw future income from them. Therefore, if you change your mindset from depriving yourself of something today to one of a future full of choice and freedom, then you won’t mind not buying something today, instead investing that money so you can 10x it for your future. Then you can buy all the ‘somethings’ you want! Prioritizing money for debt payments and investing is a positive thing you can do for yourself. You can enjoy life today and know it will be even better in the years ahead.

It’s all about balance and mindset

Those with financial goals that extend well beyond their next pay cheque have no trouble allocating themselves a ‘spend and have fun’ budget today and allocating money to other goals.

The term “lifestyle creep” has allowed us to justify its action in many ways. The most significant defence you have, when you know that your spending habits are becoming a problem and that your lifestyle is creeping beyond your means, is to employ a simple word that I think really works: NO.

If you are managing your money in a way that you don’t like or is setting you back, stop that behavior and think about the potential long-term consequences of succumbing to lifestyle creep, both financially and personally. Say no to yourself more often and remind yourself that your financial future is blindingly bright with discipline and a good plan.

Managing Debt as a Self-Employed Professional

Mon, 03 Mar 2025 11:00:00 +0000

It’s never fun to talk about debt. However, it is difficult to avoid debt as a working adult. You’ve got mortgages, credit cards, overdrafts, and Buy Now Pay Later schemes, all contributing to your personal debt.

But despite debt’s negative connotations, we all find ourselves in debt one way or another. So, we need to learn how to best manage it. Managing debt can be challenging for an employed individual. It is even more so for a self-employed professional (or business owner).

In today’s article, we’re talking about how you can better manage your debt and give yourself some financial breathing room for the future.

Managing debt by only taking good debt

Well, yes. Obviously.

Debt can be roughly categorised into two types:

Good debt
Bad debt

Good debt is debt that you take on, which will help you generate more wealth in the future.

Examples of good debt are:

Mortgage on your first home

The financial independence that comes from owning your first home is immeasurable. Also, home mortgage rates tend to be lower than other types of debt. It’s not very feasible to save up for your own home in cash, so it’s best to take on some debt to finance the purchase of your first home.

Just remember to purchase a house that is within your means. Have a talk with your mortgage adviser about what your weekly repayments will look like and use that to budget what your cash flow will look like in the near future. PocketSmith, as a home accounting tool, is really great for this sort of thing. If you’ve been updating your accounts regularly, you’ll find it easy to estimate the impact of mortgage repayments on your financial position.

Business debt

A bit of a caveat here — business is inherently risky, and unless you have a sure-fire plan to make money, I’d be very careful about taking business debt. That being said, I’ve taken on debt during the COVID period to help with business operations, and I’m still paying it off today. The good news is that my business is doing better now than it was during COVID, and we can afford to pay the debt instalments easily.

But for every business debt success story, there are those who failed to use the loan to get their business up and running. This creates more trouble for them in the future as not only do they still need to pay their business overheads, but they have an additional debt repayment to worry about.

Always talk to your accountant first before you take on any form of business debt. Business loans can be expensive, with interest rates almost double those of mortgages. I would also strongly discourage securing your own home against the business loan — if you fail to pay off the loan, you could lose the roof over your head.

Student debt

A bit like business debt, student debt is the debt you incur now to potentially generate more return in the future. That $30,000 degree should theoretically result in a $ 70,000-a-year job. Therefore it makes sense to borrow the money for your studies now and pay it off later.

Fortunately, student debt (in New Zealand) is interest-free (so long as you are working here). Also, you don’t have to make repayments against it if you’re earning below a certain threshold ($24,128 a year as of the 2025 tax year). That alone takes the risk of not landing a job after you get your degree.

Compared to mortgages and business debt, there is little downside to taking a student loan. If you’re planning on a career that requires a degree, taking a student loan is a no-brainer, even if you have the cash lying around for it, simply because repaying the student loan interest-free is financially better in the long run. Save that extra cash and stick it in an investment account instead!

On the flip side, we have bad debt like:

Credit card debt

If you pay it off within the interest free period — sure, credit cards are harmless. What is dangerous about them is the exorbitant interest rates they charge you if you’re late. If you’re not confident in your ability to pay down credit card debt. Don’t take it! Spending points and rewards be damned.

Buy Now, Pay Later schemes

I’ve always personally felt that these schemes are predatory. It encourages the consumer to purchase goods with money they don’t have. It erodes your financial discipline to keep spending on things you don’t really need. Sure enough, most of the Buy Now Pay Later schemes I see floating around are for things like luxury goods, games and appliances.

Like credit cards, if you pay these off on time, it is interest-free. But if you fail to make a repayment, well, it can get very expensive very quickly.

Automobile loans

If you’re taking out a loan for a business vehicle and you need it to grow the business (food truck, utility vehicle, delivery van, etc), then yeah, go for it! If, however, you’re taking out a loan to get a fancy, expensive car that won’t really make you more money, I’d discourage taking out a loan for that.

Second-hand cars from reputable dealers are always cheaper. Plus, you should have the funds available to buy them in cash. Cars are an asset that depreciates. So don’t waste your future funds by taking a car loan. If you really want a fancy car — save up for it and buy it in cash.

Debt is unavoidable. So instead of avoiding all debt, learn how to manage it effectively.

Managing debt that you already have

Okay, so we sometimes make bad decisions in life. You could be in a position where you’ve taken on a lot of debt for various reasons. Life is complicated and sometimes you make decisions that seemed like a good idea at the time.

If you are a self-employed professional, here are some tips to manage debt that you may have already taken out:

Start by averaging out your monthly income

As a self-employed individual, your income may be intermittent and irregular. You might have an awesome six months where you get heaps of work. This can be followed by three months of no work. The same goes for business owners. Clients could be paying you on time earlier in the year, but in the later part of the year, they are struggling to pay your bills.

To bring some certainty into your financial planning, you need to average out your income over a monthly basis. Why monthly? Simply because it is easier to work with 12 periods in a year instead of 52 periods ( weeks), and repayments tend to repeat on a monthly basis (or fortnightly).

To work out the average, take a look at your incomings over the past 12 months. Then divide it by 12 to get your monthly average. For example: Deshan made $60,000 over the past 12 months from his freelancing job after tax. $60,000 divided by 12 is $5,000 a month. With this figure established, Deshan can start planning how to budget the $5,000 that he is getting each month.

List down your debt

Open up a spreadsheet and start listing down the debt that you have. Be sure to list down the amount outstanding (as of today), the monthly repayment amount and the interest rate per annum that you have to make.

For example:

From here, you have a good idea of what loans need to be serviced. For more accuracy, you should use PocketSmith to keep track of your historical loan repayments. This will help you better estimate what your monthly repayment amounts are.

Prioritize high-interest debt first…

If you have a lot of debt, this can feel overwhelming. However, by prioritizing the debt that needs paying off first, you can start to get on top of your existing debt.

In the example shown above, let’s say your household take-home pay is $8,000 a month. Your monthly repayment amount is $4,500. Let’s also say that your monthly spending amounts to $3,000 a month (for groceries, insurance, etc). If you’ve been keeping track of your spending on PocketSmith, you can easily work out what your average monthly spend on these items is.

This leaves an additional $500 for savings. This $500 should be directed against the highest-interest loan that you have — your credit card loan. Any amounts paid against this loan will help reduce the overall interest that you get charged on it.

…unless you have tax debt

Paying off your high-interest debt is usually a good idea unless you have outstanding tax debt. The tax department generally has the resources to liquidate you and/or your business holdings if you’re not up to date on taxes. So if you have any tax debt, you must work on paying that off first!

In my experience dealing with tax agencies, you can often secure instalment arrangements to reduce the burden of repaying your tax debt. If you ever feel like your tax debt is starting to get out of hand, be sure to call the tax department immediately and work on a plan for repaying your debt. Remember that while the tax authorities can easily liquidate your assets, they’d really rather not do that. They will often work with you to come up with a repayment arrangement that suits both parties.

Managing debt by securing work for the future

It goes without saying — if you don’t have any money coming in, you can’t service any of your debt. As a self-employed individual, you will need to plan in advance where your funds will be coming from. You can’t rely on the regularity of a paycheck to pay your bills.

Here are some tips that I’ve used and have shared with my self-employed clients:

Always be saving

You never know what challenges the next month holds. Always, always be saving. As a rule of thumb, I’m putting away 20% of my take-home pay into a savings account. On top of that, I also have short-term investments I can draw down on if things get really dire.

That being said, if you have outstanding high-interest debt that you need to pay — you should direct your savings there. Financially speaking, you’ll be better off paying off existing debt and saving on interest compared to just putting cash into a savings account.

Plan the next income pipeline

For business owners like me, this usually means going out there and getting clients. Our accounting firm gets a steady stream of two to three new customers each month. This way, we’ve always got work going, and it’s enough to pay my team and myself. Getting new clients can be a challenge! However, I don’t have more industry-specific tips to offer. You just need to always be doing something about it. This can include networking, re-branding, advertising, or just getting your existing clients to refer more clients to you.

If you are a self-employed professional, you need to know when your contract is going to end. More importantly, you need to have work lined up at least three months before that contract ends. Sometimes it may be difficult to find contracts — in which case, you’ll be grateful that you’ve been saving up those funds!

Consider income protection insurance

We’ve written about insurance before, so I’m not going into great detail here. Suffice it to say, if you fall ill and can’t work, you’ll be grateful for income protection insurance to cover the bills whilst you recover and get better. It may seem like a bit of an expense now, but it is definitely insurance worth getting, especially as a self-employed professional.

Managing debt by being selective about your debt

As a self-employed professional, you shouldn’t have too many concerns about getting debt to fund your work. This is because, for the most part, your concerns are quite similar to employed individuals. Business owners, on the other hand, have more variables to worry about. Staff to keep hired, overheads to cover and suppliers to pay on time. So the need to manage debt is more pressing than for self-employed individuals.

So if you’re planning to get into debt as a self-employed professional/business owner, here are some good reasons to do so:

Training/upskilling yourself

For the same reasons why student debt is good debt. Any funds spent towards upgrading your personal skills opens up new opportunities to make money in the future. You can be selective about the courses you choose. Do some research. Find out what is the current demand in the industry. Find out who the reputable providers are.

Investing in a revenue-generating asset

This is more relevant for business owners. An example of a revenue-generating asset is a commercial kitchen if you are in hospitality. If you are a tradesperson, your set of power tools is a revenue-generating asset. If you are a tech professional, a high-powered computer is a revenue-generating asset. If you are taking on debt to acquire an asset that will generate revenue for your work, that is usually a good idea.

You do need to be careful about what type of debt you use to acquire the asset. I wouldn’t recommend using Buy Now Pay Later or credit cards to purchase these assets, as it can take some time for them to start generating revenue. You may find that the repayment term may come up even before you’ve made money from your asset.

Business loans or overdrafts are a good place to start. Or you could look at borrowing from friends and family.

Who to ask for help in managing your debt

Managing debt can be overwhelming. Fortunately, there are finance professionals who can help you out.

Talk to an accountant

If you are a business owner or self-employed professional, you really should get yourself an accountant. As an accountant, I’m always telling my clients, “Don’t take on any debt without talking to your accountant first!”. Like, seriously, always consult with your accountant before you take on any new debt.

Your accountant will help you work out the best form of debt for your given situation. As a bonus, your accountant will also help you keep track of your tax debt, making sure that you are putting away money to meet your tax obligations on time.

Talk to a financial advisor

A financial advisor will be more knowledgeable about the different types of loans available on the market. So once your accountant has given you the go-ahead to take the loan, you may want to find a financial advisor who can choose the best loan provider for you.

A financial advisor can also review your current debt position and give you an idea of what sort of debt you can access. Or if you should even be taking any borrowings at all.

Talk to your banker

Life can get tough, and you may fall behind in your loan repayments. In this case, the best person to talk to is your banker. Generally speaking, most banks want you to pay off your loans. So they may show some lenience in allowing you mortgage holidays, loan consolidation, deferring your payment terms, etc.

As soon as you notice that things are getting tough for you, contact your banker and see what you can do about it.

Manage your debt, don’t let it manage you

Debt is, as mentioned before, unavoidable. So instead of avoiding all debt, learn how to manage it effectively. Remember that not all debts are made equal. The best kind of debt is the debt that will help you generate more wealth in the future. Stay away from easy credit and instead focus on how you can create long-term value for yourself and/or your business.

Stay positive!

The ADHD-Friendly Guide to Organizing Your Finances

Mon, 24 Feb 2025 11:00:00 +0000

Neurospicy brains are the best. ADHD can make you creative, spontaneous, and give you the ability to hyperfocus on your interests. But there are also some challenges that come along with neurodivergence and traditional budgeting strategies. Today, we’ll break it all down — the good, the bad and the beautiful — to help you figure out the best way to organize your finances with ADHD.

Pitfalls of managing your finances when you’re neurodivergent
a. Organization
b. Procrastination and time management
c. Impulsive spending and generosity
Strengths of neurodivergent budgeters
a. Passion
b. Hyperfocus
c. Creativity
d. Spontaneity
Are you “bad with money” or do you just need to do things differently?
FAQ on managing your finances with ADHD

Pitfalls of managing your finances when you’re neurodivergent

If you’ve followed traditional budgeting advice and it’s gotten you nowhere, it might just be because that advice wasn’t built with neurodivergence in mind. Here are some of the stumbling blocks people come across when they have ADHD, and ways you can address them to make money management easier.

Organization

When you’ve got ADHD, it can be difficult to stay organized—especially when it comes to non-preferred tasks. This can have some pretty negative ramifications in the realm of financial management. It might mean you miss a due date and rack up late fees or interest charges. It might mean making slow progress towards your goals because you can’t get organized enough to paint a clear picture of your starting point, nevertheless, the endpoint.

How to address it: Automate and use budgeting software

Luckily, we live in the age of magic technology. You don’t have to pull out every last bill and manually enter it into a spreadsheet. Instead, you can use budgeting software that pulls your banking data automatically, giving you a clear, visual picture of where you stand today. Some budgeting software programs (like PocketSmith) will even project your income and expenses into the future, allowing you to create a plan for tomorrow’s finances, too.

Another great tool at your disposal is automation. When you set up automatic payments on your bills, you don’t have to worry about missing due dates. Automation is great for savings, too. Automatically transferring a portion of your paycheck to your savings account makes it much more likely that you’ll actually follow through on your savings goals.

The good news is that you may not be bad with money at all. You’ve just been using strategies that don’t accommodate your neurodivergence.

Procrastination and time management

Big or non-preferred tasks can feel suffocating at times. The anxiety they induce may lead you to put them off until the last minute — or maybe even past the due date. If you struggle with time management, it might be hard to sit down and review your budget regularly like you know you should. It can also make it difficult to do tasks like tracking down all your investment accounts or filing your taxes.

How to address it: Routinize with an accountability buddy

For those tasks that require regular maintenance, routine is your best friend. But because routine can be easy to break when no one else is watching, it’s best to implement that routine with an actual best friend. Whether that’s your partner or a friend who is similarly working towards bettering their finances, setting money dates with an accountability buddy can be a great way to address time management and procrastination.

Let’s say you meet every Sunday afternoon. Maybe in-person. Maybe on FaceTime. Over the course of a one-hour stretch, you update each other on your current financial status. You might also pick at least one other task du jour, like prepping a chunk of your tax return or researching side hustle ideas to help make ends meet now that you’ve actually taken a peek at that budget.

Impulsive spending and generosity

There are two ways to frame spur-of-the-moment decision-making. Sometimes it feels positive, like spontaneity (which we’ll cover in a minute — keep reading!) But other times, it can manifest as impulsivity, which is tricky when you’re trying to stick to a budget.

While it’s true that impulsive spending can look like a name-brand handbag you just had to purchase for yourself, it can also look like giving money or gifts to others. Generosity is a beautiful trait that people with ADHD tend to have in spades. But when giving to others starts interfering with your ability to take care of yourself, you need to set boundaries with your spending.

How to address it: Budget and keep your savings separate

The first step to knowing how much you can spend is boringly basic: You have to budget. It’s only when you’re familiar with your income and expenses that you can get a firm grasp on how much you have left over for “fun” stuff or to give to others.

Another way to set firm boundaries with yourself is to keep your savings account separate from your checking account. That way transferring the money is an additional step you’ll have to take before you can spend the money you’re supposed to be saving for tomorrow.

If you want an added layer of protection from those impulse buys, you can keep your savings account and checking account at two separate financial institutions. This makes automatic transfers less feasible. When you have to wait a couple of days for the transfer to come through, it gives you time to think about the purchase or gift. 48 hours can really give you some perspective.

Strengths of neurodivergent budgeters

We are not here to tell you that ADHD budgeting is all negative! There are some real strengths to being neurospicy, too, and they can absolutely serve you in money management.

Passion

When you are into something, you are into it. If you can steer this tendency towards passion towards your financial life, you could end up becoming the most expert personal financier on the planet.

How to harness it: Set financial goals you’re excited about

Maybe numbers themselves don’t get you excited. But finances aren’t all about dollars and cents. Instead of imagining spreadsheets, spend some time daydreaming about your big, lofty life goals. The ones that light your heart on fire. Don’t limit yourself to the realm of what others think is possible. Reach for whatever you think is awesome.

Want to spend your summers at a cabin on the lake with a sick new jet ski?

All of those things can be achieved through passionate budgeting and saving.

How about taking a year away from the grind to travel the world?

It may be achievable with enough savings and travel points.

Just be sure to include some longer-term goals in there, too. For example, are you passionate about selling off all of your assets in old age so you can live in a government-sponsored nursing home?

No, we didn’t think so.

But you’re likely more excited about the prospect of being able to spend your golden years in your home surrounded by those you love, and possibly passing on a little bit of wealth to them so their own lives are a little easier after you’re gone.

To achieve a goal like this, you’re going to want to learn about investing and estate planning sooner rather than later. It can be one of the “special topics” for your money dates. By focusing on the end goal rather than the dollars and cents of today’s paycheck, you can motivate yourself to get excited about advanced financial literacy topics.

Hyperfocus

Part of the reason it’s so hard not to procrastinate when you have ADHD is that you know yourself. Once you sit down and really dedicate yourself to a task you’re passionate about, you could go at it for hours and hours on end. It can feel overwhelming to know you’ll “lose” that chunk of time.

But when it comes to planning your personal finances, know that it’s time well spent. As long as you’re not using your budgeting software as a distraction from other immediate responsibilities, this is one hobby that can make a tangible difference in your day-to-day life.

How to harness it: Budget when you feel inspired — even if it’s outside of your routine

You should absolutely keep your routine money dates. But in addition to those, don’t push off any inspiration to work on your money goals just because it isn’t the “right” time. You’re likely to make the most progress when you lean into that urge to hyperfocus, even if inspiration strikes in the middle of the week.

Again, while you will be working with numbers, you’re more likely to hyperfocus if you can keep your eye on the larger goal. If the math just isn’t doing it for you, hyperfocus on jet skis and summer cabins, or leaving a financial legacy for your family members and friends. It will make focusing on those numbers so much easier.

While it’s true that traits like impulsivity or procrastination can be detrimental to financial success, other traits like hyperfocus and creativity can actually be a boon to your budget when harnessed appropriately.

Creativity

Neurodivergent people tend to be extremely creative. When you come up against a problem, you can turn it left, right and upside down until you find a solution. It might even be a solution no one else has thought of before.

This is a huge strength when it comes to managing your finances. Money problems — whether they be unexpected emergency expenses or an interruption to your cash flow — are something all of us encounter on our journey. But those with a little creativity are uniquely positioned to solve them.

How to harness it: Treat financial roadblocks like side quests

It’s easy to let money troubles bum you out. Those are legitimate feelings. Allow yourself to feel all of them.

But after you’ve felt your feelings, reframe your financial roadblock as a side quest. Yes, a hurdle presented itself on the path towards your goals. But finding a creative solution to jump it can enable you to get back on track. Plus, overcoming these obstacles will help you build confidence in your own financial skills.

Spontaneity

Sure, you could frame your tendency to do stuff at the drop of a hat as impulsive. But you could also frame it as fun. Your spontaneity is likely something people love about you, and it’s probably something you love about yourself, too. Rather than attempting to dampen your shine, plan for it financially.

How to harness it: Budget for the fun stuff

You are allowed to be good with money and have fun! It’s all a matter of budgeting. When you make a budget, it can be tempting to pretend you’ll never purchase last-minute concert tickets or go on a wild adventure with friends. But that’s probably not realistic. Build spontaneous spending into your budget so you can continue being your glorious self without necessarily derailing yourself from your larger financial goals.

Are you “bad with money” or do you just need to do things differently?

The good news is that you may not be bad with money at all. You’ve just been using strategies that don’t accommodate your neurodivergence. While things like organization and time management might be tricky with ADHD, there are technological solutions that can accommodate those pitfalls. You can also tap into your strengths, like your passionate nature and hyperfocus, to help you get ahead on your financial goals at lightning speed once you’ve framed them in a more helpful way.

FAQ on managing your finances with ADHD

Do people with ADHD struggle to manage money?

Sometimes! People with ADHD tend to struggle to manage money when they follow systems that aren’t built to accommodate their neurodivergence. While it’s true that traits like impulsivity or procrastination can be detrimental to financial success, other traits like hyperfocus and creativity can actually be a boon to your budget when harnessed appropriately.

Should I have multiple accounts for different purposes? Or is it better to consolidate?

There are pros and cons to having multiple deposit accounts for different purposes. Everyone’s brain is different. Just because you have ADHD it doesn’t mean there’s one, supreme answer for everyone who shares your diagnosis.

For some people, having multiple accounts may serve as a self-instituted boundary that guards against overspending. For example, if you have one checking account for bills and a separate checking account for “giving,” when the “giving” account runs dry, that might be a good reminder that you need to stop so you can take care of yourself. If that money’s all in one account, you might give more than you can afford without thinking. This method works particularly well if your accounts are at different institutions, which usually means an automatic transfer is out of the question. In the days between transferring money from your savings to giving account, you’ll have some time to think over your decision — and possibly reevaluate it.

For others, having money spread over too many financial institutions can lead to chaos. Let’s say you need to transfer cash to your primary checking account because you forgot about an annoying recurring subscription, and now you’re short on your electricity bill. If you have to wait days for a transfer, you might end up incurring unnecessary late fees. If this sounds like you, consolidating all of your money into a single checking account may be a better strategy. Keeping your savings and checking at the same bank where day-of transfers are possible may help, too.

Is there an ADHD money management app?

PocketSmith works particularly well for our neurodivergent users. It takes all the “work” out of tracking every last expense, evaluates your current financial situation and can even project budgets out into the future. If you have ADHD, be sure to check out all the features that could make money management easier for your fabulous, neurospicy brain.

How Tracking My Shoe Spend Helps Me Save Money

Thu, 20 Feb 2025 11:00:00 +0000

When I was a kid, I watched my dad park the car and retrieve a notebook from the glove box. There, he carefully recorded the details of our trip: Kilometers done, fuel usage, the price of petrol. I asked him why. He said it was so he could track the fuel economy and the wear on the tires and make sure he wasn’t running some gas-guzzler of a vehicle that was more expense than sense.

Two decades later, as I plugged numbers into a spreadsheet, it occurred to me that most people probably don’t track the distance they walk each week… or the shoes they’re wearing at the time. I might not track my fuel economy, but I track where the rubber meets the road. Essentially, I was doing the same thing as my dad.

After all, shoes are just tyres for my feet

I don’t own a car. To get around, I walk, bike, or take public transport. Most often — say, 90% of the time — I walk. Which means wearing shoes. Which means wearing out my shoes at a great rate of knots.

Do I have an entire separate category in PocketSmith just for my footwear? I sure do. It gets an annual budget, and I adjust it as needed. For example, the balance as of May 2024: $450 spent out of $900 budgeted. Milage up until that point: 1,135km.

“You rack up the miles more than almost anyone else I know.” — Direct quote from the owner of our local Frontrunner shop, a guy who runs ultramarathons at the weekend. For fun.

Well, for his definition of fun, at least.

The tracker spreadsheet is simple. It started as part of Wilderness Magazine’s Walk1200KM challenge. I check my iPhone’s fitness tracker, plug in my daily kilometers walked, and then keep a running tally for whatever shoes I was wearing at the time. I’ve been tracking it for a few years now. That’s long enough to know what my average spend on a pair of shoes is, how long they should last me, and to warn me when I need to replace them.

Official recommendations are just that — a recommendation

The recommendation from the Strava sports app and from most footwear companies is that you should look at replacing shoes every 500-ish kilometres to avoid increased risk of injury. Considering I mostly do low-impact exercise like walking and that I can cover 500km in 6-8 weeks, that would be a lot of new shoes for no real reason.

Instead, I track my distance and keep a note of when they start to feel uncomfortable. On average, a pair of shoes lasts me 600-700km before I start noticing any discomfort. I can generally go to 750-800km before risking blisters. Beyond 850-900km, they’re only good for mucking in the garden at the weekend.

That’s almost twice the official recommendation — which means my money goes twice as far.

You get what you pay for? Not always

The most expensive pair of shoes I’ve bought in the last three years were chunky, waterproof Keens. They’re the most comfortable shoes I’ve ever had, and they weren’t on sale: They cost me £120 ($240) in Shetland. They’ve lasted just over 900km at the last check.

The cheapest pair were basic black trainers from some brand I’d never even heard of called Superset. They were on clearance at an outlet shop. They cost me $65 in New Zealand, and they lasted 750km.

It’s tempting to make blanket statements like “cheap shoes aren’t worth it.” Usually, I’d agree. Cheap shoes wear out faster, they’re worse for your feet, and they’re made under incredibly unethical conditions in sweatshops. The last time I bought shoes from The Warehouse, years ago now, I could feel them wearing out by the end of the first week.

But sometimes, a great deal is worth it.

The cost per kilometre on the Keens? 13p, or about 26 cents. That’s still good value, don’t get me wrong!

The cost per kilometre on the El Cheapo Supersofts? An incredible 9 cents.

And for a prime example of how spending more on shoes can actually save you money…

“The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.

Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of okay for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that’d still be keeping his feet dry in ten years’ time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

This was the Captain Samuel Vimes ‘Boots’ theory of socioeconomic unfairness.”

― Men at Arms by Terry Pratchett.

Why You Should Care About Your Net Worth In Your Twenties and Thirties

Sun, 09 Feb 2025 11:00:00 +0000

Not so long ago, nobody talked about their money. Your parents probably told you it was rude to ask people what things cost or how much they earned — but gradually, the lid is being lifted on the M word. In fact, younger generations are talking money more than ever, and the term on everybody’s lips seems to be ‘net worth’. Seriously, just go on TikTok. But what is net worth, and why should you care about it in your twenties (or thirties!)?

What is net worth?

Your net worth is the value of all the assets you own, minus any liabilities. An easy way to remember it is: Own - Owe = Net worth (you know, just in case you get caught out by a mansplainer on Hinge). Your assets are things like cash and savings in your bank account, cars, property, shares, and maybe even valuables like art or jewelry. Things you owe might be student loans (sigh), outstanding mortgage balances, and any consumer debts like credit cards or personal loans.

When do you need to start thinking about your net worth?

Honestly? Today! Right now! You’re here, you’re interested in this stuff — let’s flippin’ go! Paying attention to your net worth from a young age is incredibly valuable, because it shows you the potential to grow your overall wealth over time. Plus, it can help you set and track big-picture goals, even if you’re working with a lower income.

Your net worth gives you a holistic view of your financial situation, and can help you reconcile the value of using debt to further your financial position. For example, taking on a mortgage can be stressful — it’s a big commitment, and seeing that big number owing on your balance can be scary. But from a net worth perspective, taking on that mortgage is often furthering your position. That’s because your net worth factors in the equity in your property, not just the amount you owe.

Let’s say you’ve got the following:

$20,000 in savings
An apartment worth $400,000
A car worth $10,000
A mortgage balance of $320,000
A student loan balance of $20,000

Your net worth is your apartment value, plus your car’s value, plus your savings, minus your mortgage and student loan balances. In this example, your net worth would be $90,000. That’s certainly more encouraging than staring at that $320,000 you owe on your mortgage and feeling deflated!

Things to remember about your net worth

Your net worth figure can fluctuate as the value of your assets changes. That can be an active change, for example, if you add more money to your savings account, or it can be a passive change that results from a change in the value of your assets.

That means, if you own shares worth $10,000 and their value increases to $11,000, your net worth has increased without you lifting a finger! Sweet! However, the same can happen in reverse. If the stock market drops and your shares are now only worth $6,000, your net worth can plummet $4,000 instantly.

For this reason, it’s important to look at your net worth objectively, and not get too invested in the normal fluctuations of asset values.

How do I keep track of my net worth?

You can keep track of your net worth all in one place using PocketSmith’s net worth feature. You can add and remove assets and update their values periodically. Checking in with your net worth once a month gives you good visibility of your progress over time.

Ruth's Two Cents: Money Management Amid Health Struggles

Tue, 04 Feb 2025 11:00:00 +0000

Hi Ruth,

I’m facing a tough situation, juggling a recent chronic health diagnosis and personal finances. My medical condition is costly, and I’m already struggling with some of the expenses — let alone what other expenses might be coming my way in the future. It’s eating into my savings and causing financial stress. How can I manage my expenses at this time without sacrificing my financial stability?

It is time to assemble your support team because this is too significant an event to cope with alone. You will captain your team, and you are the primary decision-maker. There is a crucial question that you will be continually asking yourself as the weeks unfold. What is the best course of action for me, given what I know about my health today, and what path should I take to lead me back to health while staying financially healthy?

Now recruit your team members:

Health professionals who deal with your primary care and help you navigate the health system
Government organizations that work alongside the health system to ensure you are getting any support you are entitled to
Your Insurance company
Family, friends, employer, and coworkers

In my limited experience of helping others cope with a health crisis, I became immediately aware that patients must advocate for themselves and ask for what they need. If you cannot do this, you need your team of family and close friends to step in and advocate on your behalf.

If you ask the right questions and approach the right people, they will help you with your medical finance questions. From a personal finance perspective, this is a financial emergency, and you can treat it as such. Your expenses are unknown; therefore, managing your savings and income is critical now. As much as you might try to ‘carry on as normal’, life is not normal, so adjust to suit.

Conserve your money

All unnecessary spending needs to stop immediately as you begin to spend every dollar carefully, freeing up as much cash as possible to cover immediate costs such as a doctor’s bill. Stabilize your situation and conserve your money so you have more to go around if required.

Contact your insurer

Do you have health, life, trauma, and income protection types of insurance? Contact your insurer and see what they will cover. Read the fine print. Ask questions. Bring in a family member or close friend to get their help and input if you are not in the right state of mind to deal with an insurer.

Accept that your out-of-pocket expenses will continue

Although New Zealand has some free healthcare, some of it is delayed, and paying for treatment yourself speeds up the process.

In the ideal world, you will have a specific bank savings account (Sinking Fund) for your health needs that cover anything related to keeping your body healthy (doctor, dental, optical, etc). The purpose of this savings account is to pay immediate out-of-pocket expenses, such as the repeated doctor visits you are likely to have in the lead-up to a diagnosis.

Next, use your emergency fund

Once that fund is empty, you shouldn’t hesitate to use your emergency money, and this diagnosis is definitely an emergency. You don’t mention an emergency fund specifically, but you do mention ‘savings’. I would consider using these as your emergency fund, spending every dollar carefully.

By using first the Health Sinking Fund and then the Emergency Fund, I hope that you can cover all bills that come your way, from parking at the hospital, putting fuel in your car to attend appointments, and paying for an X-ray or a doctor’s visit.

Begin to access government and community resources

The first stages of a significant medical diagnosis are intense and uncertain, with new information coming at you thick and fast. Take notes, record appointments, bring a support person to help you remember what was said, and ask questions about what you don’t understand. Start to work out what health-related costs are coming up, and then begin to apply for any financial resources that are available to you.

Learn what costs you might incur and approach each agency for their input and support. For example, I live in a regional town, and medical issues may mean I have to live close to a hospital in a bigger city to get access to treatment for a short period. These cities have funded accommodation for people just like me. Find what is available to you.

Figure out how to cope with lost income

If your illness will affect your ability to earn an income, approach the relevant agencies early and ask questions about when they will step in to provide financial support. Speak with your employer about extended leave options and financial support. If you become physically unable to care for yourself or your property, seek agencies that provide government-funded support, such as house cleaning.

Don’t be too proud to accept help

When your good friends say, “How can we help?”, they mean it. Instead of saying, “I’m okay, but thanks for asking”, just be honest about your situation and let them help you. For example, you might say:

I have a procedure this week that I know will tire me. Could you collect me from the hospital? I can’t face taking the bus.
I’ve lost the desire to cook. Is there any chance you could freeze me a few easy-to-heat dinners? That would be a huge help.
I’m having trouble negotiating government websites to access the information I need to offset my financial costs. Could you please help me with this?

You will get back on track with your money

You reference sacrificing your financial stability and eating into your savings, so clearly, you were working towards some goals. But those plans get put on hold in an emergency like this. All saving stops while you cope with this emergency, meaning the money you were moving into a savings account for another purpose is now used for health. You’ll get back to those other goals when you are well. Give yourself a break here. Focus on what’s important.

Although your savings might not have been for this type of spending, it is a credit to you that you have them. Therefore, if you can manage your money exceptionally carefully and at the same time tap into the government, community, workplace, and family financial and personal support that is hopefully available to you, you will get through it okay financially. This situation won’t ruin you financially, but it may set you back a little. Make peace with that.

I have written this piece for both you, who is in the midst of a health situation, and for everyone else who is not. I appreciate you sharing your situation because it is helpful for others to see the degree of helplessness that you can feel if a medical diagnosis, with an unknown financial price tag, is thrust upon you.

We can all learn by putting ourselves in your shoes, thinking about how prepared we would be in a similar situation, and acting immediately if we find ourselves financially lacking. Plus, I know that if I had a friend coping with what you are going through, I would be honored to be asked for help. I wish you a speedy recovery back to full health, and I’m sure that a financial recovery will follow soon after.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

Despite Last Year's Resolutions, Americans Are Spending More on Alcohol

Mon, 27 Jan 2025 11:00:00 +0000

On a day in late March 2020, I found myself on the phone with a customer service representative. I honestly don’t remember which bill or service I had called in to discuss. We were less than two weeks into the lockdown, and we were already desperate for human interaction. I was in Pittsburgh, and she was just across the state line in Ohio. Rather than discussing the business at hand, we were engaged in a game of one-upmanship as we compared our pandemic horror stories.

“I’m actually working out of my living room because no one’s allowed to go into the office,” she said.

“Yeah, I mean, I already worked from home, but all my friends have to do Zoom meetings now, too. The governor put out an order.”

“Did you know they shut down our schools in Ohio?”

“Same here! They’re talking about teaching my kids online soon? I don’t know how that’s gonna work. And now you have to make an appointment to go to the grocery store here.”

“We have to do that, too. Plus, they shut our movie theaters down. They’re even saying there’s not going to be room in the hospital soon, so we can’t go in unless we’re actively dying.”

“Yeah, we’re hearing the same thing.” Then I came in with the coup de grace. “In Pennsylvania, they shut our liquor stores down.”

“Lord Jesus,” she said with all reverence. “But this is the time when you need it most.”

Americans upped their alcohol intake in 2020

Americans did indeed increase their drinking habits in 2020. The CSR wasn’t alone in her thoughts — it seemed to many like the year they “needed” alcohol the most.

The world appeared to be ending. In addition to the pandemic, which filled up morgues in New York City to the point where freezer trucks had to be brought in to accommodate the bodies, this was also the year of governmental reactions to Black Lives Matter protests across the country. There were many dramatic scenes, including one led by the president himself in Washington, D.C. In that disorienting year, PocketSmith’s Global Spending Map revealed a 28% increase in year-over-year alcohol spending when controlled for inflation.

Interested in the data? To get these numbers, we calculated all reported American alcohol spending in the quarter starting in September and ending in November for each respective year. We then converted this spending into 2024 dollars to adjust for inflation, allowing us to arrive at an accurate percentage increase or decrease for each period.

America gets sober-curious

Americans stayed pretty drunk in 2021. While it’s true that a not-insignificant portion of the country was determined to return to pre-COVID-19 living and acted accordingly, another large portion stayed isolated even after orders were lifted in order to preserve their own health. After the vaccine was available publicly, some people would start to congregate in relatively small groups with others who had been vaccinated. But society was not yet back in full swing, and people were still salving their loneliness with booze.

From 2020 to 2021, Americans’ alcohol spending decreased by less than 3%, according to Global Spending Map data. It was still 26% higher than it was in 2019.

Something interesting happened in 2022, though. After two years of over-consumption, a surprising number of Americans expressed interest in something called a “sober-curious” lifestyle. The trend flooded social media. While some people straight-up joined Alcoholics Anonymous, others simply slowed down dramatically. They weren’t promising they’d never drink again, but they weren’t going to make it a regular part of their social life anymore.

The numbers reflect the trend. Compared to 2021, Americans spent 23% less * * on alcohol in 2022. That’s after accounting for inflation that skyrocketed in June of that year. It’s notable that this happened during a year when a much larger portion of the population tepidly stepped back into “normal” life and socializing habits.

However, while this was a dramatic year-over-year decrease, total alcohol spending was still 9% higher than pre-pandemic levels in 2019. While many people set their drinks down, some people were still consuming more.

Despite New Year’s resolutions, Americans returned to heavy alcohol spending in 2024

For all we’re still hearing about the sober-curious lifestyle, the data reveals that 2022 was the trend’s peak. In 2023 and 2024, reducing alcohol use was cited as a top New Year’s resolution in news story after news story. But the numbers didn’t pan out.

PocketSmith’s data reveals that inflation-controlled, year-over-year alcohol spending went up by 6% in America in 2023. By 2024, it had returned to the exact same level as 2020.

That means that even when you adjust for inflation, Americans are spending just as much now on alcohol as they were at the onset of the pandemic.

This is not the drunkest America’s ever been

America has a rich history of people who drink too much – and people who don’t drink at all, moralizing the issue. Despite the dramatic increase in alcohol spending since the onset of COVID-19, the total average consumption per drinking-age adult during this time period never breached 3 gallons of alcohol-related ethanol per year.

In 1790, shortly after the country was founded, that average was 5.8 gallons per year. It wasn’t uncommon for alcohol to be prescribed as medicine, and even Puritan ministers in the early days of the country went on record endorsing the substance. While public drunkenness was frowned upon in many settings, it wasn’t outside of social norms to get sloshed at celebratory events — which weren’t infrequent. By 1830, consumption had grown to 7.1 gallons per year.

America’s attempts to regulate its alcohol consumption

As this usage was growing, something called the temperance movement started gaining steam. Temperance, by and large, was about an individual’s choice and pledge to either stop drinking altogether or start drinking less. By the time it reached its peak right before the Civil War, it had effectively cut the average American’s ethanol consumption down to a mere 3.5 gallons per year — an impressive feat.

Next came a different political movement called prohibition. While temperance was usually about controlling yourself, prohibition was more about controlling the behavior of other people. There was a famous period of national prohibition in the 1920s and early 1930s.

This was the period when speakeasies were a thing. It was also the period when criminals like Al Capone built their wealth through bootlegging. Capone’s business practices during this time gave us the terminology of “laundering money,” as he’d “clean” his illegal alcohol money by running it through otherwise legitimate laundromats, which he also owned.

By the early 1930s, the American government had to concede prohibition wasn’t working. It was too difficult to enforce, was leading to criminalization and the advancement of organized crime, and was preventing the government from collecting taxes on alcohol sales during a period of severe economic struggle — the Great Depression.

Today, there’s a national drinking age of 21, but alcohol sales are largely regulated at a state-by-state level. Some states, like Pennsylvania, hold a tighter grip on the liquor market, but in many other states, you can buy any type of alcohol in gas stations. That said, some states and localities have rules about purchases on Sundays, reflecting the continued religious moralization of the substance in the law.

Millennials and Gen Z are more likely to be sober-curious in 2025

What’s curious about these latest experiments with sobriety is that they’re largely being led by Millennials and Gen Z — neither of which are a particularly religious lot. Americans started leaving organized religion in large numbers as Millennials came of age, so it wouldn’t appear to have the same religious undertones as past movements.

Gen Z has been known to stay further away from alcohol than previous generations, even prior to the pandemic. While part of the reasoning may be a generational focus on health, another contributing factor is a fear that no prior generation has had to contend with. In today’s day and age, the drunken antics of youth — embarrassing as they are — can easily be streamed and preserved on social media by anyone nearby who happens to be holding a smartphone.

While Millennials did engage in these youthful antics in much larger numbers, they also have to contend with this new, streamed reality as they age. This, combined with the fact that the generation is maturing to a point where their bodies are experiencing physical health consequences, may also be a contributing factor — especially because they’re aging during a global pandemic where the focus on mortality is so acute.

But when we look at the numbers, for every American who has newly dedicated themselves to an alcohol-free lifestyle, there are others who are picking up the slack by picking up the bottle.

Money for Couples: How Buying a Fitbit Strengthened My Marriage

Thu, 23 Jan 2025 11:00:00 +0000

We found ourselves in Nebraska Furniture Mart, a giant department store where shopping carts are more like yachts. I had been eyeing up a Fitbit tracker for about six months. I felt like it would keep us active. My wife Katie loves data, and we could track our health.

I persuaded Katie to look at the trackers. The salesman showed us the models, told us the differences and we both decided the one with GPS was the one we wanted. With GPS, Katie could get maps of her runs and cycling. I was super excited we were going to do it.

Then I felt Katie going weird. Have you ever been about to do something and felt your partner’s energy change? I asked the salesman to give us a moment.

“What’s wrong, Katie?”

“I am… not sure we need them?”

“Why not?”

“We don’t need them.”

“They will improve our lives.”

“I don’t want to spend the money.”

“Why, we have enough!”

It went downhill from there. It became an angry argument in the store, with us both walking off separately to sulk in different departments. I was angry that I wasn’t allowed to spend money on something I genuinely believed would improve our lives; Katie was upset and sad that we had argued.

Ever argued about money only to realize it isn’t about the money?

The phantom person in your relationship

Your relationship with another human can be tough enough without adding a third party to the mix. No, I am not talking about polyamory, I am talking about money. Just like the ghosts of former romantic partners, your partner came to the relationship with a money history that may or not be in alignment with your own.

Let me share with you the painful and hard-fought lessons we have learned in the 19 years we have been together: Mastering communication about money is the key to keeping your relationship as strong as your bank account.

Once a year, every year, Katie and I run Rebel Finance School, a 10-week free program that teaches people financial basics. 10,000 people in 40 countries joined us in 2024. The number one complaint from our students is that they can’t get their partner on board with working on their finances. Sometimes, it’s not only that they can’t get their partner on board but also that the partner is actively working against them, digging a financial hole the couple won’t be able to get out of.

The lament from our students about their partners is that they won’t track their spending, they aren’t interested in budgeting, and they won’t help. I have learned over the years that NO ONE cares about budgeting, tracking spending, and sitting with a spreadsheet until they know their why.

What is your ‘why?’

Instead of starting a money conversation with your partner grounded in details and numbers, start to try and uncover their vision of the future. If your partner isn’t on board or doesn’t have a vision of their own, they will have no motivation to crunch numbers at all. You can help them uncover their vision and reason ‘why’ so they are excited to go on this journey with you. There are two ways to do this — the power of questions and then the power of pitching a vision.

Before your partner budgets with you, you need to understand them. Ask questions. If you didn’t have to work, what would you do with your time? Have you ever had a bucket list? If you had $10,000 and you HAD to spend it, what would you spend it on? Get them thinking about what they would do if they had the money.

If they don’t have ideas, pitch them some of your own. “I want us to quit our jobs, firewalk in Fiji, go to Hobbiton in New Zealand, and live life on our own terms.” Notice what they react positively to. Be curious about what excites them, and create a compelling vision of your future that they would be happy to budget, to create.

A partner, not a parent

There are a few key phrases that should be forbidden in relationships. “Why did you buy that?” is one of them. If it comes out of your mouth, know that you have made a mistake; making amends is in order. It doesn’t take much to make people feel judged and guilty for their spending.

Does your partner hide their purchases? Do they spend in cash or on certain cards so you can’t see it? If people feel like they can’t spend without judgment, they end up hiding their spending. Judgment and criticism can lead you down a path that many couples can’t come back from.

One way to solve this problem is to each have your own “no-judgement budget” to do whatever you want with. A monthly amount on which there is no oversight. If they want to spend their money on Lego, clothes or expensive spa days, it’s up to them. If you want to invest the money or spend it all on a personal trainer, that is up to you. You are not their parent, you are a partner.

Gift your partner the freedom to spend on what is important to them.

Leave judgement at the door

When we first learnt about financial independence (FI), we got super excited and wanted to “help” all of our friends! We would judge them for all their purchases. “Why have you bought that new car? What a waste of money!” We would tell them about FI and say, “All you need to do is invest £1M, and you will be free!” and other really endearing things like that. It is remarkable we still have friends after this period!

We finally got through to our friends by living our best life. We saved, we invested, we talked to them about what we were doing, and, eventually, we retired early and went traveling. I think this shocked them, to see us out in the world doing exactly what we wanted to do. They started to get interested in us and what we were doing and ask questions. Once they start to ask questions, then you know you have them!

Bring them to you by living your best-ever life.

Build your future… together

The extraordinary belongs to those who create it.

After 10 minutes or so of sulking time in the store, Katie and I found our way back to each other.

“I think we should get them,” she said, calmer now. “I remember our why.”

Katie and I achieved the goal of being financially independent so we could travel the world, live on beaches, and eat eggs benedict with amazing coffee whenever we wanted. We still have problems — we are human, after all — but we share a common vision, our very own version of extraordinary that we built by working together.

Those Fitbits have now traveled thousands of miles with us, to the Andes mountains in Colombia, hiking in the Swiss-German Alpes and across the Tongariro Crossing in New Zealand. They have tracked life and motivated us to move more.

Your future with your partner is whatever you choose to make of it. With a no-judgement zone and a shared vision, you can inspire each other to use money to create an extraordinary future.

Katie and Alan Donegan are the founders of Rebel Finance School, Rebel Business School and the Rebel Entrepreneur podcast, dedicated to helping people design extraordinary lives. They are authors of the upcoming book, The Rebel’s Guide to Financial Freedom, due out in Spring 2025. Contact them at hello@rebeldonegans or via their website.

Alan retired at 40 years old after learning to save and invest and now he teaches others to do the same through the award-winning Rebel Finance School! What’s the secret? Decrease your spending, focus on earning more and invest the difference in simple global index funds or ETFs! Since retiring Alan has travelled the world, received a British Empire Medal for services to financial education, written a book and eaten too many almond croissants.

What Your Favorite Movie Franchise Says About You and Your Money

Mon, 20 Jan 2025 11:00:00 +0000

A glance over the highest-grossing films page on Wikipedia presents some interesting trivia. Only two of the top 20 movies were made before 2010. A single movie — Titanic — pre-dates the year 2000. And there are overwhelmingly more franchise movies than solo movies. In fact, solo movies only make up 5% of the list.

For those of you doing the maths in your head, yes, 5% of 20 movies is one.

It’s Titanic. Again.

With movies, as with money, the compound effect is in full force. By the time you’ve seen four movies in a franchise, there’s compounding interest (pun fully intended). You’ve built momentum, you’ve sunk costs into cinemas and popcorn, and you’re emotionally invested in the characters. Of course you have to see the next movie!

Let’s take a look at those top franchises, and what your favorite might say about you…

Star Wars

Movies in the franchise: 9 core + 3 standalone

Movies in the Top 20: 2

PocketSmith type: Digital Nomad

Maybe you were a small-town kid dreaming of a big adventure in the wide, wide world. You might be a passionate advocate for your favored global-scale cause. Whichever it is, you’re happy to spend money where it matters. You love travel, exploring new places, and making new friends; you love it even more when these serve a bigger picture.

Peace Corps, Doctors Without Borders, World Vision, WEC International… if there’s a way to balance work, travel, and fighting for the underdog, you’ve found it. If you can’t travel, you’ll be checking your “Charities” budget to donate to your local homeless shelter or pet refuge.

You also like new tech. Let’s face it, when you’re working from anywhere, a twelve-hour laptop battery is sheer necessity.

Avengers/Marvel Cinematic Universe

Movies in the franchise: 34

Movies in the Top 20: 5

PocketSmith type: Net Worth Nurturer

Ah, the natural multitasker. How else can you juggle family, friends, life admin, multiple streams of income, and have time left over to just enjoy life? Chances are you’re not too fussed with the micro-details, preferring instead to track a few key numbers, such as your overall Net Worth. Like any good superhero team, you know your finances are more than just the sum of their parts. You’ve got them working together seamlessly.

You’re not ruffled when your investment portfolio shows a drop in returns, any more than you’re ruffled when a workmate turns out to be married with three kids and a secret farmhouse. Why would you be? It’s only a temporary disruption. As for you? You’re looking to the future and playing the long game.

Jurassic Park

Movies in the franchise: 6

Movies in the Top 20: 1

PocketSmith type: Budget Organiser

You were the kid who spent hours (or days) playing Rollercoaster Tycoon on your Windows 98 with dial-up internet. You like problem-solving. You love the details, whether it’s remembering that T-Rexes have bad eyesight or diverting that leftover $1.73 from your utilities budget into savings. Your money journey is one big game of Survival Tetris, and you’re on a mission to fit the pieces together.

Of course, you couldn’t do it alone. You want to bring your household on this journey with you. Daily budgets, color-coded nested categories, custom dashboards for each member of the family… you use all the features to keep your finances on track and on target toward your goals.

Avatar

Movies in the franchise: 2

Movies in the Top 20: 2

PocketSmith type: Digital Nomad

Another nomadii digitalis, you’ve worked your way into (or created for yourself) a job where you can work from anywhere — even Pandora. There are a few cons, irregular income being one of them, but for you, the trade-offs feel worth it.

You get to explore new cultures on the regular. You probably have bank accounts and assets in more than one country, and use PocketSmith’s multi-currency features to track these effortlessly in one place. Maybe you’re there for love, maybe for the thrill, but one thing’s for sure: You’re not backing down from the opportunity to actively curate your own life journey.

Disney Animation Studios

Movies in the franchise: 63

Movies in the Top 20: 1

PocketSmith type: Net Worth Nurturer

A natural wealth creator, you’re not too worried about tracking every tiny detail of your finances. With so many movies in the franchise, it’s only natural that one or two would slip your mind! Whether your life motto is “Hakuna Matata” or “Change starts with you,” you lean into it and let the growth curve do its thing.

You’ve found your tried-and-true formula, but that’s not to say you never try new things or add another income stream. Sure, you’ll have a dud now and then, but mistakes are part of life. As long as that golden nest egg keeps growing, it’s all groovy. Just keep swimming on towards your goals.

Top Seven Rewards Programs in the UK

Thu, 16 Jan 2025 11:00:00 +0000

Points hacking has become a popular way to get more bang for your buck. Whether you’re collecting frequent flyer miles for cheaper flights, or getting rewarded for your grocery spend, there are endless ways to optimize your spending and get rewarded. We’ve done some digging and found the best loyalty programs and rewards schemes in the UK so you can get the most value for your points-hacking efforts. Here are our top picks to add to your digital wallet.

1. Avios

Avios is the UK’s leading travel rewards program. It’s the official loyalty program of national carrier, British Airways, but its long list of partners means you can earn and spend your Avios with a multitude of airlines and retailers. There’s no set earn rate or value of Avios, as it depends on the earn source and redemption method, but if you’re smart about how you spend and collect points, you could score a discounted or even free flight.

You can collect Avios in all kinds of ways, from flying on BA and partner airlines like Qatar, Cathay Pacific and Qantas, or through spending on hotels, retail and car rental at its list of over 2,000 partners. You can also get Avios-earning credit cards with banks like American Express and Barclaycard. Avios-earning cards are often considered the best rewards credit cards in the UK.

2. Tesco Clubcard

In the UK, just about every supermarket has its own loyalty program, so you can ensure all your grocery spending is put to work. But Tesco is touted to have the best value program with its Clubcard. You earn 1 point per £1 spent, and each point is generally worth £0.01. You can then turn your points into vouchers. You can collect and redeem Clubcard points online and in-store at Tesco stores and through its partners.

3. Nectar Card

Nectar is supermarket rival Sainsbury’s rewards offering, which also earns at a rate of 1 point per £1 spent. But with 500 points redeemable for £2.50, the redemption value is substantially lower than the Tesco Clubcard. Nonetheless, you can collect Nectar points in-store and online with Sainsbury’s and its partners like Argos.

4. Boots Advantage Card

The Boots Advantage card has been around for many years and remains a popular loyalty program to this day. With special discounts available to students and new mums, as well as an earn rate of 3 points per £1 spent, it’s the best way to ensure you’re being rewarded for your health and beauty spending. There are regular points booster events to help you maximize your points balance, and you can redeem points in-store and online when checking out to get money off your shop.

5. Costa Coffee, Caffe Nero and Pret a Manger

We’ve bundled coffee rewards into one they all offer a similar suite of perks. Costa Coffee’s Costa Club will reward you with a free coffee after 10 cups purchased, though you can get a special green stamp for using a reusable cup and score a free coffee after just five purchases instead. At Caffe Nero, nine drinks stand between you and your next freebie, while Pret’s Pret Perks allow you to collect stars, with a free perk offered after your 10th star.

Ultimately, it depends on your coffee preference and proximity to stores to determine which loyalty program you’ll benefit from the most. But, it does pay to visit the same brand on the regular, to maximize your opportunities to collect rewards and freebies.

6. TasteCard

Less of a rewards program and more of a discount passport, TasteCard entitles you to either 2 for 1, 50% off or 25% off at thousands of participating UK restaurant chains, like Pizza Express, GBK and Domino’s, and even coffee shops.

You can get access to TasteCard from £7.99 per month, which means you can earn back your outlay fairly quickly. However, look out for promotions and free trial periods, as you may be able to score a discount — that’s savings on top of savings!

7. TopCashback

TopCashback is the UK’s leading cashback site, allowing you to earn real cash back on your purchases with no strings attached. TopCashback earns a commission from retailers and splits that with you, the customer. You can earn cashback on retailers like Argos, Marks & Spencer, Curry’s, ASOS, Look Fantastic, and others. Just sign up, and click through to your favorite websites and shop as usual. Top Cashback will track your transactions and pay out a percentage into your cashback account.

How PocketSmith Has Changed Digital Nomad James' Money Mindset

Sun, 12 Jan 2025 11:00:00 +0000

Read how James has used PocketSmith to transform his approach to budgeting and improve his spending habits during a period of career instability.

Tell us a little about yourself?

I’m an artist who was, until recently, based in London. But I’ve moved to Spain to escape the rain and overall greyness, not to mention the cost of living in one of the world’s most expensive cities. I’m 35 years old and have always been terrible with my finances.

For the last 12 years, I have worked professionally across film and animation, mostly as a video editor. I found myself in quite a lucrative career, earning what I would consider a good London salary. This was all good and well, but for some reason, I always ended up living paycheck to paycheck. As a self-employed person, I have to pay taxes yearly, and it was always a really stressful scramble to save up and pay my tax bill.

Over the last six or seven years (that makes me feel old), my life has been on a bit of a rollercoaster. I decided to enrol in an MA program at the Royal College of Art in London and study animation for two years, thus throwing me back into a student lifestyle. The problem was that I was now used to living with a high steady income, so I saw my financial situation crumble. Couple this with Covid, and my world was slightly turned upside down.

How would you describe your role in your household?

I guess I could be described (although I dislike the term) as a digital nomad. I work remotely and recently left London to move to Spain, but I often move around. During the last year, I’ve lived in Barcelona, Kyoto, and Southern France, and I’ll soon be moving to Granada. So my household is pretty much just me until perhaps I find somewhere that I want to settle. Short-term rentals can quickly become expensive, though.

What drew you to PocketSmith?

I tend to only start thinking about money when things start going wrong. After Covid-19, there was quite a boom in my industry, and I was busier than ever. However, over the last year, things have really turned upside down. In 2024, I have barely had more than 15 days of work, which has completely drained my bank account and made me really have to get good at managing money. I heard about PocketSmith a couple of years ago, but I initially thought it seemed too complex for my needs, and I tried countless other apps and tools. None of them helped my financial situation.

I recently stumbled upon PocketSmith again and thought I’d give it a try. I was amazed at its features. Within a few hours of setting it up, I suddenly had complete clarity over my financial situation. This was both a great but scary thing. For the first time, I could see that unless I made serious changes to my spending habits, I was going to find myself homeless. I’d like to think that it would never come to that and that friends would be there for me, but it would have likely led to me having to move back to England and give up my dream of living a nomadic life.

How long have you been with us?

I have been with PocketSmith since July, initially on the free plan. But I immediately saw its value and the effect it instantly had on my spending, so I subscribed straight away and can pretty much see no reason that I would leave. I can look at a graph and see the startling difference between my finances before and after PocketSmith.

What do you primarily use PocketSmith for?

So… life can get busy, and I by no means claim to use PocketSmith to be penny-perfect. I use it in probably a slightly lazy way, but it gives me a clear enough view of my money to know if I need to panic or if I can relax.

The way I have it set up is to list all my bills and direct debits, i.e. rent, phone, internet, etc. Then my little trick is I just made a category called ‘Misc Daily Spend.’ I can then spend that on whatever I want each day.

At the moment, it’s set to 15 euros per day. I use the rollover function so that if I spend too much on one day, it will reduce the amount I can spend the next day(s). So, with these 15 euros, I can spend it all on groceries, treat myself to something nice, or just go and sit with a beer (which happens quite a lot).

I can adjust this ‘Misc Daily Spend’ amount and see how it will impact my finances months (or even years) down the line. So I adjust it regularly to make sure that I am in a stable situation while still being able to enjoy life.

How has PocketSmith changed the way you manage money?

I’m at a time in my life that I would class as the worst financial situation of my adult life. Yet with PocketSmith, I have never felt richer. I can really notice the difference in my mindset, knowing that I am spending within a budget. Before, I would just never even know what I was spending or if I could afford it.

I am practically unemployed and have a small amount of passive income that I have to live off (£800 a month). Without PocketSmith, this would terrify me, but because I can break that £800 down in detail and know that X amount pays my bills and X amount is spending money, I feel relative financial freedom.

What are your favorite features?

For me, I just love looking at the graphs; it almost becomes a bit of a game where I try to beat yesterday’s spending. I love the ability to project 10 years into the future. It makes me really wish I had this 10 years ago; I could have probably bought a house by now. But it’s better to start getting on top of my finances late rather than never.

Got any tips?

My biggest tip would be to outline your core income and expenses and then throw everything else into ‘Misc.’ This way, you just have a clear amount of how much you can spend right now, today. This resets every day, and you can even allow budgets to roll over. I initially was rolling over whether I was above or below my spending targets, but now I only roll over to round down the next day’s budget if I overspend today.

I also like to check in every morning; it takes 5 minutes, and it’s surprising how often surprise expenses can pop up (thank you, yearly Vimeo Pro subscription). This helps keep peace of mind, and then you can happily not think about money for the rest of the day.

What’s the best money decision you made in the past 12 months?

I’ve made plenty of terrible financial decisions over the last year! But by far, the best one has actually been subscribing to PocketSmith — as cheesy as that sounds. And no, I didn’t get asked to say that!

A note from the PocketSmith team: James is an insanely talented animator, and we seriously love his work! If you want to check out some of his previous projects, or you’re looking for an experienced animation artist and director across 2D and 3D for your next video needs, visit his website: https://james-cheetham.co.uk/

Choosing the Right KiwiSaver Fund for You

Fri, 10 Jan 2025 11:00:00 +0000

It is easy to get stuck and overwhelmed by excessive information. You know you need to join or change funds but end up having a stab in the dark about what provider to use and what type of fund to sign up for. I’m inviting you to relax about choosing ‘the right’ KiwiSaver and will give you an easier way to choose a ‘perfectly fine’ fund.

Please don’t be fazed by KiwiSaver

There is no perfect KiwiSaver provider and fund, but there are plenty who are perfectly adequate! Remember that the fund you choose might suit you today but might not be right for you in five years. That’s fine. Not much stays the same in life; KiwiSaver is no exception. Use the information you have today to make the best choice and review your choice over time.

KiwiSaver starts small and grows with you, at your pace, and all it needs is some money and a lot of time. If you commit to making decent regular contributions to your fund month after month and year after year, you will enjoy a large nest egg at retirement. With employer and government contributions, your stash will grow even larger.

That’s the simple part out of the way.

The confusing part is picking a provider and fund to send your money to.

Navigating the options for picking your KiwiSaver fund

The KiwiSaver business is subject to stringent government oversight, and it’s a lucrative industry for providers to be in. KiwiSaver providers are absolutely in it to make a buck, but for them, it is a delicate balance of making money for you whilst making money from you. 35+ companies offer over 300+ different funds to entice your investing dollar onto their platform, while you, on the other hand, are just trying to pick an investment that gives you the most money when you retire.

Your goals are not necessarily aligned, and with slick marketing campaigns clamoring for your attention, it’s hard to choose a fund.

Plan A: You could pay a (often hefty) fee to an independent advisor to have them select a fund for you, and honestly, that would be the most thorough way to make a choice. They are unlikely to focus solely on KiwiSaver but will help you map out your entire financial life. That would be awesome, but most of us don’t have the ability or the desire to pay for financial advice.

Plan B: You could just ask your mates. Yep. Survey the crowd, so to speak. I want you to ask ten of your friends or acquaintances (whose intelligence you respect) about their KiwiSaver.

Ask this question: “Please, can you tell me what KiwiSaver provider you are with and what fund type you are in?”

You are not looking for a commentary on their fund or their financial point of view. Nor are you being intrusive and asking for their KiwiSaver balance. You are simply after the provider name and the fund name.

To test my theory, I texted ten people I knew with a 100% response rate and a diverse range of funds to follow up on.

Why do this?

Most of us have no reference point to narrow down our choices. By canvassing ten people, you now have some provider names to look into, plus an idea of the different types of funds they offer. It is a place to start.

This is far better than beginning with a KiwiSaver comparison website, which is akin to walking into the Chemist Warehouse: Overwhelming!

Write out a list of your friend’s funds, and then go onto the government-run website Sorted Smart Investor and look each of them up. This website is a database of what’s on offer. You will see information about the mix of investments in the fund, their returns, and the fees they charge. This simple exercise will show that some funds are more expensive than others, and some perform better. Some are new, and others have been around since 2007 when KiwiSaver began. You will begin to see differences and similarities in what they invest in. Pick the ones that stand out as being better, and research them a little more by going directly to the provider’s website.

You might even type “Provider Name review” into Google and see what pops up. Find reviews from independent sources.

Consider a few things when looking at KiwiSaver

1. When do you need this money?

If you are nowhere near 65, you can choose to be in higher growth. This means a bumpier ride in the share market week to week but more money at retirement. You may consider going to a more balanced fund if you are about to retire. Higher risk equals higher returns over time. If you have the time to take higher risks with a KiwiSaver fund, put risk into perspective.

2. What fees are you paying?

The lower the fees, the more money you get to keep invested in your fund. Higher fees don’t mean higher returns.

3. Active or passive?

Are humans actively trying to pick and choose how to make your fund do better (active investment), or is it mainly being left to follow the share market (passive investment)? What’s the difference? Put simply, over time (and your KiwiSaver fund is one of the longest-running assets you will ever manage), humans are not known for outperforming the average returns of a share market. Yet, they will charge high fees to attempt to do so. With few exceptions, low-fee passive funds generally perform better over time.

Fund managers may shake their heads at my “ask your mates” approach

But I’ve seen it work more times than not. And I can’t help but think it is better than just taking an eeny meeny miny moe approach, as many do.

The beauty of KiwiSaver, or any investment, really, is that we have the luxury of changing our minds. Granted, we don’t want to chop and change them too much, but if you signed up with a KiwiSaver provider based on the information that you had at the time, then well done, you made an excellent choice.

But to maximize your fund balance, continue to survey your friends and check in with your KiwiSaver fund occasionally. I continue to write about my KiwiSaver choice and balance on my blog, The Happy Saver because others use me as a reference point. Whenever you hear KiwiSaver mentioned, listen up and continue to take the time to learn. This might cause you to move your KiwiSaver fund to a new provider (something that is extremely easy to do) or stay put.

As the KiwiSaver industry has grown, so have the funds on offer, and I’ve made three changes in the 16 years I’ve been in it. Just yesterday, a friend stopped in for a coffee, and I asked them my two questions. They told me without hesitation, and I’ll check out their provider shortly. It all adds to my understanding of what’s available.

Retirement is a certainty for most of us, and we need KiwiSaver. Therefore, in my view, prioritizing paying a decent amount of money into your KiwiSaver fund from every pay cheque is a no-brainer. Ultimately, it’s your decision which fund you will direct your money to, and you should have complete faith in your ability to make the right decision and choose the appropriate fund.

You’ve got this!

Disclaimer: The information about KiwiSaver funds provided on this blog is for general information only and should not be considered financial advice. PocketSmith is not accountable for any actions or decisions made based on the information presented.

What Quitting Coffee For A Month Taught Me About Money

Sat, 21 Dec 2024 11:00:00 +0000

“I’m sorry, you’re what?” was the incredulous response when I told a friend I was going without coffee for a whole month. This was followed by a concerned look and, “Are you feeling alright? Headaches, shakes, out-of-body experiences? Any other uncharacteristic urges?”

No to all of those. I don’t drink coffee for the caffeine or because I’m addicted to it. I drink it for the taste and the cozy ritual (at home) or the social experience (at a cafe). And I had done a month-long coffee detox before, so I knew I could do it again.

But since this is an article about money, let’s get to it. Guess how much money I saved by quitting coffee for a month. Go on. Take a stab.

By quitting coffee for a month, I saved:

Enough for a house deposit
$5.20 latte x 30 days = $156.00
I don’t know, maybe $50?
Nothing

If you guessed d) Nothing, you’d be right. There’s a reason the title of this blog isn’t I Saved Hundreds Of Dollars By Quitting Coffee For A Month. But then, saving money wasn’t the point. For me, this wasn’t some kind of no-spend trend. It was a mental check.

It’s not (just) about the money, money, money…

See, there’s this thing in psychology called habit replacement. It’s why a former alcoholic might chug two liters of Coca-Cola a day, or a former smoker might carry an armload of nicotine patches. It’s why I went to the supermarket, looked a little further along the shelves from my usual coffee sachets, and picked up a box of Chai Latte packets instead.

That same cozy sachet-tearing ritual? Check.

A hot milky drink with an inviting scent? Check.

No cost difference? Check. I only buy them on special, which generally works out to around 50c per packet.

So my usual grocery coffee budget was diverted to grocery chai instead. My cafe coffee budget went the same way. All I did was replace spending money on coffee with spending money on chai. It’s what you might call a zero-sum game.

And it was okay! I was prepared for some residual taste bud cravings (yep), being haunted by the smell when around other coffee drinkers (very much so), and curling up on the sofa with what was essentially a hot cinnamon milkshake instead of the coffee I was accustomed to. The first two weeks were fine.

But then I ran out of chai.

Recognize the reflex

In the previous four days, I had somehow gone through an entire ten-pack of chai sachets. Why? Because the reflexes were still there. I was treating chai exactly the same as I’d treated coffee — as a breakfast pick-me-up, as a 10am ritual, as a post-lunch snack, as an after-dinner wind-down.

Sure, I wasn’t mainlining coffee. But was a like-for-like treatment of chai really what I wanted out of this detox month?

No. No, it was not.

Okay. So there were mental reflexes in play that I didn’t realize might be an issue when I started this thing. It’s that little whisper at the back of my head. When I’m checking emails in the morning and instinctively go to sip a hot drink. When I come home from a long walk in unseasonal drizzle and just want to relax.

And now I’d run out of chai. Great.

How could I beat the like-for-like replacement issue? Simple. Do what any chocoholic does: Put it up high in a box on an inconvenient pantry shelf that takes effort and second thoughts (and a step stool) to reach.

Confession: I actually did this with a block of Whittakers Roasted Supreme Coffee chocolate. Eating it would have been cheating.

Or, since I was out of chai anyway, I could take the consequences of my own actions on the chin and just… go without… for a while.

So I did. I went without. I drank any and all fruity teas I could scrounge up from the depths of the kitchen drawer. I chugged a glass of milk. I even upped my intake of plain cold water. Three days later, when I was back at the supermarket for my weekly shopping trip, staring at those oh-so-tempting boxes of chai that were back on special, I asked myself one question: Why?

Interrogate the impulse

I was aware of the reflex now. I could look it in the eye, stare it down, and break the habit by deliberately reaching for my water bottle instead. But I still wanted — even craved — the cozy ritual that coffee and then chai gave me. The times in the day when I could take a deep breath and relax. Those small moments that signaled ‘rest’.

Had I been doing it mindlessly, without thinking? Absolutely. There were times I reached for coffee out of boredom or habit, not because I genuinely wanted one. But far more often were the times I drank coffee mindfully, deeply in the moment, whether that was relaxing on the couch or stopping for a rest break halfway up a mountain.

The habit was broken. The reflex was there, but it didn’t have to rule me. And I wanted those moments back. Fruity tea just wasn’t cutting it. I wanted chai again. I could do this.

And I did.

As I wrapped up the month, preparing my return to coffee with a deeper awareness and intense gratitude, I wondered: Do I do this with other habits?

I’m sure I do. I’m sure I sometimes spend money mindlessly, by reflex, because it’s a thoughtless habit and not because I really want or need whatever I’m buying. I’m sure there are other money habits that have slipped past me — that are so engrained I don’t know they’re there.

There are ways to catch them. They might be slippery, zig-zagging like rabbits, but there are ways. It’s why I do an annual overview of my spending. It’s why there’s a separate “Regret” category in my budget. It’s why I’m actively working on taking a step back, recognizing my reflexes, and interrogating my impulses. Even the subconscious ones.

No, it’s not just about the money. I didn’t save a single cent by quitting coffee for a month. But what I learned — about myself, my habits, my mindset — was more valuable than any $5 cafe latte could ever be.

PocketSmith Superfan Shawn Analyzes His Financial Data Like a Pro

Sat, 21 Dec 2024 11:00:00 +0000

Read how ext-Mint user Shawn has seamlessly integrated PocketSmith into every facet of his money management for ultimate control and transparency.

Tell us a little about yourself?

I was born and raised in central Ohio and moved to Florida for a couple of years in the mid-90s. I finished a bachelor’s degree in 2008 in Information Technology. I met my wife in 2003 and we married in 2005. I’m a federal Supervisory IT Specialist and have been with the Agency also since 2005.

We’ve got two kids: An 18-year-old son who has just started going to Ohio State (studying Finance) and a 15-year-old daughter. We’ve also got two dogs and a cat.

I collected comic books as a kid and sold them all in 2008 when I had my own kids. I’ve got tons of interests: History, photography, videography, cryptocurrencies (and mining) and politics.

How would you describe your role in your household?

The principal user, and key data importer and categorizer for our family. I set it up and maintain the bank feeds in PocketSmith, but my wife signs on to the mobile app occasionally to view all the accounts.

What drew you to PocketSmith?

It was Mint’s announcement that they were shutting down in late 2023. I was a Mint user for probably 8-10 years. While I loved the “free” part of Mint, I hated the ads and the limitations of being unable to truly customize categories. There was a default set you had to use that was immovable.

So I spent about a month trying out just about every package under the sun and came across PocketSmith. I found a free trial for it online and have been hooked ever since.

How long have you been with us?

Since December 2023.

What do you primarily use PocketSmith for?

It’s my net worth chart by time period, my spending tracker, my cash flow tool, and my “source of truth” for account data (well, what does it say in PocketSmith?) It’s my filing cabinet for old receipts (when did we get that fridge again, and what did we pay?)

It’s my weekly cashflow email report generator and my investment tracker. Say I’m selling a corporate bond now — what was the total I paid? I select the purchase price (the minus), then add back in the coupon payments (the addition), so if I sell now, my profit will be X. One cannot underestimate the value of having a running balance with selectable transaction amounts. It’s like a calculator at your fingertips.

How has PocketSmith changed the way you do money?

It’s much quicker to get the big picture on what I’m overspending on and to visually see trends — “That chart really went up in late 2022, what were we doing right then?” — then, dig into the calendar and transactions.

What are your favorite features?

The aforementioned selectable transactions with the instant totals, the “All Transactions” view which shows your current balance in each account on the right. When you have a lot of bank accounts, this is invaluable.

I also love the customizable dashboards. I created one that shows (across all accounts) my latest 10 transactions, my credit card balances, my savings, my investment balances, and my net worth. A complete financial picture; a single pane of glass. Plus, if you see something that seems off, you can click on any item, and it will bring you to the transaction page.

Also the saved searches and filters are amazing. Want to rename every purchase under $4.00 that you used on your Visa to automatically be renamed, tagged, marked as a transfer? Not a problem.

Got any tips?

Don’t waste your time with other apps would be #1. If you’re serious about your financial picture grab a PocketSmith subscription. Be warned though, the power of the dashboards is addicting — being able to filter expense/income or both, filter by account, account type, category and product amazing output — I don’t think I did anything in January 2024 other than create and mess with these. Amazing.

What’s the best money decision you made in the past 12 months?

Maxing out my Age 50+ contribution ($30,500) in my work retirement account in addition to the 8k max Roth contribution. PocketSmith (and I had a hunch too) confirmed the data on how much more quickly it goes up when you contribute the max.

The Future of PocketSmith on Mobile

Thu, 19 Dec 2024 10:30:00 +0000

Over the coming year or so, we’re changing how we deliver PocketSmith to you on mobile. Following some essential improvements to the PocketSmith Sidekick mobile application (namely, transaction splitting and budget analysis date selection), we will work toward deprecating the current PocketSmith Sidekick applications.

Our focus will be on making the web application fully mobile-responsive, meaning it’ll be as functional and useful on your phone’s web browser as on your computer. Once we’re nearly there, we’ll work on delivering a new native app that wraps the web app up for delivery on the iOS and Android app stores but with enhancements for mobile.

There, it’ll appear as just “PocketSmith”, not “PocketSmith Sidekick”. Because then — finally — it’ll be the full PocketSmith experience on your phone, not a companion application experience.

In this post, I’ll discuss the storied history of PocketSmith on your phone, why things are changing and what is happening next. Buckle up; this is a long blog post (we’re old), so let’s kick off with a table of contents.

Why is PocketSmith a web application?
History of PocketSmith in your pocket
a. 2012-2015: Mobsmith
b. 2015-2016: PocketSmith Companion, with Nativescript
c. 2016-2020: PocketSmith Sidekick
d. 2020-2024: Maintenance mode
Why we’re changing tack now
a. The web can now be completely mobile-responsive
b. Keeping parity with a fast-changing web app is very hard
c. Phones are as fast as computers now
d. In 2024, there are many options for packaging a web app as a native app
e. PocketSmith is web software company, not a mobile software company
What our plans are for the coming year
a. Stage 1: Key features into PocketSmith Sidekick
b. Stage 2: Make PocketSmith entirely mobile responsive
c. Stage 3: Start a new PocketSmith native app
d. Stage 4: Let PocketSmith Sidekick retire
And that’s all folks

Why is PocketSmith a web application?

Building applications for the web is in our DNA, both as a company and as founders. My co-founder Jason and I cut our teeth in the early 2000s at a web development agency, long before the first iPhone was released. We incorporated PocketSmith on June 23, 2008 — 17 days before the Apple App Store opened for business on July 10, 2008.

Working with the web provides PocketSmith with many advantages: improvements can be delivered directly to users in a matter of minutes after they’re completed; it’s inherently cross-platform at its core; and there are effectively no gatekeepers limiting the delivery of your application to users.

By contrast, developing for mobile is nearly the complete opposite. Improvements can take days or weeks to be delivered to users and only happen once your application has been reviewed by the gatekeepers — of which there is one for each distinct platform. For people steeped in the golden age of the internet, this feels diabolical!

Nevertheless, it’s always been clear that having PocketSmith on your smartphone is essential, so we started on a relatively unfamiliar journey and ended up where we are today.

History of PocketSmith in your pocket

PocketSmith on mobile had three full iterations appear in a short five-year timeframe, starting in 2012 and culminating in the PocketSmith Sidekick app, which exists today and was released in 2017.

The below gets a bit inside-baseball — if you’re not interested in the entire history from a fairly tech-centric angle, please feel free to skip to the next section, or straight to what our plans are for the coming year.

2012-2015: Mobsmith

Our first attempt was a separate web application, built by us when PocketSmith was just Jason and myself. It was lovingly named Mobsmith and lived on mobile.pocketsmith.com. It even had an offline mode to cache data for offline use once it had been loaded. It felt very progressive for the time.

The stunning Mobsmith, circa 2012. Right in the thick of the v2 PocketSmith era.

Unfortunately, Mobsmith was unwieldy to maintain, and shipping main-application features slowed down. The offline support was a bit patchy, and despite big talk from Apple about progressive web apps with the launch of the iPhone, the tech didn’t catch on in the early 2010s – not with the App Store around.

Worse, though, was that performance on 2012-era phones was fairly poor —the internet was slow, the chips that phones ran on were slow, and mobile operating systems were still in their early days. Overall, it was a sub-par experience.

Mobsmith limped along for a few years after launch (primarily because I had a thing for the Mobsmith-only safe-to-spend feature) until we decided to give mobile development another shot in 2015 once a few more web software engineers were on the team.

2015-2016: PocketSmith Companion, with Nativescript

A framework called Nativescript was released in 2015. It promised to allow developers to use web technologies to deploy native mobile apps across multiple platforms at once, with one codebase. It was a dream come true! If this could be achieved, it would be ideal for us as a web application company.

The unreleased PocketSmith mobile using Nativescript, 2015.

This mobile app never got fully released. It was very early for cross-platform mobile development, and as a result, the applications were extremely slow. Nativescript was still very young and had few features, meaning relatively simple things like menus took a lot of work — everything still had to be built by hand. In addition, natural app interactions for Android vs. iOS apps were very different back then — and there was no built-in support for these differences.

The final nail in the coffin came at the start of 2016: Apple rejected the app outright because we didn’t build in the ability to pay for PocketSmith subscriptions within the app (and pay them their cut). This was far beyond both Nativescript’s and our own capabilities at the time. Countless other subscription-based applications (e.g. Netflix, Spotify, etc.) had been accepted before us without issue — unfortunately, our timing fell right in the midst of a policy change, and we were too small to really push back.

Nearly a year had been spent on the mobile app, and then a further six months was spent trying to get it past the gatekeeper. The web app was not getting the attention it deserved, so we finally bit the bullet and hired real mobile engineers to build real native mobile apps in 2016.

2016-2020: PocketSmith Sidekick

With our first talented, dedicated mobile engineer joining us in mid-2016 and our second in 2017, we were off to a great start. A fantastic base was built for the mobile applications, and on the web side, we focused on delivering the required APIs for a brand new mobile experience: native apps for both iOS and Android.

The PocketSmith Sidekick native iOS application, as at 2024.

We released the fully native apps in 2017, alongside a shiny new Apple Subscription option, so the gatekeepers (or Shrek, at the entrance of the swamp, I suppose) could claim their 30%.

PocketSmith Sidekick is the result of this. From this era, many years of improvements to the native app followed. This was the end game — the native apps were blazingly fast, modern apps built on the latest technologies for iOS and Android.

We didn’t neglect the apps, however they still fell behind as their lightweight features couldn’t keep up with what we offered on the web. We’d solved our users’ primary need for a proper native mobile app. However, because we moved so quickly on the web, many features have always been missing from these native applications, and that gap continued to grow. So why is that the case, and how did this happen?

2020-2024: Maintenance mode

When our last mobile software engineer left in 2020 to pursue an amazing career opportunity in Australia, we decided not to hire a replacement. COVID was in full swing, and we had other things to focus on. We had already been finding it very challenging to balance a totally separate stream of mobile product and API work alongside our natural state of producing a web application.

We quickly discovered that it takes a village to raise an application. Having a couple of excellent mobile engineers didn’t suffice — without full-time product structures around them, from vision to design to backend engineering, it didn’t work.

To provide support for PocketSmith Sidekick at this juncture, we started working with a great mobile app development consultancy (whom we’d now consider to be a “partner”, as cheesy as that is). This allowed us to keep the app up-to-date with new iOS and Android versions and make tweaks and changes as needed.

Since then, there has been a small handful of updates, primarily the massive upgrade to our bank feeds system in 2021. But aside from that, we’ve only been keeping up-to-date with iOS and Android operating system updates.

Why we’re changing tack now

We have a few specific company and engineering reasons why it’s time to take a different approach, which will be discussed here. However, I also have a personal belief that, while nascent, has encouraged me to lead the company down this particular path.

Namely, personal finances should not be confined to small screens. Amazing things are achieved on larger screens, and managing your money is something to be achieved. What our users do in support of their households daily is no small feat, destined for a small screen.

Phones are designed for consumption, not creation. Brain-rot might be posted on TikTok from a phone, but nourishing content — video essays, long-form writing, novels, music, shows, and movies — is all created on larger screens. Why should managing money be dumbed down to a small screen?

This might be a very Boomer take (or, more accurately, an elder millennial take). A take from someone who grew up with dial-up internet accessed through a CRT monitor. Indeed, in 2015 — during the height of mobile-is-everything mania — this might be considered madness. But with sentiment shifting in younger generations and more people making healthier digital decisions each day, I believe there is a good chance that my take will be sustainable in the long term, too.

There will always be mobile-oriented personal finance applications, offering a small-screen view for organizing your transactions and seeing some valuable reports. PocketSmith stands in contrast to this, offering flexibility, depth, and a non-dogmatic approach to your money. Ultimately, this is what the web affords us.

Anyway, let’s now get into the non-opinion based reasons as to why now is the time for us to change how we deliver PocketSmith on mobile. Despite the rant above, this project is designed to enhance your overall experience of using PocketSmith on your phone. I still want to categorize and check my budgets on my phone too!

1. The web can now be completely mobile-responsive

First and foremost, this change is because it’s now possible to give you the whole PocketSmith experience on your phone directly from the website.

The tooling around mobile-responsive web applications has come a long way in the past decade. In the era of Mobsmith, the most effective way we found to achieve a good mobile web experience was to develop a completely separate web application customized to the limitations of the era’s phones.

Now, however, our team is doing fantastic work building mobile-web versions of updated and new features while they’re getting built for the desktop.

Switching between existing PocketSmith desktop and responsive mobile layouts.

Each new feature that we release or upgrade on the web app is being rebuilt to work perfectly on mobile. At this point, about 1/5 of the feature pages on the web app are reasonable to use on mobile — the goal is to reach all the features.

2. Keeping parity with a fast-changing web app is hard

We pride ourselves on PocketSmith’s flexibility. Being able to tweak the application to suit customer needs, fix bugs, and deliver improvements swiftly is paramount to our identity as a company and product.

Not being able to do the same for mobile immediately is frustrating. An exciting customization setting like changing what day your month starts on would require additions to our API, changes to two different mobile apps, new test builds being distributed, and then finally reviews from Google and Apple. This process alone would take weeks to complete, instead of the few days it took to deliver the same improvement on the web — available to everyone, all at once.

Once the new PocketSmith mobile app is released, we expect that new features will be released as swiftly as they are for the web app — because they’re effectively the same app.

3. Phones are as fast as computers now

Mobsmith was limited due to the underpowered mobile devices of the early 2010s. Using Javascript-heavy applications on your phone in this era was very painful, meaning building lightweight dedicated mobile web applications was wise. Simply put, in 2012 there was a gulf in raw performance between a desktop computer CPU and a mobile phone CPU.

Now, however, smartphone CPUs are on par performance-wise with desktop computer CPUs and can even be faster. Desktop computers are trending towards using mobile-based CPU architectures across both macOS and now Windows — that’s how strong the advances in power efficiency and computational power have been. This is due nearly entirely to the proliferation of phones.

Small sample of single-core CPU performance for Apple phones versus laptops.

The above illustrates that in 2015, laptops had nearly twice the single-core CPU performance of phones. Move forward to 2021 though, and the phones being released matched the CPU performance of laptops of the same year. Single-core CPU performance is what matters for web-applications, and it’s clear that there is scarcely any difference between phones and laptops anymore.

So the worries about running Javascript-heavy web applications on phones are a thing of the past. Modern phones can efficiently run the modern PocketSmith web, just as well as desktop computers. Only the layout needs to change to account for the smaller screen.

4. In 2024, there are many options for packaging a web app as a native app

It’s essential that we take advantage of the unique advantages of a native app while also delivering the full PocketSmith experience. This means using your camera to add receipts to PocketSmith, delivering timely notifications to your phone, and hopefully, some level of offline access.

Happily, the landscape is different from just a few years ago. The promise of Progressive Web Apps (PWAs) via service workers has picked up since 2020, and the iOS and Android app stores have relaxed their stance on wrapped web apps. The tooling is better than ever.

We now find ourselves in the world we could only dream of in 2016, because…

5. PocketSmith is web software company, not a mobile software company

Looking beyond the examination of why we’re a web application company above, it’s important to consider the deeper reasons why this makes sense.

We’re a bootstrapped business, and so it’s essential to our customer focus and our longevity that we play to our strengths. Supporting a dedicated mobile development team takes a lot of time and money. Not only in hiring mobile engineers but throughout the entire product development stack — design, product management, and API engineering.

Keeping a development pipeline full of interesting and impactful work for talented engineers is challenging — even for a single team of web engineers. Feeding the pipeline for multiple engineers working on separate iOS and Android applications is a huge challenge.

So, by pulling back from the edge, we’ll be better able to focus on delivering the long-term needs of our users.

What our plans are for the coming year

Deprecating PocketSmith Sidekick will take a while — as stated above; we have probably around 80% of the application to upgrade to better mobile responsiveness. So, without further ado, here are the stages we see as at the end of 2024.

Stage 1: Key features into PocketSmith Sidekick

PocketSmith Sidekick is often seen as disappointing because its features don’t match like-for-like with the web application. We agree — indeed, the whole purpose of these changes is to solve this key issue with a fully responsive and wrapped web application.

In the meantime, we’ve performed some analysis on the specific feedback we’ve received about the mobile apps, and three key missing features repeatedly come up.

First, the bad news: we won’t be solving advisor access for the PocketSmith Sidekick apps. The security model around advisor access means this would be time-consuming and not worthwhile when the ultimate goal is to deprecate the PocketSmith Sidekick apps.

Good news: we’ll be working on making splitting transactions operational in the apps and introducing better date range selection options for the Budget analysis pages. These two were at the top of the list of things that need to be solved for everyday users of the Sidekick apps.

While our mobile app development partners undertake this stage, we’ll continue with Stage 2.

Stage 2: Make PocketSmith entirely mobile responsive, end-to-end

This is a large task, but excellent inroads have been made this year. We’re rebuilding more features into modern front-end web frameworks, which are attuned to being adjusted for mobile web experiences.

We’re not sure what order we’ll tackle the features in yet. Chances are we’ll focus on the features that have had long-planned updates, like the Income and Expense pages, along with very high-traffic pages like the Transactions and Calendar pages. All new features will be fully mobile responsive, and some existing features can be tweaked to suit mobile without too much effort.

Another large portion of work will be the interfaces outside of the main app features, such as the various settings modals that pop up throughout the app. This work, in particular, would have a large payoff once solved — entire tracts of the app would then be more usable on mobile — but this work needs to be scheduled alongside the more impactful feature work.

At some point during this process, we’ll recommend that people start to use the “add to home screen” feature on their mobile browser. At this point, or before, we’ll kick off stage 3.

Stage 3: Start a new PocketSmith native app, wrapping the now-responsive web app

Our mobile app development partners already know the plans we discuss here. We’ll be working with them as soon as it’s practical to implement the new version of the PocketSmith mobile app.

They’ll focus on bringing the web app to a native experience and the accoutrements expected from a mobile app, like camera integrations and notifications. On our side of things, we’ll ensure that all the experiences in PocketSmith Sidekick also exist in the web app - for example, there are likely some mobile dashboard widgets that don’t yet exist in the web app dashboard.

We have no timeframe for when this will ultimately be completed. The investigation into how we achieve our goals will be ongoing this coming year as we figure out what exactly is involved in web app development versus native app development.

The end goal, however, will be to release “PocketSmith” on the app stores, where it’ll initially sit alongside PocketSmith Sidekick until we…

Stage 4: Let PocketSmith Sidekick retire and reflect upon a near-decade of service

At some point, we will need to remove PocketSmith Sidekick from the app stores as we’ll no longer be updating the app to support the latest versions of iOS and Android. What is unclear is whether we’d do this right away or not.

Either way, after removal, people with the app already on their phones are able to keep using it. We sincerely hope they won’t want to, given what we would have achieved in previous stages!

And that’s all folks

It feels great to open things up and discuss our plans for mobile with everyone. The apps have been in stasis for years now. This conversation started when multiple team members wondered, what exactly is our mobile strategy?

Now everyone knows — it will be more PocketSmithy, relying on pushing the envelope with what is possible on the web. I’m confident you’ll all love the result — and we appreciate your patience while we get there.

Thank you to all our customers for an amazing year — we’re so pleased you’re along for the ride. Merry festivities to everyone, and see you in 2025!

Don't Let ACA Anxiety Cost You Coverage in 2025

Tue, 17 Dec 2024 11:00:00 +0000

It’s ACA enrollment season, and people are feeling a lot of anxiety. Active marketplace health insurance plan selections are down by 27% compared to this time last year, according to data released by CMS. A major reason for the lack of action is that Americans are feeling uncertain about the future of the ACA, and this lack of certainty is leading to analysis paralysis.

It’s perfectly reasonable to feel overwhelmed by all the potential “what-ifs” of the future of American healthcare. But pushing through that frozen state and moving towards action is in your own self-interest. Not only can making your plan selection for 2025 ensure that you have coverage for the year ahead, but it also has the real potential to save you money on your monthly premiums.

Addressing ACA anxiety

It is true that the incoming administration will likely attempt to repeal the ACA, which could push up premiums or even disqualify many Americans from coverage. It’s even possible that this attempt will be successful.

Many Americans are worried that if the ACA is repealed this year, plan prices will spike or coverage levels will change. It’s important to know that even if these predictions do come true, there is no penalty for cancelling your plan should the health insurance landscape change. You will want to be mindful about how you do or don’t claim subsidies, but generally speaking if you call up your insurer to cancel your plan in the future, you won’t be on the hook for the rest of the year.

TIP: Any time you cancel a marketplace plan, you’ll also want to let the government know so they stop sending your insurer subsidies.

As well-founded as this anxiety may be, it’s a concern for the future — not for today. For the moment, the ACA still exists. People with pre-existing conditions can still get health insurance with comparatively reasonable premiums, Medicaid expansion still serves low- to lower-middle-income Americans in most states, and you still have the ability to choose the health insurance plan that best serves your family, complete with mandatory coverage for things like preventative care.

We don’t know when the incoming administration will begin any attempts at ACA repeal. It may end up being a 2025 issue, but it could also be lower on the priority list and not affect your health insurance this year at all.

What happens if you don’t participate in open enrollment season

One thing we do know for sure in the midst of such uncertainty is that not actively participating in open enrollment season is likely to have negative consequences. If you’re a new enrollee who lets this opportunity pass you by, you could end up going through the entire year without any health insurance at all. Missing enrollment deadlines is the primary reason Americans went uninsured in 2024.

If you already have a marketplace plan, a lack of action means that you’re highly likely to be enrolled in the ‘same plan’ by your current insurance provider. There’s a few things to watch out for with passive re-enrollment, though.

First, even if your plan is truly identical in terms of coverage and deductibles, marketplace premiums this year are going up. Overall, they’re 4% higher than last year. Depending on the subsidies you receive, this could make a plan that was doable for your budget last year a bit less affordable.

However, it’s extremely common for health insurers to change your plan from year to year. Even if the plan has the same name, coverage or deductibles could change in addition to premium increases. If you’re not actively participating in your plan selection during open enrollment season due to analysis paralysis, these changes could catch you off guard.

Finally, if you’re anticipating a change in income compared to the numbers you submitted during open enrollment last year, it could impact your subsidies. If you’re making less, reporting that decrease could help you secure larger subsidies, effectively lowering the premiums you pay on a monthly basis. If your income is going up, you’ll still want to report it. If you don’t and your subsidies aren’t adjusted, you could end up with a higher-than-necessary tax bill when you file your 2025 taxes.

There’s still time to participate in open enrollment

Participating in open enrollment allows you to shop for the plan that best suits your family’s medical needs in terms of coverage, and ensures it’s actually within your budget in terms of premiums and deductibles. In the most extreme cases, participating in open enrollment can be the difference between having health insurance or not having it at all.

The deadline to secure coverage effective January 1, 2025, was December 18, 2024. If you’ve missed this deadline, don’t panic. Your January coverage may be unretractable, but you still have a few weeks left to claim or change your coverage for the rest of the year.

The deadline for coverage beginning February 1, 2025, is January 15, 2025. So if you participate in open enrollment before January 15, you can still exercise agency over your health insurance plan for the rest of the year.

After January 15, though, open enrollment is officially over. Any changes or enrollment options will be closed for the rest of the year unless you qualify for a special enrollment period.

How to prepare for the worst

Now that you’ve taken control of your 2025 health insurance plan and premiums, it is okay to start thinking about what might happen if the worst does come to pass and the ACA is repealed. If you are anticipating low healthcare expenses this year, one option would be to enroll in a high-deductible healthcare plan (HDHP) with a Health Savings Account (HSA) attached. Money invested in your HSA can be used tax-free for future healthcare expenses, whether you need that money in old age or five years due to changes in the healthcare market.

For those who aren’t a great fit for an HDHP with an HSA, there are other steps you can take to prepare. Let’s take a look at two groups of people who are highly likely to be affected: Self-employed people with pre-existing conditions and low- to lower-middle-income adults in general.

Self-employed Americans with pre-existing conditions

If you’re self-employed with a pre-existing condition and the ACA is repealed, you might want to start thinking about updating your resume as you keep an eye on the legislature. That’s because prior to the ACA, people with pre-existing conditions could only really effectively get health insurance if they were a traditional employee and coverage was offered to them through work. Most insurers wouldn’t take you on unless it were through an employer plan and those that did accept you typically charged rates that were so high the vast majority of Americans couldn’t afford the coverage.

Another option would be to expand your business so that you could purchase a group plan to cover you and your employees. The viability of this option will only apply to select businesses, though. The majority of America’s small businesses only generate enough revenue to support a single employee or household.

Neither of these options means that you have to up and quit on your solopreneur endeavors this very moment. But if you’re worried about what would happen if the ACA were repealed, at least prepping your resume to re-enter W-2 employment may help you feel some semblance of control.

Low- to lower-middle-income Americans

In addition to the marketplace, the ACA also expanded Medicaid coverage in U.S. states that chose to participate. This allowed millions of uninsured adults to secure free or low-cost coverage — some for the first time in their lives.

The ACA also placed requirements on more employers to offer health insurance to their full-time employees. This requirement affected many lower-wage workers. When they didn’t qualify for Medicaid, it was usually because the employer now had to extend some type of relatively affordable coverage through work.

That means that securing a traditional job isn’t necessarily a foolproof way to secure insurance through an employer if there is a repeal of the ACA. Some employers — especially those who pay closer to minimum wage — may no longer be required to provide it if a repeal is successful. If you’re after employer-sponsored insurance, you may want to look towards higher education so you’re more likely to secure a higher-paying job in the event of a repeal, as higher-paying positions were more likely to offer health insurance prior to the ACA.

College in America is expensive, but if you’re lower- or lower-middle income, filling out the FAFSA can help. This opens up funding opportunities like Pell and FSEOG grants, which can sometimes pay for the full cost of a community college or even state college or university education, sometimes with a little extra money to spare for living expenses. Grants are money that you don’t have to pay back, so you wouldn’t necessarily have to worry about student loans.

Starting your education today can help you get better prepared not only in terms of your health insurance in the event of an ACA repeal, but it is also statistically likely to significantly boost your income over your lifetime.

Uncertainty is stressful, but you can still take control

We may see a revocation of the ACA over the next few years. But it hasn’t happened yet. To a certain extent, you still have some measure of control. Take steps like actively choosing your health insurance plan during enrollment season this year, and considering what moves you might make in the future should the ACA be repealed.

Ruth's Two Cents: Overcoming Credit Card Debt Struggles

Wed, 11 Dec 2024 11:00:00 +0000

Hi Ruth,

I really need some help with my credit card debt situation. Over the past few years, I’ve racked up a lot of debt due to unexpected expenses. Now, it’s all adding up, and I feel completely overwhelmed. On top of that, I’ve got my regular living expenses like rent, utilities, groceries, and transportation. I can’t cut back on these because they’re essential. How can I start paying off my credit cards without sacrificing my basic needs? I’m stuck and don’t know where to start!

Thanks for reaching out. You’ve taken the first step, acknowledging your problem and starting to seek solutions. Credit card debt can sneak up on you without you realizing it is even happening, and I understand how overwhelming it can be to face it head-on. But take a deep breath. You’re not alone in this, and there’s a way out.

Acknowledge the situation and stop taking on more debt

The initial and crucial first step is accepting where you are. You’ve already made a significant move by seeking help. Now, let’s channel that energy into a solid plan. Say “NO” from this moment to taking on any extra debt. Remove all credit cards from your physical and virtual wallets. Delete credit cards that have already been loaded onto online stores. To get out of debt, you must stop going into it.

Find your debt

Find all your credit card statements (online or on paper) and list your debts using a pen and paper. I like using physical paper because it is rare to do so these days, and having it lying open on your desk makes you look at it. Note each card’s lender, balance, interest rate, and minimum payment. This will give you a clear picture of what you’re dealing with. Knowing these details is empowering and will help you prioritize which debts to tackle first. If you have other debts, such as a car payment, student loan, personal loan or mortgage, list them too. If you are tackling debt, you could go the whole way and lay all your cards on the table!

Create a realistic budget

Next, you need to get crystal clear on where your money is coming from and go to. Track your monthly expenses using PocketSmith. Note down everything — rent, utilities, groceries, transportation, and any other costs; essentials and luxuries — all of it. Then, compare this against your monthly income. This will highlight the gap between what you earn and what you spend. This ‘gap’ can go towards debt repayment. You want this gap to be as big as possible. If you find that there’s very little or nothing left, don’t panic. This exercise is purely about understanding where your money is going.

Identify areas to cut back

You mentioned that you can’t cut back on essentials, but I want to challenge you on that assumption. Can you:

Move into a smaller and cheaper room in your flat?
Get a roommate in your spare room?
Stop using your vehicle?
Cook very basic yet nutritional food?
Cut all non-essential subscriptions or insurance?

Take a far harder look at your ‘essential’ spending instead of accepting the status quo. If it’s not essential to your survival, cut it. You can add it back later when you are not so broke. This approach has no grey areas, and you will surprise yourself at how much cash you can free up. Remember, you are trying to increase your gap.

Set up an emergency fund

To stop yourself from taking on new debt, make saving a $1,000 ($2,000 if you can manage it) emergency fund your priority. While saving money when you’re in debt might seem counterintuitive, having an emergency fund will prevent you from falling back on credit cards for unexpected expenses. This buffer gives you peace of mind and keeps your debt repayment plan on track.

Investigate the Debt Snowball and Debt Avalanche methods

These are two popular strategies for paying off debt.

Debt Snowball: Once you have written out your list of credit card debts from largest to smallest, focus on paying off the smallest debt first while making minimum payments on the others. Once the smallest debt is paid off, move to the next smallest, and so on. This method provides quick wins and boosts your motivation.
Debt Avalanche: Focus on paying off the debt with the highest interest rate first while making minimum payments on the others. Once the highest-interest debt is paid off, move to the next highest, and so on.

I prefer the Debt Snowball because interest rates begin to matter less if you get after it. But whatever method you choose, the key is to get busy! The sooner you get all this credit card debt out of your life, the sooner you can move on. If you tippy-toe around it, the debt will hang around.

Automate payments

Keeping track can be tricky if you have several debts on several cards. Set up automatic payments for the minimum amount due on your credit cards, and using your pen and paper, track the payment amount and the payment date. Update the decreasing balance as you go, and when it’s paid off, reallocate that payment to the next debt. This helps you avoid late fees and keeps you on track. It also removes the panic you currently feel. With a plan set up and working, plus a hand-drawn list you can refer to, you can assure yourself that you are on track to get out of debt.

Stay motivated and celebrate wins

Debt repayment may feel like a marathon, but all marathons have a finish line. The reason that I prefer the Debt Snowball as opposed to the Debt Avalanche is that your first payoff will happen quickly. Most people in debt have some small debts hanging about, and with focused intensity, you can wipe them out fast.

I want you to celebrate each milestone. Have you paid off your first credit card? That’s a huge win! Share it in the chat of a debt-free social media group, and you will be encouraged by the support you receive. Mini celebrations keep you motivated and remind you that progress is being made. I’m a fan of displaying your debt list on a wall at home so you can see them and then enjoy crossing them off one at a time.

Avoid future debt

As you work through paying off your debt, take note of the lessons you’re learning. Challenge your ingrained thinking. Build better financial habits to prevent future debt, including never using a credit card again. If you have not taken the time to consider why you went into debt in the first place, you run the risk of going back into debt again. You mentioned a lot of unexpected expenses, and I want you to learn how to prepare for the unexpected bills that will continue to happen. Once you are 100% out of credit card debt, you can increase your emergency fund to hold up to 3-6 months of expenses, and this should take care of any future events you could not foresee coming.

Get unstuck, and get moving!

The most important thing is that you’ve decided to tackle your credit card debt and that you are willing to make a start. You can pay off your credit cards with a clear plan, working your tail off, and showing patience and persistence. Don’t stop until you are done. It may have taken you years to accumulate these debts, but it need not take years to wipe them out. You may have to sacrifice your lifestyle, but it will be short-term. Most people I speak with underestimate their capabilities, so envision your finish line and get cracking!

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

The Five Most Useful Apps When You're Working Abroad

Mon, 02 Dec 2024 11:00:00 +0000

Following the global rise in remote working during lockdowns, working abroad has become more popular than ever. Some countries are even introducing digital nomad visas, welcoming remote workers to live out their work-from-anywhere dreams.

But whether you’re working by a pool in Bali or café hopping in Singapore, you need systems and programs that support you while you’re working abroad. Here are our top apps you need in your working abroad arsenal.

1. Wise

Wise, formerly Transferwise, allows you to send and receive money in multiple currencies anytime, anywhere. Perfect for getting paid in local and international currencies, Wise even provides you with bank account details for any country you’re in, which you can use to receive funds from clients and customers. Just remember to keep on top of your tax obligations when working in multiple countries.

2. PocketSmith

Managing money abroad is one of the more common expat struggles. You’ve got your money and accounts back at home, and you’ll probably pick up several on your travels depending on your varying needs. With PocketSmith, you can manage all your income streams, currencies and transactions in one place. You can connect bank feeds from over 12,000 banks and financial institutions in 49 different countries, making it your number one personal finance companion when working at home or overseas. Find out more about how PocketSmith supports remote working from a real user!

3. Google Translate

If you’re working remotely in a country where you don’t speak the language, Google Translate will be your best friend. By using the app on iPhone or Android, you can translate text instantly, using either text or voice recognition. Looking to get more confident without a translator in your pocket? You could also try using Duolingo to school up on conversational phrases in different languages.

4. Citymapper

Citymapper is a global journey mapping app that helps you plan a journey from one place to another using different types of transport. Plug in your locations and Citymapper will generate a range of routes and modes of transport, including all the info you need to navigate local public transport. The app doesn’t have every city registered yet, but you’ll find most of the US, Canada and Europe covered, as well as some new additions across Asia Pacific and more on the way.

5. Slack

Slack is one of the best remote work softwares available if you need to collaborate with others in a team. You can set statuses so people know if you’re online or away, manage conversations and projects with channels, set rules and auto-responses, and manage workflow on the go while never missing a beat with your team. Plus, you can integrate third-party systems like Zoom, Google, Dropbox and Canva.

Optimizing Cash Flow: Tips From an Accountant

Sun, 24 Nov 2024 11:00:00 +0000

Kia ora, accounting fans!

Across the globe, we’re starting to feel a general slowdown in business. Much of this is attributed to the post-COVID inflation high. Supply chain issues that resulted from COVID and shipping issues have also contributed to increased inflation. Governments around the world are looking at reining in spending. Here in Aotearoa New Zealand, this has resulted in many public sector jobs being terminated. This has created a flow on effect to private businesses, many of whom are laying off their employees and contractors.

This article is written for you, dear reader, as an individual. Some of these tips are relevant to businesses, but since PocketSmith is designed to help families get on top of their finances, we’ll be taking a personal perspective on cash flow. If you’re looking for small business cash flow tips, you can check out our business comic blog at The Comic Accountant. Pour yourself a nice hot drink, and get comfortable — because we’re going to learn how to optimize your cash flow!

Cash Flow vs. Income

A lot of people are confused between cash flow and income. If you’re running a business, the misconception is that profit is the same as cash flow (hint: It’s not!). For families, the misconception is that cash flow is the same as income. So let’s clear that up! Unlike businesses, we don’t have to worry about profit for families, only cash flow matters.

What is income?

Income is the money that you earn as an individual. For salaried workers, this is your take-home pay (after taxes). For business owners, this is the drawing(s) you’ve made from your business. Income is cash coming in from its source. This source is your paid employment or your business.

For example: Amina earns $2,000 a fortnight from her job as a marketing manager. After taxes, her take-home pay is $1,600 a fortnight. Her income, therefore, is $1,600.

If you are a business owner, you want to make sure that you’ve already put aside money for taxes before you pay yourself.

For example: Chandran is a business owner. He has $4,000 cash available in his business. He needs to put aside $1,500 for taxes and leave $1,000 in the business to cover his expenses. This leaves $1,500 cash available for drawings. He then takes the $1,500 drawings as his personal income.

For more details on how to pay yourself as a business owner, check out our pay yourself article.

What is Cash Flow?

Cash flow is the inwards and outwards movement of cash in/out of your family accounts. To keep it simple, we’re going to use cash flow to refer to net cash flow (the difference between your cash inflow and cash outflow). Cash flow can be a negative or positive figure. If it is positive, you have more cash inflow than outflow. If it is negative, you have more cash outflow than inflow. Easy!

For families, your cash inflow will mainly consist of your income. If you sell any of your assets/personal belongings, they can contribute to your cash inflow too, but this rarely happens, so we’ll stick to just income for now.

For example: Amina and her partner have a combined income of $3,100 a fortnight. This works out to $6,200 a month. Each month they have average monthly outgoings (cash outflows) of $5,500. Their cash flow for each month works out to $700.

Cash flow is calculated over a period of time. Generally, I would recommend looking at cash flow on a monthly basis. It is long enough to see income and outgoing trends but still short enough that it is easy to focus on the individual transactions that make up your cash flow.

Understanding the difference between cash flow and income will help you gain better…

Cash flow visibility

Unwatched cash in your spending accounts will always disappear. Remember that. Which is why it is important to have visibility of your cash flow. To gain cash flow visibility, you need to do these two things:

1. Identify your household’s five largest monthly outgoings

Home accounting apps like PocketSmith are really good for this. Using PocketSmith, you can easily identify your household’s five largest outgoings by generating monthly income reports. If you’re not using accounting apps (or are on the fence about one) you can start scribbling down on a notepad what your five monthly outgoings are. You may have to do this based on gut feeling. Or you can track down all your spending receipts. Seriously, just get an accounting app already.

Generally speaking, most households will have the following outgoings in their top five:

Rent/mortgage repayments
Groceries/food
Fuel/vehicle expenses
Utility bills
Insurance payments

Most households can’t function without these items. Although some households may choose to cheap out on insurance and live life on the edge — but hey, you do you. Note that if you’ve got a lot of commercial (i.e. credit card) debt, debt repayment may bump out one of the above categories from the top five. Whatever it is, to start building cash flow visibility you need to identify these expenses and average them out based on a 12-month average (or gut feel, if you’re not using accounting apps).

For example: Chandran works out the following outgoings for his household’s top five monthly outgoings:

Mortgage repayment: $2,900
Groceries: $1,000
Fuel/vehicle: $400
Utilities: $380
Insurance payments: $350

In total, Chandran has monthly outgoings of about $5,030.

2. Work out your average monthly income

This one is really easy. For salary workers, your income is simply your take-home pay after deductions. It is trickier for business owners or contractors. Their income tends to fluctuate and you may not be able to accurately predict how much your average monthly income is. Once again, an accounting app like PocketSmith can help tell you exactly what your average monthly income is. Otherwise, you’re going to have to look at your business’ drawings report and work it out from there.

For example: Chandran made business drawings of $4,000 in June, $5,000 in July and $2,000 in August. Averaging the past three months, he reckons his personal monthly income is about $3,600 a month. His partner has a take-home pay of about $3,600 a month as well. Combined, they have a monthly income of $7,200.

This tells you how much you can expect incoming each week. Using Chandran’s figures, we can see that on average his family has a monthly cash flow of $7,200, minus $5,030, which equals $2,170. Ka pai Chandran! But of course, that remaining $2,170 can easily get swallowed up by less obvious expenses (like education, gym memberships, Netflix subs, internet fees, etc). Using PocketSmith to keep track of all your family expenses is the best practice here.

Fortunately for Chandran, his family is staying afloat. However, not all of us are so lucky. Let’s take a look at the next section.

What if your outflows are more than your inflows?

The unhelpful answer would be: Make more money!

Make more money? In this economy? Seriously? The job market is getting tougher which is resulting in less spending, which has impacted businesses, many of whom are going under. So making more money isn’t the best option. So instead of supply-side economics (income), we’re going to look at spending-side economics (your outgoings).

What spending can be cut?

This is a tricky one. First, you need cash flow visibility. So if you haven’t done that yet, get on top of it! Once you’ve identified your monthly outgoings, its time to take your metaphorical money scissors and start cutting.

Rent/mortgage repayments

Sorry, you’re not going to be able to reduce this. You may get a mortgage holiday if your situation is really dire. But even then you’re just kicking the can down the road. If you’re renting, good luck getting your landlord to reduce your rent.

Groceries/food

You can possibly get the most savings out of this category. Here are some tips that I’ve managed to pick up over the years:

Eat less meat: No you don’t have to go vegan, but reducing meat in your diet leads to overall savings. This is because meat (especially red meat) tends to be more expensive than plant-based proteins (like beans, legumes, tofu, etc).
Buy whole fish, not fillets: Whole fish tend to be less expensive per kilogram compared to fillets. The downside is that you need to gut, scale and clean the fish. Then the fish frames and head (if you don’t like eating the head) can always be boiled to make fish stock.
Eat out less: This is an obvious one. Cooking is almost always more economical than eating out.

Fuel and utilities

This one is tough to suggest cuts to without sounding preachy. So I’m not going to. You can’t always rely on public transport at all times and it’s always hard to save on power in winter. Do what works for your family.

Insurance

It’s always a balancing act trying to work out the right amount of insurance to have. Higher premiums equal better coverage, but you may not necessarily need all that coverage. It’s worth talking to your partner (if you have one) and your insurance agent about your options. As a general rule of thumb, your personal (life, income protection, health) insurance premiums annually should be less than 10% of your annual income. Any higher than that is just over-insuring. For car insurance, the more expensive your car is, the higher the premiums. So you can save by not driving expensive cars!

Repeating outgoings

Repeating outgoings are things like gym memberships, Netflix subscriptions, Microsoft subscriptions and Afterpay repayments. Most of these things are wants, not needs. So if you’re looking to cut stuff, you can easily save a few hundred each month by cutting these out.

To start off, do up a forecast for the next six months. Monitor your results every month to ensure that you’re sticking to the plan. I have to keep emphasizing here that having a home accounting software will really help you in doing this well.

I’ve done everything I can but my cash flow is still negative!

Then we only have two options:

Explore financing options

Not the most ideal solution, however, you may realize that you just need a bit of money to cover your expenses over a short period of time. In this case, financing may be helpful. If you have equity in your own home, you can look at re-mortgageing your house. If you need finance for less than 30 days, credit card finance is usually interest-free if you repay within a certain period. Finally, most banks will provide an overdraft facility where you can only draw down on what you need. You get charged interest on any balance that is owed.

If you already have a lot of debt, then this may not be the best option for you.

Make more money

Again, not the most helpful suggestion but if you’ve done everything you can and your cash flow is still in a bad state, then your household needs more income. Consider starting a part-time job or running a small side hustle. If you own a business, think about ways to diversify your income stream. Our firm has a client who runs a bubble tea shop, laundromat and cleaning service all in one business. If one line of income isn’t working for you, try out another one.

Despite the overall gloom and doom in the economy, there are still opportunities out there. You just need to find them. Go and get them champ!

Always stay on top of taxes

There are different strategies to use for salaried workers and business owners.

PAYE salaried workers

If you’re on a PAYE salary, this one is really easy. Your employer pays taxes for you. At the end of the financial year, your taxes get filed. In most cases, you’ll end up with a nice refund. Note that this may not be the case if you’ve changed employers within the financial year. In fact, if you’ve switched employment within the financial year, it’s likely that your taxes are not being deducted sufficiently and you will have tax to pay at the end of the year.

Always review your tax position at the end of the financial year to make sure you don’t have any surprise tax bills to pay. If there are any tax bills to pay, make sure that you pay these ASAP. If you don’t have the cash on hand to pay your tax bills, you can always pay your tax debt in instalments. Most tax authorities will allow this, you just need to (yikes!) contact them and ask them to sort it out for you.

Business owners

There is a lot to know about business taxes and how they affect your personal taxes. So we’re not going to cover it all here. If you’re looking for tips on how to put aside money for taxes, you can read this article we wrote about paying yourself as a business owner.

For cash flow optimization, the best strategy is to pay taxes when they are due. This avoids interest and penalties on the outstanding amount. If you can’t afford to pay your taxes when they are due, there are two strategies you can use to manage your cash flow (please note that these tax strategies may only apply to Aotearoa New Zealand):

Paying on instalments

All types of tax debt can be paid in instalments. However, you will still be charged interest on overdue amounts, so this is not the best method to use if you’re looking at saving on taxes in the long term. Please note that your minimum repayment amount depends on the size of your tax debt. The larger the debt, the higher the repayment amounts.

Using tax pooling services

This only relates to provisional tax and income tax. You can purchase tax credits from an approved tax pooling agency which can then apply those credits to your your income tax balance for the previous financial year. The payments are credited on the due date of the tax payments — which means your penalties and interest on your tax debt get written off.

Obviously, you need to pay for this service. So instead of the tax department charging you an interest on what you owe them, the tax pooling agency will charge you interest on the tax credits that they ‘loaned’ to you. You can then pay the tax pooling agency as a lump sum or in instalments. Paying a tax pooling agency may be beneficial for the following reasons:

Tax pooling can be used after the due date for provisional and income tax
Interest charged by tax pooling agencies tends to be lower than tax charged by the IRD

Build out your cash forecast

Once you’ve attempted all of the above, you need to bring it all together in the form of a cash forecast. PocketSmith is really good in this regard as it automatically generates a projected bank balance based on your historical household spending. Of course this only works if you are updating your PocketSmith accounts regularly. So you should set aside at least one hour a month to match your bank transactions to the right categories.

If you’re trying to DIY your own forecast, you can use a spreadsheet. You need to identify your average monthly incomings less your average monthly outgoings. From there you can have a rough estimate of what your monthly baseline will be looking like. If you have any large, one-off expenses coming up, you can plug those figures into the months you expect them to be incurred.

For example: Chandran has already estimated that his household will have a monthly cash flow of $2,170. Chandran also knows that in two months’ time, he needs to pay his annual car insurance which costs $1,000. He makes sure that this is reflected in the forecast two months from now.

Setting your budget from your forecast

Once you have a forecast handy, you can build out a monthly budget based on your forecast. PocketSmith has a handy budgeting tool that allows you to set spending limits on different categories of expenses and income. This makes it easier for you to ensure that you are spending within budget.

If you’re not using a home accounting app, you can create different bank accounts that contain funds for different purposes. This is the modern ‘envelope budgeting system’. If you plan to spend $1,000 a month on groceries, you put $1,000 into the bank account for groceries and only use it for grocery purchases. Once the $1,000 is finished, you don’t buy any more groceries until next month.

Have a plan and stick to it

We’ve covered a lot in this article. Cash flow management is not easy! However, by practising the tips in this article, I’m confident that you will have a good idea of where to start optimizing your cash flow.

When it comes to household finances, you should always have a chat with your partner about the state of your finances. Identify areas of overspending. Talk about the sustainability of your income. Try and predict where your next major outgoing is going to come from. If you’re single, you can do this all on your own, or you could talk to a trusted person about it.

Use the tips in this article to come up with your own cash flow forecast and budget. To start off, do up a forecast for the next six months. Monitor your results every month to ensure that you’re sticking to the plan. I have to keep emphasizing here that having a home accounting software will really help you in doing this well.

I believe in you, dear reader. You can do this! Go on and optimize the heck out of your cash flow.

Stay positive!

Clinton Budgets for an Investment Property With PocketSmith

Tue, 19 Nov 2024 11:00:00 +0000

Read how Clinton is using PocketSmith’s categories to allocate expenses into discretionary and essential spending, making it easier to spot opportunities for cutting costs.

Tell us a little about yourself?

I live and work in Melbourne. My wife and I are full-time professionals in demanding roles. We have two primary-school-aged girls.

How would you describe your role in your household?

I’m a qualified chartered accountant, so no guesses as to who manages the household bills and finances.

What drew you to PocketSmith?

I’m a digital product manager, and I’m always on the lookout for life hacks or software that can make my life easier and more efficient. Having worked in AccountingTech for many years and with my background in accounting, it’s no surprise I have a strong appreciation for personal finance software.

I was using and enjoying Pocketbook for a few years, but then it shut and I came across PocketSmith. After running through the trial and demo data in PocketSmith, I quickly realized that it was a far superior product, and even though PocketSmith wasn’t free, I felt it to be really good value for money.

How long have you been with us?

A quick search on the Transactions page of PocketSmith tells me I’ve been using it for two years.

What do you primarily use PocketSmith for?

Helping us to minimize our spending.

How has PocketSmith changed the way you do money?

We’re gearing up to purchase an investment property and it’s helped us to establish and track an actual and scenario-based budget to ultimately understand what property we can afford.

What are your favorite features?

Oh man, where do I start? I love so many features… flexible category hierarchy, the speed of categorizing, powerful reporting (Income and Expense, Trends), and budgeting (I can keep it simple or go super sophisticated).

Got any tips?

Ctrl+Enter to save a transaction category.
Categorizing between discretionary and essential spending (our top-level categories) has helped us to identify easy opportunities to reduce spending.
If you want to take your budgeting seriously, you need to use PocketSmith’s budget rollover feature.
Next time you’re on the couch watching an average show on Netflix, whip out the PocketSmith mobile app and categorize a few transactions.

What’s the best money decision you made in the past 12 months?

Reviewing and reducing our excess life insurance.

Navigating Currency Fluctuations as a Digital Nomad

Sun, 17 Nov 2024 11:00:00 +0000

Let me get one thing off my chest straight out: There is a particular feeling that comes with checking my PocketSmith dashboard in a specific situation. This feeling is rather like taking the first sip of a very good cup of coffee. It’s warm. It’s comforting. There’s a bit of a thrill to it. And it is, more than anything else, intensely satisfying. That specific situation is when I’ve been dealing with clients in multiple countries within the last month.

Because then, when I check my dedicated Freelancing dashboard, I see three or four different currencies smiling back at me.

In any given month, I can be dealing with clients in New Zealand, Australia, Canada, and the United Kingdom. Depending on where I’m living at the time (Recently: The Shetland Islands, UK. Currently: Back home in NZ), my everyday expenses might be in another currency yet again.

It’s a bit like juggling four balls at the same time

The balls are worth different amounts depending on their dips and peaks, economic timing, global markets, and (some would swear) how close to a full moon we are. Now, I’m not great at juggling. I can never watch every ball at the same time, and if I take on too many, I’m liable to drop some. When I’m already dealing with multiple projects and multiple clients, trying to actively track multiple currencies and time them to make the most of their peaks would be madness.

So I don’t.

Keep it simple

The market will drop. It will recover. It always does. That’s not to say I’m completely ignorant of currency shifts, but nobody has time to watch those micro-fluctuations (unless you’re in, say, investment banking or share trading. I’m not.) I certainly don’t have time, and neither do my clients. I’m here to make things easy for my clients. So, to streamline matters and give us one less thing to think about, I charge them hourly and in their own currency.

I’m in a fortunate position, admittedly. The countries my clients are based in have stronger currencies than my home country of New Zealand. I haven’t yet been in the reverse position; I’ll cross that bridge when I come to it. In the meantime, I work out all my expenses in a single currency (the local one), and I leave the global currency conversions to my tax agent, Hnry.

Diversify that income

We’ve all lived through downturns and recessions, right? We all know someone who’s gone to work at 8am and found themselves out of a job by lunchtime. So we talk about spreading the risk. Investing in broad-based index funds rather than single shares. Picking up a side hustle so you’re not reliant on a single source of income.

I charge international clients in their home currency for much the same reason. I’m diversifying my income, not just across projects and niches, but across global currencies.

Could I charge my clients entirely in my home/tax currency of NZD? Sure. But why would I? I have a global client base, an invoicing system capable of auto-techno-magically handling dozens of currencies, and custom budgeting software that effortlessly reflects those numbers. There will always be rises and dips in global economic markets. That’s just the nature of the beast. But at least, by spreading my income between multiple currencies, I’m making the most of the rises and spreading the impact of the dips.

Live like a local

With income in four different currencies, it frees me up to live everyday life in the local currency. I can ride out changes in countries and changes in living costs. A train ticket from Newquay to the Cotswolds might cost £70 ($140NZD), but it gets me where I want to go. Paying a little more for an airport hotel in Toronto is worth it: The free breakfast doubles as lunch, and there’s no need to pay for public transit when I can take the free shuttle to my next flight. Groceries at Tesco (UK) are cheaper than Walmart (USA), and both are cheaper than New World (NZ.) We live and we travel and we work and we learn.

Find the balance

I’m still juggling four balls. I don’t expect them to stay static, so I’m not surprised at an unexpected drop or lift. After all, I’m on the move just as much as those fluctuating currencies are. One rises and another dips. One falls, and the next one rises. I don’t keep a close eye on them. It’s enough for me that they’re there, spinning in the air, and they’re not crashing to the floor.

Global clients demand global solutions, and as a digital nomad, I have a global office. Let me tell you, when I check my dashboard and see those four currencies smiling back at me… it’s the best feeling in the world.

Ruth's Two Cents: Navigating Work Burnout and Financial Stability

Mon, 11 Nov 2024 11:00:00 +0000

Hi Ruth,

I’ve been working non-stop for years and am starting to feel the heavy weight of burnout. I’ve realized that I desperately need some time away from work to mentally and emotionally recharge. However, the thought of reducing my hours or potentially taking an extended break makes me anxious about my finances. I have some savings, but the uncertainty of the future holds me back. How can I find a balance between prioritizing my well-being and ensuring I don’t jeopardize my financial stability?

Gosh, that’s a tough one. I’m sorry you are feeling the impact of burnout. I have felt burnout symptoms myself, and you more or less feel like a deer in the headlights, trapped and looking for a way out. It sounds like the pressure has been slowly and steadily mounting. For this particular stressful episode, time to financially prepare may be short for you. You might be at an absolute breaking point right now, meaning you may need to cobble together a financial strategy to get you through as best you can. But, hopefully, you have a little more time on your side. You can learn from this vulnerability that you are currently feeling and work on building a rock-solid financial foundation that will make future stressful episodes easier to work through.

It’s an opportunity to truly reflect on your job satisfaction

Reflecting on my life, a tipping point always seems to arrive, and I’ve had to make a considered choice about how to react, which is not always easy when the pressure is building. I’d like to address your work first, then move on to the money side if that’s okay. In my experience, it is okay and perfectly normal to be “over” your job. Think of the people you know who have moved through many careers in their working lives, often into vastly different roles and sectors. Why do they do it? One day, just like you, doubt crept into the job they were doing. When this happens to me, I think to myself that I have three choices:

Zip my lips and put up with it
Change the things that I don’t like
Leave

Each method has varying results:

I’ve zipped my lips, but the pressure and dissatisfaction grew bigger
I’ve attempted to change the things that I didn’t like, with varying degrees of success and failure
Leaving is radical, but it has always led me to something different or better

However, from the tone of your email, I don’t think it’s the job itself that is the issue (you don’t say you hate it); it’s just that, for whatever reason, it’s all becoming too much. Therefore, the first step is to get clear about what is not working, then approach your manager at work and discuss this with them. They may be unaware of your state of mind and the rising sense of reaching burnout, but they should be ready and willing to discuss options with you. That begins the process of changing things that you don’t like about your job. It will hopefully lead to a good outcome for you and help you settle back down so that you can address the financial side of the issue.

But it is also perfectly okay to change your job and let life take you in a different direction.

A solid financial foundation can withstand all sorts of stress

From the financial perspective, my thoughts may come too late; it depends on how close you are to breaking point.

I wrote a blog post called Begin at the Beginning: Step-by-step Path to Financial Independence. In that post, I talked about the journey you go on with your money to set up a solid financial foundation so that when both opportunities and crises occur, you can pivot and deal with a situation. Put simply, your money is in the right place to help you cope with whatever life throws at you.

Creating this rock-solid foundation can take some time. Without knowing your financial position, I thought it best to share with you how I’ve set mine up and how it has become helpful time and time again when I, like you, get burned out. I’ll share below what I do and why it comes in useful:

What I do: I track our net worth every month. I note down the value of our assets (and liabilities, if we had any).
Why this is useful: It removes anxiety around my finances. Often, we are doing better than we realize, and in an instant, I can see our financial position. Instead of thinking the worst and guessing that reducing hours or stopping work will financially negatively impact us, I can see in black and white numbers what it might do.

What I do: I budget our income and spending using PocketSmith.
Why this is useful: I know what it costs to run my life each month. Therefore, I know how much income I need to cover those costs. I can also clearly see what spending I can instantly stop if I know we need to conserve cash for something like a break from work.

What I do: I have an emergency fund, which, if required, could cover 3-6 months of income if, for whatever reason, I stopped working.
Why this is useful: If I woke up in your shoes and needed an immediate break from work, this fund would cover those lost wages. The thought of reducing your income is making you anxious because of the money you will miss. An emergency fund removes that worry.

What I do: I pay into my retirement fund.
Why this is useful: It creates peace of mind that when I reach retirement age, I will have money available. Currently, you are young, yet you feel scared about stopping work because you may not be able to support yourself financially. Paying into a retirement fund will prevent the exact same feeling at retirement when you are forced to stop due to age and health.

What I do: I became debt-free.
Why this is useful: By getting out of all consumer and mortgage debt, I can earn less if I choose to or stop working for a period of time. Not having to answer to a lender gives me a greater sense of control over my life.

What I do: I invest in assets outside of my retirement fund.
Why this is useful: Creating wealth, other than retirement funds, creates a financial buffer between me and life. There have been times when my work has become untenable, and I’ve been able to take the time away that I need without feeling financially vulnerable. This is the stage I want you to get to.

What can you do right now to start addressing your burnout issues?

I need you to get clarity around your exact financial position as it stands today. That will give you direction, purpose, and actual information to help you cope at work while you plan your next steps.
The next important step is to reduce your spending to the bare minimum to keep the lights on at home, the fridge full of food, and all essential needs met, including debt servicing obligations. Anything else is surplus and can be paused.
As fast as you can, using that now freed-up income, plus the savings you already have, build up your cash buffer or emergency fund so that it represents enough money to cover those basic expenses for a while. Three to six months is ideal.

Taking charge of your finances this way will bring a sense of control to your whole situation and put you in a much better position to have those conversations with yourself and your employer about precisely what you need to change at work. Whether you amend your role, the hours you work, or seek to change jobs entirely, having control of your money removes one stressor from you and will allow you to see the future more clearly.

This phase will pass, but we all face stress, and it will come back in another form later. But with each episode, we learn to put some coping mechanisms in place to adapt and deal with it each time it happens.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

Should You Align Your Investments With Your Values?

Thu, 31 Oct 2024 11:00:00 +0000

Investing is becoming more and more accessible to the everyday person. From in-depth content on social media to a weakening stigma around talking about money and wealth, it seems more and more of us are opting to park some of our cash in the stock market.

But as a newbie investor, wrapping your head around the concept of investing in shares can mean you lose sight of what you’re actually putting your money behind. Here’s how we can approach investing without violating our personal ethics.

What are your personal values?

We all have our own set of values, and we uphold these in our everyday behaviors. From where we shop to what we eat — many of our decisions come back to our own values.

One of the best ways to begin understanding ethical investing or values-aligned investing is to look at your own set of values. What do you care about? What causes matter to you? What changes do you want to see in the world, and what do you use your voice to shout about?

From climate action, gender equality, trans rights, and anti-racism to stopping animal cruelty. Our values form an important part of the change we’re hoping to see, and can actually play a role in your investment strategy, too.

Factoring your values into your wealth goals

One important way of considering your values in your investment activities is to look at what wealth means to you, and how financial freedom could help you support the things that matter to you.

Think about what you would do with limitless money. What causes could you help? What change could you make? You can use this information in your investment decisions. For example, if you’re pursuing FIRE (Financial Independence Retire Early), you might strive for a FIRE number that allows you to allocate time and/or money toward creating change.

Are your values reflected in your investment choices?

Where our money goes is an important consideration when it comes to our values. Money infiltrates almost every area of our lives, so being discerning with how you invest your money and the vehicles you use to grow your own personal wealth is important when upholding your values.

Really look critically at where your money is invested, particularly if you’re investing in ETFs (exchange-traded funds) or managed funds. Do your own independent research into the practices and activities of companies you hold investments in, and see if these stack up to your values. You may find that your investments violate many of your personal values. For example, holding shares in a bank that funds coal and gas projects, or owning an ETF that contains Amazon shares.

How do you invest in alignment with your values?

Investing in alignment with your values is all about looking more deeply at companies and funds to see where your money is really going. You could start by exploring ESG investing (Ethical and Social Governance). This involves the use of different criteria to exclude companies that engage in certain practices.

With that said, not all criteria will align with your values either, which is why it pays to do your own research.

Does values investing mean lower returns?

Investing in alignment with your values means prioritizing ethics and values equally or more so than financial returns. For this reason, it’s important to weigh up the importance of your ethics and values against your financial goals. Of course, there may be investment options that balance both, but this comes down to research and monitoring over the long term.

PocketSmith Helps Kath Budget for Her Travels During Retirement

Mon, 21 Oct 2024 11:00:00 +0000

Read how Kath uses PocketSmith to manage her retirement budget and track expenses, allowing her to embrace unexpected opportunities.

Tell us a little about yourself?

I am late 50s… okay, very late 50s! Married to Mike for 31 years with two gorgeous adult children and one son-in-law we are extremely proud of. I ran an international training consulting business for 25 years, which required a lot of travel. 12 years ago, I bought the New Zealand part of the business and settled down to grow it. Mike retired from his business shortly after and was keen for me to join him in retirement. Roughly five years ago, I sold my business, joined him in retirement and suddenly, my goals and priorities changed.

How would you describe your role in your household?

The organizer! Our life is very different now with just the two of us in the house. We complement each other really well. I definitely don’t do all the cooking and shopping! My role here now is as a partner and cohort in adventure.

What drew you to PocketSmith?

We have been good in our married life in keeping to our goals and saving to achieve what we needed. However, when we sat down to complete our first retirement budget, we couldn’t say how much we spent on food and fuel all year. What did our house actually cost us to run each year? We had no specifics, as we had never tracked our costs specifically. It was a general approach. PocketSmith enabled us to track all our expenses and income and realize how far out we were in our first year!

How long have you been with us?

Five years. Since I sold the business.

What do you primarily use PocketSmith for?

Tracking all costs so we can manage our annual budget.

We created a travel budget when we started retirement. PocketSmith allows us to analyze what each travel trip has cost, what we have left for other opportunities in the year, and of course, it helps us plan the next year’s trips!

How has PocketSmith changed the way you do money?

Knowledge is power! We have total transparency to make decisions. We can see month-to-month how we are tracking. We can choose to make changes or change our decisions together.

What are your favorite features?

The rollover budget feature
Income and Expense statement
And, of course, categories and subcategories

Got any tips?

Get started! Start slow. Start small. We have our budgets really close to actual every year now, but that didn’t just happen. It takes time to understand where your money goes! And start to make changes if required.

What’s the best money decision you made in the past 12 months?

We have been invited to go to Japan with some close friends. Our travel spend is at its limit for this year. The instinct is to say no, it’s not in the plan. But life is about opportunities! And making the most of them.

We sat down with our PocketSmith budget, looked at what we could do to make it happen, adjusted a couple of spending plans, and, like that, we are going. Too easy with PocketSmith to make those unplanned decisions. Love those choices!

Insurance Needs for Digital Nomads

Thu, 17 Oct 2024 11:00:00 +0000

Looking through the ‘Travel Insurance’ sub-category in my PocketSmith Trends, it turns out I’ve had three different providers for travel insurance in six months of overseas travel as a digital nomad.

To be more exact, I had one provider for approximately 48 hours, one provider for a month, and the third provider for every month after that. For those curious: Yes, the first provider was by far the most expensive.

Travelling without insurance wasn’t an option. As a freelancer, I didn’t have an employer to cover work-related incidentals or pay out annual leave. I was a foreigner, so I would no longer have government-subsidised healthcare. Also, the first time I went to the USA in 2014, I landed in hospital with a major concussion and a bill for tens of thousands of dollars (which insurance covered). Given that, I wasn’t willing to leave it to chance.

Hot tip: Don’t buy airline travel insurance, kids

At the time, I didn’t have much of a choice. I’d booked tickets to the USA a mere 24 hours before my flight, then realized how much I still had to organize and panicked. I simply didn’t have time. So I added that 48-hour Air New Zealand travel insurance to my ticket. Just to get me through, I rationalized. Just to buy me time to figure it out at the other end.

Provider 1: Air New Zealand

Cost: $146 NZD

Duration: 48 hours

Cost per day: $73 NZD

Lesson: Short-term thinking can cost you big time

Travel and health insurance for the USA is widely known to be exorbitant (more on that later), but even so. Ouch!

I found my second provider by rummaging through the top ten results on Google for “Best Travel Insurance” and “Insurance For Digital Nomads.” World Nomads had a reassuringly travel-focused name, good reviews, and broad country-specific coverage. Any traveller since 2019 will know to check for pandemic- or global-health-related clauses. As well, any digital nomad gets savvy at checking reimbursement amounts for lost or stolen clothing and — particularly — digital devices such as cameras, phones, drones, and laptops.

Through World Nomads, I could get comprehensive travel insurance for the USA, Canada, and the UK for $417 a month. Not bad… except for one thing.

Including my laptop in the policy would cost an extra $190/month

Did I really want to pay an extra 45% every month on the slim chance that my laptop went missing? Well… no. Sure, my laptop is how I work. It’s my sole source of income. But compared to the cost of buying a new one, it seemed disproportionate. I took a breath, did some quick maths on how much my Macbook Air had cost in the first place and how much it had depreciated since, and bought the insurance without electronics coverage.

Provider 2: World Nomads

Cost: $417 NZD

Duration: 30 days

Cost per day: $13.90 NZD

Lesson: Run a quick cost-benefit analysis before committing — the add-ons might not be worth it

By the time that insurance was in its third week, I had moved through the USA and Canada to Scotland. I’d also finished a longstanding freelance project and had a different, regular client go radio silent on me. This meant I was looking at my PocketSmith income/expense reports and doing some hasty rejigging. I needed to slash that $417/month budget to something lighter.

Back to the research board it was, then

This time, I found SafetyWing’s Nomad Insurance. The coverage wasn’t as comprehensive as World Nomads’, but for global travel and medical insurance, it was plenty adequate for my needs. I certainly didn’t need add-ons for high-risk activities like paragliding or extreme snow sports!

Even better, SafetyWing had an automatic policy rollover. No need to reset your policy every month, they’ll do it for you. As a footsore traveller with a million decisions to make, that was music to my ears. There was no list of countries that I would have to keep manually updated as I travelled, either. Simple is the name of the game: they offered one plan for global travel covering 180+ countries, including the USA, and one plan for the same excluding the USA.

What was the price difference, you ask? The US-inclusive plan cost more than the base plan with the extreme adventure add-on and electronics theft add-on combined. It would, in fact, double the monthly cost of the insurance. And I wasn’t planning to be back in the USA anytime soon. The base plan was good enough for me.

Provider 3: SafetyWing Nomad Insurance

Cost: $45 USD (around $72 NZD)

Duration: 28 days, automatic rollover

Cost per day: $1.60 USD (around $2.55 NZD)

Lesson: Don’t settle for “good enough”, keep searching until you find what best fits your needs

Third time’s the charm, as they say. It was in my case! I stuck with SafetyWing for the last five months of my travel. They had the cheapest plan I could find that was still comprehensive enough for my needs, and the automatic rollover makes things a breeze. I took a certain amount of joy in tracking that regular (small) budget in my PocketSmith account. Looking at the Trends page makes me smile, too.

In three payments, I went from a daily travel insurance rate of $73 down to $13.90 and down again to $2.55. You can’t get much better than that.

Should You Prioritize Investing During Increasing Costs of Living?

Tue, 08 Oct 2024 11:00:00 +0000

Should you prioritize investing while the costs of living are increasing? In short, YES.

Our living costs are continuously increasing over time; we are at a point where they are rising particularly quickly at the moment. But it will pass, and prices will settle — we all just have to adjust the course as we navigate our way through. As long as your level of investing still matches your risk tolerance and your financial goals, your ship will continue to steer you forward.

A throwback to my family’s last battle with living costs

As COVID-19 started to enter my consciousness in 2020, it sent me running. Not for my mask and hand sanitizer (we didn’t yet know of such things), but I was running to check in with my PocketSmith.

I looked at our household income and knew what we had historically earned as we prepared for the fact that we might lose our jobs, a very real threat at the time. We didn’t lose our jobs, but our income decreased and became inconsistent. But that was manageable; we knew our minimum income needed to cover our minimum no-frills lifestyle.

I monitored it weekly as we adjusted to our new reality of a global pandemic. At the same time, I was keeping an eye on what local and global share markets were doing. They were dropping.

A top priority doesn’t have to be inflexible

One ‘expense’ that I kept in our budget, right alongside food, accommodation, utilities and transportation, was investing. My family has invested every month for over 15 years, and if I could avoid doing so, I didn’t want to stop that flow of money into assets that grew over time. To be clear, the basics of life took priority over investing, but if there were any way we could financially manage to invest as well, we would absolutely try to do so. Although I heard all the chat of meme stocks and supposed sure bets, I ignored all that share market noise. We stuck to the investment path we were already on.

I listed out the regular investments that we contributed to monthly in order of priority:

Retirement account for myself, and one for my husband
Share investment into ETF fund A
Share investment into ETF fund B
Retirement account for our daughter
Share investment into an ETF fund for our daughter

Because our income had dropped, and we didn’t know how long it would remain that way, we decided to continue investing in our retirement accounts as usual. They were our priority, and we could afford to do so. But with our share investments, we just didn’t have the income coming in as we once did, so we kept contributing to these accounts, but we reduced the amounts invested down to the minimum allowed by the fund manager, so they just kept ticking over until we stabilized our finances, which we were able to do. Because the amounts in our daughter’s investments were much smaller and already set at the minimum, we were able to cover those.

I monitored our income and expenses closely in PocketSmith. As the 20th of the month rolled around, I checked our cash flow and invested whatever we could manage above the minimum. Looking back over the last three years, the monthly amounts vary widely, but we still managed to invest something every month.

Staying the course is worth it in unstable times

Clearly, investing for us was and is a priority. We decided to do whatever we could to continue contributing to our share market investments.

The decision to do this came from years spent educating ourselves on how investing works and the fact that we are long-term investors who invest in long-term investments such as retirement funds and broad-based low-cost index/ETF funds. We saw that the looming pandemic had sent shock waves through the share market, and the price per unit of the funds we invested in had dropped too. By continuing to invest, we bought the same units at a cheaper price month after uncertain month. Over time, as the share markets rise again, as they always will, those units bought cheaply will increase in price, bringing our investment balance up.

We were so confident of this approach because of the steady way we invest. I’d strongly caution those looking to ‘nab a bargain’ or exploit a niche they see in the investing landscape not to use this uncertain time in our history to take an investing punt. If you are struggling to meet rising costs of living, gambling on the share market at the same time is a fool’s errand. We were not and did not gamble on the share market; instead, we invest steadily over time in assets that have proven to rise in value.

Investing can help you remain stable in an unknowable future

My advice to others is to use PocketSmith to understand what it costs to run your life and then understand that having money available to invest is not a ‘nice to have’; it is a necessity alongside all the other financial basics. Life is full of shocks, upsets and changes in direction, and if we paused investing every time one occurred, we would never invest. Continuing to invest in assets that grow in value over time will prepare us for the next global shock, the next recession, and the subsequent rise in the cost of living, and when that time comes, those investments can, in turn, be used to pay for the rise in expenses.

So, if you’re in the position to do so and can adjust how you spend your money so that you can continue to invest while your living costs are on the rise, I would absolutely make that a priority if you can.

An Accountant's Guide to Preventing Fraud in Your Financial Systems

Tue, 01 Oct 2024 11:00:00 +0000

In an increasingly interconnected electronic financial world, there are more opportunities for financial fraud to occur. One example is the ‘Lion’s Share’ pyramid scheme, where individuals invest money in the hope of greater returns. We are increasingly seeing bank-related scams, like this Australian man who lost his entire life savings by providing his bank information to a scammer.

Financial fraud and scams come in a lot of different flavors now. Sometimes it’s hard to keep up with the new ways scammers use to defraud you of your money. Fortunately, there are ways to detect fraud and prevent yourself from becoming a victim.

Some of these tips may be of great use to business owners who are more exposed to financial fraud compared to a salaried employee.

Prevention is better than cure. If you’re good at identifying it in the early stages, you shouldn’t have to worry about spotting fraudulent transactions in your regular transactions.

Identifying financial fraud

Generally speaking — if something is too good to be true, it probably isn’t true.

As a general rule of thumb, avoid clicking on links that advertize investments that promise huge returns on minimal investments. Be especially careful if there is any mention of crypto. If you get any emails from anyone talking to you about ‘investments’ — that can go straight to your spam folder. Suffice it to say reputable investment platforms won’t send you emails if you haven’t signed up for their mailing list.

That being said, be careful of emails from investment platforms that you do use — some sophisticated scammers will create fake emails that look official to extract your details. Take note of the address they are sent from. If it looks different to the usual address, contact your investment platform using the official channels and determine if the email is legitimate.

Any investment that sounds too good to be true is designed to appeal to one of our basest emotions: Greed and/or desperation. Scammers will use emotional hot buttons to get you to give up your hard-earned cash in return for promised returns. When presented with an investment opportunity too good to be passed up on, always remember:

‘If you don’t invest now, all you’re missing out on is the opportunity of maybe getting something later.’

If you do invest and things go south, well, that’s all your money gone.

A close encounter with financial fraud

Very recently I personally experienced what I consider a close encounter with a fraudster. An individual on LinkedIn reached out to me, asking to try their new financial software. I’m always keen to try new financial software (it’s part of my job as an accountant), so I went to their website to sign up for the free trial.

However, my ultra-skeptic accountant training kicked in as I noticed a few red flags:

Firstly, this company was offering $89.99 a month to use their software, but if you paid $45.99 you could use their software for a lifetime subscription. Why is the lifetime subscription cheaper than the monthly subscription? Very strange.
Secondly, when I was about to sign up for the free trial, they insisted on me providing my credit card details to the website. Sensing a scam, I decided to do additional snooping to find out if the software was legit.

I did an image search on the profile picture of the person who reached out to me on LinkedIn. I got several hits back showing me that it was a stock image used by several different websites. After that, I closed the website, added this person to my block list and never looked back!

I’ll never actually know if the website was fraudulent. But my instinct was telling me something was off. Even if I was wrong, I only lost out on a free trial. But if I was right, I could have ended up losing more!

Spotting if financial fraud has happened

Well, prevention is better than cure. If you’re good at identifying it in the early stages, you shouldn’t have to worry about spotting fraudulent transactions in your regular transactions. However, there are some habits you can build to quickly spot fraudulent transactions if they happen.

Review your transactions regularly

At the very least, you should be reviewing your bank and/or credit card transactions on a monthly basis. This helps you identify any ‘weird’ looking transactions. If you spot anything strange or out of place, you can immediately call your bank to get more information. Things to look out for can include:

A payee that you don’t usually use
An unexplained amount that is greater than $100
A recurring transaction to a payee that you’ve never seen before

If you’re using financial software like PocketSmith, which connects to your bank feeds, this process is even easier. Plus, you can program rules for PocketSmith to categorize your regular payees automatically. This way, the irregular payees will be left uncategorized and you can review them for their legitimacy.

Keep track of your recurring payments

Insurance, software, and music service subscriptions are all examples of payments that you set up to occur regularly. If you know exactly what will be charged to your bill every month, it is easy to see any recurring payments that are out of the ordinary.

However, it is a good idea to keep recurring payments to a manageable number. Focus on the important stuff. Like insurance payments, rates payments and software subscriptions (like that PocketSmith subscription!). Avoid taking Buy Now Pay Later schemes which create even more recurring payments for you to keep track of. These are especially difficult to monitor because the values differ, and they can all add up really quickly!

Involve your partner in spending discussions

I get it, finances are a touchy subject. Some couples avoid saying the ‘F’ word (finances) around each other. But if you spot any weird spends during your transaction review, you need to discuss it with your partner first (if you have one). This way, you can ensure that you’re on the same page financially and they can confirm if any of your suspicions about the transaction are true.

Tangents for financial fraud

Not all scammers are dodgy email bots promising astounding returns for little to no investment. Sometimes it’s the folks closest to us that take advantage of our financial situation. Here are some less-talked-about tangents for financial fraud.

Your romantic partner

I’m not even talking about catfish scams. In my time as an accountant, I’ve seen a lot of relationships fall apart because of money. Often it’s because one partner has a don’t-care attitude to money and racks up the credit card bills. Then the more fiscally responsible partner has to shoulder the burden of debt.

When a breakup happens, spiteful partners can (and do) utilize their connection to your bank accounts to withdraw the money. They may even spend it on large purchases like cars or boats without you even knowing. I believe that in any relationship, having honest conversations about finance is important. An aversion to talking about money is often (in my opinion) a financial red flag in any relationship.

The best way you can protect yourself is to have a separate account that only you have access to. This can be a separate personal or even your business account. This way, even if things go south, your ex-partner can’t access funds that you’ve put away.

Your family members

This is especially true for older individuals who require care. I’ve read a lot of stories of nephews, grandchildren and even children taking advantage of their older relatives. This happens because they have access to their older relatives’ bank cards, passwords and cash.

If you have an older relative whom you feel is being taken advantage of, you should say something. Ask to see their bank transaction details. Better yet, help them set up a PocketSmith account that connects to their bank feed, which you can monitor to ensure that their money is being spent correctly.

As always, trust and communication are key to countering fraudulent activity. You need to be open with your older relatives and the person who is looking after them. Be sure that you are all on the same page when it comes to managing the older relative’s finances.

Your employees

Especially true for business owners! Even big corporations like Microsoft are not immune to this. Employees can sometimes occupy a trusted position in your business and take advantage of that position to exploit your company. Basically, any staff position that comes into contact with your business funds has the ability to defraud your business.

Examples include cash register operators, servers, secretaries, salespeople and, yes, accountants. Fortunately, there are a lot of studies dedicated to developing strong internal controls to reduce the likelihood of fraud happening. Here are some suggestions for internal controls you can implement in your business.

Security cameras on the premises will deter most would-be offenders from pocketing cash from customers.
Having two signatories on the bank account will also prevent large sums of money from being paid out by a single person.
You can have customers wire funds directly to your bank account instead of going through your salespeople.
If you have an accountant who pays your bills and suppliers for you, make sure to set a limit on the size of the transactions they can make. If you can’t afford another accountant to check their work, you must check the accountant’s work yourself!

Your business partners

In a slight variation on the investment scam, your business partner may convince you to invest in a venture together. However, said venture turned out to be a dud. What’s more, they claim a stake in the money you put in, saying that they’ve been working hard on the business and deserve a wage, even though the business isn’t making any money.

As an accountant, I’ve seen many business partnerships go sour. I’ve even had to step in and mediate for shareholders who were accusing each other of financial mismanagement. Here are some tips I’ve learned to protect yourself from fraudulent business partners.

Make sure you are a signatory to the business’ bank accounts. This prevents your partner from spending the money as they please.
Ensure that all partners sign a shareholder (or partnership) agreement which clearly outlines the roles, responsibilities and financial contributions of each partner.
If any partner wishes to work for the business and receive a wage, they must get, in writing, clear approval from all the other business partners for this to happen.

Scammers are becoming more sophisticated, and every day there is a new crypto-investment scam popping up. The best way to protect yourself is by educating yourself.

Professional help in combating financial fraud

Some folks will say that a financial advisor can help you avoid financial fraud. This is true to the extent that they can advise you on what is and isn’t a fraudulent investment in a very general way. However if you want a stronger control against financial fraud for your business, you need an accountant.

Due diligence reviews

Due diligence (DD) reviews are investigations that accountants carry out on potential investment targets for their clients. These are often businesses that are up for sale. We’ll look at the historical financials, research the industry, examine the prior ownership of the business, and flag any concerns that we have about the business. Most importantly, we can spot any scams in the making.

If the seller of the business is trying to overvalue the business or if they’re passing on a toxic asset, we’ll let you know about it. DDs can be expensive. But you know what is more expensive? Losing your savings on a bad, fraudulent investment.

Transaction analysis

Some accounting firms will perform bookkeeping work for their clients (like our firm). In doing so, we are keeping track of your business’ spending on a daily basis. The minute a transaction looks out of place, we’ll let you know immediately. Most of the time, the transactions are legitimate. However, there have been more than a few occasions where we spotted overpayments made to our client’s suppliers in their transactions. Thanks to our regular checking and quick communication, our client was able to get a refund from their supplier. As you can see, having a pair of trusted eyes on the accounts helps spot discrepancies (like fraud) really quickly!

Stay safe from financial fraud

Scammers are becoming more sophisticated, and every day there is a new crypto-investment scam popping up. The best way to protect yourself is by educating yourself (like you’re doing right now, good job!) If you’re looking to invest on an investment platform, make sure that they are licensed by the Financial Markets Authority if you are in New Zealand. If you live outside of New Zealand, only invest in platforms that have been verified by a governmental financial authority.

Be aware of financial advisors pushing investment products onto you. They may not necessarily be fraudulent, but the advisors are almost certainly getting a cut of the product, and they may be saddling you with a non-optimal investment to increase their financial gain (which is apparently common practice).

Stay safe, dear reader! Invest wisely, and as always:

Stay positive!

PocketSmith's Top Financial Podcast Picks for 2024

Sun, 29 Sep 2024 11:00:00 +0000

The Australian Finance Podcast

Hosted by Owen and Kate from Rask Australia, The Australian Finance Podcast is an excellent resource for anyone wanting to deepen their financial understanding. They share their tips and tricks on all sorts of money-related topics such as investing, property, and insurance. Their podcast style is conversational, which makes it enjoyable to listen to their expert knowledge and insightful interviews with other industry voices. I personally really enjoy their starter pack and mini-series that describes the essentials you need to know about money, and gives you action points to ensure you can get started. If you want to hear why using PocketSmith is one of Kate and Mitch’s favorite money hacks, have a listen to 10 money hacks to level up your life in 2024. This podcast is perfect for listeners who want to learn in-depth knowledge about investing and other finance-related topics.

Equity Mates Investing Podcast

The next podcast we have loved this year is the Equity Mates Investing Podcast. Hosted by Bryce and Ren, this podcast is a super fun and energetic way to hear licensed investing advice. With interviews featuring CEOs and other financial heavyweights, they make learning about finance an engaging experience. They have a great series called ‘Uncovered’ where they look at up-and-coming Australian companies to hear their journey and what they’re about. There is also a great episode about Equity Mates tracking their spending with PocketSmith. Ideal for those looking to level up their investing game, Equity Mates drops new episodes twice a week — perfect for when you’ve got a bit of downtime and want to take notes!

The Broke Generation

For a podcast that feels like a chat with a friend, The Broke Generation Podcast, hosted by our pal Emma Edwards is a perfect listen. Emma breaks down financial topics without judgement, offering relatable examples like emotional spending and practical advice on budgeting. Her lighthearted approach leaves you feeling inspired and ready to make changes. She covers a large variety of topics, such as budgeting tips and mid-year checkpoints. Her personal stories are a favorite as she relates them to money situations such as hair styling and money consumption. Give The Broke Generation a listen if you want to feel better about money, without feeling patronized or left thinking it’s all your fault.

The Happy Saver

An amazing New Zealand podcast is The Happy Saver, hosted by Ruth Henderson, a longtime PocketSmith friend. She focuses on getting people started on their financial journey, whether it’s starting the money conversation or adjusting what you already have. Her podcast style involves sharing stories from her listeners about their financial situation and what she believes is their next steps. From 20-year-olds with a big chunk of savings to 40-year-olds who are working to pay off their mortgage, these podcasts are super interesting as they let you hear about a variety of financial situations. She also offers some podcast series, such as her financial independence series, which offers a great overview of topics such as net worth, investing, and KiwiSaver. I personally loved this series as it gave a nice and simple overview of topics that can seem tricky but are essential to know. This is a great one to chuck on while you’re cooking dinner or doing some cleaning as you listen to the different, and engaging, stories Ruth has to share.

It’s No Secret

Hosted by Cat and Christine, It’s No Secret by personal finance platform Kernel answers the questions you’re afraid to ask about money. Each Tuesday, they cover everything from personal finance wins and failures to interviews with fellow Kiwis about their financial journeys. I love their question episodes as they really get you thinking, for example, “Is university worth the cost?” or “Does money affect friendships?” They also discuss property and investing to help their listeners grow their wealth. This podcast is great for those seeking practical advice and answers to life’s financial questions.

Cheques and Balances

Another great New Zealand podcast is Cheques and Balances, hosted by James Blair and Michael Vincent of Lighthouse Financial. Their episodes are short, sweet, and packed with actionable financial advice. James and Micheal share a large range of knowledge on various different financial situations, such as moving to a different country, retirement funds, debt, and many more. I really enjoy their ‘Takeover’ episodes, featuring Jess and Makayla, as they add an extra perspective to their discussions. If you’re after digestible, New Zealand-focused financial content, this is the podcast for you.

Get Rich Slow Club

Get Rich Slow Club, hosted by personal finance creator Tash and Ana from investing platform Pearler, aims to make long-term investing accessible by stripping away the complex jargon. Their episodes focus on slow and steady wealth building, rather than get-rich-quick schemes. One of my favorites is their discussion on first-home buying, where they break down how investing plays a role in achieving homeownership. This podcast is perfect for anyone who wants a calm and informative listen with their cup of tea. Get Rich Slow Club covers everything from saving for retirement to learning the investment basics.

The Money With Katie Show

An American-based podcast that shares great insights is The Money With Katie Show. Katie focuses on creating fun and engaging conversations about all things money. Her main focus is on the FIRE (Financial Independence Retire Early) movement as she discusses what you need to do to achieve this. She brings on all sorts of guests to help discuss tax, spending and investing tips and tricks. I enjoy how Katie’s podcasts are done in a relatable way as it makes the topic of money exciting rather than stressful. Have a listen if you want to learn more about how to look after your money in a US-related context.

Cash Chats Money Podcast

Cash Chats Money Podcast from Be Clever With Your Money is an excellent UK finance podcast. Hosted by Andy Webb, a personal finance expert, this podcast focuses on how you can make the most out of your money. The segment ‘Your Money This Week’ brings co-host Amelia Murray to join and discuss different money stories that have happened throughout the previous week. These are great episodes as they are current and engaging. This podcast is well-recognized and perfect for listeners who want to feel inspired to make monetary changes.

Eliza is PocketSmith’s marketing intern and is currently studying a Bachelor of Commerce in Marketing and Management. Eliza is an active saver to achieve her goal of having no student loan at the end of her degree. Eliza’s interest involves going on long walks with her friends and family, and she is passionate about photography.

Teenager Harry Uses PocketSmith To Get Ready for Uni

Mon, 23 Sep 2024 12:00:00 +0000

Read how Harry is setting himself up with good habits by monitoring his income and expenses trends with PocketSmith.

Tell us a little about yourself?

My name is Harry. I have just finished my A-levels and started attending university in September. I enjoy cooking and competitive sailing.

How would you describe your role in your household?

During the summer, I have a job, and my parents give me an allowance to cover my food expenses. I manage this allowance and cook for myself.

What drew you to PocketSmith?

I wanted to track my finances to avoid overspending or being unable to afford things, especially since I’ll be studying in London. PocketSmith helps me stay on budget with its smart budget alerts and visual reminders.

How long have you been with us?

I have been using PocketSmith for almost five months.

What do you primarily use PocketSmith for?

I use PocketSmith to ensure I stay within my budget, monitor changes in spending trends, and flag unusual expenses so I can address them.

PocketSmith helps me track my income and expenses, showing my spending breakdown and enabling me to create rules and filters to automatically sort transactions. I use the label feature to export data as a text document, which I then input into an Excel finance sheet. This process is helping me prepare for managing my finances at university.

How has PocketSmith changed the way you do money?

PocketSmith has helped me stay on budget and reassured me by showing me my financial habits. It’s like having someone oversee my finances, helping me budget for expected expenses in the future.

What are your favorite features?

My favorite features include the savings rate dashboard, bill reminders, recent transactions view, balance page, and spending forecast.

Got any tips?

Don’t create overly narrow categories; make them broader to reduce the number of rules you need. Also, nest labels within larger labels, such as having a “bills” label with sub-labels for “water,” “wifi,” and “electricity.”

What’s the best money decision you made in the past 12 months?

The best decision I made was to save a bit of money each week with the help of PocketSmith, allowing me to see what I would have left after forecasted or recurring purchases. This enabled me to save enough to buy headphones I had wanted for ages, which I didn’t think I could afford.

How to Deal With Financial Burnout

Mon, 16 Sep 2024 12:00:00 +0000

Burnout has become commonplace in our everyday conversations in recent years, and it’s not surprising. Having dealt with a global pandemic and the Ukraine war, we’re now facing a cost of living crisis and, *checks notes*, yep, the threat of a global recession. Cool, cool, cool.

Burnout symptoms extend to physical, emotional, and behavioral symptoms, including headaches, feeling overwhelmed, low self-esteem, cynicism, low satisfaction, procrastination, and isolation. Traditionally a term associated with employees in workplaces, burnout can extend to other areas of our life, too, including our finances.

While financial burnout may be linked to burnout from other causes, the money-specific symptoms of burnout are worth looking out for.

What is financial burnout?

Financial burnout is a feeling of overwhelmedness, helplessness, avoidance, or stress around your personal finances. Money may keep you up at night, or you may experience feelings of anxiety related to money, and procrastinate completing key financial tasks.

Financial burnout can be caused by a myriad of things, from rising costs to budgeting to mounting debt. Money is inherently emotional, and so our personal finances can often get caught up in other things going on in our lives.

How to manage financial burnout

Managing financial burnout starts with understanding where the burnout is coming from. Is it a byproduct of burnout in another area, for example at work, or while grieving the loss of a loved one or the end of a relationship, or are your feelings caused by money itself?

Next, see if you can identify whether your feelings are linked to over-engagement or under-engagement with your finances. Here’s why:

Some forms of financial burnout come from working too hard towards a goal at an unsustainable rate. For example, if you’re paying off debt and you’ve been living ultra-frugally for some time, financial burnout can ensue from focusing too much on cost-cutting.

Other forms of financial burnout can be caused by or can cause, avoidance of your finances. You may have let expenses pile up without paying them, have last year’s tax return to file, or know you need to clean up your spending habits but don’t know where to start.

Understanding the difference between the two is important for what you do next. If you’re over-engaged, we need to look at ways to step back. If you’re under-engaged, we need to find ways to safely start facing your finances.

Overcoming financial burnout

When you feel burned out, taking action on those feelings can feel draining and impossible, so we need to approach with caution. Start by creating a safe space for yourself without distractions or interruptions. Then grab a piece of paper and brainstorm or mind map the key themes that are causing you to feel the way you’re feeling. Dump it all out onto a page — it can feel surprisingly cathartic.

Once it’s out on a page, walk away. Give yourself some space — don’t immediately try to tackle all the things you just let out. That defeats the purpose!

After a few days, return to your brainstorm and extract some of the key actions you feel you can face starting with. By extracting them from your brain dump, you can gradually take things off your mental plate one by one, methodically by problem, without facing the whole thing as one huge task that’s floating around your mind.

By focusing on manageable steps, you’ll be able to tackle the bigger picture without feeling overwhelmed. Financial advisor Trevor Randall recommends “celebrating small wins along the way”. This will not only boost your confidence but also help reduce stress as you make progress on your financial goals. Taking things one step at a time will prevent burnout and support you in building long-term financial resilience.

Preventing or intercepting financial burnout

Burnout can happen after a period of consistent stress, focus, or overwhelmedness — but we can stop it in its tracks if we know how. Here are some ways to prevent burnout from occurring:

Check in with your money regularly. A monthly money date is more than a social media buzzphrase. It really can help you keep on top of things, and giving yourself that regular accountability keeps things small and manageable.
Set realistic goals. Some burnout can arise from focusing too hard on a goal. This can leave you disillusioned with your finances, and maybe even lead to self-sabotage.
If you see a mental health professional, mentioning your feelings around money during your treatment can be helpful as it may be linked to other mental health challenges.

Getting support for financial burnout

If your financial burnout is linked to financial hardship or cost of living pressures, there is help available. Financial counselors are free in many countries and can help you deal with mounting bills or debts and feelings of helplessness or overwhelmedness. Helplines for Australians and New Zealanders are listed below.

Australia

National Debt Helpline: 1800 007 007
Mob Strong Debt Helpline: 1800 808 488 (free legal advice service about money matters for Aboriginal and Torres Strait Islander peoples)
Small Business Debt Helpline: 1800 413 828

New Zealand

MoneyTalks Helpline: 0800 345 123

Five Essential Budgeting Tips for Financial Success With PocketSmith

Thu, 12 Sep 2024 12:00:00 +0000

Managing your finances can sometimes feel like a never-ending task. As a Financial Adviser, helping a client with their budget is often a top priority for me, and PocketSmith is one of the tools we use daily to help clients achieve financial freedom.

Creating a budget and sticking to it is one of the first steps in taking control of your finances. You just need the right tools, strategies, and support.

My top five tips below are a great place to start, along with this podcast episode of Cheques and Balances: The Takeover — Budgeting 101 (also available on Spotify and Apple podcasts). Makayla Edwards-Russell and I discuss where to start with a budget, as well as our own bills and spending habits.

1. Automate EVERYTHING

Automation is a powerful tool for anyone looking to improve their financial health. By setting up automatic payments and categorization, you can work towards a goal with no admin required.

Set up automatic payments to ensure that your bills are always paid on time and that you are consistently setting aside some savings. You could be building up an emergency fund or saving for specific goals like a holiday, house deposit or retirement.
Make sure you are using PocketSmith’s Category Rules tool wisely to reduce the time spent on managing your money. It shouldn’t take more than five minutes a week!
PocketSmith’s forecasting tool can help you visualize how these automated payments will look over time. It can show that you may need to adjust your budget, or it will keep you motivated and on track.

2. Plan for the one-offs

Whether it’s a new car, renos, or an unexpected vet bill, big expenses can disrupt your financial stability if you’re not prepared. Planning ahead for these expenses can help you avoid unnecessary debt and stay in control of your finances.

Allow for the one-offs in your budget, using PocketSmith to set up an annual allowance for these costs. By breaking it down into manageable monthly savings, you can gradually build up the funds you need.
If you have a big expense coming up, you may need to adjust your budget to accommodate it. This might mean cutting back on non-essential spending for a few months to ensure you can cover the cost.
One-offs will always come up. Expect the unexpected!

3. Spring clean your providers and subscriptions

Set an annual calendar reminder to review and refresh your utility providers and subscriptions. Over time, we often accumulate subscriptions and services we no longer use or need.

Check if you are getting the best rates for your utilities, such as electricity, gas, and internet. Compare different providers and consider switching if there are competitive alternatives.
Look through your budget or transactions and identify subscriptions that you no longer use. Whether it’s a streaming service, magazine subscription, or gym membership, cancel anything that does not add value to your life.
Don’t hesitate to ask your current providers for better rates. Often, a simple phone call can result in discounts or promotional rates.

4. Track your spending

Tracking your spending is essential for understanding where your money goes and identifying areas you may need to adjust. PocketSmith makes it easy to categorize your expenses and monitor your spending patterns.

Set up categories for different types of expenses, such as groceries, dining out, transportation, and entertainment. This helps you see exactly where your money is going.
Establish spending limits for each category based on your budget. PocketSmith will alert you if you’re approaching or exceeding these limits, helping you stay on track.
Set aside some time in your calendar to review your spending at the end of each month. This will help you identify any problematic areas and adjust your budget accordingly.

5. Regularly review your budget

Your financial situation and goals can change over time, so it’s important to review and adjust your budget regularly to reflect these changes. PocketSmith’s flexible budgeting tools make this process easy.

Set aside time each month to review your budget and make any necessary adjustments. This helps ensure that your budget remains aligned with your financial goals.
In addition to monthly reviews, conduct a more comprehensive budget overhaul at least once a year. This is a good time to reassess your financial goals, review your spending habits, and make any significant changes to your budget.
If you manage finances for your household, make sure to involve your partner in the budgeting process. This ensures that everyone is on the same page and working towards the same financial goals.

By implementing these tips and utilizing PocketSmith, you can take control of your finances and make informed decisions that will help you achieve your financial goals.

For more information or to book a meeting with a Financial Adviser from Lighthouse, please visit our website.

Jess is a Financial Adviser at Lighthouse and avid user of PocketSmith, helping individuals and families take control of their finances. With a passion for personal finance and a knack for simplifying complex client budgets, Jess writes to empower others on their journey to financial independence.

Invoicing Your Freelance Clients

Tue, 10 Sep 2024 12:00:00 +0000

How invoicing works for me

To answer the #1 most-asked question about my invoicing process as a freelancer: No, I don’t use Xero. I also don’t subscribe to the old “payment by the 20th of the following month” model. I invoice at the end of each week or the end of the project, as needed, with a default 14-day payment window. It’s that simple. How else am I supposed to keep anything like a predictable income moving through my financial train stations?

I use Hnry. They’re my invoicing and expensing people and also my official tax agent. The process is simple:

Add client and set the currency I’ll be charging them in. NZD for Kiwi clients, CAD for Canadian clients, etc.
Create invoice, usually by auto-filling from my Services section.
Send. Payment happens, either by credit card or direct transfer.
Hnry takes care of the income tax, ACC, and any allocations I’ve set for tithes, Kiwisaver, etc. They send the rest to my designated bank account.
That transaction then shows up in PocketSmith. No setting aside 25% for income tax and GST here! It’s my actual post-tax income. It’s all mine to do whatever I want with (you know… after I’ve paid rent and coughed up a painful amount for groceries.)

Note: I’m getting better at predicting net income, but there are always small variations. At this point, I also go into that client’s budget and tweak the amount to reflect the actual figure that I was paid.

My top tips for invoicing clients

1. Communicate, communicate, communicate (and negotiate)

At my last salaried job, I was once handed a task to do “whenever you can get to it” which, when I pressed for more information, turned out to be “by the end of today, which is in two hours.” Cue side-eye. I’ve brought that lesson into self-employment. Up-front communication is one of the most critical elements of freelance invoicing. This doesn’t just encompass my hourly or project rate, but also payment terms, hard or soft deadlines, and clarifying those tricky situations like “Is this job for a nonprofit organization paid* or voluntary?”

Negotiation is part of this, too. Maybe a client has a small budget, so they want a project cap of five hours. Maybe they can only run payments once a month, so they’d prefer a single invoice at the end of the project. Whatever it is, it helps to be a little flexible.

*and I don’t mean paid in branded pens, a baseball cap, or “exposure.”

2. Speedy is as speedy does

Here’s the great part about offering a deadline: It’s proactive and it sets an expectation. Packed month? No problem, you gave yourself breathing room. Slow month? Delivering ahead of schedule means the client will love you.

This often has a direct financial benefit, too! More than once, I’ve had clients pay me the same day I’ve invoiced them, because “you did such a speedy job on this, it’s only fair we repay the favor.”

3. …But not too speedy

Don’t promise more than you can deliver; if you do, communicate that sooner rather than later. Heck, communicate anyway! And don’t let those Speedy Gonzales jobs become the norm. If I deliver a 48-hour turnaround, I always make it clear it’s an outlier and shouldn’t be the expectation going forward.

If someone wants two-day turnarounds on a regular basis, that’s when you charge them that extra 30% rush fee — or you start evaluating whether they really bring joy to your client list.

4. Nobody minds a polite nudge

Look, life happens, right? We’ve all been there. I’ve had to apologize for late deliverables, the same as a client had to apologize for completely missing an invoice in their crowded inbox. I have a weekly client (a rare thing in freelancing!) who regularly runs weeks overdue on his invoices and then pays several at once. It’s give and take! Sending that reminder note might seem scary, but I promise you it’s not. Nobody will be offended that you’re asking to be fairly and promptly compensated for your work.

And if they are offended? Read the next sentence.

5. psst You can say no

So your client hasn’t paid you in three months. Or they’re on the phone twelve times in one day with their demands, then the next day they’re incommunicado when you urgently need sign-off. Or they’re flat-out abusive. Pro tip: You’re the boss. You can say no.

I’ve done it myself. I can only keep so many people on my client list, and I’d rather they were people I enjoy working with. But again: Communicate. It’s polite to give enough lead time to wrap up any projects before you send that final invoice with a beaming grin.

Why Are Part-Time Jobs Important for Teenagers?

Thu, 05 Sep 2024 12:00:00 +0000

Look around you, and you will see that everyone works. And if they are no longer working, they were at some point in their lives. Therefore, it makes sense to us to prepare our daughter for the fact that she will work one day. I want her work to be an enjoyable experience, as it is for us.

Finding a work-school balance is important

Since she was very young, I have encouraged our daughter to work and earn money for herself. Initially, this was by her ‘working’ for Jonny and me, and then, as time passed, she progressed to working for others. Now, at 16, I see her primary job as her schooling, and her doing well remains front and center for us as a family.

However, I am also aware that school cannot teach her every skill she needs in life, so I am actively supporting her acquisition of as many extra skills as possible. One of them is the ability to work for and with others and find out for herself just what type of work she likes to do. I am encouraging her to learn all the softer skills around working, such as managing the money she earns, interpersonal relationships, and time management.

Encouraging your teenager to find some paid work that fits around their schooling has many positive outcomes, and the primary standouts are:

The opportunity to find out what they do and don’t enjoy doing as a job
The chance to make some money of their own

Outside of those two positives, there are many more:

Engagement with others outside of home and school
The responsibilities that come with working (time management is a key one)
Opening their eyes to what careers are out there
The ability to budget and manage their own money
An increased understanding of the value of money
Negotiation skills around pay rates, working hours and the work itself

I advocate helping your child get their first job

Whether your child is self-motivated or needs a little prodding from you, get behind them and support them to approach people or businesses, fill out application forms, and get to work on time. Via my blog, The Happy Saver, I’ve met countless young people whose parents actively walked beside them to get their first job and then helped them progress to others, and it’s been hugely helpful in assisting them to navigate the working world.

My daughter’s first ‘proper’ job working in a cherry packhouse over the summer resulted from a chance conversation I had with the manager that, with her okay, I followed up on. Helping your child get a job has to be a collaboration that you both agree on. We were able to negotiate hours and pay rates that suited both employer and employee. Her new employer was grateful for the fact that they knew an adult was taking an interest because what that meant for them was they knew they would have a reliable worker who would turn up on time, ready to work. My daughter, who was only 14 then, knew she could come to me with any questions or concerns about this significant step in her life, and I would help her work through them.

Initially, when I dropped her off or collected her after the shifts, I would stop in and see the office manager to check that they were happy, asking, “Is there anything she needs to be doing differently?” Due to her young age, they were amazing at being really flexible in all aspects. But within a relatively short period, she settled in well. Far from being a ‘helicopter parent,’ I stayed around long enough to help her settle in and then stepped back.

PocketSmith has been instrumental in letting her see her entire financial life in one place and has given her much greater awareness of where her money comes from and where it is going.

Working increases confidence

That first summer job gave her the confidence to think about working during the school term. Connections I had within our community facilitated a conversation between her and her future employer, the local library, and saw her apply for a position. She missed out on that job but learned another lesson: Coping with a ‘no’. Again, I came alongside her and encouraged her to reply to the ‘sorry you didn’t get the job’ email with a reply, “Please keep me in mind for future roles”. And sure enough, six months later, a job opened up, which she got. She now works a few hours a week there.

For the last few years, she has had steady summer packhouse work and steady work during term time. Each teaches her about the workforce, but neither gets in the way of schooling. Both give her some money in her pocket to manage. Many of her friends also have part-time jobs, and each compares notes about work conditions, work issues, pay rates and types of work. These open conversations are brilliant between teens because they enable them to counsel each other to find better pay, better jobs, or deal with workplace personal issues.

How does my daughter manage her earnings?

Having two jobs has been great because each pays differently and shows her the variety of pay and conditions available. Her summer job has a higher hourly rate but unpredictable hours, while her library job has a lower hourly rate but set hours. Both workplaces have vastly different colleagues, too, from roving international seasonal workers to full-time, long-term team members.

I did not need to remind her to check her bank account for her wages; she quickly learned when to expect a bump in her balance! But I did have conversations about what to do when that money arrived. The most important thing for me was to continue encouraging her 50% investment rate. I didn’t want her to spend all her money as it came in and learn the poor lesson of working paycheck to paycheck. Once a month, we would sit down, add up all her income, and transfer half to her Sharesies S&P US500 ETF investment. Having invested in her future, I have always told her that the remaining money is hers to spend, share and enjoy.

I also took the time to go through her payslips and explain what they show her, including the tax she pays (and why she pays it), the KiwiSaver deductions, and how she accrues holidays. Occasionally, questions arose like, “Why did I get paid when I didn’t go to work because it was a public holiday?” She was delighted to learn about paid public holidays! Bumps in pay lead to conversations about minimum wage increases over time. So many conversations crop up, each teaching her something about paid work.

She’s not a big spender; most of her outgoings are small, but others are large, such as replacing her phone. Therefore, just like I do, she has ‘sinking funds’ with her bank, where each week, she automatically moves money into a different bank account to save for a particular purpose. Paid work means the amount of money she deals with continues to grow, and the systems she already has in place enable her to adjust to her ever-increasing income.

Introducing PocketSmith

More recently, with her approval, I took the next step in teaching her to manage her money and signed her up with PocketSmith. She has her account linked to her bank accounts, KiwiSaver, and Sharesies. We set everything up together, and then I left her to tinker and explore, taking a very light-touch approach. She is a teenager who pushes back if I tell her what to do, which I respect.

Now, at the end of each month, I ask if I can have a sit-down and go over her money, just checking in with her spending and income, helping her categorize any tricky transactions and answering any questions. PocketSmith has been instrumental in letting her see her entire financial life in one place and has given her much greater awareness of where her money comes from and where it is going. It’s early days, but I’m pleased to have helped her start while she is still living at home because having an overview of her money will set her up so well for when she goes it alone.

Early work, lasting life skills

Taking on some paid employment has been fundamental to teaching her some life lessons safely and constructively. The lessons and insights, both good and bad, that come from working feed back into her more formal school education, and I remain, as she needs us to be, incredibly supportive of her working. Is she overjoyed to go to work? No, not really! But, I’m afraid you don’t get a pass on working, and our staying involved each step of the way is helping her plot her future career path.

Money Milestones Q&A: Daisie, Retiree

Thu, 29 Aug 2024 12:00:00 +0000

For New Zealand Money Month, PocketSmith’s Chief Marketing Officer Dora Yip chats to her mum, Daisie, a retired Singaporean educator in her 70s.

What are the most important lessons you’ve learned about managing money?

I grew up in a humble household and learned to always spend within your means from a young age. When I started working, I decided that whatever I earned, I wanted to save some first. I aimed for 10%.

What has been your biggest financial challenge, and how did you overcome it?

Your dad and I were young parents. I was 22 when I had my first child, and he was 24! We decided for me to take a break from teaching to look after our 1-year-old daughter. This was in the 1970s and not commonly done. Most mothers carried on working and relied on extended family for childcare help.

We also planned not to have a second child too soon. (Reader: there’s a five-year age gap between Dora and her older sister!) Because we were quite intentional with our planning, and very careful and prudent with our budget, and spent within our means, we found that it was very comfortable.

I also tutored the neighbourhood children when I could to earn a bit of side income.

Where do you go for financial advice and information?

I’ve never actively sought out financial advice. On reflection, I think it’s because I’m a civil servant, and in Singapore, at least, this means that my salary was stable and guaranteed. This consistency of income meant I always had a psychological safety net.

How do you measure financial success in your life?

Financial success to me means having enough to live on and enough to save.

My day-to-day expenses are minimal. I don’t really care for brands, and am pretty frugal. I still have good health, can travel and eat what I want, and spend time with my grandkids. I don’t need expensive things to be happy.

Do you have an approach to managing money?

Frankly, no! I have been blessed with an iron rice bowl. I was a teacher who retired as a Superintendent of schools. I married another teacher, so our financial situation has been pretty stable together.

How did you prepare financially for retirement?

I thank the Singapore government for creating the Central Provident Fund — it’s our country’s compulsory savings plan to help citizens and residents fund their housing, education, retirement and healthcare needs.

I’m also a typical kiasu Singaporean, so I knew that I had to always focus on continuously improving and finding the best path for myself. In the case of retirement, I could have opted to take out a lump sum payout when I retired or live off a monthly pension. I chose the monthly pension because I felt that it was the most stress-free option. I also didn’t know what to do with a big lump sum payment — I prefer to have a healthy regular income in retirement rather than one big payment and nothing coming in after.

How do you manage your retirement income and expenses?

My day-to-day expenses are minimal. I don’t really care for brands, and am pretty frugal. I’m still spending the same amount on haircuts than I did as a new teacher. My lifestyle hasn’t really crept up with growing income. Take clothing for example, as long as it’s comfortable and doesn’t look dowdy or tarnish my professional look, I’m happy to wear it!

I still have good health, can travel and eat what I want, and spend time with my grandkids. I don’t need expensive things to be happy.

How do you handle healthcare costs and other unexpected expenses in retirement?

Singapore has excellent healthcare, and I’m also careful with nutrition and diet, and I do what I can to avoid falling sick. I also have a good savings buffer for emergencies.

What financial habits have helped you the most in reaching a comfortable retirement?

A helpful fashion tip that has served me well: I want to look good, but I don’t have to look expensive.

This interview is part of New Zealand Money Month 2024. NZMM is coordinated by trusted personal finance resource Sorted, in partnership with the financial capability community, and it involves events all around the country to encourage New Zealanders to talk about money and develop greater financial capability. To further the conversation about money, we got in touch with everyday people to explore how financial priorities and challenges evolve through different life stages and milestones.

Five Things I Learned in the Process of Writing a Book

Mon, 26 Aug 2024 12:00:00 +0000

If you’ve ever considered writing a book, you’re not alone. In fact, it’s estimated that as many as 80% of people say they’d like to write a book one day. I was one of those people, and now, after 18 months of work, I published my first book, Good With Money (crowd cheers!)

Unsurprisingly, book writing isn’t all sunshine and rainbows. It was actually a lot of tears and sour Skittles, if I’m honest. But it was one hell of an experience. If you’ve ever thought about putting pen to paper — or perhaps more appropriately, fingers to keys — here are five things I learned along the way that might help you.

1. You need to work with your brain

We all approach work differently — and writing a book will tell you a lot about how your brain works. Some people swear by the rule of writing for one hour every morning or holding themselves accountable to writing every single day for however long they feel able to. I, however, found that I needed at least an hour of procrastination time (read: Staring at the wall, unable to get started) before I had any hope of getting anything done. Needless to say, the hour-a-day rule didn’t work for me. Instead, I found I needed to carve out entire days dedicated to writing so that I had time to get distracted, go for a walk around the block, get in the headspace to write something and step away whenever I got too overwhelmed.

I would set Pomodoro timers for short 25-minute bursts of work, where I’d often smash out over 1,000 words at a time, before spending equally as long doing anything but writing. At first I felt guilty, like I wasn’t working hard enough. I’d get to the end of a writing day and have written 5,000 words, but done so in five intense time blocks of 25-45 minutes each. Letting go of how I thought an author ‘should’ work meant I could focus on just getting the words out, however that looked.

2. You will hate everything you’ve written at multiple points

This was the part I was most unprepared for. I really wanted to fall in love with my book, but for the most part, I hated it. You get to the point where you’re so familiar with what you’ve written, and you’ve gone through so many iterations of the content itself, that you lose all sense of rational thought, and you’ll truly believe that your book is awful. If you’re anything like me, you’ll take that even further and decide that you’re actually terrible at what you do and don’t know anything about your subject matter.

During one particularly emotionally charged writing day, I found myself deep in a Reddit discussion between authors. An author in that thread had said, “The only thing you’ll hate more than the words you’ve still got to write are the words you’ve already written,” and I breathed a huge sigh of relief that I wasn’t alone.

You will hate your book. It’s normal. It comes and goes, but you have to just accept it. I got into a good rhythm eventually. Any time I started to feel that panic coming on, I would shut my laptop, go outside and come back to it in half an hour, and work on a different section when I did so.

3. Choosing a title really, really helps

The real turning point for my book writing journey was when I settled on the title, Good With Money. For a long time I was working with an ‘untitled manuscript’, but it made it really difficult to settle on a direction or weave in thematic links to the overall direction of the book. It also helped me pull myself out of mental spirals by giving me an anchor point to bring everything back to. I think that’s especially important for non-fiction books.

I’d originally planned to just get words out and shape the title later, which probably does work for some people. But if you’re finding yourself going around in circles, spending some time brainstorming titles might really help. It can feel like you’re wasting time, but trust me. It needs to be done at some point.

4. Scaffolding out your structure needs to be a priority

When you’re writing a book, you’re pouring all your knowledge, passion, analogies, frameworks, and stories about your subject matter into one little container — and organizing that can be a bit of a stress sandwich.

You’re taking your reader through a transformation. They’re a different version of themselves after reading your book. And wanting to get that transformation right can make it hard to know when to introduce certain concepts, how to structure the information, and how to introduce and conclude different subsections of the book.

One of the most valuable conversations I had during my book writing experience was with a fellow non-fiction author who had finished her manuscript recently. She said to me, “Emma, just pick a structure and write to it.” And that’s when I realized: My quest for the one perfect structure was keeping me stuck. There’s no one right way to write your book or tell your story, but it serves as a great procrastination activity to keep tweaking your chapter list or scrapping the whole thing and starting a new one.

No structure is worth anything if you never write to it. So if you’re stuck on structure, take the advice I did: Just pick one. I didn’t personally make use of AI tools like ChatGPT during my book writing process, but if I did it again, I might consider trialling different prompts to get thought-starter ideas on structure.

5. Reading other people’s books is a bad idea

Yikes, did I wish someone had told me this. When I was feeling particularly uninspired on how to shape my brain dumped words into a book, I tried reading other non-fiction books in the hope it would help things click. Big mistake.

A published book has gone through multiple rounds of edits, usually with a team of people working on it. Comparing your messy manuscript to a completed and published product is a surefire way to double down on your self-doubt and make the end goal feel even more unreachable.

My advice? Don’t read other non-fiction books while writing yours. I devoured a lot of fiction, though. It helped me switch my brain off and renew my creativity.

Curious as to how this chaotic process turned into a book? Get your copy of Good With Money at all major retailers and many independents across Australia and New Zealand.

Money Milestones Q&A: Rupert, Early Startup Founder

Wed, 21 Aug 2024 12:00:00 +0000

Tell us a bit about yourself!

My name is Rupert, and I live in beautiful Dunedin. I moved here three years ago from Melbourne, Australia. I was a teacher for 10 years in metro and regional Victoria, where I worked predominantly in lower socio-economic status schools with high trauma-affected student cohorts. I was, and remain, really passionate about working with these kids to improve their educational and life outcomes through education.

When I moved to Dunedin, I made a bit of a career shift and went into software and web development, which I had largely self-taught throughout the lockdowns during the pandemic. At the start of this year, I finally went all in on my own startup, returning to my educational roots and love of reading and reading instruction.

I recently released my first product to market: Spellcaster. Spellcaster is designed to support older readers who still need to work on foundational literacy skills but don’t want to feel babied by the resources. It’s currently being used in a few schools around New Zealand and Australia, as well as in a few speech therapy and literacy tutoring clinics which is very cool to see, but it’s just the start of the journey.

What is your approach to managing money?

Honestly, pretty bush league.

I just have a Google sheet with all my outgoings, revenue, and incoming money. I try to keep all of my subscriptions, contractors and the like clearly laid out so I know how much things are costing me, how much runway I have, and when my “drop dead” date as a company is.

When I’m preparing for a feature sprint, I budget out how much it will cost in terms of additional labor so I have a good handle on what it’s going to cost me to achieve that sprint.

I don’t really use any form of software. I have a Xero subscription which costs me money, but I haven’t used it yet! I’m waiting for my accountant to show me how to use it.

How do you measure financial success in your life?

For me, “financial success” is simply having enough to not feel stressed. It means having some buffer and enough disposable income so that you can do things that you enjoy: For me, that’s eating out, buying books, having friends over for dinner, and doing a bit of travel back to Australia.

Nothing too extreme. I just seek to be able to do those things without any stress. I like working; it is a wonderful sense of purpose and meaning — especially when I am working on Spellcaster. I think it is a necessary ingredient to a balanced and happy life, so I’m not looking to, like, exit the workforce and live on a yacht.

I just want to earn enough to do the things that I enjoy without feeling like I have to cut back or sacrifice other things in my day-to-day to afford those things.

But that is fine because my personal life satisfaction has definitely gone up because I get to work every day on something that I’m passionate about and care deeply about. I know that if I do this well and do this right and execute properly, I will probably be okay in terms of my personal net worth again.

How did you manage your personal budget alongside your business budget in the early stages?

I manage my personal budget by always making sure I spend more than I earn.

Ha, joking… but it’s also true.

I have a pretty haphazard approach to managing my money. I definitely live a La Croix lifestyle on a soda water budget. I tried doing The Barefoot Investor stuff with the buckets and found it was totally counterintuitive for me — it didn’t work. Basically, I just have a pretty well-built Google Sheets spreadsheet that I use to just manage outgoings and incoming, and then I watch my bank account trickle down slowly 😀

The best thing I’ve done is probably documenting all of my outgoings and then systematically removing what we didn’t need and things we weren’t using regularly to bring things down a bit.

But other than that, not great with managing my money.

How has starting your own business impacted your personal net worth?

Negatively. But in a good way!

As the founder of a very early-stage startup, I obviously can’t pay myself the sort of salary that is concomitant with my actual career stage or skills. But that is fine because my personal life satisfaction has definitely gone up because I get to work every day on something that I’m passionate about and care deeply about. I know that if I do this well and do this right and execute properly, I will probably be okay in terms of my personal net worth again. I’m not on a mission to be a squillionaire.

How do you balance your personal financial goals with the demands of running a business?

I don’t really have many personal goals at this stage. I’m sort of just hoping to be happy with where I’m at personally, so it’s not like I see having additional money unlocking more stuff — I’m not looking to buy additional houses or do any major life events that require a lot of money.

Obviously, I’ve got my mortgage and everything like that, but at this stage, my financial goals are just to have that financial freedom. I see the business side of things ultimately leading me there again. I think that if you’re given my skill set and my career so far, and my ability to do whatever I can, I will be able to build a successful business that will allow me to have that additional layer of financial security to just do the things I want to do — without feeling like I need to sacrifice other things.

What tips do you have for maintaining a healthy work-life balance while managing business finances?

Managing my business finances doesn’t take much time, maybe because of the stage I am at. I keep my spreadsheet up to date and meet with my accountant occasionally — so all in all, no dramas for me! Maybe a good tip then is don’t overcomplicate things? But I am a solo employee of my own business with a couple of contractors, so what would I know!

How have your personal financial habits influenced the financial health of your business?

There is an inverse relationship. I am very, very careful with my business expenses. I am largely bootstrapped, so I have to squeeze every dollar; while personally, I tend to be a bit lush, professionally, I am quite the opposite.

Dual Citizen Mike Manages His Money Across Borders With PocketSmith's Multi-Currency Features

Mon, 19 Aug 2024 12:00:00 +0000

Read how ex-Mint user Mike is using PocketSmith to go beyond local money admin and manage multiple assets and expenses in both New Zealand and the US.

Tell us a little about yourself?

In 2013 my wife and I moved our family of eight (six kids aged 2-16) from Utah, USA, to New Plymouth, New Zealand.

We decided to rent our home in Utah while we were gone, anticipating a return to Utah after two years abroad. We also had multiple retirement and investment accounts in the US.

While working full-time in the health sector of the New Zealand government, I also continued to travel back to Utah three times a year to work at my old job to cover holiday periods for my former colleagues.

Our two-year stay in New Zealand stretched out to 10 years, as we found it a magical place to raise our family.

We are now citizens of both countries, and we own homes in both countries.

How would you describe your role in your household?

I have been the primary earner in our family, and my wife has been the lead parent. Despite these roles, my wife has always worked as a professional piano teacher and performing artist. While in New Zealand, she also obtained a second Master’s degree at Otago University and worked part-time for the New Zealand Red Cross.

What drew you to PocketSmith?

After six years in New Zealand, attempting to manage our finances and taxes in both countries, we realized we needed a single tool to help us manage our budget and finances in both New Zealand and the US. We had been using Mint by Intuit while in the US, but this tool would not allow us to manage accounts in multiple currencies, and we could not add our NZ accounts to the profile.

We started searching for a new digital money management tool, and PocketSmith seemed to check all the boxes. We were so happy to find PocketSmith and haven’t looked back since. With it, we track a mortgage account and multiple banking and retirement accounts in NZ. We also track four different retirement accounts, a mortgage account, several credit card accounts, and several personal and business bank accounts in the US. Transfers between accounts are seamless, even if the currency of the two accounts is different.

How long have you been with us?

Almost four years.

What do you primarily use PocketSmith for?

Managing our family and my business finances and taxes. We use it as our budgeting tool, our finance tracking tool, and our financial planning tool.

How has PocketSmith changed the way you do money?

It is like having Intuit, Quicken and Quickbooks with the power to manage accounts in multiple countries and across multiple currencies.

What are your favorite features?

The ability to manage multiple currencies without having to do any conversions.
The ability to enter data using either my MacBook or my iPhone using the Sidekick app.
The ability to add bank accounts from multiple countries and have them sync automatically each time I open the app.

Got any tips?

I find I can categorize expenses more quickly using the Sidekick phone app than using the desktop program.

What’s the best money decision you made in the past 12 months?

Buying our home and paying off our car 2.5 years early.

Money Milestones Q&A: Cathy, Young Family Mother

Tue, 13 Aug 2024 12:00:00 +0000

Tell us a bit about yourself!

Kia ora! I’m Cathy — 34 years old with a husband and a (nearly 3-year-old) son. My main “9 to 5” is as a manager in administration in tertiary education, and I love contributing to a dynamic environment where we can support students’ study goals and aspirations. In my spare time, I try to stay involved in the local musical community and have been fortunate to be offered the occasional paid gig as a classical/operatic singer in concerts and shows in the past few years.

What is your approach to managing money?

I have always tended to squirrel away my money into a savings account, ensuring I always had a back-stop for when those unexpected costs came up or to have money put aside for a specific event or trip. I generally like to budget using a spreadsheet to factor income vs. outgoings, and for the most part, have done this alongside my husband to make sure we’re working towards our individual and shared goals. I also try to avoid unnecessary debt, so even though I have a credit card for “emergencies”, I don’t use it often, and I’ve been working towards paying off my student loan debt over the years.

What are your current financial goals, and how are you working towards them?

The biggest thing on our life agenda is planning for the purchase of our first home. We spent about six years living and working abroad in the UK and Europe, and while it was a wonderful experience, with the housing market in the state it was on our return to NZ in late 2020, not to mention the earning of interest on our student loans during our time overseas, we’ve been put a bit on the backfoot when it comes to achieving this goal. My husband and I both make regular KiwiSaver (or the university-specific equivalent) contributions, and the rest of our saveable income goes into savings accounts and balanced investments.

Where do you go for financial advice and information?

I like to seek out financial advice from friends and family who have achieved or are in the process of achieving shared financial goals. I have also utilized the resources available through my employer. My husband, as a researcher, is always pretty effective at weeding out reputable sources of financial information online.

Have an honest conversation about your financial expectations as a family. Set aside time to budget and weigh up the pros and cons of different working arrangements, e.g. it may be more financially viable for one parent to stay home with the child while the other parent works.

How did having a child affect your financial priorities?

Having our son created a strange dichotomy of focus between the immediate financial impact on our ability to save (outgoings required as part of raising a child) and the desire to future proof for our child’s financial wellbeing. This meant budgeting for life insurance, seeking out investment options, and generally being a little tighter on our outgoings. Larger purchases and big holidays have become fewer and definitely planned well in advance.

What adjustments have you made to your budget since becoming parents?

I stayed home with our son for the first year, which did have an impact on our net income. We try to be more mindful about going out to eat — planning meals and doing bulk weekly supermarket shops. We received a lot of hand-me-down baby gear that offset a large chunk of the immediate costs of having a baby. When I do make personal purchases, I veer towards lower-cost and more ethically-conscious options, such as second-hand/thrifting. We don’t have the ability to save as quickly due to the additional costs associated with raising a child, but where we do have money to save, we make it happen.

How do you manage childcare costs alongside other household expenses?

This is one of the biggest child-related costs in our household, and it is necessitated by my husband and I both working full-time. Once our son turns three, he will qualify for the 20 hours of free childcare per week, which will provide a bit of a buffer for us in terms of managing our household budget. Childcare is prioritized alongside housing costs, power, internet, petrol, and food. And I’m sure I’m not the only mother of an active toddler who would tell you that factoring in the occasional visit to the Urgent Doctors for an inevitable after-hours tooth through the lip situation should probably be a part of your household budgeting.

How do you ensure that you are still saving for your own future while taking care of your child’s needs?

It really comes down to making our immediate needs the priority while putting aside the money we can save. Our KiwiSavers and investments are regular background contributions that we’re hopeful will pay dividends for supporting our future plans. We also have a small amount of pension built up during our time working in Germany that we’re working towards accessing (hello paperwork!).

What steps are you taking to financially prepare for your child’s future?

We are going to be setting up a bank account for our son, where we’ll funnel monetary gifts from family as well as contributing a small amount as part of our regular savings strategy. We’re also discussing putting some of these savings into a balanced investment that he’ll be able to access when he turns 18, that he can then choose what he wishes to put the money towards, whether this be education or to let it further accrue as a contribution towards a house downpayment.

What advice would you give to expectant parents about managing finances?

Have an honest conversation about your financial expectations as a family. Set aside time to budget and weigh up the pros and cons of different working arrangements, e.g. it may be more financially viable for one parent to stay home with the child while the other parent works. Aim to reduce or eliminate any debt you have where it makes sense to do so and look into different savings options. Try to seek out second-hand options in op-shops or in trusted online forums and research as much as you can into subsidies and other funding. Finally, and perhaps most importantly, never take your 2.5-year-old to the toy section of The Warehouse unless you’re a) financially prepared to buy a firetruck; or b) physically prepared to manhandle your toddler out of the store. Good luck! 😊

The Pros and Cons of Juggling a Side Hustle and a 9-to-5 Job

Sun, 11 Aug 2024 12:00:00 +0000

When I first started using PocketSmith, I had a single income category labeled, simply, “Income”. Color code: Green.

Then my work life got a little more complicated. Eventually I up-ended the whole system and started over. Now I use an “Income” parent category, two main sub-categories, “Freelance” and “Other”, and a host of subbier-categories across three layers, from project type to individual clients.

All’s well that ends well, you might say. But it’s not the end, and that’s never the part that interests people. They don’t ask, “What’s your end-goal system?” They ask, “How did you get there?”

Sorry to disappoint you, but I didn’t wake up one morning, quit my day job, and launch a full-time freelancing career by lunchtime. These things take time. A 9-to-5 job has its pros and cons. So does that #sidehustlelife. Let me take you through a few of them.

Pro: Slow and steady growth

I started freelancing seven or eight years ago, through a friend at church. He needed some transcribing done and, with a travel-heavy work schedule, didn’t have time to do it himself. I was working part-time and could do with the extra income. He’s been my most consistent client over the years since; in fact, he pays every invoice within 24 hours of receipt.

Was it busy at times as I balanced his work against various day jobs? Sure. But our timeframes are always flexible. His work is seldom red-flag-urgent, and as a way to lay a solid foundation, it was ideal. I built up my regular income levels and built my client base at the same time.

Con: Knowing when to make the leap

I’ll be honest: If I hadn’t just finished a 12-month contract with no ‘next step’ lined up, I might never have gone full-time freelancing. I didn’t have enough clients at the time to justify it. But I also knew that, unless I put serious effort into growth, this side hustle would stay a side hustle. It would never become anything more. And I would never have the time or energy to grow it while I was still working a regular 9-to-5 job.

I checked my income/expense budgets in PocketSmith, made sure I had a good balance in my emergency fund and took the plunge.

Pro (and Con): Consistency

If there’s one thing that would tempt me to go back to a 9-to-5 job, it’s the consistency. Routine. Structure. You get up, go to work, come home. Leave work at work. There’s far, far less decision fatigue. Life, and finances, are more predictable. You know where your next paycheque is coming from. You can budget the same amount of income every month — even every week! That’s something I haven’t been able to do in more than two years.

If it gets too stifling? Too predictable? Too boring? Well…

Pro (and Con): Flexibility

By contrast, being self-employed is the epitome of flexibility. If I want to take Fridays off, I can (and often do). If I find one client more interesting on the day, I can shuffle projects around without worrying about my boss yelling at me. If I want to vanish off overseas and work that #digitalnomadlife for six months across Canada and the UK, I can. My budgets have to be similarly flexible, though. If I didn’t have PocketSmith’s automations to help manage my day-to-day budgeting, I’d be well and truly lost. My old spreadsheet budget could never have handled the amount of irregularity and vague deadlines that PocketSmith does.

If it gets too unstable and starts feeling like too much of a rollercoaster, then…

Pro: Finding the balance

Juggling a day job and a side hustle can be a tricky balance. There have been times I was working 50-hour weeks at the office, coming home to put a few hours into the side hustle at night, and then studying at the weekend. As if I wasn’t busy enough! It was unsustainable as a lifestyle, and I knew it. The adrenaline surge only carries you so far. Sooner or later, the crash is coming.

Get the balance right, though, and it’s the best of both worlds. On one side, you’ve got a steady income, a solid career track, a good team around you, and your taxes and retirement contributions are all done for you. On the other side, you’ve got the potential to out-earn anyone in your circle and you can set your own schedule for the week — and the year.

And hey. Don’t stress it. Nothing is permanent.

You might find that balance, try it for a while, and decide it’s not for you. You might go full-time one way or the other, ride the wave for a few years, and then make the transition back to the other side. Like any PocketSmith setup, you’ve got a whole range of options out there. And that optionality can only be a good thing.

Investing for the Future: Simple Strategies for the Home CFO

Thu, 08 Aug 2024 12:00:00 +0000

While this blog post focuses primarily on the UK financial system, there may still be valuable insights and strategies that readers from other countries can adapt to their own financial situations.

Investing in your family’s future is crucial for financial security and growth. As the home CFO, your role is vital in managing and optimising these investments.

This guide offers simple, effective strategies for creating a robust family investment plan that will ensure a prosperous future for all family members.

Create a family investment plan

A well-thought-out investment plan is essential for securing your family’s financial future. To create a comprehensive investment plan, you will need to carefully consider your financial situation and goals.

Here are the steps to create an effective family investment plan:

1. Assess your financial goals and risk tolerance

Define your short-term and long-term goals, such as saving for university, purchasing a home or retirement.
Assess your family’s risk tolerance to determine the types of investments that are suitable. This involves understanding your comfort level with potential losses and the time frame for your investments.

2. Budget and allocate funds

Review your family’s income and expenses to identify surplus funds available for investment.
Create a detailed household budget to understand where your money is being spent and how much can be allocated to investments. Use a tool like PocketSmith to track your personal finances.
Based on your goals and risk tolerance, allocate funds to different investment options.
Prioritize your investments based on the importance of each goal and the time frame for achieving them.

3. Choose investment options

Choose a mix of low-risk and high-return investments, so your investment portfolio is diverse, which will reduce your risk of loss and increase the potential for returns.
Low-risk investments may include savings accounts, bonds and certificates of deposit.
High-return investments may include stocks, mutual funds and real estate.

For example: If you aim to save for your children’s education and future home, you may want to mix how you allocate your funds, for example, investing in stocks and bonds and contributing regularly to a savings account. By diversifying your investments, you balance the potential for higher returns with the security of lower-risk options.

By taking these steps, you can build a strong foundation for your family’s financial future. Regularly review and adjust your plan as your family’s circumstances and goals evolve to help keep you on track toward achieving your financial objectives.

Managing family investments to get the best return for your family requires well-thought-through strategies and regular maintenance.

Explore investment strategies for children

Investing in your children’s future is a crucial aspect of family financial planning.

Here are some options you may want to consider:

Junior ISAs (Individual Savings Accounts)

Stocks and Shares ISAs

You could consider opening a Stocks and Shares ISA at birth and contributing monthly to build a significant university education fund.

Overview: Allows investments in the stock market, offering higher growth potential.
Benefits: Tax-free growth, higher potential returns.
Risks: Market volatility can affect returns.

You will need to review and adjust your investment portfolio regularly to align with market conditions and your child’s age.

Cash ISAs

Use a Cash ISA for short-term savings goals like extracurricular activities or secondary school expenses.

Overview: Savings account with tax-free interest.
Benefits: Stability, guaranteed returns, tax-free.
Risks: Lower returns compared to stocks and shares ISAs.

You will need to make regular contributions and monitor interest rates to ensure competitive returns.

Junior SIPPs (Self-Invested Personal Pensions)

Contribute annually to a Junior SIPP to leverage compound growth over decades for a substantial retirement fund.

Overview: A pension plan for children offering long-term growth and tax benefits.
Benefits: Significant tax relief on contributions and long-term growth potential.
Considerations: Funds are locked until retirement age, making it a long-term investment.

You may want to start with small, regular contributions and adjust based on your financial capability.

Considerations when setting up investments for children

Funds in Junior ISAs and SIPPs are accessible at age 18 and retirement age, respectively. Planning should account for these timelines.
Parents or legal guardians should manage and monitor the accounts, making informed decisions until the child can take over.
Consider combining Junior ISAs, Junior SIPPs and other investment vehicles like bonds or savings accounts to spread risk, provide stable growth and cater to short-term needs and long-term growth.

Understand tax considerations

When investing for your family, it is important to understand your tax implications so you can maximise returns and minimize liabilities. Proper planning and utilization of available tax reliefs and allowances can significantly enhance the family’s financial health.

Here are some key tax considerations to bear in mind:

1. Capital Gains Tax

Capital gains tax (CGT) is levied on profits made from selling investments like stocks, bonds and property (excluding the primary residence).

Tax-saving strategies

Utilize annual tax-free allowances (e.g. £12,570 in the UK for the 2024/25 tax year).
Consider timing sales to spread gains across multiple tax years to stay within the allowance.

For example: If you sell shares at a profit, ensure the gain is below the annual CGT allowance. If you exceed the allowance, use losses from other investments to offset the gain.

2. Tax relief

Tax relief can reduce the amount of tax owed, especially through contributions to specific accounts.

Tax-saving strategies

Invest in tax-advantaged accounts like ISAs and pensions to benefit from relief.
Contributions to a Junior SIPP attract 20% tax relief on contributions up to £2,880 annually (effectively becoming £3,600).

For example: You can contribute to a Junior SIPP for your child and receive tax relief, which boosts the investment. This helps long-term growth and reduces taxable income.

3. Inheritance tax planning

Inheritance tax (IHT) is charged on estates over a certain value threshold.

Tax-saving strategies

Use strategies like gifting assets, setting up trusts and taking out life insurance to cover potential IHT.

For example: You could set up a family trust to manage and distribute assets, helping to keep the estate value under the IHT threshold and ensuring more wealth is passed on to your heirs.

4. Tax-free accounts (i.e. Junior ISAs and Regular Savings Accounts)

Tax-saving strategies

Junior ISAs allow parents to save or invest up to £9,000 annually per child, with all gains and withdrawals tax-free.
With a regular savings account, you can effectively use your tax-free interest allowance by ensuring the interest earned does not exceed the personal savings allowance (£1,000 for basic-rate taxpayers, £500 for higher-rate taxpayers).
Make regular contributions and monitor growth, switching between cash and stocks as needed.

For example: You could open a Junior ISA and regular savings accounts to diversify and ensure all savings grow tax-free. Maximize your contributions to the ISA first for the tax-free benefit, then use your regular savings accounts.

Practical tips for the Home CFO

Managing family investments to get the best return for your family requires well-thought-through strategies and regular maintenance.

Here are some tips to help you excel at family investment planning:

1. Regularly review and adjust the investment plan

Regular reviews help ensure that your investments align with your family’s evolving financial goals and market conditions.
Schedule periodic reviews (e.g. quarterly or annually) to assess the performance and make necessary adjustments, such as reallocating funds from underperforming assets to more promising ones.

2. Encourage family participation in financial planning

Include family members in financial discussions to promote a collective understanding and interest in managing finances.
Have regular family finance meetings to discuss your goals, review progress and make decisions together. For example, monthly family finance meetings can be held where everyone can suggest ideas and ask questions about the family budget and investments.

3. Set realistic financial goals

Establish clear, achievable financial goals for the short-term and long-term.
Divide large goals into smaller, manageable milestones to maintain motivation and track progress.

4. Build an emergency fund

An emergency fund can be there as a financial safety net for unexpected expenses.
If possible, endeavour to save at least three to six months of living expenses in a readily accessible account.
Set up an automatic transfer to a high-yield savings account dedicated to emergency savings.

Investing wisely for your family ensures financial stability and growth

By creating a robust investment plan, understanding tax implications, making informed decisions and actively involving all family members, you can secure a prosperous future. Start planning today to give your family the financial security they deserve.

Piotr Kubalka is CEO of J. Dauman & Co, a west London accounting firm within the J. Dauman Group. With extensive experience as a chartered accountant and business advisor, he’s passionate about helping UK companies grow and expand into European markets. Piotr’s expertise spans multiple sectors, developed through years of work in both British and international markets. His leadership has cemented J. Dauman & Co’s position as a key player in cross-border financial advisory services.

Money Milestones Q&A: Patti, First Home Buyer

Mon, 05 Aug 2024 12:00:00 +0000

Tell us a bit about yourself!

I’m Patti, a 27-year-old sports podiatrist living in beautiful Queenstown. I’m super passionate about keeping active, getting outside and living life with my partner and our blue heeler.

What is your approach to managing money?

I used to be terrible with money! Prior to studying, I was a ski instructor, traveling from season to season and generally enjoying a life of minimal responsibility. This usually involved a lot of pubs and pizza and not much chat about investing or saving. I was super passive and nonchalant about my KiwiSaver and where it went and was generally under the impression that you just held it with whichever bank you were with.

I had to have a long hard look at myself when my partner and I spotted these new-build townhouses here in Queenstown, selling off-plans for $650K, fixed price. We knew this was pretty much the only window we could get into the Queenstown market without a) a relative dying and subsequent inheritance or b) a million-dollar mortgage we definitely could not afford.

We weren’t planning to buy anytime soon so it required a really rapid 180 turn in how we were spending our money and time! This led to doing a lot of research around this, and now we approach our finances really deliberately. Separate accounts for different needs i.e. vet bills, our bills, rates etc. We routinely sit down and review our expenses and make sure we are always putting the right amounts aside for the right expenses.

How do you measure financial success in your life?

For me, I see financial success as not solely relying on your salary to get you by. Long term, I would love to have multiple streams of income, so if one takes a hit, it doesn’t mean end days. To be able to cover your outgoings with one income source and save another for the future would be the biggest feeling of success for me.

What was your biggest challenge in saving for your home deposit?

We were lucky enough to still have the First Home Grant when we were going for our place. Since we set our sights on a smaller, cheaper house, the grant and our KiwiSavers gave us our deposit. In retrospect, the deposit was the easiest part of the process for us!

We went unconditional on our place in October 2021, and then the following month, all of the Credit Contracts and Consumer Finance Act (CCCFA) changes came into effect. For the entire year following, while we waited for the build to complete, we had constant shifting goalposts of new rules and interest rates. It felt like every time we met with our mortgage broker, we had another thing we were spending too much money on or not earning enough from. Since we only had a 10% deposit, all of our finances were gone through with a fine-toothed comb to deem us ‘responsible’ enough for our mortgage.

The biggest thing I would recommend is to find any possible way to increase your income. There is only so much you can cut your expenses, especially with the cost of living currently, so any extra cash from a side hustle or pay rise would make a big difference.

How did you determine your budget for buying a house?

Since we were more or less dependent on the First Home Grant, our budget was limited to the price cap for the grant. At the time, the cap was $650K for a new build, something essentially unheard of in Queenstown, which is why we leapt on our place when we did.

What financial adjustments have you made since purchasing your home?

We had our interest rate go up about three times in the first year of owning our place, as we were on a discounted floating rate through ANZ. Our financial position changed pretty rapidly due to this, and on top of that, I also changed jobs which landed me a lower salary at the same time.

We felt insanely vulnerable with the thought of any surprise bills possibly crippling us, so we started trying to be as proactive as we could. We sold heaps of unwanted stuff we had around the house and got into the habit of doing routine reviews of our expenses to see where we could trim up and what we needed to concentrate our income towards. As I mentioned earlier, we have lots of little accounts for our separate needs and allocate the same amount into them each payday based on the monthly average outgoings for each. That helped us heaps, and keeping this habit has helped us out hugely in getting back on track now we are both back in a position of earning a bit more.

How do you balance mortgage payments with other financial goals?

The reality of the last couple of years is the mortgage has taken top priority. We have tried to save around that, but with ongoing increasing rates and cost of living, it was a matter of surviving for a while. We had to put some other saving goals, like a holiday, on hold and just focus on keeping those repayments going out on time. It was hard when you maybe see your friends going on their #eurosummers but we just had to keep in mind this pinch was only temporary, kept consistent, and now we are in a more comfortable position. It still is our #1 priority, but we have more wiggle room to spread the focus also.

How are you planning for home maintenance and unexpected expenses?

We have a House Account, and after all of our money is set aside for mortgage, bills etc, the rest gets funneled into that. We have set aside any wants for holidays and the like until we have a comfortable financial barrier again. We have a goal amount to hit that will sit untouched in case of emergencies, once we do that, our reward is to plan a holiday and start saving bit by bit for that. We generally hold a “Hope for the Best but Prepare for the Worst” approach to our finances after so many sudden changes in our first year of paying our mortgage.

What tips would you give to others looking to buy their first home?

The biggest thing I would recommend is to find any possible way to increase your income. There is only so much you can cut your expenses, especially with the cost of living currently, so any extra cash from a side hustle or pay rise would make a big difference. Having the deposit is a big win, but the main thing the bank agonizes over with you is the actual affordability of the loan, so get your finances as trim as possible in the three months leading up to when you want to apply for approval. I have heard they maybe aren’t as strict as they were when we went through the process, but there is no harm in a few months of temporary tightness if it increases your lending power!

Money Milestones Q&A: Thomas, Young Worker With a Student Loan

Wed, 31 Jul 2024 12:00:00 +0000

Tell us a bit about yourself!

My name is Thomas, and I am currently in my third year of study at the University of Otago. I study Psychology, Sport Management, and History. I am currently on track to be completed at the culmination of next year. I enjoy watching and sometimes playing rugby and love reading (that isn’t assigned by lecturers) in my free time. I also have a lot of fun writing and hope to earn something from it at some point in my life.

What is your approach to managing and budgeting money?

My personal approach to managing money is that of identifying what is necessary week in and week out. These are often the consistent and unchanging costs of rent, power, and groceries. I then allocate the appropriate and minimal amount of money possible to these necessary expenses and, hopefully, save whatever might be left over. It is very difficult to keep my head above water with my very small student weekly paycheck, but I manage — unless there’s a special occasion wherein my weekly leisure expenditures on golf come under the microscope.

What are your current financial goals, and how are you working towards them?

Like most young New Zealanders, my main financial goal is to buy my own home, which will be my first. There are obviously things in the way, and with my part-time job, I can only dedicate so much to my KiwiSaver every fortnight. This is, of course, a plan for the future and I am aware that many post-university years will be spent on a shoestring budget as I juggle a loan and saving for a house. However, I feel living frugally throughout my tertiary years will put me in good stead to manage the hopefully more substantial paychecks I will be getting in the future.

My current plan to really tackle the loan is to live at home after I finish my degree. Hopefully, this will allow me to have minimal expenses insofar as I can put substantial amounts of my paycheck towards the loan in the inevitably trying years following my degree.

Where do you go for financial advice and information?

As for personal financial advice, my father’s history of working in foreign exchange qualifies him, at least in my mind, as a financial professional. He is the one I go to for advice in setting up any minuscule investment I make into the likes of Sharesies. These are in an attempt to diversify my very solitary financial portfolio.

How do you manage your budget as a student and young professional?

I like to divide up my insignificant weekly paycheck into different, for lack of a better term, piles. These ‘piles’ are then used to pay my different expenses, which are consistently rent (weekly), power (monthly), and groceries (weekly-fortnightly).

The toughest one to plan for is my grocery shop as that is often changing, depending on what level of hunger I enter the supermarket with. Power can be a struggle too, if my flatmates have decided to use ovens and showers like they’re free. In this case, which isn’t often, it can be a rather debilitating monthly expense, but it can also go the other way if we keep it tight. So I have three ‘piles’ I like to keep my weekly paycheck in, and I do try to alleviate any stress by hopefully having a smaller pile to cover any erroneous costs that may pop up. However, it is difficult to manage such a small budget, but it seems to work for me.

What strategies are you using to pay off your student loans?

There aren’t too many strategies I can implement to pay off my student loan currently. Obviously, part of my paycheck from my part-time job goes to paying it back automatically, along with any full-time work I may do over the summer. However, my current plan to really tackle the loan is to live at home after I finish my degree. Hopefully, this will allow me to have minimal expenses insofar as I can put substantial amounts of my paycheck towards the loan in the inevitably trying years following my degree.

How do you prioritize your spending between necessities and leisure?

As for prioritizing between necessities and leisure, there is not too much leisure I can allow myself. My golf habits are left with a very small sum after my essential expenses. I do consider it important, however, to have an outlet of leisure that is somewhat habitual from week to week. It would be ideal if it were free but playing at the cheapest and closest courses allows for minimal cost. With it often being a group fee, I will offer to drive friends to the range and then have them front the bill — allowing my own expenses to only center on gas.

What financial advice do you wish you had received before starting university/your job?

I personally would have liked investment advice earlier in life in order to gain a retrospective head-start in the investment world. I would have a greater net worth today if I was pushed in that regard to diversify my finances. Small tips regarding the allocation of funds would have been very useful to me when first living away from home.

Haggling Hacks: How to Negotiate and Save on Everyday Expenses

Sun, 28 Jul 2024 12:00:00 +0000

For some, haggling seems like an activity reserved for a bazaar in some far-flung corner of the world. But for those in the know, negotiating for the best deal is one of the most effective ways to save money on purchases of all kinds.

Haggling doesn’t come naturally to many, mainly because they don’t know what they should haggle for or how to go about it. But in this article I’ll take you through some common purchases and expenditures you can haggle on, why they’re great targets for negotiation, and provide some tips for talking your way into significant savings.

Common things to haggle over

While you can’t haggle over every expense (your tax bill is non-negotiable, sadly), there are still plenty of things you can save money on with a little negotiation. Purchasing a car is one of the few well-known opportunities for haggling, but here are some other top things you can talk your way to a discount on.

Utilities and insurance

From power to insurance and mobile plans, utility bills can be a great opportunity to get a better deal through haggling.

Utilities and insurance companies usually save their best deals for new customers, whether it’s a bonus credit, a discounted rate for a set period, or some kind of welcome gift. If you’ve been a loyal customer for years, these promo deals are out of your reach. Unfair, right? This is where haggling saves you from missing out.

Utilities and insurance companies are always working hard to attract new customers, but they’ll also fight to keep valuable existing customers by offering discounts or goodies if they think they might leave.

If you make your move at the right time (usually as your existing contract is about to come to an end) and come into the conversation armed with a little information on what other offers are out there, there’s an excellent chance you’ll come away with a cut-price deal.

Rent

Moving into a new rental property can be expensive, from moving furniture to covering the cost of a bond to possibly even paying twice for overlapping rental agreements. But landlords face a similar problem: Finding new tenants can also be costly and time-consuming.

If you’ve proven yourself to be a good tenant (paying your rent on time each month, managing not to burn the place down, etc.), your landlord won’t want to lose you. This puts you in a great position to push back against proposed rent increases, request property improvements, or even negotiate a temporary rent reduction.

High-street purchases

While it wouldn’t occur to many, high-street haggling can result in major savings, especially on electronic goods and whiteware.

Stores can provide discounts on products at their discretion, and they often do so for lots of reasons. Whether it’s to beat a competitor’s deal, as an incentive for you to purchase multiple items, or even just to clear shelf space for new products, you might be surprised how flexible a retailer can be with its ticket prices.

Top tips for haggling your way to a discount

So now you know what you can haggle on, how do you actually do it?

You don’t have to be a master in the art of negotiation or a tenacious pitbull who just won’t take ‘no’ for an answer. With these simple tips, you can secure a discount by thinking ahead and asking in the right way.

Do a little research

Haggling isn’t just about charming people with your undeniable charisma and winning smile — it does help to do a little homework first.

Got your eye on a particular TV? Go online to find out who offers the lowest price and use that information to get an even better deal. Lots of stores and service providers have a policy of matching or even beating competitor prices and they will be eager to deal with someone who’s proven to be a motivated buyer.

Choose the right time

For services that involve a contract (such as mobile plans or insurance), you’re in a much stronger position to negotiate when that contract period is reaching its end.

For example, you don’t have much leverage just six months into a one-year contract because you don’t have the option to go elsewhere at that moment. But if you call to discuss a better deal in the final few weeks, the provider knows there is a very real risk of you jumping ship, and they’ll use whatever tools they have available to keep you as a customer.

Have the right attitude

‘Confident but friendly’ beats ‘aggressive and forceful’ when it comes to haggling. You want the person you’re dealing with to like you and coming across as pushy or rude isn’t the way to achieve that.

In many cases, whether you get a discount and how much it is is at the discretion of the person you’re dealing with, and we’re all more inclined to help out people we like. You catch more flies with honey than vinegar, right?

Have them throw in something for free

If you’re just feeling your way into the world of haggling and aren’t yet comfortable negotiating discounts, try asking for a little extra to be thrown in to sweeten the deal instead.

If you’re buying a new TV, get them to chuck in a HDMI cable or an extra remote. If you’re looking at a new washing machine, ask for a free extended warranty and/or free delivery.

Typically the bigger the purchase, the more you can get added on. You might be surprised about the extra value you can squeeze out of a retailer just by asking for a little extra.

Target already discounted or damaged products

On-sale items, or those that are often on sale at a reduced price, are prime targets for haggling and even greater savings. A discount shows that the retailer is keen to move a product on, possibly because demand isn’t as strong as expected or to make way for new stock. Either way, it’s an indicator that there is pricing flexibility you can take advantage of.

Damaged or ex-display items are also great targets for hagglers. Stores know that even the smallest scratch, stain, or dent can be a major turn-off for customers, and you’ll find they’re often more than willing to bend on price for those who are willing to accept an imperfection.

Kevin McHugh is the Founder and Head of Publishing at New Zealand personal finance website Banked. He believes in making money topics simple and accessible to everyone and in providing all the information people need to make the most informed decision.

Nick and His Wife Get Transparency in Their Money Management Using PocketSmith

Mon, 22 Jul 2024 12:00:00 +0000

Read how Nick uses PocketSmith to take the guesswork and time-consuming details out of his family’s money management with PocketSmith.

Tell us a little about yourself?

My wife and I live in country Victoria, and we are parents to an energetic 3.5-year-old boy. We also have a male Golden Retriever who was the eldest in his litter and still thinks he runs our household. The area we live in has some fantastic bushwalks, wineries and plenty of nice parks.

How would you describe your role in your household?

My wife and I are both breadwinners and have reasonably demanding roles in professional and financial services. We contribute equally in most ways aside from cooking. My wife is a wonderful cook, and I find it stressful, so she ends up doing the majority of it.

What drew you to PocketSmith?

Like a lot of people during Covid, I started listening to a lot of podcasts, especially financial independence ones. I came across The Happy Saver podcast, which obviously promotes PocketSmith, and the rest is history.

How long have you been with us?

Probably about 2.5 years now.

What do you primarily use PocketSmith for?

Tracking net worth and expenditure. The categorization functionality automatically picks up most of your bank transactions, and once you have defined your category labels and trained the tool, it picks up most transactions and auto-categorizes them — painting a super powerful picture of where our money is going.

How has PocketSmith changed the way you do money?

Both my wife and I like to be in control of our collective finances. We like transparency. PocketSmith takes the speculation around where our money is going out of the conversation, and all the data is there on the dashboard plain as day — we know what strings to pull if things need to change, and we know how to impact our net financial position. We tried other platforms, but the open banking feed reliability was generally poor and inconsistent, and the UX was average.

What are your favorite features?

The income vs. expenses summary for your selected range is one I keep an eye on most, and when I want to get into the weeds a little more, the transaction search functionality helps me figure out what those morning coffees are costing me over a calendar year.

I must admit I am a Wallabies supporter, but putting the Trans-Tasman rivalry to one side for a moment, I like the back story and the fact that PocketSmith was founded and is still based in Dunedin. It has that focus on the customer, and despite being a genuine fintech, it feels like the human element shines through.

Got any tips?

I use the dashboards and information captured in PocketSmith in conversation with my financial adviser. It means we are going into our annual review informed as to our cashflow position, can cover that off in a fraction of the time then focus mainly on conversations around the future and retirement planning, which is obviously where the real value is.

What’s the best money decision you made in the past 12 months?

It might be too early to call, but we just got our roof covered with solar panels, which should provide twice as much power as we currently use, so hopefully means lower electricity bills and the option to switch to an electric vehicle in the near future. Hopefully there is a PocketSmithesque app to help us maximize what we take from this new system, and we can’t wait to properly start generating our own power!

Fireside Finance: Tim Calder, Prime Campus

Thu, 18 Jul 2024 12:00:00 +0000

Welcome, Tim! Tell us a bit about yourself.

Well, I am 40 years old, born and raised on a farm in the Bay of Plenty, attended boarding school in the Waikato, university at Otago, and now live between Queenstown and Hamburg (Germany) with my wife and three kids while I remotely manage my now public student property fund Prime Campus.

You certainly sound like a busy man. What strategies do you use to strike a balance between work, finances, and personal life to achieve a fulfilling lifestyle?

My work is a big part of my finances, which literally occupies every waking hour of my mind. However, as I am self-employed and work remotely, my family and I are able to travel between New Zealand and Germany to follow the warm weather and maximize our time together.

How do you handle financial setbacks or unexpected expenses, and what advice can you offer for building financial resilience?

Through managing student property for over 20 years, I have learned to expect unexpected expenses. While not for the faint of heart, the way I build resilience to these setbacks is through ruthless frugality. I find practising gratitude helps lower your baseline requirements for happiness.

While not for the faint of heart, the way I build resilience to setbacks is through ruthless frugality. I find practising gratitude helps lower your baseline requirements for happiness.

Speaking of resilience! In your opinion, what are the most common financial challenges people face today, and how can they overcome them?

I don’t think some people truly understand the power of compound interest, which causes them to inadvertently overconsume. If people knew just how much future value they could create on a daily basis by simply stretching a little further down the supermarket aisles, it would blow their minds.

How has your understanding of risk evolved in your financial journey, and how do you approach calculated risks?

The most obvious one for me is how I have scaled back the leverage I apply to my investments as I get older. In my 20s, my loan-to-value ratios were in the 80s; in my 30s, they were in the 60s; and now, in my 40s, they are below 40. I’ve tapered this faster than most would, as I’m less interested in risking the lifestyle my family currently enjoys for anything better.

It sounds like you’re a shrewd investor. What’s your philosophy on building wealth, and how do you avoid getting bogged down in the nitty-gritty of financial tracking?

‘Building wealth’ means ‘creating financial freedom’ for me. I achieve this by investing in assets that I deeply understand and am acutely focused on adding value to while applying leverage. I only need to review my PocketSmith account on a biannual basis, as my natural frugality keeps my positive cash flow strong.

What advice would you give those who might be more focused on immediate financial goals or daily expenses to start thinking about their long-term financial well-being?

This quote helped me:

“Most people overestimate what they can do in one year and underestimate what they can do in ten years.” — Bill Gates

In my 20s, I was always disappointed when reconciling my annual goals, but when I looked back in my 30s, I was genuinely surprised by how much I exceeded my 10-year goals.

A fun one to end things on! What’s one thing you splurge on without feeling guilty?

I love splurging when there is a special at the supermarket on an item that I regularly buy. Each of my friends seems to have a story about one of these occasions they like to tell (much to my wife’s embarrassment). There are so many, but one that comes to mind was when I purchased a couple hundred cans of my already dirt-cheap tuna at the supermarket because it had a 15% discount.

Digital Nomad Accounting and Tax Tips

Mon, 15 Jul 2024 12:00:00 +0000

Moving to a new country? Planning on embracing the digital nomad lifestyle?

Awesome! But it’s not all sunshine and sunny beaches. The biggest challenge to overcome for all digital nomads isn’t adjusting to foreign culture, language or cuisine. It’s adjusting to foreign financial matters! In this article, we’re going to learn some tips on making that financial transition easier for digital nomads.

Digital nomad tax residency

Tax residency is a concept that exists across most (if not all) tax-paying jurisdictions. Note that tax residency is different from having a residency visa in a country. Tax residency is usually determined by the number of days that you have spent in your new country. Let’s look at an example:

Taane is from Aotearoa New Zealand (NZ), but he has recently moved to Malaysia to work on his travel blog. In Malaysia, an individual is considered a tax resident if they have been in the country for 182 days or more during a calendar year. Taane has been in Malaysia for two months — close to 63 days. Therefore, he is not a Malaysian tax resident. However, this also means that he’s still a tax resident in NZ, the country he last spent more than 183 days in a 12-month period.

Working out your tax residency is important as it affects the tax that you pay in your host country and your home country. In Taane’s case, as a Malaysian non-tax resident, he only needs to pay income tax on income earned in Malaysia. However, as an NZ tax resident, he has to declare his overseas income in the NZ inland revenue and pay taxes on it. This tax residency situation can change as he spends more time in Malaysia, thus becoming a Malaysian tax resident and an NZ non-tax resident — which will also change how he pays taxes.

Before you move to any country for work purposes, it is very important that you find out:

How tax residency works in your destination country
How your tax residency is affected in your home country by living in a different country

Double taxation agreements for digital nomad tax

Another bit of tax to wrap your head around is double taxation agreements. Double taxation agreements are memorandums of understanding between the tax authorities of different countries/jurisdictions. Basically, they exist so that individuals paying taxes in different jurisdictions don’t end up getting taxed twice on the same amount. Let’s head back to Taane’s example:

Taane earned some income in Malaysia teaching English as a contract worker for a local college. As a Malaysian non-tax resident, he needs to declare this income to the Malaysian Inland Revenue Board of Malaysia (IRBM) and pay taxes to the Malaysian tax authorities. As an NZ tax resident, he still has to declare this income to the NZ Inland Revenue Department (IRD). Fortunately, there is a double taxation agreement between Aotearoa NZ and Malaysia, which means that Taane can claim the taxes he paid in Malaysia on his Malaysian income as tax credits when he declares his Malaysian income to NZ IRD.

Confusing? Here’s how it works with numbers:

Tax by the numbers

Taane makes MYR 10,000 teaching English in Malaysia for two months. He pays taxes of MYR 3,000 on this amount to the Malaysian IRBM. He then converts the MYR 10,000 to NZD using the NZ IRD’s foreign tax schedule to declare it to the NZ IRD. MYR 10,000 converts to roughly NZD 3,500. On this amount of NZD 3,500, he’ll have to pay NZ income tax of NZD 350. He can claim the tax credits of MYR 3,000 (which converts to roughly NZD 1,000) against his NZ income tax to pay. This means that he can claim a tax refund from the NZ IRD of NZD 750.

In summary (figures in NZD):

Malaysian Income	NZD 3,500
Paid for Malaysian taxes	NZD 1,000
NZ income tax payable	NZD 350
NZ income tax refundable (Malaysian tax paid minus NZ income tax)	NZD 750

Note that this situation applies only when a double taxation agreement exists between your host and home country. If no such agreement exists, you may find yourself in a position where you have to pay tax twice! Be sure to do your research on double taxation agreements before you pick your digital nomad destination.

Accounting for digital nomad taxes

Learning how your tax is affected by moving overseas is important. However, it is more important to calculate your income accurately!

Accounting for digital nomads isn’t too different from accounting for non-digital nomads. The only difference is that you may have bank accounts from different countries to manage. Here are some tips for accounting whilst overseas:

Get a local bank account in your host country

If you’re planning on earning money in your host country, it is a good idea to register for a local bank account. This is especially true if you’re on a travel work permit. There are a lot of travellers to Aotearoa New Zealand who travel while working, picking fruits at orchards and doing other seasonal work. Having a local bank account makes it easier for employers to pay you.

Consider getting an accounting app like PocketSmith which allows you to connect banks from multiple different currencies. It also can display your balances in your chosen currency. This is especially great if you’re making income from different countries.

Separate your personal from your work account

Since your tax situation may be more complicated as a digital nomad, it is a good idea to keep your personal and work accounts separate. This means setting up at least three accounts while working as a digital nomad:

Work account: All work-related income and expenses should be paid in/out to/from this account.
Personal account: You can transfer money from your work account into your personal account. All personal expenses (rent, groceries, utilities, etc) should be paid from this account.
Tax account: To transfer money from your work account for tax savings.

Ideally you should have a set of these three accounts for each currency that you are earning in. Keeping the accounts separate makes it easier to prepare your income statement for tax purposes. Also, if you’re using PocketSmith, you can generate income statements on individual bank accounts or denote tax-deductible expenses. This makes it even easier to prepare your taxes.

Use an accounting app

I’ve probably said it a few times now — get an accounting app to help with your finances. PocketSmith is a great fit for digital nomads as it allows you to have bank accounts in multiple different currencies. If you have an accountant, the accounting app will also make it easier for them to calculate your taxes (and potentially save you some money!)

Spreadsheets are… okay… but seriously, we’re living in 2024 now. There exist a lot of better options for accounting that are superior to calculating your income and expenses on a human error-prone spreadsheet. An accounting app like PocketSmith is certainly worth the investment.

Remove tax anxiety, and enjoy yourself!

Don’t let tax anxiety get in the way of your digital nomad lifestyle. While you’re out there experiencing new cultures, foods and ways of living, you don’t want to be worrying about accounting and taxes. Make sure that you are educated on the tax residency laws and double taxation agreements before heading to your host country.

And remember the simple accounting tips in this article. They will go a long way in making your digital nomad experience a more enjoyable one!

Stay positive!

Strategies for Getting the Raise You Deserve

Tue, 09 Jul 2024 12:00:00 +0000

As the cost of living rises across the world, many of us are exploring how to make more money. Increasing your income can help to meet rising costs and allow you to continue working towards your financial goals. While there are endless ways to earn extra money from a side hustle, the first place to consider making more money is increasing what you’re paid at your existing job. Now, let’s get you a raise.

When is the best time to ask for a salary increase?

The idiom ‘timing is everything’ is extremely important when negotiating salary. Striking at the wrong time can have lasting consequences for your income, but striking at the right time can open the door to future potential.

Career experts recommend timing your salary discussions a couple of months ahead of a new financial year or calendar year. This is because budgets may be being organized for the year ahead, making it a prime time to discuss increasing your remuneration. It’s also recommended to schedule salary discussion meetings separately from any performance reviews.

How to research salary potential

When asking for a raise, it can help to be prepared with knowledge of the job market and the salary for similar roles to yours. You can research salaries in a few different ways.

Speak to your peers

Having open salary conversations with friends, family and, if permitted, coworkers, can help you collect current and relevant information on the going rate for your role. However, it’s not about going into the negotiation and saying, “Tim gets paid $80,000, I want that too!” It’s about gathering information to help you make your case for your value.

Search on job sites

Explore salaries shown on job sites, and if necessary, reach out to recruiters or hiring managers to request the salary range for advertised roles. This can help you benchmark what’s out there, and also help you prepare to move on to another company if you’re unable to secure the raise you want.

Consider finding a mentor or coach

Depending on your industry, career coaches and mentors can help you negotiate your salary and be strategic with your career advancement. Networking within your industry or investing in the services of paid mentors can be extremely worthwhile in this instance.

Making your case for a raise

The way you approach salary discussions can make or break the outcome. Here are some top tips from career experts on landing a raise.

Keep track of your achievements

The best way to be prepared for your salary negotiations is to have a really clear understanding of the value you bring to the company. It can help to keep a monthly log of your achievements, including more obvious successes like revenue data or sales numbers, as well as more covert achievements like problem-solving or team management.

Collect testimonials, reviews or endorsements

If it’s appropriate for your role, you might consider collecting evidence of your work ethic, dedication and output by asking clients, colleagues or leaders to endorse your work.

If you’re looking to grow with the company and have ideas for ways you can contribute to future expansion, share these during your salary negotiations. It can help employers to see you’re dedicated to staying for the team long term and allows you the chance to show off your capabilities.

Keep personal factors to a minimum

While it can be tempting to make your case for a raise by listing off all the things you need extra money for, it rarely makes for a compelling case for a substantial salary increase.

Negotiating other benefits

Sometimes salary increases just aren’t possible, particularly during tougher economic conditions. Instead, you can look to negotiate other benefits that could benefit your personal bottom line in forms other than a higher income. That might include additional time working from home to reduce commute costs, getting your employer to pay for development courses or training to increase your capabilities, or even other perks like lunches, memberships or time in lieu.

Ruth's Two Cents: Supporting Your Parents Financially

Sun, 07 Jul 2024 12:00:00 +0000

Hi Ruth,

My mother was made redundant from her work when she was in her early 60s. It was a huge blow to her confidence, and my partner and I rallied around her, providing emotional and financial support. It’s been five years, and we’re still financially supporting her, giving her $150 a week to help with living expenses and bills. My two other siblings don’t support her because they are struggling with the cost of living, too. My kids are now entering high school, and that $150 a week would really help our family budget — I’m thinking of stopping the payments to my mother, but I feel really guilty. What should I do?

What an interesting situation you find yourselves in. Many parents financially support their children well into adulthood, to the detriment of their retirement. In turn, many adult children, such as yourself, financially support their parents to the detriment of their family finances. It goes both ways. I’m fully in favor of using our time and our wealth to help others, but if it is having a negative impact on your own situation, I think it is entirely fair to make some changes. It is unusual for your mother not to have returned to any type of work in the last five years. I’m assuming that she is collecting some form of wage subsidy or has shared finances with her partner to enable her to get by during this time.

Open communication is a non-negotiable

To navigate the way forward, a lot of communication between you and your partner, you and your mother, and then with your wider family needs to occur. Starting with you and your partner, talk through every angle of the situation and every option available. Talk about the math of the problem and the emotional aspects, too. When you decide to support others financially, it needs to be with an open hand, without resentment, and it sounds like this has been the case up until now. Be very clear in your communication about what you see as the solutions being here. Decide together what the best outcome is.

Then, go and have a coffee with your mother. Ask her where she is at financially. Given that you are gifting her money each week, you can ask direct questions. Listen to what she has to say, and then speak to her about the conversations you and your partner have had up until now. And how, after a discussion with her in which you have learned the extent of her situation, you are considering making some changes.

You don’t want to pull the rug out from under her feet. You and your partner have had time to think this through, and it’s fair that you also give her time to think about her options.

Support can be a family affair

After learning the full extent of the situation and, with your mother’s buy-in, both go and speak with your siblings, too. Families with adult children and grandchildren often flow in and out of each other’s lives, never really understanding the reality of each other’s situation. Take the time to bring each other up to speed. It’s important to calmly and with compassion hear everyone’s situation because only then can you look for solutions to help you step in and help her help herself. Collectively, you can plan a path forward, and you will feel supported by your siblings instead of going it alone.

You are a good person who wants to support your mother, and she will see that. I’m sure she is a great parent who doesn’t want to put a financial strain on her child. Now, with all the facts, you can devise a family plan on how to proceed so that everyone feels helped and listened to.

Throughout this process, discuss ideas together. If returning to work is an option, discuss how that might happen and how you can all support her to help make it happen. Can you help write her resume, apply for jobs, and prepare for an interview? Do you have contacts who are looking for staff, and can you connect the two? Or are there additional benefits she is entitled to that will bring in extra income? Can you help her get creative in coming up with $150 a week?

Not all help has to be financial

Talk at length about money management. How much is she earning from all sources, and where is it spent? If budgeting is an issue for her, offer to help. If she has trouble with online banking and bill payment, offer to help. Not all support is financial, and rebuilding her confidence can be done by her children coming around her with the skills they have and helping her move forward, as she once did for each of you, I am sure.

I come from a family of seven: My mum, dad, and five children. Financially supporting my parents was our reality some years back when my parents hit a financial brick wall. Ultimately, one sibling stepped in and gave that financial support, and they laid all their cards on the table when they did, explaining to all what they were doing so there could be no uncertainty or gossip. The rest of us had non-financial strengths and helped out in non-financial ways. Time passed, and my sibling’s financial position changed, much as yours had, and they began the awkward conversation about pulling back financial support. It got a little tense at times, but because from the beginning, we were all on the same page, those niggles got worked through, and ultimately my parents got back on their feet, and my sibling was able to concentrate on her family finances.

Your situation allowed you to step in and help five years ago, but now, it has changed. It’s entirely fair that you get to communicate with all of your family and make some changes. Far from feeling guilty for considering stopping those $150 weekly payments, you should feel proud of yourself that for five years, you had the ability to make them.

I wish you well.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

The Five Best PocketSmith Features for Travellers

Sun, 30 Jun 2024 12:00:00 +0000

Last July, I booked flights from Christchurch, New Zealand, to Atlanta, Georgia, USA. Then I gave notice on my flat. I sold all my family and hugged my stuff goodbye —

Wait. Strike that last sentence. Reverse it.

Via Gifer

The United States of America was never my permanent destination. It was a safe transition zone, that’s all. A stepping stone to keep my feet dry while crossing a few wild oceans. One month later, I had spent two weeks in the USA; six days in Canada; three hours in Amsterdam; and I wrote this from a kitchen table in Scotland. Working remote and adjusting to digital nomad life, I’ve relied on PocketSmith more than ever — and found features I never had a use for before.

So what are the best PocketSmith features for global travelers?

5. Offline accounts

I’ve moved through four different countries in a single month, which means I’ve dealt in four different currencies. But I don’t want to (and can’t) open a bank account in each new country. And I don’t want to (and won’t) suffer the offshore service margins incurred by using my NZ bank card.

So what’s a girl to do when she’s deprived of live bank feeds?

The answer is simple: Four offline accounts and one multi-currency debit card.

My preloaded debit card currently holds four currencies (NZD, USD, CAN, GBP) and can hold up to ten. The exchange rate is locked in at the time of loading, so you always know what you’re getting. I created an offline account for each currency in PocketSmith. Once a month, I export the month’s transactions from the card portal, import them into PocketSmith, and let category rules do their thing. Done.

Offline accounts work just as well to track cash in multiple currencies! A lot of places simply don’t have card facilities and only accept local cash. Besides, I’m not the first person to find a spare NZD$20 note in my wallet as I step off the plane in Aberdeen… right?

4. Accounts in different currencies

Until I left New Zealand, 100% of my PocketSmith usage was in a single currency. My bank accounts were in NZD. My bills were in NZD. Even when I invoiced clients in AUD or CAD, my tax agent handled the conversion and paid the balance through in NZD.

Looking back, it was all a bit too simple.

Which meant I got a wee surprise when I created an offline account, scrolled down, and set the account currency to USD. *boop* Something changed. Everywhere. On my PocketSmith screen. Suddenly every account, every transaction, and every balance had a little three-letter code beside it.

NZD. NZD. USD. NZD. USD.

More codes were added when I created my second and third offline accounts.

USD. USD. NZD. CAD. GBP. GBP.

I won’t lie. Going from decades of working in a single currency to abruptly dealing in four at once was a significant mindset shift. But it’s a natural one. PocketSmith eased the transition for me and made it easy.

3. Balance graph currency conversion

Creating accounts in multiple currencies opened up swathes of features I didn’t know existed, or if I did know, they were an afterthought grouped under “multi-currency support.” A cool afterthought, a nice-to-have, but an afterthought.

Not anymore. Now they were front and center because I was dealing with them all. the. time.

Like the balance graph at the top of my dashboard. It’s one of those stalwart features we take for granted, innit? Sturdy. Dependable. Until I looked at the balance for my CashPassport GBP account, expecting to see 1,190, and I saw… 2,500.

Cue miniature freak-out. I knew I hadn’t loaded that much onto the card.

After some frenzied clicking, I realized the obvious: Of course PocketSmith can’t calculate a total on selected accounts when they’re in different currencies. So the amounts are converted into your native currency, whatever you’ve set that as. In my case, it’s NZD.

Which showed me the danger of only seeing what you expected to see. Expecting £1,190, I’d read the total as £2,500 — pounds sterling. But on second glance, it was really $2,500 — New Zealand dollars.

The transactions column widget has always been in my top five favorite dashboard widgets. With its hard work over the last few months, it has firmly cemented its place and earned a gold star for good behavior.

When I started prepping to move overseas, I needed a way of tracking the ins and outs of my travel finances. I won’t go into my full PocketSmith overhaul — that’s a story for another time — but in the meantime, I created a category called “Prepping To Go.” Anything, and I mean anything, to do with the upcoming move went in there. Houseplant sales? Prepping To Go. Buying a travel pack? Prepping To Go. Selling my beloved Doc Martens because they wouldn’t fit in my carry-on? Prepping To Go.

I tracked it all in a transactions column widget. ‘No account filtering’ + ‘Include only selected categories’ + ‘Prepping To Go.’ That gave me a daily update on how much I had spent or earned for that category and whether it was even close to balancing out*.

Spoiler alert! By some miracle and despite all my expectations to the contrary… it did.

*Not factoring in flights and insurance because they’re a different category and a whole other kettle of fish.

1. Transaction currency conversion

My favorite. Okay, one of my favorites. They’re all intertwined and interconnected, frankly. I can’t talk about offline bank accounts without mentioning setting the bank balance in your chosen currency. Likewise, I can’t talk about currency conversion in one place without following that through to other places.

So, aye, the currency conversion carries through to the Transactions page. But it doesn’t stop at glancing over the Transactions page and seeing four different currency codes. On the Calendar, you’ll see individual transactions in their own currency and an overall total converted to your native currency. On the Income & Expense report, a category will roll up to show an overall total; but click into it, and you get the breakdown of transactions in each individual currency.

It’s the first time in my life that I’ve done something as mundane as buying groceries — in four currencies, in four countries, in the space of four weeks. PocketSmith lets me see that. All of it.

And it is awesome.

Mastercard Welcomes PocketSmith Into the Start Path Program To Accelerate Open Banking Innovation

Wed, 26 Jun 2024 12:00:00 +0000

New Zealand-based PocketSmith, a market leader in personal finance software, has been selected to join Mastercard’s global Start Path Open Banking and Embedded Finance program.

PocketSmith enables Home CFOs to understand their finances and plan ahead. It has customers in 190 countries and offers connectivity to nearly every bank worldwide.

The program offers PocketSmith access to Mastercard’s cutting-edge technology, data connectivity, analytics solutions, and its vast ecosystem of banks, merchants, partners, and digital players.

Mastercard Start Path's 2024 full cohort comprises nine fintech innovators across open banking and embedded finance. Image source: Mastercard

Jason Leong, CEO and co-founder of PocketSmith, has been impressed with the passion and dedication demonstrated by the Mastercard team, particularly their holistic approach towards innovation and partnerships.

“We’re proud to have spent the last 16 years bringing financial inclusion to consumers worldwide through our products and services. As our journey today intersects with Mastercard’s, we embrace the opportunity to see the problem with fresh eyes. We look forward to working together to understand how to better democratise finance through open banking.

“Consumers deserve frictionless access to their financial data, which is essential for making informed and effective decisions. The increasing complexity of our personal finances should be matched with increased transparency and control. Open banking has the potential to make this a reality, but its successful implementation relies on collaboration in the fintech space.”

“As the fintech landscape continues to evolve at a rapid pace, Mastercard is embracing opportunities to support and collaborate with companies to build the future of open banking innovation through the Start Path engagement program,” says Sabrina Tharani, SVP of Global Fintech Programs at Mastercard.

“Mastercard has selected PocketSmith to join its ecosystem of innovators and will provide opportunities to access its network of partners, mentorship opportunities and resources to support their scaling journey.”

Image source: Mastercard

Jason recently spoke with Owen Rask about PocketSmith’s story on the Australian Business Podcast. They discussed the problems the company set out to solve, why it never took VC funding, and how it celebrates individuality as a core value.

Three Times I, As A Keen PocketSmither, Didn't Use PocketSmith (And Why That's Okay)

Sun, 23 Jun 2024 12:00:00 +0000

I love PocketSmith. Love, love, love. I’ve been using it for about three years now, and, quite honestly, I can’t imagine tracking my finances without it. How do I love thee? Let me count the ways… okay, not all of them, that would make for a very long article. Let me sum up.

Multi-currency support. Color-coded nesting categories. Custom dashboards. Sankey diagrams. And, of course, the all-important “X spent of Y allocated budget.”

But even as much as I love it, and even with PocketSmith’s multitude of far-reaching functionalities, there are still things I don’t use it for. Why, you ask? Read on, Macduff!

1. Invoicing, tax, everyday banking

I lump these under the same heading because they’re what beginner Smithers often ask about. It’s an easy mistake to make. After all, PocketSmith does so much it would be natural to think it also does invoicing for your business clients. Or files your taxes for you. Or you can move money between accounts within the PocketSmith portal.

Nope. Sorry to burst the bubble, but that isn’t what it’s designed for. PocketSmith offers live-feed banking integrations, not a bank in itself. When I need to move money around, I use my banking portal. Aside from that, my money train stops at three stations. There’s the blue one, Hnry, for my invoicing and self-employed tax needs. The green one, Kernel, for Kiwisaver, index funds, and high-yield savings. Then there’s the purple one. PocketSmith.

Purple is as purple does, and what purple does is make money management easy for everyday peeps like you and me.

2. Cost-Benefit Analyses

Just a week ago, I hit a situation where I had to decide: Stump up for a one-off cost and then pay less going forward? Or pay nothing up-front, spread the cost over time, and risk paying more overall? In my case, the one-off cost was for a pair of ice skates I spotted at a secondhand shop.

There were no less than six different scenarios to weigh up:

Casual entry with skate hire
Casual entry with own skates
10x entry with skate hire
10x entry with own skates
25x entry with skate hire
25x entry with own skates

What’s a gal to do? Plug a few numbers into a spreadsheet, obviously. Ten minutes later, I had entry costs for all six scenarios extrapolated out to a full 25 sessions and could check the percentage savings. The contrasts were stark. My conclusion?

Buying the skates costs me $15 up front and it saves me a full 50% on every entry ticket. That’s a whopping $300 over 25 entries (or $285 factoring in the cost of the skates.)

Worth it? I should think so!

3. Income changes and lifestyle hypotheticals

Life can be bumpy, especially when it comes to income and lifestyle changes as a freelancer. The self-employment rollercoaster is a stereotype for a reason. Sometimes I need to weigh up whether to take on an extra client, or if a contract offer I’ve had is worth accepting, or some other hypothetical. It’s only a what-if at this stage. PocketSmith offers a ‘Scenarios’ section. I could use that.

Do I log in to PocketSmith? No. I pull out my quick-and-dirty spreadsheet.

I’ve had this thing for years, since well before I joined PocketSmith. It takes me all of 30 seconds to plug in my inputs in the form of projected income sources. Loosely based on The Barefoot Investor’s ‘bucket’ system, it then tots up this income and splits it out into separate buckets:

50% for daily living expenses like rent, groceries, utilities, and transport
20% for Spend: Discretionary and other expenses like clothing, health and fitness, and household items
20% for Save or Debt: Repayments, savings, and long-term investing
10% for Give: Tithing and charitable giving

It’s basic, but that’s the beauty of it. I don’t need all the granular details that PocketSmith offers, not at this stage. All I need is the 30-second, 30,000-foot overview.

Use the right tool for the job

So that’s it. Three times I, as a passionate advocate of PocketSmith, as a daily user and daily dashboard-checker, didn’t actually use PocketSmith. And that’s okay! Use the right tool for the job, I say. For self-employed taxes and invoicing, I use Hnry. For banking, I use my bank. For a hypothetical 30-second income projection, I use a spreadsheet template that I’ve customized to sleek, streamlined perfection.

For all the other stuff, there’s PocketSmith.

Canadian Alexis Uses PocketSmith To Establish Good Financial Habits

Thu, 20 Jun 2024 12:00:00 +0000

Read how Alexis is using PocketSmith to track where his money goes so he can manage his net worth in a responsible way.

Tell us a little about yourself?

I’m a 36-year-old husband, father of two, software programmer, and aspiring music producer. I live in a suburban city near Montreal, Canada. I don’t really care about hockey, though.

How would you describe your role in your household?

I’m the breadwinner. My wife is a writer, but since we decided to start a family a few years ago, she became a full-time stay-at-home mom and a part-time writer. Also, she has no interest in money whatsoever, so even if we feel like we are a modern-day couple, somehow, we’re a lot like a couple from the 1950s.

What drew you to PocketSmith?

I’ve been keeping track of my finances for roughly a decade now in a very geeky way: I have an Excel file with a bunch of different spreadsheets in it, and I inconsistently take snapshots of my net worth over time as well as other important financial data. I think I am somewhat of a perfectionist, and I just love customization.

At some point, I read an article about a guy in his thirties saying that he had finally reached a one-million-dollar net worth and he recommended using an app — I don’t remember which one it was — so then I tried using that app, but it was only available in the United States. I tried to find similar apps in “best financial apps” lists, and somehow, I stumbled upon PocketSmith.

It just instantly knocked my socks off, mostly from a software programmer’s perspective. Full disclosure: I’m writing this article because I reached out to PocketSmith for a job, but they are not currently hiring, so they suggested that I write this instead so that I might get a discount. Still pretty cool if you ask me.

How long have you been with us?

I joined PocketSmith about a month ago, but it was love at first sight. It really feels like a video game to me.

What do you primarily use PocketSmith for?

In my twenties, I inherited a ridiculous amount of money. A few years after that, I inherited double that amount. To say it’s been a life-changing experience is, well… it’s correct. Financially speaking, I quickly became obsessed with the concept of “net worth” even though it had never crossed my mind in the past. I’m using PocketSmith in combination with my own custom solution (i.e. my dorky Excel file) to try to establish good financial habits for myself. When you artificially acquire a lot of wealth at such a young age, it’s really easy to do stupid things!

How has PocketSmith changed the way you do money?

PocketSmith has forced me to look at where my money goes. At times I’ll avoid thinking about my spending, but then with all the categories and the dashboards, I’ll suddenly notice something like, “Wow, vehicles really cost a lot of money, and you simply can’t view them as investments.” It’s like the best financial slap in the face you can get.

What are your favorite features?

Because of my tech backgound, I just marvel at the overall quality of the product. When you’re a software developer with a focus on quality assurance, you learn to appreciate simple, elegant, and effective software.

More concretely though, the features that I really like are the dashboards, the net worth calculator/visualizer/forecast, and the automatic bank feeds. The bank feeds are a bit tricky in Canada, but luckily for me, my main financial institution is fully supported, while my less important ones don’t sync.

Got any tips?

Regarding transactions, I would recommend being really precise with categories. Try to customize stuff as much as possible. Using an “okay” label as a stamp of approval has greatly improved my experience (it can get confusing when you deal with manual categorizations vs. automatic ones). This trick makes me 100% sure that I have verified and approved the categorization of every single transaction.

What’s the best money decision you made in the past 12 months?

I can’t think of anything money-related right now, but on the psychological side of things, giving up coffeefeels great. I didn’t think it was humanly possible!

Why I Gave Up Buying Clothes for a Year

Mon, 17 Jun 2024 12:00:00 +0000

At the end of 2022, I made the decision to take a break from buying clothing for a full year.

I’d noticed I’d been tumbling back into old patterns of clothes shopping, getting stuck in cycles of wanting more and more, and making online purchases that weren’t aligned with my financial goals. While I’d not been spending beyond my means, I knew I was buying more than I wanted to be, and that that money could be put to better use.

I’d been flirting with the idea of doing a no-buy year for a while. I liked the idea of the challenge and figured I could save some money in the process. But it was actually my PocketSmith dashboard that solidified my commitment. I was looking at my spending for the year to date to explore opportunities for new goals for 2023, and I started honing in on which categories were sucking up my money.

I identified that I could free up around $5,000 by cutting my clothing spending out completely. With the cost of living increasing, it felt like an easy win. Well, easy-ish. Giving up buying clothes for a year wasn’t going to be a cakewalk, but I knew that the majority of my clothing purchases were wants and not needs, and I knew my spending habits would benefit from a year-long circuit breaker.

The rules of my no-buy year

The only rule was that I couldn’t consume any new clothing, or new-to-me clothing, for the entire year. That meant no clothes shopping (obviously), but also no thrifting, swapping or renting. I love thrifting, and it’s certainly cheaper than buying new. But I’ve made the mistake before of treating second-hand shopping like fast fashion. I’d load my cart with more and more because it’s cheap, and the ethical nature of preloved sort of gives you that permission to go a bit wild.

Exemptions from my clothing ban included shoes and accessories, purely because I don’t really gravitate towards buying these things very often. I keep tabs on my behavior in this area, though. I’m conscious of making sure I don’t spend money on these exempt items just to ‘scratch the itch’ of wanting to spend money.

How I got through it

When it comes to doing a no-buy year, I think there are two approaches. You can distance yourself from the temptation, shut your eyes and just get through the year by minimizing your likelihood of wanting to buy. That’s one way of doing it. I personally chose to steer into the skid. Rather than avoid the things I find myself wanting to buy, I expose myself to them.

Every now and again, I’d take myself to stores to look at clothing I’d otherwise consider buying. I would scroll through websites I like and expose myself to things that would otherwise tempt me to punch in my card details. That’s because I wanted the year to have a lasting impact on the way I spend money and the way I consume clothing. Changing the way I respond to seeing things I like and proving to myself that it doesn’t always have to result in a purchase has been really helpful in getting comfortable with my withdrawal from clothing consumption.

I had built up an album on my phone of outfits I put together from my existing wardrobe, which really helped on those ‘nothing to wear’ days. It also really proves to me just how much mileage I can get from my clothing when I put a bit of effort into being more creative.

The financial benefits of my spending freeze

At the time of writing, I was six months into my year-long clothes-shopping freeze and really enjoying it. The mental freedom from being constantly tempted by nice things is incredibly powerful. I developed an ability to see things I like and confidently walk away, knowing I’m in control of my purchase decisions, which is starting to translate to my finances.

Thanks to not buying clothing for the whole year, I was able to pay for some unexpected life expenses more easily, and I noticed my splurge savings account gets dipped into far less often than it ordinarily would! Plus, the habits, discipline and clarity I experienced are also translating to other areas, as it’s reignited my prioritizing my goals over immediate gratification.

Is It Time To Change Your Bank?

Tue, 04 Jun 2024 12:00:00 +0000

Many business relationships have their day and come to an end. It’s a first-world problem, but I recently broke up with my coffee supplier when the delicious blend I paid a premium for them to courier to my country town began being stocked at my local store. I still wanted what they were selling; I found a better way to get it that suited my wallet and lifestyle.

Other dust-ups and bust-ups I’ve had over the years have been with various banks. I never cried once. A quick count-up revealed that I’ve used seven different banks.

I’ve never changed banks just for fun; I do it if my situation has changed and they no longer serve my banking needs. I’m gone once the need to leave outweighs the need to stay.

There are many and varied reasons why my bank and I split up and why I ended what they thought was probably a pretty good relationship:

I moved country and had to start over
They sold to another bank, that I didn’t want to join
They charged me for services I didn’t ask for
They charged me for services that other banks offered for free
The customer service was poor
I lost money through fees
Their systems felt archaic, so I found a more technically advanced bank
I wanted to separate personal and business banking, so I joined a second bank

Many people can have misplaced loyalty to their banks

When I was young, it never occurred to me to change banks, mainly because I got my first bank account while still at school, and it was with the same bank as my parents, who had been with them forever. A colleague of mine joined his bank for the same reasons as me, and I overheard him complaining about their service one day. After listening to his gripe, I told him he should change banks; there were better options. He replied that he was ‘loyal’ to his bank, always had been, and always would be, even though he was losing money and feeling frustrated by their service.

You may wonder if there are advantages to sticking with the same bank for a long time. Will it get you better products and services? My colleague thought this was the case. I’d say, “Probably not”. Your bank is a business, and you are how they generate wealth for their shareholders. They will want to maintain the relationship for as long as it is in their best interest. You should take the same approach and not hesitate to change if the relationship no longer suits your best interests.

Banking commercials play on emotion. Lots of happy people collecting keys to their new home, having just taken on a mortgage. Or boarding a plane having saved for a goal or put it on a credit card. But when you remove the emotion, it’s important to remember that your relationship with your bank is purely business.

But if it isn’t broken, don’t fix it

I’ve got a friend who has never changed banks because there has never been a reason to change. Her bank is helping her reach her financial goals. That’s fantastic to hear. I was pleased for her and agreed that she should stay put. But if you are having repeated issues with your bank, they don’t sell what you need, or their services are just not fit for purpose, staying with that bank will frustrate you over the long term, and you should look at other options.

I need my bank to help me grow my wealth over time

If staying with your bank means you will be worse off, and another bank offers options that could grow your wealth, you should consider changing. I’ll always speak with my bank first to see if they can solve my problem, but if they can’t, then off I go bank shopping.

An example was when we had a large sum of money with our bank and were drawing out large monthly amounts to pay for the new home we had built. The bank we were using would not pay any interest if we moved money from the account during a calendar month, which we had to do to pay our builder. I asked if there was a different account we could use to pay our builder still but also earn interest on the remaining balance. The answer was no.

I immediately searched online and questioned my friends about which bank they used. I made some bank account comparisons and very quickly found one that would pay monthly interest despite us making withdrawals. I immediately opened a new bank account with them and started to earn interest. We were financially better off having done so. Because I like simplicity in my banking, I moved all of our money to this new bank.

What should you look for in a new bank?

Each of us has different banking needs. If you are considering changing banks, write a list of what your specific needs are. For example:

Unlimited number of accounts
Credit, debit, or cash cards
Term deposits
Homes loans
Overdrafts
Investment accounts
Retirement funds
Business banking
Insurance
No or minor fees

It’s also important to consider the bank’s ratings. These ratings reflect the bank’s financial health and reliability, which can give you peace of mind knowing your money is in safe hands. Research and compare the ratings of potential banks to ensure you’re choosing a secure and reputable institution.

I created a list of my needs and then searched each bank’s offerings. I made a chart to list each bank, and compared their products. Whoever fulfilled my list the most got my business.

A big part of banking is their service when something goes wrong. It often makes all the difference. This is where the experiences of friends and family are helpful. Ask them which bank they use and why. You must ask ‘why’ because they might need different things from their bank. You may have a mortgage or credit card debt, and they might not, for example. Ask about the service they received when something went wrong. Ask if they would recommend their bank to you.

I’m a proponent of having a simple banking structure, which, I have to say, makes it relatively easy to change banks. I simply set up the same structure with a new bank, ceased using my old bank, and ran the two side by side for three months as I moved all transactions to my new bank. I linked these new accounts with PocketSmith and captured and categorized all those transactions. I close all my old bank accounts and unlink them from PocketSmith once I’m happy that no transaction has been forgotten.

What you need from your bank changes over time

As a student, I needed just one or two bank accounts. My bank then gave me access to borrowing money using an overdraft and a credit card. Later, I created multiple savings accounts and then took on the big one, a mortgage. Now that the mortgage is gone, I only need a debit card, everyday banking, and short-term savings accounts.

Check in with the accounts and services you use a few times a year, and tweak and change as necessary. Let go of things you no longer use, and take advantage of new services and products that will benefit you.

Is your bank still servicing your needs?

Each time I’ve changed banks, I’ve tried to take advantage of myself financially and reduce friction around using my money. In my ideal world, I don’t have to ask my banker anything, but I can instead utilize their products and services unaided to create my perfect systems.

The takeaway is that your bank is a business whose goal is to make money from you. Your goal is different; you are trying to improve your financial situation with each passing year. Your goals are not necessarily aligned, but you and your bank have a symbiotic relationship. Sometimes, they make money out of you, such as when you have a mortgage and pay interest, and other times, you make money out of them, such as when you have savings and earn interest.

You still both need each other, but it pays to pay attention. As your financial situation changes throughout your life, just make sure that the bank you use keeps pace with your goals.

What Does AI Mean for Personal Finance? Help Shape the Future of AI in PocketSmith

Mon, 27 May 2024 23:30:00 +0000

The world is all a-tither about AI. Nearly every company, product and conference is introducing an AI play or feature. If any product might see an advantage from having something summarized — you can bet that you’ll see a ✨ emoji appear to give you that summary. I’m sure that ChatGPT is bored of summarizing customer support tickets by now, stripping the human context out of the communication in the process.

When it comes to money, doing things carefully is paramount. Proof-of-concepts for “robo-advisors” have popped up frequently, years before the advent of the current large-language-model-based versions of AI. However, the phrase “this is not financial advice” has become a deep part of cultural vernacular in the past few years. And for good reason — bad financial advice leads to people losing money.

So, we’re taking a different approach. We’re still unsure what PocketSmith should use AI for, and we want to do something different from summarizing. So — we’re inviting you to play with the investigative tools we’ve been working on, currently named “AI Tasks” in PocketSmith.

What are AI Tasks?

They’re a way for you to interact with OpenAI’s ChatGPT from within PocketSmith. We’ve captured a few obvious use cases: assisting with categorization, cleaning up merchant descriptions, identifying repeating charges, and other analyses.

Further, we’re opening up your ability to interact directly with ChatGPT by allowing you to edit the prompts directly and other key variables, to experiment with your own data as you see fit. This means there are no limitations to what you can do with AI Tasks — edit a preexisting prompt to suit you and send it to ChatGPT.

We want you to explore what AI can do within PocketSmith — so much so that we also feature an “ask anything” AI Task, which allows you to send any text or data to ChatGPT for a response.

So, if you’re a beta user, click the 🤖 emoji on the Transactions page toolbar to access the AI Task view to get started. Yes, we’ve decided to eschew convention and not use the ✨ emoji!

Why release now?

We’ve been working on this gradually for over a year now, and are only happy to release now because of the drastic increase in quality of ChatGPT this year especially — up until now, ChatGPT’s outputs were interesting, but not particularly useful. Then with the release of GPT-4o a couple of weeks ago, we’ve seen a further step-change: AI Tasks produce more accurate and reliable output than ever before.

Previously, a lack of reliability and consistency of output meant that what came back to PocketSmith couldn’t be applied directly — a request to categorize transactions with specific instructions would result in different outputs that couldn’t be properly accounted for.

But now this has changed, so it’s time to release the tools we’ve been building to you all. It’s worth noting that the AI Task user interface is very bare-bones and unpolished, focusing on function over form. Please excuse the rough edges!

What about security?

Firstly, information sent to ChatGPT via their API is not used for training their large-language models. This means that OpenAI does not use the information you send beyond providing you with the output of the task that you requested.

Secondly, all AI requests and responses are stored solely in your internet browser, in local storage. PocketSmith does not store this information, and it doesn’t appear in our server logs.

Third, you can wholly opt-in and control this feature. If you’re uncomfortable with using AI Tasks, then you do not need to do so. This will always be the case — we’ll never activate a feature where your data is sent to an AI without your express permission. You’re in control — even when things progress, and we automate suitable AI Tasks.

What’s next?

The most important step is receiving feedback from our customers about the AI Tasks as they stand now and hearing ideas about what would be helpful for them for AI tasks. We have achieved consistent results with the prompts we use on our own data. However, the primary reason for getting this very early version of AI Tasks released is to hear from you about how we can use AI to improve your PocketSmith experience.

We’ve set up a dedicated email address for this – just send your feedback and thoughts to ai@pocketsmith.com, and your feedback will get directed to the appropriate team.

Once we’ve received feedback, tweaked default prompts, and added new functionality, we’ll likely rebuild the AI integration into something that can be triggered automatically. We’d like to see a world where you can either manage your categorization or never categorize another transaction again because an AI does the heavy lifting for you — and trust that the AI will accurately organize your transactions.

After acting on feedback and introducing automation, we want to expand our horizons. Our users have already been building amazing uses of AI with PocketSmith data, from automatically generated daily budget podcasts to creating a personal CFO using PocketSmith and ChatGPT. As always, we’ll consider ideas carefully to ensure any feature released works well for a broader user base.

Please become a beta user in PocketSmith, hit that 🤖 button on the transactions page to start exploring, and send feedback to ai@pocketsmith.com. We look forward to shaping how AI is used in PocketSmith alongside you!

Ex-Mint User Miranda Finds Her Perfect Budgeting Software in PocketSmith

Sun, 26 May 2024 12:00:00 +0000

Read how PocketSmith’s customizability and focus on detail allows Miranda a degree of control and insight into her personal finances she’s never had until now.

Tell us a little about yourself?

After several years in the public accounting industry, my career path is evolving; I am currently a graduate student working towards a master’s degree in data science.

Making technical topics approachable and understandable has always been at the heart of my career, and I’m excited to take that into the world of data science. When I’m not doing taxes, statistics, or coding, you can usually find me reading, gaming, banking, or playing with our two dogs.

How would you describe your role in your household?

I manage our family’s personal finances and help with the bookkeeping for my fiancé’s business.

What drew you to PocketSmith?

I was a long-time Mint user, but always felt like there were limitations that required me to maintain a system of spreadsheets to budget the way that I wanted to.

When Intuit announced that they were discontinuing Mint, I researched and tried out other budgeting apps but found similar limitations. For example, one alternative offered a lot of flexibility in categorization, but it didn’t include our bank for automatic bank feeds, and it only offered month-based budgeting.

When I stumbled upon PocketSmith, it ticked off every box I had on my imaginary “perfect” budgeting software wish list. The customizability and attention to detail allows a lot of control and insight into your personal finances.

How long have you been with us?

I have been with PocketSmith since December 2023. Once I had our accounts linked and our budget created, I was so excited that I signed up for an annual subscription before the trial period was over.

What do you primarily use PocketSmith for?

I use PocketSmith for our family budget planning and review. To start off, I entered our budgeted income and expenses. I did most of this within my first couple of days using PocketSmith, so the budget is mostly set-and-forget, with an occasional update. Every two weeks, I categorize our transactions and compare the budgeted amounts to what actually happened.

How has PocketSmith changed the way you do money?

I previously had a system of spreadsheets to supplement features that Mint didn’t have. One of my primary complaints was that Mint was centered around monthly budgeting and lacked sufficient flexibility to create or view budgets and reports with different budgeting periods.

I prefer to have more flexibility because income and expenses don’t always occur on a perfect monthly basis, and PocketSmith provides users with several features to budget with these different timetables. You have the option to specify whether each income or expense category repeats and how often (in days, weekdays, weeks, fortnights, months, and years).

In addition, the reports and dashboards allow you to view your financial status over all kinds of custom periods. That flexibility has provided a fantastic way to streamline my budgeting process, reduce manual data entry, and delete some spreadsheets.

What are your favorite features?

I already talked about how much I love the flexibility of time periods for both budgets and reports, so I won’t make you read more here.

A second feature I love is how customizable the income and expense categories are. You can make a category as broad or specific as you want, color code it, and nest categories under a parent category.

For example, our “Auto Expense” parent category has subcategories for gas, insurance, vehicle registration, maintenance, and supplies. This allows me to be specific (i.e. insurance is paid on a certain day, but gas expense is spread out over time), while monitoring the overall trend of all auto expenses.

Similarly, some weeks we go over on our grocery spending, but I can see that we spent less on restaurants and are on track for our overall food budget.

A third feature I love is using merchant keywords for auto-categorizing transactions. In my opinion, it works more accurately than the categorization in most personal budgeting apps and bookkeeping software.

Got any tips?

1. Take advantage of the customizable periods for budgets, reports, and your dashboard

PocketSmith holds a wealth of information about what your income and expenses look like and seeing that information for short (weekly/biweekly) and long (monthly/annual) time periods can hold valuable insights.

For example, most of our recurring bills happen during the same two weeks every month. Budgeting accordingly, I keep more cash available to pay bills during those weeks and emphasize savings goals during the other half of each month.

2. Plan for treats

While a key part of budgeting is being able to focus on necessary expenses first and maintaining a level of restraint when spending on leisure or luxury, I think that building “treats” (big or small) into your budget up front helps you take care of yourself and your finances at the same time.

Whether you love ice cream, books, video games, or something else,budgeting for that gives you a reasonable expectation of how much you have available to spend while reminding you that you can (and should) do nice things for yourself.

3. PocketSmith can be as simple or as complex as you want it to be

PocketSmith caters to an infinite number of budgeting styles. If you feel constrained by over-simplified and inflexible budgeting apps that don’t allow customization, there’s a lot of freedom to set up your budget with every subcategory you desire on the precise timeline that each item occurs.

If you feel overwhelmed at the thought of budgeting, you can quickly set up your budget and categorize transactions. When you want to review how you’re doing, you can focus on the report(s) and dashboard(s) that you like and ignore the rest. When in doubt, the support team is always extremely kind and eager to assist.

What’s the best money decision you made in the past 12 months?

When I decided to go back to school, I started saving money to serve as income-replacement and pay for tuition. By prioritizing savings goals before my program started, I made it possible to put more energy and attention into my future.

Insurance Must-Knows for the Self-Employed

Sun, 19 May 2024 12:00:00 +0000

Insurance. Investing money to protect yourself (or your loved ones) in the event something horrible happens to you. It’s a concept that has been around since time immemorial. These days, insurance comes in many forms. Health insurance, life insurance, content insurance, and auto insurance.

Most households will have a combination (or all) of the above. Insurance is ironic in that we pay so much money for something that we hope to never use. But if we do have to use it, we’re always glad it’s there. I for one have made a few auto insurance claims myself and have never regretted having it!

When you’re self-employed, you will still likely use a lot of the insurance mentioned above. However, running a business comes with additional risk exposure. So let’s take a look at the types of insurance that you’ll need to think about as a self-employed individual.

General business insurance

I say ‘general’ because this covers a few different types of insurance. Depending on how you structure your self-employment (either as a sole trader or as a company), you need to insure your assets. You will need to consider the following:

Auto insurance

Does your company own a car or a fleet of cars? Then you’ll need to get each one insured. The policies for insuring company cars are slightly different from personal car coverage. You’ll want to ensure that your employees who will use the vehicle are covered. Depending on the type of vehicle, you may need to ensure that the insurance covers any situation you may be putting the car into. For example, making sure that your work truck is covered for off-road accidents or damage due to load-bearing issues.

Business premises insurance

Otherwise known as ‘contents insurance’. If you have a physical business premise (which is not your home office), you will want to take out premises insurance. This protects against theft, arson, structural damage, etc, that could affect your business. Be sure to ask your insurance agent/broker if income protection is included in this as well. If your premises got broken into and you had to close shop for two weeks, it is good to have insurance that will cover your lost income for those weeks.

As a self-employed individual, it’s also good to have income protection or trauma/health insurance. These types of insurance will typically cover your income if you’re unable to work due to various issues. These are typically taken out in the individual’s name, not the business.

Public Liability insurance

Now we’re looking at business-specific insurances!

Public Liability often gets confused with Professional Indemnity (which we’ll discuss later). They are very different! Public Liability looks at covering the liability that your business incurs if you cause damage to property as a result of carrying out your business activity.

In short, if you went out to see a client and your car ran over your neighbor’s mailbox, you can put in a Public Liability claim. Of course, the mailbox may cost less than your insurance’s excess fee, but you get the point.

Another example of Public Liability is damage caused to property as a result of incorrect equipment installation. If you installed a piece of electrical equipment wrongly and it caused your client’s building to burn down, you will be responsible for the damages. Public Liability insurance will allow you to claim for some of those damages.

Do I need public liability insurance?

It depends on how much interaction you have with the public when carrying out your work. If you are frequently going out to see clients/visit worksites, then yes, you should get Public Liability insurance. The same goes if your service requires you to service client property.

If you are a retailer/restaurant owner, you may be covered by Public Liability if a customer managed to get injured in your store as a result of your or your employee’s negligence. If you are a rideshare driver, Public Liability will cover you if you run your car into a road sign (or something similar).

Do you work from home? You may not get much value from Public Liability insurance. If your work does not require you to leave the office frequently and/or interact with clients physically, you don’t really need Public Liability insurance.

Professional Indemnity insurance

Do you provide professional advice and services to your clients? Do your clients rely on your professional advice to make their business decisions? If yes, Professional Indemnity insurance is for you!

Say, for example, you’re an accountant (like me!). Your clients rely on you to file their tax returns, ensure that they comply with tax legislation, and advise them on how to structure their tax affairs legally. If your client runs afoul of the tax authorities because they relied on your advice, they can sue you for providing bad and/or negligent advice.

Professional Indemnity insurance will come in to cover any settlements, legal fees, or fines that result from your professional negligence. Naturally, if your client messes up because they didn’t follow your advice — that’s on them. No sweat for you.

Professional Indemnity is different from Public Liability. Public Liability typically focuses on damage to property whereas Professional Indemnity focuses on losses arising from bad advice. So, a builder who installs a beam wrongly can claim Public Liability. An architect who draws up the wrong plans will be claiming Professional Indemnity.

Do you need professional indemnity insurance?

Much like public liability insurance, it depends on the nature of your business. If you are providing professional advice in any capacity (as an accountant, lawyer, IT adviser, management consultant, etc), then you are exposed to professional risk. If there is a chance that your clients could suffer losses as a result of your (bad) advice, you should get Professional Indemnity insurance.

Retailers and restaurateurs don’t have to worry about Professional Indemnity. No one’s ever lost a few thousand dollars because their barista recommended them a bad coffee (I mean, there might be a really specific situation where that could happen, but let’s be realistic here). Similarly, a bad dress recommendation in a retail shop usually won’t result in financial losses for your customer.

You will find that some larger organizations may require you to have Professional Indemnity insurance before you can do business with them. This is usually true for government contracts for consultants. In this case, you have to get Professional Indemnity if you want to unlock that revenue stream.

Pricing for business insurance

That depends on a few things.

For general business insurance, you are typically priced by the size of your premises, the value of your automobiles, and the value of your assets.

For Public Liability insurance, pricing is determined by the nature of your business (the more you need to be out and about, the higher the premiums will be).

Professional Indemnity insurance is tied to your yearly turnover from your advisory services. The higher your advisory income, the more your risk exposure and the higher your premiums.

Protect your future

Insurance is all about managing the risk of the unknown. Being self-employed often means embracing the unknown and taking big risks with your income. As a self-employed individual, you are exposed to greater risk than an employee. Understand what these new risks are. More importantly, understand what sort of insurance you can take out to protect yourself!

Stay positive!

Dealing With International Banking Hassles

Sat, 11 May 2024 12:00:00 +0000

“I’m sorry, what?” I say to the bank’s support agent over the phone. I must have misheard. After months of solo travel and a full two days of trying to ring the bank during their ‘holiday hours’ — from the other side of the world — I’m fatigued and frustrated, and I must have misheard him. It’s the only explanation.

“I see you’re not calling us from your registered mobile number,” he repeats.

Seems I heard him correctly the first time. I take a deep breath and reply through gritted teeth. “That’s because I’m calling you from the UK, not New Zealand. I deactivated my NZ sim when I left, which means I had to buy Skype credit just to make this call, and I would like to reset my password so that I can access my accounts. Now. Thank you.”

Safety measures can be a pro and a con

Maybe it was my own fault. Working overseas as a digital nomad, I’d gotten used to operating through my global multi-currency account. Exchange rates and international transfers were no problem. NZD, CAD, USD, GBP… all at my fingertips, and all reflected with pinpoint accuracy through PocketSmith’s live transaction feeds. But an attempt at logging in to my NZ bank portal for once had resulted in… well… exactly this situation.

Now I was locked out of my NZ accounts and staring down a looming deadline for making onward travel plans.

It’s the situation nobody wants to be in: Alone, in a foreign country, with limited access to steadily decreasing funds. Bank processes can be tortoise-slow and stressful even when you’re in the same country. Now I had all the usual issues: Short business hours, convoluted processes, box-ticking bureaucracy — and with the added challenge of limited resources and a diametrically opposed time zone.

Don’t get me wrong, I understand why those processes are like that. Security is paramount when it comes to money, as many scam victims will attest. The worries of fraud and identity theft are bad enough at a domestic level. They’re even worse at an international one. After all, when I’m a 14-hour flight away, I can’t just walk into my nearest branch and prove my identity in person. With the rise of AI auto-calls and deepfakes, a phone call isn’t as secure as it once was. The last thing I would want is for my bank to allow someone who isn’t me to access my accounts.

But there has to be a balance. Setting up a brand-new global multi-currency account had been remarkably easy. I’d done that in Scotland, from the comfort of the couch, in the space of an hour. Why, then, was it so darned difficult to gain access to my own New Zealand accounts, which I’ve had for literal decades?

Is there room for improvement?

Was it that the process was grounded in local systems, like the presumption of an active New Zealand phone number? With the post-pandemic travel boom meaning more Kiwis than ever before are traveling overseas, this seems short-sighted. Why would I maintain an active NZ sim and expensive global roaming when I’m overseas for months at a time? Especially when there are so many low- or no-cost alternatives. Airalo is my default data provider for international travel. Many global companies offer customer service through a free WhatsApp line.

Was it compounded by my bank being short-staffed during the holiday period? By operating shorter seasonal hours in the weeks between Christmas and New Year’s? And only in New Zealand’s time zone?

Because, of course, global money emergencies only happen during New Zealand working hours. Yeah, right.

As with any travel issue, it comes down to an unfortunate convergence of factors: Partly system complexities, partly human error, partly ‘we do things that way because we’ve always done them that way.’ I shouldn’t complain. Really, it’s reassuring to know there are so many layers protecting my money from being accessed by anyone who isn’t me. For the one person who is me, though, it makes me think. How can we do this better?

It might just be a rite of passage for travelers

And what happened with that password reset?

The process isn’t as simple as just asking the support agent. In the end, it takes a handwritten and hand-signed request, several photos for ID verification, and three days of radio silence. A formal complaint eventually prompts a WhatsApp call from a senior manager to my (registered and verified) mobile number, at which point we can finally reset my password.

I’m relieved and tempted to write it off as a one-off. Everyone has bad days, right? But then I’m chatting with Chloe and Dora from PocketSmith, and they say they’ve both had the same experience while traveling outside New Zealand.

“In fact,” Chloe adds thoughtfully, “I’ve still got the rest of that Skype credit sitting there. After all, who uses Skype these days?”

Next-Gen Neobanks and Money Apps for Australians

Sun, 05 May 2024 12:00:00 +0000

Have you heard? Boring banks are so last decade. It’s all about tech-first neobanks with a sleek user experience and tons of nifty features that help make money fun. How good is that?

We’ve gone down the rabbit hole and plucked out the cream of the neo-crop for our Aussie mates. So if you’re looking to jump banking ship, listen up for our hit list. But first…

What actually is a neobank?

A neobank, often called an online bank, is a digital-first bank that does away with physical bank branches and operates online only. These banks also tend to have “challenger” features, like new-age app technology or more modern features designed for a younger audience. Some of these neobanks in Australia offer their own money app functionality, that not only holds your money but helps you manage it. Sounds pretty sweet, right?

Here are some to watch.

Up Banking

A fave among personal finance creators, Up is a digital bank designed to help you organize your money and simplify your life. Users are given a bright orange card linked to their transaction account, and the entire user interface is so much fun to use.

The app has all kinds of gamified features not only to make managing money easy, but also FUN! You can organize your savings into different buckets, cover transactions with any saver you like, round up your transactions to boost your savings, and even save up for your next purchase using the MayBuy feature. The app is rapidly adding new features like a payday function that organizes your salary for you once it hits your account and a ‘slice’ function that helps you split expenses with friends and family.

Connecting your Up account to PocketSmith is pretty much the most financially savvy a person can possibly be!

Spriggy

Spriggy is a family-favorite money app that helps you teach your kids about saving, budgeting, and reaching their money goals. It’s a prepaid visa card with an interactive app that allows kids to start managing money like a pro, without the need for a proper bank account.

Kids can set savings goals and track their progress, manage a budget and organize their money into different categories, and track their spending as they go.

Wise

Wise, formerly Transferwise, is a multi-currency global account that allows you to get paid locally in multiple currencies across the world. With an intuitive app to help manage your different currency wallets, it’s the perfect companion for digital nomads or frequent travelers who earn and spend in different currencies.

Douugh

Douugh brings together spending, saving, and investing into one neobanking app. You store your spending money in your spending ‘jar’, and you can even earn cashback on purchases that goes straight into your investing ‘jar’. With multiple investing options inside the app, Douugh combines your money management into one place.

If you’re short on cash, you can even ask Douugh to ‘spot’ you an advance — though we recommend approaching this function with caution, as with all borrowed funds.

Alex Bank

Alex Bank makes getting a decent interest rate on your savings account simple. Gone are the days of thinking you’re snagging a 5% return only to discover you didn’t meet the criteria. With Alex Bank, you can chew on fee-free savings, score a generous variable interest rate, and cop no minimum transactions or caveats.

It’s currently invitation-only — ooooh, exclusive! — but will be rolling out to more users in 2024.

Ruth's Two Cents: Playing With FIRE (Financial Independence Retire Early)

Sat, 27 Apr 2024 12:00:00 +0000

Hi Ruth,

I was recently reading an article that mentioned Mr. Money Moustache (MMM), and it kind of captured my imagination! I went down a FIRE (Financial Independence Retire Early) rabbit hole and resonated with not waiting until retirement to live the life I want. However, the frugal side of things has given me pause — I’m not sure that living off beans on toast is worth it. Should I strive for FIRE, or should I go my own way? Where would I even start?

Pete Adeney, AKA Mr. Money Mustache (MMM), has been a huge catalyst for many to set their financial lives in order and become happier as a result.

He gets you thinking about one of the critical questions you must address: What do you want? You talk about not waiting until retirement to live the life you want. But do you know what that life even looks like? I suggest you start there. You can then work out if each action you are performing today gets you closer to it.

In regards to becoming more frugal, so that you can stop wasting money (money which you could instead be investing), just start where you are. It starts with budgeting and knowing where your income comes from and goes to, but it rapidly expands. Mr. Money Mustaches’s ultimate aim is to be happy, and it turns out that you don’t have to spend much to achieve it.

His recipe for human happiness includes friendships, freedom and security, health, good nutrition, meaningful work (paid or unpaid), and community. None of these things need to cost us money. In his view, happiness is the only logical pursuit. With these bases covered, we have enough to be happy. But the marketing departments of product and service-producing companies are very adept at using this recipe against us, which is where the problems begin. Where once we thought we had enough, it is pointed out to us at every turn that we probably don’t. Enter consumerism.

Finding happiness in less…

Having heard MMM speak many times and read most of his website, there is no doubt that what he proposes from a mathematical perspective works. Put simply, if you spend less on life and invest aggressively in a couple of big index funds, your wealth will rapidly grow. I’ve had the good fortune to meet people who have systematically followed his advice, and within ten years, they had enough money invested to make going to work entirely optional. Math doesn’t lie. If you spend less, you have more money.

The sticking point, however, is you!

Letting go of your need to purchase things that bring you a quick dose of joy or make your life easier makes you feel like you are taking frugality to the extreme. You should approach frugality in smaller steps, just like you build up your fitness slowly over time.

The most challenging concept you and others struggle with is finding happiness in less. Because that is the secret weapon MMM has in his toolbox — he is on the ultimate quest for happiness and has found that it is not to be found in purchasing things. It’s to be found in good food (which might just include some beans on toast), good friends, and meaningful work.

He cracked the secret code in many ways; live on a lot less than you make, and invest the difference. In time, that investment money makes more money than you will ever really need.

…Then maximize it each day

Because he found happiness without the price tag, it freed him up to invest most of his income into index funds, and in several years, they built to such a level that they then provided income, too. All the while, he never felt he was missing out; quite the opposite. He said he was surprised that when he quit his job because he had more money than he could ever need, none of his colleagues were in a position to do the same. He invested his money; they spent theirs, trapping them at work.

He is flat-out maximizing his happiness each day. He might be sleeping in the back of his car (which is a Tesla these days) on his friend’s property while they work on building a cabin together, where he will then be welcome to enjoy future summers. Or he might be hanging out with his son and helping him with his schoolwork, stopping and enjoying the company of good friends, or cooking a delicious and nutritious meal that may or may not contain beans.

He has found his ‘enough’. You need to find yours, which will look different from his.

At the moment, you are focused on what you may have to give up. Focus on what you gain.

Where might you begin?

I’ve heard him say, “The key to success in early retirement and, indeed, most areas of life is to get the big picture approximately right and then not sweat the small stuff.” Improve yourself in increments as you move towards your big picture. Each time you work something out, add this insight into your new and improved self.

How can you quit spending when you have spendy friends? MMM suggests you take over the organization of friend meet-ups. Instead of Saturday nights at a bar downtown, where you quickly spend $200 on food and entertainment, take charge by having your friends round to your place with their favorite playlist ready to blare through your speakers and their favorite tipple that they want you to share — $40 tops. You’ll have time with the people you like, still have a great night, and save a small fortune.

Focus on community and the cost per use of an item. If friends already own or do things that you want to enjoy the use of, then be useful yourself. Fix the deck of their holiday home, wash their windows, and cook a meal while you stay for free. Instead of buying a truck for the two times a year you need to cart a load of goods, borrow your friend’s one, but detail it inside and out, and fill up the tank as a thank you. They will want you to borrow it again! You have saved money, got exercise, achieved a job that needed doing, and caught up with a friend. Winning!

MMM does a lot of DIY and finds that ticking smaller jobs off his to-do list gives him more satisfaction than completing everything at once. He is intent on creating as many moments of happiness as he can. What things do you have on your to-do list that could be broken down into many enjoyable moments instead of one gargantuan task?

Choose to do things that include as many ingredients from his recipe for human happiness as possible.

Remind yourself why you want to FIRE

List out your top life priorities and keep them in a handy place. Before you decide to do anything, consult your list, which will anchor you. My top priorities are maintaining friendships, consistent parenting, physical movement and health, and financial independence. What are yours?

MMM said, “Stop doing what other people are doing and live differently.” To you, the word frugal has negative connotations. To MMM and myself, it only has positive connotations. To me, it means freedom. It’s all in how you go about things, and I can assure you that living this way is absolutely worth it.

The simple answer is that you should strive for your version of FIRE. And ‘go without’ more than you currently do. I’ve never spent so little yet had such a rich life. I promise frugality won’t harm you.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

Book Review: "Good With Money"

Mon, 22 Apr 2024 12:00:00 +0000

Emma Edwards from The Broke Generation is a Certified Financial Behavior Specialist. She combines her psychology expertise with practical advice to inspire an understanding of spending behaviour and the adoption of healthy, fulfilling money habits. As a blogger, podcaster, and content creator, Emma shares actionable tips and tricks for managing finances effectively.

In her debut book Good With Money, Emma starts by addressing the external factors that influence our spending habits — social media, “Pay Later” schemes, advertising, and other marketing influences. She then turns inwards, focusing on the internal factors that influence our spending. This includes recognizing the role our family and childhood spending habits have on our money management today. Her point is that your mindset and motivations about money matter as much as your approach to managing the dollars and cents.

To help readers navigate their financial journeys, Emma introduces her ‘Good with Money’ methodology that employs a top-down money management approach. This encourages readers to start with clear goals, drilling down into specific actions and steps that will support them to make informed and prioritised spending decisions. She loves a good acronym, introducing psychological concepts like PERMA (Positive emotions, Engagement, Relationships, Meaning, and Achievement) to link financial management to long-term wellbeing and happiness.

What sets Good With Money apart?

This book engages with the reader. By focusing on mindset, Emma gives readers a sense of control over their financial destiny, whatever their circumstances. Her use of tasks and reflective exercises ensures the reader adapts and applies her approaches and tactics to their own situation, beginning the process of building healthy money practices.

A few of my favorite takeaways

Like any good self-help guide, Emma leaves you with three solid takeaways to help you on your journey to becoming good with money.

1. Focus spending on things you actually want

Find out what you actually need and want to spend your money on. Being good with money doesn’t mean taking the joy out of spending money. She makes the reader look at our regular expenses to determine if these purchases are the ones that are really making us happy.

“You don’t need to stop buying things you want; you need to stop buying things you don’t want.”

2. Treat money like a relationship

Think about your money like a relationship. Nurture your money like you would a trusted relationship. Put effort into the things that you care about.

“Relationships are something your brain can actually understand. You can’t control what the other person does, but you can control how you contribute to the relationship.”

3. Expect the unexpected

When building a budget and categorising your expenses, allow for the unexpected. Create a “getting out of a shitty situation” fund that will help you to make decisions that align with your priorities. Planning for the unexpected can stop you getting stuck in a job you don’t enjoy or a relationship that’s not making you happy. Set aside an emergency fund to manage accidents, car repairs, and broken phones without diverting your other financial goals.

“While you can’t plan for every scenario, giving some thought to your options if you do experience financial difficulty can help you withstand unexpected challenges.”

Personal anecdote

On a personal level, through Good with Money, I have discovered that I am what Emma calls a “Tight-hold Tina”. When asked to reflect on how I would spend $50, $100 and $1000 in a way that reflects my money values I couldn’t think of anything fun I would want to spend my money on. The book helped me realize that it is okay to spend sometimes, I just need to find the things that I really value.

Overall, this book was a great and simple read. It offered comprehensive advice on how to manage your spending. I would recommend this book to someone who is struggling with saving. It is aimed towards younger people who are just starting out, getting a solid income for the first time with little idea about how to manage the money coming through their bank account. While the repetition might not be necessary for someone who already has the fundamentals locked in, it’s great for someone who needs to “rehearse, rehearse, rehearse” to create good money habits.

Book cover used in banner image from Allen & Unwin.

Delving Deeper With PocketSmith's Search Function

Wed, 17 Apr 2024 12:00:00 +0000

I wandered into my client’s office, stopped short, and blinked at him. “Oh, hey. Nice haircut.”

“Not bad, eh?” He grinned. “My wife trimmed it for me. Way cheaper than going to the hairdresser.”

“So next time it’s your turn to trim her hair?”

He made a strangled noise of amusement. “No, no, no. I think not. I tried that on the kiddo back during lockdown. Let’s just say it, uh, didn’t turn out too well…”

Which got me thinking — how long had it been since I had last had a haircut? It must be over six months. It wouldn’t be a year yet… surely not… would it?

There was an easy way to find out.

Go to the PocketSmith menu bar > Transactions
On the right-hand side, click the magnifying glass to Search

Enter query: Hair

Most recent result: 22 June 2022, Category: Hair, Amount: $40.

Oh. Hum. Okay. Considering we were now in 2024, it really had been a year or two since that last haircut! Maybe it wasn’t surprising: I’d grown my hair out from a pixie cut to messy bob, had the maintenance trim in June 2022, and then… well. Life got busy.

I guess that’s one way to save money.

A search style for every occasion

The one-shot wonder

I use PocketSmith’s search functions for a ton of different things. Sometimes it’s an idle, impulsive, one-off wondering, as with the haircut question. This inevitably leads me to the Trends page. Here, I can compare current spending to past history and see if anything has changed for the better — or the worse.

The narrow-it-down

Sometimes I only have one or two pieces of the puzzle. I might want to look up a restaurant transaction, but I only have a vague date range — it was sometime a six-month period. And it was for someone’s birthday, but I don’t recall if I saved it to the “Dining Out” category, “Coffee” category, or “Gifts > Birthday” category. Never fear! Add all three categories to the search filter, plug in the date range, et voila. There we go.

The saved search

Sometimes my ponderings need more structure than that. I might find myself wondering the same thing several weeks in a row, like ‘how much was my last grocery shop?’ When it becomes a recurring question, I plug the details into the search bar, including any labels if I’ve used them, and hit save. This gives me a quick-search option. Quick searches are listed in the Transactions sidebar for ease of use. It not only saves me time and hassle, but it also opens out some nifty extra options to get crafty with.

Go above and beyond

Now that I have saved searches, I can do more with them. Don’t get me wrong, it’s great having the raw data there, but anyone can do that. Being able to take that data and turn it into something more is one whopping advantage of using PocketSmith. A saved search gives me power over one-step customized results. From here, I can do all sorts of things, from checking business expenses with my tax agent to creating dashboard widgets to visualize that data.

Of these, my favorite is creating a mini Trends graph for my dashboard. Maybe, like me, you’re trying to keep your grocery budget under control despite the cost of living crisis. Or maybe, like my client, you’re curious about how much you spend on haircuts each year.

So what you do is:

On your dashboard, create a new Transactions Column Widget
Select ‘Get transactions using: Saved Search’
Choose the saved search you’re wanting to use, whether that’s “Groceries”, “Tax Deductible Expenses” or “Haircuts”

Okay, there you go! No twelve-step navigation with a map and compass for you! No, you get an up-to-the-minute, fully custom Trends graph, right there in front of you, every time you open your dashboard. It tells you current and past spending by week or month. It tells you the total you’ve spent over the last year. It even breaks down that total into an average spend for you.

And that’s only the start of what you can use searches for. So what are you waiting for?

Bonus: Search and Filter

Did you know! You can turn any search into a filter. This isn’t a filter in the traditional sense, but rather it’s essentially an automated action. Based on the search parameters you set, you can automate a resulting action and apply it to current and future transactions. This is a no-fuss way of deleting transactions from certain accounts, renaming merchants to standard wording, assigning categories, assigning labels…. you name it.

Ex-Mint User Mike Finds a New Money Management Home in PocketSmith

Sun, 14 Apr 2024 12:00:00 +0000

Read how Mike and his wife have greater peace of mind when making financial decisions and confidence that they’re meeting their goals with PocketSmith.

Tell us a little about yourself?

I have worked for an NGO throughout my entire 35-year career. As a result, I’ve had the opportunity to travel to many different countries and learn how to conduct business across various cultures. I enjoy helping others achieve their goals and fulfill their vision. I met my wife during our first year on the job, and we’ve been married for 33 years. We have four adult children and a grandchild who live in different parts of the United States.

How would you describe your role in your household?

As a husband and father, I see my role as being a leader who loves unconditionally and sacrifices for his family. Although my wife and I are equal partners in everything we do, I’m responsible for leading our family and setting the tone, standard, and moral compass in our home. I lead by loving my wife and children unconditionally, regardless of their actions or responses. And I serve them sacrificially as a servant leader.

What drew you to PocketSmith?

For the first half of our marriage, I managed all of our finances. We had a simple philosophy of only spending what we had, except for our initial home purchase. I managed our spending through intuition and by keeping a written ledger of our expenses. When our children grew older, my wife wanted to be more involved in our financial picture.

This led us to create a budget based on spending categories. Since we were frugal and hadn’t used a financial management tool before, we wanted to find a free and straightforward tool. We began using Intuit’s Mint tool to categorize our spending and track our budget.

This helped us gain insight into our spending habits. However, we were frustrated by the built-in ads and confusing features of Mint’s layout. The challenge was that we didn’t want to learn a new system or lose all the historical work we had done.

When Intuit stopped supporting Mint, we realized it was time to find a better solution. That’s when we discovered PocketSmith. We’ve been using PocketSmith for only a few months, and we can say that it’s easier to accomplish all the same tasks, the interface is much more intuitive, and we were up and running in a short time.

How long have you been with us?

We have been using PocketSmith since October 2023.

What do you primarily use PocketSmith for?

We use PocketSmith to track our home expenses against our budget. The ease of categorizing expenses, splitting transactions across multiple categories, setting automatic rules, and carrying budgets across different periods has made tracking finances a straightforward process.

How has PocketSmith changed the way you do money?

We have greater peace of mind when making financial decisions and confidence that we’re meeting our goals. We can quickly see where we’re spending our money, which allows us to make decisions about reducing or changing spending habits before they become a problem.

What are your favorite features?

Since we’ve created a budget based on our goals and historical spending habits, we love the ability to see current trends in spending and how they compare to our budget.

Got any tips?

PocketSmith’s automatic categorization needs to be trained to know how you want to categorize expenses. It will suggest a category, but you can teach it by setting rules for expenses as they occur. I found it helpful to use PocketSmith’s suggestions for a couple of months to set those rules. This made it easier to introduce the tool to my wife because it was tuned to our way of categorizing.

What’s the best money decision you made in the past 12 months?

We love to give to charity. The best decision we’ve made is to set aside our charitable giving from our regular budget in real time. We move money from our regular bank account into a separate account after each paycheck. We have greater joy in seeing how much we have to give.

Essential Tax Deductions for Non-Business Owners in New Zealand

Tue, 09 Apr 2024 12:00:00 +0000

Hi, accounting fans!

If you have business-owning friends, you may have heard them go on and on about all the ‘deductions’ they can claim. It’s true business owners can claim a fair amount of deductions for their business income.

What about non-business owners? Surely there is some form of tax relief for the non-employing employed?

In this article, we will look at some common deductions that non-business owners can make in Aotearoa New Zealand. Please note that if you are from a different tax jurisdiction, you may want to consult with a local tax agent for more info.

We’re going to focus mainly on tax deductions for PAYE employees. So let’s get into it!

Expenses paid to your accountant

If you have paid an accountant or tax agent money to prepare your tax return — you can claim that expense against your income. I like reminding my clients that paying your accountant is 100% tax deductible. No questions about it!

You might point out the obvious though and say, “If I’m already paying tax as I earn, I don’t need an accountant”.

And you would be absolutely right! You don’t need an accountant if you have a PAYE salary.

However, if you have rental properties as an investment, you will want an accountant to help you put together your rental tax returns. Or you may have overseas share investments that trigger the foreign income fund (FIF) rules.

Please don’t go spending on an accountant just to claim tax deductions. You will end up paying them more than what you can save in taxes.

Your income protection insurance premium

Ever heard of income protection insurance? It is insurance that will continue to pay out a portion of your regular salary should you be unable to work. This type of insurance can also be known as trauma insurance. If you have suffered injury or trauma that affects your ability to work, this insurance will kick in.

Please note that the income that you receive from income protection should be taxable if you want to claim the premiums as a tax deduction. As such, it is a good idea to talk to your insurance provider about the nature of the income protection that you are receiving.

Generally speaking, if you are receiving a direct income replacement from your insurance provider, that amount is taxable. As such, the premiums paid on them are tax deductible.

If your work is highly physical (nurse/builder/chef/doctor/etc), I would recommend getting income protection insurance. Not only is your income protected in the event of an accident, but you can claim tax deductions on it too!

Commissions on investment earnings

If you do your investing through an agent or broker, the commissions that you pay them on your earnings are tax-deductible.

For example, if you got your broker to execute a share sale for you, you can claim the commission that they charge you on that sale as a tax-deductible expense. Most of us would be conducting our investments through intermediaries — so be sure to check if your broker has charged you any commission on your investments for the financial year! You can claim them back as a tax deduction.

Most investment platforms will provide you with a tax statement that should list any commissions charged to you. You can then key in those figures on your tax return to get back some sweet deductions.

On interest paid on money borrowed to invest

Sorry folks in Aotearoa, I have to point out — this only relates to non-residential rental property investments. This is to say that if you take out a loan to invest in shares (generally a not-so-good idea) or buy commercial property, you can claim all of the interest expense paid on the said loan as a tax deduction.

Residential rental investments have their own set of tax rules I’m afraid. As of this current financial year (FY2024) — you can only claim 75% of the interest on loans taken out to buy residential rental investments. The current government is looking to reverse this rule in the coming tax year, so watch this space.

Interest paid to New Zealand Inland Revenue

Uh, look. In the first place, you don’t want to be in a position where you are overdue on your Inland Revenue debt. That being said, if you are in that position and you’ve been charged interest on the amount owing, you can actually claim back that interest as a tax-deductible expense.

Wild, eh? You get to claim a tax deduction on the amount the Inland Revenue charges you. Heh.

It’s not a position you want to be in, though.

Please note that interest on overdue amounts is separate from penalties. Penalties are strictly non-deductible. Be sure to check your tax statement on which amounts are interest and which are penalties.

Seriously though, please pay your taxes on time.

Anything else you can claim as a tax deduction in New Zealand?

Not really. Aotearoa tax rules aren’t very permissive for salaried workers. If you’re looking at claiming more tax deductions, you should consider starting a self-employed side hustle from home. That way you can make some extra money and claim home office expenses as a tax deduction (a topic which deserves its own article).

So if you are paying for any of the above items, track down those documents or receipts! Please note that in Aotearoa, the IRD will auto-calculate your taxes by July of the following financial year. So if you want to make sure that your expenses are claimed, be sure to access your MyIR, click on your income tax return for the last financial year (after 31 March), and add in those non-business expenses that you have incurred.

If you missed the auto-calc deadline, fret not! You can still amend the return via your MyIR and add in the tax deductions you wish to claim.

Happy tax deducting!

Fireside Finance: Sarah Kelsey, The OneUp Project

Sun, 07 Apr 2024 12:00:00 +0000

Welcome, Sarah! Tell us a bit about yourself.

Kia ora! My name is Sarah; I host a podcast called The OneUp Project, a safe place for all people to become the best version of themselves. Through insightful discussion, I aim to push the boundaries of my existing knowledge and take everyone along that journey so we can grow together. This project began in 2020 when I was 21 and has been thriving ever since. I describe it as a creative playground for my mind where I can make mistakes and connections, and hopefully become a much more empathetic, aware, and educated person as a result. I am currently on a one-way ticket out of Aotearoa in search of new perspectives and a consistent remote working lifestyle.

I got into KiwiSaver three years after I started working because my family was big on “owning your own money”. A huge misconception about KiwiSaver is that someone else is ‘using’ your money. After becoming a lot more educated and starting OneUp, I now feel secure in my investments. This was my introduction to personal finance, and from there, I learned more and more about what money management style suited me and my goals best, regardless of the opinions around me.

Debunking myths can certainly change your perspective on money. What are some common misconceptions about personal finance?

There are so many misconceptions around KiwiSaver (as described above), but often, many barriers to people engaging in personal finance come from too much information. When we receive a tsunami of advice about a topic we already feel quite exposed to, it can leave us feeling vulnerable and insecure. Often misconceptions come in when people have had conflicting advice and now have no idea where to start. Right or wrong, I personally believe no matter how or where you start, it’s the starting that gets you actively involved in the journey.

What role do personal values and beliefs play in your financial decision-making?

It’s everything! Knowing yourself is knowing your finances. On OneUp, I often talk about how financial literacy is only one thing under the umbrella of personal development. You are probably better positioned to answer questions about your finances when you understand who you are and what you want from life. All of your choices, especially investment decisions, depend on you having an idea of what you want from your investments.

I am chasing the work and lifestyle I want over the $$$’s that come with it. So maybe I have not achieved financial freedom yet, but in other ways, I have achieved more freedom in my life than some people have ever been allowed.

How do you define financial success, and does it extend beyond monetary wealth for you?

Financial success to me is ordering at a restaurant and looking only at the dish, not the price next to it. For me, it’s the small freedoms that remove weighing up ‘pros and cons’ or crunching numbers about when the next pay comes in. I, of course, would appreciate financial freedom, but to me, that doesn’t mean not working; it means not thinking about money.

In the pursuit of financial freedom, what role does income diversification play in your strategy? Have you explored multiple income streams or passive income sources?

I am a freelancer and, so naturally, have multiple clients/projects and sources of income. I think choosing to structure my work as a freelancer has served me in so many more ways than as an employee. In saying that, there are certain things I miss about having one job, and one income, but the grass is greener where you water it. Diversification is a huge part of my investment strategy, and passive income has never been a huge goal for me as I prefer the pursuit of work I love. With that said, I intend for many of my investments to act as passive income into my retirement; for now, that is a reasonably ‘set and forget’ process.

Speaking of investments, what’s your philosophy on building wealth, and how do you avoid getting bogged down in the nitty-gritty of financial tracking?

I try to keep my investing strategy reasonably easy and ‘forgettable’ where it does its thing in the background, and I can adjust it as my life or goals change. I am much more focused on building a career I am in love with than building wealth right now. A controversial opinion in some groups, but I want to be obsessed with the work I do and contribute to something so much bigger than just me. As long as I am setting up my financial foundations right in the background, I can continue to pursue the lifestyle and work I want regardless of income. I do a financial check-in monthly, and that is enough to get my ducks in a row. I only expense track when I need to shock myself into changing habits, and wow, does that work!

In terms of financial planning, how do you account for potential fluctuations in remote work opportunities or income streams?

Is “I don’t” an answer? I think the key here is always having a beefy emergency fund that you can rely on to get yourself out of situations, e.g. a flight home last minute or unforeseen expenses. I go through my financial plan monthly and plan out the expected income for the following month. If it is looking a little… sketchy, I change my approach to work or rejig my spending and expenses for the current month to suit next month. Often it involves a lot of maneuvering and adaptability. I am not sure if this lifestyle is sustainable for that reason.

Sarah's a podcaster, marketer, investor and she's unendingly curious about money.

Beyond the finances, what’s the most rewarding part of being a Digital Nomad for you? And how does your approach to handling money support these aspects of your life?

The freedom and lifestyle it offers will forever be its biggest benefit. To have the choice to work wherever and whenever is a privilege and blessing I need to remind myself of daily. Yes, it can be stressful at times, but I also acknowledge how pressure is a privilege, and because of that, I am able to access a lifestyle that isn’t available to everyone. The key is to continue building up my financial foundations at the same time (Kiwisaver, investments, etc), and if I can’t, I am living beyond my means. As I mentioned earlier, I am chasing the work and lifestyle I want over the $$$’s that come with it. So maybe I have not achieved financial freedom yet, but in other ways, I have achieved more freedom in my life than some people have ever been allowed.

A fun one to end things! If you could have any celebrity or historical figure as your financial advisor, who would it be and why?

My first thought goes to Warren Buffet because I just know I would have a great stack of cash by now. In saying that, I almost want to choose someone who is all about taking big risks and has a good finger on the pulse of innovative ideas. That way, I can be having fun, experiencing the full breadth of human emotion (even if that includes stress), and possibly making some big dosh at the same time.

Top Four Australian Personal Finance Apps I Use

Tue, 02 Apr 2024 11:00:00 +0000

Personal finance apps — it’s a tough one, isn’t it? Where do you start? Will it take me long to set everything up? How do you know if they’ll “work” for you? There are a lot of question marks when it comes to money apps, but my advice is this — don’t go looking for a personal finance or budgeting app that’s going to be the miracle solution to your money management. No app can change your money situation for you. What they can do is support you to optimize and monitor the way you already manage your money.

Here are four Australian personal finance apps I use to support my money management.

Up Banking

Okay, so this isn’t strictly a personal finance app, but Up is an app-based Aussie bank that makes managing your money really fun. Yep, you heard me. FUN! I’ve got my money categorized into buckets that I can customize as my budget changes, and I store my monthly salary in there and pay myself a weekly spending allowance every Monday using the auto-transfer feature. You can set up a payday routine (we love), cover purchases from savers at the tap of a button, round up your transactions to boost your savings without even trying, and even set up a MayBuy, which is like buy-now-pay-later in reverse. You link the thing you want to buy and a little picture of it appears, and then you choose a savings frequency and a target buy date. It’s SO cool.

PocketSmith

I couldn’t leave old faithful off this list, could I!? PocketSmith is the money management software for all walks of life, and that’s something I love about it. It meets me where I’m at. I don’t use lots of the whizzy in-depth features because that’s not how my brain does money. But I pick and choose other features that do work for me, like the transactions dashboard that visually shows where my money has gone for the month, the quarter, or the year, in a colorful pie chart. I use PocketSmith as part of my quarterly money reviews (which is when I lodge my quarterly taxes as a freelancer, too) and my annual review and goal-setting. It’s actually part of the reason I committed to buying no clothes for a year. PocketSmith helped me look at my finances from a birds-eye view and see opportunities to save big by cutting out or cutting back in certain areas.

ThinkUp

Okay, this is niche and technically not a finance app, but hear me out. ThinkUp is an affirmations app — stay with me — that helps you create more positive thought patterns through repeating positive affirmations that help create new neural pathways in your brain. You can record your own custom affirmations in your own voice and listen to them mixed with meditation and relaxation music. You can create categories and lists of different types of affirmations, and one of my lists is money. A lot of our ‘money stuff’ lives in our subconscious brain and actually dictates our behavior. Building a positive relationship with money is about recognizing where your beliefs might be keeping you stuck and replacing them with new ways of thinking and feeling when it comes to money.

Rounded

Rounded is the freelancer accounting software that I’ve used in my business for the past eight years. So yeah, you could say it’s getting pretty serious between us… *blushes*. Rounded is one of the most affordable accounting software available and is designed specifically for freelancers — yay! You don’t need to contend with big business features you don’t need, and I find the interface really simple and intuitive to use. I use Rounded to generate invoices and record income, input my expenses and upload receipts, view reports like profit and loss or Business Activity Statements, and keep tabs on my revenue and profit for the year so I know my tax savings are on track.

Ruth's Two Cents: Deciding To Join Finances With Your Spouse

Tue, 26 Mar 2024 11:00:00 +0000

Hi Ruth,

My partner and I have recently gotten engaged. It’s exciting times! Now we’re taking the chance to go over all of the ways we’re joining our lives together, and of course, our finances are a big one. This is the first time both of us have combined our money with someone else. What should we do to prepare? To what extent should we join our finances together?

Congratulations on your engagement! It is terrific news that you have found someone to share your life with.

I’m not going to beat around the bush here. I’m for maximum sharing, unity, participation, and connection in a relationship. It’s not old-fashioned to join your money with someone you love; it’s immensely practical and empowering. If I’ve found my person, I’m all in, and it’s us against the world! And that includes anything to do with money, with no distinction between who earned or spent what. As soon as $100 hits our bank account, it’s irrelevant who made it; it’s ‘our’ money and deciding how to use it unites us as a couple.

It might surprise you to learn, but my husband and I have never had one single argument about money. In case I was wrong, I asked him, and he confirmed it. And I can only put that down to talking about money very early on in our relationship. Then as we progressed to marriage and having a family, the conversations never stopped. As in all aspects of our marriage, we are a team, and we address money as a team because, in my experience of watching how thousands of others handle their money, those who are financially united can better create a long-term vision for their relationship. And that is what builds a strong marriage.

Engaging in full disclosure first

Very early in our relationship, I was nosey and wanted to know my partner’s exact financial situation, and I shared mine. Full disclosure was crucial because I was trying to look under every rock for potential problems before fully getting involved. When it came to money, it was essential to work out if we were compatible because we could create a future together, not as two separate financial entities. With no cause for concern, I trusted him with money, and he trusted me too. Trust is a huge deal.

I’m assuming that you have already been talking openly about how you feel about money, how you save and spend money, what you earn, what debts and investments you have and where you see your financial future going.

If there have been some sticking points during this time, then before you get married, they need to be discussed in direct sunlight; no point sweeping a tricky conversation under the carpet. It will only resurface at a later and more inconvenient date. For example, if one of you doesn’t want to disclose their debts or income, that’s a red flag. Best to resolve and reach an agreement now than years into your marriage. If you have trouble trusting your partner before marriage, you are destined for divorce. The fastest way to halve your net worth is to get divorced.

Getting on top of the admin

Before you are married, a great place to start is by creating a list where you both write down all your financial information, each noting down what you own and owe. Note down the bank you use, all your accounts, and their balances. Write down your retirement accounts and balances. Your liabilities and your assets, as well as your monthly incomes and outgoings. Also, talk about the insurance that you each have and what changes you might need to consider after marriage — for example, adding your spouse to your life insurance policy. Now is also a good time to discuss updating your wills to include the other after marriage. Compare notes, discuss the decision-making process behind each area of your financial life, and let each other give their opinions on the pros and cons of those decisions.

Make no mistake; this is going deep. You are laying your financial soul bare. But it’s this sharing of such detailed information that will unite you as a couple. If it throws up more questions than answers, pour a glass of wine, and discuss!

The key to successfully managing money as a couple is talking and negotiating, therefore being able to explain the benefits of each of your money systems means you will be better able to pull out the bits that work for both of you and implement those once married and negotiate your way through the rest. Like in every other part of marriage, money is a compromise where you can reach an agreement that both of you are happy with.

Setting those future goals together

Given that you now know where you both stand today, both take the time to think ahead, like all the way ahead, to when you are both old and wrinkly. How do you dream about your life together as you move through the years? This is how goals get set, by creating a shared vision of your future.

The over-arching sentiment when it comes to joint finances is that you are working together to create a better financial future for both of you while at the same time appreciating that life evolves and changes. At different times, you will each contribute and spend differently. But as long as you mutually agree, you are all good. Shared finances and viewing money as ‘ours’ especially comes into its own if you go on to have children together or one of you decides to take a break from working, making it impossible for both of you to contribute evenly. Combined finances take the pressure off you even having to calculate what the other does or does not contribute.

Putting your planning into action

If you clearly understand each other’s financial position going into a marriage, and understand how the other uses money, then once the rings have been exchanged, you can formulate a plan for your joint money. Combining finances takes far longer than you realize, so this process needs to be started early in your marriage and implemented slowly and with the consent of both of you. It is natural for one person to be more engaged in this, which is absolutely fine; play to your strengths, I say. But the trick is that even if one of you is handling daily money chores, both of you fully understand what is happening with the money, and you both have an equal say.

Once you are married, it is a matter of coming up with an overall plan for your money and merging your systems that you each noted before marriage. This will naturally mean that some bank accounts are opened while some are closed, cutting down on double-ups and fees. The same will be true for the subscription services you have. For each account, whether a banking or a utility account, where you can, you will need to put both of your names on them and set up passwords to have full access to all areas. Transparency is key.

Communicating to become a well-oiled machine

It is about respect for each other and having an equal say. You will need to communicate with each other about what brings you anxiety about what the other is doing with your money, and you will only discover these sticky points after you start working from the same bank account. For example, one of you might keep a chequing account at a minimum balance and feel perfectly calm about that; the other might panic that their card will be declined, so it’s about reaching a compromise over what a minimum balance should be. Or, if you don’t like being surprised by unexpected expenses showing up on your account, you might do as I do, create a mutual agreement that you won’t spend over a certain dollar amount without running it past the other person first.

This point is essential. it is not about power and control; it is about prudent financial management where you communicate about upcoming expenses as a team. Plus, it gets you to understand that as a couple, you will undoubtedly spend different amounts and differently from each other, but it doesn’t matter what is purchased, just that you mutually agree on it.

As a team, we are continually assessing how the earning, spending and investing decisions we are making are moving us further towards or further away from our goals. Even with the daily touch points that you have with money, it’s essential to take some time (once a month is perfect) to sit down and quickly check for anything money-related that needs your attention. It’s your opportunity to zoom out and decide whether you need to make any tweaks or changes or discuss and plan for anything on your horizon. This is when you will honestly feel like you each have the full support of the other.

I wish you well; I’m sure you will be a formidable financial team. All the best for a long, loving and happy life together.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

Going Global: Part Three — How PocketSmith Helps Me Handle Multiple Currencies as a Digital Nomad

Sun, 24 Mar 2024 11:00:00 +0000

The last time we talked, I had just finished a complete overhaul of my PocketSmith setup. It was one of those painful-but-necessary things: I’ve moved overseas and the established-in-New-Zealand system was no longer working for me. It needed to change and adapt.

Thankfully, PocketSmith makes the whole change-and-adapt thing a breeze. Any PocketSmith setup is much more than the sum of its very flexible, endlessly customizable parts. Which is great! because that overhaul was only the interim step.

Oh, the structure of my system was fine. I had my color-coded categories, I had my “Travel” setup. I could see income and expenses, I could see my biggest areas of spending, and I could make sure that I was living within my means. For my current lifestyle as a freelance digital nomad with no fixed abode, it worked okay.

It worked okay, but not well

The problem is, I’m not satisfied with mediocrity. When I’m working with a system as complex and customizable as PocketSmith, why on earth would I reach a level of “just okay” and then sit back and go, “Right, that’s good enough, let’s stop there”? I wouldn’t do that for my clients. I’d keep working on their pain points until we had a solution. So why do it to myself?

Don’t get me wrong, I like a lot of things about the current setup. I love the color coding. Obviously. That’s why I joined PocketSmith in the first place. I love the vast amounts of data, from granular single transactions to sweeping years-long trends. Now that I’m working in upwards of four currencies at any given time, I love the multi-currency support, from account overview conversions to seeing my Net Worth at today’s exchange rates. I love the live feeds —

Record scratch.

That was it. That was the problem.

See, my multi-currency debit card doesn’t support live feeds. I have four different currencies on it, and I was transacting in these different currencies… but I couldn’t see that in real-time. To reflect that in my PocketSmith setup, I had to create a different offline account for each currency (ouch) and then import transactions manually from the customer portal (double ouch).

Talk about a pain point

That was the one thing taking my system from “fantastic and seamless” to just “eh, it’s okay.” And, now that I had recognized it, it was an issue.

It was too late. Or was it?

Nothing is set in stone, right? Sure, I was using the debit card. I’d been using it for a few months now. But that didn’t mean I had to keep using it. That’s the beauty of PocketSmith and the beauty of life: If something isn’t working for us, we can act to change it.

So what did I need in a card? I needed multi-currency support on a level that matched PocketSmith’s: comprehensive. I needed live feeds: pronto. And, for preference, I needed a local bank account in whatever country I happened to be in — which was currently the United Kingdom.

A few solid hours of research led me to the global, borderless Wise card (formerly TransferWise — note, that’s an affiliate link). 24 hours later, from the comfort of the couch, I was ID-verified. I had a digital card in my Apple wallet and a physical card on the way. And I had local bank accounts in NZ, Australia, USA, Canada, and the UK.

Going banking borderless — a game changer

A single feed from Wise channels into multiple live accounts in PocketSmith, each in their own currency. Whichever currency I’m transacting in gets matched to the relevant account. I even have a New Zealand Wise account, where I can instantly — and I mean instantly — convert money from NZD to GBP, USD, etc.

Surely it couldn’t be that easy. But it was.

On an up-to-the-minute basis, I can see all my accounts in every currency I work in. I know my overall Net Worth in my native currency at the current exchange rate. I can receive money from New Zealand or pay it out in the United Kingdom, and then categorize that transaction in a matter of seconds. I can buy a week’s groceries in Scotland, check my Groceries budget, and see how that price trend compares over time with the last few years in New Zealand.

My multi-currency setup is no longer “just okay”

It’s both fantastic and seamless.

As for the work-life-travel balance?

It’s a work in progress. I’m settled for a few months where I am, which feels great. It means I can lean away from “Travel” categories like “Travel — Flights” and “UK Specific”, and lean into my everyday “Living Expenses” categories like “Groceries” and “Transport — Bus”.

It feels like getting back to normal life — whatever that is these days!

Expat Laurie Tracks Her International Budget With PocketSmith

Thu, 14 Mar 2024 11:00:00 +0000

Read how Laurie manages her household’s retirement financial plan in multiple currencies in PocketSmith to make their travel budget go further.

Tell us a little about yourself?

I’m one half of an American couple who retired early and moved from Texas to Spain. We’ve been living in Spain for 2.5 years and absolutely love it.

How would you describe your role in your household?

I am the keeper of our budgets. Coming from the United States, it has taken us some time to get our arms around what an actual budget looks like living in Spain. Before our move, we did a lot of research about the cost of living in Spain, but it wasn’t until we had actually lived here for some time that we were able to really get our arms around the true costs.

What drew you to PocketSmith?

Before PocketSmith, I tried a number of different budgeting and spending tracking systems. PocketSmith was the only one that has finally given us the needed insight into our spending.

As retirees, we have a fixed budget target for the year that is based on US dollars. But our daily spending is primarily in Euros. We use our US credit card for 90% of our spending (paying in Euros), so we can also earn travel rewards. So daily currency exchange fluctuations can greatly affect how far our US dollars go here in Europe.

After trying several other approaches to setting up our budgets and tracking our spending, I had a wishlist of features, and PocketSmith has delivered beautifully on all of them.

Accurate multi-currency support
Automatic bank feeds
Customizable categories
Nested categories
The ability to tag transactions and add notes
Desktop and mobile versions
Income/expense reporting

How long have you been with us?

We have been using PocketSmith for about a year and a half.

What do you primarily use PocketSmith for?

The initial setup of PocketSmith took me some trial and error (like establishing our categories, sub-categories, creating multiple dashboards, and establishing budgets), but now that it’s fully set up, it’s so simple to use. I spend a few minutes assigning categories and tags to our transactions each day. By keeping up with our daily transactions, we can see how we’re doing on our spending as it relates to our budgets. Knowing where we are each day lets us make good decisions about how we’re spending. This is especially helpful around knowing if we have any money left in our restaurant budgets and if we should/shouldn’t go out to eat that day — Spain has great food!

How has PocketSmith changed the way you do money?

For us, the biggest expense we have is travel. In addition to an annual travel budget, if there are any months where we come in under budget on our variable monthly expenses (utilities, groceries, restaurants, entertainment, or discretionary type spend), we ‘transfer’ those savings as income into our annual travel budget. Knowing that we have a little extra money available for another trip is a great incentive to savea little bit here and there during the month because it adds up!

What are your favorite features?

I love the automatic feeds from our Spanish bank account and US credit card. I can quickly categorize and tag transactions, which allows me to get a very accurate picture of what we’ve spent and what we spent it on.

Got any tips?

Spend the needed time to really think about how you want to track your spending and set up as many budgets, categories, sub-categories, and tags as you need. The PocketSmith support team was always super responsive if I had any questions during my setup period.

Take a few minutes daily to categorize your transactions and check how you’re doing against your budgets. Being able to be proactive about spending instead of reactive has really helped us create a great balance and has reduced anxiety about making sure that we have an accurate picture of our spending.

What’s the best money decision you made in the past 12 months?

As new retirees, we’ve had to learn to be much more mindful about how we spend our money. We started our retirement in Valencia, Spain (which we loved). But as we saw rents and cost of living rising there, with PocketSmith, we could really visualize the changes quite easily, we made the decision to move to a less expensive region of Spain (it was also too hot for us there in Valencia so that also impacted our decision to move to a cooler climate). By moving to the beautiful green north of Spain, we cut our rent nearly in half. With those savings in rent, we’ve managed to fund an extra vacation or two this year.

Seven Pitfalls To Avoid When Refinancing Your Home Loan

Mon, 11 Mar 2024 11:00:00 +0000

While this blog post focuses on Australian home loans, there may still be valuable insights and strategies that readers from other countries can adapt to their own financial situations.

If you went into 2024 with a goal to really take stock of your finances, looking at your biggest expense might be the first place to start.

For most people, that expense would be their home loan.

A couple of years ago interest rates were at record lows, but we’ve now seen 13 interest rate rises in less than two years. For home loan borrowers, that’s a considerable difference in repayments.

The average monthly loan repayment would have gone from $2,487 to $4,036, assuming they’ve stuck with the same variable rate loan in that time and haven’t negotiated a better rate*.

If you haven’t had a look at getting a better interest rate (even in the last 12 months), it might be time to see if you can.

But remember, even with a lower interest rate, you might find yourself worse off. So here are seven pitfalls to avoid when you’re refinancing your home loan so that you can actually save money and still get the features you need.

1. Choosing a loan based on the low-interest rate alone

There are thousands of different home loan options out there; if it was all about choosing the loan with the lowest interest rate, what would be the point?

Everyone has different circumstances, and what makes a loan great for some people is exactly what makes a loan not so great for others. And sometimes, getting the right loan means paying a higher interest rate than the lowest on the market.

If you’re refinancing to a new loan, be sure to check that it’s suitable for you. For example, consider whether fixing your home loan will provide you peace of mind or whether you’ll want to take advantage if interest rates fall during the loan term.

2. Paying too much to refinance

Even if you’ve found an ideal loan with a lower interest rate and you’ve worked out your monthly repayments, you might not end up saving as much as you think.

Many loans come with exit or discharge fees — these are fees that need to be paid when you pay off your loan.

At the same time, a new loan may charge application fees and/or settlement fees. Over a long-term loan these fees should be fairly insignificant, but it’s worth checking.

You may also need to pay for the costs of a new property valuation, lenders’ mortgage insurance (LMI), and legal fees.

These are all costs you would need to be sure you can afford in the short term. If you’re refinancing because you’re struggling now with your repayments, it is probably worth trying to negotiate with your existing lender.

3. Paying fees that wipe out savings

Finding a loan with a lower interest rate and lower repayments isn’t enough. Beyond the fees that you might face when exiting or starting a loan, you need to check any other fees that come with the new loan.

Some loans have ongoing account-keeping fees and also other charges for features like an offset account.

Work out how much you’ll be paying in fees per month, and add this to your new monthly repayments to see how much you’ll really be saving.

You should also add any exit or establishment fees to those monthly calculations.

4. Sacrificing features

You might find yourself a lower interest rate but does the loan have the features you need?

Features like an offset account, extra repayments, and redraw are key features that offer flexibility and savings, and may not be worth sacrificing. Keeping money in an offset account may end up saving you more money than a slightly lower interest rate without an offset account would.

Some people may also benefit from a package loan, like those that come with credit cards.

Assess your needs before you jump at the lower rate.

5. Sacrificing ease and flexibility

Even if a bank offers the lowest rate and all the right features, it doesn’t mean it’s the right provider for you.

Depending on your circumstances, you might need a bank that offers things like branch access, mobile banking, and/or a choice over your repayment frequency.

Be sure to check that you can make repayments, access your account and speak to the bank in the way you would like to before you commit to the new loan.

6. Refinancing too soon

Although technically, you can refinance whenever you like, if you’ve only recently taken out your first home loan, it’s not necessarily going to be worthwhile.

Particularly the case with those who bought with less than a 20% deposit; you may end up having to pay LMI all over again if you still don’t have at least 80% equity in the home.

With exit and application fees you may also lose out on any savings if you have to pay those additional costs so soon.

7. Honeymoon rates

Some lenders will offer low-interest rates for an introductory period. The rate then reverts to a higher interest rate once that period is over, leaving you paying more.

If the new loan you’re looking at is offering an introductory rate, make sure that you calculate how much the repayments will be beyond that period to see if you’re really saving money. Even if you plan to refinance again after that, you’ll need to take into account all the other costs associated with refinancing, which may not be worth it so soon after.

For a rough estimate of the overall cost of the loan on a honeymoon offer, make sure you check the comparison rate of the loan.

*This calculation uses the average home loan value in March 2022, plus the RBA’s average home loan rate for variable owner-occupiers in March 2022 adding on the 4.25% increase in the cash rate.

Rebecca Pike is Finder’s senior writer for money. She joined Finder after almost four years writing for business publications in the mortgage and finance industry, including three years as editor of Mortgage Professional Australia. She regularly appears as a money expert on programs like Sunrise and Today, as well as across radio and newspapers.

Five Money Challenge Ideas for 2024

Thu, 07 Mar 2024 11:00:00 +0000

Last year I took on the challenge of not buying a single item of clothing for a whole year — and it was one of the best things I’ve ever done. While there were instances when it was tough, for example, around my birthday or when I had an event to attend, I found the whole process really quite powerful. It taught me a lot about my spending habits and helped me save some money in the process. I’m now so much more mindful about my clothing spending and am able to buy better with the learnings I gained from the year of not buying.

If you love a challenge and fancy putting your financial habits through their paces, here are five money-saving challenge ideas to try in 2024.

1. 100 envelope cash stuffing challenge

Cash stuffingis a popular personal finance method that sees you switch tapping the plastic for budgeting with cold, hard cash. The 100 envelope challenge is a money-saving challenge using cash envelopes that can help you save $5,050 throughout the year.

Take 100 envelopes and number them 1 through 100. Then, throughout the year, fill each envelope with the number of dollars written on the back. In envelope one, save $1. In envelope 50, save $50. Once you fill every envelope, you’ll have $5,050. It’s a fun one to do with kids, and using cash can help you detach the challenge from the rest of your finances.

2. No-spend/low-spend challenge

A popular savings challenge is the no-spend challenge. This involves cutting your spending right back to the bare essentials for a defined period of time. Some people opt for a ‘low spend challenge’ that cuts out certain categories of spending but allows a bit more freedom in predefined areas.

Doing a no-spend challenge can help you be much more mindful with your spending decisions, and develop a lifestyle of living with less that could help you on your journey to financial independence. You can choose to do a no-spend challenge for one week each month, or for a month at a time whenever you need a reset.

3. 75 Richer

A variation of the 75 Hard (a mental toughness challenge that requires you to do two workouts a day and drink 3 gallons of water every day, among other hellish rules), 75 Richer was created by finance creator Katie Gatti Tassin aka @moneywithkatie. For 75 days, you follow a set of personal finance rules with the aim of improving your finances and juicing up your savings.

The rules include:

Track your spending
Cook at home a minimum of six nights a week
Transfer 10% of your salary to your savings as soon as it hits your account
Listen to a finance podcast of your choice each week
Read one money book of your choice
No discretionary purchases over $25
Unfollow one account each week that influences you to buy things you don’t need
Make one extra debt payment each month
Transfer to an investment account each month

4. 75 Hard Style

Another variation on 75 Hard is the 75 Hard Style challenge coined by analyst and fashion writer, Mandy Lee. The idea of the challenge is to maximize your wardrobe by getting dressed with things you already own for 75 days in a row. You don’t buy any clothes for 75 days, with the aim of saving money and getting more in touch with your personal style.

5. Snowball Spending Challenge

This one is actually a spending challenge I invented myself *takes bow* that is a really fun way to start getting more engaged with your finances. Each month, you review your transactions and identify any spending that was optional. PocketSmith’s transaction reports are a great way to do this! Then, total up all those transactions that you had a choice over — that’s now your ‘opportunity number’. Your challenge is to use that opportunity number to move closer to your money goals in the next month. Repeat the same process each month and you’ll gradually refine your financial behavior in each individual monthly container.

Things To Do Before Moving From Full-Time To Part-Time Work

Mon, 04 Mar 2024 11:00:00 +0000

One of the most common questions my husband Jonny and I get when we meet people, and they realize that we each only work part-time is, “I couldn’t do that. I don’t know what I would do all day”. The second question is, “How do you survive financially?”

Working part-time is undoubtedly not for everyone, and because we moved to part-time work while still young, it raises a few eyebrows.

Why would you want to work less?

It’s a fair question. If you simply love your job and everything that goes with it, I genuinely believe that as long as no other parts of your life are suffering, then by all means, keep working a lot. But if your life feels out of kilter, perhaps stopping working so darn much might be the right thing to do.

In our case, our life felt off balance, and we knew there were other things we wanted to do with our time other than working, so year by year, we changed course and began to work less and less, and we couldn’t be happier. We each get the following:

The satisfaction of working jobs we enjoy.
The enjoyment of working together on a side hustle.
Plenty of time together as a family.
Both being present and available as parents.
Plenty of time alone, or with friends, enjoying our individual interests.

It was not a straight line that brought us to this point, but we did have a goal in mind to work less, so each time the opportunity to move closer to that goal came up, we took it — one step at a time.

Being more productive, not less

When you work less at your day job, you need to be aware that you will structure your time quite differently, because the concept of the 9-5, Monday to Friday traditional working week goes out the window. For Jonny and I, there are the constants of working two set days each week and the routine of Monday to Friday schooling for our daughter, but anything goes other than those two commitments!

We each have 24 hours in a day, filling those hours in different ways, both of us settling into some sort of pattern. And just like when we worked, we are still looking to find challenges, social interactions, a sense of meaning, purpose and satisfaction, some income, plus some exercise for both brain and body. So how I choose to work is, starting on a Monday, I write myself a list of things I want to achieve over the next seven days. I’ll do them in no particular order; I’m happy as long as I’ve crossed them all off by the end of Sunday. Each job on my to-do list will touch on the above criteria somehow.

When we are not ‘at work’, the way we work is now very fluid and doesn’t follow a set routine, as a day job does. There are many distractions to divert us away from the plan we had in mind for the hour or the day! That’s a unique way to work, and we are both still adjusting to so much more of our time being our own. Time management is key, and the most challenging part is finding the focus to complete a task before moving on to the next.

Therefore, if you are pulling back to part-time work, you need to replace the things you will lose; you need to curate your free time well in a way that brings you happiness and is a good use of time. What you consider a good use of time is entirely up to you.

There will be a period of adjustment

Our move to both working part-time has been gradual. I’ve had to fight the desire to fill every waking moment with something, reminding myself that it’s okay to relax and ‘waste’ time. There have been a few times that Jonny, in particular, has questioned working less as he sometimes struggles to structure his days. But that’s okay; one door closes, and he is just finding new ones to open.

We spent all those years working full-time because we wanted to find meaning, create a difference at our workplace and feel we did a job well. That drive and ambition have stayed the same, but it takes a little time to direct that energy somewhere else.

I believe that moving from full-time work to retirement must be the most challenging thing because you suddenly have a whole week that you need to fill, so moving to part-time work first really does even out the ride.

Plan your transition

Before you leap from full-time to part-time work:

Discuss ideas and options with those closest to you impacted by your reduced hours.
To ensure everyone is happy, discuss it with your colleagues and how your working less will impact them.
Look at your household spending and earning, and decide how you will survive on a reduced income. In our case, our reduced incomes, plus income from our side hustle, are still more than enough to live comfortably on.
Forecast your spending and be honest about the fact that you might spend more than before because you suddenly have time to do new projects.
On your non-working days, create a daily planner, as this will give you a sense of purpose and structure and is particularly useful in those early months.
Be flexible. Know that returning to work is always an option!

What about money?

Our move to part-time work was well thought out; it was in the planning phase for years. The key was getting our living costs as low as possible, so becoming debt-free was a considerable part of our planning. But when I say ‘planning’, it was less about the math and more about conversations about what we wanted in life and how we would need to position ourselves to get there financially. Our ultimate goal was and still is for Jonny to quit work entirely and for me to stay working part-time. Why? Because that is what will make each of us happy.

Therefore, we didn’t want to be forced back into full-time work due to money. Of course, if we had to, we wouldn’t hesitate, but the goal was to live comfortably on our part-time incomes or by using a portion of our share market investments.

So, I looked at our weekly, monthly and annual spending in PocketSmith, which helped me figure out how much we would need to earn from working to cover our costs, still pay into our retirement accounts, and keep up our standard of living. We rely heavily on Sinking Funds to save in advance for upcoming expenses that we know of, plus we keep a six-month emergency fund on hand for those costs we couldn’t predict. I closely monitor our spending using the PocketSmith pinwheel, knowing that we can quickly trim our spending if we need to. We don’t sail close to the wind with our money, and we keep a decent cash buffer meaning that if our incomes start to dwindle and we struggle to cover costs, we have both time and money to draw on while we try to fix the income issues.

It’s working well so far

What I’ve noticed is that when you are younger and choosing to work less, society expects you to be constantly ‘doing something’ with your time. On the one hand, people can be quite judgy, while on the other hand, they have little interest in what you are doing. People are busy enough living their own lives to give yours more than a cursory glance. So I think it’s vital to do things with your time that are meaningful to YOU and be unapologetic about that. Our working life looks different to all our friends, but working less was not us overreacting to hating our jobs. It was instead a considered move towards finding a better balance in life. And although we are still working out some kinks, we have indeed found that. I would encourage you to curate your life well, too, because we each have one shot at it.

Happy saving!

Going Global: Part Two — Why I Overhauled My Entire PocketSmith Setup After Two Years

Wed, 28 Feb 2024 11:00:00 +0000

If you’ve read Part One of this Going Global series, you’ll know that a month of chaotic prep and an intense overseas move left my long-established PocketSmith setup in something of a shambles. Offshore service fees, uncategorized transactions, earn/spend budgets that barely resembled the period they were supposed to be tracking — the works.

It was a mess, and it was only getting worse

In New Zealand I’d had, if not regular income (hello, freelancing), at least stable everyday expenses. I knew how much I needed to budget for rent, utilities, and so on. My earnings were predictable enough relative to my client load. It made my color-coded setup easy to handle. Automated rules took care of most of it.

Now, that was out the window. My spending had shot up immensely, thanks to last-minute flights and other travel expenses. My earnings were steady enough for the moment, but who knew how long that would last? And I had a bunch of transactions I simply didn’t know how to classify. I didn’t have a tidy category for them.

Were flights classed as “Transport” or “Travel?” Was clothing bought in the USA “Travel” or “Clothing & Shoes?” Should I put a breakfast run of bagels and coffee under “Groceries”, “Dining Out” or “Travel?” I could feel my brain spinning as I stared at my increasingly overwhelming pile of unorganised budgetry. Heck, maybe I should just shove everything into a “Digital Nomad” category and sort it out later? But that wasn’t a solution. Not long-term.

My setup needed a complete overhaul

I couldn’t avoid it any longer. The system which had worked so well for me for the last two years… didn’t. Without knowing it, I had designed it for a specific lifestyle: A lifestyle I no longer had. I was on the move, and my budget system needed to move with me.

But how to do that?

First things first: Close out the old life

I went into every category I no longer needed and stopped their active budgets. This was most of my old life. Rent, internet, household maintenance, houseplants… all the things I didn’t need while I was on the road. I was left with the bare basics: Groceries, clothing, footwear, and a couple of extras like gifts.

The plan, such as it was, was this: From the USA I would bounce to Canada and then on to Scotland. I’d spend a couple of months traveling and visiting friends and family while maintaining a decent level of remote work. At some point, I planned to settle, but I didn’t know what that might look like yet. When? Where? For how long? Who knew?

They were questions I could answer when the time came. I could reactivate those budgets when the time came, too.

Now to tackle the current lifestyle

I wanted to keep everything contained. That Travel category was a tempting way of doing it. But I couldn’t assign everything for the next few months to that one category. It would balloon out of control in no time.

Thank goodness for nesting categories

I had been assigning transactions to “Travel” which was an issue. Parent categories are only a shell for the sub-categories they hold; they shouldn’t have active budgets or transactions assigned to them. Easily fixed. I created a new “Prepping To Go” category, nested it under Travel, and moved the relevant transactions across.

Now… what were the essential areas of a new life on the road? Where had I been spending the most money? What was annoying me the most?

Essential categories: Travel insurance and communications

Expenditure: Flights

Annoyance factor: Those offshore service fees

That took me to five sub-categories. “Other Transport”, for things like trains and bike hire, took me to six. But once I’d tidied away as many transactions as I could, I still had unassigned transactions left over. One was an easy fix — the only place to file USD25 in overpriced luxury chocolates was “Regret”, a category I hadn’t used in over a year.

But the rest were frustrating. Erratic. Highly specific to the country I was in at the time. They weren’t everyday expenses like groceries, but they weren’t holiday expenses either. I wasn’t on holiday — but neither was I settled in an everyday life. Like my PocketSmith setup, I was caught in an odd sort of limbo. (More on that another time.)

Aha — a lightbulb moment

They were specific to the country, so why not file them as that? One category for “USA specific”, one for “Canada specific”, and one for “Scotland specific”. Done. That gave me seven sub-categories nested under a parent category in bright sunshine yellow.

After tidying up the loose ends of last month’s budgets, I sat back and scrutinized the overall setup.

A budget system reflects its owner. This one certainly did. Like me, it held a dash of the old and a splash of the new. Like me, it was on the move and adapting as best it could. It wasn’t settled or permanent — how could it be? — but it was headed in the right direction. There were things I would change about it once I myself was settled. Once I had some stability for the next six or twelve months.

What does that look like? I’ll let you know when I’m there.

A Closer Look at Australia's Health Insurance System

Mon, 26 Feb 2024 11:00:00 +0000

When the cost of living bites, the budget-savvy individual looks at what to cut. Should health insurance be on the chopping block?

Straight up, health insurance isn’t worth it for everyone. Look at me — I’m a health insurance expert, but I don’t have hospital cover. I’ll explain why in a bit, but first, remember that what’s right for me almost certainly isn’t right for you. And honestly, it probably isn’t right for me either.

My point is, don’t listen to me. Except for ambulances, which I’m right about. I think some background info will help.

How health insurance works in Australia

Lots of countries have both public and private healthcare, but the specifics vary. Here’s a quick rundown of the Australian situation.

Medicare: Our public healthcare system, Medicare will keep you alive and relatively healthy for free. This includes GP visits to doctors that bulk bill, treatment in public hospitals, surgery costs, and some specialist fees. There are some key things missing though, including dental care, glasses, hearing aids, ambulance rides, and treatment in private hospitals. You may also need to wait months or years for some surgeries.

Private health: Australia’s private healthcare system is a network of private hospitals and specialists that offer services not covered by Medicare. The main benefits include faster treatment, your choice of surgeon, and nicer facilities. Nice things are always expensive though, so pretty much everyone who uses private healthcare has private health insurance.

Three types of private health insurance

There are three different types of health insurance as I see it. Whether they are worth it for you depends very much on your circumstances. Let’s start with the most interesting one, hospital cover.

Private hospital cover

Private hospital cover helps pay for treatment in a private hospital. It’ll cover your accommodation costs, plus a portion of your other fees, e.g. anesthetist and surgeon’s fees. It doesn’t cover everything though — you’ll often still pay a gap, which can be expensive. For example, private childbirth can still land you with a gap of around $5,000.

Hospital cover is divided into tiers: Basic, Bronze, Silver and Gold. Each one covers more stuff than the one before. A word of warning — a lot of Basic policies only exist for tax reasons, explained below, but are basically junk. If you’re going to get hospital cover, I would consider starting from Bronze at a minimum.

Is it worth it? Hospital cover is worth it if you want the added perks of a private hospital, like your choice of surgeon, shorter surgery waiting lists and your own room when you get treatment. Shorter waiting lists for surgery are particularly important, especially if you engage in risky activities or are getting a bit older.

Hospital cover may also be worth it if you earn over $93,000 a year ($186,000 as a couple) as you’ll be slugged with extra tax for not having it. This tax, the Medicare Levy Surcharge, is the government’s not-so-subtle way of bullying you into holding private cover. If you earn exactly $93k, the tax starts at 1%, or $930. You can get a bronze policy for about that much.

Let’s talk about turning 30, and the Lifetime Health Cover loading. For every year you don’t have cover after 30, the cost of premiums goes up 2%. The maximum loading is 70%. The loading resets once you’ve held cover for ten years. I know 70% is a lot of cash, but not paying premiums throughout your 30s tends to make up for those more expensive ten years. That said, if you are definitely going to get private health coverage, this could be a reason to get it sooner.

Extras cover

Extras cover pays for out-of-hospital care that Medicare should cover, but doesn’t — things like the dentist, prescription glasses, and physio. It gives you either a dollar or percentage benefit (e.g. $30 or 30%) on services like these. It can sometimes even get you free stuff, like a free dental checkup each year.

Extras cover is only worth it if you use it enough to get your money back. Consider it like a paid book of coupons. If you can claim back more benefits each year than your cover costs you, then you’re set. Otherwise, you’re better off canceling your cover and paying out of pocket.

Ambulance cover

Ambulance isn’t covered by Medicare. It’s dumb, I know. Ambulance insurance pays for emergency transport when you need it, so you’re not hit with an unexpected bill. If you live in Tassie or Queensland, the state government offers some cover, but the rest of us are on the hook.

There are a few ways to get ambo cover: With an extras or hospital policy, as a stand-alone ambulance policy, or through a subscription with the ambulance provider in your state. If you don’t have ambulance cover already, it is 100% worth getting it. Stand-alone ambulance cover is around $5 a month, which is more than worth it to prevent the $1,000+ price you can be slugged with if you need a lift to the hospital. If you live in a remote area, it’s even more valuable!

My insurance situation

I promised I would use myself as a case study, so here’s my current situation.

Extras: I have extras because I get more benefits than I pay. I max out my limits for optical and physio and see the dentist twice a year. That alone pays for my policy. That said, I switch my policy every few years if another suits me better. It’s dead easy, and most funds respect your old waiting periods if you’re moving to equivalent cover.

Ambulance: I will always have stand-alone ambulance cover. It’s not covered under every extras policy, but it’s too important to not always have cover. This covers me for emergency ambulance rides across the country, whether I’m at work in the Sydney CBD, camping in the Dandenongs, or road-tripping across the Nullarbor.

Hospital: I’m in my mid-30s, so I’m affected by the Lifetime Health Cover loading, and I earn more than the Medicare Levy Surcharge threshold. So I have a lot of good reasons to have hospital cover. But I don’t. Why not?

Truthfully, it’s because I am young, in relatively good health, have no concerning family history, and am confident Medicare will be enough if something goes wrong. Yes, I run the risk of having to wait on a public waiting list if I get a hernia or some more serious condition, but I think I can manage. Also, Aussie hospital cover includes pre-existing conditions after a 12-month wait period, so I can get hospital cover if something goes wrong, and I’ll only need to wait 12 months.

As for the Medicare Levy Surcharge, it’s hitting me with over $1,000 a year in extra tax that I could be spending on private health insurance. However, I wouldn’t be getting an especially comprehensive policy for the amount of tax I pay, and I think I would rather make a contribution to Medicare each year than have a junk policy. Also, claiming on private insurance would open me up to gap payments, so it’s not a sure thing that I save money in the long run.

Why you shouldn’t listen to me

Unlike a mortgage, credit card, or car insurance, I can’t tell you whether health insurance is worth it to you. It depends on your risk appetite, but also the literal luck of the draw. My decision to not have private cover right now could turn out to be the worst decision I ever made if I’m unlucky enough to have a condition that could really benefit from private treatment. Most people I tell this story to decide that my decision is a bad one, and they decide to go and get hospital cover. You’ll probably do that too, based on my track record.

So, I don’t want you to listen to me. But if you can understand why I made my decision, it might help you to understand how some of the variables might apply to you.

One exception. Get ambulance cover. Do listen to me on that one. Thank me later.

Tim Bennett is a health insurance expert at Finder. He’s a regular commentator on TV, radio, and news talking about how to save money and make better financial decisions.

Little Treat Culture: Harmless Fun or Damaging Habit?

Thu, 22 Feb 2024 11:00:00 +0000

The term ‘little treat’ has become an anchor in the cultural zeitgeist. Instagram and TikTok have become a mecca for videos detailing our affinity with little treats, from iced oat lattes to an online clothing or cosmetics order, and we even joke about not being able to leave the house without indulging in a little treat. But when is treating ourselves a harmless expression of discretionary spending, and when is it damaging our financial wellbeing?

Where did little treat culture come from?

It’s said that the expression of ‘little treats’ all started with a meme about allowing a cat a small amount of salami ‘as a treat’. Over the years the term has evolved. Like many meme-based trends, little treat culture is both an unremarkable strand of human existence, and an entire cultural moment in itself. At its core, having something special as a treat isn’t anything to write home about. Giving treats for good behavior is something we do, whether it’s when raising kids or training a pet. But the culture of treating ourselves is something much more significant.

You could question whether our obsession with little treats is actually rooted in nostalgia for a simpler time in our lives. Maybe we remember getting little treats as a reward for doing something well. Now as adults battling the realities of life post-pandemic and mid-economic crisis, rewarding ourselves with a little treat after a hard day, or for doing an errand we’ve been avoiding, or for getting through an interview, reminds us of the reckless joy that came from getting a fun reward as a child.

Do little treats signify problematic spending habits?

Like most aspects of financial behavior, it all depends on the circumstances. Rewarding yourself for doing something well, or giving yourself a little pick-me-up during a rough time doesn’t immediately signal a problem. In fact, when we engage with treats from an intentional perspective, it’s actually a great way to use our money as a resource to improve our lives.

When we get value from the money we spend, we feel like we can use money to make our lives better. As a result, our relationship with money gradually improves. And so in this sense, little treats can be used to develop a positive financial experience.

Using money to improve your life is important, but being able to do this isn’t as simple as it sounds. The improvement and enrichment we see from little treats need to last longer than the fleeting moments during which it’s enjoyed. There’s a fine line over which treat behavior can lead to more significant financial problems.

It’s easy at any given moment to justify a purchase as a treat that will improve your life. But we need to ensure we’re balancing impact, consequence and frequency of these little treats.

Using the concept of little treats to actively sabotage your financial position, or as an excuse to engage in behavior that you ultimately know isn’t financially productive is where things can get messy.

When little treats can cause financial problems

The more dangerous side of little treat behavior is when it’s related to a deeper problem with spending outside of your means, and/or when it signals difficulty with controlling impulses. With so much temptation everywhere we go, it’s really easy to get stuck on a spending hamster wheel. And it’s here that our universal acceptance of ‘treating yourself’ can cause problems. If we’re buying things we don’t need, or that don’t bring us happiness, or that cause us to live beyond our means or compromise financial stability, we need to take a closer look at that.

This is particularly important during difficult periods of our lives. If we get in the habit of soothing emotions or anxieties with little treats, that spending can soon get out of control. PocketSmith’s Global Spending Map identified that ‘entertainment’ spending went up as much as 11% in some countries over the last year, despite pinched household budgets and rising costs of essentials. While this may not be an issue if it’s planned and budgeted for, it demonstrates our tendency to dial up treat spending when times are tough.

How to treat yourself safely

As we’ve covered, treating yourself is absolutely fine when it exists within a robust spending plan or financial ecosystem. If your bills are paid, you’ve set some savings aside, you’ve got visibility over where your money is going, and you can cover yourself in an emergency, spending some of your surplus income on little luxuries isn’t an issue.

In fact, you may even want to build in a ‘little treat fund’ into your money management so that you’ve got a pot of money there to use when you’re craving a little treat. This way, you’re intentionally setting some boundaries around what little treats you can build into your budget. $15 on a coffee and a pastry might not break the bank, but repeatedly spending $50 on small items of clothing can add up much faster.

If you’re a PocketSmith user, try organizing your little treat spends into their own category, and using the monthly, quarterly and annual view to get a top-down look at how much of your income is going on little treats. It might be a case of spending less each time, or reducing the frequency with which you’re treating yourself!

Digital Nomad Vasti Manages Multiple Currencies With PocketSmith

Thu, 15 Feb 2024 11:00:00 +0000

Read how Vasti keeps on top of her personal and business finances while traveling the globe using a range of PocketSmith’s features.

Tell us a little about yourself?

Hi, I am Vasti, an expat and business owner. I was born and raised in South Africa, and I have been traveling full-time since 2015. I started my journey in China and soon became known as the Tallest Traveller, where I have been sharing my spiritual journey on Instagram ever since. Since then, I have had the privilege to keep traveling as I have been exploring the world, and I am able to work from anywhere.

While traveling, it is important for me to keep track of my finances, and over the years I tried different tools, but it was quite time-consuming to upload and manually input my transactions due to all the different bank accounts and multiple currencies I deal with on a global scale. I have a variety of clients who pay me for my services, and I am setting up my businesses currently and will also be selling products in the future, so I am so thankful for finding a financial management tool that is my ally.

How would you describe your role in your household?

I am currently traveling solo and am the only person in my household who has my own business, so managing my finances is very important to me.

What drew you to PocketSmith?

I was drawn to PocketSmith for its robust nature and the integration of everything I need from a financial management tool into one website, with many more features than any other financial management website or application offers. I like the option to sync to all of my bank accounts in one place, knowing I can see my financial status all at once and stay on top of things as well. I appreciate that I have the ability to load different currencies and that PocketSmith can calculate all of the income and expenses, and balance the books for me.

As I have a background in graphic design and web development, I absolutely need a good UI and visual graphs to help me digest all the financial information. The graphs and layout of PocketSmith manage to condense a lot of information into the dashboard and still make it easy to read and not overwhelm me.

How long have you been with us?

I have been using PocketSmith for seven months.

What do you primarily use PocketSmith for?

To analyze all my financial data and to keep my financial transactions recorded.

How has PocketSmith changed the way you do money?

It has helped me to take control of my finances and save my time and energy to manually calculate and record it. It has helped me to calculate what I am spending in different environments and countries as every month is different for me, so it really helps to add something familiar to all that is different and going on around me.

What are your favorite features?

I love that PocketSmith automates calculations as a multi-currency account, and it saves me the time to do it. I also love the forecasting feature that gives me an idea of what the future may look like and helps me to prepare.

Got any tips?

Downloading both the desktop and mobile apps of PocketSmith has been useful in accessing it on all my devices wherever I am, as that way, everything stays synchronized.

What’s the best money decision you made in the past 12 months?

There are two. One was to invest in a really good teacher to help me heal and develop myself, and the second one was to purchase a flight back to my home country to visit my family and catch up with them after a long time of traveling.

What Is a Will and Why Do You Need One?

Sun, 11 Feb 2024 11:00:00 +0000

Leave a financial legacy with a will

Having a will is one of the most important things you can do for your family. New research by Public Trust shows around 98% of Kiwis want to leave a legacy, and a will can help you leave the one you want.

A will is one of the best ways to clearly outline your wishes for what you’d like to happen with your assets when you die. Clear guidance makes it much easier for loved ones left behind, who don’t have to guess what you might have liked. It can help reduce any disagreements or debates over what people thought you might have wanted.

A will is more than just your assets

A will isn’t just about property and other financial assets either. A will lets you outline your wishes for any sentimental items you’d like to pass on to your loved ones. You can also appoint a testamentary guardian for any young children (that is, the person who can make important decisions on behalf of your children).

And don’t forget your other precious family members, like your pets. In your will, you can include a plan for them when you die.

You can also include your wishes for your funeral and burial. Starting with questions can be a good way into the conversation, including what music you might like for your funeral or memorial service and whether you would like people to send flowers or donate to your favorite charity instead. Have you thought about if you’d like to be buried or cremated, and where you’d like to be laid to rest?

Not having a will makes it harder on your loved ones

Did you know only half of adult Kiwis have a will in place? And the numbers decline to 26% for those aged 35-44. When it comes to parents of children under five, 65% do not have a will.

Think you’re too young for a will? We recommend everyone over 18 has a will if they have assets worth $15,000 or more in one institution (this could be in a KiwiSaver account, investments, a bank account, or a house). When someone dies and they have assets worth $15,000 or more in one institution, an order from the High Court is needed before the estate administration process can go ahead.

By having a will, you provide a clear direction for your loved ones and can help protect what matters to the people that matter most. Without a will, this process becomes more challenging for your loved ones.

Let your will be an opportunity to talk about what matters most

It can feel confronting to talk about death and the future, but these are important conversations to have so that everyone has clarity on what you want to have happen after you die. Talking about a funeral doesn’t have to be bleak or depressing, either. Funerals can be a celebration of your life and can be as personalized and unique as you are.

Not sure where to get started on creating your will? You can complete your will through a professional trustee services organization like Public Trust or your lawyer. Make 2024 the year you get your will sorted and help protect what matters for those that matter most.

Glenys Talivai has been the CEO of Public Trust since March 2019. She is a highly regarded executive with significant leadership experience in the financial services sector. Glenys is passionate about improving New Zealanders’ financial literacy and encourages all Kiwis over 18 to have a will and enduring powers of attorney (EPAs) set up.

Ruth's Two Cents: Deciding To Invest in ETFs or Stocks

Wed, 07 Feb 2024 11:00:00 +0000

Hi Ruth,

I’ve been torn between two investment strategies, and I can’t seem to make up my mind. On one hand, some of my friends are telling me that I should invest in individual stocks, claiming it’s the way to make the big bucks in the stock market. On the other hand, I’ve heard a lot about ETFs and index funds, which are supposed to be a safer and more diversified option. I’m leaning towards ETFs, but I’m a bit overwhelmed by all the conflicting advice, and I’m not sure which path to take. Please help!

I hear you. I once found myself in precisely the same position. Ultimately, I went down both routes at the same time, which helped me make up my mind as to which path to take.

One has proved to be much more of a money maker than the other. But it’s inadvertently given me something I didn’t know it would: Peace with how I invest.

The whole experience of learning which is the better investment route, has also caused me to find better-informed friends. I had to look outside my current batch of friends to do this. They are great people but don’t know diddly squat about money.

My first introduction to investing

Firstly, my experience.

I had joined a superannuation scheme, which, although not strictly an ETF or index fund, was moving toward ‘buying the whole market’. With one transaction, the fund I joined bought a wide array of shares in a diverse mix of investments. I didn’t need to do anything else except buy regularly. This taught me that I can be a hands-off investor and still grow wealth.

In a one-off transaction, I also spent about 20% of my annual household income buying shares in a single company. This was done on the general advice of an expert in their field, the New Zealand Prime Minister. They were selling off electricity companies then and allowed the entire population to buy a piece. The point that many miss about investing in individual companies is that you need to invest a decent amount of money in the first place. That’s a considerable risk to take.

Time ticked by as I made regular deposits with every pay cheque into my KiwiSaver fund. Apart from that, I paid it scant attention. I bought no additional shares in the electricity company, yet as is the nature of buying single stocks, I paid it a lot of attention. You have to. A big chunk of wealth is relying on a single company doing well. Yikes.

Playing around with individual stocks

Meanwhile, I extended my friend group to include experts in the field of investing. I read, watched, and listened to content by JL Collins, Mary Holm, Warren Buffett, Jack Bogle, Scott Pape, Kristy Shen and Pete Adeney, to name just a few.

I combined this new information with what I was learning from the investing I was already doing. Grow your knowledge by learning the theory of investing and doing it.

Automated regular deposits I made into my superannuation fund, and no attention from me meant the balance increased over time, and the returns were consistently good over time. ETF/Index funds work similarly.

Having bought shares in one company whose share price was increasing, I decided to find another. The thing I found hardest to do, and I suspect you do too, is how you choose another once you have picked one company. And another. And another. I spent hours deeply researching individual companies to determine the next big thing. But it was a struggle. When I say “deeply researching”, I had to wonder what I didn’t manage to learn about a company from my laptop, based in my living room in provincial New Zealand. When market analysts with access to far more timely market intelligence and whose job is to pick future winners can’t get it right most of the time, how could I possibly hope to? Introduce AI into investment; we have even less chance of beating the average market returns. Even after all of my efforts, I failed to find a second company to buy. I failed to make the big bucks your friends tell you is possible.

My peace came with ETFs and Index Funds

However, all my new friends pointed out that while not a ‘get rich quick’ scheme, simply buying the whole share market via an ETF or Index Fund would likely make me rich over time. I have time. So, that’s what I ended up doing. If you look at a graph of the share market returns of New Zealand, or other large productive countries, and you see that over time, it goes up, it appears logical to just buy that. By doing that, you no longer have to pick the winners your friends suggest you find because they are already in the ETF/Index Fund if they are that good. If they crash and burn, they fall off the index, getting replaced by the next top performer without you having to buy and sell a single thing. At any one time, you and I can hold leading companies.

Eventually, I sold the shares (for a profit) in the one company I owned and have gone down the superannuation and ETF/Index Fund path ever since. And, as every author told me it would, it works! It’s nice not to need ‘luck’ on my side to pick a single company that I hope performs well. Instead, I’ve got 100 years of historical share market returns, which, if history is anything to go by, already predicts that the chances of my ETF/Index investments growing are as high as they can be.

It can be overwhelming, but just start somewhere

Follow up on those authors above, count them as your new and better-informed friends and make your choice. Then, make a start. Once a year, reflect on and review your investments, and then inform your friend group what your thoughts are on the debate between picking individual companies or buying an ETF/Index Fund.

The thought of investing used to overwhelm me, too. I had no idea how to do it and didn’t know how to start. But over the years, I tried it all, learned a lot, and have now narrowed it down to systematic investment over time into just a couple of funds. I don’t rule out buying the occasional individual company if it piques my interest, but I don’t try to kid myself that it will lead me to the big bucks. But finally, I can assure you that I’ve never felt so at peace with investing and the trajectory of my financial future.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

Going Global: Part One — How PocketSmith Helped Me Plan an Overseas Move

Sun, 04 Feb 2024 11:00:00 +0000

On Friday 21 July 2023, I booked plane tickets to leave New Zealand. I sold off the last handful of thriving houseplants. I fielded phone calls and drop-ins from friends and family, and at 11pm, raccoon-eyed with tiredness, I confirmed my travel insurance.

On Saturday 22 July 2023, with a 35L travel pack (carry-on) and a stuffed-to-the-gills laptop tote (personal item), I flew out of Christchurch. 25 hours of traveling later, I landed in Atlanta, Georgia, USA. (Okay, there was a brief interlude in San Francisco. The TSA doesn’t like it when you book flights 24 hours out and show up with only a carry-on. We sorted it out.)

As a quiet, rational, overly-prepared woman with a pathological dislike of being late maybe the move seemed uncharacteristic. Spontaneous. Wild.

It wasn’t.

The itchy feet had started a year earlier. In the months since, I had been quietly prepping and praying, researching digital nomad life, getting ready for a move overseas. “I don’t know when,” I told friends, “and I don’t know where. But I know I’m going. And it feels like things are speeding up.”

It all began with a PocketSmith category

I started a Travel category in PocketSmith and allocated it an initial budget of $500for gear upgrades. The time frame stretched. I checked my Income & Expenses report and nudged the budget higher.

I didn’t bother budgeting flights, not yet. After all, I didn’t know when I was going.

At the start of July, I bought the travel pack. It felt like a domino tipping into place. By mid-July, I was cleaning out my wardrobe and living out of packing cubes as a trial run. I sold $500 of houseplants in the space of two days and allocated the money back into my Travel category to offset costs. I applied for my US visa waiver. It came back approved in 45 minutes.

On the morning of Friday 21 July, I woke up and thought, “If I don’t do this, I will always wonder if that was it and I missed it.”

So I went.

“Does it feel like a forever move?” one friend asked.

“I have a storage unit, you can keep anything in there you might want later,” said another.

“I don’t know,” I said. “And thank you, but I can’t. I’m better off treating it like it’s forever and then finding that it’s not, compared to the other way around. I still don’t know where I’m going — I just know I need to go.”

Working from anywhere — true freedom!

Moving and multi-currency and messes — oh my!

I’m grateful for friends in GA who were happy to have me stay for a few weeks. I’m grateful for the flexibility of being self-employed. I’m grateful that I can work from anywhere — I wrote this from my friend’s kitchen table — and that I can delay non-urgent client work and put a hold on new projects. I’m also really, really grateful I had good savings because the TSA in San Francisco asked to see my bank accounts before they would give me my passport back.

Turns out, in the chaos of an overseas move, some balls get dropped. In my case, I hadn’t checked PocketSmith for nearly two weeks before sitting down to write this blog.

Dear reader… it was an unmitigated mess.

I can’t even look at it. There were uncategorized transactions all over the place. There were way too many Offshore Service Margins: I paid for onward flights with my NZ Visa Debit. Should’ve used the Mastercard. There was an absurdly over-extended red “Spending” bar on my Budgets page because I still hadn’t gotten around to adding actual budgets for those flights.

There will, I promise you, be a follow-up article. Or three.

Which just goes to show that even advisors need advising sometimes. I’ve had fantastic long-distance support from fellow PocketSmith advisors Ellen and Ruth. Go check them out.

I’m still figuring out the multi-currency thing. I’m accustomed to seamless bank feeds, which was fine for a single currency in New Zealand, but not for my multi-currency Mastercard. Right now, I’m carrying currency in NZD, USD, CAN, and GBP. The Mastercard is a prepaid debit card, which means it isn’t supported by bank feeds. I may have to export to CSV and then import those transactions. Watch this space.

What’s the onward plan? Always in motion, the future is. I was in the USA for two weeks. Then I flew to Toronto, Canada to see my brother. We had a brief five-day overlap before he flew back to Auckland, New Zealand, and I flew east to Aberdeen, Scotland, where my cousin lives.

I’m hoping to settle here for a while. That might mean six months on a visitor visa or three years on a work visa. We’ll see. I’ll keep you posted.

Life’s little (and big) adventures

I rang my brother the night before I flew out. He burst out laughing in my ear. “I know you love Tolkien, but don’t you think you’re taking The Hobbit a little too literally? Going running off into the blue without so much as a pocket handkerchief?”

Maybe I am. Maybe there are mountains to climb and dragons to beware of.

But what an adventure it will be.

Seven Proven Tactics To Fix Your Credit Score

Wed, 31 Jan 2024 11:00:00 +0000

While this blog post focuses primarily on the American credit system, there may still be valuable insights and strategies that readers from other countries can adapt to their own financial situations.

Extremely lower interest. Better and favorable loan terms. More enticing credit options. Exciting financial rewards. Sure-fire housing and employment opportunities. More and more access to funds.

These are just some of the perks of having an excellent personal credit score. On the flip side, a poor score can leave you crippled with limited financial access.

It’s time to ditch the idea that ‘credit’ is a burden. The truth is, it can bring you more financial benefits than you can ever imagine. However, it takes deep financial education, strategic financial management, and a little self-control to make the most of it.

This article covers what it takes to improve your personal credit score. Read on to learn how to fix your poor score, starting right here and right now!

How do you improve your personal credit score?

To begin, what is a personal credit score? It’s a measure of your overall credit behavior based on metrics such as:

Credit history
Payment history
Credit mix
Credit utilization rate

Your credit score is essential because it gives you more access to cash, loans, lines of credit, and more.

Picture this: A good credit score provides you with unlimited funding opportunities. On the flip side, a bad one can drive lenders and creditors away from you.

What if you currently have a bad credit standing? How do you go about improving your credit score?

Don’t worry; we’ll share proven tactics for fixing your credit score.

Remember, there’s no fast lane to repairing bad credit. The best way to improve your credit score is to start now and be consistent with your good financial habits!

1. Reach out to the credit bureaus regularly

Asking for credit reports and checking your credit score isn’t difficult at all. Fret not, as you can access them for free. Yes, for free!

According to the U.S.A. government website, you’re entitled to a free annual credit report from the three major consumer credit bureaus:

Experian
Equifax
TransUnion

All you have to do is request them from AnnualCreditReport.com. That’s simple and easy!

Jay (Yong Jia) Xiao, Co-founder and President of SuretyNow, suggests examining credit scores regularly.

Xiao said, “Regularly checking your credit reports yearly or more makes you aware of your credit standing. It also lets you double-check incorrectly reported financial data and correct it. Lastly, it lets you track your payments and stay on top of your finances.”

2. Stay on top of your payments

As cited, the most significant factor affecting your credit score is your payment history. This key criterion reflects how often, when, and how much you pay for your bills. The rule of thumb is simple (although hard to follow):

Pay on time. This means paying on or before the due date. There might be a grace period, but it’s best to settle your financial obligations as soon as possible. Late and delinquent payments get automatically reported to the credit bureaus. And to stress, they cause dents in your credit score!
Pay in full. You should know by now that minimum balance is a scam. Sure, credit card companies let you pay the minimum balance. However, you’ll still incur interest. These extra and unnecessary charges might pile up, making you unable to pay at some point.

Jim Pendergast, Senior Vice President at altLINE Sobanco, recommends staying on top of your payments. “While it is true that no one can be arrested just because they’re behind on loan or credit card payments, your creditors can give your information to collecting agents to follow up on your payment.”

Pendergast adds, “Late payments and account delinquencies will hit your credit scores the hardest. It is important to double-check your due dates and amount and pay them on time and in full religiously.”

3. Keep an eye on your report and dispute for errors

No one’s perfect, and this idea applies to credit bureaus. False and erroneous information reflected on credit reports happens way more often than we think.

Doubtful? Here are some of the common causes of credit report errors:

Merchants incorrectly reporting details like personal data and financial information
Accounts mistakenly reported to your account due to similarities in names
Erroneous payment history
Inflated balances
Closed and duplicate accounts reported on your account

See? These are just a few examples.

That’s why we suggest requesting your credit reports regularly and checking all the reported financial transactions. Should you find some errors, be quick to dispute them. Submit a written report explaining the erroneous reports to any of these credit bureaus.

4. Keep your credit utilization rate as low as possible

For the uninitiated, the credit utilization ratio measures how much of your available credit you’re using.

Here’s the thing: Credit utilization can take up to 30% of your credit score. As such, you should keep it as low as possible. This means maximizing your credit and not leaving any available credit behind.

In essence, a low credit utilization rate reflects how good you are at managing your finances and paying your debts. However, it’s safest to go as low as 10%, but never zero. A zero rate means you aren’t making any credit purchases at all, which isn’t good for your credit as well.

Anthony Martin, Founder and CEO of Choice Mutual, suggests maintaining a low credit utilization rate. “A low rate often indicates that you’re properly managing your finances. This means that you don’t overspend and that you’re able to settle your bills on time. That gives you a good credit score.”

5. Put all your debt eggs in one loan basket

You may have heard of the famous line, “Don’t put your eggs in one basket.” Nope, it doesn’t apply to your credit score!

In this context, putting your eggs in one basket means debt consolidation. As the name implies, it entails taking a personal loan to pay off all your existing debts. It’s one of the best tactics for fixing your bad credit score.

Suppose you have multiple credit cards, mortgage debts, and house-flipping loans. In this case, you can apply for a personal loan for debt consolidation. Once approved, you can use the money to pay all your debts. Then, moving forward, you’ll repay your loan to only one lender until its maturity date.

Keep in mind that a debt consolidation loan does not necessarily get you out of your debt. Continuing lousy spending habits will make you acquire even more debt. So, financial discipline is key!

6. Don’t ditch your old credit card accounts

It’s easy to close your credit card accounts once they have zero balance and when you feel you don’t need them. But hold your horses; think twice before doing so!

Consider this: Closing an old credit card after eliminating your debt will likely hit your credit scores rather than improve them. Here’s why:

Credit history matters. FICO considers the length of your credit history as the third highest factor in computing credit scores at 15%. The longer you have your credit card balances, the better your credit history looks to creditors. This is especially true when a credit card account is settled regularly without defaults.
High credit utilization ratio. Closing your old credit cards will increase your credit utilization ratio by reducing your overall credit limits. This is especially true for those with higher credit limits. Therefore, crunch the numbers before you decide to close your credit card account.

Stephan Baldwin, Founder of Assisted Living, offers a few recommendations regarding closing credit card accounts. “If you have no choice but to close credit cards with zero credit balances, choose new ones and those with low credit limits so they don’t significantly affect your credit score.”

7. Knock on credit agencies’ doors for help

A bad credit score can affect almost anyone. When this happens, you have no choice but to seek help from financial professionals and experts. They can help you rise above your situation. Below are two agencies you might want to consider:

Work with a credit repair agency. A credit repair company is a team that fixes your poor credit score on your behalf, particularly by removing inaccurate information from your credit reports. These credit repair companies communicate with the credit reporting agencies on your behalf.
Seek help from a credit counseling agency. A credit counseling agency houses a non-profit credit counselor to help you get to the bottom of all your debts. Whether you’re spending way more than what you’re earning, they can help. For example, they can help you lease your car with bad credit or as simple as creating a realistic budget for you.

There’s no quick fix for your credit score

Striving to achieve a high credit score is a key part of financial stability. However, getting a better score requires discipline in developing good paying habits. But first and foremost, you’ve got to address your bad score first!

That said, heed our practical advice for fixing your personal credit score. Start with checking your credit report and filing for credit disputes. Likewise, consider lowering your credit utilization rate and consolidating all your debts.

If worse comes to worst, work with credit repair and credit counseling agencies. They can help you manage your finances and improve your credit score. However, it all boils down to paying your debts in full and on time!

Remember, there’s no fast lane to repairing bad credit. The best way to improve your credit score is to start now and be consistent with your good financial habits!

Shawn Plummer is CEO at The Annuity Expert. He has been a licensed financial professional focusing on annuities and insurance for more than a decade. His former role was training financial advisers, including for a Fortune Global 500 insurance company. He’s been featured in Time magazine, Yahoo! Finance, Entrepreneur and Bloomberg.

What Your Favorite Barbie Says About Your Finances

Sun, 28 Jan 2024 11:00:00 +0000

We’ve still got Barbie fever here at PocketSmith, and we don’t plan on toning that down any time soon. Yes, we know, the movie is out of cinemas and loaded onto streaming platforms already. But that’s fine by us. Any excuse to revisit Barbie World, after all. If you’re fully in the Barbie club too, keep reading to find out what your favorite Barbie says about your financial personality.

Totally Hair Barbie

We reckon Totally Hair Barbie was actually a risk-averse queen — those long locks demonstrated her conservative attitude to finances, and might mirror yours too. If you like to feel safe and secure with your finances, keep your savings account stacked and make decisions slowly and carefully, you’re this Barbie’s twin flame.

Favorite PocketSmith feature: Forecasting — always one eye on what’s coming up.

Malibu Barbie

An icon of her time, Malibu Barbie exuded California cool — and your money is no different. You’re low maintenance but you nail it every time, taking your money management at a chill pace, doing what needs to be done, but not sweating the small stuff.

Favorite PocketSmith feature: Net worth view. She keeps it top-level.

Day to Night Barbie

Oh, Day to Night Barbie, you’re so savvy. Your money management system is efficient, flexible and can withstand anything you throw at it. She loves a budget, never misses a weekly review, never pays for an unused subscription, and won’t miss out on a good deal!

Favorite PocketSmith feature: Rollover budgeting. She never misses a beat.

Barbie Twist and Turn

This Barbie is always ahead of the curve, and so is her money. You’re on top of hot new stocks, have a jacked splurge account for those high-tech facials (hello FaceGym), and you drop knowledge bombs about the future of crypto left, right and center.

Favorite PocketSmith feature: Sharesight connectivity. Gotta keep your eye on those investments!

Quick Curl Barbie

Quick Curl Barbie loves a shortcut, so your finances are probably automated to the absolute max — and we love to see it. When your pay hits your account, it’s whipped into shape by your savvy system, and we reckon your favorite thing to spend money on is life-improving solutions. Dyson Airwrap, tick. Robo mop? Of course. Meal kit delivery? Absolutely.

Favorite PocketSmith feature: Advisor access — let the pros keep an eye on things.

Peaches ‘n Cream Barbie

Peaches ‘n Cream Barbie is just the right amount of extra, and we bet your finances are too. You love bold fashion and keeping up with your beauty maintenance — but it’s all absolutely budgeted for. Oh, and you collect frequent flyer points on as many purchases as possible to get you one step closer to that business-class lifestyle.

Favorite PocketSmith feature: Multi-currency functionality (for her slick fashion and beauty imports from the US).

Original Barbie

There’s nothing wrong with the OG — especially when it comes to your finances. OG Barbie lovers stick to what they know, whether it’s in their bank accounts, their PocketSmith dashboard, or their wardrobe. You rock your capsule wardrobe with pride and never faff around with complicated banking systems. You keep it simple, and we applaud you for it.

Favorite PocketSmith feature: Transaction categories — PocketSmith’s backbone feature.

Five Limiting Money Beliefs Holding You Back (and How to Tackle Them)

Wed, 24 Jan 2024 11:00:00 +0000

As you work through setting up your financial foundations, look more closely at your money story and start to think about how you want to spend your time and money, you may have already found yourself running up against some roadblocks.

This is normal.

You’re doing something new, challenging your past choices, and thinking about what could be possible in your future, and your brain will be coming up with a whole range of reasons why you can’t do these things. These thoughts and stories that we tell ourselves, and that are actually keeping us from working towards the things we’d like to achieve, are called ‘limiting beliefs’.

Hands up if any of these statements have ever run through your head before

I’m not smart enough
I’m not good with money
I don’t have enough time
I’ll never be wealthy
I don’t deserve to have money
I’m afraid to make the wrong choice

These are just some of the common limiting beliefs people have around money.

Do any of these resonate with you?

Though these thoughts are completely valid, they can limit your ability to take control of your financial future. The thing is, we all have unique backgrounds and a wide variety of experiences with money.

If you identify with one or more of these beliefs, I want you to start by asking whether this mindset is currently serving you. Has this thought pattern or story you’ve been telling yourself helped you on your money journey?

Listeners of The Australian Finance Podcast have told me that many of these statements are reasons they haven’t taken control of their own financial future, and the World Economic Forum found similar results globally when they asked people why they hadn’t invested yet. Though you mightn’t be able to set aside these long-held beliefs immediately, education plays a big part in building your financial confidence over time. Acknowledging your current situation is the first step to improving it.

So, let’s go back to some of those common limiting money beliefs and think about some strategies to overcome them. I’ve included a few ideas, but get creative, do some research and have a think about what might work for you.

I’m not smart enough

One of the biggest misconceptions about managing your money and investing well is that it has to be complicated. You don’t need a PhD, some fancy finance qualification or even to be good with numbers to set yourself up financially, but everyone needs to have a basic understanding of what they are doing and manage their behavior accordingly.

I’m not good with money

Maybe you’re not good with money yet. So, keep learning and schedule some time in your calendar to learn one thing about your finances each week. You can directly challenge this statement by taking action on a regular basis.

I don’t have enough time

Find 15 minutes a day or an hour a week in your calendar to work on your finances and stick to it. Committing this time now will pay off massively for future-you. Time is just how we allocate our priorities; there will always be too much to do, so break the task down and prioritize it.

I’ll never be wealthy

This is a common belief that stops people from ever taking the first step on their investing journey. Small amounts have a huge impact on your future if you give them time to grow. Many investors started where you are right now, so just take it one step at a time and think about your ‘why’.

I’m afraid to make the wrong choice

Not making a choice is still a choice. You don’t need a perfect plan to start — you can learn as you go. Schedule in time to do the work, figure out your financial starting point and go from there. One step at a time!

Take action

Your challenge now is first to identify one of your limiting money beliefs and then experiment with ideas for tackling that belief. You might need to try out a couple of strategies before you find a solution, but stick with it.

Kate Campbell is the host of the Australian Finance Podcast and the author of Buying Happiness: Learn to invest your time and money better, available online through Amazon and Booktopia.

How To Have Supportive Money Conversations

Mon, 22 Jan 2024 11:00:00 +0000

Why don’t we talk about money?

Many of us have been taught from an early age that we shouldn’t talk about money, but I think that the taboo does much more harm than good. We’re all thinking about money — every time we pay a bill, go to work, or decide whether to take that holiday.

And we’re stressed about it, too. The American Psychological Association’s Stress in America 2022 study found that money, inflation, and the economy are significant sources of stress for the majority of surveyed adults. The emotional strain of this is obvious, but the study also reports that stress is leading to all manner of health issues, including headaches, tiredness, feeling overwhelmed, and more physical complications. Even if we’re not talking about money, it’s affecting us much more than we realize. If the goal is to be happy, stress is going to make that difficult.

Talking openly about finances isn’t the silver bullet for money-related stress, but it helps remove the culture of fear and shame. It helps us to know we’re not alone, and we might even be able to find solutions to specific issues in the experiences of others. So many of us are struggling in similar ways — living pay cheque to pay cheque, using BNPL, or racking up credit card debt — and yet it can feel like we’re on our own.

Coming from the other direction, if we have enough to get by or we’re not struggling as much as others we know, it can also be easy to feel our problems aren’t big enough to talk about, too. But that doesn’t mean our financial stress isn’t real.

Let’s start having good money conversations

If you’ve always wanted to bring up a money-related topic but you just haven’t known how to kick things off, this is for you.

My suggestion is to start small.

Don’t jump straight into the deep end by talking about how much money you have in your investment accounts and what you get paid. Instead, opt for something lighter and simpler. Everyone loves to talk about their savings goals, whether it’s a new phone or a trip to Disneyland, and their best money-saving hacks.

Hold up — vulnerable conversation alert! If someone opens up to you about their financial situation, keep in mind that you might be the first person they’ve shared these details with. Your response matters, and it could have a huge impact on your relationship moving forward.

Take action

Listen very carefully to what they say.
Understand that their situation is unique to them and that their money story will be different from yours.
Don’t compare their situation to your own (or your great-great-aunt’s), unless they ask you for specific insights into those situations.
Ask open-ended questions that will support conversation rather than closed questions that can be answered with a simple ‘yes’ or ‘no’.
Try to understand what they need from you at this moment. For example, if your friend shares that they’ve ended up with a huge credit card debt and feel lost, they might not be ready to hear how you think they should solve their problem. Asking if they’d like your help in any form right now or whether they just need a supportive ear is a good place to start.
Be supportive, even if there’s a small ‘I told them this would happen’ at the back of your mind. Showing even a hint of judgment can shut the whole conversation down.
If they’re looking for extra tools, you could share your favorite money resource (for example, a podcast or a book), and make time to discuss it with them once they’ve consumed it.
Remember, sometimes a professional will be much more effective at helping them solve their issue. Consider whether it’s appropriate to suggest they seek help from a financial counselor, psychologist, financial adviser, lawyer and so on, and ask whether they’d like a support person with them in the meeting.

Please don’t let this list put you off being there for the hard conversations. It might be 30 minutes to you, but it could mean the world to the person opening up. You’ve got this!

Kate Campbell is the host of the Australian Finance Podcast and the author of Buying Happiness: Learn to invest your time and money better, available online through Amazon and Booktopia.

Enjoy Today vs. Secure Tomorrow: How To Find a Balance

Thu, 18 Jan 2024 11:00:00 +0000

We talk about time and money in very similar ways. We choose how we spend our time, we look for ways to save ourselves time, and we invest time in things like our relationships.

If someone gave you $8760 in cash right now, it’s likely you’d spend a little bit of time thinking about how to spend it, right?

But do you spend much time thinking about how you’re going use the 8760 hours you’re given every year?

Balancing present and future time

You can afford to spend your time on anything, but not everything, so it’s essential to choose wisely. This is one of the challenges Derek Sivers considers in Hell Yeah or No: What’s Worth Doing. According to Sivers, a “present-focus” is necessary to enjoy life. However, “too much present-focus can prevent the deeper happiness of achievement”.

Enter delayed gratification: The act of resisting an immediate reward (for example, spending time and money on an immediate happiness boost) with the hope that the long-term reward (for example, buying a first home) will be better. Though it can be difficult, getting comfortable with delayed gratification is a particularly important skill for working towards big goals, and it can have powerful results over a lifetime.

Much like too much present-focus, however, an overcorrection towards delayed gratification can negatively affect our happiness in the meantime.

How do you juggle the big and the small?

Let’s take saving up to purchase a first home as an example. If someone is starting from scratch, this goal could take quite a few years to achieve and require serious attention on how much they’re saving each month. Reaching this goal is likely to fill them with a sense of accomplishment and add to their happiness levels. The problem is if, in the single-minded pursuit of their goal, they focus solely on making and saving money, saying yes to extra work and no to spending time with friends for years, they might find they miss a huge amount of life in the process.

We get a lot of happiness from working towards long-term goals, but sometimes it stops us from being happy right now.

So, what’s the solution? How do you work towards your big goals while remaining present and enjoying life?

It comes down to balance and priorities

Finding lower-cost ways to engage in meaningful relationships, pushing your goals back by a year or two for important experiences in the shorter term, and checking in on your goals (and actions) regularly to make sure they’re not making you miserable are just a few ideas to work on that balance.

You could also look at your life as being made up of seasons. The idea is that in one period of time, you can mainly focus on reaching a specific goal, spending your time accordingly. Then you might step back and use your time in a more balanced way in a subsequent season. It’s also worth noting that there are certain times in life when it is more opportune for you to do particular things than other times.

For example, hiking the Pacific Crest Trail in the USA might be something you have the time and energy to do in your 20s but not in your 50s. Conversely, a cruise in Antarctica might be something you leave until you have the financial resources in your 60s.

Take action

Think about all those life experiences you have on your bucket list and consider if you can prioritize them into different life stages to get more strategic about the way you allocate your time and resources. Life is full of uncertainty, and there’s always the possibility that it’ll be a lot longer or shorter than expected. Organizing the life experiences you want to have according to different parts of life is one strategy to manage your competing priorities and finite resources.

Kate Campbell is the host of the Australian Finance Podcast and the author of Buying Happiness: Learn to invest your time and money better, available online through Amazon and Booktopia.

A Step-by-Step Guide to Overcoming Analysis Paralysis

Tue, 16 Jan 2024 11:00:00 +0000

You’re scrolling through Netflix, trying to figure out what show to watch. You’ve got some good recommendations to try, you can see what other viewers are enjoying and you can even watch some trailers, but an hour can disappear while you’re trying to decide what to watch.

This is analysis paralysis.

While it’s annoying when you’re trying to have a movie night, analysis paralysis can be harmful to your wealth-building journey.

We have so many options these days, from bank accounts to investment opportunities, it can feel impossible to make a fully informed decision — even if we’ve read all the reviews, compared the fees, and analyzed the advantages and disadvantages.

More options don’t make us happier

In fact, psychologist Barry Schwartz argues that a “greater variety of choices actually makes us feel worse”. Then, if we do make a decision, we worry about whether we made the right choice. Schwartz calls these “decision ghosts”. So given all the choices we have now, the natural desire to make the ‘right’ decision, and the resulting drive to research, research, research, how do we combat analysis paralysis?

Analysis paralysis is a decision-making problem at its core, so let’s tackle it that way. Choosing a brokerage account, which you’ll need to buy shares and ETFs, is a common challenge that people in my community experience analysis paralysis with.

Negotiate analysis paralysis with this specific challenge

First, you need to identify the problem you’re trying to solve and figure out where you’re stuck. Start by writing down all the pieces of information you feel you need to know before you make a decision. Without doing this, you can get trapped in an endless research quest where you never feel ready to make a choice.
Then use this list to do your research and write down what you discover. This information will form the foundational knowledge you need to make a decision further on in the process.
Use this knowledge to generate options. Try to narrow down the choices of brokerage accounts to three suitable options that would fit your personal requirements. Any more than that will start to get overwhelming and reduce the chance that you’ll make a decision.
Now it’s time to experiment. Give yourself a set time period to open an account with each of your top three options and try them out. Make notes on what works and what doesn’t, and assess how well each option meets your needs. Importantly, set yourself a due date to make a decision at the end of that trial period and move forward with your chosen brokerage account (remember, this decision is not set in stone). Even better, find a friend to hold you accountable for this decision-making process.
It’s time to make a decision. Using all the information you’ve gathered and the experience you’ve had testing out each brokerage app, make a decision that is the closest fit to solving your problem. You don’t need a perfect solution, but you do need to make a choice here.

Remember, not making a decision is still a decision. If you’re struggling with analysis paralysis, it’s also good to remind yourself that perfect doesn’t exist in finance. Our lives are full of change, and searching for perfection can stop us from taking action. So, throw the word ‘perfect’ away and instead learn just enough to take your first small step.

Take action

My challenge to you is to find one tiny action you can take today on a task you’ve been stuck in analysis paralysis mode with for a while.

Kate Campbell is the host of the Australian Finance Podcast and the author of Buying Happiness: Learn to invest your time and money better, available online through Amazon and Booktopia.

Incorporating Generosity Into Your Money Management

Thu, 11 Jan 2024 11:00:00 +0000

My Dad taught me to be financially generous, but I’ve tweaked the lessons he shared over the years. He was an excellent example of how you get a lot back in return when you are generous to others. It feels good to help other people. I think he chased the positive reinforcement that being generous to others gave him. He didn’t brag, but he loved retelling stories about how he helped other people.

Generosity isn’t always an innate behavior

He was generous in his actions, and he was generous with money too, supporting several organizations for much of his life and handing out cash ad hoc to those he thought needed it. To his dying day, he was generous with his possessions. Any visit to my Dad inevitably saw him spreading his arms wide as he surveyed his house or shed, saying, “Take what you want”. And he meant it. But, he sometimes gave too much, leaving our family, on some occasions, without enough money to live. It drove Mum to distraction. As an adult, I’ve taken the good bits from my Dad’s giving nature and let the rest flow by.

Because of my upbringing, I’ve always made attempts to be generous. I remember it was hard when I first started earning my own money. Money was hard to make; therefore, it was hard to give it away. Initially, I held onto it just a bit too tightly. But little by little, I learned how to loosen my grasp on it, and I’ve since learned that when I give it away, I never miss it, and I get the same emotional boost that my Dad got. It feels good to help other people.

My husband was raised differently from me, and charitable giving didn’t feature as largely in his home as mine. But we work well together, and he has told me I’ve taught him to be more generous. Now, through our actions, we are teaching our daughter how to be generous too.

Creating a system can help you donate consistently

Over time, I’ve developed a giving system that works for us. It puts some guardrails around our generosity that lets me be spontaneous and means we don’t go without. We have a bank account specifically for donating money to others. It is a sinking fund that builds over time that we call “Giving”. When I see that bank account in PocketSmith, it’s a visual reminder to look for opportunities to be generous.

I automatically transfer a set amount of money into this bank account every Monday, meaning it is set and forget. It’s not a percentage of our income because that is too variable and would require admin each week. Automation is key. Otherwise, you will forget or think you can’t afford it. I’ve created a good habit now, one that is locked in.

The psychology behind my simple system is that it fixes my Dad’s problem of giving too much away. By moving money aside into this account, I still ‘have’ that money for a little while longer. Having moved it to one side, I get to monitor and judge whether I can do without this money. Over time, I’ve settled on a ‘safe’ amount of generosity that doesn’t jeopardize my family’s wellbeing.

According to the PocketSmith Global Spending Map, New Zealanders donate approximately $65 monthly to charity, about $780 annually. If you are starting, this is an excellent figure to keep in mind, and it lets you know what others are up to. Your budget may only allow for less than that, which is fine; do what you can. Or it might allow for a lot more. You get to set your charitable spending. No one is keeping score.

Choose recipients that match your values

Money builds up in our Giving bank account until we decide what to do. Deciding who and what to support is straightforward. If I hear about a good cause, I’ll check the balance of the account, run the idea past my family for their feedback, and then donate. Like my Dad, I’m always looking for opportunities to help other people, and now, my daughter gets to see me do the same.

After becoming overwhelmed by the volume of national and international charities looking for donations, I decided to focus closer to home in my community and country. I always keep my antennae up for a worthy cause and will step in when I see one. That is the trick: Not overthinking it, just doing it. What stops people from being more generous is that they doubt the recipient will use the money well. I’ve got more faith in my ability to pick a good cause and their ability to make good choices. I’m yet to be proved wrong.

I give without strings attached. I expect nothing (except a thank you) in return. I trust that people will make good choices with the money we offer because, over my lifetime, when I’ve been down on my luck and been given money, I used it to help me move forward. Most people will. You can check your motivations for helping. If they are genuine and you care about the cause you are giving to, you will consider it money well spent. Start small, and give a little and often. Give a little more as you find ways that work for you and your income allows you to.

Charitable giving can come in many forms

Donating to someone in need can be awkward, especially if you are face-to-face with them. Giving online or to large organizations removes that awkwardness. But because I meet people all around me who could simply do with a bit of money, I’ve learned to move past my inhibitions. Generosity is a learned behavior; the more you do it, the easier it gets.

I wanted to share actual examples of how we give. Because, as I learned by observation, you might too. This is what charitable giving looks like in my family, and here is where we have donated money in the last couple of years:

A school student who was shaving his head for the charity Leukemia and Blood Cancer.
High school students fundraising to compete in a national sports competition.
Local community group that is encouraging young women to be active outdoors.
Using investment providers who have a charitable component to them and enjoying watching where that money goes.
Giving out scholarships to tertiary students that we come across. I find them via connections I make throughout the year with people I meet from all walks of life. I’ll learn a little about the student, then approach them directly and explain that we offer a no-strings-attached scholarship for them to use however they see fit. I was a broke student for many years, and I know how much an injection of cash helps.
During several natural disasters recently, I contacted friends in the affected area and asked them if they knew of anyone impacted. They did. They approached them on my behalf and received the okay for me to contact them directly. I asked for their bank account information and deposited money. Having been through something similar, I know that immediate access to cash is so helpful.

Generosity begets generosity

I don’t like to foist my generosity upon others. I want to be respectful and acknowledge that I don’t know the ins and outs of someone’s finances. I offer help and donate if they would like me to. I have learned the difference between someone politely turning me down out of embarrassment but with a genuine need and someone turning me down because they genuinely don’t need help.

What goes around comes around. And although I’m not looking for anything in return, “give and you shall receive” is very accurate, too. PocketSmith can tell me exactly how much money we have given away in the last 12 months, and it was money well spent. We got massive value for money out of doing so; knowing we have helped make someone’s day a little easier is all the thanks we need. The world is busy and challenging for many. Sometimes, people just need a little financial help. I encourage you to quietly and with an open heart find someone who needs a little help today. You might initially feel awkward, but that will soon be replaced with the feeling of having done a good thing.

Chris Uses PocketSmith For His Short, Medium, and Long-Term Money Goals

Sun, 07 Jan 2024 11:00:00 +0000

Read how PocketSmith veteran Chris manages his finances — from simple transaction categorization to the more complex, like forecasting cash flow.

Tell us a little about yourself?

I am a self-funded retiree in my mid 60’s. My wife and I spend quite a lot of time traveling around Australia and enjoying our grandchildren.

How would you describe your role in your household?

I am the CFO and household manager (my wife still works on a casual basis).

What drew you to PocketSmith?

It was the online access to all my financial institutions. I had been a long-time user of MS Money and Quicken, but I became tired of entering each transaction from my monthly statements.

How long have you been with us?

I have been with PocketSmith since 2017 (nearly seven years).

What do you primarily use PocketSmith for?

I use PocketSmith on a daily basis, usually on the mobile app:

Confirm transactions (I have stopped fraudulent credit card transactions by confirming all transactions daily!)
Check for upcoming bills

On a less frequent basis:

Checking my cash flow forecasts to make sure that I have enough money in my cheque account and also have as much as possible in savings accounts to maximize interest
Analyze the impact of larger purchases on our forecasts

Longer term:

Analyze how much I need to draw from my pension fund based on our previous spending and forecast

How has PocketSmith changed the way you do money?

It allows me to make long-term forecasts.

What are your favorite features?

The Dashboard, transaction confirmation, and forecast graphs.

Got any tips?

Turn on confirmations so that you know what’s really going on and can categorize correctly.

Use labels to reduce the number of categories, especially if you want to track transactions for vehicles.

What’s the best money decision you made in the past 12 months?

Pay extra into bonus accounts to earn additional interest.

Five Self-Employment Goal Ideas for a Successful 2024

Wed, 03 Jan 2024 11:00:00 +0000

Whether you set new year’s resolutions in your personal life or not, setting goals in self-employment is definitely something worth doing. Goals can give you a roadmap of where you want your business to go. When we have an idea of where we’re going, we can make decisions that help us get there.

Here are five goal ideas for the self-employed. They’re broad, but the aim is for you to take their overarching angle and tailor them to your specific business and personal aspirations.

1. Increase revenue and/or profit

Every business owner wants more cash — right?! Wanting to make more money in the year ahead is a common goal, but rarely do we approach it correctly. Instead of plucking a random number that sounds kinda sexy and deciding that that’s your goal, we can be more strategic.

We need to be looking at where our money is coming from, where it’s going, and what’s left over. Increasing revenue doesn’t necessarily mean increasing profit. Play with different revenue goals and break down how you’d achieve that based on where your revenue comes from, and don’t forget to factor in additional costs of earning that revenue!

2. Maximize visibility and reach

Marketing is critical to almost every business, and you can set goals around the amount of reach and visibility you and your business get. If you’re wanting to juice up your leads, increase your connections, or position yourself as an authority in a certain field, work up a goal to help you get yourself out there.

You could consider going to networking events, posting on social media a certain number of times per week, running a free masterclass each quarter, or collaborating with others in your industry. These types of goals can go hand in hand with revenue goals, too. The more people that see your business, the more chances you have to make money!

3. Turbocharge efficiency and productivity

Reflecting on how you spend your time in your business can be a great launchpad for goal setting. For a few days, track what you’re doing during your work day, and be as granular as you can. How much admin are you doing? How long are you spending on emails? How often do you lose time to a clunky system or process?

Making improvements to your efficiency and productivity by introducing new systems, processes, or ways of working can free up your time to — you guessed it — make more money!

4. Diversify income streams

Economic volatility can be scary when you’re self-employed, so a great goal to work on is diversifying how your business makes money.

How much flexibility do you have in the way you set out to bring in revenue? Could you explore a new service offering to meet a new branch of demand? What does your ideal client or customer need right now — can you respond to that in a new way?

5. Build up business resilience and runway

How long could your business survive if your revenue dropped? How reliant are you on your key clients to keep the lights on? A great goal to have, particularly during economic uncertainty, is to increase the business’ resilience and build up a longer ‘runway’. This means the amount of cash reserves you have available in the business to cover slower income periods or to reinvest back into the business in order to seize an opportunity.

Building up your business savings by either increasing revenue or cutting costs can help your business’ longevity and make life easier for you as a business owner. Sometimes it’s just a case of putting yourself on a bit of a spending pause for a quarter or two. Cutting back on expensive events, retreats, courses, programs, or even office space can free up some easy money to go toward your business’ stability.

How to decide what goals to pursue

If you’re thinking, “Um, I kinda need to achieve ALL of those things!”, don’t stress. Business can feel overwhelming sometimes, especially when it feels like we need to be doing everything all at once.

Deciding which goals to focus on comes from reflection and analysis of where you’re at — so spend some quality time with your business. Write out an overview of what happened each month of 2023. What were the highs, and what were the lows? What’s going well in your business? What’s not going so well? What are you great at? What do you wish you could do less of?

Doing an end-of-year SWOT analysis can help you establish your next steps for 2024. It prompts you to explore your business’ strengths and weaknesses (which are internal) and its opportunities and threats (which are external).

Look at ways you can work to your strengths, seize opportunities, bolster your weaknesses, and mitigate threats, and you’ll start to see a pathway unfolding.

Navigating the Holiday Period as a Freelancer

Sun, 17 Dec 2023 11:00:00 +0000

Can I be real with you for a minute? I’ve been freelancing for eighteen months now, and in that time, I’ve learned a lot. There are things that aren’t ever a surprise, like filing business expenses or a client paying me three weeks late. And there are things that, no matter how prepared I think I am for them, always catch me off guard.

Like… well. The topic of this blog, for one.

Holiday period? What? But it was August last week!

Yeah, nah. Surprise!

Something similar happened to me last year. I’d had a steady nine-month growth curve in my work and was finally settling into a routine. I had a solid client base, I had regular-ish income (as regular as it ever is in freelancing), and my budget was, while by no means flush, enough to live on.

Then… wham, the emails started dropping into my inbox

Client 1: Just letting you know I’ll be on leave for six weeks over the summer break. We’ll pick back up in the first week of February.

Client 2: We need to wrap this project up before this date, as the office closes from then until January 16th.

And so on. Honestly? As a struggling freelancer who had just had my first glimpse of stable financial ground, my stomach dropped. Two months without income isn’t a fun place to be for anyone, let alone a sole trader — and over Christmas, to boot!

This year, I told myself it wouldn’t happen. This year, I was going to be prepared.

1. Use PocketSmith’s Calendar to plan ahead

I dove into my calendar and started planning for 2023, based on what had happened at the end of 2022. Every client is different. They’re on different schedules, and they plan their workloads differently. My budgets had to be similarly adaptive.

Blogging gigs: Monthly budgets to November with a conspicuously large gap through December and January.

Client A: Fortnightly budgets, recurring, with an end date set to close out in mid-December. This client tends to be irregular with his payments throughout the year, but he always clears his existing invoices before closing the office for the summer. We start the new year with a blank slate.

Client B: A two-week gap for the New Year, followed by a four-week bump, then we settle back to baseline. This client takes advantage of the Summer Slowdown to send me extra work, so January actually tends to be my busiest month for him.

2. Communication is paramount

By September, I was looking at next quarter’s budgets and feeling that familiar prickle of unease at the weeks with no income budgeted. Time to get ahead of the curve.

One downside to living that #digitalnomadlife is that it’s too easy to start letting things slide. Like communication. Regular check-ins were always part of my schedule in New Zealand. They should have continued to be as a traveler of no fixed abode. But life is busy and, let’s face it, travel is an extra level of hectic. Still, it needed doing.

So I blocked out a chunk of my morning to dedicate to emails. It doesn’t have to be formal: A quick check-in, a reminder that you’re still there and happy to help. You don’t even have to mention the words “work” or “schedule”.

Hey, how is life for you? What do you have coming up in the next few months going into the New Year? Let’s touch base!

3. Ebb and flow

With a solid calendar plan and some email replies trickling in, I could look ahead and see what the holiday period would hold. It was quiet. Too quiet.

But that’s the nature of freelancing! There are good times and bad. It’s all ebb and flow. This is why we plan ahead: So we can spot the potholes before we hit them at full speed, and with any luck, we have another project lined up to fill that gap. It doesn’t have to be work-yourself-to-burnout feast and twiddle-your-thumbs famine. Not with a bit of planning and a steady client baseline.

Incidentally, it’s also why we harp on about the importance of an emergency fund — to mitigate the inevitable slowdown periods.

You can’t change the nature of the beast

Freelancing is a rollercoaster, and any rollercoaster is going to have ups and downs. But you can be smart about it. In a busy time, make sure you’re putting enough aside to cover your expenses during the next lean time. Rearrange your schedule to move a less time-critical project into the next holiday slump. Keep up that contact with clients: Believe me, they’ll appreciate it more than they’ll ever let on.

And hey — take advantage of the holiday slowdown to let yourself slow down, too. You’ve been grinding away at work all year. Step away from the desk. Enjoy some family time. You’ll come back refreshed and re-energized, and with some of your best ideas yet.

Trust me on that one.

The Psychology of Holiday Spending: Understanding Emotional Triggers

Sat, 02 Dec 2023 11:00:00 +0000

The holiday season is upon us, and don’t our bank accounts know it! Unsurprisingly, household spending spikes towards the end of the year as we begin planning Christmas shopping and holiday celebrations. But if we’re not careful, the season of celebrations can bring with it some scary spending.

Why do we spend more around the holidays?

The holiday season is a spendy one for many reasons. First, the more obvious culprits. Time off work, Christmas gifts, holiday parties, school holidays, gatherings with colleagues, family, and friends — all of these things cost more money than your average month, so it helps to be prepared for higher expenditure in November and December.

But on top of that, the end of the year can be an emotional time. We might be confronted by the fact another year has passed, holiday traditions can be loaded with expectations or even stress and anxiety, and we’re just exhausted from the year itself — and that’s all before we’ve even cooked the family meal or organized the kids’ wishlists! All of these factors can create the perfect storm when it comes to our spending.

Emotional spending triggers to watch out for

Becoming aware of the types of spending triggers you might face during the holiday season can help you spot them and stop them in their tracks.

Being overly generous

If you frequently go over budget when buying gifts for others, it’s worth being extra careful with how you shop for gifts and the emotions that come up when you do. Spending more than you planned on gifts can throw your money management into a tailspin.

One for them, one for me

If you often shop for yourself while you’re shopping for others, you risk doubling your holiday season spending without even realizing it! Finding ways to reduce the temptation to buy for yourself, like only searching for specific items instead of browsing, shopping only with cash, or challenging yourself to stick to your list and rewarding yourself only once you complete it, can help you keep that mindset under control.

The write-off mindset

When a new year is just around the corner, it’s easy to mentally write off the final weeks of the year and vow to fix everything in January. This can lead to mindless spending and taking your eyes off your budget when it matters most.

Instead, try to be more intentional with the end of the year. Check in with your budget (even if you loosen the reins a little for the festive season) and recognize when you’re justifying decisions by saying, “I’ll deal with it in January!”

Overwhelm spending

If you’re hosting for the holidays, or you’re a busy parent, or work is hectic in December, the overwhelm of the season can fuel additional spending. Making last-minute decisions, missing out on opportunities to get a better price, and paying up for extra conveniences can all see money leaking out of your account unnecessarily. Instead, try to plan ahead of time to give yourself plenty of breathing room, and delegate tasks to other people in your family so it’s not all on you.

Celebratory justification

If the end of the year is a time of celebration for you, justifying extra spending with the fact you’re celebrating can cost you. It can help to set a fun Christmas budget for yourself that builds in the spending you want to do while still honoring your financial boundaries. Whatever you spend, you’ll always feel better if you’ve planned for it in advance than if you’re left scrambling to organize your finances on January 1.

Momentum spending

The holiday season is full of opportunities to spend, and momentum spending will see you spending more and more money purely based on the fact that you’ve already spent money. Wild, right? This may also be closely tied to the ‘write-off mindset’, because the momentum we’ve built up from spending can prompt us to avoid the consequences until the new year.

To avoid momentum spending, be strategic about your spending plans and put obstacles in place to intercept your momentum. For example, do all your gift research and/or shopping in one set period rather than sporadically throughout the month, and always define an endpoint to your spending in advance.

End-of-year emotions

A new year can bring up all sorts of emotions that can drive spending, and you might find yourself spending more than usual to make yourself feel better — particularly if you find the holidays difficult due to family dynamics, grief, or loneliness.

Be gentle with yourself if you expect to feel these emotions. They’re valid, and spending money to resolve them makes a lot of sense. To protect your financial best interests, it can help to address these emotions and find other ways to manage them that don’t involve spending.

How to keep tabs on your silly season spending

The best way to limit off-track spending damage is to keep your finger on the pulse. Checking in with your spending every week or every few days in the PocketSmith transaction dashboard, and categorizing them as you go can give you clearer visibility over your costs and a greater sense of control. Plus, you’ll have the data to look back on next year for more accurate cost planning!

Moving From Mint to PocketSmith: Budgets, Calendar and Forecasting

Wed, 29 Nov 2023 00:00:00 +0000

Mint's Budgets page

The ability to set a budget is a big reason for monitoring our spending transactions. Mint’s Budgets feature was a simple and effective tool that let us set spending limits for each category and see how we were tracking against it.

via Tenor

While it may be hard to say goodbye to a familiar feature you’ve relied on for a long time, here’s what you can look forward to in PocketSmith.

We’re continuing to craft an elegant budgeting experience that grows with you based on years of customer feedback. We’re confident you’ll be surprised and delighted at what we have in store.

Flexible budget periods
Intuitive, colorful display
Calendar
Forecasting and what-if scenarios
Auto-budgeting
Quickly see the transactions belonging to the budget period
Quickly see the historical trend for the budget category
Custom top-level categories
Nesting and roll-up budgets
Roll-over budgeting

1. Flexible budget periods

Where Mint’s budgets are limited to one-off, one-month, or a few months, PocketSmith lets you set budgets in common configurations you can find in a calendar:

Daily
Weekly
Fortnightly
Monthly
Annually
And all variations thereof, like every two weeks or five days

Budgets can be started on any date you wish — not just at the beginning of a month.

You can also set advanced options, like when you would like a budget to permanently end, or if it’s a transfer to another account, or a bill, and more.

2. Intuitive, colorful display

We make the information as clear as possible so you can quickly see what’s going on, with:

Clear progress bars for each budget
The ability to better personalize by adding colors and emojis to your budgets
Sorting available by category, budgets, amounts and more

3. Calendar

PocketSmith can show you your budgets in a calendar because it treats budgets like calendar events.

This view makes it easy to see when:

A budget is set to end and begin again
One-off budgets or bills are due
How you’re tracking against a budget to date via a pop-up

Adding, editing, or deleting a budget from here is as simple as clicking on it, just like on a regular calendar.

4a. Forecasting — a time machine for your money

Another cool thing about PocketSmith’s event-style budgeting is that it will make a forecast for you based on your recurring budgets.

You’ll see a daily predicted balance at the bottom of every day in the calendar, and this can go as far as 60 years into the future, depending on your plan.

Jump forward to a future date to see what your predicted bank balance will be on any day.
See a graph showing your forecast balances and where they’re trending.
See the forecast for one account, a selection of accounts combined, or all your accounts combined.
Click on a future point in the graph to take your calendar there.
Plan for significant upcoming expenses with ease.

4b. What-if scenarios

You can make multiple forecasts comprised of different budgets and budget amounts in separate scenarios. By switching scenarios, combining them, and turning them on and off, you can quickly model the outcomes of different decisions on your future bank balances, like:

Reducing your income
Adding a new repayment for a car
Increased interest rates on your mortgage payments
A new hobby
Significant one-off financial commitments in the future

5. Auto-budgeting

If you’d like to get set up quickly, you can use the Auto-budget Tool to get PocketSmith to make budgets based on your categories and average spending.

This tool also creates your forecast, giving you an idea of how you’ve performed historically against your averages and what your potential future would look like.

PocketSmith will automatically set your budgets based on the information it has from your transactions. If there’s not much data, please remember that a large purchase or income may skew your averages.

Auto-budgets can be easily deleted, however, so you can quickly undo this step and go on to refine your budgets as you see fit.

6. Quickly see the transactions belonging to the budget period

Okay, so you’ve gone over or under budget — but how did this happen?

We love saving our users time, so we’ve made it easy for you to refine the information you’re looking for.

PocketSmith lists the number of transactions belonging to a budget for the period, and you can see them in a pop-up simply by clicking on the number.

You can then dig in deeper within the pop-up by:

Typing to filter the transactions to find something specific
Sorting by date, merchant, and amount — the latter lets you see the most expensive item in the budget

And for more heavy-duty work, just click “View on transactions page” to be taken there, where you can rename, recategorize, edit, add notes and attachments, delete and more.

7. Quickly see the historical trend for the budget category

Just click on a budget, and voilà:

See your entire history for the budget at once or within a date range.
Adjust the columns to show the data by budget period, year, month, or week.
The dotted line shows you the average for the period shown.

Our friend, the Transactions Pop-up, also works here. The pop-up appears when you click on any total value of your actuals that appears as a link.

You’ll be able to see the reason for the red spikes in the past with just a couple of clicks.

8. Custom top-level categories

Mint’s top-level categories are fixed, whereas in PocketSmith, you can choose your category names across all levels to budget in a way that suits you best.

I’ll clue you in on a pro feature here. You can quickly create entire category structures on the Manage Category page in one click.

Pick an existing template of categories available in Mint, Quicken, and Microsoft Money, or
Just type in your list of categories in the same format.

Click “Add new categories”, and boom! You’ve just created all your categories in one shot.

9. Nesting and roll-up budgets

Like in Mint, you can also nest your budgets in PocketSmith. We offer a couple of advanced features here, though:

You can nest up to three levels deep, as opposed to just one in Mint.
You can roll up your budgets to have the parent budget show one total of all its children (subcategories).
You can still see the budgets for each child.

10. Roll-over budgeting

This is the most feature-rich aspect of PocketSmith’s Budgets. Simply put, for each budget period:

If you spend less than expected, you can put the surplus from your current budget into the next period. Your budget is adjusted so you have more to spend in the next period.
If you spend more than expected, you can make your next budget period smaller by the amount of the overspend. Your budget is adjusted so you’ll have less to spend in the next period.

While the concept is relatively straightforward, we’ve worked hard to represent this phenomenon as clearly as possible for:

Your current budgets
And your historical trends.

There are also multiple configuration options for budgeters who use this system:

Rollover when above and below — any over/under-spending or over/under-earning is carried over to the next budget period.
Rollover when above — only any over-spending or over-earning is carried over to the next budget period.
Rollover when below — only any under-spending or under-earning is carried over to the next budget period.

You also have control over when you would like to roll a budget over and can choose to save the underspent amount instead of making the next period’s budget bigger.

Last but not least, you can use the distribute rollover surpluses feature if you have accumulated rollover surpluses in some categories and want to lock in this surplus or distribute this surplus to another category’s budget.

PocketSmith will grow with you

We know that the right tool at the right time can give you the valuable insights you need to make the best decisions without a ton of effort. This is why we’ve spent years refining our budgeting system in response to the needs of our customers.

We don’t expect you to use everything here, but rest assured, the tools are ready when you are.

So keep it simple, or get geeky. We’re here to help you be more productive with your money, your way. If our attention to detail resonates with you, you may have found your new home.

Jason is the CEO and co-founder here at PocketSmith. He is fascinated by our unique relationships with our money, and is passionate about making peoples’ lives better through the technologies we craft. He’s been a sneakerhead since the 80’s, and loves gardening on sunny days while listening to Planet Money.

How To Save Money While Planning For Holiday Travel

Mon, 27 Nov 2023 11:00:00 +0000

I like to travel as much as I can. Two factors hinder my ability to travel: Time and money. The time factor is probably obvious for a working mum, so let’s dig into the money side.

Start saving and never stop

The way we travel might not be luxurious, but travel is a luxury, and we have to be very organized with our money to make it happen. We have a specific bank account (sinking fund) that we call “Holiday Fun”, where money is automatically transferred weekly. It steadily builds up over time. Knowing what the yearly amount we will save gives us a budget to work to.

We track it in our PocketSmith Calender, and that helps us prepare to have the money we need all saved up before we take our holiday. Saving into this account never stops, which is why we can financially manage to take such regular holidays.

Set a REALISTIC travel budget

With some strategic planning and a sprinkle of frugality, you can embark on the holiday of your dreams within a budget.

My financial planning begins with looking at the cost of the last trip we took or at a trip I know will be similar to the one we intend to take. If you have no such comparison, ask your friends!

Conveniently, PocketSmith keeps a meticulous record of our travel, and I always go back and look at the costs of:

Flights and transportation
Accommodation
Sightseeing
Food and activities
Insurance

This information helps me set a very realistic budget that I can make adjustments to for my next trip. It also reminds me of the costs we tend to forget about when planning a trip, such as putting the dog into boarding kennels or parking the car at the airport. Past spending helps you make informed decisions that align with your financial goals. Be honest about how much you can realistically afford to spend on your holiday, and work out how you will pay for it before you leave.

Timing is everything

Regarding holiday travel, timing can be your best friend or your worst enemy. If you can be flexible with your travel dates, you might snag some deals. These deals are to be found if you can avoid peak travel times, such as major holidays and school holiday periods, which is when prices tend to skyrocket. Simple tricks like booking mid-week flights or traveling to a destination in the off-peak seasons can lower costs significantly, leaving you with more money to splurge on experiences at your destination. The country you are visiting functions all year round, not just in peak season!

Stay like a local

Undoubtedly, accommodation is often the most significant travel expense you will incur. While it’s tempting to book a fancy hotel, consider alternative accommodation options to save big because there are many affordable choices, from apartments to cottages to a room in someone’s house. Staying outside of the city center can also be friendlier on your wallet. Plus, you’ll have the chance to explore hidden gems that tourists often miss.

Another strategy we employ is to stay in cheaper places for most of our trip but then splurge a little for a night or two at a fancier place. I have to say, I sleep equally well in both places, meaning that extra money spent doesn’t necessarily mean a better night’s sleep.

Optimize transportation costs

The world is a big place, and we all use transportation differently. Research the best way to get around in the destination you are heading to and be prepared to do things a little differently than you would at home. I live in a town with no public transport, so I have to drive or walk everywhere. But drop me in Singapore, and I’m taking public transportation! Don’t discount walking, something I love to do. It gives me a good overview and helps me get my bearings and see things I would otherwise miss.

Getting around your destination can quickly add up, so be savvy about your transportation choices. If you need to rent a car, compare prices from different providers (perhaps make it part of a bundle deal when you book your flights) and book in advance to secure the best deal.

Shop smart for souvenirs

I remember one of the first big trips I ever took, a month in the United States. We’d agreed that we would not buy gifts for the family while away, figuring that we would end up with too much luggage and, with a large family, too much cost. But we quickly realized that buying gifts for others is all part of the international experience, but it’s easy to get carried away with souvenir shopping.

Ultimately, we wrote a list of people to buy for and set a budget. We loved tracking down a little something for all our friends back home. This included finding local markets and avoiding tourist traps. We even visited second-hand stores for really unique treasures. Ironically, you can find a lot of unwanted local tourist merch in shops like this! If you find yourself in a place where haggling is encouraged, then go for it, but always be respectful that the vendors are trying to make a living and that negotiation is a normal part of the process.

Currency conversion on the go

An easy way to trip yourself up and go over budget is if you are not viewing an expense in your own currency. We inadvertently did this on a cruise we took. For the first 24 hours, we thought we were spending in the currency of the country we embarked from until a friendly traveler sidled up to us when we were shopping onboard and said, “Do you realize all prices are in USD?”. Rookie mistake, and one we won’t repeat twice.

A currency conversation app on your phone is necessary when traveling so you stay within budget. Throughout our travels, I check my PocketSmith app just to check that all is as it should be. It’s a safe way to check our spending without compromising our banking security.

Schedule a post-holiday debrief

Once I’ve settled back in at home, I always take the opportunity to jump on PocketSmith and categorize all of the transactions I’ve not had time to view during my holiday. It is important to tidy all this up while your memory is fresh so that you can create the framework for planning the next trip. I’ll always add lots of notes to each expense, just to jog my memory; plus, of course, you can add photos and upload receipts, too.

All of this data has helped us narrow down what is important to us when we holiday so that each time we go, we get smarter about our spending habits, maximizing our enjoyment.

PocketSmith CEO: What Mint's Closure Means for the Future of Personal Finance Software

Thu, 23 Nov 2023 11:00:00 +0000

A very brief history

It tickles me to think that we’re continuing a tradition of products that began in the early days of personal computing.

The very first PFM, Quicken, made its debut in 1983. Its success was notable, as was the impact of Microsoft Money, which entered the scene in 1990.

At that point in time, PFM was still a relatively niche product as it catered to home budgeting enthusiasts with personal computers. Software came boxed and on floppy disks, data was manually entered on heavy keyboards attached to big beige machines, and it wasn’t until the mid-2000s that online versions emerged.

Wesabe and Mint were a part of this first wave in the US. They capitalized on the ability to swiftly import account transactions through file uploads and connecting directly to users’ financial institutions — a feature colloquially called “bank feeds”.

While both were popular products that were free to use, Mint was eventually acquired by Intuit (which was then Quicken’s parent company), whereas Wesabe shuttered its operations. This showed the significance of bank feeds as a crucial part of a successful PFM user experience.

Mint, becoming a free product supported by a multi-billion dollar company, steadily grew its market share, introducing a new generation of people to online money management.

While its significance and value to the public should not be understated, Mint’s dominance has long disrupted the market dynamics for subscription-based PFMs by setting a precedent that alters user expectations.

In doing so, it has also posed a unique challenge for companies like ours that have chosen not to pursue venture capital and instead, self-fund in order to stay independent.

Thanks, Mint

Today, in the roaring 2020s, consumers are much more privacy-aware than they were a decade ago, and many are now familiar with the phrase “if you’re not paying for it, you’re the product”.

But in the 2010s, it wasn’t uncommon for more people to be offended by the fact we charged for PocketSmith, asking, “Why should we pay for software to manage our money?” as if there was a grand irony in having to pay a reasonable subscription fee that would diminish the pool of funds they were looking to save.

This was largely because Mint’s backing by Intuit furthered the narrative that consumers saw little value in paying for PFM. Its supposed commercial success with a free model shaped the landscape in a way that made it seem peculiar to build a SaaS business around PFM with a traditional subscription fee structure.

It should go without saying that PFMs cost money to build, maintain, and support — just like any other software. They also incur ongoing costs for each customer because bank feeds are subject to fees, and they’re expensive and complex to maintain.

It may be that the very presence of bank feeds implies that PFMs are also somehow bank-like and have deep pockets, but no. We don’t hold customer funds, we don’t earn interest from deposits, and we don’t take percentages of customer transactions. Still, we’ve been expected to wear the cost to serve and recoup it through means other than subscriptions, like ads.

The recent closures of popular free PFMs in the last year alone — Pocketbook and MoneyBrilliant in Australia, and most recently, Money Dashboard in the UK — seem to indicate that this business model doesn’t work. Now, perhaps the chickens have finally come home to roost for Mint as well.

PFMs are not just about helping people count their pennies. They also save people time because they put actionable financial data at their fingertips. They save people from stress, heartache, and poor financial decisions by presenting important information in a useful manner. These things are absolutely worth paying for.

All this aside, a company that has a duty of care over your personal financial management should not be incentivized to sell you financial products and services. Val Agostino at Monarch Money has written an excellent piece about this very topic.

As we bid farewell to the reign of a titan, we welcome a whole new generation of users and companies who we believe will contribute to an incredibly bright future for PFM.

Personal finance isn’t a one-size-fits-all problem to solve

The presence of a dominant PFM establishes a “common” approach to money management that is assumed to work for all. This risks alienating those who don’t resonate with its features, causing many to feel that effective money management is out of their grasp.

The original idea for PocketSmith was a simple calendar for your money that would help you forecast your future bank balances. We firmly believed that we had created a new and better way for people to manage their money, so our original business model was designed around the calendar.

As we shipped our alpha and beta versions in 2008, we quickly learned that people had a wide range of reasons for working on their finances, along with a wide range of mental models of their money.

We learned that while there’s an allure to making money management “simple”, relying on simplicity does little to help us when our finances inevitably get more complex as we grow families, make homes, and go on to lead more interesting lives.

This understanding led us to the product we have today: PFM for all walks of life. One that grows with you, and that offers you the tools you need to find the facts in your finances so you can make the best decisions for your future. The original calendar is now one of a suite of features available to our users.

It wasn’t easy to build the product we wanted for the people we wanted to help. Growth took time amid a market that wasn’t wholly receptive to paying for PFM. Over the last fifteen years, we’ve seen other PFMs come and go, and I wonder if we would be seeing many more innovative products today had the landscape not been in the shadow of Mint’s eclipse.

Now that the Mint era is over, I’m hopeful for a gradual adjustment of that landscape. I’m optimistic about what this means for our industry, and, most importantly, for you, the consumer.

This is starting to look a little familiar.

The rise of the boutique PFM

If you’ve only ever used Mint, I’m excited for you because you’re about to discover what boutique PFMs have to offer. And yes, most businesses are “boutique” when compared to Intuit — but hear me out.

The businesses I’m describing make PFM software at an artisanal level, and we share a very similar set of values, among which:

We each have a clear purpose to fulfil and a reason for believing in it (i.e. an interesting origin story).
We care about the mission, and we care about people: our customers, our teams, and their families.
We believe in aligning our incentives with positive customer outcomes.
We believe that personal finance isn’t a one-size-fits-all problem to solve. It’s okay if our software isn’t a good fit for a customer; we’ll happily recommend another that does.
We have a high degree of control and independence and are likely still founder-led.
We use our own products, we believe in privacy, and we put our energies into building an Internet that we want to leave for our children.
We don’t believe in growth at all costs.

It is a rewarding experience to engage with a product and business that you feel a connection with. You’ll know it when you find one that prioritizes your best interests, aligns with your perspective on personal finance, and is genuinely enthusiastic about embarking on a journey with you. You’ll know, because the product will resonate with you, and if you reach out to the company, you’ll find passionate people keen to support you.

So please go check out:

Tiller if you love spreadsheets
Copilot if you love beautiful Mac software
YNAB if you love a system that guides you
Toshl if you love a team with an impish sense of humour
Monarch Money if you love to manage money with someone you love
And of course, PocketSmith, if you love all of the above (yes, we’re being cheeky)

Mint started out as a boutique PFM, and I foresee its legacy being cemented as both an inspiration and a cautionary tale for us.

A day in the life of PocketSmith

I’ll leave you with a glimpse into what our boutique PFM does on a day-to-day basis. We’re a remote-first team of 24 based in New Zealand, serving customers in over 190 countries.

Over in Support, we’re reading and responding to customer emails about topics that range from the minutiae in our features, through to offering help setting up things like budgets, forecasts, and mortgages. We have two teams in Support. One is dedicated to guiding customers, and the other is dedicated to helping customers with their bank feeds. We partner with multiple data providers to offer the most reliable bank feeds in each region because we know how important it is to have timely and accurate data.

We take a collaborative approach towards customer support, often seeking advice from each other in order to craft the most accurate response we can for our customers.

Along the way, we take note of customer feedback and raise it with our designers and product owners in order to maintain a constant rate of improvement to our product. We also keep tabs with the Marketing team to ensure that we’re mutually prepared for upcoming campaigns.

We also keep our Learn Center as up-to-date as possible with comprehensive guides on how to make the most of PocketSmith, and there will be no end to the number of articles we’d like to write.

We’ve been chosen for this role because we’re loving, empathetic, and artsy. Seriously — from bands to baking to brushwork, we’ve got it covered.

It tickles me to think that we’re continuing a tradition of products that began in the early days of personal computing. I hope we make our forefathers proud.

Our Engineering team cycles between upkeep weeks and sprints, and we have a Slack channel dedicated to S4S, or Support for Support. The latter is a hotline that we spring to when one of our friends in Support needs a hand. We may offer some some timely advice, fix a newly discovered bug, or tinker with any plumbing issues that might arise with bank feeds.

We’re composed of experts in our field, and we hand tasks elegantly to each other, from the stack to the back end, to our front end, and beyond. Curiously, we all share a love for craft beer.

There is no shortage of work to do, and we manage to deliver while constantly working to pay down our technical debt. It’s pretty great actually, considering our technology will celebrate its Sweet Sixteen in 2024.

We keep a keen eye on PocketSmith’s vital statistics and ensure that it never runs out of steam, especially when demand is high. Every so often, we surprise the team with a new innovation or improvement that makes things better for the team, our customers, or both.

We’ve been chosen for this role because we take an immense amount of pride in our work, we’re trusted to make ethical decisions, and we’re constantly looking to deliver a better experience for our customers and our team.

Meanwhile, over in Marketing, we’re getting together for our weekly morning tea, where we extend an open invite for everyone in the company to join in. This might give you a clue that we’re PocketSmith’s social butterflies, and this is why we’ve been chosen to be the voice for our company.

We love popular culture, books, music, and film. Later today, we’ll connect with some of the many people we enjoy working with — an influencer in Melbourne, a publication in North America, and our favorite podcaster from right here in Central Otago, New Zealand.

We keep our blog updated with interesting articles and customer stories, sometimes sharing perspectives from our friends and family. We keep a keen eye on statistics and pay attention to how our customers are using our product.

Our designers are part of our team, and so we’re plugged into the Engineering and Support teams by way of user experience and user interface design. It’s important to us that we can collectively express ourselves honestly through our work.

Our Founders flit between all teams and find it an absolute pleasure working with people who are amazing at their craft. Together, we determine our commercial and product strategies and do our best to convey them to our team. We remain dedicated to nurturing and preserving our culture and values.

We’re now fifteen years old, and still, we thrive on the same kind of excitement and energy we did when we were founded. In many ways, we’re still just getting started.

So — yeah. It tickles me to think that we’re continuing a tradition of products that began in the early days of personal computing. I hope we make our forefathers proud.

As we bid farewell to the reign of a titan, we welcome a whole new generation of users and companies who we believe will contribute to an incredibly bright future for PFM.

We're well and truly fortunate to work with a bunch of creative, thoughtful, brilliant, and silly humans.

PocketSmith Newbie Suresh Is Enjoying His New Clarity Over His Finances

Sun, 19 Nov 2023 11:00:00 +0000

Read how Suresh is getting as much understanding of his personal finances as he does with his business finances using PocketSmith.

Tell us a little about yourself?

I’m Dr Suresh Sivacolundhu, 53 years old, husband of 24 years to Katie, dad to Alana (19), Lauren (17), James (12), dogs Sophie and Millie, and cats Bean, Tigger, and Felix.

I’ve been a podiatrist and CEO of The Foot Clinic in Cottesloe, WA for the past 24 years. My passion is to stay fit, fast and strong and move well forever! I’m into running, HIIT, Body Attack, strength training, hockey, and tennis.

How would you describe your role in your household?

Firstly, I’m the fun guy! Life is way too short to take too many things too seriously. I bring a ridiculously annoying positive attitude to my family and my home.

I fix things — I’m the handyman and maintenance guy, and I’m also the gardener with a very big and very overgrown vegetable garden.

What drew you to PocketSmith?

At work, we have brilliant visibility over our numbers. At home, we didn’t.

Katie and I both work full-time, and the only numbers we ever looked at were how much money was in the bank and whether it was enough to feed the ever-hungrier credit card. We use Xero at work, but I figured that was too OTT for home, so I googled and found PocketSmith!

How long have you been with us?

I’m very new to PocketSmith, having only signed up in May of this year, so just over six months.

What do you primarily use PocketSmith for?

Getting clear visibility over our household budget, the main expense areas being groceries, transport, entertainment, pets, personal spending, investments, and medical expenses.

I’m a bit of an Excel geek, so transfer monthly reports to a color-coded spreadsheet so I can see everything at a glance.

How has PocketSmith changed the way you do money?

I love our new visibility!

I can see exactly what goes in and out, and when.
I can see the good months, and the lean months, and why that is.
I can prepare for what’s to come and discuss changes to our spending habits with numbers to support the decisions Katie and I can make together.

What are your favorite features?

I love the seamless integration with multiple banks and accounts. The reporting is also clear and simple — with a single click on the Income and Expense Statement, I can drill into more detail to understand exactly what we spent our hard-earned dollars on.

What’s the best money decision you made in the past 12 months?

Definitely to put everything we earned into paying off our home loan, which after 24 years of various home loans, we have finally done!

A close second would have to be subscribing to PocketSmith. I know that sounds a bit contrived because I’m doing this Q&A as a service to the PocketSmith community, but as a successful business owner of 24 years, and the business surviving a global pandemic, we could not have done it so well without a clear understanding of our numbers. PocketSmith has allowed us to do this for the thing that is most important in my life – my family.

What is crazy is that we had not done this for our household earlier. I now enjoy categorizing all uncategorized items once every 1-2 weeks and looking more closely at everything every month. This has given Katie and me real comfort in knowing we are headed in the right direction, and when we are not, we can make educated decisions and take action quickly.

Ruth's Two Cents: Working on Improving Your Financial Education

Tue, 14 Nov 2023 11:00:00 +0000

Hi Ruth,

It’s fair to say that I understand most of the necessary basics of budgeting and the like. I really want to learn more and expand my knowledge, but I’m a little stuck. I know there are lots of good resources out there; I just have no idea where to start! Or even what format is the best option. Please help!

Acknowledge that you know more than you give yourself credit for

I love expanding my financial knowledge. I particularly love applying that new knowledge to my finances. However, I’m honest enough with myself to know that I only need to know so much, the basics really, so anything beyond that is honestly just personal interest, a hobby of sorts. I never thought personal finance and budgeting would become my hobby, but there you have it, the honest truth.

So to help you answer your question, I encourage you to understand something about yourself; you likely already know enough about budgeting. You already are enough. Anything additional to this can be considered an additional interest bonus payout on an already high-interest savings account! You are already winning!

I’ll often meet people who know a lot, but because of the plethora of books, blogs, podcasts, seminars, apps, companies, and products think that they only understand the tip of the iceberg regarding good fiscal management. They feel stupid that they don’t know everything there is to know. You can never know everything, and in my opinionated opinion, as a budgeter of your own finances, nor should you even try to. Life is too short, and as my Mum used to say: Go outside and play instead!

Find one good thing, and follow it down the rabbit hole

Now that I have surmised that you are already winning by knowing the basics of budgeting, I’ll talk to your curious side instead. I love that you have a thirst for new knowledge, and as I’ve alluded, there is plenty of it out there. I encourage you to follow your nose regarding resources; that is what I do. If I am reading a blog post or a book and they recommend a tool or resource, if it sounds interesting, I’ll follow it up.

For example, I’ve just finished the book Die With Zero by Bill Perkins. I went out of my way to find and read it because I kept hearing it mentioned by people in the budgeting and personal finance space I respected. I tend not to follow up on resources companies recommend because they invariably try to sell me something. But this book came up time and time again.

I read it. I loved it. You might enjoy it too. In it, he mentioned the website The Living to 100 Life Expectancy Calculator, which also piqued my interest. So off down that rabbit hole, I went! In case you are interested, all signs point to me dying at 98! Wish me luck!

Trying applying your learnings to your real-life finances

What on earth do I do with that information? What did it teach me? Well, back to my retirement calculator I go. It’s time to plug in my numbers again and see if the way we are currently earning and spending will see me in the fancy retirement home of my dreams. I apply the new things I’ve learned to my own budgeting knowledge if I think they will help, and I often use what I’ve read to confirm that I’m on the right track. I am also curious enough to research widely enough and absorb content that I disagree with, it’s all good stuff that adds to my journey, if only for me to think, “I’m right; they are wrong”.

The discovery of blogger Mr Money Mustache many years ago introduced me to a whole new crowd of people who speak and write about money and who seem to live the retired life I’m aiming for, so that gave me many years of great content to add to the knowledge I have about budgeting and how it fits in with our broader lifestyle. Those connections led me to Rebel Finance School and their 10-week money course. Taking part in that led me to spend an hour one Friday night on a Zoom call chatting with the lovely show hosts, Alan and Katie. In fact, the only reason I write for PocketSmith is because I signed up for their budgeting app, realized they were located just 2.5 hours away, and reached out to them for a chat!

Find your tribe to keep motivated

Every time I find a new piece of content to learn from, it leads me to the next, and the beauty about being curious is that as the snowball of knowledge grew, it moved out of the pages of books and websites beyond listening to podcasts and into real coffee shops, and video calls where I meet up with real people, who are just as interested in my hobby as I am. Meeting real people took my interest in budgeting up another level, and if ever I feel stuck for new information, I just ask someone for a suggestion — as you have just asked me.

Much like a physical hobby, such as being interested in dog obedience, will naturally lead you to join your local club, so will your interest in money. As you turn over rocks to find something new to learn, it will naturally lead you to real people, and then the floodgates of knowledge will really open up to you. That’s what happened to me, and it’s why I know that knowing the basics of budgeting and how money works are all you really need. Do the basics well, and spend the rest of your time finding your community, and before you know it, you will find a nice balance of learning new information and then, in turn, helping others learn too.

To sum up, I encourage you to follow up on one of the above resources and see where it takes you. You might even want to contact me, and you are very welcome to do so. From the pages of that book, blog, or podcast, something will jump out at you: Your next fork in the road. Take it! And always stay curious!.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

How To Make the Most of Black Friday Sales

Sun, 12 Nov 2023 11:00:00 +0000

Make a wish list before the sales start

The golden rule of savvy sales shopping is going in with a clearly defined list before the flashy marketing, bright colors and big percentage markdowns get the better of you. Personally, I have a running wishlist going all year round that I add to when things catch my eye. Usually, I end up removing things later when I realize I don’t really want or need them, but some things do stick — and Black Friday is a great time to scoop up these hard hitters for a discount. Spend some time tightening up your list before the sales start, so you know what you’re shopping for. It helps you avoid getting lured in by big deals on things you don’t really want.

Then, note down the current retail price of each item. Black Friday sales can be misleading. You might see products with enticing percentage discounts, when actually the original RRP has been inflated to make the sale look better.

Set a price track alert

In the Google app, you can track your favorite products and get notified when the price drops. It’s a great way to make sure you don’t miss a good deal during strong sale periods.

List out your high-rotation purchases

Black Friday and Cyber Monday can be a great time to stock up your regular consumables like skincare. Make a note of anything you buy regularly, and look out for opportunities to save by stocking up. If you buy four cleansers per year at $30 each, you could stock up on a year’s supply when it’s 30% off and save yourself the cost of one whole bottle. Smart.

Plan ahead for gifts

Is there anything more annoying than remembering your brother’s birthday right after you just saw the sneakers he wants at 25% off? Nope. Make the most of the Black Friday and Cyber Monday deals by thinking ahead about upcoming gift-giving. Birthdays, housewarmings, newborns, weddings, anniversaries — not only does planning in advance make things simpler, but you can save some cash at the same time.

Set aside your budget in advance

Allocate the funds from your budget in advance of Black Friday 2023 so you don’t blow your cash flow out of the water. If you think you might want to have a guilt-free browse and treat yourself, build in a buffer for that too! Remember, you can do whatever you want with your money — just make it intentional and accounted for.

Don’t forget to utilize your PocketSmith dashboard to keep on top of your Black Friday spending. Label your transactions so you can easily access them next year, or to help you reconcile the higher spending period in your budget.

Transferring From Mint to PocketSmith

Thu, 09 Nov 2023 11:00:00 +0000

We have a special offer available of 50% off your first two months of PocketSmith Foundation or Flourish for all new customers! Head to this page to claim the exclusive offer — the guide below can be followed once you’ve claimed this offer.

Greetings from all of us at PocketSmith!

We’re delighted to welcome Mint.com users! Navigating the shift to PocketSmith is designed to be as smooth as possible and we’re here to ensure you have all the support you need. This guide will help you transfer your financial data effortlessly, set up insightful budgets based on your historical spending, and establish connections with your banks for ongoing automatic transaction and account updates.

A bit about our roots: Since launching in 2008, PocketSmith has been an independent and self-funded entity. In a domain where personal finance tools have appeared and disappeared, our commitment has been unwavering — to develop exceptional financial tools that we use ourselves. Our vision is long-term, and we’re not going anywhere.

We’d like to make one thing clear: At its heart, PocketSmith is a premium service. Our business model is straightforward — we are sustained by users who appreciate and choose to pay for finely-crafted software. Transparency and integrity are our bedrocks; you won’t find any hidden commissions or sale of personal data in PocketSmith. Our commitment to these principles is embedded in our Terms of Service.

While PocketSmith does offer a free plan suitable for basic use, it’s important to know that access to bank feeds is a feature of our paid subscriptions. Should you be in search of a free solution with bank feeds included, you may wish to look elsewhere. But it’s worth bearing in mind the adage “if you’re not paying for the product, you are the product”.

We’re eager for you to dive in and start your PocketSmith journey, so let’s get going!

Step 0: Essential steps for a swift transition

For those of you who are seasoned in using personal finance applications and prefer to hit the ground running, we’ve compiled the essential steps right here at the beginning. This list might be enough to get you started on PocketSmith without any delay. If you need more in-depth guidance, we’ve got you covered with detailed explanations further down.

Export your Mint.com transaction CSV files.
- Login to Mint.com.
- Go to the Transactions Page.
- Scroll down to the bottom of the page.
- Select Export transactions.
- Note: Mint only allows exporting 10,000 transactions at a time. If you have more than this, you’ll need to export multiple files, exporting separate files using their date range filter. Check their help documentation for more information. You’re able to upload any number of files to PocketSmith at once.
Import your Mint CSV files into PocketSmith using our Express Import tool. If you have multiple files to upload, select all of them at once.
Connect your bank feeds from the Manage Feeds page. You’ll link up your newly connected feed accounts to your accounts transferred via your Mint file(s).
Go to the Budgets page and test the auto-budget tool via the link in the toolbar.
Check out the various features of PocketSmith, from the customizable dashboard, and the forecast calendar to the Income & Expense report.

Now that you’ve got the gist of what’s to come, let’s delve deeper into each step!

Step 1: Get your transactions data file from Mint.com

Mint.com allows you to download CSV files of your transaction history which is stored with them. This file includes all transaction details, including account names, categories, labels and notes as well. All of this data will be imported into PocketSmith as part of the process — so all of your account names, transactions, categories, labels and transaction notes will be intact.

Important note: Mint only allows exporting of 10,000 transaction at a time, which might be inconvenient to say the least. If you have a lot of history in Mint, you’ll need to use the filters on their transactions page to download multiple files; more on this below. Mint also has these instructions on their own help site.

These are the steps to follow:

Log into Mint.com.
Head over to the Transactions page.
If necessary, select Filters from the top left, to reduce the number of transactions in the export, keeping in mind that only 10,000 transactions can be exported at once. If you have significantly more than this, exporting entire calendar years at once might be the easiest way to achieve a full export.
Scroll down to the bottom of the page.
Click the link to Export transactions.
With your Mint data file downloaded to your computer, you’re good to move onto the next stage!

Step 2: Import your Mint data into PocketSmith

Once you’ve signed up for PocketSmith, you’re all set to bring in your financial history from Mint.com. Our user-friendly import tool helps you transfer your categories, transactions, labels, notes and accounts to mirror what you had set up previously in Mint.

1. Navigate to the Express Import page

Upon creating your PocketSmith account, you’ll be greeted with the Welcome screen. Select the Bring your own data button on the right, followed by the Move from another app button. A selection of app logos will appear — you’ll be looking for the Mint.com option displayed.

Import from Mint.com button from the Welcome page

If you’re already in the setup process and aren’t shown the Welcome page, you can directly access the import tool designed for Mint.com. During the upload, you’ll have the chance to clear any existing data — but be sure to not choose this option if you’re uploading an additional file that you needed to export due to Mint’s transaction export limitations.

2. Upload your Mint.com CSV files

Select the import button on the page and select the CSV files you exported from Mint.com.

Import from Mint.com confirmation

Should your account already contain data, you’ll encounter an option to “Delete all data before importing.” This is useful if you’ve experimented with bank feeds already or have previously imported some data; checking this box will prevent any duplication. Even though your feed accounts will be detached, the feeds themselves will remain active and can be easily relinked to the accounts you’re bringing in from Mint.com.

After you confirm your choices and click “continue importing,” a progress bar will display, initiating the import of your accounts, transactions, labels, notes, and categories.

In progress import from Mint.com

If you have a very large number transactions in the import, the process might take a while, especially during the “Processing imported transactions” phase for each account. You don’t need to keep the browser window open for this to proceed - if you choose to take a break and come back later, you’ll be taken to the final step to complete the import process.

3. Assign banks and set account balances

Mint’s CSV exports do not include bank names associated with each account, nor any current account balances. This means you’ll need to manually assign each account that was newly imported to the correct bank and update the balances. This will only need to happen for the first time that a particular account is found however.

If you’re planning to set up bank feeds later in the process, don’t worry so much about entering absolutely perfect balances at this stage — these will be updated when you connect up your bank feeds. However, if you want to get right into an accurate Net Worth calculation straight away, it’d be wise to have fairly accurate balances entered out of the gate.

Entering the correct bank names is also highly recommended, as this’ll help you along with a smooth process of linking your bank feed accounts to your imported accounts later down the road.

Setting your bank name and balances

4. Celebrate and discover PocketSmith’s capabilities

Brilliant! Your Mint.com data has now been fully brought into PocketSmith. Take this moment to explore your new Dashboard, or delve into the array of features available under Reports. With your financial history in place, you’re now all set to really get into PocketSmith.

Mint.com data import complete

With all your historical data now preloaded in PocketSmith, it’s the perfect time to establish bank feeds for your accounts and connect them to the accounts you’ve imported. More on setting up bank feeds in Step 4 below.

Step 3: Establish your budgets and schedule bills using your historical spending

One of the standout features of PocketSmith is the ability to generate a cash flow forecast for your accounts by scheduling your regular budgets and bills in the calendar. This means that budgeting in PocketSmith isn’t just about tracking; it’s about projecting your future bank balances for future dates. This is invaluable for financial planning.

Within PocketSmith, you have the freedom to assign a unique budget for every category for any given budget frequency — weekly, monthly, annually — or anything in between. Each budget can be tailored to align with your financial goals, whether income or expenditure focussed. Keen to learn more right away? Take a look at our budget tips and tricks on our extensive Learn Center.

For a swift start, our auto-budget tool is an excellent way to jump right in — particularly if your imported historical transaction data is accurate. This feature analyzes your categorized transactions to suggest appropriate budget amounts and frequencies based on your historical spending. Once these are ready, you can tweak any auto-budgets to fine-tune things.

1. Head to the Budget page from the main menu.

2. Select the auto-budget tool link, from the toolbar of the page, or within the introductory section.

The budget page immediately after import

1. The auto-budget popup

Selecting this option above will open the auto-budget tool dialog. Simply click the bold green Start auto-budget tool button to begin the calculation process. The duration of this process will depend on how extensive your transaction history is.

The auto-budget popup showing the confirmation button

2. Your automatically-created budgets

Once the auto-budget tool completes its calculations, you’ll be shown a series of suggested budgets in a new window. Should you see a budget for a category that it doesn’t make sense to have a set budget for — such as a regular allocated amount for Transfers — you can remove it by clicking on the minus symbol that shows next to the budget when you hover over it. This will remove the auto-generated budget for that particular category. An example is illustrated below, where the “Household” budget is being removed.

Display of auto-generated budgets with an option to remove the "Household" budget by clicking on the icon next to it

3. Your budget analysis

After closing the auto-budget tool, you’ll be brought to the main Budget analysis and summary screen that displays your newly established budgets. To alter any budget details, click the three-dot icon next to the budget and choose “Edit/Delete budget”. If you’re curious about how your spending in a category has changed over time, a click on the category name will complete a historical spending analysis via our Trends feature.

The main Budget page showcasing the budgets that have been set up

Diving into the historical trends analysis for the Groceries budget

4. Visualize your budget in the Calendar

With your budgets in place, head over to the Calendar page for a different perspective on things — including your newly generated cashflow forecast. The Calendar offers a visual understanding of when exactly in a given month your money is coming in and going out — and merges your budget information with your actual account balance, providing a dynamic forecast of your finances.

You have the flexibility to adjust individual or recurring budget entries as needed. To make edits, select a budget entry on the calendar and use the form that appears to refine your budget.

The PocketSmith calendar displaying the budget entries and financial forecast graph

These steps offer just a glimpse into what you can achieve with PocketSmith’s budgeting tools. As you become more accustomed to the platform, trust your instincts and utilize our Learn Center for additional support and insights.

Next, we’ll guide you through linking your imported accounts with automatic bank feeds to keep your data up-to-date.

Step 4: Connect your bank feeds to your accounts

In PocketSmith, access to bank feeds is a feature reserved for our paid subscribers. Once you’ve moved to a paid plan from the Free tier, you can begin by navigating to the Manage Feeds page.

We offer bank feeds via both Yodlee and Plaid, in order to offer the latest open banking feeds where available, and alternative feeds if things aren’t that reliable with a particular data provider.

For step-by-step instructions on establishing your bank feeds, please refer to our comprehensive guide in the Learn Center. The setup process is straightforward, particularly if you have experience with bank feeds from your time with Mint.

After your bank feed is active, the next step is to link your new bank feed accounts to the ones you previously imported. Matching up your feed accounts with your imported accounts is important to prevent any duplicate transactions or accounts. For detailed guidance, our Learn Center provides a dedicated tutorial to walk you through the process.

Step 5: Embark on your revitalized financial adventure

Congratulations, you’ve crossed the finish line! We’re confident that you’ll enjoy exploring PocketSmith and making the most of its flexible tools that allow you to really flex your financial muscles. We’re dedicated to perfecting our craft, and your insights are invaluable to us. Our exceptional support team is ready to assist you whenever you need it, so please don’t hesitate to get in touch.

We’re continually motivated by stories of how PocketSmith has transformed the way our users manage their finances. We’re looking forward to hearing your own story of financial empowerment with PocketSmith!

Financial Literacy in New Zealand High Schools: A Teenager’s Perspective

Mon, 06 Nov 2023 11:00:00 +0000

Recently, the announcement of a proposed financial literacy policy for young people in New Zealand has sparked much attention. New research underscores the financial behaviors and challenges faced by young adults, especially with the emergence of financial products like “buy now pay later” (BNPL) services. As someone heading into young adulthood, I’d like to offer my perspective.

I believe that financial literacy should definitely be taught in schools, and I think that it is great that the subject is getting the recognition it deserves. Looking at my peers and myself, I reckon the state of financial literacy amongst teenagers isn’t bad, but it could be improved upon. I am lucky enough to live in a household where financial literacy is valued and often talked about, which has given me some exposure to the subject.

Breaking down the curriculum and that BNPL buzz

The proposed curriculum touches on several critical aspects of financial literacy: saving, investing, budgeting, financial management, setting goals and planning ahead, banking, credit, debt, insurance, income and taxes, consumer rights, and identifying and managing risks. These are all important topics, and will be very useful for teenagers and young adults in the future. This is because it will improve the knowledge and understanding of financial literacy in the general population, and it will help people be more organized in managing their finances.

Of late, the BNPL (buy now pay later) concept has been in the spotlight. While I’m not very informed on the subject, I get the gist of it. Essentially, BNPL lets consumers access goods or services in the present, but pay for them in the future, through a series of payments. Though BNPL purchases don’t charge traditional interest, additional fees can be placed on the purchase, such as late payments, or transaction fees.

When I am an adult, I believe that I will try to avoid BNPL purchases in most situations. My reasoning? I’d like to stay on top of my finances, and make any purchases outright, rather than putting myself in debt. In September 2023, Auckland University of Technology published a study indicating that many young adults use BNPL sensibly, but 20% show problematic use patterns. This shows that there may need to be extra emphasis placed on BNPL services when teaching financial literacy.

Making it real: What teens really need to know

While financial education in schools can boost confidence, it doesn’t always improve decision-making. I think this shows there’s a gap between just knowing about financial literacy and truly understanding how to apply that knowledge in real-life. I believe an effective way to teach financial literacy would be through interactive learning, such as gamification (like money management games), interactive workshops, and simulating real-life situations, which would allow students to practice their decision making skills.

Surprisingly, recent studies highlight that a number of young adults, even with financial education, don’t see BNPL as a form of debt. Having better financial education in schools may address this by spending additional time looking into borrowing money and debt, and encouraging students to think deeply about how they use their money.

As a teenager, I think the most relevant financial topics for my age group are: saving and investing, and planning ahead. These topics would be very beneficial to a teenage audience because the earlier you learn these skills the better.

Teenagers often don’t think too much about spending, so learning to save and invest early is crucial. After all, the sooner you start investing, the better. Planning ahead is also an important skill to learn early because this will let you plan out your future, and really think about how you are managing your money. Saving and planning ahead would also help to prevent impulse buying, and getting into debt early in life.

Wrapping it up: What’s next for Kiwi teens?

Overall, I believe the introduction of financial literacy into the curriculum will be a positive development.

While some teenagers have a basic understanding of financial matters, there’s room for improvement. I’m fortunate enough to have exposure to financial topics at home, but many other teenagers don’t. The proposed curriculum covers foundational topics and addresses emerging issues like BNPL services, which can be risky if not understood. Introducing financial literacy in schools is a big step towards giving teenagers and young adults essential life skills.

Jordan is a high school student in Dunedin, New Zealand. He loves writing across a range of genres, from zombie fiction to articles about financial literacy. Outside of school, Jordan is happiest on a cricket field, in a forest photographing fungi or playing video games with his friends and younger brother.

The Difference Between Everyday Costs in New Zealand and the USA

Wed, 01 Nov 2023 11:00:00 +0000

Standing in the supermarket aisle, I sent my mum a photo of cheese

Nothing special, right? A perfectly normal thing for any Kiwi to do in the age of rising food prices. I was standing in the dairy aisle of a supermarket. To appearances, it was a normal block of cheese. Not a luxury brand or anything. Just ordinary cheddar cheese. A standard 1kg / 32oz block.

Except the supermarket was an Ingles, not a Woolworths or Pak N Save. The brand was Laura Lynn, not Pams or Mainland. I was in Georgia (GA), USA… and my mum was in New Zealand.

The cheese was US$8.98. Plus tax.

“That’s cheaper than our $14 blocks!” my mum replied. “What does it convert to?”

In general, I try to avoid converting prices into NZD when I’m traveling. Que sera sera — prices will be what they will be. It’s enough to compare cheap local options with expensive local options; why worry about comparing prices thousands of kilometers away and totally out of reach as well?

On the other hand, it can be a fun exercise, and it’s always good to have a ballpark figure.

Anything for you, Mum.

A US$8.98 block of cheese, it turns out, is NZ$15. That’s pretty comparable to anything on the shelves at Pak N Save back in NZ.

I admit I was surprised

Based on past trips to the USA, a quick look at prices on the shelves around me, and the ever-escalating cost of living back home in NZ, I thought for sure that USA cheese would be a few dollars cheaper than NZ cheese.

(“It is,” my GA friend said later. “Ingles is pricey. There’s a reason I do my normal grocery shop at Walmart.”)

Hmm.

Curiosity piqued, I went hunting for more cost comparisons

At Ingles, 28oz / 880ml Powerade was on special at 5 for US$5 — ridiculously cheap compared to Pak N Save, where 25oz / 750ml bottles cost NZ$2.79 each.

A box of Nature Valley protein bars? US$4.98 at Ingles, or NZ$5.75 at Pak N Save.

Bagels? Two for US$2 at Ingles, fresh-baked and enormous, or NZ$5.19 for a four-pack at Pak N Save.

And that’s not starting on the low prices and convenience factor of plentiful, easily accessible fast food in the USA. (Chik-Fil-A, I love you… on a ‘sometimes’ basis.)

But let’s zoom out from the food close-ups

I don’t know about you, but they’re making me hungry. Let’s move on to PocketSmith’s Global Spending Map, where we get a bigger window and a wider view of global prices. I’ll stick with the USA for consistency’s sake.

The Global Snapshot draws aggregate data from PocketSmith’s own users — worldwide — to give us a bunch of handy-dandy spendy data. For example:

Groceries

If I compare the average cost of groceries between New Zealand and the USA, leaving both in their native currencies, we see the following:

NZ

Average grocery cost for September 2023: NZ$967.
Up 6% from $914 in September 2023.

USA

Average grocery cost for September 2023: US$619.
Up 2% from $606 the year before.

I spent two weeks in the deep south of the USA, and I can definitely believe the difference in prices. As a single person in New Zealand, I was budgeting $200-$250/month for groceries. A family of four could easily spend $1000/month, even with careful budgeting and no luxury items. My GA friend, on the other hand, would spend far less than that and get far more food for her money.

Transport

I’m interested to see what the Snapshot has to say about this. How much do hundreds of fellow PocketSmithers spend on their transport costs on a monthly basis, and what does it average out to?

NZ

Average transport cost for September 2023: NZ$170.
Up a painful 14% from $82 in September 2022.

USA

Average transport cost for September 2023: US$53.
Down 7% from the year before.

Admission of bias: My view on this is skewed. In New Zealand, I lived in a very walkable town and hadn’t owned a car in years. By contrast, my GA friend lives in a town without public transport infrastructure and has a 40-minute commute to work. Years ago, we had a lengthy conversation about gas prices, ending with the conclusion:

“If the American has $20 and the Kiwi has $20, which one of us can afford to fill our petrol tank?”

(Spoiler alert, it wasn’t the Kiwi.)

The comparisons are endless

The range of categories offered by the Snapshot is immense. To put it another way, the scale at which PocketSmithers track their finances, from the big-picture overview to the tiniest detail, is jaw-droppingly impressive. Personal finance is personal, and a big part of that is the way we categorize our money spends. It has a way of showing what is really important to us.

There are the big-ticket categories. Housing. Utilities. Transport.

The mid-size categories. Charity. Education. Subscriptions.

The smaller, more detailed, far more personal, categories. Netflix. Coffee. Alcohol. Books.

We could be here all day digging into the differences between everyday costs in New Zealand and the USA. And that’s only two countries! What about Germany? Canada? Australia? France? Singapore? The United Kingdom? The options are endless.

The Global Snapshot provides a fascinating insight into household spending habits around the globe. It’s not drawn from some mass-produced static data set by a random consultancy. It’s data years in the making, and it’s personal. I’ve used PocketSmith for a long time. My data is hidden in the aggregated mix. I’m not just sitting here writing about it; I’m in it with you.

All that to say, go and have a play around with it — and when you do, think about the other side of the world, where someone just like you is doing the same thing.

Seven Ways Australians Can Save on Their Car Insurance Bill in 2023

Sun, 22 Oct 2023 11:00:00 +0000

As the cost of living continues to soar, bills associated with owning a car, like car insurance, are becoming increasingly taxing on Australians.

There are some genuinely easy ways to save though. Here are seven tips that take less than an hour to do and can save you hundreds or more over the course of a year.

1. Compare policies

If you’re only to take away one tip, it’s this — make sure you shop around and compare car insurance quotes. It doesn’t take long to do, and it can save you hundreds of dollars.

For example, there was a difference of $1,456 between the cheapest and most expensive comprehensive car insurance policies when we conducted research for the recent Finder Awards.

Make sure you compare policies every year before your car insurance renews. Unfortunately, loyalty doesn’t pay. A Finder survey of 933 drivers found that 55% of people have noticed an increase in their car insurance premiums over the last 12 months.

2. Raise your excess

The excess is the amount you need to pay when you make a car insurance claim. Every insurer has one. You can’t avoid it, except in a handful of circumstances — for example, if you add no excess windscreen damage cover to your policy.

The good news is that the excess can lower your car insurance premiums.

You can do this by choosing a higher excess (most car insurers let you do this when you get a quote). The bigger the excess you select, the less your car insurance will cost.

The catch? If you need to make a claim, you’ll have to pay more upfront. However, if you’re a safe and confident driver, it’s a really easy way to lower your monthly or annual car insurance premium.

3. Only pay for what you need

All comprehensive car insurance policies cover you for damage to your car as well as other people’s property. That’s standard.

However, many go much further than this. Most comprehensive car insurance policies also automatically include cover for things like stolen personal items, a hire car if yours is stolen, and a new car replacement if yours is written off.

If you’re not interested in these benefits, it could be worth looking at a bare-bones comprehensive car insurance policy. Bingle, for example, is one of the cheapest providers on the market, largely because it covers the essentials (like damage to your car and others) and not much more.

Alternatively, it’s worth looking at your policy and seeing if you’re paying for any add-ons you don’t use. When you took out cover, did you add on no excess windscreen cover or a hire car benefit if you’re involved in an accident? You might be able to drop these benefits and get a cheaper policy.

Comprehensive vs third-party

You could also save a lot by taking out a third-party car insurance policy. Third-party policies cover damage to other people’s property. They don’t cover damage to your own car. Only comprehensive cover can do this.

Taking out third-party car insurance over comprehensive cover is a little risky. If your car got damaged, could you afford to repair or replace it? If not, it might be better to stick with comprehensive cover.

4. Restrict other drivers

Insurers including Budget Direct, Everyday, Commonwealth Bank, and St.George all let you restrict the age of the driver on the policy.

If you know that nobody under the age of 25 is going to be driving your car, this is a good option for you. Younger and inexperienced drivers are more likely to be involved in a car accident.

So if you declare that there are no drivers under 25, you will pay less for your car insurance.

5. Park your car in a safe area

If you can park your car in a safe place such as a garage or secure car park, your insurance provider will charge you a little less.

This is simply because you pose less of a risk to the insurer. It’s less likely to be damaged or stolen if it’s securely locked away.

6. Change how you pay your premiums

The majority of Australian car insurers will charge you less if you’re able to pay upfront for the entire year as opposed to monthly.

This can save you $100 or more in a year.

Of course, this option isn’t ideal for everyone; paying 12 months of car insurance all at once isn’t cheap.

Another option is to look at pay-as-you-drive car insurance. These types of policies offer reduced annual fees if you drive less than a predetermined distance each year.

Several big insurers, including Budget Direct and AAMI, offer this type of policy. Others, such as KOBA insurance, use real-time driving data to charge you a consistent per-kilometer rate.

If you don’t use your car that much, say less than 15,000km in a year, this can be a really cost-effective option.

7. Look for discounts

Discounts are great if you’re strategic about how you use them.

Most of the well-known car insurers offer discounts for the first year to incentivize you to sign up. Some give you up to 15% off.

However, after the first year, don’t be surprised if they increase your premiums significantly to offset the first-year discount.

If they do, switch. There’s almost certainly another insurer out there offering a sign-up discount.

As mentioned earlier, loyalty doesn’t pay. Yes, no-claims discounts can save you some money, but it’s usually not enough to justify sticking with the same insurer year in, year out.

Fortunately, comparing and switching car insurance is a lot easier than it used to be. Set aside 30 minutes to an hour once a year, get a handful of quotes, and see who is offering the best deal.

Gary Ross Hunter is an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 5 years, has pored over hundreds of product disclosure statements and published more than 700 insurance articles. Gary has written articles for Yahoo Finance, Real Insurance and Soho, and regularly appears as an insurance expert in publications including The Sydney Morning Herald, news.com.au, Herald Sun, The Telegraph, Explore Travel and Escape.

Retiree Cliff Coordinates Multiple Accounts With PocketSmith

Thu, 12 Oct 2023 11:00:00 +0000

Read how Cliff manages all of his investments and pensions in retirement using PocketSmith.

Tell us a little about yourself?

I’m a retired small business owner used to using Xero at work, with a lot of small investments including securities and pensions.

How would you describe your role in your household?

The one person managing the money through retirement for my partner and me.

What drew you to PocketSmith?

The fact that it linked to the majority of accounts — I hadn’t realized that live feeds from investment companies like Vanguard were possible. And where this isn’t possible I can create my own accounts and maintain them manually.

How long have you been with us?

A year.

What do you primarily use PocketSmith for?

Daily reconciliation of all card and bank accounts with monthly updating of the investments not on a bank feed.

How has PocketSmith changed the way you do money?

I can do everything on it and no longer need to use spreadsheets. Just takes five minutes a day.

What are your favorite features?

Graphs for every account so I can even see how stock market performance is reflected in my investments on a daily basis.
Grouping of accounts so I can separate long-term investments, especially pensions, where I can monitor short-term daily expenditures.
Net Worth graph and ‘rolling year’ option on the P&L sheet.

Got any tips?

Take some time to appreciate the differences from double-entry packages like Xero and read the instructions to appreciate all the features.

What’s the best money decision you made in the past 12 months?

Subscribing to PocketSmith.

Does a Podcast Make a Good Side Hustle?

Tue, 10 Oct 2023 11:00:00 +0000

If you’re a lover of podcasts, there’s a good chance you’ll have wondered ‘Should I start my own podcast!?’ It’s estimated that there are over 3 million podcasts out in the world in 2023, so you’re not the only person to experience that feeling of having something to say. Starting a podcast can be very rewarding and can even open doors to new opportunities, but is it right for you? If you’re considering starting a podcast as a side hustle, here are some important things to consider before you hit record.

Can you make money from a podcast?

The short answer is yes. Podcasts can make money in a few ways. Firstly, you can sell advertising spots to sponsors who want to get in front of your listeners. Secondly, you can crowdfund your podcast by charging an optional small fee for listeners who enjoy your show. You can then choose to provide bonus content for this fee if you want to add extra value to your paying listeners.

Podcasts can also make money indirectly by acting as a funnel to other paid products you offer. Some smaller podcasts don’t make money directly but serve as a marketing tool for a business’ products or services. New customers find the show, enjoy the content, and then later purchase a paid product from the show’s creators.

Okay, but what’s the long answer?

While there’s money to be made with a successful podcast, most require an established listenership, which can take time and resources to build — and unfortunately, there are no guarantees. Even if you do monetize a podcast, it will likely have cost you a lot of time and resources to get to that point.

Is it expensive to start your own podcast?

Making money from a podcast needs to be a balance of input and output. You’ll need to be able to cover your time and expenses that relate to the podcast before you’re technically making a profit.

Setup costs for your podcast can vary depending on the quality of equipment you choose to invest in, and how you plan to produce the show. On the one hand, you can start your podcast for almost nothing by recording on your phone with a low-cost microphone. But your audio quality will be lower than someone using more advanced equipment. And great audio is part of what keeps listeners coming back for more.

You also need to consider where you’ll host your podcast. There is often a monthly fee for your podcast host — that’s the server that pushes your show out to major players like Apple Podcasts and Spotify.

Then, editing. You can edit your show yourself in programs like Garageband or Audacity, or using online services like Anchor. But it can take time to develop the skills and efficiencies required to keep up with creating your show regularly.

At the very least, your show will cost you time to produce. If you have plenty of free time and tons to say week after week, this might not be an issue. But consider whether you have the resources available to either self-produce your show week after week, or pay someone else to help you.

The bottom line: What do you want your podcast to achieve?

When it comes to podcasting as a side hustle, there may be money to be made, but it’s by no means instant, consistent, or without risk. Growing and maintaining a podcast listenership can be difficult, and that can mean putting in a lot of effort without an obvious reward for quite some time.

Ask yourself what you want your podcast to achieve outside of just money-making. Could it help you in your career? Do you have a product or service to sell? Is it something you’re really passionate about? Is there an impact you want to have on the world? Do you have connections that can help you grow and commercialize your show?

Ultimately, there are so many benefits to having a podcast, but it’s not a way to make a quick buck!

World Investor Week: Investing Spotlight With PocketSmither Dora

Thu, 05 Oct 2023 11:00:00 +0000

How did you first become interested in investing?

I didn’t think about actively investing until I joined PocketSmith four years ago! We have an awesome #investing Slack channel at work, and I lurked there for a while before gaining the confidence to ask some questions and start the journey for myself.

Before that, I held some investment-linked insurance plans I bought as a clueless 20-something-year-old in Singapore.

Are you more of a long-term investor or a short-term trader?

Long-term. In my daily life, I value fun, creativity, and spontaneity, but in my investing life, I’m the opposite! I’m methodical, practical, and I don’t tend to chase fads or do anything rash.

What role does diversification play in your investment strategy?

I didn’t set out to intentionally build a diversified portfolio, but at this stage in my life, I’ve gathered a variety of assets, including equities, property, and bonds.

Are there any investing books, courses, or resources that you’ve found particularly valuable?

Aside from our work Slack channel, I have to credit my good friend Ruth Henderson for the incredible wealth of content she puts out on The Happy Saver blog and podcast!

Have you ever considered investing in something purely for the novelty factor?

Not really. My rule of thumb is to only invest in ETFs and not individual stocks. But I sure am having fun living vicariously through my sons’ investment decisions. My younger son, who’s an aviation enthusiast, recently bought some Air New Zealand shares through Sharesies. It was quite lovely helping him weigh up the pros and cons and seeing the excitement on his face when he eventually made the purchase.

What does sustainable investing mean to you?

Sustainable investing means making decisions through the lens of social and environmental responsibility. Essentially, asking myself if my investment decision will help or harm others. It’s not tough to do when you have kids.

How do you handle the emotional aspects of investing, such as dealing with market volatility or making tough decisions during downturns?

I automate my investing, so there’s really no emotion involved at all. I invest a fixed amount every week in a few ETFs, and I re-invest any dividends that come through. I don’t pay too much attention to market volatility because it’s part and parcel of the cyclical nature of investing.

Interestingly, when it comes to property, I find it harder not to get emotional. I think it’s because my husband and I didn’t set out to become landlords (ew, the concept in itself is one that doesn’t align with my personal values). But when we moved to New Zealand, we decided to hold on to our beloved apartment in Singapore and rent it out with the view of someday living in it again. We’re so fortunate to have kind and reliable tenants in it, but the administration that comes with managing a rental from overseas can sometimes be stressful!

Which three emojis would you use to describe your current portfolio?

🌱🌏🧘🏽‍♀️

Disclaimer: The information provided on this blog about investing is for general informational purposes only and should not be considered as financial advice. PocketSmith are not accountable for any actions or decisions made based on the information presented.

Migrating From Money Dashboard to PocketSmith

Wed, 04 Oct 2023 11:00:00 +0000

Welcome to PocketSmith!

We’re thrilled to have you here, exploring this guide! Transitioning to PocketSmith is a breeze, and we’re here to assist every step of the way. This post will guide you on importing your transaction data swiftly, setting up budgets with insights from your past spending, and reconnecting your accounts to bank feeds.

A little about us: Since our inception in 2008, we’ve stood fully independent and self-funded. While the landscape of personal finance tools has seen many players come and go, our dedication lies in crafting top-notch tools we’re proud to use ourselves. We’re here for the long haul.

Let’s clear the air: PocketSmith stands as a premium tool at its core. Our revenue comes from patrons like you who value quality software and willingly invest in it. Rest assured, we believe in transparency and fair play; there’s no tricks, kickbacks, or selling of user data here. This isn’t just a claim either – it’s baked right into our Terms of Service.

While we do offer a free plan catering to basic needs, we want to note that bank feeds come exclusively with our paid subscriptions. If a wholly free tool with bank feeds is what you seek, you might want to explore further. But always remember, if you’re not paying for it, you are the product.

We’re excited for you to get kicked off, so let’s begin!

Step 0: All the steps listed for busy people

To get you up and running as quickly as possible, we want to list out all the steps in this guide right up front. If you’re confident with personal finance tools in general, this might be all the information you need! More detail is provided in the article below too, but let’s whip through all the steps first up.

Export your Money Dashboard transaction CSV file.
- Login to Money Dashboard Neon or Money Dashboard Classic depending on which version you use.
- Go to the Transactions Page.
- Click Export CSV for Neon, or Download for Classic.
Import your Money Dashboard CSV file into PocketSmith using our Express Import tool.
- If you’ve already imported some data or have previously linked up bank feeds, select “Delete all data before importing”. This will avoid any duplicate accounts and transactions.
Connect your bank feeds from the Manage Feeds page, linking up your feed accounts to the accounts imported from Money Dashboard.
Head to the Budgets page and try out the auto-budget tool by clicking on the link in the toolbar.
Look around the other features of PocketSmith, including the customizable dashboard, the forecast calendar and the Income & Expense report.

So with that overview presented, let’s dive into a bit more detail!

Step 1: Download your CSV data file from Money Dashboard

With both Neon and Classic versions of Money Dashboard, you can download a CSV file of your transaction data. Our understanding is that this doesn’t contain a heap of different data, however it is sufficient to get the key parts of your transaction history in place in PocketSmith – account names, transactions and categories should all be included. Follow the steps below to get started:

Sign in to your Money Dashboard account, getting into either the newer Neon or the Classic version of the app. If you’re not sure, check here to work out which version you use.
Navigate to the Transactions page within the app once you’re logged in.
For Money Dashboard Neon, click the Export CSV link located on the top right-hand corner of the page to download your CSV file.
For Money Dashboard Classic, click the Download button that appears towards the top of the Transactions page, next to the page title.
Once your CSV file has been saved to your computer, you’re ready to move on to the next step!

Step 2: Import your Money Dashboard data into PocketSmith

After you’ve created your PocketSmith account, you’re ready to easily import your Money Dashboard CSV file. The handy import tool will set up your categories, transactions and accounts, just as they were in Money Dashboard.

1. Head over to the Express Import page

If you’ve just created your PocketSmith account, you’ll be shown the Welcome screen. Click the large Bring your own data button on the right of the page, then Move from another app button. This will show a popup with a number of logos of other apps – click the Money Dashboard logo.

Import from Money Dashboard button from the Welcome page

If you don’t get shown the Welcome page because you’re already in the process of setting up, you can directly access the Money Dashboard express import tool. Once your file is uploaded, you’ll be given an option to remove any existing data before finalizing the import.

2. Upload the downloaded CSV file to the page

Click the button on the import page and then choose the file you downloaded from Money Dashboard.

Import from Money Dashboard confirmation

If there’s already data in your account, you’ll see an additional checkbox that says “Delete all data before importing.” If you’ve previously connected bank feeds but now aim to import your Money Dashboard history, it’s wise to choose this option. This prevents any data duplication. While your linked feed accounts will be removed, the feeds will stay active and can be relinked to the accounts you’re bringing in from Money Dashboard.

The delete data option shows if you have data in your PocketSmith account

After confirming your options and pressing the “continue importing” button, you’ll see a progress bar similar to the one depicted below. This will then begin importing your accounts, transactions and the categories associated with each transaction.

In progress import from Money Dashboard

Be aware that if you have a large number of transactions, the import might take a bit of time. Don’t worry if it seems to stall, particularly during the “Calculating running balances” phase at the end of the import for each account. Just keep your browser window active and maybe it’s a good time for a coffee break!

3. Set your banks and balances

Because Money Dashboard doesn’t contain bank/institution names nor account balances within their exported CSV files, you’ll need to enter what bank each account belongs to, and enter the current balance for each of the accounts.

The account balances will be brought up to date later when you connect bank feeds to these accounts. So if you intend on connecting bank feeds straight away, it won’t be essential to get this completely correct, unless you want to see your correct Net Worth right away.

It’s a good idea to enter the correct bank/institution names for each of the accounts imported however, as this’ll help with linking up the correct bank feed account with the correct imported account when you get your bank feeds connected up next.

Setting your bank name and balances

4. Rejoice and check out PocketSmith’s features

Great! Your Money Dashboard data has been successfully transferred to PocketSmith. Feel free to dive into your new Dashboard or explore some of the other functionalities under Reports.

Money Dashboard data import complete

Now’s a great opportunity to set up feeds for your account and connect them to the accounts you’ve just imported. PocketSmith is open banking-ready, and you can connect to your banks via our PSD2-compliant data provider Salt Edge for most accounts in the UK, with Yodlee filling in the gaps that the PSD2 legislation doesn’t cover. You’ll find more details on this in step 4 below.

Step 3: Start your budgets and enter your bills based on your average spending

What’s ace about budgeting in PocketSmith is that when you input your regular budgets and bills, you’re creating a cash flow forecast for your accounts. This allows you to preview anticipated bank balances at any future date, which is fantastic for planning.

In PocketSmith, every category can possess its own budget — be it an income or expenditure goal for a specific category, set for a designated budgeting period. Budgeting within PocketSmith is supremely adaptable, allowing you to adjust each budget to perfectly match your circumstances. Fancy a deeper dive? Have a gander at our budget tips and tricks over on our Learn Centre.

For a quick kick-off, the auto-budget tool is a brilliant choice, especially if your transaction data is spot on. It examines your entire categorized transaction history, sets a fitting budget frequency, and establishes a benchmark based on your past expenditures. Once you’ve got your auto-budgets in place, you can further fine-tune them as you see fit. Let’s dive in!

1. Go to the Budget page from PocketSmith’s main menu.

2. Click the auto-budget tool link, from the toolbar above or the section at the beginning of the Budget page.

The budget page immediately after import

1. The auto-budget popup

This action will bring up the auto-budget tool prompt. Just click the prominent green Start auto-budget tool button to initiate the budget computation. How long this takes will vary based on the number of transactions you have.

The auto-budget popup showing the confirmation button

2. Your automatically created budgets

PocketSmith will display your auto-generated budgets in the pop-up. If there are any budgets under a category you’d rather not allocate funds to – like a hefty budget for Transfers – just hit the cancel dash symbol visible beside the budget when you hover. This action will delete the auto-budget for that specific category, like the “Household” budget showcased in the image below.

Automatically created budgets, showing the removal icon for "Household" budget

3. Your budget analysis

Once you exit the pop-up, an analysis reflecting your freshly crafted budgets will be presented. To modify a budget, tap the three-dot menu adjacent to each budget and select “Edit/Delete budget”. For an in-depth historical overview of a particular category’s budget, just click on the category name.

Created budgets shown in the main Budget page

Drilling down into the historical analysis for the Groceries budget

4. Your budget in the Calendar

After reviewing your budget analysis, navigate to the Calendar page to visualize your budgets in an alternative layout. If you wish to tweak some budgets post auto-budgeting, you can adjust either every occurrence of a budget or just a specific one. Simply click a budget in the calendar to edit it, and follow the provided guidance. This page also highlights one of PocketSmith’s standout features — the seamless blend of your budgets and current balance to project your financial future!

The PocketSmith calendar, showing budgets and the forecast graph

We’ve just touched upon the vast capabilities of PocketSmith in terms of budgets. Moving forward, trust your instincts and turn to our Learn Center whenever you require guidance.

Now, let’s connect the accounts you’ve imported to a bank feed to begin fetching new data.

Step 4: Connect your bank feeds to your accounts

Within PocketSmith, bank feeds are an exclusive premium feature available only with paid subscriptions. After you’ve upgraded from the Free plan, start by visiting the Manage Feeds page.

If you’re adding UK-based bank feeds, you’ll be able to use our PSD2-compliant data provider, Salt Edge to add open banking feeds. To add these feeds, just keep an eye out for the “via Salt Edge” tag next to your bank in the feed results.

Look for the via Salt Edge tag to identify open banking feeds

For guidance on setting up your feeds, you can refer to our Learn Center’s guide. The process is designed for simplicity, especially if you’re familiar with bank feeds from Money Dashboard.

Once you’ve connected your feed, the subsequent move is to associate your feed accounts with the ones you transferred from Money Dashboard. This ensures you won’t encounter any duplicate transactions or accounts. For a step-by-step, check out this tutorial on our Learn Center.

Step 5: Dive into your refreshed personal finance journey

Kudos, you’ve made it! We wholeheartedly believe you’ll relish navigating through PocketSmith and harnessing its adaptable features. Our passion lies in refining this craft, and your feedback means the world to us. Don’t hesitate to reach out — our stellar support team is always at your service.

Tales of how PocketSmith has revolutionized personal finance management inspire us daily. We’re eager to soon hear your unique story and success!

World Investor Week: Investing Spotlight With PocketSmither Nic

Wed, 04 Oct 2023 11:00:00 +0000

How did you first become interested in investing?

Back when I first started university! I initially became interested long before I actually started. I definitely wish I had started straight way, but was lucky that by the time I was keen to give it a crack Sharesies came on the scene meaning I could invest whatever I had spare at the end of the week.

Being a student and having the important costs of a $7 bottle of Fat Bird wine, with a $5 corkage fee at the BYO dinner, this was often a whopping $2.80.

But the habit of it is what has got me to where I am today!

Are you more of a long-term investor or a short-term trader?

Long-term for sure! Mad props to short-term traders, but I don’t have the wits or the stomach for it. Set, forget, ride them waves, and still enjoy life along the way is my goal.

What role does diversification play in your investment strategy?

When I first started learning about investments the concept of diversification was pretty drilled in, and importantly so!

Scrolling through the multitudes of different options for investing can definitely be pretty intimidating, but you start to pick up tips and tricks and things to look for. There are a huge number of diversified funds out there which make it easy to invest in a diverse portfolio in one nice hit!

Are there any investing books, courses, or resources that you’ve found particularly valuable?

My first introduction to the power of getting on top of your finances was The Barefoot Investor, though I never actually read it — ironically, I couldn’t afford it. But there were so many great articles out there on the relevant principles, so I mashed up my own version which has evolved with me through to today! PocketSmith even has some articles on this, which are excellent.

My interest in investing in particular was ignited by Canna Campell and her passion for creating long-term, sustainable passive income for that financial freedom.

And then it goes without saying that the She’s on The Money podcast and the community they have created continue to be a really great knowledge and inspiration source!

Have you ever considered investing in something purely for the novelty factor?

I might sound pretty boring here but nope 🤣

It goes back to the whole ‘set and forget’ — investing for me is about long-term wealth building, and I am happy to let my chosen diverse funds do their thing.

What does sustainable investing mean to you?

This question can be pretty nuanced! On one hand, there is obviously considering the ethical and sustainable choices of where you are actually putting your money and being conscious of environmental and social repercussions. On the other, you could look at this question as the sustainability of being in this for the long term, so only invest what you know you don’t need in the short term.

I think it is important to find what feels right for you but also to lean into the beauty of investing being fluid — as you grow and your priorities change, so can where * * you choose to contribute your money and how much!

How do you handle the emotional aspects of investing, such as dealing with market volatility or making tough decisions during downturns?

I think it is important to have a clear underpinning understanding of why I am investing. If I know it is for the long term, the ups and downs along the way are a part of the process. I set an amount to invest from each pay cheque; whatever the market is doing doesn’t matter, the same amount goes in each week. Over the long run, I have faith I will get to where I want to be!

Which three emojis would you use to describe your current portfolio?

🙈 🌱 🙌

World Investor Week: Investing Spotlight With PocketSmither Olav

Tue, 03 Oct 2023 11:00:00 +0000

How did you first become interested in investing?

It started in the depths of the global financial crisis in 2008-09. It was the first time that I had really felt the impact of macro-economic conditions on my personal microeconomics which jolted me into taking an interest in the wider economy and how our personal success and failure are so dependent on the whole. It’s all connected man!

Around this time I would often walk past a second-hand bookshop on my way to my favorite coffee shop. In the window was a book that kept catching my attention every time walked past, but I wasn’t one to rush into things so I let the book call to me for a while before I responded, spent my money, and then read it over coffee (I was very frugal at the time…but I probably spend more money on the coffees than I did on investing books, if I had used PocketSmith I might have noticed this).

The book said, among many other things, that a stock market crash is actually just a sale. Hmm… there seemed to be a crash going on around me. After that I did a lot of reading, watching the markets, and talking to anyone interested who had invested. The book was ‘Rich Dad, Poor Dad’, the classic beginner investor book. I didn’t like everything I read in the book; it had some great investing advice, but philosophically, it lacked a social and environmental conscience.

Are you more of a long-term investor or a short-term trader?

Always long term, I still have the first shares I bought in 2009. I’m sure the company deeply appreciates my patience. Though to be honest, I’m sure most new investors secretly think they can outsmart the market and get rich quick. Yeah, nah. Look for real value then wait.

What role does diversification play in your investment strategy?

I’m a little bit diversified, I like to hand-pick my investments because I’m still enjoying the process and I think it will give me more opportunity compared to full diversification via a fund. I figured that if I wanted true diversification and the security that comes with it, I would buy into a fund.

Are there any investing books, courses, or resources that you’ve found particularly valuable?

As mentioned above, ‘Rich Dad, Poor Dad’ certainly got me started and it is useful when you are new to investing concepts. If you are totally new to money management, The Barefoot Investor is a great first book to get you started on your journey.

The resource I have found the most useful over the long term is stock screeners. There are thousands of investing options out there, and once you decide on what you think makes a worthwhile investment, you can set your parameters and get a shortlist to consider in detail. For example, you can filter by industry, price-to-earnings ratio, share price, etc. It really helps to narrow down the possibilities and keep you focused on the factors that matter to you and avoid getting distracted by shiny companies that don’t actually have the fundamentals you might be looking for. A lot of companies will have great PR and sell their story well but may not have achieved anything tangible yet. Sadly, great intentions to change the world are not the same as great abilities to do so.

I have found the stock screener on Investing.com useful but more recently I have enjoyed the stock screener as part of the app Simply Wall St as it also provides some in-depth analysis of the companies I’m looking at which gives me a bit more confidence about my choices.

Have you ever considered investing in something purely for the novelty factor?

Yes briefly, but thankfully I thought better of it. Investing in something when there is too little chance for return is really just a donation, which is fine if you are happy with that.

What does sustainable investing mean to you?

Social, environmental, and economic, the triple bottom line, also now known as the more catchy 3 P’s: People, Planet, and Prosperity. If one of the three is neglected or abused, the system will eventually fall over.

How do you handle the emotional aspects of investing, such as dealing with market volatility or making tough decisions during downturns?

When things get bumpy, zoom out, look at the long term, and avoid knee-jerk reactions and decisions. If you look at a 40-year average of the stock market, each crisis looks small and temporary. You are most at risk of making bad decisions at the top and at the bottom of the market. When the market is booming you might feel flush with wealth and opportunity and take bad risks; when the market crashes, you might exit good companies when you should just wait.

Make sure that you are diversified enough that you are not too badly affected by the fluctuations of individual companies. It is a good idea to apply the ‘can-you-sleep-at-night’ rule. If you are losing sleep over your investments, chances are you are taking too much risk.

Which three emojis would you use to describe your current portfolio?

💔🔬🧘

World Investor Week: Investing Spotlight With PocketSmither Chloe

Mon, 02 Oct 2023 11:00:00 +0000

How did you first become interested in investing?

I think every elder millennial is subconsciously drawn to investing when given the chance to think about how our later years are probably going to look quite different financially than those of the generations before us. Apart from enjoying imagining myself as a stereotypical 80s Wall Street investor with massive shoulder pads and a phone the size of my head, I really resonated with the growth nature of investing. While I could stow away thousands in my bank account to be rewarded with a paltry amount of cents per month, investing gives me the ability to actually grow my wealth over time with compounding interest and reinvestments.

Are you more of a long-term investor or a short-term trader?

I’m definitely a long-term gal. I envy and admire the people who are skilled at making short-term gains, but I just don’t have the patience (or brains) for it. I’m a long-term investor because that’s where my goals lie — investing is part of building my wealth for the future. I don’t intend to touch that money for a really long time.

What role does diversification play in your investment strategy?

Variety is the spice of life and all that. I have a mix of ETFs and individual company shares, both local and global. I’ve already been exposed to the importance of sharing the love around — I think my S&P500 ETF might be the only piece in my portfolio that’s keeping it from bottoming out at the moment!

Are there any investing books, courses, or resources that you’ve found particularly valuable?

I’m super blessed that I work somewhere filled with money geeks. Being able to talk to them about the realities of investing, or even just passively observing their conversations and thoughts about what’s going on in the stock market, has been a huge boon to my investing literacy.

I’m also lucky to have access to a great range of NZ-based investing platforms like Sharesies, Hatch, and Kernel. When I was starting to dip my toes into investing, I was able to get a really solid foundation by going through their extensive learning libraries.

Have you ever considered investing in something purely for the novelty factor?

I mean, wasn’t there a small part of all of us that wanted to be a part of the GameStop craze and get some sweet Reddit cred?

What does sustainable investing mean to you?

There’s always room for improvement, but I do try to take sustainability into account when choosing what to invest in. The definition of that may change depending on what my goals and risk tolerance are at the time, but I do feel like my portfolio is more well-rounded when I’ve evaluated if I want an investment opportunity to be value-driven or values-driven.

How do you handle the emotional aspects of investing, such as dealing with market volatility or making tough decisions during downturns?

I think a healthy amount of pragmatism and distance helps here. Employing strategies like dollar-cost averaging is a fairly easy way to remain objective. And while online investing platforms make it easier than ever to check up on your portfolio on the slightest whim, I really do make a point to only look at it like once a month. Seeing it bounce up and down on a daily basis only serves to stress you out, while averaging those fluctuations out over a month or two makes you realize how negligible they are.

Which three emojis would you use to describe your current portfolio?

💰📉🥲

Book Review: "The Sharesies Guide to Investing"

Sun, 01 Oct 2023 11:00:00 +0000

If you’re living in New Zealand and have paid attention to the personal finance space, you’ve probably heard of Sharesies as they blasted onto the scene in 2017. Over half a million people have created accounts and begun to invest using their platform with as little as a few dollars a week. This democratization of investing (similar to other platforms that allow fractional share investing) has given rise to a new class of retail investors and allowed them to build their future in a way that wasn’t possible with traditional stock brokers.

Not ready to rest on their laurels, founders Brooke Roberts, Leighton Roberts, and Sonya Williams have come out with The Sharesies Guide to Investing: Your roadmap to financial freedom. As one would expect, it targets those who are brand new to investing. It provides an excellent exploration of the basic investing terms, what you can invest in, diversification, coping with downturns, impact investing, and many other aspects of the financial world.

A few of my favorite takeaways

Dollar-cost averaging and compounding interest are your friends

Like Sharesies itself, a large part of the ethos in this book is the idea that you don’t need to be wealthy to invest. Even when you’re on a tight budget, consistently investing even $5 per week can add up in the long run, and this is a point that is hammered home over and over again in this book. Sprinkled throughout are graphs that demonstrate how compound interest can make your returns skyrocket — it’s the difference between a hundred thousand dollars by the time you retire and hundreds of thousands. Investor stories from Sharesies users at all income and investment levels are scattered across each chapter and help humanize the idea of actually making investing a consistent part of your financial life. It’s all well and good reading about compound investing and dollar cost averaging, but hearing these stories about people who’ve implemented those habits and improved their financial lives gives context and encouragement to those who haven’t yet started.

Exploring initial public offerings (IPOs)

I enjoyed the section covering what you can invest in, especially the discussion surrounding initial public offerings (IPOs). An IPO is when a company first lists its shares on a public stock exchange and becomes available for purchase to the public. They have always held a certain appeal to retail investors, especially within the tech sector in the past couple of decades, where the prospect of extreme growth like that of Facebook and Google may be possible. Everyone wants to get in on the ground floor of these companies, as seen by the number of Unicorns (private companies valued at over $1 billion) funded by venture capital. The increase in SPAC (Special Purpose Acquisition Companies) allows private companies to merge with a company already listed on the stock exchange and essentially makes the process of an IPO much easier. But while this makes it easier for companies to IPO, it doesn’t necessarily mean it’s great for the investor — roughly 90% of companies that used SPACs to go public in 2020-2021 wound up trading lower than their initial offering price. Given how easy it can be for the newbie investor to get swept up in all the hype on social media, I think it’s important to discuss the finer details of an IPO and the risks associated with investing in one.

By covering the basics, the authors offer a ‘roadmap to financial freedom’, giving an accessible starting point to those who hadn’t ever considered investing as something in their future and thought of it as something reserved only for the wealthy.

Coping with downturns

One of the most important things a new investor should learn is how to cope with an investment that’s losing value and how to know when to sell. Selling too early for fear of a market crash or selling and locking in your losses are two of the main mistakes investors make and the authors do a great job laying out how to best cope with your losses and what your thinking should be when it is time to sell. They’re pointers I wish I’d had during the stock market crash when Covid-19 hit in 2020. Essentially, any losses you have in your portfolio aren’t losses until you lock them in by selling — it’s a mistake that many new investors make, myself included. As the book also mentions, it’s really important not to get caught up in the hype or echo chambers of sentiment online. When the Covid crash was at its worst, the media was hyping it up to be the end times, when in reality the stock market recovered after a month and went on to rocket past the previous high. It’s important to think about the fundamentals of the company and whether the reasons you bought the stock are still sound or if it’s just market conditions that are causing you to sell.

The rest of your financial life

While this book primarily focuses on aspects of investing, I’m glad that it touches on the broader aspects of personal finances in the final couple of chapters. Investing is an essential tool for your future financial freedom, but it’s not possible without laying out the groundwork of budgeting and getting rid of debt. It also touches on the importance of discussing finances with your family. Studies have shown that children growing up in wealthier families that teach healthy financial habits end up years ahead of their peers coming from lower-income households who may not have that opportunity. While only one of the reasons why wealth and poverty can be generational, increasing youth financial literacy is one of the more actionable barriers for us to break.

While there are mentions of the Sharesies investing platform throughout the book, it never feels as though the book is merely an advertisement for it. It’s valuable to readers, regardless of the platform they choose to implement their investment knowledge. While you might think that a book written by Kiwi authors and founders of a Kiwi investment platform would be skewed heavily towards a Kiwi audience, you wouldn’t be entirely correct. Yes, there is a focus on New Zealand investment, and yes there are local cultural influences, however, the investing techniques and strategies are solid for people all over the world.

All in all, The Sharesies Guide to Investing presents an excellent introduction to the world of investing and how a few small habits maintained across decades can help set you up financially for life. Although decidedly foundational in the information it conveys, that’s not a strike against it — it’s a book for beginners after all. By covering the basics, the authors offer a ‘roadmap to financial freedom’, giving an accessible starting point to those who hadn’t ever considered investing as something in their future and thought of it as something reserved only for the wealthy.

It’s not the most in-depth personal finance and investing book I’ve ever read, and it won’t make you a master investor overnight, but it is one that I would happily recommend to any of my friends who perhaps haven’t yet dived into the investing world due to a lack of knowledge. If you have teenagers at home who have an interest in money, this may be an excellent way to set them on their investing journey. Like the authors, I think it’s a good thing that investing is becoming more accessible than ever — the main thing you need to do to build your financial future is to just make a start, and this book may be the right tool to help you do just that.

Book cover used in banner image from Paper Plus.

Anton is PocketSmith’s Marketing Coordinator and has just completed his BComSci degree in Marketing and Ecology alongside working at PocketSmith. Anton started his investing journey in high school and hasn’t looked back since. He’s a strong proponent of index investing, although he still likes the thrill of individual stocks on the side.

Creating a Financial Plan for Divorce: How to Make Smart Decisions During This Transition Period

Wed, 27 Sep 2023 11:00:00 +0000

Here are a few tips to consider that will help you make smart financial decisions during the divorce process.

Evaluate your needs moving forward

When creating a financial plan, it’s essential to understand your needs moving forward. What will be changing for you as a result of this divorce? Are there any changes to your income? Do you need money for relocation, separation of shared property, or debts? Will you need new insurance coverage?

Creating an honest assessment of your finances allows you to be better prepared for any upcoming expenses. Start by creating a budget that regulates all the costs associated with divorce, including legal fees, child support, and alimony. Once you understand your financial needs, you can forge ahead and create a personalized plan that works for you.

Take an honest look at your assets and liabilities

During your divorce, you’ll want to make a comprehensive list of all your assets and liabilities. This means not just your bank accounts and retirement plans, but also any property or investments such as IRAs, stocks, life insurance, Bitcoin, high-yield savings accounts, and certificates of deposit that could be affected by the divorce.

It’s crucial to be upfront about any debts or obligations you might have, and not overlook the value of your assets. This will give you a better understanding of your financial situation as you navigate the divorce proceedings.

Set goals for yourself

Now that you’ve evaluated your financial situation, it’s time to set some goals. Do you want to buy a new home? Are you thinking of starting a business? Setting financial goals for yourself can help you stay motivated and focused on your future. Make sure the goals are realistic, and create an action plan that helps you reach them.

Consult financial professionals

Due to the complicated nature of divorce, it’s important to work with professionals you trust. Speaking with a financial advisor before making any significant decisions allows you to evaluate your current situation and navigate the financial implications of your choices. A financial planner can also help you craft a plan that matches your new financial situation and provide emotional support throughout your divorce process, which could prove useful if you end up in a contested divorce.

If you and your current spouse share a financial planner, you may want to consider hiring a new one for yourself. Doing this allows you to hire a financial planner who specializes in divorce and understands your state’s or country’s laws concerning divorce and marital and separate property. You can also avoid dealing with a conflict of interest should your current shared planner have an unwitting bias in your spouse’s favor and put fresh eyes on finances that could help spot any unnoticed issues.

Create an emergency fund

Divorce is expensive! Therefore, preparing for unexpected costs is pivotal for your current and future financial security. Consider setting up an emergency fund for financial cushioning in case of emergencies. Even if it’s a small amount, setting some money aside can provide peace of mind during this challenging period. Below are some examples of how you can save and acquire more money:

Set savings goals
Get a second job
Pay off high-interest debt
Track your spending habits
Set up automatic transfers from your checking to your savings account
Cancel unnecessary subscriptions
Have a garage sale

Be patient

It may take some time to adjust to your new financial reality, so be patient and avoid rushing into any decisions. Take things one step at a time, and make sure each decision is right for you. Doing this is especially important when considering your assets and debts during your divorce so you can get your fair share of both.

Although it can be difficult to manage finances during such an emotionally charged time, these tips can help you create a solid financial plan that will help secure your future. So, take the time to understand your needs and consult with professionals as needed. With some planning and patience, you can stay on track financially during and after your divorce.

Stay positive

Remaining hopeful during your divorce can be challenging. However, maintaining a positive mindset will benefit you and your family as you progress in life. Though there may be times when you feel like everything is falling apart, a solid financial plan will help you rest assured that your future is secure. As you maintain a good attitude and dedication to your goals, you’ll overcome this challenging time and come out on top.

Key takeaways

Consider your needs moving forward when creating a post-divorce financial plan.
Take an honest look at your assets and liabilities during the divorce process.
Set realistic goals for yourself and create an action plan to reach them.
Consult with financial professionals before making considerable decisions.
Be patient with yourself, and don’t rush into any decisions.
Create an emergency fund to prepare for unexpected costs.
Stay positive throughout the process.

Divorce is a trying time, but with some dedication and planning you can guard your financial success. As you take the time to consider your needs, set goals for yourself, and consult with professionals when needed, you can move forward confidently after your divorce.

Mark M. Childress is the Founding Attorney of the Law Offices of Mark M. Childress. Mark is a fierce legal advocate who uses his extensive litigation experience to help clients with various family law needs. Mark and his team have garnered a stellar reputation for providing customized one-on-one services and for vigorously pursuing the best possible outcome for the clients they represent.

From the Trenches: One-Year Retrospective on CDR Open Banking in Australia

Mon, 25 Sep 2023 11:00:00 +0000

The future is bright for CDR open banking, but having an honest conversation about the state of CDR open banking as it applies in a personal finance context is essential — particularly during this time when the regulators are setting their sights on a world in which traditional bank feeds via screen-scraping can be deprecated.

Introduction
Barrier 1: Enduring consent doesn’t exist yet
Barrier 2: Too many banks aren’t training their staff
Barrier 3: Data inconsistency between online banking and CDR data
Barrier 4: CDR is incomplete for the financial sector
Despite it all, the future is bright

Introduction

Last month, we attended Intersekt 2023, a fintech conference in Melbourne. Hon Stephen Jones, the Minister for Financial Services, delivered the welcome address. The clear focus was on the CDR, which was exciting to hear for both ourselves and Basiq, our data partners in Australia. It was clear that delivering quality data to consumers is a top priority for Treasury.

Likewise, the passion shown for CDR open banking data sharing was high amongst those at the coalface — ourselves, our contemporaries in personal finance software, and our data partners. We use this data to provide value to Australian consumers.

In this piece, we’ll discuss the barriers that stand in the way of CDR open banking being able to fully replace traditional screen-scraping feeds in PocketSmith. We hope this will allow you, the reader, to decide what sort of feeds you use in PocketSmith.

Barrier 1: Enduring consent doesn’t exist yet

We recently discovered that consent isn’t enduring under CDR open banking. This means that your consent to share your data between your bank and PocketSmith expires every year. Our understanding was that consent could be extended when required, and that many of the tools to enable extension had been documented by Basiq. In addition, extending consent is a straightforward process in other geographies that have introduced open banking (such as the PSD2 in the UK and Europe), so we assumed that the same would hold for the newer CDR open banking.

Sadly, though, extending consent does not work. For this reason, we’ve chosen to fall back to a defensive position — allowing consent for data access to expire after a year and guiding the user through re-authorizing these expired feeds.

We’re trying to understand why enduring consent is non-operational at this stage. It could be a deficiency in the current CDR legislation, which means that it’s impossible to extend Basiq’s consent to access your bank data. It is possible that enduring consent is simply under-tested and under-served because the majority of CDR use cases (e.g. credit and loans) don’t require it.

We understand the inconvenience of re-authorizing your feeds, especially when the process of establishing connections is unreliable with some banks. We’re sorry that the experience isn’t as good here as with traditional screen-scraping bank feeds, where enduring consent is the default.

We’re smoothing out the process by notifying you when your connections will expire and then giving you a straightforward method for reauthorizing. Our confidence is high that this will improve when September 2024 rolls around!

Barrier 2: Too many banks aren’t training their staff

If an error occurs during the CDR authorization process, customers are given a phone number to call to resolve issues.

When they do call, however, they might be told by bank staff that no third party data sharing exists, and further to this, that staff have no knowledge of the CDR.

So far this year, customer service staff from seven banks — from medium to some of the Big 4 banks — have spread this incorrect information to their customers.

This is despite these very same banks having sections of their website discussing CDR open banking data sharing available to the public.

In one case, one of our users reported that when they weren’t letting the bank off the hook, they and the customer service representative started laughing at the ridiculous stand-off they found themselves in.

In another, a bank has sent multiple letters to a customer in response to a complaint, on their official letterhead, stating that third-party data sharing under the CDR doesn’t exist.

This misinformation and demonstrable lack of knowledge erodes consumer trust in the CDR. All public information campaigns on the CDR go to waste if a customer calls their bank only to be told that third-party data sharing is unsafe and not allowed. Uptake of the CDR is based on mutual trust, and the banks are currently breaching that trust.

We’re raising these issues as they come up via Basiq, which are pushed through to the upper echelons of the bank. Unfortunately, the message is still not getting through, and we’ve heard more of the same from our customers in the past week alone.

Barrier 3: Data inconsistency between online banking and CDR data

It’s become apparent in the past year that the information users see in online and mobile banking differs from what is delivered via the same bank’s CDR APIs.

These range from differing transaction dates to more significant issues such duplicate and missing transactions, and generic transaction descriptions that make money management nearly impossible for people who transact often. For example, you might be given an “APPLE PAY” transaction, without any other context.

We believe this difference is because the data exists in silos: The data displayed with online and mobile banking versus the data delivered over the CDR. Without regulation covering the need for consistency between their platforms, screen-scraping will often win out in terms of data quality, because the data is retrieved directly from the online banking platform that the consumer uses.

This further erodes consumer trust in the CDR, as users see online banking as the verified source of truth, and yet that same data is delivered with different fidelity and details when accessed over CDR open banking.

Fortunately, we’ve been told that the ACCC is focusing on data quality for the remainder of this year, and we’re raising these issues with banks via Basiq when they get brought to our attention. However, it takes some time for fixes to be put in place for these issues, if indeed fixes will ever come without regulation around data consistency. There is massive variation in banks’ responsiveness to these data quality issues.

Security concerns notwithstanding, these are some of the reasons fintechs are still backing screen-scraping. Over the years, screen-scrapers have developed extensive systems and internal consistency checks to ensure that data anomalies are dealt with because of the inherently volatile nature of gathering financial information directly from a website.

When CDR was launched, the expectation was that these systems and checks would no longer be required. Transactions now had internally consistent IDs, and data wouldn’t spontaneously change — so the assumption was that the tight-rope walk of consistency checking would be a thing of the past.

Unfortunately, this wasn’t what the banks delivered with their CDR data. IDs would be missing or would change, or the data would change between one sync and the next. This means that data providers like Basiq are faced with back-tracking on the assumptions of a clean pipe of transactions via CDR and re-implement the consistency checks to prevent duplicate and missing transactions. This is still a moving target, and improvements continue to be made as new missing and duplicate transaction issues crop up.

The lack of data consistency between CDR data and online banking means traditional screen-scraping feeds win out here. These technologies retrieve consistent data directly from the online banking interface and are built defensively to address duplicate and missing transactions.

Barrier 4: CDR is incomplete for the financial sector

Australians still cannot see all of their financial information in PocketSmith through the CDR because only the banking sector is covered, leaving out vast swathes of the financial industry.

Non-bank lenders were skipped in the first iteration of the CDR. This means data from these lenders — from credit card providers like American Express to dedicated non-bank home loan providers like homeloans.com.au — needs to be brought in via screen-scraping. Superannuation accounts — a core part of most Australians’ finances — can’t be connected via CDR open banking.

While some banks make business and trust accounts available under their CDR program, most avoid doing so even though the data is mostly the same as banking data: Accounts, balances, and transactions.

This means that people have an incomplete picture of their finances unless they fall back to traditional screen-scraping bank feeds, dramatically impacting a key use case for CDR data.

This is a poor introduction to the CDR for newcomers, who will find an incomplete regime that still requires a variety of methods — including screen-scraping — to access their data.

Despite it all, the future is bright

We remain optimistic about the CDR in Australia. The intent is great, most stakeholders are passionate, and the promised outcomes are coming to fruition. The CDR will continue to give consumers secure access to their banking data.

We’ve spent a year in the trenches, and these are the insights we’ve gained. We believe it’s important to bring you on the journey because we want you to feel secure in the knowledge that the issues you’re experiencing are not unique, that we recognize the flaws in the system, and that we’re doing everything we can to improve it.

The CDR is the coming together of different sectors: The government, the financial industry and fintechs, to produce something positive for all Australian consumers. These teething issues are the price of progress.

We’re hopeful that at our two-year retrospective, we’ll look back upon these times as a mere bump in the road. In the meantime, we will push for better-informed bank staff, simple methods of extending consent, and high-quality, consistent data available for all sectors of the financial industry.

When this happens, we’ll fully support the broader deprecation of screen-scraping technologies. But we’re not there yet.

In the meantime, we’ll always go to bat for you: Our users, the first movers, and the all-important C in the Consumer Data Right. We will keep working to ensure that all stakeholders are holding up their end of the deal so that you can get better visibility into, and control of, your financial lives.

Six Apps Australians Can Use for Their Investments

Thu, 21 Sep 2023 12:00:00 +0000

Investing is definitely the thing of the moment — we quite simply love to see it. Over the past few years, we’ve seen investing become more and more accessible to the everyday person, and with investment apps allowing you to start growing wealth with as little as $5, there’s something for all levels. Today, we’ve got a handy guide for our Aussies, sharing six investment apps in Australia that may suit your investing needs.

Sharesies

Certified B-Corp Sharesies has hit Australian shores after huge success when it first launched in New Zealand. The ultra-user-friendly app experience breaks down investing into a simple, easy-to-understand process that, in their words, gives someone with $5 the same investment opportunities as someone with $5 million. We like.

With Sharesies, you can invest with as little as $5, making it one of Australia’s most cost-accessible micro-investing apps. You can invest in US, Australian and New Zealand markets, across a raft of direct shares and Exchange Traded Funds (ETFs).

Shares you buy through Sharesies are not owned under your Holder Identification Number (HIN) and are not CHESS sponsored. Instead, they’re held under a group HIN owned by Sharsies, but you are the full beneficial owner of your shares.

Raiz

Another of Australia’s most popular micro-investing apps, Raiz allows you to invest your spare change by rounding up your transactions. And trust us, if you’ve never used round-ups before, you’ll be amazed at how much you can stash away without even noticing.

If round-ups aren’t your bag, you can just make a regular transfer, or invest lump sum amounts whenever you like. With Raiz, you’ll choose from one of their own portfolios based on your risk tolerance, making it great for beginner investors.

As with Sharesies, your shares are not CHESS sponsored or owned under your HIN, but you are the beneficial owner.

Pearler

Pearler is one of Australia’s most well-known investment platforms. Specializing in “boring investing”, Pearler advocates for long-term buy-and-hold investment styles over flashy get-rich-quick trading. Their neat auto-invest feature allows you to invest little and often, and build it into your budget. You can set target FIRE (financial independence retire early) dates if that’s your thing, or just commit to a slow and steady investment strategy for the long term.

As a direct brokerage, all your investments bought through Pearler are CHESS sponsored and owned under your own HIN. You can buy Australian and US shares and funds, too. Plus, they’ve recently launched Pearler Micro — a micro-investing solution for beginners.

Selfwealth

Selfwealth offers the most markets of any Australian investment platform, so if you’re looking to trade in the Australian, US and Hong Kong markets, this could be the platform for you. If you’re crypto-curious, that’s coming soon too.

Your shares are owned in your HIN, and you’ll get flat-fee trades at $9.50.

Stake

Ultra-low-fee trading app Stake has a modern user experience that makes investing simple. At just $3 brokerage for trades under $30,000 across their AU and US markets, you can do more for less. Plus, trades are CHESS sponsored.

Sharesight

While not an investment platform where you can actually buy shares and funds, Sharesight is every investor’s best friend when it comes to tracking, monitoring, oh, and tax time. It’s a portfolio tracking software that allows you to see all your investments in one place — yes, even if they were bought through multiple platforms, including micro-investing platforms. Ummm, keen! Plus, at tax time you can easily export the reports you need to remain compliant.

Tracking your investments with PocketSmith

PocketSmith can import data from all of these listed platforms, making it even easier to integrate your investments into your money management routine. Keep an eye on your net worth, set goals and forecast when you’ll reach big milestones.

Disclaimer: The information provided on this blog about investing apps is for general informational purposes only and should not be considered as financial advice. PocketSmith are not accountable for any actions or decisions made based on the information presented.

Jimmy Uses PocketSmith for Home Ownership and Management

Sun, 17 Sep 2023 12:00:00 +0000

Read how Jimmy and his family use the income and expense report to change their mindset about their regular purchases.

Tell us a little about yourself?

I’m 31, part of a family of four, and have always worked in sports. For the last six years, I have managed sports clubs in Auckland and Nelson, New Zealand. My partner also works full time and we have two young kids, an 8-year-old boy and an 11-year-old girl.

How would you describe your role in your household?

My partner and I share roles. The nature of my work has given me some financial understanding, so I got the role of managing our accounts by default.

What drew you to PocketSmith?

Every Christmas holidays when I had some spare time I would sit down and review my personal finances. This was done on paper, Excel spreadsheets, and by scrolling through my online accounts. It took hours. I used business accounting packages for work so it occurred to me that there must be something better for personal finances. I did some research and found multiple options but ultimately decided on PocketSmith as the best option. It was a bonus that it was an NZ-based company.

How long have you been with us?

I have been using PocketSmith since February 2021.

What do you primarily use PocketSmith for?

Initially, to monitor and cut expenses to save as much as possible for a house deposit. We bought our home in late 2021 so the primary use changed to setting and tracking against a new budget, taking into account the financial changes home ownership brings.

How has PocketSmith changed the way you do money?

We look at our income and expense report at the end of each month in PocketSmith. It changed the way we thought about regular purchases, small and large, because the cumulative total of our categories added up to be far more than we expected. When we saw this, we were able to take steps to bring expenses down to what we considered reasonable levels.

For example, when we saw the total cost of our subscriptions, we made the decision to cancel less-used apps. We were spending too much on food so we made changes to the way we shop at supermarkets and ate out less.

What are your favorite features?

Automated bank feeds coupled with setting up filters to automatically assign your transactions to the desired categories. These features automate almost all the work, saving a lot of time.

Got any tips?

The bulk of the work is done at the beginning, and it will take a little bit to get used to the software (just like anything new). Don’t let this scare you off. PocketSmith has an impressive array of how-to articles to help you with the initial set up e.g. establishing categories that work for you, linking your accounts, etc. My tip would be to automate as much as possible by:

Linking up your bank feeds
Creating filters for as much as possible
Setting up your dashboard

Once this is done, you’ll be able to view your finances in real-time on a variety of reports and charts with very little effort.

What’s the best money decision you made in the past 12 months?

An overall change in mindset around money, particularly expenses. We are prioritizing expenses that will make our lives easier or more enjoyable (i.e. travel, experiences, or useful appliance purchases) and cutting the lower priority expenses so we can afford these.

The Financial Benefits of Small Town Living

Thu, 14 Sep 2023 12:00:00 +0000

When PocketSmith asked me to share my experiences of the financial benefits of small-town living, I immediately began jotting down thoughts, and my very first thought was this:

Oh, how do I count the ways?

My thoughts rapidly expanded to a full-blown conversation with myself (I work alone) about how small-town living has so many benefits, but not all of them are financial.

I’ve had the pleasure of living in Christchurch, Wellington and Dunedin, the second, third and seventh largest urban areas in New Zealand. I now live in the 67th! I have certainly downsized my town.

Housing is usually cheaper

We moved to a small town in Central Otago because there was a housing shortage in Christchurch, the last city we lived in. That pushed house prices up and out of our league. It made us look elsewhere, and take many road trips to find a more affordable region where we bought our next home.

A trap for city slickers moving to a small town is that they trade a city house on a small section for a country house on a big block of land. The amount of money spent might be the same. However, the ongoing costs of a lifestyle property and the sheer amount of work involved in upkeep are far greater. It is very easy to move to a small town and spend more. If you are moving to save money, think carefully about your housing purchase.

Sometimes, completely uprooting yourself from all you know is what it takes to find affordable housing and improve your life — if that’s what you’re happy to do. We had no connection to this region except for a family member who has since moved elsewhere. Sadly we left close family behind. However, we picked a great spot and have never suffered from a shortage of city visitors, who always stay awhile because they are on holiday. The next best thing to owning a holiday home is having friends who own a home in the town you want to holiday in!

Employment tends to be more secure

With housing sorted, employment is the second most important consideration. When you downsize the town, in my experience, you commonly downsize the salary. This surprised me, given that products and services are relatively similar in price.

So I advise those who move to a small town to retain their current employment and take their job and higher salary with them, if they can. I’m constantly surprised by the community of work-from-home employees in my town, earning significant incomes working for some big national and international companies. But, if that is not an option, then you need to be prepared to research remuneration for your role, negotiate your wage or salary, and be aware that you will most likely work for a smaller employer.

I’ve realized that employment is incredibly stable in my small town. If you start with an employer and find a great fit, they don’t want you to leave, and you don’t see why you should! Employers work hard to retain good staff because they have a limited pool of employees to draw upon. Also, a lot of work opportunities come through word of mouth, which I find is the way to find the best career fit. I’ve never had a problem with finding work.

Plus, it is my view that in my small town, at least, it’s relatively recession-proof. Each business has a customer base who want their products and services, so there are not excessive amounts of the same business competing for customers. Yes, this might, in theory, reduce competition, but if the prices get too high in small towns, customers don’t let their feet do the talking by taking their business elsewhere. No, they literally tell the business owner they are dissatisfied with their product or service. The feedback is direct and immediate, which seems to keep the whole system in check.

Alexandra — Ruth's small town in Central Otago, New Zealand.

The most significant saving is needing less

When we lived in cities, we used to jokingly say we were going ‘hunter gathering’ at the weekend, where we moved from a mall to a restaurant to a hardware store, stocking up on the two things we were looking for and filling up the car with ten things we didn’t know we needed until we saw them.

See it, want it, buy it.

Quietly, gently and almost without noticing, our spending dropped when we downsized our town. We saw less for sale because fewer shops were selling things, so the urge to spend quietly left us. Initially, we kept driving the hour to our closest large town or buying online, but over time, our wants drained away, and we saved a fortune. When I go to a big city, I’m now shocked at the quantity of stuff available. The most significant saving I have noticed in my PocketSmith budget is fewer consumer items purchased because there is less to buy. Each time we holiday in a city, solely because there is more stuff to buy, I see my spending on consumer items explode.

Fewer opportunities or different opportunities?

There are different things to do in small towns that are generally cheaper. It’s harder to find organized entertainment such as a ballet, comedy festival, or big sports event, meaning you will undoubtedly save money. When big things happen in small towns, the event is cheap, and everyone shows up, creating a fantastic vibe. Without those big events, you have to find ways to have fun, which requires you to get out and about in your community and find what’s on, or create your own event. So instead of paying an entry fee to a single event you attend and leave, it’s not uncommon to turn up to an event, recognize many people at it, and take part too. I know I’m never bored with the cheap fun my town offers.

Some surprise benefits to our finances

I thought we would spend more on fuel because we drive longer distances between towns. Although fuel is priced similarly to other places (we are often cheaper than the main centers), we only head out of town a few times a month. However, when at home, I can walk everywhere. Overall, we use less fuel.

About 22% of our spending is done at the supermarket. However, with fewer choices of restaurants, we naturally eat most of our meals at home. And instead of dining out with friends, we dine at each other’s homes, meaning food and entertainment are provided under our grocery budget!

Although my town has gym facilities, I’ve never found a need to use them because I can run, walk or bike out my front door to exercise in my region’s incredible landscape. I can do an online workout or walk to my local swimming pool, tennis club, sports ground, or BMX track (as if!)

I love living in a smaller town. It doesn’t mean I’ll never leave, but for now, it is perfect. Had we arrived here and expected to continue to try to live our city life in a smaller town, our costs would have ballooned. Instead, we went with the local flow and realized we needed to adapt and find contentment. We had to adjust to our new surroundings, they didn’t have to adjust to us, and the slower pace of life that you find in smaller towns does mean that if you try, you can live on less money.

While the prices of homes in my area have grown over time, that is not to say that there are not plenty of other regions in New Zealand with more affordable housing, plenty of jobs, friendly people, and a quality lifestyle. You just need to leave the city limits and go out and explore.

How I Use PocketSmith as a Freelance Writer

Mon, 11 Sep 2023 12:00:00 +0000

A side hustle is an interesting thing. Going by the accepted definition of “a part-time job or piece of work that a person does as well as their regular job,” I’ve been hustling ever since I finished university. But here’s the rub: If someone is working three part-time jobs simultaneously… which one, if any, is the side hustle?

For me, these extra sources of income are usually related to writing. I’ve had novels published under a pen name, I’ve done regular transcribing for a local historian, and I’ve picked up bits and pieces of editing work. In April 2022 I finished a fixed-term contract at a full-time office job. Instead of launching into the next traditional-employee job, I sat back and took a breath.

I looked at my most consistent hobbies and side jobs over the last ten years. There was a common thread, and it was a thread I could use to venture out on my own: Freelance writing.

It’s early days yet. I enjoy the work and I’m building a good client base, but as living costs skyrocket, I may get a part-time day job. If there’s anything we’ve learned in these uncertain days, it’s that multiple income sources are a good thing. And boy, has PocketSmith been a massive help there.

Let me show you my old system, the change in April, and my new system.

The old system

I’ll always sing the praises of the category nesting and color coding that PocketSmith excels in. I used a “Freelance” sub-category under the “Income” parent category to keep freelance income separated from day job income. Business expenses weren’t really a thing; the beauty of freelance writing is it doesn’t need specialized equipment. Any side jobs were less than five hours a week total. The hassle of claiming power and internet expenses wasn’t worth it.

In terms of tax obligations, I kept a sinking fund bank account and a “Freelance Tax” budget category. Anytime I was paid for freelance work, I manually took 30% of the payment and set it aside in that bank account, ready for the end of the tax year.

Side note: Don’t be afraid to query the official numbers if they seem wrong. Once I was landed with an unexpected ACC bill for more than my total freelance income for that year! I queried it and it turned out they’d mistakenly allocated my “total annual part-time” freelance income to “monthly full-time”. It got cleared up and the bill was canceled in full.

The change

When I decided to expand my freelancing, I knew I needed a systems change. The way I’d been doing things was fine for a side hobby, not so much for a growing business. As a result, Hnry now handles all my invoicing, business expensing, pay-as-you-go tax obligations, and more.

The new system

With the new system, I’d love to say my business admin is cut in half. It’s not. But it’s a lot more efficient, and I have far greater peace of mind.

As Hnry handles my tax, I no longer have a need for that “Freelance Tax” sinking fund, which means any money that lands in my accounts is really mine to keep. I now file any business expenses, down to my internet plan and my website domain. Given I needed to buy a new laptop within a month of going freelance, this was impeccable timing. With work-specific purchases, I categorize these in PocketSmith as “Business Expenses” and keep an eye on the trend lines to track them over time.

The biggest change is in my Income sub-categories. One overall “Freelance” category didn’t cut it anymore. Thank goodness for three-layer nesting! My “Income” parent category drops down to “Freelance” and “Other” categories. The “Freelance” category then drops down again to show my individual clients. If they’re regular clients, I set a recurring budget based on their average rate. This might be hours-per-week or piece-rate-per-month. And for irregular clients, if I want to, I can set a non-recurring budget based on the specific invoice dates for that job.

I also use the Income & Expense report for a quick, easy overview of my financial breakdown. I tend to check this monthly. It’s a great way to see the ins and out of each category as part of the bigger picture.

So that’s the system — for now. I can almost guarantee it won’t be a forever system. That’s the great thing about life: It changes. Thankfully, PocketSmith gives me the flexibility to change with it.

Investing in an Era of High Interest Rates

Tue, 05 Sep 2023 12:00:00 +0000

Higher interest rates are here, and they’re here to stay. For now anyway. So for those of us looking to invest for our future, where does that leave us?

Borrowing is a high-risk exercise at the moment, as interest rates are high. But on that same note, term deposits are increasing in their interest rate returns. Of course, before making any investment decisions, you need to consider what your financial goals are.

Financial independence and early retirement

Just keep chucking money at that mortgage, buddy. Every dollar paid against your mortgage is interest saved in the future. In a time when we’re looking at a 7-8% mortgage interest rate, every dollar paid off in mortgage principal is equivalent to a guaranteed return of 7-8% percent per dollar in interest saved. Good luck finding an investment with a better return than that. The faster you pay off your mortgage, the faster you reduce your yearly outgoings. This is usually the first major milestone in the FIRE journey.

Building a stock portfolio

If you can’t (or won’t) pay off your mortgage early (you may have a fixed-rate contract), you can still look at some options for diversifying your investments. Stock markets (as of the time this article is published) have turned bearish, and there are plenty of good deals to be found.

There is an inverse relationship between interest rates and stock prices in general. Stock prices tend to go down as interest rates go up. As interest rates go down, stock prices rise. The simple reasoning is that institutional investors will put more money into secure cash bonds as interest rates rise and sell off their stock holdings. As the interest rate goes down, these same investors will sell off their bond holdings and invest in the stock market.

Search for companies with long-term track records of profitability, a good return on assets and healthy cash balances. Avoid over-geared and unprofitable companies (even if their stock prices have been high in the past). Share prices have fallen across the board, and with some homework, you can find a good deal. Don’t expect to make any money in the next couple of years though, it’ll take some time for the global stock markets to rebound — so don’t go investing cash that you’re going to need in the next couple of years.

Buying (more?) properties

If you’re reading this, I would assume you already own the property you live in. Should you be buying up investment properties? It depends. As a result of higher interest rates, there is lower demand for properties around the world. Lower demand means reduced prices. Reduced prices mean that you can potentially get a good investment property at a low(ish) price.

The flip side is that you’d have to take a new mortgage (or re-mortgage your home) and contend with the current high interest rates. If you can generate rent return that covers your mortgage repayments and you’re planning on holding for the long to medium term, go for it. If you’re looking to flip properties, now is a bad time to do so, as property prices are likely to be depressed for the next couple of years. This is all assuming that you can convince your bankers to lend you more money in the first place (good luck!).

Saving up for your first home

With property prices on a downward trend, the barriers to entry have reduced for first time home buyers. This means that you may be well positioned to buy your first property in the next few years. What you do depends on how much you’ve saved up. If you’re less than 80% of the way to getting a decent deposit (about 10% of average property prices in your area) I would suggest parking your savings in a term deposit or peer to peer lending platform (like Squirrel) for the next 12 to 24 months and earn some of that high interest income.

If you’re more than 80% of the way there, start talking to your banker/mortgage broker and work out how much you can borrow and what your monthly instalments will look like now and within the next couple of years. Accounting software (again, like Pocketsmith) is a great tool for telling you how much you can afford to pay in monthly instalments. Ideally your repayments should be near or equivalent to whatever you can pay in rent, with a 20% uplift to compensate for higher interest rates in the future. If you can afford this, you’re good to go!

Find out what works for you

By the end of the day, investing is a deeply personal exercise. Don’t base all your investment decisions on a single article (like this one). Read the news, talk to your accountant or seek professional financial advice.

Don’t let the high interest rates and the current recession get your investing hopes down. Think about what your financial goals are, and then make the right decisions. I hope that this article has given you some financial inspiration (fin-spiration?) to start thinking about how to best deploy your investment funds.

Stay positive!

New Zealand Money Month Q&A: David Cunningham, CEO of Squirrel

Wed, 30 Aug 2023 12:00:00 +0000

Icebreaker! Buy Now Pay Later — yay or nay?

If you’re a business, yay! It’s a brilliant tool for driving sales — even for service businesses. My local hairdresser told me it’s materially lifted sales for them, particularly amongst 18-35 year-olds, because it’s enabled clients to afford a more expensive style.

But for consumers, it’s a definite nay. You’re spending what you don’t have (essentially it’s a credit card with a payment plan). I see a world of pain amongst many young people who let it get out of control — and Buy Now Pay Later accounts won’t do you any favors when it comes to applying for a mortgage.

What’s your approach to managing money?

I love buckets!

When the paycheck comes in, I set amounts aside for charity, holidays, the kids’ education, the kids’ KiwiSaver accounts (to help them with their first home), and bills.

Then I have a “bike” account for my cycling holidays, an account for play money… and the rest is for my wife 😀

Of course, my own KiwiSaver contribution, of 8%, is deducted before I even get my pay.

Do you do anything special to keep engaged with your money?

Knowing what you’ve got helps. In the ‘olden days’ (as my kids would say) that was cash. Today, it’s all done through your banking app. Being able to see what you’ve got in real time is absolute gold!

How important are financial goals and do you have any you’re working towards?

I’d love to pay off the mortgage and have been working on that for 33 years now. Apart from that, owning shares in Squirrel is my bet on the future!

Where do you get your financial knowledge from?

My dad. He taught me all about investing in the share market when I was about 12.

At the time, I was earning $2.14 a week delivering the Evening Post. I saved hard, and when I had $100, bought some shares — in Brierley Investments to be precise (well before that name had the negative connotations it does now).

It was my dad’s teachings that started my life-long interest in finance.

What do you love spending money on?

Cycling stuff.

There’s a saying in the cycling world that the right number of bikes to have is x + 1 and y - 1. Where x = the number of bikes you have now and y = divorce 😎

What has been the best investment you’ve ever made?

My five kids — they enrich my wife’s life and mine, and keep us both grounded.

And Squirrel shares, of course.

Have you ever experienced financial difficulties?

Divorce would count I think. Not good for the finances.

What advice would you give someone just starting out with their finances?

Put 10% in KiwiSaver. Use buckets. Have a play money account.

What’s the silliest thing you would put on a new design for the $100 note?

🐿️

This interview is part of New Zealand Money Month 2023. NZMM is coordinated by trusted personal finance resource Sorted, in partnership with the financial capability community, and it involves events all around the country to encourage New Zealanders to talk about money and develop greater financial capability. To further the conversation about money we got in touch with some of our pals in the personal finance space to get their perspectives on their own finances.

New Zealand Money Month Q&A: Frances Cook, Investments Editor for BusinessDesk NZ

Mon, 28 Aug 2023 12:00:00 +0000

Icebreaker! Buy Now Pay Later — yay or nay?

Hard nay. If you could see the documents these companies use to sell their services to businesses, you’d know why. They pride themselves on getting customers to spend more than they would otherwise, because it plays into the money psychology of feeling like a smaller purchase. It’s borderline predatory.

What’s your approach to managing money?

I’m a bit loosey-goosey to be honest! I like a simple system — bills on autopay, savings and investments on autopay for the day after payday, and then a chunk of money left for spending. Once it’s gone, it’s gone.

Do you do anything special to keep engaged with your money?

I think the best thing is to simply treat it like a normal part of life. One day I might listen to a money podcast; the next it’s celebrity gossip. Take away the judgement, do the best you can, move on with life. If you beat yourself over the head trying to be perfect, of course you’ll hate thinking about money.

How important are financial goals and do you have any you’re working towards?

It’s so important to have a goal. You will never save money just because you ‘should’, and want to be ‘good’. It needs to be for something. Currently, my big goal is becoming mortgage-free, and investing for financial independence.

Where do you get your financial knowledge from?

I’m very lucky to get to speak to experts from across the money world on a daily basis, as part of my job. It’s hard not to absorb a few things in that situation!

What do you love spending money on?

Food. Clothes. Time with friends and family. Anything that hits serotonin in the brain, I’m there.

What has been the best investment you’ve ever made?

Investing in myself, and my own knowledge. Once you know more about the money world, you can see the easy changes that can make a big difference.

Have you ever experienced financial difficulties?

Absolutely. Growing up my family went through times of feast and famine, which is quite destabilizing. My student years, and early years of my career, were pretty lean times. It was only once I got serious on educating myself about money that I could see some of the patterns that were holding me back, and make the changes that have seen me become financially stable.

What advice would you give someone just starting out with their finances?

Start where you are, with what you have. We all start at a different place and have different obstacles, that can make it difficult for us. Those obstacles are real. But it’s also true that there’s usually something we can do to make our life better, even if it’s just knowing where to go to get some help, or changing some KiwiSaver settings. Look at the situation in front of you, and decide what the biggest priority is. Then just focus on getting that one thing sorted.

What’s the silliest thing you would put on a new design for the $100 note?

The laser kiwi. National treasure at this point.

New Zealand Money Month Q&A: Lance Wiggs, Co-founder of the Punakaiki Fund

Thu, 24 Aug 2023 12:00:00 +0000

Icebreaker! Buy Now Pay Later — yay or nay?

A friend told me a few years ago that she was vehemently against our funds investing into any BNPL company, as the product was intrinsically unethical. I agree.

What’s your approach to managing money?

Earn more than you spend, and for me, the focus has always been to work on the first part of that equation. That means studying and working with a clear goal of building skills and experience to build my earning power as an employee, and then start and grow a business. These days my advice to people is to start a business early.

My partner and I each come from frugal backgrounds, and we are able to live within our means. We save time and money by living downtown, walking, and using electric bikes for commuting and school runs.

Do you do anything special to keep engaged with your money?

I use PocketSmith, but relatively infrequently, to complete home office expenses and review spending. Otherwise, I focus on the larger flows of capital, such as the mortgage and investments.

How important are financial goals and do you have any you’re working towards?

We reiterate to company founders that money goals are output measures — the focus should be on driving to a mission, or purpose. I guess it’s the same personally — the focus is on building resilience to shocks and allowing us to invest in growing a business and long-term wealth. I also have an obligation to over 1,000 investors in our funds, so we treasure their commitment and work hard to invest and manage it well.

Where do you get your financial knowledge from?

I learned basic budgeting and finance by growing up in the 70s and 80s in New Zealand when being frugal was a necessity. I observed my parents prioritize our education, worked part-time while at school, saved to go to university, and managed expenses through university. I’ve studied finance, learning some finance in the BTech degree at Massey, and then went overboard by doing an MBA at Yale University. And it’s my job — we are financial professionals making frequent investment decisions with large amounts of money, and living with the consequences.

What do you love spending money on?

I have a weakness for shiny electronic objects with Apple logos and Lego, though it seems our family spend has recently evolved to Lego princess castles.

What has been the best investment you’ve ever made?

As far as personal investments, it’s hard to go past investing in the second round of Vend (which ultimately exited for ~$500 million), while for Punakaiki Fund we love our 3500% annualized return from what turned out to be a very short term investment in Moxion. It’s early days, but we see great promise from Climate Venture Capital Fund’s investment in MGA Thermal, a company that makes high-temperate energy storage blocks. And for a bonus, I tried to buy shares in Trade Me in 2003 — but they were far too smart to sell.

Have you ever experienced financial difficulties?

Absolutely. I’ve been worth less than zero several times in my life, lived in a moldy cold house as a student, but have also had the privilege of being able to have a warm bed and food at my parents’ house, albeit in generally another city or country. I learned to be able to live very frugally, and that later helped me travel for long periods of time with relatively low amounts of money.

What advice would you give someone just starting out with their finances?

Invest in yourself so that you grow your earning power. Increasing earning power allows you to better transfer wealth from when you are older to when you are younger. That sounds strange, but it means living at or even slightly beyond your means when young, and using greater earning power when older to grow your investments more quickly. This is not the best financial advice (actually it is terrible) if your income is relatively steady, but many cultures do this well through early intergenerational transfers.

What’s the silliest thing you would put on a new design for the $100 note?

King Charles.

New Zealand Money Month Q&A: James Fuller, Co-founder and CEO of Hnry

Tue, 22 Aug 2023 12:00:00 +0000

Icebreaker! Buy Now Pay Later — yay or nay?

Nay! I’ve just never been a fan of credit — it’s a useful tool when paid back quickly, but it’s all too easy to lose track of and for things to get out of hand.

What’s your approach to managing money?

I’m a bit of a data nerd when it comes to managing money. I tend to get far too into the details of where I’m spending, and how that tracks over time — much to the annoyance of my family!

Do you do anything special to keep engaged with your money?

I used to regularly import bank statements into Microsoft Money, and categorize all the spending so that I could look at the charts of our family spending patterns over time. When we started Hnry a few years ago, I found I had less and less time to get this sort of admin done, so I haven’t done it in a while now. These days I tend to just scrutinize the business spending!

How important are financial goals and do you have any you’re working towards?

I think it’s really critical to have some solid financial goals. It’s important to actually make them achievable though. I’m a big fan of having some longer-term goals and breaking those down into smaller, more achievable short-term goals, so that you can really see the impact over time. So a long-term goal might be something like paying down a mortgage over many years, and the shorter-term goals might be making voluntary contributions to that mortgage to help pay it down faster.

Where do you get your financial knowledge from?

I’ve always been interested in business and finance — so it’s something I’ve learned over time, picking things up from research and reading, as well as learning some lessons the hard way. I remember back when I was around 10 years old I would play a game with my dad where we would ‘invest’ an imaginary amount of money in the UK Stock Market, and see who did better over a few months. I became obsessed with tracking the share prices of the things I’d put imaginary money into, checking the price movements in the newspaper every day. Spoiler alert: I was not a good investor, and my dad won every time.

What do you love spending money on?

I really enjoy spending money on experiences — things that create memories — rather than simply buying ‘stuff’. I don’t really spend money on clothes or luxury items (most of my wardrobe is Hnry merch!), and I much prefer to spend money on going somewhere or doing something with the family.

What has been the best investment you’ve ever made?

Claire and I scrimped and saved and were lucky enough to be able to buy a small flat southeast of London many many years ago, and it increased in value by 40% over a few years, as the area it was in gradually became a little more livable and a bit less run-down. We sold that place when we moved back to New Zealand, and that helped us get a place here. I can’t take the credit for it being my master plan though — Claire was the one to see the potential in the property, whereas I was too worried about the area it was in!

Have you ever experienced financial difficulties?

When Claire and I first started Hnry, we weren’t able to pay ourselves for quite a while, so having both quit our full-time jobs to start the business put some pressure on our family — especially with two young kids. We ate into our savings a lot and had to really change our lifestyle to minimize spending and ensure we didn’t blow through everything we had. Luckily we managed to get the business to a place where we were able to take a small salary each — which made a huge difference.

What advice would you give someone just starting out with their finances?

I would always recommend that people make regular contributions to their KiwiSaver or Superannuation — it’s never too early or too late to start. Often we see Hnry customers (sole traders) tend to sacrifice making KiwiSaver contributions in favor of putting money into their business; however it’s a really good idea to always make voluntary contributions. Building a habit of making regular payments can really help in the long term, and if you make those contributions straight away when you get paid, it’ll pay off for you in the future.

What’s the silliest thing you would put on a new design for the $100 note?

We didn’t get Laser Kiwi as our flag, so maybe we could put it on the money instead?

New Zealand Money Month Q&A: James Blair, Wealth Director at Lighthouse Financial

Thu, 17 Aug 2023 12:00:00 +0000

Icebreaker! Buy Now Pay Later — yay or nay?

Absolutely not. 10% of those who use Afterpay are missing repayments and are getting crushed by big interest rates. If you want something — save for it. It creates an unhealthy relationship with money.

What’s your approach to managing money?

Automatic payments. I’m a simple guy, and the easy way is APs so you don’t need to think about it. If it’s taking more than ten minutes a week to manage your money that’s too much for me.

Do you do anything special to keep engaged with your money?

I’m big on goals in all areas of life. I write a note on my phone at the start of the year. No more than five goals. I look at it all the time which keeps me on track with the money decisions I need to make to stay on track.

How important are financial goals and do you have any you’re working towards?

We’re wired for instant gratification. I think the only way to stick with delayed gratification is meaningful financial goals. We had a few goals this year:

We have an 8-month-old son, Cooper. My wife Hannah is now on unpaid parental leave so making sure we have enough money set aside for that.
I have a $70k floating loan that I’m paying off that I want cleared by the end of the year.
I have an income goal for the year.
We want to buy another investment property before the end of the year.

Where do you get your financial knowledge from?

As a Financial Adviser, it’s now just a big part of my life. Before I was a Financial Adviser I was lucky enough to start my career as a graduate banker and learned a lot then! I have also learned a lot from my dad.

What do you love spending money on?

All the good stuff — nice dinners, holidays, spoiling the family, clothes.

What has been the best investment you’ve ever made?

On paper, it would be buying my first home which is now an investment property, but I can’t go past becoming my own boss. Being in control of your own future is a game changer if you get it right. Not to say it doesn’t come with risk!

Have you ever experienced financial difficulties?

Starting your own business definitely raises stress levels and gets you up nice and early in the morning.

What advice would you give someone just starting out with their finances?

Subscribe to Cheques & Balances on Spotify! One thing I see all the time is everyone is in too much of a rush. Take the smallest step forward you can and build on it.

What’s the silliest thing you would put on a new design for the $100 note?

A Cheques & Balances logo?

Calendar Connoisseur Amos Forecasts Into the Future With PocketSmith

Thu, 17 Aug 2023 12:00:00 +0000

Read how Amos is future-proofing his personal and business finances using PocketSmith’s scenario and forecasting tools.

Tell us a little about yourself?

I’ve been a software engineer for the last 25 years and live in sunny Texas (currently). I’m originally from Michigan but have moved around the country quite a bit over the years for work. I currently work remotely as an independent contractor. When I’m not working, I’m usually either golfing or running (both of which I’ve taken up recently).

How would you describe your role in your household?

Currently, it’s just me in the household, so I guess I’m the Chief Financial Officer, but also the guy who does the laundry and feeds the cat.

What drew you to PocketSmith?

Several years ago, I was looking for a tool to get a handle on all of my accounts, income, and expenses — something to pull it all together and make it easier to manage. I tried several other tools before landing on PocketSmith. From the moment I saw the calendar and the ability to forecast weeks, months, even years into the future, I was hooked. It made so much sense to me — this is how I was thinking about my finances anyway (I think a lot of people do), and finally, a tool was actually mirroring that internal thought process. I loved it right away.

How long have you been with us?

I’ve been using PocketSmith for just over 10 years. I can’t imagine managing finances or operating without it at this point. I can’t believe it’s been a decade, but also can’t believe that I somehow managed my finances — and stayed sane — in the dark days before PocketSmith.

What do you primarily use PocketSmith for?

I use PocketSmith for both personal finances and tracking income and expenses for my contracting work. I use it (especially the calendar) for forecasting both business and household operating expenses, and it allows me to be smarter about what I need to keep in everyday accounts, and what I can move to investment accounts, etc.

How has PocketSmith changed the way you do money?

I can say with confidence that the complexity of my finances would be completely unmanageable without PocketSmith. It’s not just a tool to make things easier — it’s as essential to me as my electricity service. I make smarter operating and expense decisions, and consequently, smarter long-term investment and savings decisions as well.

What are your favorite features?

Calendar, calendar, calendar! It’s an absolute game-changer. Being able to adjust scenarios and roll ahead months and years to see how that affects your bottom line is a special brand of magic that I never want to go back to living without.

Got any tips?

Dive in and play with forecasting and scenarios. If you’re still a Free plan user, try the Foundation plan for a month and see how being able to forecast up to 10 years into the future changes how you look at things (no, I don’t work for PocketSmith, really!)

What’s the best money decision you made in the past 12 months?

Renewing my PocketSmith subscription.

New Zealand Money Month Q&A: Ruth Henderson, The Happy Saver

Sun, 13 Aug 2023 12:00:00 +0000

Icebreaker! Buy Now Pay Later — yay or nay?

That’s a hard pass. Absolutely not. If someone could convince me that the $160 shoes they pay off in four $40 payments meant they better utilize the money that stayed in their bank account a bit longer, then I might be swayed. But they can’t, so I won’t be. It’s a false economy. Flip your thinking and save $40 a week for four weeks, then buy the shoes. The sooner you realize there are clever people in big companies scheming up ways to make you part with your money AND make you feel good about it, the wealthier you will be. I never borrow money, and BNPL is borrowing money.

What’s your approach to managing money?

I spend less than I make, invest the difference, and always keep a good cash buffer. I automate as much as I can, but I still regularly monitor my family finances, checking in to see that it is running smoothly and tweaking when necessary. I don’t always get it right, hence having a cash buffer to mop up any overspends. I’m constantly talking to my husband and thinking weeks, months, and years ahead, scanning the horizon for what might come up so I can prepare early for a situation instead of reacting to it. Simplicity is essential, plus I have a very positive mindset about money.

Do you do anything special to keep engaged with your money?

I’m always playing around with my PocketSmith. I think it’s the middle-aged equivalent of a ten-year-old emptying out their piggy bank to count their pennies. I find managing money fun, and I love to talk about it. Money is simply a tool to help me live the life I want. I also always say yes to new information about money. If I see or hear something money-related that grabs my interest, then I follow it up. I acknowledge to myself that I can’t possibly remember everything I read, watch or hear, but it all adds something to my collective knowledge. The irony is that the more I learn, the more simply I structure our family finances.

How important are financial goals, and do you have any you’re working towards?

I tend not to have set monetary goals. It’s more the desire to move in a general direction. I call it “the vibe”. Life has far too many variables and ways to ruin my best-laid plans, but if I have a general direction to head in, such as becoming financially independent so that work is optional, then each time I need to make a decision, I ask myself: “Is this taking me closer to that, or further away?”

Where do you get your financial knowledge from?

Books, blogs, podcasts, YouTube, and interesting people. I tend to shy away from information released by companies, as their motivation is obvious. I lean more towards hearing the experiences that regular people share about their experiences with money. They have nothing to sell and just want to share and help others. I have a soft spot for speaking with those over 70 because they remind me to keep my money simple, and they have an obstinate amount of common sense.

What do you love spending money on?

$6.50 for my weekly lane swim at my local pool. It’s my thinking time, and the locals and staff are friendly, plus the spa has the best view!
$18 monthly, so I don’t have to watch endless ads on YouTube.
$15 spent on pocket money for my teenager. The enjoyment comes from teaching her to manage her own money and her seeing the benefits of investing 50% of her income in the S+P500 from a young age. She gets to see compounding returns in action!

What has been the best investment you’ve ever made?

Signing up for New Zealand’s retirement scheme, KiwiSaver, when it was first launched in 2007. I didn’t understand it but knew I should do it anyway. It has since taught me to be a calm, steady investor and that compounding is fundamental.

Second would be my first investment into an S&P500 ETF fund after listening to JL Collins from The Simple Path to Wealth explain why it was a good investment decision. Again, I learned on the fly, but I’ve never stopped investing in that fund, which now provides my family with passive income.

Finally, it’s all the time I put into The Happy Saver and the emails I receive from people who have turned their financial lives around. I’m investing in my happiness when I help other people.

Have you ever experienced financial difficulties?

You betcha! Haven’t we all? Phoning my parents and asking for a plane ticket home when I realized I had drained my bank account dry while backpacking around Australia was an awkward conversation. They bailed me out and then (rightly so) made me pay them back every single cent! Which I eventually did. Still skint, I started university and lived below the poverty line week after week, using student debt to pay my fees. Those pivotal experiences ignited my aversion to debt, and I might have been broke, but I decided I wouldn’t stay that way. I decided not to stay stuck with the “I’ll always be poor” mindset and slowly learned how money works from then on.

What advice would you give someone just starting out with their finances?

Assess where you are at. Take out a pen and paper, pull up your last three months of bank statements, and work out exactly what you spent and earned for each month. Add up what you own and what you owe to find your net worth. Find out where the problems are and go about fixing them. Aim to increase your net worth each month and track your progress so you can see that you are improving.

What’s the silliest thing you would put on a new design for the $100 note?

A caricature screaming, “Nooooooo, don’t spend me!!! I don’t wanna go!”

New Zealand Money Month Q&A: Emma Edwards, The Broke Generation

Wed, 09 Aug 2023 12:00:00 +0000

Icebreaker! Buy Now Pay Later — yay or nay?

The short answer: Nay. The long answer: Buy Now Pay Later is a complicated one because as a product, it’s a neat way of spreading the cost of things over time without being penalized with interest. In an ideal world, being able to spread that unexpected $800 dental appointment over three paydays is pretty smart.

Unfortunately, it’s gone far beyond that. Until recently, BNPL was entirely unregulated. It’s marketed as a way to buy consumer goods like shoes, clothes, and tech before you have the money, and as more providers come to the table, users can open multiple accounts with very little friction.

What’s your approach to managing money?

I’m self-employed so I pay myself a set amount each month into my personal account, and from there I take that number and pull it down into different categories. First I pay my bills (rent etc), and I pay that as a set amount from each pay. I total up my bills and expenses for the whole year and divide it by 12 months, so I set aside an equal amount every time. Then I move a portion over into a ‘salary holding’ account, where I pay myself my spending money weekly to help me spread my money out. Then I pull other money down into other categories and savers, like my personal care account for eyelash and eyebrow appointments, and a holiday saver for an upcoming trip.

I really value autonomy and freedom, so I always allow myself that free, unassigned spending money that I drip-feed myself from the ‘salary holding’ account. I use it to buy coffee, takeaways, and other little discretionary items.

Do you do anything special to keep engaged with your money?

I do a quarterly review, which coincides with doing my quarterly business tax reporting, which is handy. I use my PocketSmith account to look at the pie chart of where my money went and assess whether there are any opportunities to make better decisions.

I also use my own signature mindful money review, which I make available via my digital notion template and my Pulse Money Journal. It keeps me on top of where I’m getting value from my money, where old patterns or money leaks are emerging, and how other things going on in my life can dribble into my financial behavior.

How important are financial goals and do you have any you’re working towards?

Financial goals are really important for our motivation because they help create discrepancies between where we are and where we want to be. When we get the size of that discrepancy right — not too big that it’s overwhelming but not too small that it’s not challenging — we can leverage that gap to drive better behaviors.

Having a goal that excites you and tapping into that feeling is something you can train your brain to recall when you go to make financial decisions. Making it a choice of ‘buy this or get closer to that’ can help us assess whether things are worth our money or not.

Personally, I’m saving up for a honeymoon with my husband — we got married in a micro wedding last year. We also need to get a new car as our shared banger is now 18 years old and, er, she’s getting a little bit clunky.

Where do you get your financial knowledge from?

I’m mostly self-taught. I didn’t get taught about money growing up, and I had no idea about things like investing or financial freedom (or even financial stability!). Reading books and listening to podcasts got me started on my own journey, and since then I’ve undertaken my own further education. I’ve just finished up studying a graduate certificate in Financial Psychology and Behavioural Finance, which was a really interesting insight into the emerging field of research in the US.

What do you love spending money on?

Hotels and nice restaurants. I’ve always loved hotels, and I love visiting new ones and soaking them in. Even if I can’t afford to stay there, I’ll go in and check out the bar and have a coffee or a drink. It makes me feel so special, and I worked in hotels when I was younger so there’s an element of nostalgia too.

I’m a food lover, too, and I love trying new restaurants. I always try to get the chef’s selection menu (or the banquet or feed me option), so I don’t have to choose. I love just being brought a range of stuff to try, especially if it’s flavors I haven’t had before.

What has been the best investment you’ve ever made?

Probably the ongoing investments you make in your business when you’re self-employed. I sometimes forget that I created this from nothing, that I started off writing for free, and then got so excited when I would earn $20 per article, and now I have a multi-hyphenate career that pays me a wage (just!). It’s so easy to forget how far you’ve come and focus just on the struggles of where you’re at — and trust me, there are many — but when I’m stressing about not making enough to cover my costs one month, I think back to the version of me that worked evenings and weekends to get her work out there and get noticed, and remind myself that I owe it to her to keep going.

Have you ever experienced financial difficulties?

I have in a way, both growing up and as an adult before I sorted out my finances and I was in a cycle of debt. I’ve also had to provide financial help to my Mum at times because we’d never really had financial security. That said, I’m a white, able-bodied woman and I’ve always had the privilege of a roof over my head and food on the table, even if it meant paying with credit, so I haven’t experienced it to the degree others have.

What advice would you give someone just starting out with their finances?

Streamline your expenses. Total up all your bills (rent/mortgage, utilities, subscriptions, memberships, car payment, etc) for the full year — it takes a bit of number crunching, but it’s worth it. Then divide it by the number of times you get paid, and add a 10% buffer. Then, every time you get paid, you set aside that set amount towards your expenses.

The mental space you gain from knowing you’ve paid your bills first and you’re not going to realize rent is due in three days and you’ve only got $200 left is so powerful. It can give you the clarity you need to start budgeting the rest of your money without running into a speed bump every time.

What’s the silliest thing you would put on a new design for the $100 note?

A cat wearing a velvet cloak. You’re welcome.

New Zealand Money Month Q&A: Josh Daniell, Co-founder of Akahu

Mon, 07 Aug 2023 12:00:00 +0000

Icebreaker! Buy Now Pay Later — yay or nay?

It depends how you use it. If you’re using BNPL to pull forward purchases that you can’t afford, then you’re playing with fire. If you’re using BNPL as a shopping app, and could pay for your purchases with cash if you wanted to, then there’s no problem.

Please indulge a little rant here. It annoys me to hear criticism of BNPL from banks.

BNPL is generally a better consumer product than the credit cards that banks continue to push.

What’s your approach to managing money?

Boring — I pretty much follow the Personal Finance New Zealand subreddit guide.

I like to have some cash available for emergencies. I’ve just switched to using Kernel’s cash plus fund for this purpose. This fund aims to deliver a better rate than a savings account, and your money is available immediately upon notice.

Then any extra dollars go into high-growth funds which mainly consist of shares. I’m using Simplicity’s unhedged global share fund and Kernel’s high-growth fund.

Do you do anything special to keep engaged with your money?

My wife and I use PocketSmith to give ourselves visibility over our joint finances. We then Marie Kondo our spending each month to ask: “Is this sparking enough joy?” The aim is to cull spending that doesn’t deliver enough value.

I give 2% of my pre-tax income to the Maximum Impact Fund. If you’re interested in philanthropy and delivering the most impact with each dollar, then this is a good option for New Zealanders (because you can snowball the tax deductions to increase your donations). Giving a percentage of my income helps me feel less selfish about money — if I earn more, then the benefits flow to others as well.

I also try to remember how insanely wealthy we are in NZ. Here’s a calculator where you can see your estimated global percentile for income. If you earn the median income in New Zealand, you’re in the top 4% of income earners around the world. It’s human nature to compare ourselves to others and feel envious at times. But zooming out to a global perspective makes me feel lucky to have been born in New Zealand at this point in the history of the planet.

How important are financial goals and do you have any you’re working towards?

I’ve probably got a non-consensus view on this one. Whenever I try a new fintech app, and it asks me to set a goal as part of onboarding, it seems forced. I don’t need to have goals such as saving for a holiday or new clothes in order to feel motivated to save. I reckon you can optimize your financial life and have your money compounding in your favor without needing specific goals.

That said, I think there are always some financial pressures or objectives lurking in the background. My wife and I now have three kids and one income. We’re currently trying to “not go backwards” financially. We’re also trying to be financially resilient, meaning that we can handle a surprise expense, and we’re not handcuffed to suboptimal jobs. Perhaps these are “goals” if you squint, but they feel a bit different to me because we’re not going to mark them as “done” at any point in time, and we expect them to evolve over time.

Where do you get your financial knowledge from?

First shoutout goes to my dad. As kids, he encouraged us to earn money more broadly than regular jobs. So my sister and I rented a small block of land to run cattle and grow crops. And we all started little businesses as youngsters that gave us a steep learning curve on money.

The next shoutout goes to a training session on financial statements that I received as a baby lawyer. It made me realize how I’d started leaning away from financial literacy, and made me decide to lean in.

And then the biggest shoutout goes to the FIRE blogging community. In particular, I’ve been heavily influenced by Mustachian philosophy. Here’s a photo of my brother and I fanboying outside the Mr. Money Mustache headquarters in Colorado in 2019.

The bloggers in this community were revelationary for me because they’re shockingly transparent about how they manage their finances, and they provide specific recommendations instead of the usual watered-down suggestions. The influence of these bloggers is probably why I chose to mention the specific funds that I invest in above. And it’s definitely why I decided to start a blog called MoneySecrets a few years ago — I’d learned so much from that community and felt like I should contribute something after absorbing so much. Please don’t check the most recent blog date though… let’s just say that life has been busy recently.

What do you love spending money on?

Macadamia nuts and dark chocolate.

And also my physio, who I credit with taking me from some dark years with back pain to a point where I can now play tennis, surf, or go for a run without regretting it the next day.

What has been the best investment you’ve ever made?

This is cringe… but my family. Those are the most important relationships to me. I could have all the money in the world, and if those relationships were sour, then it would count for nothing.

Have you ever experienced financial difficulties?

No. Mostly through luck and partially through being naturally diligent with money.

Financial stress sucks, period. But I don’t like the feeling of financial abundance either — I think that constraints are healthy. I’m a big fan of “reverse budgets” for this reason, because if you’re in a great position where you’re moving forwards financially each month, you can increase your “savings rate” so that you still feel some constraint. I think that helps to make you feel more grateful for your purchases.

This is a bit weird, but I also like doing things like hitchhiking that pour cold water over any feelings of affluence.

What advice would you give someone just starting out with their finances?

Follow the Personal Finance New Zealand subreddit guide!

A word of warning. The first step tells you to create a budget. I always worry about that because no one is born with budgeting skills, and many people drop off at that first step. If you’re worried that you’ll drop off:

Use PocketSmith to create and track a budget! They automate the hard parts.
Even if you skip the budgeting step, you can still consider and act on the subsequent steps in the guide.

If you like the idea of a heavily structured guide, I know many people that have sorted their finances by following the Barefoot Investor.

What’s the silliest thing you would put on a new design for the $100 note?

A picture of The Royal Family dance crew (2015) on one side. Flight of the Conchords on the other.

New Zealand Money Month Q&A: Dean Anderson, Chief Executive of Kernel

Wed, 02 Aug 2023 12:00:00 +0000

Icebreaker! Buy Now Pay Later — yay or nay?

Nay!

BNPL is preying on our desire for instant gratification, luring us into temptation by enabling us to buy things without the upfront hard work of actually saving for them. While a lot of people won’t get hurt with fees, many quickly find themselves caught in a surprising trap — which can impact things like buying a home.

So, while those flashy deals and discounts can be seductive, remember, it’s not just free money. Future you might end up singing the “Regret Song” if you don’t manage your spending wisely.

A quick shoutout to the Australian neo bank, Up, who launched a great alternative — “May Buy”. Effectively, the same installments, but at the end you get given the choice to decide whether you actually really still want that item or whether keeping the cash is better.

What’s your approach to managing money?

I’ve got multiple accounts set up, each with a special job. First up, the “Core Items” bucket takes care of all the essentials — bills, groceries, and all that. It makes sure I stay on top of my needs without any surprises.

Next comes the “Treat Yourself” bucket! But with a set limit, it ensures I can treat myself without going overboard — no guilt, no financial stress, just pure enjoyment!

The real magic though is automation. I’ve got these buckets set up to automatically catch my income, pay bills, and take care of my life admin. No more stressing about where my cash is going — it’s all sorted!

Of course it doesn’t just stop with spending, it’s investing too! With good money automation, I can automate a regular investment plan to ensure things are set up for me down the line.

Do you do anything special to keep engaged with your money?

The less engagement, the better. Money is a stressful topic for many and the idea of budgets, making ends meet, saving for tomorrow, etc can quickly become overwhelming.

Rather than making money engaging in itself, the discipline that comes from good automation and bucketing will help most Kiwis feel on top of their money. You’ll then be more confident and feel less stress when thinking about money, meaning when you do need to engage it is an easy conversation.

How important are financial goals and do you have any you’re working towards?

I have a lot of goals, but I wouldn’t think of them just as ‘financial’ goals. These are things that I aspire to — they could be things like milestones I want to reach with the impact Kernel can have for Kiwis and their money goals, or even life goals such as buying a home. Seven years ago when I moved to Auckland, not knowing anything about the city, I started renting and have enjoyed that flexibility, especially when growing Kernel, but current savings are for a plan to some point down the line look to buy a house again.

Where do you get your financial knowledge from?

Like 99% of Kiwis, I grew up in a home that didn’t discuss finances. I had a rough sense of how my mum was working to balance ends meet, plus being a part-time solo parent. However, growing up, I was in the same boat as a lot of other people — money talk just didn’t happen! I caught glimpses of my mom working her magic to make ends meet, juggling it all like a pro, even as a part-time solo parent. But beyond that, financial knowledge was like an unsolved riddle, waiting for me to crack it.

Fast forward, most of my financial knowledge came from study combined with life and work experience — which teaches you plenty of lessons!

Of course, this is a topic that I am incredibly passionate about and is one of the reasons why I built Kernel. With Kernel, we’re on a mission to help more Kiwis openly tackle their financial goals. We’re not holding back; we’re bringing money talk to a whole new level, where financial dreams become reality.

So here’s to cracking the code, embracing the money journey, and unleashing the financial superhero within!

What do you love spending money on?

I’m all about experiences vs materialistic items. I’d much rather spend money on a nice night out with my partner or friends, enjoying some great local food, compared to say having an interest in the latest car or clothes.

To me, money is the ultimate passport to freedom — it opens up a world of choices on how we spend our time. And let’s be real, time is the most precious treasure we’ve got!

What has been the best investment you’ve ever made?

Over the years I’ve saved, dabbled in stocks (learned my lesson and quickly got set on the power of index fund investing), renovated homes, and of course started Kernel.

Starting Kernel has been the best investment, not for the usual financial reasons, but because it has enabled me to do something every day that I am incredibly passionate about. I now get to earn an income while working alongside an amazing team who share the same fire in their hearts. We’re a power-packed squad, making a real difference in the lives of tens of thousands of Kiwis!

Have you ever experienced financial difficulties?

Of course! It is never a straight line, and for a long period of time, you always feel like you are just making ends meet. Somehow, you do make them meet and you keep learning and keep taking small steps forward, with a few backward, and over time you start to look back and realize how far you’ve actually come.

In those early days, like investing, those small little steps don’t feel like they are having any effect. But eventually, they do add up, and over time by pushing for career progressing, saving, and keeping on top of costs, you find you’ve got to a point where you have significantly more choices.

Those moments when you feel like you have control will be different for everyone. For me, the moment when I finally felt like I was getting ahead was the moment when I didn’t feel like I had to stick to a strict budget at the supermarket — to me, that was choice and freedom. I could spend on some luxuries and not feel guilty.

What advice would you give someone just starting out with their finances?

Create habits. As small as they may be, starting those small regular habits such as paying bills early, and putting aside a small investment each week, will get you into the rhythm.

Over time, you can then start to align those habits with your goals, think about increasing your savings and investments, and take bigger steps. But don’t feel like you have to take a giant leap on day one. These small habits will build into the lifelong traits that will get you toward each of your financial goals.

What’s the silliest thing you would put on a new design for the $100 note?

An extra 0.

Why I Paid Off My Student Loan With a Final Lump Sum Payment

Mon, 24 Jul 2023 12:00:00 +0000

So a while back, you might have seen the article I wrote about using PocketSmith to pay off my student loan. If you missed it, you might want to go and read it before embarking on this next adventure. That was Part One. This, my friends, is a somewhat spontaneous Part Two.

The ten-second summary

At the time, my strategy for paying off my student loan was tried and true, and, above all, simple: Sit back and let the automatic repayments take care of it over the next four or so years. For a while, I also set a bonus autopay of $50 a week. It wasn’t a lot compared to the loan amount, but it was enough to make me feel like I was making progress.

I didn’t have to think about it: My company or my tax agent did that for me. Student loans in New Zealand are interest-free, so there was no incentive to pay it off faster. All I had to do was cast an eye over my custom Student Loan dashboard in PocketSmith, where those infinitesimal automatic repayments were ever-so-slowly nibbling away at the mountain of student debt I’d somehow accumulated as a late teen.

Yep. That was the problem, really. That word…

The awful d-word: Debt

If that word were a gif, it would be the classic gif from Jurassic Park. You know the one. Where Dr. Ellie Sattler is elbow-deep in a steaming pile of… dinosaur digestion.

Via Tenor

So what? I didn’t have to look at it. I didn’t even have to do anything. The repayments were taking care of the loan, like thousands of tiny flies gradually taking care of that poop. I had crossed the income threshold of $22,828, beyond which 12% of every pay is deducted to repay the loan. I’d moved from being an employee to being self-employed, so my tax agent took care of it.

12% of every invoice vanished before it ever hit my personal accounts. I never saw it.

But I was still in debt

I was in debt. Not looking at it didn’t change that fact. I had been in debt since finishing university. Thanks to years of part-time work in a job I’d loved, where I hadn’t earned enough to meet the repayment threshold, I still had almost half my original loan amount remaining. I was on track to still be in debt for another 3-4 years.

And those 12% repayments? The ones I never saw, the ones that came out of every single invoice?

They were killing me. Figuratively speaking.

It was death by a thousand cuts

Sure, those nibbles were killing the student loan too. 12% here, 12% there, it added up. Slowly. Far, far too slowly for my liking. Every nibble hurt. I looked at my remaining loan balance, at the constant 12% bites being taken out of every hard-earned invoice I sent to my clients, and then looked ahead.

I didn’t need PocketSmith’s forecasting to see the future.

I looked at the next two, three, four years of this — of watching 12% of every invoice vanish before I saw it, of standing passively by while my student loan eroded away so slowly I could barely see it move — and made my decision.

With the benefit of hindsight, that was another problem with the whole thing. I didn’t have to do anything to pay the loan off. It was all automatic. Inactive. Passive. But by doing nothing, I felt like I was… well… doing nothing.

So I took action

I talked it over with my mother (thanks, Mum!) I consulted a friend whose money advice I trust. I looked at my PocketSmith dashboard and saw I had enough money sitting there to pay the loan off in one swoop — importantly, without touching my emergency fund.

What was I losing? The money had been earmarked for a house deposit, but I was far from settled, looking at moving overseas and years away from affording a mortgage anyway. I still had the emergency fund, so it wasn’t going to drain my reserves.

What was I gaining? Peace of mind. The IRD off my back. An instant 12% pay rise without the annual performance review.

Ultimately, it was something my mum said that tipped the decision.

“What happens if you go overseas?”

Good question. Student loans in New Zealand are interest-free… as long as you’re in New Zealand. Once you go overseas for longer than six months, the IRD starts charging interest at 2.9%.

And I wasn’t interested in that.

I wanted it gone. I wanted that 12% pay rise. I wanted my one and only debt removed from the Liabilities column on my Net Worth page. I’d discussed it with people I trusted, I’d weighed the pros and cons — it was a solid decision.

All that was left was doing it

I paid off the remaining balance of my student loan on a Friday morning at the end of March — which just so happened to be the last day of the financial year. Now that hadn’t been on my EOFY checklist!

Calculating the final payment carefully, I decided I would rather overpay it than risk underpaying. As a result, once the final transactions were processed, I received a refund from the IRD.

A refund for how much, you ask? $1.33.

One student loan closed for good: Check.

One deliriously happy debt-free writer: Check.

Afterword

It was only when I sat down to write this that I realized how exhausting it had been, looking ahead and seeing years of drip-fed repayments on the loan. It’s one reason why I don’t engage with debt-based purchasing systems like AfterPay: I don’t like current-me spending future-me’s money before future-me has a chance to spend it herself.

With my student loan paid off in full, I’m starting from scratch. I have a clean slate. I’m debt-free. The future is bright.

See you there.

Ruth's Two Cents: A Wedding on a Budget

Thu, 20 Jul 2023 12:00:00 +0000

Hi Ruth,

Me and my partner are getting married! We’re thinking that we want something that’s a bit more low-key and pared back (much to the dismay of both our parents), so we have money to go traveling afterward. Is it possible to keep to a sensible wedding budget without skimping on too much? And how do we make our parents understand that an extravagant wedding isn’t a wanted or needed expense in our budget?

Congratulations! Marriage is fun; you will love it!

I’m pleased that PocketSmith has asked me to answer this particular question because while I’m a fan of marriage, unlike many, I’m not a big fan of weddings. If people put as much effort into the marriage itself as they do for the wedding ceremony, our divorce rate would probably be lower than it is.

A wedding doesn’t have to look like a wedding

Fun fact: Jonny and I are married but never had a traditional wedding. We have been married for 21 years and counting. Ours cost us $100.

My mother was furious to miss out on a wedding! She was happy with my choice of husband and less happy with how we tied the knot.

Like the, “I forbid you to get married”, kind of furious.

Here is how it played out.

Jonny and I met and fell crazy in love. The natural progression was that we get engaged, but we couldn’t see why this was worth a public announcement, and there was no ring. We had simply decided to commit to each other. Time passed, and we realized that the next logical step, according to society, was marriage. And a wedding.

By now, we were in our late twenties, had attended many weddings, and decided that a public display of affection was not our thing. Travel was our thing, however, and our math was sound enough to realize that we could not do both. Or could we? The logical next step was our decision to get married while away on holiday.

We didn’t elope, we were not doing it in secret, and we told our families of our intentions, which is when my mother started to express her opinions about our lack of a wedding. Even though we were clearly in love, she wanted to witness us tying the knot and proving we were in love. Goddamnit, she wanted a good old wedding! White dress, wedding cake, and a big party!

Our expectations bumped firmly up against her expectations. And the fun began.

External expectations will change

This is the point that I realized that to make my mother happy, I would make myself unhappy. Ultimately we decided that given it was Jonny and I getting married, our happiness came first. The point I want you to take away is that your happiness comes first.

And happiness for Jonny and I came in the form of a month-long trip to America, during which we would get married if the moment felt right. Just in case, we took wedding rings with us. Lo and behold, the right moment did present itself, and we phoned home to tell our parents that we would be getting married at 5pm on that particular September day.

The rest of the family was excited for us, but it was at this point my mother, in no uncertain terms, forbade me from getting married. I’m not going to lie; she was pretty distraught. It was not easy to go against her wishes, but I’ve not regretted the fact I did.

Our wedding was brief, unique, and fabulous. I remember every moment of the experience. We took one photo. The entire month-long holiday was brilliant, and we created so many memories, one of which was tying the knot.

Years later, when our daughter was four, we took her to the small town we were married in and to the spot where we took our wedding photo. We took one more picture with our precious daughter in it this time.

It took a while, but my mother forgave us her lost wedding opportunity, and it’s now become a bit of a family joke… “Remember when you forbid me to get married? Hahaha”. I hold up my ring finger and point out that we are still married all these years later, proving that it’s not the size of the wedding that matters. It’s the love and commitment of the couple getting married that is most important.

It’s your day — make it match your needs, and your budget

Therefore, I advise you and your fiancee: You do you!

It’s you and your partner getting married; you are the main event, the only event, and you need to do what feels right to you.

If a wedding is something you want to do, then do it on your terms and be unapologetic about that. If happiness and showing commitment to each other is a BBQ in the backyard and everyone brings a plate of food, that sounds grand. If you both agree on what you want to do, and how much that will cost, then go nuts.

It all boils down to your love for each other and how you want to express that. Standing our ground on what ‘getting married’ meant to us united us, and we’ve carried that team spirit into our marriage.

There are many milestones in life; marriage is just one of them. You want it to happen in harmony with your other plans for your life together, not to the detriment of those plans. Once you know what you, the happy couple, want, the rest will flow on your terms.

Congratulations to you both. I wish you a long and happy life together.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

Six Things That Are Worth Paying the Convenience Tax For

Mon, 17 Jul 2023 12:00:00 +0000

When it comes to managing money, there’s a lot of talk on what not to spend your money on. While saving is important in a money management practice, we want to talk more about giving yourself permission to spend. Remember — money is a resource for life. We use it for absolutely everything, from covering our basic needs to splurging on things that make us feel good. Understanding the value of your life and of your time, and learning how to use money to not only sustain your life, but actively improve it, is a big part of building a positive money mindset.

There are certain things in life that carry what’s known as a ‘convenience tax’. This isn’t a real tax but it refers to a premium paid for certain goods and services that add value to your life. Getting comfortable with paying for things that carry a convenience tax requires a robust money mindset and perspective on the value of your time. To help you get your head around it, here are five things we think pay seriously good convenience dividends.

1. Professional cleaning or chores

While paying for help around the house can feel like you’re just being lazy, it’s actually life-changing when approached with intention. Not only can professional help get the job done better and faster than you, it can also free up your time to do other things. For example, starting a business, spending more time with your partner, friends or family, or simply resting. When you view the cost of services through the lens of what you’re else getting in return beyond the service itself, you can make informed decisions about when these conveniences are ‘worth it’. It’s all about understanding the value of your own time.

2. Smart home appliances

Robot vacuum, anyone?! Smart home appliances can be pricey, but if it means you get to enjoy a clean home and maximize your time, it can definitely be worth it. Identifying tasks that regularly fall off your to-do list and sourcing solutions that allow you to double down on efficiency can unlock a whole new level of productivity in your life. What you do while your robot vacuum cleans your floors is entirely up to you!

3. Babysitters

Parents, how long has it been since you had a childless date night?! Having children drastically changes your life, and prioritizing quality time with your partner can be something that gets pushed to the side. Investing in babysitting every once in a while can restore a sense of balance in your relationship, and improve your life in ways you’d probably not considered. If you’ve been wanting to try that new restaurant or catch up with your friends, don’t be afraid to throw some money at things to make it happen.

4. Meal delivery services

A busy week at work, sick kids, hectic social calendars — you name it, there are tons of things that can derail our nutrition. Paying for a pre-prepared meal delivery service like HelloFresh might seem counterintuitive from a financial perspective, but if it buys you time to nail that work report or look after your kiddos without a messy kitchen, it could be worth your coin. Plus, it could even save you money in the long run if it stops you from reaching for expensive takeaway options.

5. Convenient transport options

Ever had to get to the airport at some obscene time because it was the cheapest flight, or taken some scary budget airline to save a few bucks? Sometimes paying a little extra for comfort, convenience and peace of mind is worth it for the lifestyle value. For example, flying at a reasonable hour could mean you get more enjoyment out of your holiday. It’s not always about just the upfront cost. Consider how your experience would benefit from that extra cost, too.

6. Subscription app services

While you might find yourself refusing to pay for apps in memory of the ridiculous cost for 30 seconds of internet data on your phone in the early aughts, you could be missing out with today’s powerful and affordable apps. From collating all of your favorite online recipes to ditching your spreadsheet and automating your finances, paid apps can be a vital utility and not just a luxury purchase. Splurging for your beloved apps makes privacy sense too — if you don’t have to pay, they could be monetizing your personal data.

Ultimately, knowing when to pay extra for conveniences comes down to your own personal financial situation and values. What adds to one person’s life might not add to another’s, so it’s really important to get to know yourself and what matters to you. Then, seek ways to use whatever financial capacity you have to make life simpler, easier, and more enjoyable.

PocketSmith’s Customization Lets Darin Manage His Money the Exact Way He Wants

Wed, 12 Jul 2023 12:00:00 +0000

Read how Darin gets granular with his transactions so he can categorize them in an instant and make sense of his spending.

Tell us a little about yourself?

I’m a freelance consultant, living in Boston with my wonderful wife and Sumi, perhaps the smartest, most handsome, kindest dog in the world.

How would you describe your role in your household?

I handle most of our finances — checking expenses, monitoring our budget, and making investments.

What drew you to PocketSmith?

For years I’ve been looking for personal finance software that does what I need — syncing transactions consistently and letting me categorize them in buckets that I define, with a hierarchy, and rules to automate the repeat stuff. It’s a pretty simple need, but I’ve tried everything from Mint to Quicken to YNAB to Excel sheets and everything in between, and couldn’t find anything that was easy, fast, and did what I needed without loads of hassle. Eventually I heard about PocketSmith, tried it out, and fell in love.

How long have you been with us?

I’ve been using PocketSmith for about two years now.

What do you primarily use PocketSmith for?

Tracking our household expenses and budgeting.

How has PocketSmith changed the way you do money?

With a fast, well-thought-out interface and hierarchical, self-defined categories it has become MUCH easier to (a) quickly categorize transactions in a few minutes once a week, instead of letting them build up for months, and (b) categorize transactions in a way that we can actually drill down into and see, in practical terms, where we are spending money and where we should be cutting back.

What are your favorite features?

The speedy and streamlined interface is the first big one — everything was clearly designed with actual users in mind. So many personal finance apps require way too much clicking through different options to update a transaction or search for what you’re looking for.

The next is the customization. So many apps try to force you into their model of budgeting or categorizing, and that just doesn’t match the reality that every house thinks about their spend differently. PocketSmith has made it incredibly easy to structure your finances the way you think about them, and cut out anything else.

Got any tips?

Create pretty granular, layered categories. It makes it a lot easier to drill down and make sense of ‘where exactly is our pet budget going’ than just using high-level buckets and having to look through all the transactions within.

What’s the best money decision you made in the past 12 months?

Being more careful about how often we eat out — it’s fun but it plays an outsized role in our spend.

Interest, Inflation and How To Stay on Top of Them

Sun, 09 Jul 2023 12:00:00 +0000

Everyone holds their breath every time the central bank makes an announcement.

Here in Aotearoa New Zealand, the Reserve Bank of NZ (RBNZ) just recently announced an overnight cash rate (OCR) hike by 25 basis points to 5.5% on 24 May 2023, the highest it has been for the past five years. For those of you not from Aotearoa, the OCR is the equivalent of the Base Rate in the UK or the Federal Reserve Rate in the USA.

Any hikes to the OCR results in an overall increase in interest rates faced by consumers (us regular folks) and businesses (those who employ us regular folks).

How did we get here? Why are central banks around the world hiking their interest rates? Let’s start with a quick economic lesson on inflation.

Inflation – what’s the big deal?

Let’s have a quick flashback to 2020. Ah, good times. When the pandemic was a big scary unknown and huge swathes of the worldwide population were put into virtual quarantine. Businesses suffered. Companies could not pay their workers. The wheels of the global economy stopped turning.

In the face of an economic meltdown, many governments around the world initiated recovery support services. These recovery funds helped businesses survive Covid-19, kept people in lockdown paid, and helped halt the spread of Covid-19.

These are all good things. You can’t really fault the governments of the time to do what they did. The alternative would have been to let people die and suffer (which would have been worse for the economy). However, the flip side of this is that a lot of cash got pumped into the economy. A lot of that cash came from new currency produced by the central bank and from sovereign debt.

This put a lot of money into the economy. Businesses were literally getting money for doing nothing. By extension, their workers were also getting money for nothing. This creates an ‘oversupply’ of currency in the economy. When people have a lot of money, they spend it. There is more money in circulation which allows suppliers to raise their prices and consumers are willing and able to pay those prices, which is how you get inflation.

Of course, there are a lot of other factors affecting inflation, like impacted supply chains, tighter border regulations, and more recently, the war in Ukraine. But from a local perspective — inflation is driven by government spending.

Interest rates… to the rescue?

Here’s where interest rates come in. Every central bank around the world has a blunt tool at its disposal. That blunt tool is the ability to hike up the interest rate of their country’s banking system. Arguably there are other ways to combat inflation, like higher taxes or cuts to public services. But those are harder to sell to the public. With interest rate hikes, the government devolves responsibility to the central bank. This is especially true in countries where the central bank is independent of the government (like in NZ).

How it works is simple. As interest rates go up, people borrow less money. This means less money circulating in the economy. For people that already have debt (like your average homeowner with a mortgage), more of their income goes towards servicing their debt interest (instead of circulating in the economy). On top of that, savings accounts and term deposits suddenly become attractive investments as banks increase the interest return rate. This further encourages people to save money instead of spending it.

With less money circulating in the economy, suppliers are forced to reduce their prices (or not increase them by that much) and inflation is beaten… for now. Inflation is an ever-present factor. You can’t eliminate inflation without eliminating human consumption. Once inflation is down to a manageable level (1 to 3%, according to the RBNZ), we can see interest rates fall again. And the cycle begins anew.

Okay, what can I do about rising interest rates?

Well, unless you’re the governor/chairperson of your country’s central bank there isn’t much you can do about interest rates.

But, as a consumer with debt, here are some tips to deal with rising interest rates:

Fix your rates if you can!

Interest rates are going to remain static for the next half-decade or so. If your fixed-term loan is up for renewal, try to get it fixed at the lowest rate the bank can offer you. I can guarantee that the next time it comes up for renewal, the rates offered will be higher.

Avoid Buy Now Pay later schemes

Buy Now Pay Later (BNPL) schemes have proliferated in the past few years. They create a false sense of financial security by allowing consumers to borrow money, interest-free. On the face of it, they’re not too different from credit cards. However unlike credit cards, their ‘late payment fees’ aren’t governed by interest rates and can sometimes be higher than credit card interest. You are better off saving that money (or paying off your mortgage) instead of buying that pizza with BNPL. Besides, if you’re spending money you don’t have, you’re just contributing to the inflation problem by adding more cash into the economy and encouraging suppliers to set higher prices.

It’s time to start side-hustlin’

Think about starting a business, like a small one on the side. The upshot of this is that you can start claiming expenses against your income. Also, this shifts you from being a consumer to being a producer. Now you can set exorbitant prices under the guise of inflation! Hooray!

From a tax perspective, business owners typically pay less taxes than your average wage earner. This is because you can claim more against your income as expenses. Furthermore, if you run your business through a company, the tax rate is usually less than the top tax rate for personal income (Note: In practice this could vary depending on your personal tax situation — always talk to an accountant before making big tax decisions). Fewer taxes equals more opportunity to service your existing debts.

Keep track of your finances (if you haven’t already)

If you’re reading this, I assume that you’re a pretty financially savvy person who uses accounting software to manage their life. If you’re still on the fence about this, you should make the jump and use accounting software like PocketSmith to keep track of your personal finances. The ability to monitor your expenses vs. your income is extremely powerful. This allows you to plan your finances ahead, set aside money for emergencies, and even put money away for investing purposes.

Are you ready for higher interest rates?

The first thing you can do is review your family’s (or personal) financial situation. If you’ve been using software like PocketSmith, this is very easy to do. Don’t have PocketSmith? Then you can take stock of your income and outgoings manually.

If you have any expensive credit card debt, focus on paying that off first (or transfer the credit to a new credit card). Then have a chat with your banker about what your upcoming repayments will look like under the new interest rates.

Keep following good financial advice and be conservative with investments (so no crypto, please!) and you should get through this rough patch just fine!

Dealing With the Rise in Cost of Living as a Freelancer

Mon, 03 Jul 2023 12:00:00 +0000

I’ve never been so grateful to live in a walkable town. It means I don’t need a car.

I take public transport. Or I carpool with friends. Mostly, though, I throw on a jacket, lace up my walking shoes, and get those steps in. It’s good exercise. It keeps me fit, clears my head, and lifts my Vitamin D levels.

It also saves me a metric heckton of money. In 2021, the AA estimated the annual cost of owning and running a small vehicle to be $8,060. Compass Business Partners put it at a whopping $11,500. More recently, MoneyHub estimated running costs alone to be around $6000 a year.

By comparison, wearing through a $200 pair of running shoes every three months doesn’t seem so bad.

Frankly, we’re in a cost of living crisis

You know that as well as I do. Costs just keep going up: Fuel, groceries, rent… Everywhere you look, people are doing it tough. Budgets are trimmed to the bare necessities. Side hustles are booming. Friday night takeaways are out, and eggs on toast are in.

As a freelancer, I’m not immune to the pressure. On the contrary: I’m reliant on my clients having enough business coming through the door to trickle down to me. I’m constantly looking for ways to add value and build my network.

In the meantime, I deal with the cost of living crisis in two main ways:

Work those PocketSmith budgets
Open those client conversations

Work those PocketSmith budgets

Don’t worry, this isn’t a “rice and beans” talk (all due respect, Dave Ramsey). You don’t need me to tell you to put the luxury brands back on the shelf and reach for store-brand instead. I’m just telling you a few things that work for me.

Annual budgets

As part of my end-of-year review, I changed my grocery budget from a weekly amount to a yearly amount. Now that I’m a few months into the year, I’m really seeing this pay off.

PocketSmith calculates the average of that annual spend for me, so I still have a rough target for my weekly shop. It evens out the bumps and stops any spending creep. As a bonus, I’m way less stressed about going over that threshold once in a while. It’s no big deal. I know it will even out over time.

Check the calendar

Last week, I nearly dove head-first into a voluntary $300 expense. I had enough in my budget, and next month would take care of itself, right?

Hold up, I thought, let me just check next month’s calendar first…

Whew! I’m glad I did. Sitting there, bold as brass on the first of the month, was an annual subscription renewal — a $300 lump-sum expense that I couldn’t avoid, couldn’t postpone, and couldn’t pay in smaller installments. Good thing I hadn’t committed to the extra spend for this month!

Make sure the emergency fund is good to go

This is something any money blogger will harp on (and on) about, but we have good reason to! An emergency fund is your safety net. It’s the thing that stops you sinking into credit card debt, or worse, when something goes wrong. It’s peace of mind. It’s a massive decrease in financial stress. Even as little as $1000, stashed away in a separate account, gaining interest and being available when you need it, can be a life changer.

Open those conversations

When it comes to the rising cost of living, I’m aware my clients are feeling it just as much as I am. I keep an open line with them. These tend to fall into two categories: “Brakes On” chats, and “Accelerator Pedal” discussions.

“Brakes On”

As a freelance writer, naturally my money conversations extend to my clients. This is especially critical with my weekly clients, whose regular invoices make up more than 50% of my income. It’s nothing formal, but once every few months, I make a point of opening a casual dialogue with them:

How’s your workload? Are you overworked? (And is it something I can help with?) How’s your budget looking for the next quarter? If we need to take a break for a few weeks, put a project on hold, drop some internal work and concentrate on external billables for the moment, we can do that. Let’s have a conversation around that.

Essentially: How’s business holding up for you, and do we need to put the brakes on?

The flip side of this is…

“Accelerator Pedal”

Whether it’s pitching new projects or raising my rates, this is the opposite of the brake pedal. Open dialogue and negotiation are the key. After all, it’s a conversation. This might look like a video call or an email, but it covers the same ground:

We’ve worked together for a while now. You love my work, you know I deliver on time and with high quality. I bring this, this, and this to the table. We have some great momentum going on X and Y. I would love to continue working with you.

Essentially: We’re on a roll, let’s hit the accelerator.

We’re only human

Ultimately, I’m only human — and so are my clients. We’re all in this together, battling the tidal wave of rising costs and building the boat as we go. I do as much I can, myself, to manage the cost of living. I cut down on any big expenses. I keep an eye on my budgets. I open communication lines with my clients. And I respect them enough to know they’re doing the same thing at their end.

Together, we’ll get through it.

Ruth's Two Cents: Preparing Your Finances for Parenthood

Thu, 29 Jun 2023 12:00:00 +0000

Hi Ruth,

I love it when mentions of your daughter pop up on your blog — you’re obviously a great mum! My husband and I are planning to try for our first child soon. Among all the other bits, it’s obviously a huge financial undertaking (especially with the cost of living right now). How do we prepare our finances for becoming parents? I have no idea where to start!

Thanks for your kind words. I am doing the best I can with the information at hand, meaning I’m making it up as I go along! So far, so good! Over the years, I thought about what I would do differently regarding the financial aspect of preparing for parenthood.

Make a strong financial foundation for your family unit

The first place I would begin is making sure that my financial position was as rock solid as possible because that would allow me to have certainty over that part of my life. I could think of nothing worse than having a baby and then learning to communicate with my spouse about money and budget. That scenario has drama written all over it.

When one of you stops to care for your baby, the dynamic between you changes in all sorts of ways. Money can create a wedge between you if you let it. Long before a baby arrives, you need to discuss openly and in detail just how the money will work for you as a couple. I’m in favor of combined finances so that any money coming into the home, no matter who earned it, is family money to be used for the good of all. If you do things differently, you need to discuss how it will work. You both must feel a sense of control over your situation, have an equal say and understand where the money comes from and goes, and know that you are both spending in line with your goals and values as a family. I think that is the most essential part. Having a baby is wonderful, but it’s full-on too. Being 100% united with your financial situation means that money is the least of your worries. Working out how to get your tiny human to sleep is more important right now.

Long before the baby arrived, if I were in a relationship, I would:

Adjust to living on one income and work to a budget using PocketSmith
Be clear about where our money was earned and spent and openly discuss it with my spouse, and discuss what will stay the same and what will change
Have an emergency fund of six months of expenses
Be already saving towards known upcoming costs, including extended leave from work
Keep adding to the retirement accounts of the parent who is away from work

Even if the parent who is staying home is still receiving maternity leave payments, I would try to live on one income. Why? So that if anything happens and you cannot return to work, you know you can cope financially. Test yourself. I know this is an enormous ask, given the cost of housing and higher rents and mortgages, but if you know that you would struggle financially if both of you couldn’t work, it’s better you understand that now than after the baby arrives.

Plan for the worst and hope for the best. In an ideal world, your baby will be perfect and hit every milestone. But if they don’t and need you at home for longer, I want you to be financially prepared so that your priority is on what is best for your baby, not how you will survive financially.

Seek out support opportunities — professional or otherwise

I also encourage you to talk to various parents about funding and support available to you both before and after the birth. Speak to your employer about how maternity leave works, and seek out the advice of government agencies about paid parental leave, financial support pre- and post-birth, and for future daycare costs. From what I understand, if you are returning to work, daycare costs are high, so before the birth is an excellent time to understand these costs and look into all available options. For example, while I was home with my new baby, I also looked after my one-year-old niece (for free) so my sister could return to work. We had the best fun, and the two cousins have a strong bond as a result.

Ask your doctor, midwife, or specialist what costs you are likely to expect, what is provided for free, and what you must pay out of pocket. Very early in my pregnancy, I was advised that I would need specialist care at my own cost. The early warning and the fact that we had laid a solid financial foundation and still had two incomes meant we had plenty of time to save up for this expense. I was always grateful for the early advice which let me remove the financial stress from the situation.

Be smart about your shopping

If I have any regrets, we probably wasted money on items we never used or used infrequently. Our pram cost the same as a cheap used car! I mistakenly asked other parents what they would advise me to buy and then set out to buy everything they mentioned, not realizing that what they found helpful, I might not. It would have been better to gather the basics and shop as needed.

And by the shop, I also now realize that there is an extensive underground network of other parents who, like me, also bought every single thing any other parent mentioned! All it would have taken was for me to ask around for the item I needed, buy second-hand, or accept gifted items. Babies, toddlers and children grow so fast that they rarely wear anything out, so I’d encourage you to snap up things you know you need at a fraction of the price. In most instances, parents are delighted to get unused and unwanted items out of their houses.

Often we have babies at a similar time of life to our friends so that we can form connections with other parents and trade items (and childcare). The handiest thing you will ever find is a friend with a baby of the same sex, six months older than your own! You will find you have a ready source of hand-me-downs. And advice!

There were things I wanted to buy new, particularly safety equipment like a car seat, but I could have sourced a lot more second-hand. I recently met up with a friend who accepted every hand-me-down offered from several close friends. They are now fully equipped for their baby and have not spent a single dollar. Incredible! Not only that, but they have begun living on one income, topped up their emergency fund, and are now setting money aside for after the baby arrives. With family living overseas, they are now budgeting to fly them here for the birth. This couple are average income earners, but above average savers and planners.

Start setting aside for future expenses now

Once the baby has arrived safely, I’d encourage you to start setting money aside for them and never stop. Money will always come in useful somewhere. It took me some time to realize this was a good idea, but I now have a specific bank account for my daughter where an automatic weekly payment goes. I use this money for anything related to her, whether it be clothing, schooling, school supplies, or extracurricular activities.

You will never know all the costs your unique human will likely incur. Still, if you ask a few parents around you, you will begin to form a rough idea: Daycare, school uniforms, bicycles, musical instruments, laptops, endless pairs of shoes, and the list goes on. I’ve got friends who spend money on private schooling. Others spend money on a myriad of afterschool activities. While others, myself included, incur very few additional expenses. A regular savings plan can account for all of this. Only you know what type of spender you are likely to be, and the thing I’ve found helpful is that if you start early and save a little bit of money often, the cost of future expenses will be leveled out over time.

I hope that is helpful to you. Given you have asked this question so early on, I’ve little doubt that, like my friend above, you are people who also like to plan. You will be just fine, and when your baby joins you one day, embrace your new life. It’s an incredible journey.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

Six Ways To Save Money on Your Work Commute

Sun, 25 Jun 2023 12:00:00 +0000

The World Health Organisation has declared that the Covid-19 pandemic is no longer a ‘global emergency’, and employers are ushering employees back to the office. Hey, we love a bit of office banter as much as the next person. But the commute? Not so much.

What started as a measure for public safety, working from home brought with it a raft of financial concessions for employees. The most significant of which was the savings pocketed by skipping public transport costs, toll roads, and petrol. Now, the dreaded ‘back to the office’ email is hitting inboxes across the world right in the middle of a cost of living crisis. Not cool.

If you’ve been told it’s time to retire your sweatpants and get back to the office, here are a few ways to save money on your work travel expenses.

1. Call out for a carpool

We know, we know, sitting through the morning commute while Derek from accounts tells you about his kid’s last bout of gastro isn’t exactly ideal. But what if it slashed your work travel expenses in half?

As you return to the office, consider putting the feelers out for colleagues that live in your local area who might be interested in carpooling to work. In some cases, it could even be faster or cheaper than public transport, so be sure to crunch the numbers even if you don’t currently drive in.

2. Check for rebates and concessions

Some states, territories, or countries offer rebates on toll roads or travel expenses — seriously. In New South Wales, drivers who spend more than AUD$375 on eligible tolls each year can claim quarterly rebates of up to 40%.

Do a quick Google search to make sure you’re not missing out on an applicable offer in your region.

3. Compare petrol prices before filling up

If you drive to work, you’re probably facing the rising costs of petrol. Make sure you’re utilizing fuel comparison apps in your region to get the cheapest price and pounce on cheaper petrol days for big fill-ups. In Australia, you can lock in low fuel prices with the 7-Eleven app or compare real-time prices with PetrolSpy and Simples.

4. Snag savings with travel passes

Depending on how often you’re going back to the office, you might be able to score tasty savings by buying a weekly, monthly, or annual travel pass. Yes, it’s more to pay upfront, but you can shave down your weekly commute costs significantly.

Plus: If you buy a pass and find yourself unable to use it, check if you’re eligible for a refund. Under some conditions, you can claim a refund for the unused portion of your pass.

5. Side hustle during your work travel time

Sitting on a train for a couple of hours a day? Put your time to good use by taking part in market research surveys or taking on easy remote freelance jobs like editing, designing, or writing. If you can monetize that dead time, you might be able to balance out the extra costs and earn a little extra cash on the side.

Alternatively, use your commute time to listen to audiobooks and podcasts that develop your job skills and expertise.

6. Talk to your employer

If you’re finding that the costs of returning to the office are causing significant financial problems for you, try having a conversation with your employer or your HR department. There may be a way to negotiate other benefits or cost-cutting arrangements to help you make the transition. We know it can feel futile — but if nobody says anything, change doesn’t happen.

Bonus tip: Bear commuting expenses in mind when job hunting

Not all workplaces are returning to a full-time in-office model, so it’s important to bear the cost of commuting in mind when you’re negotiating new roles and salaries. Make sure you’re clear on the medium-term expectations around working from home and the office, and consider the financial implications. A new job might offer more money, but if you’re going to double or triple your commute costs and/or travel time, you need to make sure you’re aware of how that affects the net benefit to you.

Keep on top of your commute costs and savings using category rules in the PocketSmith transactions dashboard.

What I Learned About Money From 400 Days of Gratitude

Wed, 21 Jun 2023 12:00:00 +0000

It was September 2020. The last nine months had been particularly grueling: A worldwide pandemic, a nationwide lockdown, and a redundancy process that began in January and finally wrapped up nine months later. Faced with unemployment, I needed something to keep me going. Something that would help me see the good, the true, the beautiful in life.

That night, I made my first #30daysofgratitude post on social media.

The physical and mental benefits of gratitude are well-documented. 30 days seemed like a manageable target. I never would have thought that two years and 400+ gratitude posts later, I’d still be going.

It’s amazing the things a regular gratitude post has taught me. For one thing, there really is something to be grateful for every day — even if it’s only the warmth of the sun. For another, I’ve learned a lot about myself in ways I didn’t expect.

Take money, for example. It’s a strangely reciprocal relationship; money teaches me about gratitude, and gratitude teaches me about money.

1. (Money) mindset matters

In the early days, gratitude was an effort. I was so busy focusing on what I didn’t have — like a job — that I had to stop and actively think of something to be grateful for. Now? I won’t say it’s reflex, but it’s definitely a solid habit. It’s the same with my money mindset. Unemployment, temp work, freelancing… through the ups and downs, I learned to look for the positive and the plentiful. Instead of worrying about using my emergency fund (after all, isn’t that what it’s there for?), I worked on being present, being content, and looking ahead to the next opportunity.

The scarcity vs abundance mindset is well-known. I looked back even further in history for some inspiration, and found myself dwelling on this verse from the Bible: “Give me neither poverty nor riches, but give me only my daily bread” (Proverbs 30:8b).

2. The details and the big picture aren’t mutually exclusive

I like gratitude for the same reason as I like PocketSmith: Because, unlike my phone camera, I can focus on the tiniest details at the same time as the hundred-mile overview.

With gratitude posts, I’ve taken snapshots of everything from the breathtaking vastness of the night sky to a bus driver stopping while a cat crossed the road; from the fluffy feathers of a sparrow to a seismic shift in employment. I’ve been grateful for the overwhelming (Day 165. Fell in love with the perfect flat. Ran the numbers and I can afford it!) and the overwhelmingly mundane (Day 417. Another sunset! Cool how they happen every night, innit?)

Likewise, I love that I can track the slow growth of my net worth and watch my student loan slowly tick down, while also keeping an eye on the dollars and cents of my weekly grocery budget. Big picture and small, they work together. The loan might seem overwhelming and the groceries mundane, but they balance out.

3. Money isn’t everything… but it’s a factor

Looking back through my “Discretionary Spending” category in PocketSmith, it’s reassuring to see that I’ve never hit my monthly limit, but also that I’ve always spent something. As an introvert and a natural saver, it’s easy to justify not spending money. But in 400+ days of gratitude, I’ve learned that’s not an excuse.

I’ve been grateful for making money. Day 17. I’m grateful for: Good friends, church networks, and full-time work that turns up out of the blue.

I’ve been grateful for saving money. Day 382. Gratitude post and #moneytip in one: Before you buy something online, google “[website] discount code.” You’d be amazed at what pops up.

I’ve been grateful for spending money. Day 322. I’m grateful for a little $5 paint test pot but what a big change!

Money is an inextricable part of modern life — not an unknown element to be feared, but a practical tool to be used.

And now, for me, so is gratitude.

Explaining the Rising Cost of Living to My Daughter

Mon, 19 Jun 2023 12:00:00 +0000

Encouraging my daughter, who is now 15, to learn how money works in the real world is my best shot at ensuring she is prepared when the day comes and she leaves home. When the words ‘recession’ and ‘inflation’ are constantly in the news, I see it as a teaching opportunity, not something to protect and shield her from. Both of these things are a normal part of any economy and worth a brief conversation.

She said something the other day that completely cracked me up. I asked her what blog post I could write on money that she would actually read. Without hesitating for a second to try to protect my delicate ego, she said, “Mum, no offense. But nothing”.

Ouch! Burn!

This intelligent, wonderful, creative, and honest child of mine is never going to pick up a single one of the most excellent 40-plus personal finances books that I have on full display on our family bookshelf. Let alone go to my website! I should have known better than to try.

Contextualize money in a way that’s meaningful to them

But far from being defeated, I stick with what I know works for her. I’ve always found the best way to teach her about money is with actual income and expense information that is meaningful to her, and I’m lucky to have that at my fingertips with PocketSmith. Conversations over the dinner table about the cost of groceries are frequent, with straightforward explanations about why things have increased in price. And, more importantly, what we as a family can do about it:

Earn more
Change what we eat
Don’t waste food
Buy less of the ‘nice to haves’

Plus, she often heads along for the weekly grocery shop, and being consistently exposed over the years to the cost of her favorite foods means that she can’t help but notice that the price has increased for most of those items. Another useful expense that I’ll often share with her is our monthly electricity bill. Why? Because it is undeniable proof that her leaving lights on and having extra long showers costs us money! And I can easily show her how our bill increases annually, exactly in line with her entering her teenage long shower years. She is yet to change her habits, unfortunately.

Although I would be chuffed for my child to say, “Mum, tell me why eggs have gone up in price”, well, it’s not ever going to happen. However, it’s not hard for me to talk with my husband within earshot of her about the price of eggs… Sneaky yet effective.

Let them safely experience it for themselves

Now that she has an after-school job that provides a small yet steady stream of income, the conversations have become far easier and more relevant. We spent the day in town recently, and she invited a friend along. They went off shopping together, but I’d said I would love to buy lunch for them both; she just needed to let me know the cost, and I would reimburse her later.

The next day she said they spent $33 at McDonald’s, but she was surprised at just how much it cost. Why was she surprised? Because she compared the cost to the fact that she only earns $35 a week in her job and that she also knows that as a family of three, we spend $250 a week on groceries. This led us to quickly chat about the other things she bought and also reflect on how much money her friend spent at the shops.

All of this flows into her gaining an awareness of what life costs for us, her, and others, and led to conversations, just brief ones, that touch on money.

Cultivate a non-judgmental environment for discussing money

One of the critical elements when teaching children about money is to talk about it without fear or regret. Many things were playing on her mind as she paid for their food, and these came up during our conversation. I think it’s important to help her verbalize them:

$33 was a lot
She would get this money reimbursed, but she still felt the sting of the expense regardless
She could have bought a cheaper lunch elsewhere (her favorite dumpling shop was just down the street)
Her friend chose this spot, and she wanted her to enjoy her lunch
The lunch was yummy!
It felt good to order and pay for it herself

As a person who often second-guesses decisions, I wanted her to feel okay about spending that money and enjoying her lunch. It was a special treat, one that she doesn’t often do, so I really wanted her to make the most of it.

I would encourage you to tap into what your kids are curious about and talk to them about the money they earn and spend and, when appropriate, weave in your own experiences too, such as the cost of electricity!

Encourage them to explore their own solutions

I’m mindful that she doesn’t get hung up on what things cost, but instead finds solutions. I want my daughter to be a problem solver because most issues often have an easy solution. Well, I’m pleased to say that she is beating back inflation without my help. This year her school canteen put up all of its prices, which was one of the rare instances where she brought up money at the dinner table, not me!

She thought it outrageous that a pot of instant noodles went from $2.00 to $2.50, nachos from $4 to $6, and so on, but I explained that due to inflation, they would be paying more to buy the products that they sell, plus the staff members’ wages have probably increased too. This means that the price of the food they sell needs to cover these increased costs and that she and every other hungry student is where they earn their profits. What’s her solution to this problem? It took me a while to realize that she has packed her lunch almost every day this year. Normally she was using the canteen a few times a week. Now, she just visits it for a small treat from time to time instead.

I love this. Without my knowledge, she is making her own financial decisions and realizing that just because the price has gone up, she is not a powerless consumer. She has choices too. And it also explains why she has been helping with the grocery shopping more, she can select what she wants for lunch, at her parent’s expense. Genius!

A future PocketSmith user in the making?

One final pleasing note to share is that as she was scrolling through the transactions on her banking app, telling me what she spent where and what she bought, I asked her if one day she would like to use a budgeting app like I do. “Maybe…” was the cautious response. That’s good enough for me! Within moments I showed her my PocketSmith pinwheel with a ten-second explanation of how it could be useful to her. Discussion over. Short and sharp.

I don’t want to push my luck so I’ll pause that line of thought, but the seed has been sown, and given we all were once teenagers, we know that she will mull that thought over and when the time is right, I reckon I can circle back to that conversation, gauge the response and maybe, hopefully, get her using a budgeting tool one day soon.

PocketSmith Allows Dave To Keep Flexible in His Budgeting

Mon, 12 Jun 2023 12:00:00 +0000

Read how Dave is managing his finances his way by setting up his own version of envelope budgeting using PocketSmith’s Budget feature.

Tell us a little about yourself?

I’m a 62-year-old recently retired Police Officer in Western Australia. I’m married to my wife (who has two adult sons), who is still working.

How would you describe your role in your household?

Head honcho, chef, IT consultant and researcher (registered business).

What drew you to PocketSmith?

I’ve used and trialed so many other personal finance apps and software over the years that I’ve had to modify, adapt and reconfigure just to give me the basics of what I wanted in a personal finance app. When I found PocketSmith, I found the perfect solution for what I needed.

How long have you been with us?

Can’t remember when I started with PocketSmith but it’s been quite a while!

What do you primarily use PocketSmith for?

I do all the household budgeting, financing, manage my retirement income and monitor all transactions in our bank feeds, categorize everything to work out trends, and more.

How has PocketSmith changed the way you do money?

I have a much greater understanding of our overall financial situation and know exactly how much money we have for anything in particular. Guaranteed peace of mind!

What are your favorite features?

Bank feeds, and categorizing transactions into the flexible budgeting capabilities.

Got any tips?

If you use Envelope Budgeting, you might find that the rollover function out in the budget that actually does a better job, if you take time to get familiar with it. Once I had my budget categories and fortnightly amounts sorted, it’s been a breeze.

What’s the best money decision you made in the past 12 months?

Using a lump sum of my retirement income to clear our mortgage and set up a responsible fortnightly budget in PocketSmith.

I also set up my wife’s two sons with PocketSmith subscriptions and showed them how to manage money as they are just starting out in the big wide world!

Five Tips To Change Your Shopping Mindset and Deal With Rising Food Costs

Thu, 08 Jun 2023 12:00:00 +0000

Grocery prices are rising faster than the temperature before it starts raining men, except we’re not saying hallelujah. I’ll give you a second to digest that very lukewarm reference to The Weather Girls hit.

But seriously, food inflation is real, and the hit to our weekly grocery bills is evident. Dealing with the cost of living increase when it comes to a basic need like food is tough — there’s as much of a mental element to it as there is a financial one. So, we’ve rounded up some tips and strategies to help you take control of your food spend.

1. Decide to take action

It sounds simple, but some of us are yet to actually decide to make a change. We see our usual staples with higher price tags than usual. We see our checkout total get bigger despite our receipt getting shorter. We grunt and groan at how much we’re paying — but we’re still doing it.

We need to recognize that the conditions have changed.

Imagine doing a hike one day in sunny weather, and then doing the same hike again in winter. If you wore the same outfit as you did the first time, you’d probably struggle in the new conditions. The same applies to our grocery shopping. If we’re shopping in new conditions with the same list, we’re going to struggle.

2. Get flexible with your shopping list and meal rotations

To combat these new shopping conditions, we need to get creative with the things we’re buying. This means taking a different approach to food shopping.

Rather than going in with a set list and shopping only from that, go in with a more flexible mindset. Shop what’s cheapest that week, and build your meal choices around that. For example, if you usually make a curry with eggplant and pumpkin, be flexible with those two ingredients. If eggplant is expensive (which it often is), switch it out for potato, carrot, or zucchini. If you usually use beef mince in your pasta sauce, switch it to turkey or chicken mince if it’s cheaper.

The key is to have rough meal bases with flexibility in the specific ingredients. This might take a bit of creativity and exploring some new recipes online — but you’re expanding your cooking repertoire and saving money in the process.

3. Celebrate the small wins

Making small savings does add up, but if we’re not celebrating the progress we’re making it’s easy to lose motivation. Sit down with your receipts after shopping and look at where you were able to cut costs.

Keeping track of your grocery spending in PocketSmith can also help keep you motivated and help you take more notice of how your small changes are adding up over time.

4. Compare prices and specials

If you’re not a ‘shop around for the cheapest price’ kinda person, you’re not alone. Many people would rather just shop at one supermarket than make multiple stops to save a few bucks — but with prices so high, that bit of effort could save you a lot more than a few bucks.

Cross-check your grocery items across other stores to make sure you’re not missing a great deal. If you find something expensive that’s dropped to half price, stock up to maximize that saving over time.

5. Gamify your grocery savings with rewards points

If you’re not a member of supermarket rewards programs, now is the time to be! You may as well get rewarded for all this hard work, right!?

Not only can you score points that can be converted to vouchers to spend in-store, you can even earn big frequent flyer points, particularly if you shop the promotional periods for bonus points.

Getting involved with rewards programs also gamifies the process and helps you focus on getting the biggest rewards than scrimping and saving.

How I Manage Multiple Sources of Income in PocketSmith

Tue, 06 Jun 2023 12:00:00 +0000

You can tell a lot about people from the things they keep on their fridge. It could be family photos, a child’s school award, a souvenir magnet from overseas. Among other things, I keep a magnet from a good friend that says “Start Each Day With A Grateful Heart.” Gratitude is important. It keeps us grounded in the now.

Today, I’m grateful for sunshine, tomatoes fresh from the garden, long walks…. and PocketSmith’s nesting categories.

See, I’m a freelancer, which means at any one time I could be dealing with five or more different sources of income. This last financial year alone, I have had:

Government cost of living payments
Charitable giving tax credits
Salaried PAYE income
Monthly blogging income
Weekly income from two different regular clients
And a whole heap of irregular income from one-off clients, individual projects, BuyMeACoffee subscriptions, and more.

Could I handle all these different sources of income without PocketSmith? Probably. But it would do my head in, and it certainly wouldn’t be fun.

Does PocketSmith make my life a whole lot easier when juggling these multiple sources? Heck to the yes. Here’s how…

Nesting categories

I honestly don’t think I could juggle money management as a freelancer without nesting categories. The thought of only having one overarching category for all my income makes my skin crawl. As it is, PocketSmith allows up to three layers of nests — and boy do I use them!

Top Level: Income. This is my parent category, so it doesn’t run its own budget. My sub-categories get rolled up into here.

Layer 2: Freelancing and Other. When I made the transition from PAYE employee to self-employment, I needed a way of delineating that in my budgets. Freelance income goes into Freelancing. Anything else, including extras like the Government COL payments, goes into Other.

Layer 3: Individual Sources. Here, each client gets their own category and their own budget. These might be one-and-done projects, sporadic once-a-month-or-more check-ins, or regular weekly tasks.

Layer 4: Consulting. I didn’t think I had any subcategories at this level, but I do! One of my Layer 3 categories is for “PocketSmith Consulting” — I then have individual consulting clients nested under this.

Calendar management

I love my tax agent — #thanksHnry — however… The drawback of tax being deducted before it hits my everyday accounts (and therefore PocketSmith) is that I’m never 100% certain of the amount to set for a client’s budget. With regular clients, I can smooth it over by setting a monthly amount. But with a single project, it’s more of an issue.

I’m getting better at predicting that net (after-tax) amount, but it is always a guess, which is where the PocketSmith calendar comes in.

When I send an invoice, I add an approximate budget against that client. That way I can see it in the Calendar, so I know to factor it into that month’s budget, but I also know it’s likely to change a little. It’s not set in stone. Once the invoice is paid, I check my calendar, click into that individual budget, and update it to the exact amount that was paid through. Now my calendar is once again accurate. Easy as!

Roll-up functions

Nesting categories and the roll-up function go together like fresh homemade bread and lashings of butter. Or marmite and cheese. Or a hot coffee after a long walk. You get the idea. They’re a good fit. They work well together.

I love my (many) subcategories, but I don’t want to see their individual amounts all the time. On my dashboard, I keep my earning and spending donut set to “roll up sub-categories into parent category”. This gives me the broad overview at a glance without bogging me down in extraneous detail.

Likewise, with my Budgets page. The flexibility is even greater here to go as granular or as broad as I’d like. I tend to roll budgets up to the Top Layer Income category and see my overall total income. If I want to, I can also roll to Layer 2 and see the balance of Freelance income vs. Other income. For my PocketSmith advising in Layer 3, I can roll up all consulting clients into their own parent category. And for yet another option, if I want to see all that glorious detail, I unroll the budgets, expand all categories, and see how each active budget is tracking on an individual client level.

It might seem like a lot of options. That’s because it is! I love the flexibility and the versatility of PocketSmith’s systems. When I want the broad overview, I take a thirty-second look at my dashboard. When I want all the nitty-gritty details, I can do a deep dive. Juggling multiple sources of income isn’t easy, but these days it’s more important than ever — and PocketSmith makes it a breeze.

Ruth's Two Cents: Dealing With Being Made Redundant

Wed, 31 May 2023 12:00:00 +0000

Hi Ruth,

As you’ll no doubt have read, tech companies are taking a big hit at the moment and are experiencing mass layoffs. Unfortunately, I am one of the many who have been affected by this — my role will be made redundant in three months’ time. What can I do at this time to safeguard my finances should I remain unemployed for an extended period of time?

I’m sorry this happened to you, but I feel optimistic about your choices. Time to shake off the gloom that your position has been disestablished and turn the page to start planning the next chapter.

The first standout to me is that you have time, three whole months, to make a plan. You should use every minute of the 90 days you have been given before the income stops.

The second thing that has occurred to me is that you will likely receive some form of redundancy payment relative to your time with your company. So, alongside your final pay cheque, where you will receive all of your outstanding annual leave entitlements and any unpaid bonuses, you will also potentially receive a lump sum payment. Perfect.

You now have both time and money.

Things are looking up, don’t you think?

Become your own biggest advocate

For the next 90 days, you have two full-time jobs. The first is finishing up with your company and exiting with your head held high, completing every task asked of you to the highest professional standard. The second is as head of your new marketing team, which has just one client: YOU.

As others panic and run for the exits, rushing to abandon a sinking ship, you will put on your life jacket and keep a level head. You will be hitting the job market with thousands of others, so you better believe that being head of marketing is a very serious job.

Now is the time to:

Gather the details of every person who will speak well of you to any future employer.
Create a comprehensive list of every skill, qualification, and experience you have under your belt from this job and your life.
Brush up on your networking skills so that the word is out that you are looking for your next role. Talk to as many people as you can.
Sign up for every job agency or website that you can find.

Your goal is to cast your net wide and find out two things:

What wide array of career opportunities are available to you.
What do you really want to do?

Temporarily reposition your finances

You are in your strongest position to follow your heart into a new, perhaps different, role and negotiate strongly if you don’t reek of financial desperation.

So the day they gave you notice should be the day that you took the deepest look at your finances that you ever have. You ask how to safeguard your finances, and my advice would be to slash all unnecessary spending. You can spend money on necessities: Food, accommodation, utilities and transportation, but other than that, for this short period and until your situation stabilizes, you need to be strict with yourself.

Because keeping the money you already had, plus the final payment from your job, in your bank account, will be the difference between ‘having’ to take a position and ‘wanting’ to take a position. Creating the biggest financial buffer possible will give you choices.

Do the hard work before you take a rest

As your final day at work draws near, if even after your intensive search, you are still looking for a new position, now is not the time to give yourself the luxury of a break from work. If you try to take a holiday now, you won’t enjoy it because knowing you are jobless will hang over you like a dark, ominous cloud. Instead, get out of the house and find a job — any job — that will cover the necessities mentioned above. As long as you have income covering those things, your financial position and cash buffer will remain stable. This will make you feel calm and in control.

Keep your foot on the gas of your job hunt, and when you land your ideal job, which you will, that is when you take a break from work — a short holiday to replenish your depleted energy levels. This is your time to relax after an intense yet short season of your life. You will enjoy it so much more knowing that you did everything you could, under your own steam, to transition from one role to another. Relax and take a short holiday knowing that one door closes and you have just opened the next one.

I’m excited and optimistic for you! Go well.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

Managing Stress at Tax Time

Tue, 23 May 2023 12:00:00 +0000

The second quarter of the year means many of us are facing tax time. Whether your financial year ends in April or June, it’s a hectic period for anyone who shares our inherent fear of taxes. Seriously, why am I so scared I’ll get in trouble when I literally bend over backward to adhere to the rules?

The point is, tax time is stressful. There’s the admin stress of getting your receipts in order, filling in the documentation, and actually filing the thing. But there’s also the mental and emotional stress that comes with our annual financial obligations.

If you too find tax time more anxiety-inducing than an impending mercury retrograde, here are some stress management tips to give you a little tax time chill.

1. Be honest: What are you actually afraid of?

Very few people love tax time, but it pays to get clear on what you’re actually afraid of. Sometimes there’s a deeper layer to it than we realize.

Yes, filing your taxes can be an admin headache. But there could be more contributing to that icky feeling. Annual tax compliance can make you acutely aware of your financial habits and behaviors, and that can be confronting.

Are you nervous to face the real figure of how much you made this year for fear of feeling like you’ve nothing to show for it? Perhaps you’re fearful of getting a tax bill because it exposes errors in your money management system. Or maybe looking at your annual income and expenses brings up all kinds of comparisons or feelings of inadequacy around how much money you make?

Money avoidance is common, and it can carry a lot of shame. Facing up to your fears around tax time can tell you a lot about your overall relationship with money. Awareness is the first step to tackling change.

2. Separate threats into real and hypothetical

Now you’ve an idea of what’s keeping you up at night, we can start to work on taking action. List out all your fears and break them down into threats that are real, and threats that exist only in your mind.

Even the fears that seem real — like getting an income tax bill you can’t afford — aren’t actually real until they happen. By bringing your attention to all the fears that exist in hypotheticals, you can cut through the noise and see that you’re stressing over something that hasn’t happened yet. This can motivate you to take action toward finding out if it’s something you really need to deal with or not.

3. Break the task down into manageable chunks

One very real fear you might have is that you’re too busy to sit down and do your taxes — it genuinely can mean admin that doesn’t fit into your schedule. But the benefit of those real fears is that we can actually do something about them.

Breaking the task of your taxes down into manageable chunks can reduce that feeling of overwhelm when you’re looking at the task as one big beast. Break it down into smaller steps that you feel less stressed about tackling.

4. Set aside time to do small tasks

With those small tasks, take a hot tip from author of Atomic Habits, James Clear, and set aside a date and a time to do them. All too often we make bold promises in our head with no specificity. This means we’re subconsciously leaving the task at the bottom of our priority list. If anything else can distract us, the task won’t get done.

Setting a time and a date to do the small tasks helps keep you accountable and increases the likelihood of actually following through.

5. Build positive goal-setting into your tax routine

Doing your taxes can feel like a thankless task — especially if you wind up with a bill. It makes sense why you wouldn’t be motivated to start. To help make the experience a more positive one, factor in a positive goal-setting session at the end and use it as an anchor point in your year. Think about where you dream of being by next tax time to bring a sense of hope and possibility to the experience.

Staying organized at tax time

Keeping things organized can make tax time so much easier and prevent stress from reaching overwhelming levels. PocketSmith can help make tax time a breeze by giving you complete visibility over your transactions, and allowing you to tag and note-take on different transactions to help with record keeping throughout the year.

My Five Favorite PocketSmith Dashboard Widgets

Wed, 17 May 2023 12:00:00 +0000

Dashboards are one of my favorite things about PocketSmith. You can go as macro-overview or micro-detail as you like, they’re endlessly customizable, and for an added bonus — you can run as many dashboards as you’d like!

Let me give you the quick rundown of how I use mine (all three of them), and then I’ll take you through my top five widgets.

widget | ˈwɪdʒɪt |

noun

1. A small gadget or mechanical device.

2. (Computing) An application, or a component of an interface, that enables a user to perform a function or access a service.

- Oxford English Dictionary

Okay, carry on…

My PocketSmith dashboards

1. Everyday Overview

If I only have five minutes a week to take a glance at my finances, this is where I come. A balance graph of my everyday accounts, active budgets, monthly spending donut… it’s all here. I also keep a couple of tracker widgets: One for my Net Worth (tracking up) and one for my Student Loan (tracking down).

2. Student Loan Countdown

It’s simple: I hate debt, so I make myself look at it. It’s like exposure therapy for arachnophobes, except it’s my student loan. A balance graph tracks my total, while a budget widget tracks repayments. Forecast widgets look ahead to tell me what the balance will be in 3, 6, and 12 months’ time.

3. Sankey & Misc

This is the ‘everything else’ dashboard. The banner Sankey is pure fun for seeing my money flows. I keep a close eye on some spending-creep areas too: One with a donut filtered by label, the other with a transactions column widget.

My top five widgets

The Balance Graph — hello, old faithful. Look, I just want to see my money, okay? I want it to be at the top of the dash, I want to see if it’s tracking up or tracking down, and I want the option to include or exclude certain accounts. It’s as simple as that. The balance graph lets me do it all seamlessly. It might not be as flashy as some of the young’uns coming through (looking at you, Sankey) but it doesn’t need to be. This sturdy workhorse is the backbone of my dashboard.

4. Balance Alert

I love the Balance Alert widget for its sheer versatility. I have versions of it on two out of three dashboards. The common use is to alert you if your balance drops below a set amount, but I use it for more or less the opposite. Growth mindset, hello! I’m tracking upward here.

Widget 1 is set to show “all accounts”, thus giving me my total Net Worth number. It forecasts ahead to tell me when I’ll cross my next significant-number threshold.

Widget 2 is set to “student loan only.” Based on my current repayments, it forecasts ahead and tells me what date I’ll have my loan paid off (not soon enough!)

3. Filtered Donut

This one, I figured out for a client before I started using it myself.* Their problem: How to show spending in one sector when that sector is spread across all your existing categories. For me, it was realizing that every time I caught up with a certain friend, I spent more money than I’d intended to. But how could I see that on my dashboard?

The solution: Labelled transactions and a filtered Earning and Spending Donut.

Now I label any transactions involving that one friend. I have a Donut graph with all my existing color-coded categories, but instead of showing monthly transactions, it displays transactions with that label. This shows me exactly how much extra I spend (ouch), and motivates me to suggest cheaper alternatives instead of another expensive lunch out.

*I do freelance PocketSmith consulting! Get in touch.

Lifestyle creep is a menace, innit? The minute I start earning decent money, my wallet pipes up and wants in on the fun. I try to keep an eye on the creep, if only to squash it before it gets out of control. Hence this widget.

Take a transactions column widget, filter by whichever categories or saved searches you’d like, et voila. Instant mini trend graph, right there on your dashboard.

And my absolute favorite…

1. Earning & Spending Donut

Like the balance graph, some things are just an instant classic. The monthly Earning & Spending Donut was a big drawcard for my decision to join PocketSmith in the first place. It was the first thing I put front-and-center on my dash, and it continues to be a firm favorite and the thing I recommend to most clients.

I haven’t found anything else like it for seeing my income and outgoings represented spatially at a glance, while utilizing the color-coding from my existing categories. Not for me, the basic red-for-expenses, green-for-income: Say hello to the whole dang rainbow. The donut is colorful, it’s visually appealing, it’s informative in a way that doesn’t take three PhD’s to understand… what’s not to love?

Mmm, donuts.

Teenage Investor: Mining My First Shares

Mon, 15 May 2023 12:00:00 +0000

Over Christmas, I was gifted AUD$85 worth of shares in an ASX-listed company called Santana Minerals. My grandfather gifted me the shares in the form of a Sharesies gift, which I then used to buy 100 shares through my personal account.

When I received the gift from my grandfather, it had a note attached to it. Amongst other things, he said the shares are speculative — in the future they could be worth something, or be worthless. Either way, he thought it would be a fun experience to follow. He said it would be interesting to follow the shares, and one day visit one of the mining sites in Central Otago.

Researching and understanding risks

This is my first experience investing in an individual company, as I have only previously invested in ETFs. I learned that investing in individual companies comes with a few risks, including: the company going bankrupt, getting involved in a scandal, causing an environmental disaster, or simply losing interest from investors.

Since I have never owned shares in an individual company before, I now feel that I should do some research on the mining project. I went online and found that Santana Minerals Ltd is an Australia-based nickel and precious metals explorer. I had a quick look at their website, which contained sections including: Announcements; Reports & News; Share Price; and Presentations. I also searched Santana Minerals on Google News, and read the coverage about their different mining projects. Their website also has some information on the Bendigo-Ophir project, a gold project located in Central Otago, New Zealand.

Environmental impact

I googled whether gold mining is environmentally friendly and found many differing opinions, some saying that it’s one of the most destructive industries in the world, and others saying the opposite. The Bendigo-Ophir project states: “Our vision is to develop the Bendigo-Ophir project into a world class, long life, environmentally sustainable mining project that will bring generational employment and prosperity to the Bendigo Region.” This shows that they are aiming to be environmentally friendly. For now I think that there is still a lot to learn before I can form an opinion on the project.

The process of buying the shares was relatively easy. First, my grandfather bought a Sharesies gift card worth $85, and then he shared the code with me. Once I received the gift card I bought 100 shares (worth around $85 at the time).

When I first purchased the shares on 9 January, they were valued at $0.68 each. At their peak on 14 February, their worth increased to $0.91 each, resulting in a gain of around AUD$25, and my hopes were high. As of now (20 April), they have slightly dropped to $0.80; however, this price is still higher than my initial purchase, yielding a 4.66% return. I remain invested in the journey and hope that the share price continues its upward trend.

I plan to follow Santana Mineral’s journey by tracking my Sharesies, and I’ll keep an eye out for any news reports. I’m sure I’ll also be able to ask my grandfather for any updates in the future.

PocketSmith Gives Garry Transparency Over His Net Worth

Sun, 07 May 2023 12:00:00 +0000

Read how PocketSmith is giving Garry and his wife oversight of their day-to-day finances so they can concentrate on the bigger things, like planning for retirement.

Tell us a little about yourself?

I’m a project manager in the digital team (Information Technology) at the Bay of Plenty Regional Council. I’m married to Sharon, who works for Boffa Miskell as a Marine Ecologist. The last of the kids is moving out… yay from me, tears from mum. Now that the kids are spending less time with us, I have rediscovered mountain biking. Unfortunately, the money spent on everything associated with mountain biking has recently been exposed with us adopting PocketSmith!

How would you describe your role in your household?

Keeping the family happy.

What drew you to PocketSmith?

Through work, I attended a half-day retirement planning course (I’ve still got 10 years before collecting the Gold card!). The course consisted of two parts, lifestyle changes and the financial side of retirement. The key messages of the financial part were to get an understanding of your net worth, where you are spending money and how much you could be saving. A reference the presenter provided was the Sorted website, and one of their suggestions was PocketSmith. I had a quick look at the PocketSmith website and it appeared to meet all our requirements, is affordable and we love supporting New Zealand-made where we can.

How long have you been with us?

About two months.

What do you primarily use PocketSmith for?

Personal finances.

How has PocketSmith changed the way you do money?

Firstly, a few eyebrows were raised when we realized how much money we were spending in “discretionary” areas. It also made us look at the number of subscription services we have — they sure add up quickly.

After adding in our assets, debts, investments and KiwiSaver accounts, the cool thing for us is that PocketSmith has exposed that our net worth position is a lot better than we thought. Now we can focus on the lifestyle planning side of retirement!

What are your favorite features?

The automated bank transaction importing. This, combined with setting up category rules, takes all the hard work out of it.
The out-of-the-box reporting periods (e.g. rolling month, last week, quarter, etc) make getting the information you need really easy, without having to export and manipulate the data in another application.
The Financial Digest, and Income and Expenses report. These two reports are our “go-to” reports. We are reviewing these a few days after each month’s end. The monthly comparison graphs are a great way to see how we are tracking.

Got any tips?

Spend time on setting up the categories. I stuck pretty close to the default categories but introduced sub-categories to get the reporting granular enough. I had a couple of attempts at it; thankfully the searching and group editing tools make changes easy.
Using labels to further categorize the transactions is useful… but can also get you in trouble because it can highlight how much is being spent on biking!
Get a PocketSmith subscription that has bank feeds functionality — you won’t regret it, it saves so much time.

How Does A Recession Affect Your Personal Finances?

Tue, 02 May 2023 12:00:00 +0000

What is a recession?

A recession is generally defined as two consecutive quarters of decline in a country’s real gross domestic product (GDP). A functioning economy sees money flowing freely and at a stable pace, but during a recession, economic movement slows down and stability is tipped out of balance. The government’s job is to restore balance, by stimulating or slowing spending and stabilizing prices.

What are the impacts of a recession?

The impacts of a recession can become a self-fulfilling cycle. If business productivity is reduced, people may lose their jobs or miss out on pay increases, which has a knock-on effect on consumer spending, which then affects business profitability, and so the cycle continues again. Psychologically, the negativity surrounding a recession creates a lot of fear, and our natural human instincts kick in. First some people panic sell investments at a loss, and then others copy, which creates further ripple effects throughout the economy.

How does a recession impact me?

Here are some important ways a recession could impact you as an individual:

Job security

Economic uncertainty can leave businesses vulnerable. If demand for products and services is reduced, business revenues can suffer, leaving them with no choice but to cut costs — which can be in the form of redundancies and layoffs. Depending on the cause of the recession, certain jobs or industries may become more broadly unstable, making it harder to find another job.

Higher rates on lending

Governments control the central cash rate that informs the interest rates that banks and financial institutions pass onto customers. When in a recession, interest rates may increase as the government attempts to stabilize the economy, which can mean borrowing is more expensive. This means higher repayments on loans and mortgages, leading to less disposable income for individuals with loans to repay.

Higher rates on savings

The flip side of that is the interest rates on savings accounts may increase, meaning your money is earning more money. The fluctuation of interest rates informs consumer behavior by disincentivizing borrowing and spending, and incentivizing saving.

Volatility in investments

If you hold investments in stocks or funds, the value of these may decrease during a recession. This can happen as a result of reduced business productivity and profitability, and greater threats to previously high-performing sectors. However, market dips can provide opportunities to those who continue to invest through the downturn rather than selling at a loss.

Inflation

During a recession, the cost of goods and services may increase at a faster rate than usual due to inflation. Higher inflation means the value of money decreases faster than it should, and can cause the cost of living to rise faster than wages.

How do I prepare for a recession?

It’s always wise to be prepared for a recession or any other financial difficulty, whether caused by broader external factors or personal life events. Here are some tips on preparing yourself for financial downturns.

Build up an emergency fund

An emergency fund is one of the best catch-all financial protections you can prioritize. Saving up 3-6 months’ worth of living expenses can give you the breathing space you need to deal with job losses or rising costs.

Plan for the worst-case scenario

Acceptance is powerful in handling a crisis, so planning ahead for your worst-case scenario can help you better manage financial adversity. Take some time to sit down with your finances, assess how much security you have, and what your plan of action could be if you lost your job or if your expenses rose sharply. Identifying a crisis plan ahead of a crisis occurring can be incredibly powerful.

Trim the fat on your living expenses

… or at least identify areas you could cut back if necessary. Getting clear on your income and expenses and understanding areas you have the flexibility to cut back can help you know where to turn if things get rocky. Whether you could shop smarter with your groceries or ditch your subscriptions and memberships, knowing which strings to pull can take a huge emotional and financial weight off.

Visibility over your financial situation puts you in a strong position to adapt to unexpected events like recessions. PocketSmith is the global personal finance software that gives you total customizable control over your finances, and helps you feel prepared for life’s ups and downs.

Book Review: "The Bogleheads' Guide to Investing"

Thu, 27 Apr 2023 12:00:00 +0000

John C. Bogle may not be a household name, but you’ve almost certainly heard of his creation — Vanguard. When he founded Vanguard, Bogle argued that a passive investing approach of holding low-cost index funds over the long term was the best for the vast majority of people, arguing that the high fees of managed funds aren’t worth it and will often underperform the market.

The Bogleheads’ Guide to Investing is co-authored by Mel Lindauer, Tayler Larimore, and Michael LeBoeuf and centered around this John C. Bogle-investing style. The three are a part of the ‘Boglehead’ community — one which espouses Bogle’s investment techniques and comes together in online forums from all over the world. All three are financial and business experts in their own right, with Lindauer and Larimore being dubbed the Prince and King of the Bogleheads respectively by John Bogle himself.

The book covers a wide range of topics, from the basics of stocks and bonds to more complex topics such as tax-efficient investing and asset allocation. It also includes practical advice on how to choose a brokerage, how to rebalance your portfolio, and how to avoid common investing mistakes. Each chapter centers on specific aspects of the Boglehead investing mentality, and although it contains aspects of general personal finance, it has a much clearer focus on the intricacies of investing than other books I’ve reviewed.

One of the main features of the book is the emphasis on the importance of having a clear investment plan and sticking to it, even during turbulent market conditions. The Bogleheads argue that successful investing is more about discipline and patience than picking the “hottest” stocks.

A couple of my favorite takeaways

Get the basics right for your investing journey

The initial chapters of the book focus on laying the groundwork for your investing knowledge. They discuss the basics of a healthy financial lifestyle — spending, paying off debts, investing, and emergency funds. You’ll have heard all of this before, but that’s because it’s worth repeating. You can’t properly begin your investing journey without having created a strong, stable foundation.

The Bogleheads go on to present some of the more in-depth explanations of the different types of investments — from types of stocks and bonds to mutual funds, index funds, and exchange-traded funds.

I love the use of comparison tables which start here but are also found throughout the book. Rather than just telling us which options might be best for you, we get to see all the pros and cons laid out in black and white. In many chapters, the authors have collated quotes and opinions from many of the foremost figures in the investing world, backing up their arguments. And it’s not just one or two, but rather a couple of pages worth of supporting voices.

In the latter chapters, the Bogleheads discuss other key parts of personal finance such as investing for college, managing financial windfalls, investing for retirement, and passing on your assets. Not only are the classics of investing and personal finance discussed, but also the specifics in terms of what kinds of accounts you might want to use, what your goals are, minimizing tax liability, etc.

“Index funds outperform 80% of actively managed funds over long periods of time.”

Keeping your investments simple is best

The main thesis statement of this book is that for most people, in most situations, you’re better off investing in low-cost index funds that track the market rather than attempting to pick stocks or time the market. It’s reiterated many times throughout the book and from several different points of view.

It’s well-accepted that you have little chance of outperforming the market over the long term by picking stocks, in fact, “Index funds outperform 80% of actively managed funds over long periods of time”. The couple of main reasons behind this: One, that the active fund managers actually aren’t successful at predicting where the market will go in the long term, and two, that the actively managed funds and portfolio managers often charge exorbitant fees that cut into your profits. Even if the fund is outperforming the market, after fees, it often comes in at well below market returns.

One of the more fascinating sections of this book (although slightly dry in delivery) is its explanation of all the costs different funds may have as well as fees that financial managers may charge. While I’ve always heard that fees can kill your financial gains, this is the first time I’ve read up on the specifics — and they’re eye-opening. Greg Baer and Gary Gensler are quoted as saying “Many of the costs of investing are practically invisible — you never have to write a check to anyone for fees or commissions,” and it’s never felt truer to me since reading this. Having read it, it’s somewhat like a kick in the butt for me to reevaluate my own investing strategy.

Understand the implication of taxes on your returns

Another major section of the book deals with the “devastating impact of taxes” on your returns. Whatever the kind it may be, taxes have tremendous impacts on your returns, and knowing how to limit your tax burden can save you tens, if not hundreds, of thousands by the time you retire.

The Bogleheads present explanations of different savings, investment, and retirement accounts, all of which have different implications for how much tax you have to pay and when. Here, again, the use of comparison tables is an excellent way to easily show the pros and cons of different accounts that you may want to use. Although it’s largely focused on the US tax system and accounts specific to that system, learning about them may encourage you to read up on your own national versions of them which, I’m sure, is exactly what the authors intended.

In short, yes! At 270 pages long, it’s incredibly informative and punches well above its weight. Its writing style is lean and gets to the point faster than other personal finance books with much less fluff. Previous books I’ve recommended have had a conversational style, and this is the same, yet slightly different. This comes across more as an engaging financial lecture rather than a conversation with your personal finance buddy. At times fun and at times dry, this book is sure to start the reader on the right path toward financial freedom through investing.

I also have to mention the appendices which detail all the finance definitions that we come across throughout the book and also give you a reading list (from novice to advanced) if you wish to continue your investing journey. As the entire book is an advocate for index funds, it makes sense that you can find a Q&A section regarding Vanguard funds and which ones may be right for you.

All in all, this has to be one of the go-to books for the basics of investing. With a focus on frugality, low investment costs, and building a simple, low-maintenance portfolio, the Bogleheads are saying all the right things. The idea of keeping things simple is something that all investors can learn from, and this book presents that idea masterfully.

Book cover used in banner image from Wiley

Anton is PocketSmith’s Marketing Coordinator and is currently completing his BComSci degree in Marketing and Ecology alongside working at PocketSmith. Anton started his investing journey in high school and hasn’t looked back since. He’s a strong proponent of index investing, although he still likes the thrill of individual stocks on the side.

Battling Cost of Living Increases With Small Actions

Mon, 24 Apr 2023 12:00:00 +0000

Due to the cost of living increases, I have been cutting back in some areas and redistributing money to things that have increased in price. You are probably doing the same. I think it is best to cut back spending before we run out of money, not because we have run out of money.

It’s been a tough couple of years, and in another blow, prices of everyday goods and services are creeping (or jumping in some cases) ever higher. I’m confident it will settle down at some point, but like everyone else, I don’t know when that point will be. So I decided some time ago to make changes before I feel the financial squeeze upon my family, which, if I don’t take my foot off the spending gas pedal now, it will inevitably do.

Remain present in your finances

Pre-dawn is my time to sit uninterrupted with PocketSmith and review our spending in each category. This is my first tip for you. You must set aside some quiet time to take a strategic look at your money and fully understand its ebbs and flows.

If instead, you decide to act in the moment, the attention you give your money will be sporadic. If you think, “Right, that’s it, I’m cutting costs today”, chances are your willpower and attention to detail will probably only last that one day, two at most. So many transactions happen behind the scenes, with automatic payments flying out of your account monthly and yearly. You will have at some point set up payments and transactions to save time, but unless you check in on them, money that you have simply forgotten you organized is flying out the door. PocketSmith will do a fantastic job of categorizing all this data for you, but it’s still your job to actually look at it and learn from it.

As arduous as it seems, taking the time to regularly check in and concentrate on what is going where is going to cut your costs more than returning that $6 head of broccoli to the supermarket shelf.

I’ve been making a more regular effort to make month-to-month, year-to-year, and category comparisons in PocketSmith to confirm whether my hunch of a price increase is correct. That way, I look at factual information and can actively choose to do something about it.

Look at the big picture…

Firstly, I take a high-level look. To help me do this at a glance, I’ve color-coded my pinwheel using the following:

Green - Income
Red - Essential spending
Orange - Nice to have spending
Yellow - Insurance

Because we are trying to tighten our belts, I aim to see as little of the color orange in my pinwheel as possible, meaning that the majority of my spending is on essentials and insurance.

…then examine everything closely

Then I will drill down into some key categories and make some comparisons with the previous year. If possible, I’ll adjust our lifestyle to bring the costs down. For example:

Fuel per month

2022: $243

2023: $156

I committed to walking to work as much as possible. I’m saving $87 per month, an annual saving of $1,044.

Dining out per month

2022: $207

2023: $145

You guessed it — we are packing our lunches and cooking at home more, saving $62 per month and $744 annually.

Monthly house maintenance

2022: $585

2023: $281

We have stopped any big projects and are instead just doing what we need to do to keep our house well-maintained, saving $304 per month and $3,648 annually.

Monthly grocery spend

2022: $1156

2023: $1040

We are shopping smarter, adjusting our recipes and cutting back on luxuries, and have reduced the amount we are paying by $116 monthly, saving us about $1,392 annually.

We are simply trying to spend our money smarter. In the past, if I saved money in one area, I could spend it on a financial goal I had planned — now these savings are simply being redirected to all the areas that have had price increases.

I think of it as redistributing our spending towards areas currently sucking up more money than before. When I look at our total outgoings year to date, we are on track to spend less than last year, showing me that we are spending our money quite differently from previous years.

Keep it super simple

There is another layer to our cost cutting, one that I think is having the greatest impact on reducing our costs, and I’m taking a leaf out of an elderly person’s book to do it. Why an older person’s point of view? Because they lived in a simpler time, they often have a very simple answer for what can be a complex problem.

Behavior change is a key factor in keeping our outlays from growing any higher than they have to. I have an apple tree in my yard. In previous years, I’ve enjoyed picking an apple a day straight from the tree, loving that autumn flavor. During the weekends, I’d pick up the windfall from the ground and put them into my compost bin, completing the cycle of life. This time, I’ve added one more step in the process. I have turned every apple that hit the ground this year into applesauce and stored it in recycled jars. It is not only delicious, but it is 100% free. To me, this is a new thing; to my grandmother, this would have been the obvious thing to do! The very reason she would have planted the tree was so that she could pick the apples and preserve their goodness for year-round use.

It won’t hurt us to simplify our lives for a time, and there are benefits beyond what I’ve touched on here. Throughout this week, when you are looking at your spending, ask yourself what your grandparents would think of your choices. What would they have done in the same situation? I know that I have surprised myself that I can really make some big savings and some big changes just by trying something new.

Nothing lasts forever, this time will pass, and we may be able to return to our hedonistic ways, and who knows, maybe when we look back at this time, we will tell our grandchildren how back in 2023 the prices got so high we had to stay home on the weekend and eat porridge for breakfast, instead of visiting our favorite cafe for eggs benedict, with a side of bacon and a large flat white. Times were indeed tough in our day!

How PocketSmith Helps Me Pay Off My Student Loan Faster

Thu, 20 Apr 2023 12:00:00 +0000

“Student loans,” said my hairdresser. “Teenagers borrowing thousands of dollars. What’s with that?”

“Right?” I agreed.

“I know a guy who moved to Australia when he graduated med school. He’s been there a year, working in some tiny outback village, and he’s paid his loan off already.”

I digested that news in (slightly jealous) silence. “Wow. Good on him.”

I admit, I’m still paying my student loan off — maybe because I didn’t move to the outback for work straight after university. But then, because I live in New Zealand, I don’t pay interest on my loan. Those 2.8% rates kicking in around the six-month mark must bite.

In NZ, we don’t deal with exorbitant interest rates like our American friends, or rely on student loan forgiveness programs. But we still have to pay it back. Past a low-income threshold ($22,828 a year or $439 a week, before tax), 12% of every pay goes on student loan repayment.

When I tell people I’m using PocketSmith to pay my loan off early, I get a blank look.

“Why?” is the most common response, followed by “How?”

Fair enough. It’s an interest-free loan: Why pay it back early if you’re not being penalized for having it?

Reason #1: It’s the right thing to do

Yeah, the 12% trickle would take care of it over time. But that’s the bare minimum. This was my decision, right? I signed up for this. I borrowed the money. I agreed to repay it. So, as a decent human being, it’s my obligation to pay it back.

Reason #2: Get that 12% pay rise, baby!

The thing is, we are being penalized for having that student loan. Penalized to the tune of 12% in mandatory repayments.

My last PAYE job offered a 3% annual pay rise. At that rate, a 12% pay rise would take around 4 years. Want that 12% sooner? Try the student loan repayment calculator and add, say, $20 a week extra towards a $15k loan. Instead of December 2026, you’ve paid off your loan in November 2025 — which gives you a 12% bump in take-home pay a whole year earlier.

Reason #3: Net worth — every dollar down is a dollar up

I love PocketSmith’s Net Worth page. Net worth is simply what you own minus what you owe. PocketSmith provides these in two handy columns with a total in the header — and as you can see, I have exactly one liability.

My old nemesis, the student loan.

I hate being in debt. I hate that one item under What I Owe. What I love is seeing my net worth slowly growing over time. Every dollar I pay off my student loan is another dollar that gets added to the header total, because it’s money I no longer owe to anyone.

To put it another way, every dollar down is a dollar up: A dollar paid down on the student loan is a dollar paid up to my net worth.

Now, there are different ways you can set this up, and also ways you can track it.

Set it up

Make one-off payments direct from your bank account. Just look for the “IRD” or “Pay Tax” option and then select “Student Loan.” Alternatively, IRD payment options are here.
Make regular automatic payments directly from your bank account. Instead of a single payment, set it to once a month. Set and forget, it’s that simple!
Set up a weekly auto-payment directly through MyIR for a set period — say, 12 months. The IRD’s systems can be a little messy to work with, so I’d recommend looking at the other options first.

Track it

Tracking it in PocketSmith couldn’t be easier.

I use an Offline Liabilities account with a scheduled weekly transfer from my everyday account. This is great for Basic users or if your loan institution isn’t yet supported by PocketSmith.
For Kiwis, you could manage this directly through Bank Feeds. Just sync your feed directly with the IRD and it’s taken care of for you. No worries!

However you want to do it, PocketSmith makes tracking your loan payments easy. I love the peace of mind that comes with watching that balance tick down over time. It’s such a relief knowing that I can be debt free an entire year sooner than I otherwise would be — all for the price of a few coffees or a lunch out.

And I don’t even have to move to Australia to do it.

Is Paying for Netflix Worth It in a Post-Password Sharing World?

Tue, 18 Apr 2023 12:00:00 +0000

In case you hadn’t heard, Netflix has begun implementing the end of password sharing for its streaming service. That’s right, you can finally delete the message thread with your ex. The days of scabbing off their logins are over. As the streaming giant begins its rollout of what has to be the greatest dog act of all time, many of us are left wondering — is Netflix even worth it?

Password sharing has become ubiquitous with content streaming. We can all admit to fanging our password out to mates or family at some point, and maybe you’ve even got a strategic sharing setup going on to spread the cost of the best streaming services.

Netflix now stipulates that accounts can only be shared within households, which means if you want your own login, you’ll need to pay for it yourself. It remains to be seen how many users will succumb to Netflix’s demands, but as the rollout continues, it’ll be interesting to see whether those who have lost second-hand access end up signing up for their own account.

It’s time to audit your streaming services

Netflix’s midlife crisis serves as an important reminder to consider whether you’re actually getting the use out of your streaming services. What began as one or two subscriptions has spun into a smorgasbord of content hubs, each pocketing a monthly fee out of your hard-won cash.

While Netflix and its peers might have seemed like the central force of the earth during lockdown or when you were laid up in bed with the flu, it’s worth asking yourself how often you’re actually using all these services.

Are we victims of membership models?

Streaming businesses love membership models because it means recurring revenue. This allows them to have greater visibility over potential future income. And sure, when they’re pumping out new content that we have access to, it makes sense that we pay for that.

But has it gone too far? And how much revenue is a result of users simply ignoring their subscription or forgetting they’re even paying for it?

You know the routine. You sign up again because there’s a show you want to watch. You say you’ll cancel it, but you don’t because you’ve got that weekend away coming up, so you say you’ll cancel it after that, but you forget. And suddenly it’s four years later, and you can’t face canceling because you’ve gotten so used to having the option.

How to detox your streaming expenses

With the cost of living rising, it’s time to be ruthless with our streaming services. Here are some ways you can audit and optimize your streaming expenses:

Keep a streaming services log. We know, it sounds kinda silly, but seriously. Get clear on how often you’re actually using your streaming services.
Consider being strategic with your bingeing. Love to devour a new series of Love Is Blind on Netflix but also love Ted Lasso on Apple TV? Try subscribing to just one service per month. Strategically binge what’s dropped, then cancel and switch for another one. It’s a bit of extra admin, but it could save you a big buck.
Review your streaming services transactions. Are you even sure which you’re still paying for? You can tag these transactions in your PocketSmith dashboard or categorize them together and monitor where your money is going.
Make sure you’re sharing the load with friends, housemates, or family members. Netflix might have canned password sharing, but other services haven’t yet followed suit. Take this as a reminder to check that you’re not footing the bill for all your mate’s subscriptions. Either assign each person a service to pay for or divvy up the total bill you’re paying to make it fair.

Ruth's Two Cents: Entering the World of Home Renovations

Thu, 13 Apr 2023 12:00:00 +0000

Hi Ruth,

My partner and I are looking to move to one of the major cities soon for work opportunities. We bought our first home a few years ago, and we’re looking to hold onto it and rent it out. However, we need to do some remodeling to make it fit for renting. Renovations are pretty new to us, and the finance side of it is the thing that’s stressing us out the most. How do we incorporate renovations into our budget? And what renovation costs should we be prioritizing?

This question prompted a few questions for me: Why hold onto your house? Why not sell it and buy a home in the city you are moving? Do you want to return to your original city at some point? Or can you not afford to buy in your new city?

When you rent out your home, you are inviting a lot of drama into your life, both personal and financial, so I would encourage you to think deeply about the ‘why’ of becoming a landlord. I can’t guide you toward your reasons for renting your property, but I can certainly help you budget and pay for your renovations before you offer it to a tenant.

Find out what needs fixing

The priority would be to find exactly what your home needs to bring it up to a rentable standard. Approach a couple of property managers and ask them to view your property and advise you on what you need to do to appeal to future tenants, as they will know the market better than you. Don’t just take their word for it though, you should also research the government requirements for providing a rental home.

If you are about to become tenants yourself, you can also think about what you are looking for in a property and seek to provide that to your future tenants.

Once you know what your home requires:

Write out a comprehensive list of the jobs required, and then set about costing out each repair and upgrade in as much detail as possible. Request quotes for work from honest tradies and suppliers and find out their timeframes too.
Create a timeline for repairs, prioritizing the most essential maintenance and working towards a handover date.

This will now give you a firm foundation, instead of guesswork. For example, if you wanted your tenants to start leasing in June:

Consider the impact to your mortgage

It would be easy to consider just extending your mortgage by $20,000 or so to cover those costs, but I think you are kicking the can down the road by adding years and extra interest payments onto your mortgage.

Also, your bank has given you lending on this property as your primary home; they may need to be consulted about its use change and may or may not want to extend your lending.

Keep your financial planning tidy

I’m much more in favor of keeping your financial life tidy and paying your way as you go because plans change. This is proved by the fact you have bought a home in one city, yet are now moving to another. So, leave a tidy trail in your wake. Leave a home in one city that is fit for purpose as a rental property, where the repairs are up-to-date and paid for, and future rent can now pay for the mortgage on this home. This will better prepare you for your future so that you can easily pay your own rent.

By researching the costs, these become known costs, and given enough time, you can budget them. When you commit to saving up and paying with cash, you will feel the pain of each expense, which will mean you’re more likely to negotiate better rates with tradies and take on work yourself to lower those costs.

Decide on your timeframe for moving

The next question to ask yourselves is how much time do you have to raise the money required to cover the cost of your repairs? If you have six months before work begins, you will need to set aside up to $3,333 per month to have the total amount of $20,000 saved before work begins. If you have 12 months to prepare, you need to save $1,666 per month. Or you could ease back your saving and create a timeline to have the right amount of money saved up by the time each component of the work is completed.

Setting up a budget is the easy part. You find out how much you need and you set a timeline for saving it, only booking in the work once you know the money is there to pay the bill.

Create visual reminders

That timeline of repairs you created, with the associated costs listed out? It should be prominently displayed and a visual reminder of your goals: To create a property fit for renting, with all repairs paid in cash by a specific day, so that you can move to your new city knowing everything is taken care of.

Make more money and then ring-fence it

Raising the money to complete the repairs is the hardest part. I don’t know your income, but I’d imagine saving $3,333 per month would strain your monthly take-home pay. I’d encourage you, during this period of change, to focus on making more money. Get creative! Whether you borrow the money or save it up yourself, at some point, you are going to need to find the money. It might as well be now.

Then create a specific bank account called “Rental Property Renovations”. Every time you sell something, put that money in here. Every time you earn a little bit extra, put that money in there. You can also set up a direct transfer in line with your pay cheque to push money automatically into this account.

Within PocketSmith you can create a “Rental Property Renovation” budget and watch your account balance grow there. Once bills start to come in you can categorize them to this budget and keep yourself on the right track. This can also be where you manage all the future costs associated with being a landlord.

Look to the future

The first step of the process is preparing your property for sale and paying cash for all repair costs, and then you’ll have to manage the ongoing repairs once the home is rented. Just as you have set aside a portion of your salary to pay for the repairs you have made, you will also need to continue to set aside an amount of your rental income/salary for all future repairs and property-associated costs.

The final step where I would encourage you to keep checking in with the economics of your rental property and asking yourselves if it still fits within your family goals. Tracking all the money you have spent and will continue to spend, the income it generates, and the capital gain on your property will give you the information you need to make an objective decision about how worthwhile this investment is to you, and whether it is helping you grow your wealth, or preventing you from living your best life in your new city. Only you can know the answer to that.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

Andrew Digs Deeper Into His Finances With PocketSmith

Mon, 10 Apr 2023 12:00:00 +0000

Read how Andrew is using PocketSmith’s Budget and Calendar features to get on top his expenses and look towards the future of his money.

Tell us a little about yourself?

My name’s Andrew, I’m 52 and I work in IT for a mid-sized company in Australia as Head of IT. My family enjoys going on holidays to international locations, usually about once a year, when we can. We are buying our own house, and I live with my wife and our 12-year-old son. Our adult daughter has just recently moved out.

How would you describe your role in your household?

I’m the primary breadwinner in the household, working full time. I’m the logical one who asks the question: “Yes, but how are we paying for this?”

What drew you to PocketSmith?

My new year’s resolution was to start managing our money better. We seem to spend what we earn. My wife had talked about a holiday at the end of the year. I really wanted to get a handle on where our money was going and why we weren’t getting ahead.

Being good with computers and Excel I knew I could build a simple spreadsheet to manage it. I’d also used Microsoft Money a long time ago for a similar purpose. At the same time, building something would mean a lot of effort and time spent putting it all together and keeping it working. I wanted to find something inexpensive and “off the shelf” that could do the job.

I started googling “personal money management” and even tried to find Microsoft Money. I looked at a few products (free, paid or “freemium”) and tested some of them with varying results.

Then I stumbled onto PocketSmith and signed up for the trial. It was a good price, compared to the time I would spend building something with even one-tenth of the features it had.

How long have you been with us?

Signed up at the start of January 2023 — now coming up to two full months of “live” transactions and management in PocketSmith.

What do you primarily use PocketSmith for?

Well, it was originally going to answer the question “where does our money go”, but I’ve fallen in love with the Budget and Calendar features. Now I know “when will our money go” as well as where!

How has PocketSmith changed the way you do money?

Rather than spending considerations being “do we have money?” or “can I buy this today?”, the question comes to “is this in the budget and is there budget available?” We have a budget for some of the niceties, but now we at least know how any spending will affect our savings toward a holiday.

A psychological benefit is also now that the whole family is aware that we are tracking our spending. We’re all, as a family, more likely to snack on leftovers than order out. And my “new clothes” habit from last year has been broken.

What are your favorite features?

I have so many things that I didn’t expect to be so time-saving and awesome. With this new “real-time banking” world we live in, I didn’t even realize this could be done. So, favorite features in no particular order:

Automatic importing of transactions from various financial institutions. Other systems wanted me to find some common file format to use between them, and then manually download and import those transactions — what a huge time saver the bank feeds feature is.
The workflow. Not necessarily a feature, but the workflow of transactions from “uncategorized” to “awaiting confirmation” to “confirmed” gives me exactly the right spots to care about a transaction at.
Customized dashboards. I can focus on what I care about most from all that I can look at — “will our operating account overdraw” and “how is our credit card tracking” is all on one dashboard now.
Filters. Making categorizing and processing all these transactions much easier!

Got any tips?

Skip Category Rules and take a look at Filters first. They’re more powerful and let you set multiple parameters in transaction categorization.
Turn off all “Auto-categorize transactions” on all feeds (either temporarily or permanently) — for super-detail-control-freak-oriented people like me, the filters you set up above will work way better and the way you expect. This can be changed for each bank feed under Manage > Feeds.
Start your journey with Transaction Confirming set to “I want to confirm all new transactions”, then once you’ve got your Filters refined, slowly turn this off and adjust the confirming to your preferred level. I have “I want to confirm transfers” and “I want to confirm transactions categorized by the bank”. You’ll find this in User Preferences > Transaction Confirming.
Ask questions of the PocketSmith team if you need help or clarification — they’re great, friendly, courteous and respond really quickly.
Get your Tell-a-Friend program set up straight away. You’ll find it in Subscription & upgrade > Tell-a-Friend.

What’s the best money decision you made in the past 12 months?

I’ve got two and they’re wildly different.

Bought a new hybrid car. Servicing is super cheap and consistent. The fuel economy is amazing. So I get to save the planet and save money.
Signed up to PocketSmith. Within a month I’d canceled my debit card as I found my son had signed up for Roblox in too many places. The money we saved in one month from that paid for PocketSmith for the entire year! It also helped to spot those “I’d signed up for but forgotten about” subscriptions to things like Zoom and Adobe Photography plan that we weren’t using anymore.

Top Seven Rewards Programs in Australia

Wed, 05 Apr 2023 12:00:00 +0000

1. Qantas Frequent Flyer

Qantas’ flagship rewards program allows you to earn frequent flyer miles for, well, not actually flying all that frequently! You can earn Qantas points on brands you love through the Qantas Shopping store, convert points from other rewards programs, or by spending with any of Qantas’ family of brands like Qantas Wine, Qantas Hotels or BP Rewards. Points for filling up with fuel?! Yuhuh!

Another neat way of juicing up your Qantas points balance is by shopping with a points-earning credit card. You can earn as much as three points per dollar spent*, take advantage of bonus points earning opportunities, and even double-end your earnings by getting points for your transaction and for the retailer you’re shopping with. For example, pay with a Qantas-earning card for a hotel via Qantas Hotels, and you’ll get the hotel points and the credit card points. With that kind of earning, you’ll be jetting off on your next adventure in no time.

2. Velocity Frequent Flyer

Virgin Australia’s answer to frequent flyer perks is the Velocity program. You can pick up Velocity points anytime you fly with Virgin Australia or its partner airlines, and on the ground with points-earning partners like Medibank, 7-Eleven, and YouFoodz.

Much like other frequent flyer programs, your highest earning potential often comes from a points-earning credit card. Stacking your everyday expenses onto a Velocity points credit card can see you earning one point per dollar spent*, and maybe even a stack of bonus points for joining.

3. Everyday Rewards

Formerly known as Woolworths Rewards, Everyday Rewards is the free-to-join points-earning club card under the Woolworths brand. Collect one point per dollar spent* on transactions at the Woolworths brand family (including Dan Murphy’s, Big W and BWS). This rewards card offers a range of ways to redeem your points, including banking them for Christmas, converting them to Qantas points, or vouchers towards your groceries. The program also recently launched its paid offering, Everyday Extra. For a small monthly fee, you’ll score 10% off per month on Woolworths or Big W spends, plus a higher per-dollar earn rate.

4. Flybuys

Coles’ signature rewards program, Flybuys, is one of Australia’s favorites. Earning one point per dollar* at participating retailers (with the exception of Coles Express at 0.5 points per dollar), you can collect Flybuys points at Kmart, Target, eBay, AGL, First Choice Liquor, Liquorland and more. You can then convert your Flybuys to Velocity Frequent Flyer points, or as vouchers for brands under the Flybuys umbrella. 72,000 Flybuys points could get you a business class seat from Melbourne to Perth!

5. Myer One

Myer One is the rewards program held by the department store, Myer. Earn two points per dollar spent in Myer stores and online, and get a $10 credit every time you reach 1,000 points. Advance to the silver, gold and platinum Myer One tiers and receive birthday vouchers, free delivery perks, and exclusive offers and bonus point opportunities,

6. Shopback

Shopback is one of Australia’s leading cashback sites, partnering with the likes of Booking.com, Catch.com.au, The Iconic, Net-a-Porter, and more. Shopback splits its affiliate commission with shoppers who use their app or browser extension, and pay you real money for shopping as normal!

You can earn up to 30% cashback just by shopping with Shopback enabled. The system will track your spending immediately, and credit your account within 90 days. That balance can then be redeemed to your bank account — yep, real money — whenever you like. Getting paid to buy things you would have bought anyway? We like!

7. Cash Rewards

Another popular cashback rewards program is Cash Rewards. Also offering a percentage of your total spend paid in cashback, you can earn money back on your transactions from brands like Lululemon, Hotels.com and Adore Beauty.

Check and compare cashback sites before making a purchase to make sure you’re getting the best cashback available. Often boosted promotions can mean there’s big cashback on offer!

*Earn rate depends on a variety of factors and may be subject to change at any time.

A Journey From Freelancer Back to Employee

Mon, 03 Apr 2023 12:00:00 +0000

My husband Jonny has been unhappy with his work for quite some time. It has been a gentle build-up to feeling ‘done’ with self-employment and all that goes with it.

Whether employed or self-employed, I’ve observed that career burnout is relatively common for middle-aged men. I’ve also noticed they reach a tipping point where they just up and quit. While this might relieve stress in one area, like no more work pressure, it can pile on issues in another area — loss of income and financial stress.

I’m constantly scanning the horizon, and I could see this tipping point coming. I knew that things were coming to a head. I knew we could plan for this. I didn’t want it to be a shock.

It would have been easy to ignore the issue until that tipping point came, but the better option was to face it head-on. So, over many months, we began to talk about it.

Thanks to PocketSmith, I know how much it costs to run our home and family, and I was able to use that information to help us weigh up options instead of stepping off into the financial unknown. Knowing our numbers has allowed us to make a strategic decision that is in our family’s best interests.

Reflecting on the freelance experience

When Jonny turned 49, he went into the year pretty happy. Still, the pressures and annoyances of managing his workflow as a freelance graphic designer became more anxiety-producing as time progressed. It was taking a visible toll on his mental health.

Initially, we looked at what work he could let go of, and first to go were the components of graphic design he had fallen out of love with. Fundamentally, while he enjoyed the core parts of his role, he had had enough of working for himself, having to carry out every single component of managing a business. Shedding some of these responsibilities helped reduce stress, but only temporarily. We were treating the symptoms and not the problem itself.

I could always see that we were just papering over the cracks, but the pressure he was feeling was not yet enough for him to say out loud, “I’ve had enough”.

I could see the clouds gathering before he could, but although I tried to help, and we talked through many alternatives, ultimately, Jonny needed to decide for himself when enough was enough. I was just waiting for him to have his “I’ve had it” moment.

There was a lot for him to think about. As a two-income household where we share our finances, there is a real pressure to provide for our family. Both of us feel it. So, he knew that if he quit without a plan, he would remove stress from himself and put it onto me. Part of our identity is tied up in the work we do, and stopping or reducing work is something that is noticed by others. Plus, there is meaning and dignity to be found in work, something that is sometimes overlooked.

To work or not to work

So while he was considering his next step, I was looking at the income he was bringing in and working out what options we had to replace it. These options included him working part-time and not working at all.

Neither of us are big picture, goal-driven strategic planners, but we do know the general direction we want to go in, and one of Jonny’s goals has always been to quit work at 50, if at all possible.

This big luxurious goal of his was front and center in his thinking. Equally, I could also have a big goal like this if I wanted. It just happens that currently, I don’t.

My role is positioning us financially to make our dreams a reality. As a family, we have spent many years becoming debt free, saving and investing to put us in a financial position to drop his income.

Our rough intention was that when he turned 50, I would continue to work and bring in income. I enjoy my part-time job downtown, plus my blog and podcast. We could pull some passive income from our investments. Plus, he would continue working on the backend of my blog and podcast and pick up work throughout the year if something took his interest.

Taking stock of our current, and future, financial health

So, we had been gearing up for this ‘quitting’ scenario for a couple of years.

Finally, the day came. Jonny came into the kitchen with a strained look, leaned against the kitchen bench and said, “I think I’m done. I want to quit. If I do that, will we be okay financially”?

The answer? Absolutely.

A glance at our PocketSmith dashboard showed us that he could either quit entirely for a couple of years or take on a part-time role. It was his choice to make, but the point was that any decision was made with zero financial fear, which is a powerful position to put your family in. He decided that he would take a new direction starting January this year.

The happy by-product of one door closing is that another often opens, and your decision-making is quite different when the financial pressure is removed from a situation. Because we would be fine without his income, we took money out of the conversation and talked about what he would want to do in the ideal world. It turns out that there are many parts of being a designer that he still enjoys. The pieces he no longer enjoys had a lot to do with the administration that goes into managing himself as a freelancer.

Moving to part-time employment

Although he was busy at work, that didn’t translate into higher income. His working hours were all over the place, and he was finding himself working harder, not smarter. Using PocketSmith, I could show him exactly what he contributed to the family bank account, which was less than he realized.

What then transpired was a month of exploring all of his options. I encouraged him to talk with people he knew and business contacts and explore what work was out there that differed from what he does now. He went out of his comfort zone and met with people he barely knew but in whose perspective he was interested. I also encouraged him to visit our accountant and look at the process of winding up his freelance career, ensuring all boxes were ticked in that department, particularly from a tax perspective.

After all those conversations, ultimately, and somewhat surprisingly, Jonny’s remained in graphic design. After taking a zoomed-out look at his life, a conversation with a long-term client of his resulted in them offering him a permanent two-day-a-week job as an employee of their business.

He gets to do the jobs he enjoys, yet all the backend hassle is gone. They contribute to his superannuation fund and give him annual and sick leave. One of the most surprising things was that without all the costs associated with running his freelance gig, he earns more as an employee working two days a week than when he worked for himself! He has also picked up some occasional teacher aide work helping kids who are interested in design, something he never thought he would do.

So, now he has flipped the script. He works for two days a week and has five days to do whatever the heck he wants. Already he is planning physical challenges to keep himself active and healthy!

Financial freedom is all about choice

If you find yourself in a similar situation to us, knowing that you have just about had enough of your current work, I can share with you that we have only been able to make this happen because of many small lifestyle and financial decisions made over a long period.

Building financial strength has eliminated a lot of risk from our lives, and you can do it too. What this has done has given us choices. We decided to become permanently 100% debt free, including our mortgage. We chose to be mindful about where we spend our money and to keep cash in the bank for emergencies. We decided to continuously contribute to investments as a matter of urgency and priority.

Ultimately, because we are financially on track, the decision to move from a self-employed freelancer back to an employee was made not based on money but on finding a good work/life balance. In time, year after year, he will generate more income than he did before. That is the beauty of knowing your exact financial position — it creates options you might never have considered before, and Jonny is now enjoying taking the next life stage in his stride.

Navigating the End of the Financial Year as a Self-Employed Worker

Thu, 30 Mar 2023 11:00:00 +0000

In the Southern Hemisphere, summer is over. Autumn has arrived, bringing with it crisp mornings, changing colors, and of course, the fast-approaching EOFY, or the end of the financial year. No worries! With a little preparation, this impending financial milestone shrinks from an anxiety-inducing mountain to something way more manageable.

Now for the sake of example, let’s say you’re a self-employed cat sitter. Not a catnapper, that’s different. A cat sitter. Okay? Great. Here are some areas to focus on:

Check in with your accountant

If you use an accountant or a tax agent, whether in-person or digital, now’s a great time to check in with them. Personally, I use digital accountancy service Hnry, which is designed specifically to streamline the admin and tax side of freelancing.

Get clear on your tax obligations before you hit crunch time. This may include income tax, goods and services tax, ACC levies (in case of accidents, like tripping over your clients,) or student loan repayments (from that Bachelor of Feline Psychology.) It not only helps for the current fiscal year but will give you a head start on what to expect in future years.

Declare your income — all of it

Whether self-employment is your main gig or one of many side hustles, you’ll need to declare any income earned from it. You’ll also need to declare income from PAYE jobs, government benefits, superannuation, or anything else that may affect which tax bracket you fall into. A lot of the time, your local tax department will already have records of this.

I use nesting categories in PocketSmith to keep different streams of income organized. They’re a great way to tell at a glance where everything is and how much you’ve earned in various areas. A parent category for “Self Employed Income” could have nested sub-categories for “Cat Sitting” and “Dog Walking”. These categories then have sub-categories of their own for each of your clients. As a bonus, this way you can easily see who your big earners are — and target them for repeat business.

Check your GST threshold

This will differ by country, but here in New Zealand, self-employed workers providing goods or services must register for Goods & Services Tax when they earn over $60,000 a year. This means they charge 15% GST to their customers, which is collected and paid through to the IRD. They must also keep GST records for a period of seven years. Kiwis can read more on charging GST on the IRD website.

Submit those business expenses

As a self-employed worker, there are tons of things you can submit as business expenses for tax-deductible purposes. If you work from a home office, say for those all-important video calls to meet new cat sitting clients, you can expense up to 24% of your rent or mortgage interest. Power, internet, home insurance… Hnry has a great guide to household expenses, and the IRD covers it as well.

You can also submit business vehicle expenses, entertainment expenses (for that business lunch over puppaccinos), and depreciation on capital assets. So dig out those receipts from the shoebox under the bed, or check your labeled PocketSmith transactions. You remembered toattach your receipts, right? You can even email these straight to your PocketSmith account.

What about those activewear shirts that inevitably get covered in cat fur? Unfortunately, you can’t claim clothing as a business expense unless it’s “specialist clothing,” like a branded uniform.

Look back and plan ahead

Retirement contributions and charitable giving are two areas that can be easy to miss in the rollercoaster of self-employed life. 20 or 30 years is a long way away, right? It’s even longer in dog years! But there’s no better time to take a good look at these than now.

You won’t get employer contributions as a self-employed worker, but you could be eligible for a government match on your personal contributions. In New Zealand, this is a 50% match on your first $1,043 contributed every year. Looking ahead to next year, you could set this amount as an annual budget for a dedicated “Retirement” category, and transfer $87 a month. Where else can you get a guaranteed 50% return on your money?

Charitable giving is often tax deductible. Many churches, animal shelters, and other registered charities give a 33.3% tax credit or refund at the end of the financial year. All you have to do is collect your giving receipt from the charitable organization and submit it to your tax department. In New Zealand, this can be done online in MyIR under Donation Tax Credit. Even better, you can do it at any time up to five years after the donation has occurred.

So there you have it: A bundle of ways to make EOFY easier this year and into the future. Hopefully, they help to make that mountain into more of a molehill. And hey… maybe it’s not so much like herding cats after all.

Five Benefits of Renting a Home

Sun, 26 Mar 2023 11:00:00 +0000

The news says millennials can’t afford to buy houses, but wow, they must’ve forgotten to survey my mates. Somehow, my social media feeds are flooded with people my actual age buying themselves actual houses with multiple bedrooms that they’ve bought with their actual salaries. And each time I see another one bite the dust, a little bit of my soul dies all over again. So today, we’re dedicating this article to our fellow renters.

If you, too, are feeling a bit sorry for yourself because you’re not quite at the buy-house-get-poodle-start-renovating stage of life that some of your friends and peers are at, we’re right there with you.

We’ve compiled a list of all the top benefits of renting — for two reasons: To make you feel a little less glum about your housing sitch, and, well, to give you ammunition for your next run-in with your cashed-up home-owning mates.

1. FREEDOM, baby!

One of the major benefits of renting a house is the flexibility and freedom it allows you. Fancy moving suburbs? You got it. Decide you want a garden? Go forth! Want to abandon your real life and drive around barefoot in a van and read Harry Potter to your cat? No strings attached here! While there are downsides to the contract nature of renting, it does give you a lot more flexibility to change jobs and move houses, cities, or countries at the drop of a hat.

2. You can live where you like

Unless you’re a bajillionaire, there’s a good chance the areas where you’ve rented properties aren’t the same ones you could afford to buy. With rents in trendy inner city suburbs substantially more affordable than the price tags to buy, being a renter can give you a greater quality of life by allowing you more control over where exactly you call home.

3. Burst pipe? Not my problem

Being a homeowner comes with responsibilities — but when you rent a house or apartment, a lot of those responsibilities are your landlord’s to consider. If your air conditioner breaks down or you get a leak after a big storm, your landlord is responsible for the cost and organization of the repairs. For that reason, renting your home can be a more financially sensible option if you’re not in a position to have a solid emergency fund in place.

4. Renters are gaining more and more rights

Until recently, one of the most common benefits of homeownership vs renting has been the ability to paint, hang wall art, or get a pet — as traditionally tenants don’t have as many freedoms as owner-occupiers. But in more and more places, renter’s rights are on the rise. In some parts of Australia, landlords can no longer refuse pets without giving a valid reason — and their dislike of Spoodles doesn’t cut the mustard. With more rights on the renter’s side, there are new perks to not owning your home.

5. Renting buys you time to reach your bigger goals

Some people insist that renting is ‘dead money’, but this is quite an antiquated view. Renting is a reality for so many people nowadays, because of rising property prices and different ways of living. Being a renter means you have much greater control over your expenses, and you can choose a property to live in that aligns with your financial goals. If you’re saving up to buy a home one day, or for another goal like travel or starting a business, being able to rent somewhere cheaply can help you get there faster. Plus, if you’re into investing in the stock market, renting can allow you more cash to allocate to your long-term investment strategy.

Why PocketSmith Is the Fellowship of the Ring

Thu, 16 Mar 2023 11:00:00 +0000

Teamwork makes the dream work, right? Perhaps the greatest epic-fantasy-level teamwork was in The Lord of The Rings by J.R.R. Tolkien. Taking a gold ring halfway across the world and dropping it into a volcano turned out to be a big job, and a big job needed a big team: Four hobbits, two men, a dwarf, an elf, and a wizard (not to mention Bill the Pony). They all brought something different to the table. Something unique. Something only they could do.

Like the Fellowship, PocketSmith brings a bunch of different skills to the table. There’s something for everyone, whether you’re a digital nomad, a household CFO, or even a real-life wizard. Let’s dive in.

The Hobbits

“Hobbits really are amazing creatures, as I have said before. You can learn all that there is to know about their ways in a month, and yet after a hundred years they can still surprise you at a pinch.”

Hobbits are down-to-earth creatures. They’re humble, grounded, fond of the simple life, and risk-averse. And yet, like PocketSmith, there are unknown depths to them. You might be zooming your way around categories, budgets and your custom dashboard within a week, but believe me when I say you’ll still be finding new features and diving into the Learn Center a year later!

It’s easy for outsiders to paint all Hobbits with the same brush. They all look the same, right? What does it matter if someone’s grandfather was a Took or a Brandybuck? Likewise, it’s easy for outsiders to see all money management systems as the same. Who cares about the difference between Barefoot Buckets and Zero-Based budgeting? Well… PocketSmith cares. It can adapt to any system of budgeting on the fly — and like a hobbit, it always factors in historical data.

The Men

“And seated a little apart was a tall man with a fair and noble face, dark-haired and grey-eyed, proud and stern of glance.”

Men are perhaps the most multi-talented of the team. Noble and discerning, they’re equally at ease hunting deer, reciting tales from myth, journeying in the wild, or conducting diplomatic envoys. Like Aragorn, PocketSmith knows exactly what it is — the best dang Kiwi-grown money management software out there — and where it wants to go — “taking on life’s adventures on our own terms.” Like Boromir, it’s reliable and confident, happy to work in a team or strike out solo as needed. It’s also a little self-centered. It only really cares about one person’s interests: Yours — the user.

Gandalf Greyhame, Mithrandir, the Wizard

“A lord of wisdom throned he sat, / swift in anger, quick to laugh; / an old man in a battered hat / who leaned upon a thorny staff.”

Now Gandalf might look like an old man leaning on his walking stick, but there’s more to him than meets the eye. PocketSmith might not be powerful enough to take down a Balrog (or is it?), but it shares some traits with our old wizard.

At first unassuming, PocketSmith reveals deeper and deeper layers the more you work with it. Gandalf speaks many languages — PocketSmith deals in many currencies. Gandalf has many names — so does PocketSmith. I’ve personally heard everything from “that purple money app” to “PocketSith? MoneySmith? HockeyStick? What’s it called again?” Gandalf travels far and wide, from the Shire to the Lonely Mountain to Gondor and beyond. So does PocketSmith: With its multi-currency support, PocketSmith has users in over 190 countries — although I can’t guarantee Middle Earth is one of them.

Gimli, Son of Gloin

“Gimli the dwarf alone wore openly a short shirt of steel-rings, for dwarves make light of burdens.”

When I think of how much data and research lies behind the smooth running of PocketSmith, it takes my breath away. Like dwarves, PocketSmith makes light of burdens, presenting a seamless custom interface to help manage your money however you want.

Stubborn, stout-hearted, intelligent, and well-spoken, dwarves are also remarkable engineers and craftsmen. Gimli dresses for the job at hand, whether meeting elves or fighting orcs. PocketSmith does this too, flicking from a Debt Management dashboard to a World Clock view at the press of a button. It offers fully customizable options, like a Sankey banner widget. If dwarves have one failing, it’s that they can be too fond of gold and gems — but hey, long-term investments in rising stocks aren’t a bad thing! You can track your investments in the Net Worth overview, or link your Sharesight account to your profile.

Legolas, Greenleaf of Mirkwood

“[Frodo] found Legolas seated with three other Elves. They were clad in shadowy-grey, and could not be seen among the tree-stems, unless they moved suddenly.”

Keen-eyed, long-lived, a tad competitive (or more than a tad, when it comes to contests with dwarves) — elves have had long years to perfect their skills. It takes iteration after iteration, user test after user test, to achieve the level of awesomeness that elves and PocketSmith share. Like the grey-cloaked elves, a good money system is seamless, easy, working so well in the background that you barely see it until you go to change something. Category Rules are your friend there! PocketSmith is also keen-eyed, tracking your budgets down to the last cent and sub-category. It’s long-lived, founded in 2008 and actively growing.

Is it immortal? That remains to be seen — but I for one certainly hope so!

Tax-Saving Strategies for 2023 From a Practising Accountant

Mon, 13 Mar 2023 11:00:00 +0000

Hi Sam,

I’m due to refix my mortgage interest rate in September and am anxious about how high rates will be then. Add to that increasingly expensive groceries and higher cost of living in general, 2023 isn’t looking particularly fun. I’m trying to tighten my purse strings across all areas and boost my household income with a couple of side hustles. Can you suggest any tax-saving strategies that I can implement this year?

(Please note that any tax advice given in this article is practicable only in Aotearoa New Zealand and you may have to consult with your local tax adviser to see if they suit your jurisdiction.)

“How do I pay less taxes?”

I get asked that question — A LOT. So over the years spent studying tax laws, I’ve found there are ways to legally minimize your tax liability. But before we get into the specific bits of advice, let me share with you some universal tax truths:

1. Taxes are inevitable

As the saying goes, there are only two certainties in life — death and taxes. Unless of course, you live in a country that doesn’t have taxes, in which case, good for you. But the good times will come to an end, and eventually, everyone pays taxes one way or another. So given its inevitability, you should…

2. Pay your taxes

The taxman will always collect what is due to them. Don’t try to hide it. Just pay it. It’s not worth getting into trouble over taxes. Embrace taxes. Don’t fight it. That being said, it does pay to…

3. Be smart about paying taxes

Learn what is and isn’t a tax-deductible expense. Some jurisdictions are more liberal than others in allowing you to deduct things for taxes. Avoid non-tax deductible investments. Invest in tax-deductible education and/or training. Apply for tax-deductible insurance policies. And most importantly, remember to declare these deductions in your tax form!

With that out of the way, I’m sharing with you three tax tips to get you through 2023.

Let’s go.

Avoid residential rental investments

Yes, this. SO MUCH THIS.

Residential rentals are a very popular investment class here in Aotearoa New Zealand. However, recent changes to tax and tenancy laws have been making residential rental investments very, very unattractive.

Please note that if you are dead set on buying residential rental property, this article is for you and you can skip this tip. For those of you who are still on the fence, don’t do it.

Here’s why:

Interest expense is no longer tax deductible

So you’ve got rising interest rates in 2023 for the foreseeable future and the government of the day isn’t allowing you to deduct any interest for tax purposes (new builds are exempt from this). Now, interest expense easily forms between 50-80% of the total expenses for your average rental property.

This means that you are effectively increasing your taxable income from a residential property by 50-80%. This means you’ll be paying 50-80% more taxes on any residential rental income.

Rising interest rates + no deductibility = a butt-ton of taxes without the cash flow to service it.

Bright-line test shenanigans

Look, let’s call a spade a spade alright? The bright-line test is Capital Gains Tax, regardless of what some politician says. Bright-line tests have been steadily increasing from three to five and now ten years. Meaning that anyone looking to benefit from tax-free capital gains on selling their residential rental property will have to look at holding onto it for much longer.

Essentially this means that if you bought a residential rental property today and sold it four years later, the profit you make from that sale will be dumped into your personal income. This will take you from an average tax bracket, all the way to the highest tax bracket. Imagine going from the 30% bracket to the 39% bracket within a year. That’s also assuming that future governments won’t bump up the maximum tax bracket.

“Oh, yeah, I’ll hang onto the property for more than five years and then sell it”. Wow, you got a crystal ball or something? The future is uncertain. You may find yourself in a position where you need to liquidate your holdings, only to find that you’re going to get taxed out of almost half of your gains made in your investment. So do future you a favor and avoid residential rental investments.

Consider starting a side hustle

“What?” I hear you say. “The cost of living is increasing, interest rates are going up AND we’re facing a global recession! How can now be a good time to start a side hustle?”

There’s never a bad time to start a side hustle. Now when I say side hustle, I don’t mean getting yourself another job. No, I mean starting a small business. Give being self-employed a chance!

Here’s how to do it. You still work your full-time job as normal, but you do something small on the side. You can start by turning your hobby into a small business. If you like knitting, sell knitting goods. If you like dancing, start teaching paid dancing classes. If you like drawing, start selling your artwork. It doesn’t have to be making you a lot of money, as long as you are getting paid at least $200 a year for the provision of goods and services, you’re self-employed.

Once you’re self-employed, you can start claiming expenses against your income. In Aotearoa New Zealand, self-employed individuals can claim a lot more against their income than a salaried worker. So long as your expense is business related, you can claim it as a tax deduction.

Buying knitting supplies to sell? Tax deductible.

Buying dance shoes to teach dance? Tax deductible.

Buying art supplies for your drawing business? Tax deductible.

Suddenly money you’d be spending on a ‘hobby’ becomes tax deductible because you’re self-employed. If you have a hobby that you can, and want to, monetize – monetize it! And start claiming some tax deductions against your income.

But be sure to keep a record of your business’ ingoings and outgoings. Good record-keeping is important for all new business owners!

Learn deductions you can make if you don’t have a business

This is the simplest tip of all. In Aotearoa New Zealand, there are some basic expenses that all non-business owners can claim as deductions against their income.

Taken from the IRD website:

Accounting fees: If you pay someone to file your tax return, that amount is tax-deductible.
Income protection insurance: If you are on an income replacement/disability type of insurance, you can claim this as a tax-deductible cost if your payout is taxable. (generally speaking, income replacement payouts are taxable).
Commission paid on interest or dividend income: If you invest via a broker, they may take a commission off your investment returns. You can claim this commission back as an expense.
Interest on money borrowed to buy shares or invest: If your investment produces taxable income, you can claim the interest expense on any loans taken to finance that investment. Please note that residential rental properties are not included in this group of investments.
Interest charged on late payments of tax to the IRD (seriously though, you don’t want to be in a position where you’re making late tax payments).

As long as you have the documentation for these expenses, you can claim them when filing your end-of-year tax returns.

Pay your taxes

Now after having shared some tips you can take to minimize your tax liability, as an accountant and tax agent, I do need to emphasize:

PAY YOUR TAXES!

I strongly condemn any form of tax avoidance. I also turn away prospective clients who ask me “how much they can get away with”. Taxes are important for the public services you enjoy and the standard of living we all have.

So yes, pay your taxes, but be smart about it.

PocketSmith’s Labels Let Andrei Get Granular With His Spending

Thu, 09 Mar 2023 11:00:00 +0000

Read how Andrei is tracking his expenses, net worth, and other aspects of his financial wellbeing, even on-the-go with the PocketSmith mobile app.

Tell us a little about yourself?

I work for an insurance building company. I love listening to podcasts and music, reading books and keeping fit, though my dad bod suggests otherwise.

How would you describe your role in your household?

I’m a father to two young children and husband to an amazing wife. She runs the household, so my role is to provide a stable, safe environment for the family. I guess, mainly to stay out of the way so things can be “done right” 😅

What drew you to PocketSmith?

Two things. One was that it’s very similar to Xero. I get a similar experience but with a personal (rather than business) focus. The second is that it’s a reasonably priced, paid subscription. I was aware of free alternatives, but the alternatives are free for a reason…

How long have you been with us?

I’m now into my 7th year using PocketSmith.

What do you primarily use PocketSmith for?

Mainly to track where my cash is going, storing copies of bills, and giving the Net Worth and Income & Expense reports to the bank when I want to set up an investment.

How has PocketSmith changed the way you do money?

The main thing that has changed is that it has made me take responsibility for my family’s financial wellbeing. Before using PocketSmith I guess I was like anyone else, just dreading looking at credit card balances and hoping for the best. Now I know where everything is at. I know at a glance what I can and cannot realistically do money-wise by using a tool that enables me to be proactive, rather than reactive, to my financial health.

What are your favorite features?

I love the mobile app. It enables me to stay on top of allocating but also looking up transaction details I need on the go.

I also really like Labels. We have two cars, so, for example, I can allocate fuel costs for both cars to one fuel category for overall spend visibility, but then use a label per car to distinguish one from the other if I need to. Labels are great for things like identifying year-end personal tax deductions without having to set up separate categories.

Got any tips?

Take the time to implement PocketSmith for what you need. Get your categories set up for what you specifically need visibility of, and use the labels to break it down and tag things for any deeper dives you need to take. Use it daily to stay on top of things and don’t be afraid to ask the support team for help. They’re actually really good and don’t just respond, they usually solve your issue before you know it!

What’s the best money decision you made in the past 12 months?

Refinancing my home loan. With recent rate rises in Australia, I was able to land a much better deal that included a cash-back incentive, simply by shopping it around. My PocketSmith reports made the application process super quick too!

Ruth's Two Cents: Reducing Financial Stress in a Crisis Situation

Thu, 02 Mar 2023 11:00:00 +0000

Hi Ruth,

A couple of months ago, my friends had a small fire in their home. No one was hurt, but there was some damage to the kitchen. I’ve been shocked at how much money it has cost them and how long they’re continuing to deal with the incident, and it’s made me anxious about what I would do in that situation. How do I ensure I’m financially prepared if the worst happens unexpectedly?

Of all my fears, a house fire is higher on the list than others. I fear one every time my teenager says they are going to cook themselves some food while I’m out!

I’m relieved that your friends were okay, but it’s clear that recovering from this single event is a long process. Cleaning up the construction, insurance, and financial mess will teach them some life lessons they will use from here on in. I don’t doubt that it has also exposed that their understanding of the insurance claim process differs from the insurer. Their scenario, where their house was partially damaged, is probably much more common for an insurer to deal with than a total loss event.

As is always the case with these questions, I think about what I would do in a situation like this. And fortunately, or unfortunately, in a roundabout way, I’ve got first-hand experience to draw upon.

The house I am writing in was built by our insurer as we were one of the thousands who lost their homes during the period of earthquakes that kicked off in Christchurch, New Zealand, in 2010. It took almost three long years for our house to be deemed a total loss, meaning that in the meantime, we had to do our best to patch things up and remain living in it.

Although I would not wish it on anyone, that experience has taught me an enormous amount about preparing for a crisis.

Address the immediate situation

The first step? Put out the fire! Obviously.

Remain calm. What’s done is done. A chapter in your memoir has begun, and you are now on the first page. Accept that you have a journey of unknown length and cost ahead. Although you don’t know how it will end, at some point, it will reach its conclusion.

In the immediate aftermath of a disaster, you need to secure the safety of all home occupants, including pets. You might de-camp to a hotel or a friend’s house, send children to stay with family close by or immediately put your pets into a boarding facility to get them away from a stressful situation. This costs money, and you need to be prepared to pay.

Only once you have the fire out, the house secure, a dry place to sleep, and food to eat do you need to call your insurer to let them know the situation and lodge a claim. Once you have a handle on events, you are in a much better position to begin the lengthy insurance process.

Get ready for the insurance claim process

It can be hard to tell your insurance company your policy details if they have just gone up in smoke. Today is a good day to go to your hardware store and buy a small fireproof safe to store your insurance documents. Or, of course, you can keep them online too. We do both. Carefully explain your situation to your insurer and determine what you are covered for. Ask questions about the next steps, your excess and temporary accommodation. Ask as many questions as you need to to understand what to do next.

Take their lead on the next steps regarding getting experts in to assess the damage and calculate repair costs. Accept that you now have a new part-time job to add to your CV: Running an insurance claim process and juggling home repairs.

The best time to sort out your insurance coverage is long before a crisis happens. That is why an annual review is so important. Talk to your friends and ask them what advice they would have for you, given what they have just been through and adjust your insurance cover accordingly.

Having the correct insurance is a delicate balance between adequate coverage and manageable premiums. I’d encourage you to think deeply about how much coverage you need so that you are not over or underinsured.

Be prepared to pay out of your pocket

Straight out of the gate, when an emergency occurs, costs will begin to appear, and you need to just do what needs to be done to secure your situation. You need to be able to remain calm and prioritize or bring someone into your crisis who can do that for you. Ask for help if it is needed, and accept help when it’s offered.

In our situation, we had an immediate need for wheelbarrows, shovels, safety equipment, extra food and fuel for transportation. In the following weeks, we paid plumbers, builders and electricians to make our home safe enough to live in. We could never have planned for these costs, but we had to pay them nonetheless.

Money doesn’t fix all problems, but it is helpful in many instances. I’ve observed some people dig their heels in and argue over every tiny detail during the claim process. You must fight your corner and get what you are entitled to, but you can’t have it take over your life. That is very mentally draining and just drags out your pain. You need to decide whether that type of emotional fight is better or worse than the extra money you might get, and you might have just to let some arguments go.

Let your emergency fund come to the rescue

The worst thing you can do for your mental health as you enter a period of crisis, whether a car accident, an unexpected home repair or an unplanned trip somewhere, is to pay for it with debt. It may temporarily solve your crisis, but you have kicked that crisis down the road, to be addressed later. You just don’t know if, when that date arrives, your situation will allow you to pay that money back.

This is why I and many others campaign for everyone to have an emergency fund. A sum of cash in your bank that amounts to 3-6 months of your regular monthly outgoings is imperative if you want to turn a disaster into an inconvenience.

During our house insurance claim, we decided early on that we could not wait for others, such as government agencies, to step in and help. We decided we could just use our emergency money and help ourselves. We never regretted this decision as it gave us ownership of our situation early on and let those overstretched resources go to people who had more significant needs than ours.

We never saw the money we spent again, it was never reimbursed, and we never even tried to add to it our claim. Having an emergency fund already waiting meant that taking control gave us the upper hand and made us stronger and better able to cope with the lengthy development process.

However, there will be things that your insurer may agree to reimburse, such as paying for temporary accommodation, so add your receipts to your transactions in PocketSmith and stay in touch with them about these.

Remember there is only so much preparation you can do

Having had a few insurance crises over the years, like a home lost to earthquakes and two cars written off, I’ve developed a thicker skin. These are just ‘things’. Most things are replaceable. Therefore, my final piece of advice for you is: Acceptance.

Sometimes, things go wrong, and no amount of planning can prevent accidents. We are so fortunate to be able to pay for insurance coverage to sweep in and offset a lot of the work and cost when something does happen.

But insurance is not foolproof, and there are many fishhooks and exceptions within your policy that you will remain blissfully unaware of until the event is upon you. So, speak to your insurance company about your policy, chat with friends who have made claims, and try to make your coverage as robust as possible, while not paying over-the-top monthly premiums.

Be prepared to learn new skills, such as your friends have most likely just done as they learn about the construction process of fixing a kitchen fire. Take many photos and keep many notes about who said what, when, and what work has been done and still needs to be done. And then accept that you will be the secret ingredient in fixing your problems cost-effectively and promptly.

Long before the dog eats your sofa or you leave your popcorn unattended on the stovetop and set fire to your kitchen, make your personal finances as resilient as possible. That is one of the best lines of defense.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

Cash Flow Forecasting When You’re Self-Employed

Mon, 27 Feb 2023 11:00:00 +0000

What is cash flow forecasting?

A cash flow forecast is a way of predicting how much cash flow will be available to your business in the future. By looking at your projected income and expenses, you can get a clear picture of how much your business needs to earn to be profitable, and whether you can afford to take on new staff members or make purchases for your business.

Why use cash flow forecasting?

Cash flow forecasting helps you plan for the future. By modeling out predicted profits and losses, you can make better decisions about how your business runs.

How to create a cash flow forecast

Cash flow forecasting is all about the difference between your income and expenses. Here’s a simple way of creating a cash flow forecast:

Step 1: Calculate your regular expenses, by totaling up everything you pay on a regular basis, and an estimate of any ad-hoc expenses. It helps to look back over previous months to see how much you spent in order to get an accurate figure.
Step 2: Look back at how much your business has made in revenue over the past 6-12 months, and take an average of what that looks like month-on-month.
Step 3: Plot out your predicted income and expenses for the upcoming period (e.g. 3, 6 or 12 months) and measure how profitable your business can be. You can model out different scenarios to get a clearer picture of how extra income or expenses can impact your business.
Step 4: Review your forecasted cash flow and leverage that information to find ways to maximize your cash flow. As an example, if you run a product-based business, could you run a sale to increase revenue? If you’re a service-based business, could you increase your rate to make each hour more valuable?

Cash flow forecasting with PocketSmith

With PocketSmith, you can make cash flow forecasting easier and more accurate than ever. By exporting a cash flow statement for your chosen period, you can clearly see your income, expenses and profit/loss at a glance. Plus, you can build out your own cash flow forecasts in minutes, up to 30 years in the future.

Things to consider when cash flow forecasting

It’s normal to encounter cash flow forecasting challenges in business, particularly if you’re new to this kind of planning. Some important things to consider to maximize accuracy and applicability include:

Take seasonal fluctuations into account to avoid overestimating your income
Factor in ad-hoc, variable expenses as well as regular fixed expenses, to get a clearer picture of your profitability
Plan ahead for the purchase of equipment or tech, and factor this into your expenses in the month you expect to acquire them
Add on a buffer to your expenses to ensure you’re not caught short
Remember to include any loan repayments

Ready to take on the world of cash flow forecasting? Let PocketSmith help you out.

Canada: Sorry, The Connection Just Isn't There Anymore

Wed, 22 Feb 2023 11:00:00 +0000

Canada is a vast, complex and diverse country. We’re lucky to have thousands of Canadians make PocketSmith their home for personal finances to craft their money adventure. Unfortunately, though, they’re plagued with unreliable bank feeds for the vast majority of Canadian banks, despite the ongoing efforts of ourselves and our data partners.

Myriad changes to the landscape of bank feeds have occurred since we first launched in Canada. The ongoing rise of cybercrime and hacks across the internet mean that banks are on alert more than ever. The release of open banking in many geographies — which has not been without problems — means the bar has shifted for the banks, with higher consumer expectations for accessing and sharing their banking data.

So, I’d like to take a moment to opine based on my experience serving customers’ bank feeds for over 11 years: What we’ve done and doing, what the banks could do, what the government should do, and finally, what you as a consumer can do to effect change.

If you’d like to get to the chase, skip to the part where we discuss what pressing pause on actively serving Canada means, if you’d like. Otherwise, read on for some background.

Background on Canadian bank feeds

We’ve offered bank feeds to Canadian users for over a decade. Traditionally these were provided by our original data provider, Yodlee. Service was reasonably good — as traditional bank feeds were in the early 2010s (traditional bank feeds are when the data provider pretends to be a customer logging into online banking, gathering account and transaction information).

Bank feeds usually failed to sync for two reasons: An outage with the bank’s website; or the online banking user interface had changed, meaning Yodlee needed to change their scripts which navigated online banking to retrieve account and transaction data. All bank feeds worldwide only failed for one of these two reasons.

And things were usually that simple. It was the wild-west, with bank feeds never being sanctioned by banks, despite also being used by banks for their internal services. It was a better time than anyone ever gave it credit for.

What has changed in the past couple of years

Traditional bank feed reliability has tanked in the past three to five years due to increased cybercrime and people getting scammed. Multiple high-profile hacks are hitting the news every year, and more people are getting tricked into sending money to scammers than ever before. Banks had to act.

And act, they did. Big and small banks have introduced a slew of security measures designed to protect customers. While the data providers could work with most multi-factor authentication systems, the challenge is far greater for bot detection mechanisms like Google Recaptcha. These are usually presented as several picture tiles to click on with a prompt, confirming that you’re a human logging into online banking. These work very well in preventing robot access, so data providers are locked out.

Banks are also now deliberately targeting and blocking data providers’ access. Traditional bank feed data providers run scripts on servers, attempting to log into people’s online banking. These servers can be identified by the banks and blocked from access.

For whatever reason (likely to protect them financially), Canadian banks have committed to this process more than most — meaning they now have terrible reliability statistics.

What we’ve done in the past

Our first move was to add Plaid as an additional data provider to sit alongside Yodlee at the end of 2021. Our understanding at the time was that Plaid would solve many Canadian’s data connectivity issues and, at the very least, offer an alternative to our incumbent data provider Yodlee. Unfortunately, it was not smooth sailing, and we’ve generally seen the same success statistics for both Yodlee and Plaid in Canada, with a few exceptions.

We’ve been rolling out Plaid to customers over the past year, enabling feeds for banks that don’t have a Yodlee counterpart or where things were more reliable. Our excellent customer support team has added the rest when people get in touch.

Due to Plaid being as stymied as Yodlee when connecting to Canadian banks over the past year in our experience, we recently started investigating other potential data providers in Canada. We found a Canadian company that espoused better reliability.

Still, sadly they’re not priced appropriately for a company that earns revenue from subscriptions and no other source, at many times the price of their most expensive competitor. This extra cost could only be worn by high-margin businesses who earn money from their users in other ways (think product kick-backs, selling customer data, high-interest loans). This is not PocketSmith. In addition, supplied statistics for the ongoing reliability of feeds made it clear that even at the higher cost, things still aren’t good enough for PocketSmith customers.

What we’re doing now

Now — for better or worse — we’re enabling Plaid feeds for all Canadian banks, even those with aggressively poor reliability. Most Canadian banks will now show either “via Plaid” or “via Yodlee” next to feeds in search listings.

But which of these will work? To indicate, we’ve started compiling a list on our Learn Center with current success statistics for each Canadian feed. Use this as a guide to indicate which banks work best with Yodlee and Plaid. We will update this document regularly as more people add Plaid feeds of their own volition.

We fully recognize that these statistics are dire for Canadian bank feeds, and we see them mainly staying the same before significant change happens — i.e. open banking gets introduced.

As a result, we’re making the difficult decision to press pause on recommending PocketSmith to Canadians because we do not believe that our users should put up with Canada’s disappointing bank feeds.

What pressing pause means

We want to be clear about what this means for our current and potential Canadian customers: we’re not actively withdrawing from Canada; however, how we service Canadian bank feeds will differ from how we service other geographic regions.

Canadian users can still join PocketSmith without restriction.
All Canadian bank feeds we have access to are still able to be added.
But, we will not provide customer support for Canadian bank feeds displaying errors. We will not open tickets with Yodlee or Plaid.
So we will offer bank feeds without active support, but our 14-day refund policy will still apply.
We will also be providing a 30% discount to all Canadian users who experience bank feed issues and get in touch with us.

We will supply this discount to people on an honor system, as it only applies to people who’re only using Canadian bank feeds. If you use bank feeds in other regions with active support from PocketSmith, the discount will not apply.

Our Canadian customers can still do the following

Import transaction files downloaded from your bank into PocketSmith, using our bank file upload features
Continue to use all other features of PocketSmith and control your finances with all your data in one place
Email our Support team for any non-bank feed-related assistance required

With that clarified, please keep reading for what is next for us in Canada. Or, if you skipped here, feel free to jump back to the top for some background leading to this change.

What we’re going to do in the future

The best way to move forward will be for the Canadian government to introduce open banking, so we’ll be lobbying for better Canadian consumer data rights. People worldwide are starting to enjoy the additional data access that Consumer Data Right (CDR) laws provide them, and Canada needs to catch up.

In time, we’d like to pull together a community to guide how individuals want to use a CDR in Canada. We’ll consider making submissions to the Canadian open banking working group, providing the unique perspective of PocketSmith and its users. The working group meetings being undertaken currently are packed with aggregators and banks. They should hear our voice and that of our users.

In the future, we’ll be able to re-enter the Canadian market. We have a fantastic product that a Consumer Data Right in Canada should elevate — that is, your ability to own and share your financial data with the providers you choose.

What the banks could do

But putting aside our moves, let’s focus on the real boogyman: The banks. Ever since we’ve existed — nearly 15 years — any bank could have provided their customers secure access to their account and transactional data.

They’ve set up these systems before. Every bank with a native mobile app uses the technology banks could use to provide customer access to their data. Some banks did provide these public APIs (the “challenger” banks, a plethora of which launched around three to five years ago) — these have almost been wholly bought out by big banks, stifling further innovation.

All bank feed data providers are willing to work with banks to implement secure data access methods that don’t risk people breaching their online banking terms and conditions. Any bank can reach out to either Plaid or Yodlee, and their technical teams would be happy to ensure a reliable and pain-free bank feed.

The upshot is that banks serve their shareholders. Sadly, they believe that the most significant shareholder value comes from something other than allowing customers to control their data. Their drive for profit means they need to be forced by legislation to provide this customer-centric service.

What the government should do

Open banking is a certainty. The USA is the only locality where we’ve seen any secure data sharing occur without government intervention. Notably, these are a small group of huge consumer banks who previously used traditional bank feed technology anyway — implementing more efficient data sharing will have saved them high costs.

Elsewhere, the UK and EU have had the revised Payment Services Directive (PSD2) regulations since 2019, and in July 2021, Australia has the CDR legislation come into full effect. These laws were designed by governing bodies within these localities, mandating the bank’s responsibility to provide their customers with interoperable data sharing for their financial data.

In Canada, this process has just gotten underway. In March 2022, the government appointed a leader for the development of open banking in Canada, and open banking working group meetings commenced in July 2022.

Because of this late start, the time horizon might not be great. For example, Australia’s CDR commission was formed in May 2017, but meaningful bank feeds from mid-tier banks only became available to data providers in July 2021. Extrapolating from Canada’s appointment of a leader in March 2022, it would be reasonable to expect a four-year timeframe before anything becomes a reality here; the year 2026.

Governments and banks both work on years-long timeframes. With that understanding, the best thing a government can do in the short term would be to allow traditional bank feeds to be legitimized until an open banking system is in place. A mandate from the Canadian government to move traditional bank feeds from a grey area into an unfortunate necessity would make a huge difference.

And finally, we hope that the Canadian government learns from the mistakes made in previous attempts at open banking legislation. The PSD2 in Europe did not include savings or mortgage accounts, and the CDR in Australia needed more reasonable provisions for joint account sharing. The open banking steering committee should take on the learnings from the industry in these localities.

What you can do

The main power you have is moving your business to a bank that allows Yodlee and Plaid to gather your data for you. Our best Canadian feeds Learn Center article will be kept up-to-date with the options that you should look into if you want good feeds in PocketSmith.

You can also make it clear to your government representative that a Consumer Data Right and open banking is crucial to you as a Canadian citizen. We’ve seen time and again that the only way that the banking industry will respect their customers’ desire to use products like PocketSmith is through being forced by a government authority with legal power over the bank to do the right thing.

What can we say in conclusion?

… except that we’re incredibly disappointed that it’s come to this. We’re proud to service the world with PocketSmith, and Canada has been a fundamental slice of the global pie for us. Most of our Canadian customers have been a delight to work with, and we can completely empathize with the frustration expressed by those that weren’t.

We still welcome users from Canada, but we wish the circumstances were different so that we could offer you the support you deserve for bank feeds. We have the best file upload feature in the market, and we’re also continuing to improve on this in the coming months.

We’re hopeful that the Canadian government will move swiftly on open banking now that there are multiple global examples of how to achieve it. We’d love to be wrong about our extrapolation of 2026 being when we see open banking become operational inside PocketSmith for Canadian customers. We’re also hopeful that the banks will start working with data aggregators instead of being antagonistic — but that’s a long shot.

So with that, it’s been an exceptional ride, Canadian users. Thank you for placing your support and trust in us — we hope that this is just a temporary bump in our long road together. We’d love to hear any thoughts you have, and we’d also love for you to give your bank hell for being anti-consumer. Take that, banks.

Top Three Kiwi-Owned Personal Finance Apps That I Use

Wed, 22 Feb 2023 11:00:00 +0000

I’m not going to lie: In New Zealand we’re spoiled for choice for fantastic Kiwi-owned, homegrown personal finance apps and websites. I could talk about Sorted, where I’ve spent hours playing around with mortgage and retirement calculators. I could go on a tangent about PAYE.net.nz, and how it’s great to see how much tax you’re really paying. I could mention investment platforms Hatch and Sharesies, neither of which I’ve used (yet) but both of which I’ve heard good things about.

But I won’t. I’ll stick to my top three, the apps I use day in and day out to manage my money from start to finish: Hnry, Kernel, and PocketSmith.

Hnry

What they are: Hnry first grabbed my attention when some astute bloke on social media replied to their slogan of “Never think about tax again!” with the comment, “I tried that but the IRD don’t like it.” Once I’d stopped laughing, I started reading. Hnry, it turns out, is a playful but scarily efficient one-stop-shop for freelancers looking to simplify the business admin of invoices and taxes.

How I use them: As a freelance writer, Hnry is the start of my money train. It’s invaluable. Here I invoice clients and track outstanding invoices. Here my tax is paid for me before any money ever sees my bank accounts. Here I divert 10% of my income to my church and, when I can afford it, another 5% to my investment accounts with Kernel.

Kernel

What they are: Kernel’s tagline of “Grow your wealth, spend your time” reflects their values and offerings with pinpoint accuracy. The investment platform started out purely as an index fund provider, but in recent times has branched out to Kiwisaver (with jaw-droppingly low fees) and a Notice Saver with interest rates that rival even the best banks.

Also, they make a bangin’ podcast called It’s No Secret.

How I use them: If money is a train, Kernel is the next stop for mine. When I have enough cashflow, I add 5% into my High Growth KiwiSaver, up to the $1,042.86 a year needed to get the government match of $521.43 (because where else do you get a guaranteed 50% return on your money?). As a freelancer, I don’t have an employer to match my contributions — which means there’s not a lot of benefit in sinking more money into government-controlled retirement funds that I can’t access until I’m 65. Past the match amount, I put money into my personal retirement/investment fund, a 50/50 mix of the NZ 50 ESG-Tilted and the Global 100.

PocketSmith

What they are: In their own words, PocketSmith is a money management tool for life’s adventures and everything in between. It boasts an impressive range of fully-custom features, from cashflow forecasting toward achieving goals, to managing multiple streams of global income, and saving for a house deposit while paying off a student loan.

This is the last stop for the money train. It’s where I do… well… basically everything else on either side of actually spending the money. I track and organize and color-code and budget and gleefully make as much of a mess as I want, like a kid with finger paint scribbling on the walls — and then I take what works, pare the system back, and streamline it again. I’m always discovering new things, like a Sankey widget, and figuring out how (or if) to integrate them into my current system.

So that’s it. The top three Kiwi-owned personal finance apps that I use on the daily — the apps that, now that I’ve found them, I couldn’t imagine not having. What are yours?

Preparing for a 2023 Recession

Thu, 16 Feb 2023 11:00:00 +0000

I am preparing for a recession in 2023. It may or may not happen. I am also planning on 2023 being fabulous. I’m an optimist, so I figure there is no harm in having a foot in each camp and planning for the worst while hoping for the best.

From Investopedia:

A recession is a significant, widespread, and prolonged downturn in economic activity. A common rule of thumb is that two consecutive quarters of negative gross domestic product (GDP) growth mean recession.

If talk of recession concerns you, I’m here to allay your fears. Let’s narrow the conversation down to you and your immediate situation and let the government of the day concern themselves with the weighty topic of the gross domestic product of the country you call home.

It’s the choices you make that will have a direct impact on the effect a recession will have on you. I choose to be prepared, not reactive.

Hopefully, that has you feeling more relaxed already.

Everyone has a different perception of economic stress

I took part in a paid research gig late last year, and one of the questions they asked was how optimistic or pessimistic I am about 2023. I could barely contain my excitement about the year ahead; I’ve got a lot of cool stuff planned for this year, and I was looking forward to getting started.

However, my five fellow panel members were feeling a different vibe when they thought the year ahead looked particularly gloomy. They referenced rising inflation and the possibility of a recession. They each said they were doing okay personally but worried for others.

When it was my turn, I wondered what was wrong with me. Why was I so darned optimistic? Should I have been as worried as them?

I stuck to my position of positivity and said something along the lines of, “I know it’s within my power to react (or not) to events that are outside of my control. It is within my power to do well in 2023 by financially planning for the worst and hoping for the best. And I’m really optimistic that I can. I see massive opportunities for the taking for myself in 2023, regardless of inflation or recession. It’s going to be a fun year, and I’m excited.”

This 90-minute panel discussion led to some reflection on my part long after the meeting ended.

Try not to worry about things you can’t control

It’s my observation that most people think they will probably be okay, but they “worry about others”. They have heard of other people whose needs are not being met, and they fear for them, which is kind. But they they feel powerless to help, making them less optimistic. To me, that feels mentally draining. When I know of a real person in need, it is far easier for me to not just worry about them but to actively help them. And when I help others, it instantly makes me feel like a better human being.

I’m optimistic about 2023 because I choose to not doomscroll the news and engage with real people. I look at my situation and conclude that yes, I’m okay, and then I look beyond myself and conclude that 95% of them are okay. I offer support and help to the 5%.

So, the first step to dealing with a recession is to determine if it will impact you and adjust your level of concern to suit.

Time to cut the strings on the things you can't control

Time to do a stock take

I encourage you to do much as you would if you crashed off your bike. You would lay on the ground for a moment, and you would take stock of your situation: Am I in immediate danger of being hit by a passing car? Is anything broken? If all that checks out, get back on your bike, and enjoy your ride.

It’s the same with your finances. We could be better at predicting economic activity, and we tend to overestimate what might go wrong. Still, if we took the time to look closely at how we are right now, then we would begin to allay our fears about the future. If you are concerned about your financial situation, right now is the time to make some changes.

Given I have been warned that a recession ‘might’ be coming, and even though I really don’t know what that might mean in dollar terms, you can be sure that I’m not sitting like a possum in the headlights awaiting the moment of impact. I’m assessing where my family are financially, checking that we are okay and then planning what to do if a bump in the road occurs. With a plan in place, I just get on with enjoying life.

Embrace your future, don’t fear it

I’m constantly scanning the horizon for possibilities and pitfalls and adjusting course to suit:

Is my car in need of repair?
Are we prepared for schooling costs this year?
Will I need to upgrade my laptop?
Is my emergency fund appropriate?
Is my job as secure as it can be?

A possible recession is something else to add to my list of things to consider. Doing this reduces my fear of the future.

For example, I’ve personally heard people say that their fixed-term mortgage rate is up for renewal later this year, and they “will have to find more money” at that time to meet the new payments. If that was me, I’m not waiting. I would be speaking with my bank about how much higher my interest rate is likely to rise, how much extra I might be required to pay, and what impact it will have on my payoff date. And then, I would immediately begin making a plan for finding that money right now by either earning more or cutting my expenses so that when the day of increased debt repayments actually arrives, I’ve already prepared for it.

I’ve already seen in my PocketSmith budgets that we spent more on groceries in 2022 than we did in 2021, and that has led me to allocate more to my grocery budget in 2023 because we are clearly spending more now. In addition, we are currently shopping more carefully, cutting back on some luxuries and planning our meals better to keep the costs down. Heck, it might even work out that we end up spending less with these conscious tweaks than last year! Time will tell.

For many years, as a family, we have been fiscally responsible by:

Tracking our net worth
Budgeting
Keeping an emergency fund
Getting out of debt

This process has taken years to refine, but it has made us far less reactive to current events, which is why the thought of a recession doesn’t frighten me.

How are you?

Lastly, I just want you to ask yourself one key question: How am I doing?

Your response either gives you comfort that you are okay or prompts you to delve deeper and make some changes. But ultimately, you have some power over how a potential recession might impact you.

How To Invest When You’re Following a Strict Budget

Mon, 13 Feb 2023 11:00:00 +0000

Most people procrastinate investing under the excuse that they don’t make enough money to do so. While this might be true to some extent, there is always a dinner out you can sacrifice or a luxury item you don’t really need if you’re keen to invest. Managing to invest when you are working with a strict budget requires you to be disciplined financially and exercise patience. In the meantime, you can look into EV (electric vehicle) penny stocks and a few other habits you can do to fortify your finances until you’re ready to invest more.

You must pay yourself first

Establish some automated transactions or put a few dollars aside every paycheck to accommodate your expenditures, but more crucially, for yourself. You will be extremely delighted in the future if you invest cash into your savings every month before consuming your tirelessly-earned money.

Even tiny quantities will add up to something greater, allowing you to make that investment you’ve been eyeing for months. Perhaps it will enable you someday to purchase a home. In any case, by investing in yourself first, you are ensuring that you establish yourself in a position of significance and acknowledge that if anybody deserves your hard-earned money, it’s you.

Pay off your debts

Before you start saving, examine how much it costs you to carry your existing obligations and how quickly you can pay them off. For example, strong credit cards can have lending rates of 20% or higher; at the same time, student debts have a rate of interest exceeding 10% or higher.

If you have a substantial amount of high-interest loans, it is more beneficial to pay them off before investing funds. While it is impossible to forecast the precise yield on most ventures, you can be assured that paying off your debt with a 20% interest income a year early is equivalent to receiving a 20% profit on your investment.

Begin developing an investing strategy

Whether your financial resources are limited or overflowing, making tiny deposits to savings and investments can help you leverage your earnings to produce additional income. You can start by inquiring whether your company gives 401(k) or retirement fund matching, which is effectively easy cash. Consider establishing a pension or other investment portfolio.

Research is one of the most important steps when investing, especially if you are working with a tight budget. You do not want to end up investing in a dead end, or a company that is running down the stock charts. At the same time, most emerging companies do not start racking up profits for a while, which means that you will have to wait a long time before your investment starts to pay off. If you want to invest with limited funds available, it is wise to take the time to examine all your options to make sure you end up with the right one.

Keep track of your expenditure

If you’re looking to improve your money management skills, you must first understand where your money is being spent. Every month, your fixed costs will be roughly constant. Your overhead expenses, on the other hand, will constantly change since they are determined by your consumption pattern.

Monitor your spending for one month without applying any adjustments to your typical purchasing patterns. After you’ve recorded your expenditure, go through it to determine where your money was spent and where you might save it.

Today, most people are lucky because there is an app for almost everything. It stands to reason that you might want to use software to monitor your spending as well. You can utilize a vintage spreadsheet, but an app is preferable today if you want something a little more high-tech.

Use your tax refund check for investment

If you have trouble saving money during the year, try putting away a portion or the entirety of your refund check to begin making investments. It’s one of the few times of the year when you probably get a lump sum payment that you didn’t expect. Whatever business you put money into, it is essential that you comprehend and try to reduce the costs connected with it. This allows you to optimize your revenues while reducing the additional fees you will incur.

Allow your money to work for you

Whether you’re on a tight budget or not, there is always a way to make more money through investment. A savvy person will ask for guidance on what to do and which companies to invest in to work towards their investment goals.

Transforming your personal behaviors is the first step toward improved money. A few of these adjustments will prove more difficult but if you maintain the trend, you’ll wind up with financial skills that will help you for the rest of your life, and as a bonus, you’ll have more cash on hand.

Adam has had a passion for finance and investing since the beginning of high school, which led him to work at TheStockDork.com as a resource for all investors. Prior to that, he worked at an Investor Relations Firm. Adam enjoys spending time with his wife and three children, as well as all things outdoors.

Louise Tracks Her Spending Across Categories With PocketSmith

Mon, 06 Feb 2023 11:00:00 +0000

Read how Louise keeps on top of her spending habits and adjusts accordingly using PocketSmith’s Trends and Reports.

Tell us a little about yourself?

I’m Louise, a 39-year-old single mum from Melbourne. I work in the finance industry and in my spare time I like hanging out at home with my cats (Lenny, Snowy and Ellie), watching Netflix, cooking or hitting the gym — I’m a competitive powerlifter so the gym is one of the biggest expenses in my budget!

How would you describe your role in your household?

I am the sole decision-maker in my household, however, my 9-year-old son often has ideas on how to spend my money. I’m hoping to teach him about financial literacy as he grows up observing what I do on a day-to-day basis.

What drew you to PocketSmith?

I needed some way of tracking my finances, that could also give me a clear visual picture of where I currently stand. I have a pretty extensive Excel spreadsheet, but it’s static and doesn’t have the ability to track expenses or categorize (it’s good as a base to work off). I have tried some other personal finance software with varying levels of success but found that PocketSmith gave me everything I needed.

How long have you been with us?

It’s been a while! I had a quick look at my account details and it said three years! The sad part about that fact is that I haven’t really used it to its full advantage over those three years. Recently, I went through and reorganized all my categories and budgets, using color coding to help identify my different categories. I’m positive this new setup will help me get on top of where I stand financially.

What do you primarily use PocketSmith for?

It’s a way to monitor my spending across various categories, but I also enjoy looking at the trends, especially as, at this point in time, the cost of living is getting quite high. So I’m conscious of wanting to know where my money is going on a regular basis so that I can make changes to my spending habits and redirect those savings into investments. I also like tracking my net worth as it provides a level of motivation over time to see where you have come from to where you are now.

How has PocketSmith changed the way you do money?

PocketSmith has given me much more clarity over my personal financial situation. It’s shown me where I am spending too much (hello Uber Eats!) and gives me the kick up the butt to pull back in those areas and redirect my money to savings or investments.

What are your favorite features?

I love the Calendar, which shows all the upcoming budgets for the month and the impact of your spending on your account balances over that period of time. I also enjoy the Reports section, and the Dashboard — in particular the graphs to show where your money is going. I love the flexibility of being able to show periods of time that are meaningful and being able to adjust that to whatever you want to see.

Got any tips?

Set up your categories from the start! Use the nesting/parent features of the categories so it doesn’t get overwhelming. Stay on top of your transactions, as categorization and confirmation of these make the data much more meaningful. Utilize the editing features of the Dashboard to make the data make sense to you, and to show you what matters.

What’s the best money decision you made in the past 12 months?

Might not have been the best timing, but I achieved a lifelong dream of purchasing my first home — a sweet little two-bedroom apartment perfect for my son and I. My timing was pretty bad though — the week after settlement interest rates went up! Still, I’m happy to have been able to achieve something I have wanted since I was in my early twenties, and having done it on my own makes it that much sweeter.

12 Tips for Working Remotely Overseas

Thu, 02 Feb 2023 11:00:00 +0000

The rise of working from home during the Covid-19 pandemic has made us more aware than ever that work can be done remotely. As a result, digital nomadism, working holidays and even long-term international moves are on the rise. At PocketSmith, we’re big fans of remote working from all over the world. We love the work-life balance it brings, and our team appreciates the freedom to explore the world without giving up their job to do it. Here are our top tips on working remotely overseas, if you’re craving a change of scenery!

1. Choose a location(s) wisely

Whether you’re looking to work abroad from one location or go full digital nomad and move around often, it’s important to carefully select the places you’ll visit. Depending on what type of work you do, you’ll need to research the lifestyle there, places to live, the climate, safety levels, and the cost of living to establish whether it’s the right place to set yourself up. Numbeo is a handy tool to help you compare the cost of living in different places across the world. It pays to know how far your money will go in a new city!

2. Explore the tax implications

The most important part of working remotely overseas is the tax and visa implications. You’ll need to consider tax laws in your home country and the country you want to work from, as some countries require you to pay tax in both the country you reside in and the country of which you’re a resident or citizen. Speak to an accountant about your own travel plans to ensure you’re compliant. A mistake could cost you at tax time.

3. Don’t forget your visa!

Working remotely from overseas may require a visa, and the type of visa you need may vary depending on whether you’re self-employed or an employee of a business. According to Visa Guide, a number of countries are now offering Digital Nomad Visas, including Spain, Portugal, and Iceland!

4. Research the digital nomad community

Different countries have different levels of digital nomad activity, but in some places you’ll find a thriving and vibrant community of others working remotely. It’s worth exploring this before you go, particularly if you’re looking to meet new people on your adventures.

5. Establish a routine and consider the time difference

Working remotely from overseas can definitely take some getting used to, especially if you’re used to working 9-5. Depending on the lifestyle of your new location, you may want to work around different times of the day to make the most of the climate or local activities and schedules. Plus, consider whether you need to coordinate with other time zones. If you’re working in Spain servicing clients in Sydney, you may need to work later into the evening in order to be available to clients or team members in their local time zone. Looking at time zones before you leave — and remembering to factor in daylight savings changes — can help you plan a viable routine that balances work and play.

6. Review your rates

If you work for yourself and set your own rates, you may need to adjust them to suit your new lifestyle. If the cost of living is higher as a digital nomad than in your previous lifestyle, you may find your regular income is insufficient. Likewise, if your cost of living is lower, you may be able to set some new money goals to stash the difference while you’re traveling.

7. Decide how you’ll take payments

Getting paid while working remotely can be complicated. Decide whether you’ll get paid in your local currency or your home currency, or in one central currency that you convert later. Keeping records for your tax agent is essential! PocketSmith is a multi-currency personal finance software that keeps up with you as you travel to new countries and manage money in new currencies.

8. Decide how you’ll spend money overseas

If you’re getting paid in your home currency but living on another currency, consider how you’ll convert your money. If you’re using a debit or credit card in your home country’s currency, be sure to check fees and conversion rates to ensure you’re not missing out. If you’re moving around often, you may benefit from a multi-currency card that allows you to pay in multiple local currencies.

9. Consider informing clients and customers

Decide whether you’ll let your clients and customers know you’re working from overseas. If you’re concerned it could impact your working relationship, you may choose to omit it from your website or email communications. However, if you’re going to be working in different time zones, it’s often worth ensuring your clients and customers know where they stand. Adding a note in your email signature or setting an auto-responder to let people know when they can expect to hear from you can be really helpful.

10. Have an emergency fund

Access to an emergency fund is more important than ever when working remotely overseas, as unexpected costs can arise and you may need to make an emergency trip back to your home country. Review your financial position, calculate the costs of last-minute travel arrangements, and ensure you’re comfortable with the amount of financial security you’re taking with you.

11. Get adequate insurance

Digital nomads need insurance. Things go wrong, we get sick, accidents happen. There’s a good chance you won’t be covered by other countries’ healthcare systems, so having adequate insurance is essential in protecting yourself.

12. Take security seriously

Being a digital nomad is exciting, but don’t forget to take security seriously — particularly if you’re moving around a lot. Your passport will become your most important possession while traveling, as will your credit, debit or travel cards. If you’re working digitally, you’ll likely also have tech like laptops, iPads, phones and cameras that you need to protect. Make sure you’re able to keep your possessions safe on your digital nomad adventure.

Five Things I Wish I Knew When I First Started Using PocketSmith

Mon, 30 Jan 2023 11:00:00 +0000

The last couple of years have been messy, haven’t they? Ever-changing pandemic rules, housing bubbles, rising inflation… but we’re here. Summer is roaring (at least here in the Southern hemisphere!), and the season comes with a new warmth and a stubborn hope.

Change is in the air.

We’re also barreling towards my 18-month anniversary of using PocketSmith. I signed up for the Basic plan in late August 2021, lasted a few days, and then upgraded to Premium. As a new user, I had a lot to learn.

Looking back on the past year or so, there are five things I would tell myself.

1. Why pay when I can use it for free?

Oh, me. That’s like asking “Why eat a Fairlie Bakehouse Pork Belly and Apple pie for $7 when I can eat a petrol station gristle-and-gravy pie for $2?”

Sure, the Basic plan is free. It’s a great way to taste what PocketSmith has to offer. You get a tantalizing nibble around the edges. But for the full depth of flavor, it’s worth shelling out for Premium or Super.

Where the free plan relies on manual imports, the paid plans thrive on automating a ton of functions. Automatic bank feed syncs? Done. Automatic categorization of transactions? Done. Automatic visualization with a Donut or a Sankey diagram? Done!

2. Is it worth $90 a year?

A year ago, I was working full-time in a salaried job and I had a good savings habit. Listening to a Happy Saver podcast, I’d heard about this PocketSmith thing and decided to give it a go. But would it be worth that initial lump payment?

In short: Heck to the yes. I may have spent $90, but seeing what’s happening with my money has saved me that much ten times over.

My advice? Skip Basic and go straight to Premium. The automatic bank feeds alone are a life-saver. I wasted hours importing and categorizing transactions manually, only to move to Premium and find I could do it at the click of a button. Goodbye, frustration. So long, time-wasting. Hello, dozens of useful functions.

3. I want to know everything right now

Okay, calm your farm, friend. I get it. I was impatient too — but I wish I’d taken a step back and let myself breathe.

You don’t have to do it all tonight, or even this weekend. There’s a bit of a learning curve, sure. That’s what the Learn Center is for. Go. Read. Familiarize yourself. If it feels overwhelming, take a break. Or try something — anything — and see for yourself how intuitive it is. You don’t have to do everything now; it’s enough to start with one thing. Connect your bank feeds. Learn how to split a transaction. Create a category. You’ll get there, and before long you’ll be ’Smithing with the best of us.

But know that it’s not a race.

4. Do it for yourself…

When I first signed up for PocketSmith, I dove in head-first with both feet (to quote Adrian Plass): Learning this, trying that, growing more and more excited at this new world of financial functionality. Naturally, I wanted to share it with my friends. I fired off invitation after invitation, and….

Crickets.

Which is fine! As the saying goes: Personal finance is personal.

Your money journey is yours, and your friends’ money journeys are theirs. It’s not a comparison game. It’s not a competition. Everyone moves at different speeds, everyone has different priorities, and that’s fine. Don’t do it for the selfie or the debt-free scream (although they might be bonuses) — do it for your own sense of self.

5. …But be ready to welcome others

Almost a year after that first invitation, a friend read my blog about the Traffic Light Priority System and contacted me.

“Loved your article! That looks really helpful. Hang on, didn’t you send me something about those Pocket people a few months ago…?”

Annoyed? Not a jot. I was thrilled! One, she’d read the article; two, she’d found it useful; and three, she was asking about the next step. That’s everything I ever want my writing to do: Make people feel, make people think, and stir them to action.

The journey is personal, but it’s more fun in a community. Keep an open mind and an open hand. Your friends will learn from you, you’ll learn from them, and who knows? One day you might be the one reaching out to say, “I loved your podcast! Do you have any advice about…?”

Do You Really Need To Use That Buy Now Pay Later Service?

Thu, 26 Jan 2023 11:00:00 +0000

PocketSmith asked for my opinion on Buy Now Pay Later schemes, and what initially felt like an easy conversation got much more fraught.

What’s the problem?

I’m always open to new ideas, inventions, and concepts and love finding new ways to do old things. I honestly am. But I’m afraid that Buy Now Pay Later (BNPL) is just a non-starter for me personally. In my opinion, they have made a simple thing like going shopping far more complicated than is necessary.

I recently watched a show where a diabetic woman was taste-testing soft drinks to find the perfect fizzy drink that wouldn’t send her insulin levels sky-high but would also quench her thirst. There was a whole segment on the show about how she could avoid being thirsty, for goodness sake! I thought to myself, why doesn’t she just drink water?

Stick with me. There is a point to this.

My opinion of the multitude of Buy Now Pay Later offerings elicits the same logical response. If you are buying an $80 jumper spread over four $20 weekly payments, why not just save up $20 a week for four weeks and then buy the jumper?

Do you and I even need BNPL?

No, in my opinion, we don’t.

Will it pass the Granny test?

When it comes to using, or not using, a financial product that promises to make my life easier, I often think, “what would Granny say?” What would a person over the age of 70 have to say about what to drink if you were truly thirsty? They would say, “drink a glass of water”.

And if their grandchild said to them, “Granny, I’ve found the perfect sweatshirt; it’s $80. I’m going to buy it today and pay it off over the next four weeks at $20 a week”. Granny would say, “Borrowing money to buy a sweatshirt? Sheesh, are you kidding me?”

I’m with Granny on this one.

Small debt can snowball into something much larger

Since the concept of debtwas invented, inventors have been trying to work out how to get more people to go into debt. BNPL is just a new form of debt.

The marketing department of every BNPL scheme is working overtime to make you feel that slicing a payment up into smaller pieces gives you a greater sense of freedom and control. Don’t get me wrong; these are two of my favorite attributes.

But from where I am, sitting on the sidelines of watching how others handle their money, BNPL gives them anything but freedom and control over their spending. Instead, I watch people complicate their financial life by slicing up so many things into ‘easy payments’ that they lose track of where their money went. Their bank account looks more like a bucket full of holes, and as they pour a paycheque in the top, it dribbles out in all directions from the bottom.

Delayed gratification won’t break your budget

I won’t go into how these BNPL companies work because this has been covered beautifully by many personal finance writers.

I will say that little by little, these ‘easy payments’ that you find yourself paying do add up to bigger and bigger outgoings from your bank account. Every time you use BNPL, you are pre-committing your future income for something you may have even forgotten you have purchased, for something you no longer use or wear but are still paying for.

If you want that control and freedom over your money, you can do that all in-house, all within your banking app. I’d encourage you to look back at 12 weeks of banking transactions and add up all the money that left your account in “four easy payments”. Divide it by 12, giving you a weekly amount. This is the amount you can now budget with, so you can save up and pay cash for your purchase. Open up another bank account and move that amount in every Monday morning and let it build.

Next time you visit your Granny, and she comments on the new sweater you are wearing, say, “Cheers for that, Granny, I saved up and paid cash for it”.

She might reply, Yep, that seems like an obvious way to buy things, sweetheart”. Grannies are very good at pointing out the obvious.

Personal Finance and Investing Podcasts to Start Your 2023 Out Right

Sun, 15 Jan 2023 11:00:00 +0000

Podcasts that look at the bigger picture of personal finance

The Happy Saver Podcast

Ruth is a personal finance expert who loves to talk finances with everyday New Zealanders. In her view, being open about our finances is one of the most valuable things we can do to help other people reach their financial goals. In each episode of The Happy Saver Podcast, Ruth walks us through a new story from her listeners. From a couple living in a tiny home and retiring in their thirties, to getting through university debt free, to discussing how to actually use a nest egg in retirement — there’s certainly something you can learn from the stories she has to share!

The Broke Generation Podcast

If you’re looking for a podcast that feels like you’re having a chilled, relaxing conversation about money with a friend, the Broke Generation Podcast might be for you. Emma Edwards provides a feel-good, honest look at personal finance and provides tips to help you make better decisions with your money. It ranges from the psychological side of money, with episodes like overcoming emotional spending, to guest discussions on tax tips for your small business or side hustle.

Passive Income Project

Hosted by two young Aussies, Terry and Ryan, the Passive Income Project centers on the psychology and practices that you can adopt to master your finances and build a good life. A great thing about this podcast is the ongoing series they have which deep dives into certain topics. A couple of their more recent series are surviving stagnation and the current state of crypto, post the FTX collapse. These deep-dive discussions give us multiple perspectives around the issues and help develop informed opinions, which are important when your financial health is what’s at risk.

Cooking the Books with Frances Cook

Hosted by Frances Cook, one of New Zealand’s foremost personal finance authors and podcast hosts, Cooking the Books discusses a new money problem each week. Whether it’s becoming a digital nomad or a discussion on how to spend less while still eating well, Cooking the Books has you covered! Interesting guests give an opportunity to develop a deeper understanding of certain financial topics; a recent episode focuses on FIRE, where they discuss using the Financial Independence aspect, not to Retire Early, but instead to shift to a new career path.

OneUp Project

All you need to know about this podcast is in the name. Each week, join Sarah Kelsey on the OneUp Project podcast and explore the different tips, stories, and perspectives to help you OneUp your life — both financially and personally. When’s the right time to find a new job? How to financially prepare for travel? What are some bad money beliefs? Tune in each Monday for a friendly conversation to find out the answers!

The Aussie Firebug Podcast

Ranked as one of Australia’s top financial independence podcasts, each week on the Aussie Firebug Podcast Matt interviews people on topics related to the FIRE (Financial Independence, Retire Early) and their own journeys towards that goal. Discover how to make your home as energy (and cost) efficient as possible or learn how top property investors got their foothold in the market. Matt delivers a wide variety of experiences to help you understand that true financial independence can come in many different forms and is well within reach.

Girls That Invest

With their recent international fame, Sim and Sonya have built Girls That Invest into one of the most popular personal finance podcasts in the world. Their Q&A episodes, Sticky Money Monday, give advice on all things money and life that can be a bit tricky to navigate — such as dealing with a racist manager or talking to your parents about retirement. Tuesdays are reserved for deep dives on finance topics without the jargon, making it extremely accessible, no matter what part of the journey you’re on. It’s an easy-to-listen-to podcast that helps give you the confidence to take the plunge into the world of personal finance and investing.

It’s No Secret

What are the burning money questions that you have in your life? From figuring out the best use of your KiwiSaver to how you should budget for kids, Cat and Christine are here to help! Each Tuesday, It’s No Secret takes you through the ins and outs of all things finance, money, property, and investing to help you get ahold of your financial future. It’s short and sweet, and feels more like a conversation between friends than some dense lecture on personal finance — that’s a plus in our books.

Podcasts on markets, stocks and all things investing

The Monday Call

Brought to you by NZ Funds, The Monday Call is a podcast all about the current state of financial markets and where they might be headed — not just stock and bond market movements, but also technologies and crypto. It’s an excellent take on global financial markets from a New Zealand perspective, helping Kiwi investors keep up to date with the news and make informed decisions. Deep dives into topics such as the green building industry or New Zealand’s reliance on China provide a fascinating insight into our future and how that might shape your investment strategy.

Motley Fool Money

Join Motley Fool’s investment analysts as they discuss the top business and finance news, and break down their implications on the stock market for long-term investors. Keeping up on global business and financial news can be incredibly interesting, but it’s also fundamental if you want to make good investment decisions. With great, down-to-earth discussions, it’s a must-listen for anyone interested in business, investing, and markets!

Fresh Invest

Brought to you by Morning Brew, Fresh Invest breaks down the current financial climate and answers the questions to help you build up your financial future. This past season of Fresh Invest had a focus on building a passive income stream with investing, discussions around thematic investing, and a look at the state of the cryptocurrency market over the past year. With a limited number of episodes each year, Fresh Invest acts as a well-crafted deep dive into topics that retail investors can gain great value from.

Using PocketSmith’s Sankey Diagram to Visualize My Money Flows

Thu, 12 Jan 2023 11:00:00 +0000

A few months back, I made a fascinating discovery. I was browsing through the PocketSmith Pals Facebook group (a great place to ask all questions PocketSmith-related and chat with other users), when I stumbled across a thread about a new feature — the Sankey widget.

Quiz time!

Is a ‘Sankey’:

An obscure dance move from the 1920’s
Someone who loves brightly coloured or playful socks
A type of flow diagram
The extreme tip of a giraffe’s tail

Okay, if you read the title of this post, you’ll know the answer. A Sankey is, indeed, a type of flow diagram — specifically, one where the width of the flow is proportional to its quantity.

How a Sankey diagram works

Start with $100. This takes up 100% of the starting flow.

Allocate $50 to, say, a zoo visit to see the giraffes. Because $50 is 50% of your starting value, the arrow will then, proportionately, take up 50% of the flow width.

To put it another way, it’s like New Zealand’s famous braided rivers. Water starts at the source (100%), flows down through various streams (100% split between as many streams as you’d like), and eventually flows out to sea (still 100%, but by now much more dispersed).

Zoo visits, braided rivers, got it.

The beauty of the Sankey is that it lets you see everything at a glance. You can add multiple income sources and see your big earners. You can allocate spending flows to a dozen streams and watch them leap over waterfalls. It can be as simple or as complex as you’d like.

Manually generating a Sankey diagram

Now, I used to run a Sankey diagram manually. It wasn’t a constant thing: More of an occasional gut check for myself, to make sure that my spending was on track and I wasn’t running too close to the line. Once or twice a year, I would sit down at my computer, pull up my budget spreadsheet, go to sankeymatic.com, and enter my spending for each category into the diagram flows.

Yep. That’s right. Manually.

One category at a time. Income sources. Sub-income sources. Parent categories. Child categories. Grand-categories. All of them, painstakingly entered one keystroke at a time.

Let’s just say there’s a reason I only did it a few times a year.

Then I would sit back and take it all in. It’s all very well having the data visualization there, but it’s not worth much if I don’t apply it. So I’d ask myself the hard questions.

How much is coming in vs how much is going out?
Am I comfortable with that margin, or is it a bit tight?
Are there any bottlenecks? Does money go into one stream and then stop short?
How can I best allocate the extra?
Is all my income reliant on a single source? How can I change that?
Is one category color too dominant, meaning I’m spending too much in one area?

And then, having asked and answered the hard questions, I would apply them.

The great thing about PocketSmith’s Sankey widget? It’s automatic.

No manual entries. No frustrated math checks when the numbers don’t add up. It’s all there, ready for you to visualize your money flow from mountain to sea.

Go to the Dashboard
Click Add Banner Widget
Then click Category Sankey Widget
Done — now you can see your money flows!

Maybe you need to add another water source. Maybe you have too many identical creeks, and it’s time to merge some of them together. Maybe there’s one waterfall you haven’t been looking at because it’s too scary, but when you take a breath and take the plunge… hey, that wasn’t so bad.

You won’t know until you look. So what are you waiting for?

Ian Uses PocketSmith’s Insights To Reduce Spending On His Vices

Sun, 08 Jan 2023 11:00:00 +0000

Read how Ian understands the effect of the cost of living on his finances with PocketSmith, and the bad habits he was able to identify and cut out.

Tell us a little about yourself?

I am a father in a blended family — I have two of my own children, either in or nearing their teenage years and two stepchildren who are both adults. I am a person of fast obsessions; I cling on to something and immerse myself in it until I see the next shiny thing! So far, the pattern has been Air Jordan shoes which got too expensive and was only for me, then American low-and-slow BBQ which enabled me to entertain family and friends, then exercise because of how unhealthy I got by eating too much BBQ, then board games during covid to have great family experiences together, and now I am getting a sparkly new obsession of knives and knife sharpening.

How would you describe your role in your household?

In a way, I play the role of master of coin, while my wife plays the role of health and mindfulness. Together we are a team that looks out for elevating ourselves and our children.

What drew you to PocketSmith?

The cost of living is rising, mortgage rates are rising and grocery prices are increasing, so tracking where our money has gone is becoming increasingly more difficult.

We recently refinanced to another bank and now make all of our purchases by credit card and pay off the balance monthly. There is a lot of admin to managing a credit card correctly and when you are in a partnership that shares finances, navigating through your family’s monthly expenses can be a challenge.

I had been using spreadsheets to go through my monthly expenses and pay off my credit card bill. I found it was taking me hours to categorize and I would routinely adjust the spreadsheet while struggling to balance my finances.

PocketSmith delivered a software that automated that process and removed hours of work. It was software I could trust to categorize our purchases and forecast our budgets.

How long have you been with us?

A couple of months.

What do you primarily use PocketSmith for?

I started using PocketSmith to understand how the cost of living was affecting us and to look back on where our money was going. Now I have a better understanding of that and have begun using it for budgeting our yearly finances and understanding how much we can spend.

How has PocketSmith changed the way you do money?

I always know where our money has gone and how much we can spend in certain areas of our everyday life.

An outcome of routinely categorizing our purchases was finding out how much we spend per month on our vices, which helped us make an informed decision to stop spending on things that do not serve a purpose for health or joy.

What are your favorite features?

Automatic categorization
- Setting up the automatic categorization removes so much admin time when going through your monthly expenses.
Splitting expenses
- Splitting expenses into several categories is a godsend. For example, we may make a large purchase on AliExpress where a portion will be for Christmas and others on home improvements. The ability to split that out works wonders for our budget.
The mobile app
- Categorizing on the fly through the mobile app works really well and saves us time.
Dashboards
- Dashboards and charts to give us a quick glance at insights into our finances enables me to have an understanding of how we are doing financially.

Got any tips?

Take your time categorizing. Once you have a few months of categorized expenses, then begin working on budgets.

Read the Learn Center article so that your categorization works for you.

What’s the best money decision you made in the past 12 months?

Through PocketSmith, I found that we were spending a combined amount of over $350 a month on our vices. Understanding that impact drove our decision to quit, and we are now on our way to living a healthier lifestyle.

Eight Resolutions for a Productive New Year

Mon, 02 Jan 2023 11:00:00 +0000

1. Build out a mindfulness routine

The benefits of mindfulness are endless — but it takes a bit of effort to build it into your lifestyle. Work on gradually building up a mindfulness routine by trying different activities until you find the right mix for you, like journaling, meditation or gratitude practices. You can use hacks like habit stacking, where you add new habits into existing routines, to build out your mindfulness must-haves and reap the rewards of a calmer mind.

2. Track your spending

If improving your financial wellbeing is on your agenda for 2023, tracking your spending at least some of the time gives you unparalleled visibility over what’s going on with your finances. Not only can it be valuable from a mathematical perspective to see what’s coming in and what’s going out, tracking your spending gives you a window into your financial behavior and the emotions going on behind it. PocketSmith is one of the most comprehensive and customizable money management software available — so it’s never been easier to track your spending!

3. Get to know your retirement fund

Saving for retirement is one of those things that’s easily left in the ‘too hard’ basket in our minds. With so much on our minds in the present, thinking ahead to the future takes some serious brain power, but there is immense value in getting to know your retirement fund. Make it your mission to take one step forward from wherever you’re at each month — whether that’s finding the login to your retirement accounts or looking into making extra contributions. Make 2023 the year you prioritize future-you.

4. Learn a new recipe each month

Knowing how to cook tasty, wholesome and hearty meals is one of the best life skills you can hone. But how do you go from baked beans baddie to Gordon Ramsey greatness? A fun new year’s resolution could be to learn a new recipe each month, so that by the end of the year you’ve got 12 recipes in your arsenal, ready to flex at your next dinner party!

5. Set a monthly money routine

Financial resolutions often fall apart after the first few weeks of the year, but incorporating an evergreen aspect into your goals can help keep you motivated and moving forward. A powerful new year’s resolution idea could be to set a monthly money routine, to keep you engaged with your financial goals throughout the year. You can customize it to suit whatever you’re working towards, incorporating things like savings account trackers, debt pay-off progress, financial journaling or income growth tracking.

6. Learn a new skill

Learning a new skill is a great way to approach 2023 with a growth mindset. It could be something that’ll help you further in your career, or something that has nothing to do with making money. You could take a course in management or marketing, learn to knit or cross stitch, learn a new language or even basic car maintenance. Set a monthly progress check-in to help you stay motivated, and implement micro-milestones and rewards to keep your brain interested.

7. Set a morning routine

Another case for routine-based new year’s resolutions! Having a healthy morning routine that’s aligned with what makes you feel good can help you start the day focused and energized. Remember, morning routines don’t need to mean 5am gym sessions and endless meditation. Start by choosing something you love to do, and make it part of your morning. That could be making your favorite breakfast, or watching an episode of your favorite tv show, listening to a great playlist, or sitting in silence with your favorite hot drink. Then, add things on until you find a flow that’s right for you.

8. Do something new every week or month

Broadening your horizons and trying new things can teach you more than you realize. If you’re looking to develop yourself more broadly in 2023, set a resolution to try something new every week or every month. Some weeks might be smaller things like trying a new cuisine, other weeks might be bigger things like doing a public presentation for the first time. It’s a great way to get you in touch with the things you hold back from doing, and finally take the leap!

Ruth’s Two Cents: Financial Wellbeing Resolutions For 2023

Wed, 28 Dec 2022 11:00:00 +0000

Hi Ruth,

I can’t believe that 2023 is only a couple of days away! I’ve never been one for New Year resolutions, but after an unpleasant couple of years I want to start the new year intentionally improving my financial wellbeing. Which aspects of my money should I be working on, and what kind of goals should I be setting?

Planning your finances for the new year is one thing. But for me, making a financial new year’s resolution has many similarities to the microgreen spouter I was given as a gift for my birthday this year: I immediately started growing not just one, but three tiers of microgreens. I diligently watered them three times a day — heck, I even looked forward to doing it! By day four, I forgot to water them, and by day six, I failed to both water and eat them. By day eight, I had to throw them out as they were going rotten.

What was my issue?

Too much too soon. Three trays of greens. Really Ruth?
It was an unsustainable time commitment with no automation.
It relied on me staying motivated to grow microgreens, and after three salads, the excitement of eating miniature vegetables was waning.
My family doesn’t even like eating them!

Financial resolutions made in the new year are the same; they rarely last. So let’s all just lower our expectations of ourselves, okay?

If you have had a rough couple of years, you at least now know what you don’t want. The only way is up from here. If it is on your mind that you want to whip your finances into shape, I will give you just a single task to do. Only one. Because if I bombard you with suggestions, you and I know you won’t do any of them. If I am playing my cards correctly here, my proposal will pique your interest in your money and help you unlock other parts of your financial life that will interest you enough to look into them a bit more.

Are you ready for this?

Audit your current financial situation

Get a pen, paper and calculator, or use an application like PocketSmith to really speed things up. You may also need coffee or wine, you choose because this is going to take you about an hour.

On the X axis, write down the last three months, e.g. September, October, and November.

Pull up your bank accounts on your computer and select the transactions only for September.

Now, in the Y axis, start writing broad categories for the transactions you begin to see. For example, if you see transactions for your local deli, supermarket and wholefood store, just create a category name of Food. Some common category names that I suggest starting with are:

Food
Eating Out
Rent/Mortgage
Utilities
Insurance
Subscriptions
Car Costs
Fun Stuff

Keep adding each new transaction to each category until you have the total amount of money you spent in September for each category. Below that total, write your income for that month.

Repeat this process for October and November. That is all I want you to do.

Sit with your numbers for a while

What comes next? Just take some time to observe.

How do you feel about your actual finances now that you can see your spending in black and white? With zero judgment, given what you earn, are you spending more or less than your monthly pay cheque? Is the gap between those two numbers wide enough? Where is all your money going, and are you okay with those choices?

If you have a partner, bring them into this conversation too. Share the details that will get them involved and interested in your shared finances. There is no scrutiny needed here; the money is already spent, and the point is to decide if you will make the same choices next month and beyond.

For many people, this is the first time they have eyeballed each transaction and weighed up how it felt to spend that money. It is often quite a sobering experience. Do you look at an expense and it brings up fond memories, or do you regret it? Do you even remember making some of the transactions? As you now well know, transaction by transaction, your income is siphoned away from you, sometimes in such a way that you don’t even notice.

Only you can decide the correct level of spending and earning for you.

But being able to take a three-month snapshot of your earnings and spending is enough to help you make some lasting decisions about your money. If you average things out, how much have you spent and earned in 12 months? Less than you thought, or way too much?

And yes, you can focus on a $5 daily coffee or a barely used gym membership, but I know in my own home that concentrating on the bigger expenses was where we found the most wins. For example, our monthly grocery spend, when I compared it to the income we made, seemed far too high. So together we committed to a weekly amount we would spend that felt ‘better’, and it was a modification that we could stick to.

A small step toward creating lasting changes

This festive season I don’t doubt that you will read, watch and listen to many experts advising you on how to change up your finances for the coming year. But I’m encouraging you just to take one step, find out what you spend and earn for three months and then use that information to guide future decisions.

This is precisely how I started my journey to financial independence. And although I tried to keep my spreadsheet updated each month, it never happened. Even someone interested in personal finance couldn’t keep up with the effort required! But this short exercise piqued my interest — my expenses were telling me something, and I wanted to learn more.

Realizing what I had spent helped me make better decisions about what I would spend in the future. And as the gap began to widen between spending and earning because I was making better decisions with my money, that sent me off in search of new information about debt reduction and investing. For now, just a simple three-month audit is all required to kick start lasting change that goes well beyond any New Year resolution.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

My Freelance Goals For 2023

Wed, 28 Dec 2022 11:00:00 +0000

In April 2022, I finished up a one-year contract at my day job, took a few weeks out to recalibrate, and then launched into this new, exciting, nerve-wracking job called freelance writing.

It was a true leap of faith. I’ll be the first to admit there was a steep learning curve, but the more I do this freelance thing, the more I’m certain it’s the right place for me to be. Nine months later, I’ve settled into it. I have some good experience under my belt, I can pitch an article and sell my wordsmithing without a blink, and my regular clients include a historian, a website design studio, and this cool Dunedin-based money management app.

Looking over my PocketSmith dashboard, I have a number of goals there that tie neatly to my freelance goals for the new year.

Sow it and grow it

With both money management and writing, I have a solid foundation. I’m self-taught in both areas. I’ve put hours into upskilling and furthering my education. It’s a strong base, but there’s always room for improvement. Whether it’s reading personal finance books in the vein of The Barefoot Investor, spending time in PocketSmith’s Learn Center, or overhauling my website portfolio to better showcase my client work, I’m looking forward to finding ways of building and growing everything I’ve started this year.

Even out the bumps

Nobody likes a steep drop, let alone an unexpected one. That stomach-in-your-mouth feeling is never a good one. PocketSmith’s forecasting gives me a good idea of what my money will be doing in the future, but they’re only as good as their inputs. I have the capacity in my work schedule for a few more regular clients. Growing my client base would stabilize the forecasts even more, as well as help to even out the dip-and-rise rollercoaster that is so common to freelance income. It would also build a bit more resilience into my systems — both freelancing and financial.

Get ready to explore

In the OCEAN psychology model of personality traits, a person can rank high or low on ‘openness to new experiences.’ I’ll be actively working on this in the new year. Personal finance and freelance writing are big worlds, and there’s so much I feel I haven’t tried yet. From exploring academic thesis editing, to playing with new PocketSmith features, to looking at making a move overseas… who knows where the future might take me?

Let’s just say it’s a good thing PocketSmith has multi-currency support, including currency conversion on account balances and filtering transactions by currency.

Don’t forget the ‘why’

Freelancing and personal finance, if we don’t keep on top of them, can quickly become chaotic. It’s not just about the money, either. As our schedules fill up and our lives only get busier, it’s important to step back, take a breath, and ask ourselves “why”.

Why did we start on this path in the first place? We need the money, sure — but for me, I certainly don’t plan to trade one 50-hour desk job for another 50-hour desk job. I love my work. I also love the flexibility of setting my own hours, learning new things, taking on jobs that interest me, and challenging myself to write a better piece than last time, come up with fresh ideas, or approach things from a new angle.

Oh, one last thing…

When I tell people what I do for work, the reply is sometimes along the lines of, “Wow, that’s the dream! I’d love to have your job. If you hear of a position like that opening up, could you let me know?”

This response intrigues me. See, I used to say it too. But now I’m here, and I’m doing it for real, and I can tell you — the opportunity doesn’t “just come up”. These positions don’t “open up”. They’re not advertised; they’re created. They’re forged out of grit and sweat and a hundred pitches launched into the void with no guarantee of a return.

But it’s worth it. It’s so worth it. I’m now nine months into this freelancing thing, I’ve learned so much already, and I can’t wait to see where another few years will take me.

Here’s to those 2023 goals, and to whatever is next.

How To Make The Most Of New Years Sales

Fri, 23 Dec 2022 11:00:00 +0000

Another new year is upon us, and with that comes resolutions, fresh starts, big plans, bold dreams, and of course — new year sales. While we’re all about savvy spending and good financial habits, we know sale periods can be a great opportunity to snap up a bargain, so we’ve compiled our hottest tips on how to make the most of the sales this new year.

Stock up on your health and beauty staples

The best sales purchase are the ones that save you time, energy or stress later on, and we love using the new year’s sales to stock up on skincare, beauty and health staples at a discount. Work out how much of your favorite products you get through each month, and see if you can leverage new year’s discounts to stock up for some of the upcoming year. If you would’ve bought it anyway, it makes sense to get it for less!

Look for gift card deals for big-ticket items

If you know you’re going to be buying a big-ticket item like a laptop, but you’re not quite ready to pounce on a sale, see if you can buy gift cards at a discount. Often you’ll be able to get 10% off gift cards for some major retailers, so you can buy now and spend them when you’re ready.

Plan gifting for Q1 and Q2

New year sales are the perfect opportunity to get ahead on your gifting for the year. Go through your calendar and map out anyone you want to buy gifts for and see if you can get ahead on your organization by snapping up gifts in the sales — if you find a great gift they’ll love, of course. Don’t buy just for the sake of a sale.

Research ahead of time

If you’re looking to make a big purchase during new year sales, for example, a new TV or an appliance like a coffee machine, do your research in advance of the sales so you’re not caught up in frantic sale messaging. Compare reviews and specs, and then compile a shortlist of products you’d like to snap up. Then, go into the new year sales armed with the intel you need to snag a great deal.

It can also help to set a price you’re willing to pay before the sales kick off. Then, if the price drops that low, you’re ready to go. If not, that’s your reminder to take a beat and think it through — you don’t want to wind up with an impulse purchase.

Scout out which retailers offer price matching or price beating

Some stores offer price match or price beat on products they stock, and the new year sales periods can be a great time to scout these opportunities out. If you find a great price online but would rather buy from another retailer — maybe you want to buy in-store, or maybe you’ve got a voucher to use — you might find your preferred store will match or even beat the price you’ve found. School up on where offers price matching so you’re prepared in advance.

Get discounts on courses and classes

If you’re looking to take a course or a class in the new year, perhaps as part of a new year’s resolution, you might find deals and discounts around the new year. Factor this into your budget planning, too, and try to make sure you’re ready to pounce when the right price presents itself.

Look out for sales on subscriptions and memberships

Some of your favorite subscriptions and memberships may offer new year discounts or promotions, so keep your eyes peeled. You could snag a great price for renewing, and save yourself some life admin later!

Dark Patterns: My Experience Buying Hamilton Tickets in the Ticketmaster Afterpay Pre-sale

Sun, 18 Dec 2022 11:00:00 +0000

Early December 2022. The anticipation was palpable as I sat, hands poised on the keyboard, eagerly waiting for 11am. Determined to secure tickets to the hit musical Hamilton like hundreds of other Kiwi fans, I was waiting to participate in the notorious Ticketmaster pre-sale.

Pre-sale infamy and Taylor Swift

A pre-sale is a special sale of tickets to an event that is only available to a select group of people, typically before tickets are made available to the general public.

In an ideal world, pre-sales are a way for event organizers to reward loyal fans and customers with early access to tickets. In reality, as millions of Taylor Swift fans discovered to their dismay, pre-sales are anything but a fairy tale. In November 2022, fan demand for Swift’s “Eras” tour pre-sale was so strong that it caused Ticketmaster’s site to crash, disappointing fans who had waited for hours in the queue.

Swift later took to social media, saying, “It’s truly amazing that 2.4 million people got tickets, but it really pisses me off that a lot of them feel like they went through several bear attacks to get them.” This debacle occurred amidst an ongoing investigation by the US Department of Justice into antitrust practices by Ticketmaster’s parent company Live Nation over monopoly concerns.

My pre-sale experience felt less like warding off bears, and more like discovering a swampy breeding ground for dark patterns — user interfaces designed to trick people into doing things they might not otherwise do, such as buying something they don’t want or giving away personal information.

Dark pattern 1: The forced choice

In New Zealand, the initial Hamilton musical pre-sale was co-branded with Buy Now Pay Later company, Afterpay.

In my naiveté, I assumed that all I would need to do for the pre-sale would be to create an Afterpay account, enter some sort of pre-sale code, and then I’d be able to delete my account easily. After all, a musical written by champion of democracy Lin-Manuel Miranda would never force me to enter into a binding contract with a finance company, right?

Alas, no.

The Hamilton pre-sale not only required you to create an Afterpay account but also forced you to pay for your tickets with Afterpay!

So extreme was my need to get hold of those tickets I went against my instincts. I created an Afterpay account, reluctantly handing over my email address, mobile number, credit card account details, and NZ Driver Licence details.

Once my Afterpay account was approved, I saw that I had an estimated $600 available to spend. Just like that.

Dark pattern 2: Countdown timers and the scarcity tactic

The second dark pattern I encountered was the scarcity tactic. Once in the pre-sale, I was given a 90-second countdown timer to select my seats. This created a false sense of urgency and made me feel like I had to act quickly to secure the best seats. However, once I selected my seats, I was informed that they exceeded the amount available on my Afterpay account. This meant I had to pay the difference upfront, without any time to think or compare prices.

With the countdown timer still going, I quickly calculated to ensure that this totaled to and matched the ticket prices and service fees I was expecting. Relieved that it tallied, I clicked “Proceed”, only to be notified that my transaction had timed out.

After all that, I still hadn’t managed to get my tickets in the Afterpay pre-sale.

Dark pattern 3: The Afterpay cancellation trap

Still reeling from my lack of success in securing tickets, I encountered the third dark pattern when I tried to close my Afterpay account: The cancellation trap.

In the Afterpay desktop app, I clicked on my Profile, then on “Close my account”. That’s when a big wall of text appeared, explaining that I could only close my account via the mobile app.

So, forced to download the mobile app, I navigated through it and clicked on “Close my account”, where I learned that closing my account in the mobile app merely deactivated my account. Alarmingly, Afterpay still had all my information, including my Driver License number.

I googled “how to close my Afterpay account” to find the instructions. It turns out the information was located in the fine print of Afterpay’s Terms of Service, paragraph 3.4 to be specific, where it states: You may request to close your Afterpay Account by contacting us directly.

Yes, you read that right. To close my account, I had to fill in a form on the Contact page, buried in Afterpay’s footer.

After I filled in the “I would like to close my account” contact form, I waited. To my enormous relief, it only took one business day for Afterpay to action my request. My account was finally closed, a moment of light in an experience that was tinged by much darkness.

Epilogue: I got my Hamilton tickets — in another pre-sale that only required creating an account with Ticketmaster. However, my brush with Afterpay disturbed me enough for me to share my experiences publicly. I know I wasn’t alone in feeling trapped, and I would like to encourage others who feel like they have been a victim of dark patterns to speak up. Together, we can hold companies who use these questionable practices accountable and urge for a fairer and more transparent experience for all consumers.

Dora is Head of Marketing here at PocketSmith. She’s the mum of two boys, and calls both Singapore and New Zealand home. She’s obsessed with succulents, sci-fi and bubble tea, and is waiting for the day a novel will combine all three. Maybe she should just write it herself.

Using PocketSmith To Plan My Finances For The New Year

Wed, 14 Dec 2022 11:00:00 +0000

In general, I’m not a fan of new year’s resolutions. January 1st is just another day to me, albeit one that generally catches me wondering where the last week went. I don’t feel a need to join the (slightly depressing) >80% failure rate of resolutions made on that particular day. If I want to make a new habit, I’m more likely to start it:

Impulsively at 6am the day after first thinking about it, or
On a cold, wet, icy Wednesday in midwinter, on the basis that if a habit sticks then it’ll stick anytime

One thing I do like doing around the new year is taking a good hard look back at my financial habits of the last year. Some of them started on a dreary midwinter Wednesday and are still going strong. Others might have crept in over time without me noticing. After that, I can look ahead and make a solid plan for my money for the upcoming year.

The annual overview: Income and Expense Statement

I find PocketSmith’s Income and Expense Statement fantastic for seeing the big picture of where my money is (or isn’t) going. First I go through and look for any discrepancies, mismatches, or giant holes that shouldn’t be there. Then I drill down to see the nitty-gritty details.

A $1500 business expense at Noel Leeming? Good thing I scanned my receipt. Turns out I forgot to add a budget line for the new work laptop. Fill that gap and move on. Have I miscategorized a weekly client payment as monthly? Maybe I accidentally filed a big transaction as ‘expense’ instead of ‘income’. Did I adjust my rent budget back when the rent raise kicked in?

By the time I’ve finished that, my ‘budgeted’ and ‘actual’ columns should be looking pretty similar. There’ll be some differences in places, but that’s fine. Now we need to…

Check for problem areas

Whether it’s going to a shop too often or sneaking cheeky extras into our shopping basket, we’ve all got problem areas, right? I have one in particular, which is why I’ve started labeling my Warehouse transactions after each trip. There’s nothing worse than looking at unmarked transactions and wondering how to categorize them when they were a month ago and you don’t remember if you bought shoes or kitchen utensils or… wait… what even did I buy that time?

Fair warning, this can be an uncomfortable experience. Seeing all my Warehouse trips for the year makes me aware of just how often I go there, and often for things I don’t really need. It can also turn up patterns I’ve let get out of control — like, uh, impulse buy 2-for-$2 KitKats (Every. Single. Time.)

But change starts with awareness. Now that I’m aware of that habit, I can change it.

Adjust my budgets for next year

Now that I’ve evened out the bumps in my budget and highlighted the danger zones of my spending for the last year, I can sit back and breathe. Now for the fun part — using the Trends page and the Income and Expense Statement to make tweaks for next year.

What areas am I overspending in? Or underspending? I need to adjust my 2023 budget for these — while making allowances for things like inflation, income forecasts, and any known upcoming life changes.

What changes have there been in the last year? I moved jobs, became a freelancer, and started juggling multiple irregular sources of income. Do I have good systems in place to handle these? How will they affect my budgeting going forward?

Maybe my power bill came in under budget every month, except in winter when it was bang on. Is there a better way to set that up? Can I lower my monthly power budget but set it to roll over, so my winter expenses are covered by the summer excess? Or set a single annual power budget instead?

How’s my grocery budget looking? Prices are going up everywhere. Do I need to give myself more room for next year? Looking at my income forecast, can I afford to?

If I’m overspending in an area, do I need to reel it in next year or is it a sign to extend the budget? If I’m underspending, can I trim the budget or do I need to tell myself to relax and splash out a bit? If I was on target this year, do I leave that budget the same for next year or add 10% for rising costs?

By the time I’ve worked through that, I should have a solid plan for my money for the next year. Of course, any plan needs some wiggle room — no matter how good my planning, there’s always something unexpected that crops up. I have a good emergency fund, and PocketSmith gives me the flexibility to adapt on the fly.

So no, I don’t make new year’s resolutions… but I do make a new year’s plan. I find it a lot more achievable. How about you?

PocketSmith Provides Scott With a Plan and Peace for Retirement

Wed, 14 Dec 2022 11:00:00 +0000

Read how Scott discovered the freedom of budgeting and how he’s made PocketSmith’s extensive toolkit a part of his everyday life.

Tell us a little about yourself?

A grandfather of 17 “solutions,” I am optimistic about the future. Married for more than four decades, my wife and I work hard to create a family that gives more than they take. Recently, as I held our latest grandchild, two months of age, I talked to him about how he needed to grow up to help others, or in other words, be a solution. Personally, I am curious: About people, places, things, ideas and how we can all work together to make the world a better place.

How would you describe your role in your household?

Our last child heads off to college in January, so it will be just us two at home. I am a husband to a wonderful, patient wife. In the final years of my career with a non-profit, my role includes figuring out how to thrive in retirement.

What drew you to PocketSmith?

Nothing out there has the breadth of features that PocketSmith has: Tracking, reporting and modeling the future. They are either budget-oriented, focus on consolidating accounts or investing. PocketSmith combines all of them and adds top-notch customer service to the mix.

How long have you been with us?

About two and a half years.

What do you primarily use PocketSmith for?

Everything. Every morning I categorize all my transactions and review my calendar for the short term. Frequently I review my budget report and check my cash flow 10 years in the future. I want us to enjoy our after-work years, where we plan on doing more volunteering.

How has PocketSmith changed the way you do money?

I used to dread the idea of retirement: Would we have enough? What about inflation and tax increases? Now, I plan for all of that. I am at peace.

What are your favorite features?

The calendar. I can see where we are going, add in budget items and plan for the long term. In this process, I discovered how freeing budgeting is. That was a surprise.

Got any tips?

Use the “Or Principle”. I used to ask questions like: Can I afford this? What happens if I buy this? How do I get myself out of this mess? Now, we always put two of our goals in contrast: Do we want to pay down more debt or do we want to buy this? Another way: Do we want to save to buy item A or buy item B now?” That way, we are making decisions together as a couple, instead of each advocating for their desired purchases.

My PocketSmith tip is to use categories to make reporting easier. When I have to prepare my numbers for my accountant to do taxes at the end of the year, all my hard work of categorizing makes it easier. I also attach a receipt to every single purchase.

What’s the best money decision you made in the past 12 months?

Canceling two vacations. We had the cash flow, but we decided that we wanted to pay down more debt, while upgrading our rental.

Our Top Picks For Environmentally-friendly Christmas Gifts

Mon, 12 Dec 2022 11:00:00 +0000

As a company based in New Zealand, some of these are only available locally. We’ve tried to include international alternatives but also encourage you to look into your own local products and experiences as they’re sure to be even better for the environment than something shipped across the world!

Often we think of sustainability as something that requires an extra expense (think plastic-free products at the grocery store), but that doesn’t have to be the case. Homemade gifts can provide just as much joy as something you buy, without the expense, and with a more personal meaning behind them. Looking at thrift shops and regifting is also an option that can help save your wallet and the environment. Even direct donations to charities your loved ones are passionate about can create positive change in the world, without the need to purchase a physical object.

But if you want to buy something for your loved ones (or yourself!) these holidays, eco-friendly products and experiences are a great option. Here are a few of our favorites you might like to check out!

Sustainable and eco gifts

Beeswax wraps

Plastic wrap is one of those ubiquitous staples that everyone has in their kitchen. The problem is that it’s inherently single-use and will inevitably end up in a landfill for the next few centuries — and that’s a best-case scenario. Beeswax wrap offers an eco-friendly alternative that is reusable and plastic-free. Made from cotton and beeswax, you clean and reuse it for up to two years before putting it on the compost pile! If you’re based outside of NZ, you can try making your own or check it out on Amazon.

Leaf Shave razor

Razors are one of those items we use nearly every day, yet their environmental impact often goes unnoticed. Companies like Gillette pioneered the razor blade business model — selling a base product (razor handle) at a loss and charging huge markups on the cartridges (the actual blades). In this way, not only are traditional cartridge razors extremely expensive in the long run, but they also create massive amounts of plastic waste as the cartridges are difficult to recycle. Leaf Shave razors change this by allowing you to insert generic razor blades into the head of the razor. This means that in the long run, your shave is cheaper as you’re not being charged a massive markup on the blades, but you can also recycle them, making them much more eco-friendly.

The Zero Waste Chef cookbook

If you’ve ever tried to live a zero-waste lifestyle (or even tried to keep waste to a minimum), you’ll know just how hard it can be. For most people, one of the best places to start is in the kitchen. After a decade of trying to live as waste free as possible, Anne-Marie Bonneau shares her tips on how to waste less when it comes to food. From reducing your plastic rubbish to recipes that can help you save money and reduce waste, The Zero Waste Chef is the perfect book for the person in your life who wants to join the lifestyle but doesn’t know where to start.

Patagonia clothing

As far as eco-friendly fashion and outdoor brands are concerned, Patagonia is near the top. Sustainability is at the forefront of their brand and they’ve been one of the most innovative companies in the industry for decades. You could check out their Responsibili-tee line which is made from recycled cotton from their factories and recycled polyester from plastic bottles. Or perhaps their hemp collection, which requires even less irrigation and fertilizers than their organic cotton. Even the Worn Wear program offers second-hand clothing that receives the same lifetime repair guarantee as new products. As a certified B-corporation and 1% for the Planet member, you’d be hard-pressed to find a brand that suits your environmentally-conscious loved ones better.

Environmentally-friendly experiences

Project Tongariro Mahi Aroha Summer Programme

A great gift for the Family, the Mahi Aroha Summer Programme is a series of activities coordinated by a community group, Project Tongariro, and the Department of Conservation, all around the theme “loving our backyard”. It boasts a range of activities from litter pickup events, to treks to find our native bat species, and control the invasive wild pine species. It’s a great way to get the kids (or adults) involved in looking after the environment in a fun and interactive way — plus it’s free!

EcoZip Adventures

If you have any thrill seekers in the family, why not give the gift of an adrenaline rush this Christmas with EcoZip Adventures, located in the heart of Waiheke Island in a section of beautiful native forest. EcoZip Adventures built its brand on sustainability and, through its operations, has helped restore the local forest to its former glory, planting thousands of native trees and the control of invasive pest species. They’ve even offset their carbon footprint by over 120%! When you’re zooming down the ziplines, you’re not only enjoying the thrill, but you’re also helping support and restore our local ecosystems — we think Santa would approve of that!

Dusky Sound Conservation Experience

If your Christmas budget isn’t an issue, the Dusky Sound Conservation Experience is a once-in-a-lifetime cruise where you’ll spend five days on the Milford Wanderer learning about DOC conservation projects in Fiordland. Not only will you cruise around the beautiful landscapes and visit historic sites in the area, but you’ll also spend time as a DOC volunteer and assist in local conservation projects. If your loved ones are passionate about conservation, this is an experience they’ll never forget!

Tinggly

Gifting an experience to your loved ones is perhaps the best way to create memories and reduce your environmental footprint, and that’s exactly what Tinggly endevour to do. When you purchase an experience gift from Tinggly, the recipient receives a collection of experiences that they get to choose from and a gift card towards it. Experience collections can range in theme from “Just Married” to “Taste the World” and “Discover New York”. Tinggly was founded on the idea that we should help preserve our planet and to “Give stories, not stuff”. To that end, all the packaging they do use is eco-friendly, removes plastic pollution and plants trees for every item sold, and are carbon-offset by 200%. Not a bad way to gift the experience of a lifetime.

Wuldi Cultural Experience

On the outskirts of Adelaide, you’ve got the opportunity to walk along the Gemtree Eco Trail with Ngarrindjeri elder, Mark Coolmatrie, experiencing stories of his people and the responsibilities of caring for the land, water, and local ecosystems. By looking upon the world around us with the knowledge and experience of indigenous cultures, we can make connections with the land and gain a deeper understanding of environmental issues, and also how we might fix them. This experience is perfect for anyone who appreciates nature, and offers a new perspective on how the environment connects us all. Plus, after walking the Gemtree trail, you might want to finish off the day with a wine tasting at the Gemtree Winery estate — who’s gonna turn that down?!

Ruth's Two Cents: Aligning Christmas Spending With Your Money Values

Sun, 11 Dec 2022 11:00:00 +0000

Hi Ruth,

My partner is a big Christmas spender, and comes from a family where it is only a success when the food, decorations and gifts are as extravagant as possible. I’m more reserved when it comes to Christmas, and like to take a more frugal approach for the obvious financial benefits and to concentrate on the less materialistic parts of the holiday like spending time with loved ones and giving thanks. This always causes a bit of stress, so how can we align our values so we get a Christmas we both enjoy this year?

The entire festive season is a period of compromise, of which gift-giving is just one part of the puzzle. If you have a partner, and your partner has family, then it is a rare couple who doesn’t dance a delicate balance between trying to keep all of the people happy all of the time.

Immediate family, extended family, and family friends all pull on your time and your wallet during the holiday season. This can often come at the detriment of your enjoyment of the holidays, making the festive season something to be endured rather than enjoyed.

Some people love to give and it gives them immense pleasure to do so; I like believing your partner has a huge heart and gets as much from giving as they do from receiving gifts. And, of course, the other side of giving is receiving, so while you arrive at their family’s home and empty your car of the gifts you are giving away, you are likely also filling it up with gifts you have received for the drive back home. Giving is a two-way street.

What exactly is a “big Christmas spender”?

In my home, PocketSmith has helped clear up many a miscommunication when one of us has assumed the cost of something only to get pushback from the other.

I’d encourage you to put some numbers around this “big Christmas spending” to find out exactly what amount of money we are talking about here.

When each gift turns up as a transaction in PocketSmith, code it to a “Gifts” category and write notes about who the gift was for. This way, you can both see the reality of your generosity at a glance. Plus, this information will help you shape your generosity from now on.

I looked at my family’s gifting and saw that we spent $1,700 on gifts last year. This works out to $33 a week or $142 per month.

Because I put a small note with each transaction saying who the gift was for and why, e.g. Mum’s birthday, I’ve created the perfect template to use in the coming year.

Too much spending or not enough?

Only once you have actual figures can you decide what is too high for you, and too low for them. PocketSmith offers you the chance to add context to your conversation about gift-giving and allows an open discussion.

For example, we gave the same dollar amount ($1,700) in gifts as we spent on electricity. We spent two times that amount on clothing. We spent slightly more on gifts than on our two pets! We spent three times the amount on gifts taking holidays throughout the year.

From an earnings perspective, given I make about $24 an hour after tax, I had to work 70 hours to earn the $1,700 used solely to buy gifts for friends and family. I only worked 14 hours per week, so I had to work for five weeks to earn enough money to buy gifts. I ask myself — is this too little, too much, or about right?

Putting a bit of context behind your numbers can create some sobering observations. You don’t see the whole picture of generosity when you look at each gift/expense in isolation. It’s only when you add it all up that you know the extent of it.

Then you need to have the conversations and ask each other, in the broader context of what you are trying to achieve as a couple, does this level of spending seem appropriate?

Once you have the facts, devise a plan

Hopefully, digging down into the facts, figures and time spent on giving gifts creates some discussions, and you can find some common ground about how to structure your gift-giving. How much feels like the right amount for both of you? In our case, we feel comfortable gifting this amount across a year, and knowing who we want to give gifts to and how much we have to spend helps us plan.

Create a gifting sinking fund

Starting on January 1st, I open a new bank account, call it “Gifting” and set up an automatic transfer of $33 a week. This will begin to build all on its own and over the course of a year will grow to $1,700. As a gift is purchased, I use money from this account to pay for it.

Create a gifting list

By using the PocketSmith transactions and notes you have from the previous year, you already know who you are likely to buy for in the coming year, so create a gifting list of each and every name.

Make sure to include birthdays, Christmas, anniversaries and weddings and any other occasion that requires a gift.

Finding balance between your two values

If you are more reserved about Christmas gifts and feel more comfortable spending less on people you want to give a gift to, then do so. Give the appropriate gift to the person because no one is keeping score. It took me years to learn that when I asked someone what they wanted, and they told me it was something relatively small and inexpensive, they meant it. Gift the gift they want.

If you have created a list that still feels extravagant to you, but feels spot on to them, then I’d put the onus on them to find the money required to bridge the gap. Task them to make up for the shortfall.

If you can’t beat them, join them

Sometimes in life, we have to feign interest. If you really want to keep your big Christmas spender of a spouse in check, they might need you on their team to reign in their generosity when it comes to shopping. Because you have a list of gifts, as the year trundles along, help them buy them early and at a discount, using money saved in the gift bank account.

Help them fulfill the list throughout the year instead of waiting until Christmas is upon you. Then tick them off your list. This removes all the drama and the panic shopping as December 25th draws near. The gifts, the seasonal decorations, and the food have all been thought of and purchased.

Some people love to give gifts

I’m not an overly creative gift buyer, but when I’m given a gift by someone who clearly loves to give gifts and has thought long and hard about what I would like to receive, it is a joyful experience for both of us.

I’d hate for joy around to be stamped out around the holiday season when you know there is an argument looming over the whole gift-giving process. Before Santa jumps aboard his sleigh, work together to put some parameters around gifting as a family. I’m pretty confident that you can find a compromise if you approach a conversation with an open mind, acknowledging that they love to be extravagant and give gifts, but this is less important to you. You can all enjoy the reason for the season, which is, as you say, to spend time with loved ones and give thanks.

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

How To Give the Gift of PocketSmith

Wed, 07 Dec 2022 11:00:00 +0000

Have you thought about gifting PocketSmith? While giving budgeting software as a present might feel like the equivalent of gifting a pair of socks, the fact remains — everyone wears socks, and everyone takes on the responsibility of managing their money. We can’t provide the funky patterns that some have, but we can still give you the same fuzzy feeling of a thick pair of socks.

Who should I gift PocketSmith to?

For the global citizens who operate in multiple currencies

Whether they be a glamorous jet setter or an adventurous expat, many of your family and friends will be living a global lifestyle. But a lifestyle that spans multiple countries and currencies comes with — gulp — complex financial needs.

As online money management software that helps global citizens manage their finances all in one place, PocketSmith could be a welcome gift. Users can track multi-currency accounts, assets, and liabilities from around the world, as well as manage multiple streams of income, expenses and reimbursables to save hours of time when filing tax returns.

For the side hustlers and everyday entrepreneurs

Got an enterprising person in your life? While they’re busy hustling and bustling, they may find it hard to make time to properly manage their side hustles finances. PocketSmith could be the perfect gift for those with a side hustle!

As the only personal finance software recommended by Xero as an alternative to their discontinued Xero Personal product, you can think of PocketSmith as Xero for the personal accountant.

Entrepreneurs can keep good records by organizing receipts and other household and business documents using the Attachments feature. And they can take recordkeeping one step further by automating it, as PocketSmith will automatically categorize transactions as they come in.

They can also kick spreadsheets to the curb by staying informed with the Income & Expense Report, which can help with their budgeting and tax purposes too.

For the net worth nurturers

Know anyone who’s captivated by their net worth number? Many people view their net worth as an indicator of financial progress and success.

PocketSmith’s Net Worth feature allows you to measure your total financial performance across all accounts, assets and liabilities. See your net worth grow with the ability to adjust changes to the increasing values of your assets.

Net worth planners can track all of their financial systems in one place with PocketSmith — personal banking, mortgage, investment and business accounts. If they’re an investing whiz, they can connect to a slew of micro-investing platforms like Sharesies and Pearler, and portfolio trackers like Sharesight.

For the household CFO

Like any good business, a home wouldn’t be successful without its Chief Financial Officer, or CFO. They manage the household’s finances, keep on top of what’s going out and coming into the household’s personal and investment accounts and work towards the family’s money goals.

Household CFOs will love what PocketSmith can do for them and their family. PocketSmith can help them control spending with adaptable budgeting tools, map the path tofinancial independence, set up ‘what-if scenarios’ to help prioritize decisions and forecast the household’s short, medium, and long-term cash flow.

It’s an irreplaceable household assistant! But we’ll have to leave amusing the kids up to the CEO (Chief Entertainment Officer).

For the digital nomads

It’s not just a Zoom background, they really are in the Bahamas. Digital nomads are working remotely in a different city or a different country, and resolute organization of their finances is a must to successfully live this intrepid life.

These wandering workers can stick to a budget to fund their travel using PocketSmith’s Budget Calendar, where they can schedule upcoming bills and budgets and see their projected bank balances on any given day.

They can also track their taxes, keep an eye on ongoing automatic payments back home and organize finances across different currencies with automatic bank feeds, so staying on top of life admin with PocketSmith is easier too.

With PocketSmith’s mobile apps, the nomad in your life can keep on top of their finances on the go — on a beach, up a mountain, and maybe even underwater.

For the friend who’s curious about their money

People’s experience with money is deeply personal, and everyone does it a little bit differently. If you know someone who might be looking for a way to be aware and in control of their money, offer them a crack at PocketSmith.

If you’re already a user, share your unique Tell-a-Friend link to give them a free 1-month trial and receive an extension to your PocketSmith subscription. Because what better gift is there than one that you get to enjoy as well?

For yourself

Sometimes you deserve a little reward. You might identify with one of the descriptions above, or you might just be someone who wants a better understanding of their money and how they’re managing it. Gift yourself the tool to forge your own financial path. A PocketSmith subscription starts from just $9.99 a month.

Get ready to gift PocketSmith

Now you know who you’re buying PocketSmith for — what are you waiting for?! Getting PocketSmith is easy, no matter what you’re preferred method is:

Visit the gifting page and send a coupon out to your family and friends
Check out which PocketSmith plan is right for you and gift yourself a subscription
Share your Tell-a-Friend link with someone to gift them with a 1-month free trial (and get rewarded with an extension to your own subscription)

Chloe is PocketSmith’s Content Marketing Manager, and she loves that she gets to combine her love of telling stories and technology. In the office, she’s drafting a pun-filled post or debating emojis. Outside of the office, she’s collecting comic books, listening to music and suffering through Bulgarian split squats at the gym.

Ten Tips for Battling Rising Inflation

Sat, 03 Dec 2022 11:00:00 +0000

Rising inflation continues to be at the forefront of everyone’s minds, and the most immediate effect of rising inflation is the rising prices of everyday goods and services. That’s why we’re seeing everything from our weekly grocery shop to fuelling up the car get more and more expensive. While the effects of inflation are being felt around the world, there are some ways we can minimize the impact. Here are ten top tips to help you battle the cost of inflation.

1. Get clear on where your money is going

Cutting costs starts with getting clear on what your costs are. Set aside some time to understand how much you spend on different areas of your life, like groceries, transport, and entertainment. From here, you can look for efficiencies and discounts to help you cut back. Laying it all out in one place makes the task much less daunting!

2. Focus on efficiencies in your food spend

Grocery shops are one of the first places people notice rising prices. The price of food increases because rising costs that are impacting producers and suppliers get passed onto the end consumer — and it can be frustrating and concerning, especially if you’re already very diligent with your grocery spend.

One of the best ways to make your grocery budget stretch further is to focus on efficiencies with your ingredients. Purchasing simple ingredients that can be used in all different ways helps minimize waste and create more meals for less. Work your meal planning backwards, by shopping your pantry first, and then making meal decisions based on things you’ve already got. If you are buying extra ingredients, try to maximize those in other things you decide to make.

3. Slash your transport spend if you can

With fuel prices going up, even the shortest journeys can guzzle your tank and your wallet faster than ever. Look for ways to slash your transport spending to save big over the long term. Things like carpooling with a friend or coworker, sticking in a podcast and getting public transport (even if it takes a little longer), or requesting to work from home an extra day can add up.

Calculate how much your regular journeys cost in petrol and see where you can cut back. Saving one $10 journey a week would save you over $500 per year!

4. Have fun for less (or for free!)

Unfortunately, rising inflation means cutting back on some luxuries for most of us — but that doesn’t mean cutting back on seeing friends and having a good time. Get together and brainstorm some fun ways you can relax or socialize for free. Swap meals out with potluck dinners and BYO wine, go on a walk and take a traveler coffee (or cocktail!), or host a games night at home.

5. Look for bulk discounts

If you’re guilty of opting for the cheapest label price rather than the cheapest cost per 100g, it’s time to switch it up. Buying in bulk doesn’t have to mean buying a year’s worth of toilet paper. It can be as simple as buying the larger size of things you regularly use to maximize your money. Things like olive oil can be substantially cheaper per milliliter when you buy the larger bottles instead of the smaller ones.

6. Check for annual discounts

When paying for regular expenses like insurance or subscriptions, check if there’s a discount for paying annually. If you’re able to pay the full year upfront, often you can score big discounts and reduce the average monthly cost substantially.

7. Monitor your expenses

The key to getting the compounding benefit of small money-saving actions is to ensure you’re repeating the behaviors and keeping on top of them. Monitor your expenditure over time and keep abreast of changes to things that could be creeping up in price without you realizing it.

PocketSmith can help you do this by displaying all your transactions in one place, and helping you identify trends that can help you make better money decisions.

8. Check you’re getting the best deal

Staring at bills and wondering how to cut back can be really stressful, but don’t forget you can ask for a better deal on your household expenses. From energy providers to phone plans, make a list of all your outgoings and give them a call or hop on live chat. Often you can switch phone plans instantly, or score a lower rate on your car insurance just by asking. Shopping around other providers may also uncover a cheaper price, or information you can use to leverage a better deal with your existing company.

9. Check your interest rates

For the first time in years, interest rates are rising. While this adds extra pressure to borrowing by increasing mortgage and debt repayments, it also means you can earn money on your savings. It pays to check in with all your interest rates, both ones you pay and the ones you earn, to ensure you’re paying the least, and earning the most!

Example: You’ve got a $500,000 mortgage at 3.5%, and $10,000 in a savings account of 0.5%.

If you can reduce the mortgage rate to 3.3% and increase the savings account rate to 1%, you’ll be $1100 better off.

10. Make some extra cash on the side

When cutting back on costs gets difficult, your other option is to increase your income. You can start by selling off some preloved items online, or freelancing your services on global sites like Fiverr, Airtasker or Upwork.

Earning extra cash can also be a great way to help you build up an emergency fund for unexpected expenses, too.

Brave New World: Open Banking Unlocked

Thu, 10 Nov 2022 13:00:00 +0000

PocketSmith’s global focus gives us a unique perspective on open banking. We’ve been at the coalface of delivering bank feeds to customers everywhere for over a decade now. While the tide of promise for open banking has lifted us high, we’ve also been let down by the realities of providing new technology to actual users.

Here we are in 2022, eleven years after PocketSmith first started providing bank feeds. Open banking is completely upon us, in some of our most important markets — and it’s really great! Except for when it isn’t. We’re launching open banking globally, against a backdrop of teething issues.

This post will discuss the good and the bad we’ve found during our time with open banking, which we’ve been learning since we first connected to open banking providers in Europe and the UK in 2019.

The good news: Open banking is awesome

Open banking ushers in some great changes to the ecosystem that we operate in.

Needing to share your online banking username and password with a third party to share your account and transaction information has been a massive issue for PocketSmith customers. But with open banking, you establish a connection directly via your bank’s own website, who sends a secure token over to the data provider, allowing ongoing access to your account data.

No longer do consumers need to skirt around breaching terms and conditions, and no longer do banks publicly admonish screen-scraping technology but then in the next breath use it themselves behind the scenes.

Open banking provides access to tooling only the confident and lucky could use previously. People who are wary or who have been impacted by fraud or identity theft can now use better financial tools, and institutions can provide access due to sanctioned bank feeds.

2. Governing bodies can pressure the banks to do better

The government agencies who administer and oversee open banking systems have fairly significant power, which they can leverage to make banks do the right thing. These agencies include the ACCC in Australia, and the FCA in the United Kingdom.

These agencies can provide a conduit between the data providers and the banks themselves. The can also go beyond this in providing information to consumers — for example, the ACCC in Australia also maintain a “rectification schedule”, noting down the shortcomings of the bank’s open banking implementation, along with an expected resolution date.

In extreme cases, these bodies can also fine the banks who don’t adhere to open banking rules, such as the ACCC who, in July 2022, fined the Bank of Queensland over $132k AUD for not upholding their responsibilities.

3. It’s more reliable, faster and less error-prone

In general, open banking feeds are much more reliable than traditional bank feeds. The most teething problems that we see occur on the initial connection to the banks. Once a feed connection has been successfully established it’s smooth sailing, compared to the relatively temperamental nature of traditional bank feeds.

In addition, syncing is significantly faster too. Traditional feeds rely on screen-scraping technology to log into the online banking interface, and then navigate between different web pages to “scrape” your account and transaction information. This overhead when gathering data adds a lot of time when syncing these feeds.

Conversely, open banking technology talks directly to the bank’s internal systems, using machine-ready data formats instead of human-ready web pages. Because there isn’t any loading web pages, things can happen much quicker.

In addition, if the banks provide the data on their open banking connections quickly, then data can be done in near realtime. For example, Australian open banking under the CDR allows up to 20 syncs per day allowed, per bank. This frequency of syncing means that if the data is provided by the bank, you can get it into PocketSmith much faster.

The bad news: Open banking is very new

Time moves slowly for banks. Open banking in Australia is still experiencing a large number of teething issues, despite being launched in July 2021.

Fortunately, we’ve got a great partner in Australia with Basiq. They’ve supported us through our fairly unique use case: We’re a New Zealand company, and we have passionate exacting users who deftly spot flaws. Their support team have been amazing to collaborate with, who we are able to work with directly to resolve the quirks listed below wherever we can. They also have an open banking hub, which is a fantastic resource for all the questions you may have about open banking in Australia.

These teething issues listed will improve over time, due to the efforts of everyone in the ecosystem: Our customers, our data partners, the governing bodies and the banks. But right now, below are the issues impacting customers.

1. Banks aren’t great at edge-case user experiences

With new technology like open banking, there are going to be many cases where an error or issue occurs unexpectedly. In these cases, it’s important that the user interfaces are designed in a defensive way, handling errors well and explaining to the end user what happened.

Unfortunately though, we’re finding that banks are not providing a good user experience when faced with a changing environment that could result in problems. Error pages and messages shown to users are generic, without specific steps on how users can fix a problem. User interface elements like toggles might just not work, without explanation as to why clicking something is not turning something on.

It can be reasoned that banks have always operated in a closed environment, with specific tested flows for individual user segments. With open banking though, all users are being taken through the same user interface to connect — from brand new users to those who’ve had an online banking profile since the 1990s.

This is causing a lot of headaches for people when things like this go wrong, as the only option available to people is to get in touch with us, and our only option is to refer people to their bank. We hope that this will improve over time.

2. Banks are slow to improve, and to fix problems

Due to the relative youth of open banking, significant teething issues exist for some people when trying to establish a feed.

We’ve seen both big banks and small experiencing issues with customers who have some accounts that aren’t eligible for CDR open banking data sharing, for reasons unknown to both the user and the bank. Generic error pages are shown when this happens and the customer is halted.

There are other quirks with sharing that prevent users with old customer IDs from sharing data, especially when they’re associated with closed business accounts. Then, banks experience sporadic outages for subsets of customers, which take weeks to get resolved - forcing users back to traditional bank feeds to get their recent data into PocketSmith during the outage.

Each of these issues still exist after 17 months of open banking, were identified and reported by our customers weeks ago, and are still ongoing problems for many users. We can only expect other similar issues to crop up for other banks, as open banking continues to roll out further — but we’re looking forward to the time when all these problems have been shaken out.

3. The banks are the arbiters of data quality

Legislators made the laws, and the banks interpreted those laws into open banking data sharing systems. Unfortunately some consumer-unfriendly interpretations of the law resulted.

Firstly, the account types supplied under open banking data sharing can be limited. If it’s not legislated for, then banks won’t allow the data to be shared. In the UK and EU, open banking laws cover only transactional accounts, resulting in savings accounts being excluded from sharing. In Australia, superannuation and trust accounts aren’t covered by legislation and so are excluded. Some reasonable banks still provide this data, but the majority do not.

Secondly, the data supplied in open banking data responses varies in quality drastically. One bank has a universal description of “Domestic POS Transaction” for every credit card transaction — without any merchant information — despite complete information being available within their own apps and online banking. Sadly, this appears to be acceptable under current Australian CDR laws, despite the severely limited usefulness to customers.

Thirdly, the law as written can result in nonsensical implementations. In Australia, sharing joint accounts originally required each account holder to turn a key at the same time, like an missle launch sequence. While the legislation changed to more closely align with a reasonable user experience in February 2021 — the 9-month deadline was extended to a 20-month deadline non-major banks. Which leads us to:

4. Open banking language and systems are hard to understand

With new technology comes new language and systems. While those in the trenches can quickly become comfortable to jargon, others that need to use and understand the technology are left without clarity. This gap in knowledge then hampers uptake of the new systems.

We’ve been seeing this play out even at the banks themselves. When our customers have talked to their banks to resolve open banking issues, they’ve often been met with confusion from many frontline staff. Some even say that data sharing will never be allowed by the bank, contrary to the legislation.

There is an urgent need for everyone in the ecosystem to bridge this gap. We need to communicate coherently, so everyone starts both understanding and caring about open banking, and the promise it holds.

And so, to help if you need to talk to your bank about an open banking issue, we present:

A conversation toolkit for your bank’s customer service representative

Some of our users we’ve guided in getting set up with open banking in Australia have found that frontline customer service representatives can often not know about any forms of data sharing.

In order to ensure that you’re getting the right advice from them, a certain combination of words seems to do the best job of cutting through and reaching the open banking team that can help you.

I’m having a problem with CDR open banking data sharing. Can you put me through to someone who can help?

You might be receiving an error when connecting your bank, or you could be stuck figuring out why a particular account isn’t available for data sharing. You could also be told you’re completely ineligible to share data under the CDR.

In each of these cases, referring to “CDR open banking data sharing” appears to be the best way to get put in touch with the people that are able to assist you.

Open banking: It’s early days, but the future is bright

Even when we first started integrating bank feeds in 2010, the concepts of open banking were not new. Specific standards had started to be created in part of Europe, which rolled into the PSD2 launch in 2019. Now with the CDR in Australia and a few banks introducing open banking-like data sharing in the United States, the future is very promising.

A template is now laid for other geographies to introduce open banking, and hopefully some of the missteps made are avoided when open banking commences in other countries.

Despite the missteps though, we’re excited about the promise that open banking holds for all customers. It’s certain that we’ll reach a point where the good points discussed above exist, but without the teething issues being experienced right now.

Through open banking, banks will be held to greater account than ever before. Firstly, by the legislative bodies that oversee the various open banking regimes.

But secondly — and most importantly — by consumers themselves. Now that data rights are becoming enshrined in law, customers are more empowered to move between banks to support those that fully respect their data rights.

Jadon Uses PocketSmith To Track His Side Hustle Finances

Wed, 02 Nov 2022 11:00:00 +0000

Read how Jadon uses PocketSmith to evaluate the cost-benefit of his hobbies and any services he pays for.

Tell us a little about yourself?

I’m a fast-approaching 50-year-old IT Manager originally from South Africa but now happily Australian living in Brisbane. No kids but plenty of hobbies to make up for it, including golf, laser cutting, CNC machining, 3D printing, home brewing and gourmet mushroom cultivation.

How would you describe your role in your household?

I am the primary income earner and bill payer given my full-time employment, however both my partner and I have side hobby businesses on Etsy that provide for some extra income to spend on fun things like dining out or a weekend away.

What drew you to PocketSmith?

Many years ago, I was discussing managing finances with my general manager, and he mentioned he had found PocketSmith and thought it was good. Since I have always been a person to try and stay on top of my finances and like to know how I am trending, PocketSmith was a good fit.

How long have you been with us?

Over eight years! Signed up way back in April 2014.

What do you primarily use PocketSmith for?

PocketSmith is a tool for me to track spending habits and summarize bill expenses to better assess the cost-benefit of any service I am paying for. It allows me to easily collate taxable/deductible transactions for my accountant and also allows me to pick up on any odd or fraudulent transactions as I will categorize them at the end of every two weeks.

How has PocketSmith changed the way you do money?

PocketSmith has given me the ability to easily see my financial position and anticipate expenses in the coming months. While all this is possible with spreadsheets and the like, PocketSmith makes the process easier and more visual. With the time invested in categorizing all my transactions, I can see how much my hobbies are costing me and how much my Etsy store is bringing in to cover those costs. This has given me greater control over where my money goes and when I should curb spending.

What are your favorite features?

Bank feeds and auto-categorization rules are great time-savers, along with the dashboard.

Got any tips?

It takes a little bit of time to get PocketSmith working the way you want. Invest some time in watching the how-to videos and setting up your categories. Don’t try to get it perfect first go, as you will find it’s an evolving and iterative process that does change over time as your focus or needs change. PocketSmith makes it easy to change categories if you need to, so all you need to do is start!

What’s the best money decision you made in the past 12 months?

After looking at our insurance expenses more closely, I decided to refine our private health cover and reduce our premium by about 40% while still maintaining the coverage we need.

How I'm Using PocketSmith To Prep For Christmas

Mon, 31 Oct 2022 11:00:00 +0000

Ahhh, Christmas. The season of giving, gratitude, family time, twinkly lights, terrible shop music, and stuffing yourself with trifle and that third slice of pavlova until all you can do for the afternoon is lie on the floor groaning. Here in New Zealand, December is in our summer. Christmas is less “snow and sleigh bells” and more “sandy beaches and the slap-slap-slap of jandals on searingly-hot tar seal”.

It can be a time of financial stress for many people, too. The seasonal obligations add up. There’s the workplace Secret Santa gift, the company lunch out, the kids clamoring for the latest whatsit that all their friends are getting, the mountain of grocery bills, the Christmas shop sales, the time off work… and of course the togs (swimsuits) that no longer fit and need replacing. Whew!

But as they say: Christmas happens every year. Don’t let it be a surprise.

With that in mind, here’s how I’m prepping for December 25th with PocketSmith.

1. Save for Christmas with a sinking fund

Some people love ‘em, some don’t, but what are they? A sinking fund is somewhere to set aside money regularly so you’re not caught out by a sudden big expense. For predictable costs, it’s a great way to even out a big mountain into a number of smaller, more manageable lumps.

Create a new bank account. Label it “Christmas”. While you’re at it, create a new category in PocketSmith called “Christmas” and assign it a budget. There are 52 weeks in the year — but you want some prep time, right? Okay, call it 48 weeks.

If you automatically transfer $12.50 a week for 48 weeks into the Christmas sinking fund, you’ll have $600 set aside for Christmas expenses by the time December rolls around. That’s worth gold for your peace of mind — and at the price of a Big Mac combo!

2. Budget Christmas as an annual expense

In my traffic light system, I have a parent category called “Luxuries”. Under this, I have a “Gifts” category. Under this, I have a “Christmas” category. Aren’t you glad PocketSmith offers three layers of nesting categories? I sure am!

Now, I tend to set an annual budget for Christmas rather than a weekly one. I always go back into my Income and Expense Statement and look at what I spent the previous years, and then adjust this year’s budget accordingly. The neat thing with PocketSmith? I assign an annual budget, then PocketSmith tells me what it averages out to per week — and how much of the total I’ve already spent.

Being able to categorize Christmas transactions throughout the year is fantastic, particularly for those pesky “I know I bought something in advance for Brother 2 back in June… but what was it?” moments. Unfortunately, PocketSmith can’t tell you which spot you stashed it in so your brother wouldn’t find it!

3. Use gifts to offset costs

You know that envelope your uncle slipped you with a crisp $50 note in it? Or the bank transfer that arrived from Auntie Maia in Peru on December 23rd? Can you remember what you spent that money on?

Yeah. Me neither.

Gifts of money are a great way to offset the costs of the season — if you know where it’s going. As soon as I receive cash gifts for Christmas, I trot down to the nearest ATM and deposit it. In PocketSmith, I file the deposit under “Christmas”, just like I would with an expense. This then shows up as a refund against expenses for that Christmas period.

I like to label these transactions with the person’s name, so I can send them a personal thank-you later. For example, a photo of the whanau with an email saying “Check out the waterfalls! Your gift helped us have a week-long family holiday in the Catlins — thank you!”

There’s always room for improvement

I’m always fine-tuning my systems. Some years I budget a set amount, then my work situation changes and I have to adjust accordingly. Some years I don’t leave enough wiggle room, and I have to pull savings from my emergency fund, then make a note to top it back up as soon as I can.

Every year, I look at how I handled Christmas last year and I think, how can I do it better next time?

This year, I’m starting by reminding myself not to go back for that third slice of pavlova.

Shifting From MoneyBrilliant to PocketSmith

Wed, 26 Oct 2022 23:00:00 +0000

Welcome, one and all!

It’s great to see you here. Come on in, the water is fine! PocketSmith is a richly featured alternative to MoneyBrilliant, and you’ll soon be up and running and seeing your money in a completely new light.

This blog post will take you through getting your data imported into PocketSmith from MoneyBrilliant, discuss the options that are available to you during the process, and the decisions that were made while we built the tool.

Some good news is that you’re able to import nearly all of your data from MoneyBrilliant into PocketSmith: Your accounts, banks, transactions, categories, budgets, labels, notes and more. The Excel data export from MoneyBrilliant is the best that we’ve ever seen from any application, and we’re extremely happy to be able to provide tooling which allows you to get all your data set up in PocketSmith and ready to go.

A bit of background on us: We’ve been fully independent and bootstrapped since we were founded in 2008. Many other personal finance companies have come and gone, but by building the best tools that we’re proud to use ourselves, we’re focused on building a company to last.

That being said, it’s important to mention that: PocketSmith is primarily a premium application. We only make money through people just like you paying a fair price for great software — no tricks, kick-backs, or selling of user data.

PocketSmith has a free plan which is great for people with lesser needs, however, only paid plans get access to bank feeds. If you’re looking for bank feeds in a completely free application, you’ll be best served to look elsewhere (keeping in mind the adage that if you’re not paying for it, you are the product).

However — we currently have a special limited-time promotion, exclusive to ex-MoneyBrilliant users, which you can find here.

We’re excited for you to get kicked off, so let’s begin!

Step zero: All the steps listed for busy people

If you’re used to being forced to move between different personal finance applications (because — let’s face it — this isn’t the first closure we’ve seen), the following list quickly outlines the key steps that we describe in more detail deeper in the article.

Ensure your MoneyBrilliant accounts have unique names, as the data file assigns transactions via the “account name” and “user account name” - but different accounts can share the same name. Check that each account has a different name in MoneyBrilliant, before exporting.
Download your MoneyBrilliant Excel data file (Login > Settings > Export).
Import your MoneyBrilliant data file into PocketSmith using our Import tool.
- Choose whether you want to import your Transactions, Budgets or both.
- If you’ve imported data before or connected up feeds, choose “Delete all data before importing” to avoid duplicate accounts and transactions.
Set up your bank feeds from the Manage Feeds page, linking your new feed accounts to your imported MoneyBrilliant accounts.
Check out the Budgets page.
- If you imported your budgets from MoneyBrilliant, look at your historical budget analysis by clicking on each category to show the Trends page.
- If you didn’t import your budgets (or didn’t use their budgeting feature), try out the auto-budget tool by clicking on the link in the toolbar.
- you can always reimport with or without your budgets, if you change your mind. Just choose to “Delete all data before importing” after you upload your file.
Check out the other features of PocketSmith, from the customizable dashboard, the forecast calendar and the Income & Expense report.

With the short version now out of the way, dip your peepers into the long version of this guide below!

Step one: export your data from MoneyBrilliant

MoneyBrilliant lets you export your data in an Excel spreadsheet, in .xlsx format. This contains all your accounts, transactions, categories, budgets, labels, and financial institutions stored in MoneyBrilliant. This Excel .xlsx file gets imported into PocketSmith in order to set up all this data at once. Just follow the steps below:

Sign in to your MoneyBrilliant account.
Check that each account has a different name in MoneyBrilliant. Transactions in the MoneyBrilliant export file belong to an account via their “account name” and “user account name”, so making sure each account has a different name ensures data integrity.
Click this link to go straight to the export page, or click “Settings” at the bottom of the left hand sidebar, and choose “Export” from the menu that appears.
Change the timeframe dropdown to “All time”, or another timeframe that suits you (we recommend exporting your “All time” data for posterity, even if you don’t import it now).
Click the Export button and wait for the file to be generated.
Once your download is ready, click the Download data link to save the file to your computer, then move on to the next step!

Step two: Import your MoneyBrilliant data into PocketSmith

Once you’ve created your account at PocketSmith, you’re ready to import your MoneyBrilliant Excel data file. The express import tool we’ve built creates all your existing categories, transactions, accounts, and financial institutions you had with MoneyBrilliant. Using the tool, you’re also able to optionally recreate the budgets that you already had set up in MoneyBrilliant.

1. Get to the import page

If you’ve just started, you’ll be on the “Let’s get started” screen. Click See more > at the bottom of the screen, then click the Import from other app button. A “Move from another app” popup will be shown — click the MoneyBrilliant logo.

The import from MoneyBrilliant button when starting

If you’ve already started getting set up, you can head straight to the MoneyBrilliant express import tool. After you’ve uploaded your file, you’ll get the option to clear existing data before completing the import.

2. Upload your Excel file to the page

Click the button and select the file you downloaded from MoneyBrilliant. Once upload is complete, you’ll be able to choose which data you want to import: Your accounts, transactions and categories or just your budgets and categories.

Import from MoneyBrilliant confirmation

The first option will import your accounts, transactions, financial institutions and categories. All labels and notes associated with your transactions will also be imported.

The second option will import your budgets, including the dates that your budgets started on, along with any amount changes that were made to your budgets as time went on. To match how MoneyBrilliant worked, your budgets will start on the 1st of the month, and will only be imported if they have an amount greater than 0.

If your account has existing data within it, you’ll also be shown a third checkbox offering to “Delete all data before importing”. It’s a good idea to select this if you’ve already connected bank feeds, but now want to import your MoneyBrilliant history — this will ensure you won’t have any duplicates. Your connected feed accounts will be removed, however the feeds will remain intact to relink to the accounts you’re importing from MoneyBrilliant.

The delete data option shows if you have data in your PocketSmith account

Using the “Delete all data” checkbox will allow you to upload your file multiple times, to check out different options. For example, you can choose to import your budgets the first time, but if you then decide to use PocketSmith’s own auto-budget tool subsequently, you can upload your file again to clear things out.

Once you confirm your options and hit the button to continue importing, you’ll be shown a progress bar like the one below.

In progress import from MoneyBrilliant

Note that the import process may take a few minutes if you’ve got many thousands of transactions, so please be patient! Don’t be alarmed if things appear to hang, especially at the “Calculating running balances” process at the end of importing transactions for each account. Just leave your browser window open, and go grab a coffee!

3. Rejoice and check out PocketSmith’s features

Awesome! Your MoneyBrilliant data is now in PocketSmith. You can head straight to your new Dashboard or peruse some of the other features under Reports.

MoneyBrilliant data import complete

This is also a good time to get feeds set up for your account, and linked up to the accounts that you’ve imported. PocketSmith is open banking-ready, and you can choose to connect to your banks via our CDR open banking partner Basiq, if you’re located in Australia. We also offer feeds via other data partners too, like Yodlee and Akahu. You’ll find more details on this in step five below.

Step three: Things to note if you imported your budgets from MoneyBrilliant

The way that MoneyBrilliant sets up your budget is a bit different from PocketSmith, meaning there are a few things to keep in mind if you choose to import your budgets when you’re getting set up above.

Where MoneyBrilliant only allowed budgeting for monthly amounts, PocketSmith’s forecasting engine enables non-monthly budget periods too — weekly, fortnightly, quarterly and everything in between. Life doesn’t strictly run from month to month! So while your budgets will be imported as monthly repeating budgets initially, you can change them to a different budget period subsequently.
Individual budgets (e.g. your Groceries budget) in PocketSmith belong to individual accounts, although spending across accounts counts towards spending within the budget. When your MoneyBrilliant budgets are imported, they’re assigned to the account that has the most transactions in a particular category. So if most of your Groceries spending occurs on your credit card, the budget will be assigned to your credit card account. This enables accurate forecasting on a per-account basis.
MoneyBrilliant sets up budgets at the top-level parent category only, but mostly assigns transactions to the subcategory. This means there is a slight disconnect — you’ll have an overall Groceries budget, but transactions are assigned to the “Fruit and Vegetables” subcategory. We resolve this by activating on the roll-up feature for all categories when you import from MoneyBrilliant by default, so that budget analysis remains correct.

If you find that the way that your budgets were set up in MoneyBrilliant doesn’t quite work for PocketSmith, you can either edit the budgets to suit, or reimport your data and skip importing your budgets. If you choose this option, you can make use of PocketSmith’s auto-budget tool described below instead.

Step four: Start your budgets and enter your bills based on your average spending

If you’ve chosen to not import your budgets from MoneyBrilliant, or you never used their budgeting feature, you can get up and running in PocketSmith very quickly. The brilliant part of budgeting in PocketSmith is that by adding your repeating budgets and bills, you’re generating a cashflow forecast for your accounts which lets you see your predicted bank balances at any point in the future.

In PocketSmith, each category can have a budget — an earning or spending target for a particular category, for a given budget period. Budgets are highly flexible and customizable in PocketSmith, and you can tweak each budget for each category to suit your needs. If you’d like, check out our budget tips and tricks article on the Learn Center.

To get started quickly, a great option is the auto-budget tool — if all your transaction data is accurately categorized. This analyses your entire categorized transaction history, calculates a suitable budget frequency and draws a line in the sand based on your previous spending. Once auto-budgets are set up, you can tweak and refine them from there. Now let’s get stuck in!

1. Head to the Budget page from the main menu of PocketSmith.

2. Click the auto-budget tool link, from either the toolbar or the section at the top of the Budget page.

The budget page immediately after import

1. The auto-budget popup

This will display the auto-budget tool popup — click the large green Start auto-budget tool button to start the budget calculation process. This might take a few moments, depending on how many transactions you have.

The auto-budget popup showing the confirmation button

2. Your automatically created budgets

PocketSmith will show your automatically created budgets in the popup window. If any budgets are in a category that you don’t want to budget for — such as a large budget for Transfers — click the cancel dash icon that appears next to the budget when you hover over it. This will remove the auto-budget for that category, such as the “Household” budget in the screenshot below.

Automatically created budgets, showing the removal icon for "Household" budget

3. Your budget analysis

When you close the popup, you’ll see a budget analysis based your newly created budgets. You can edit a budget by clicking on the three-dot menu next to each budget and choosing “Edit / Delete budget”. If you want to see the detailed historical analysis of any given category’s budget, click on the category title.

Created budgets shown in the main Budget page

Drilling down into the historical analysis for the Groceries budget

4. Your budget in the Calendar

Once you’ve checked out your budget analysis, head to the Calendar page to see your budgets in a different format. You can edit individual budgets here, if you need to make changes after the auto-budget process — either all instances of a budget, or a single one. Just click a budget in the calendar to edit it, and you’ll be guided from there. It’s also where one of PocketSmith’s key features is clearest — your budgets come together with your current balance to forecast your financial future!

The PocketSmith calendar, showing budgets and the forecast graph

We’ve only scratched the surface of what PocketSmith can do with budgets here. From here, follow your nose and consult our Learn Center when you need to.

But now, let’s get the accounts you’ve imported linked to a bank feed to start receiving new data.

Step five: Connect your bank feeds to your accounts

In PocketSmith, bank feeds are a premium feature and are only available on paid plans. Once you’ve upgraded to a Premium or Super account, go to the Manage Feeds page to begin.

If you’re based in Australia, you’ll be able to take advantage of our open banking bank feeds, provided via our CDR open banking data sharing partner Basiq. These feeds are easy to spot in feed search results — just look for the Open Banking tag next to the feed results.

Look for the Open Banking tag to identify Basiq feeds

Check out our Learn Center for a guide which walks through getting your feeds set up, if needed. However, things have been designed to make hooking up feeds straightforward, if you’ve used bank feeds in MoneyBrilliant previously.

When your feed is connected, the next step is to link up your feed accounts to those you imported from MoneyBrilliant. This makes sure that no duplicate transactions nor accounts will be present. Just follow this guide on the Learn Center.

Step six: Enjoy your new personal finance experience

Congratulations, you’re here! We’re confident that you’ll enjoy using PocketSmith, and taking advantage of the flexibility that it can afford you. We’re dedicated to our craft, and love to hear from our users. Please always feel free to get in touch — our amazing support team are here to help.

Hearing stories of how PocketSmith has changed the way people manage their money nourish us, and we’re hopeful that soon you’ll have one of your own!

James is the CTO and co-founder at PocketSmith. He loves tech from software to hardware to music, and is passionate about technology being a net-positive in people’s lives. He lives off-grid with two humans, two axolotls, two rabbits, one dog, and too many possums.

Can You Trust Money Advice On Social Media?

Mon, 24 Oct 2022 11:00:00 +0000

Social media has transformed from a place to share a snap of your dog, to a platform to learn about everything from fashion and beauty to finance and investing. The latter forms part of a relatively new wave of social media landscape, where followers flock to those with information and knowledge to share rather than just those that look the most glamorous. But when it comes to learning about finance and investing from social media influencers, is this advice we can trust? Today we’re breaking down the need-to-knows about personal finance content on social media, and how to ensure you’re not taking bad advice online.

What is an influencer — specifically, a finance influencer?

While there’s no official criteria that qualifies someone as a social media influencer, broadly speaking, these are online profiles that amass any level of following to the extent that their followers are ‘influenced’ by the things they say. Where a fashion influencer might influence their audience to buy a pair of jeans they recommend, a finance influencer might influence their audience to open a bank account, or invest in a type of stock.

Without a doubt, the rise of personal finance content on social media has seen more and more people engaging with their finances — and broadly, that’s a great thing. In a generation with a distinct shortfall in financial literacy, it’s wonderful that our social feeds have been filled with budgeting and savings tips in between snippets of celeb gossip. But when do ‘tips’ become advice?

Giving financial advice without a license is illegal in many countries. March 2022 saw Australian finance creators come under fire from the industry regulator Australian Securities and Investments Commission (ASIC), and the distinction of what qualifies as financial advice was re-clarified in the context of social media. Every country handles its financial advice laws differently, but it serves as an important warning to anyone producing or consuming finance content.

Discussion of financial products and investment assets

Much of the controversy about finance influencers surrounds financial products — most specifically stocks and cryptocurrency. While cryptocurrency isn’t yet regulated as a financial product, its place in the online investing conversation is an important one.

Promising certainty, guaranteed returns or ‘get rich quick’ investments

A major red flag from finance influencers is any promise of certainty, particularly around investment returns or how much money you can make. All investing carries risk, and nobody can actually promise you how much you can earn in returns. A finance influencer encouraging their followers to invest in a specific stock, fund, cryptocurrency or NFT is an important red flag.

Pumping and dumping of shares

In many cases, finance influencers share their knowledge online perfectly innocently. But there are some sinister exceptions. Social media influencers have the power to influence behavior, and this has led to what’s known as ‘pumping and dumping’. Influential identities online share a ‘stock tip’ and encourage their followers to go and buy that stock. This can inflate the value of a stock fairly quickly. In ‘pump and dump’ schemes, influencers will then go and sell their stock at the high price following the flood of demand they generated.

Regardless of whether an influencer is sharing stock tips, mortgage education or budgeting hacks, it’s always worth supporting your learnings with your own research outside of social media. Even information that is presented as ‘factual and balanced’ (which is the recommendation from many regulators), errors and misrepresentations can be made. Even though these may be innocent mistakes, it can still leave you with false information that could impact you down the track. Here are some other ways to protect yourself:

Check whether the creators you’re following have appropriate licenses and educational background to provide the information they’re putting out there. The more advanced the information, the more skeptical you should be. While things like budgeting tips are broadly safe, high-level information about investing in asset classes should be correlated with an appropriate financial services qualification and license.
Take information selectively and apply it to your own financial situation. While someone else might be paying off their mortgage, that’s not necessarily the right thing for you to do. Seek qualified and, most importantly, personalized advice from a financial planner before making any big financial decisions.
Be very careful of online scammers, particularly in the finance space. Social media is now a hotbed for impersonator accounts, who poach vulnerable followers of a social media influencer in an attempt to gain their trust — and their money.
Know where the line is. Learning about budgeting styles, savings tips and behavioral money habits online can be really helpful to your overall financial wellness. But when it comes to financial products (like bank accounts, assets and cryptocurrency), it’s best to back up decisions with your own research and support from a financial professional.

Ruth's Two Cents: Regrouping Financially After A Divorce

Tue, 18 Oct 2022 11:00:00 +0000

Hi Ruth,

My husband and I separated about 18 months ago after 15 years of marriage. It was mutual, and I’m happy with the outcome — that’s just the way things go sometimes! However, now that the dust has settled, I’m beginning to feel stressed about my financial situation. I’m not well-versed in managing money, as my husband did the bulk of that, and I don’t have as much in my Kiwisaver as I would like, as I took some time off work to be a stay-at-home mother. I don’t know where to start on this new phase of my money adventure - please help!

I’m sorry to hear about your divorce. Not because of the marriage ending, as you sound happy with that outcome, but for the pressure you are feeling about your finances and the financial learning curve you are suddenly facing.

I don’t doubt that there were many jobs your husband did throughout your marriage that you are now learning to do for yourself. I’m sure he is facing the same situation! The outsourcing of financial management to your spouse is a big one, though. It’s a broad topic that reaches into most of the decisions you will now find yourself having to make.

The first thing I want you to internalize is that your financial situation is unique to you, and you alone get to map out how you want to structure things. You have complete control over how you earn and spend your money, which is exciting! I want you to think, “I get to build my financial future in a way that is meaningful to me”.

The second key point about money is that keeping it simple is the best way to feel in control and grow wealth. Whenever you need to make a decision, think to yourself, “is this the obvious and simple choice I’m about to make?”

Right, let’s go! I have outlined a roadmap for you.

1. Calculate your net worth

Find all your money! Grab a pen and paper or open up a spreadsheet and in the left-hand column, write down the balance of each of your bank accounts, your KiwiSaver account, and any other investments or accounts. Total them up.

Next, write down the balance of anything you owe; your mortgage, credit cards, student loans, and Buy Now Pay Later debt. Total them up.

Deduct what you owe from what you own — this is your total net worth.

Write down each month of the year, and from this point forward, calculate your net worth on the first day of every new month. Over time, we want to see your total net worth amount growing.

You can start with pen and paper, but over time, money management software such as PocketSmith can be used to help you easily and accurately calculate and track your ever-changing net worth.

2. Start a simple budget

Budgeting is the most empowering thing you will do, impacting your sense of wellbeing and feeling in control.

Open up your bank statements for the last three months and have a new spreadsheet or piece of paper ready. For each month, note down what you have earned from any source. Then create broad categories such as Housing, Food, Utilities, and Transportation. Every expense you see on your bank statement needs to fall under one of the categories you create. This is your first opportunity to see, maybe for the first time, what you earn and spend each month — this is critical information to help you.

Look at:

Each month: Are you spending more than you are earning or less?
Each category: Are you overspending in one area and need to cut back?
Your income: Do you need to earn more, or is your income covering your expenses?
Each expense: Could you cut it, get a better deal elsewhere, or are you happy with it?

You can use this information to shape your spending. Always spend less than you earn. If you find yourself with more month than money, you have two options: Spend less or earn more. Like net worth, I want you to give up this paper-based system over time and learn to use PocketSmith, mainly because you will soon begin to forget to update your spreadsheets manually!

Next, set up several bank accounts, called Sinking Funds, where you can begin to save towards future expenses, such as an annual insurance bill, school fees, a child’s orthodontist bill, or even Christmas. Each has its own account with a name that is meaningful to you. Find out the cost of the expense, when it is due for payment, and divide it by the weeks you have until it is due. Set up a weekly automatic transfer of this amount into a separate bank account. By the time the bill is due to be paid, you will have the money there, which will remove “bill shock”.

3. Create an emergency fund

It’s all on you now. If the car needs a $500 repair, it’s you who will be paying. But don’t feel frightened; feel empowered and know you can handle any emergency alone. Open another bank account and call it “Emergency fund”. Now that you know your monthly expenses, work towards having 3-6 months of those expenses saved up in this bank account.

Set up an automatic transfer of an amount you can afford to get this started. As this builds to $500, then $1,000, then $5,000 and beyond, you will feel that pressure begin to come off your chest, that fear of having no money in a crisis will pass. Next time your car needs an emergency repair — no bother! Reach into your emergency fund, pay it, and then begin to replace that money in your fund.

4. KiwiSaver

Find out what fund you are in, what risk profile it has and what its fees are. Many people your age are looking for a low-fee, passive growth fund, but pick whichever one feels right for your goals. Make sure your employer contributes the maximum amount they will allow to your fund and match that with deductions from your paycheque. If you are self-employed, create a weekly contribution to your fund, a minimum of $20, more if you can manage it. Once your budgeting and income stabilize, increasing your contributions to your retirement fund makes sense.

5. Work towards becoming debt-free

If you have any debt, the first step is to commit to taking on no more. Remember how I said, “simplicity is key”? If you have a credit card, consider getting rid of it. Credit cards are a form of debt and add a layer of complexity to your budgeting that you most likely don’t need at this time. A debit card does the same job, but you are using your own money and will naturally spend less.

List your debts from smallest to largest, then start using whatever money you have left over after your monthly spending to start wiping these debts out. If you have a mortgage, stabilize your mortgage payments and settle into making set payments, which will then help you budget further.

6. Explore investing to grow your wealth

Finally, once everything else is done, the last stage is to invest your money for future growth. I advocate using just one or two broad-based, low-fee diversified ETF investments for beginners as they allow exposure to an entire share market at a lower risk.

But take the time to explore what’s out there and what channels you can use to invest — that’s half the fun of investing!

That’s a lot to take in!

How do you feel about all that I’ve just said? It’s easy to write and easy to read but hard to implement, mainly because it takes time. But, starting today, you have time on your side to build a simple solid financial foundation.

I’ve spoken with many people who have ended a marriage and struggled to find their feet, but once they decided (like you have) that they are going to get back on their feet, they just follow a simple plan like the one I’ve outlined above and month by month, start rebuilding their financial lives.

Money is just a lot of learning and small but consistent actions where incremental steps add up over time. I guarantee you that you will quickly get stable, gain a sense of control, and keep moving forward. Enjoy the adventure!

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

How Life Insurance Could Make Your Life as An Entrepreneur Even Better

Wed, 12 Oct 2022 11:00:00 +0000

Picture this. You’re a driven, fun, curious, and sophisticated entrepreneur with a lust for life. On the weekends, you enjoy going on a run, maybe some yoga, spoiling your dog, hosting your friends for dinner, and being involved with your community.

What could possibly be missing, right? Well, there’s actually one really huge — but still really affordable — thing, and that’s life insurance. Here are a few tips on why you may want to look into buying life insurance today and how it could actually even make your life that much better!

Lock in those affordable rates

A lot of people procrastinate on getting life insurance and feel intimidated by the process. Buying life insurance tends to have a reputation of being boring, sad, and something for much later in life. But the truth is, life insurance policies today are getting exciting and there’s a ton of value in buying it when you’re young. There’s two primary reasons to get life insurance when you’re young.

The first is that it’s more affordable. There are products now available where you can lock in your monthly premium throughout your term. As you get older, that premium typically increases. If you buy when you’re younger, your total costs are typically more budget-friendly.
The second reason is simple — you don’t have to be older to have someone depend on you. Do you have kids, pets or elderly parents? What about a spouse, significant other or family members who would be impacted financially if the unexpected happened? Nobody wants to need life insurance when they are young, but many do. Two questions to ask yourself are: Do I have anybody in my life that would be hurt financially if I were to die? Do I want to protect those people from that situation? If the answer to both is yes, it might be time to start looking into your options.

Yes, life insurance is more affordable when you’re young, but it also tends to stay affordable with rates starting as low as $5 per month. Much like how the unique preferences of a fancy coffee can impact the cost, the exact price of life insurance will differ for everyone.

With most life insurance, rates will rise when you get older, but your monthly premium stays the same throughout the term of your policy. What this means is if you sign up for a term that takes you from your 20s or 30s into your 40s and 50s, you don’t have to worry about paying the increased rates that a 40 or 50-year-old might expect. You’ve already locked in your affordable rate. These monthly prices are not only budget-friendly, but they’re in the same ballpark as your next fancy coffee drink!

A win for young entrepreneurs

Whether you’re a small business owner, a budding entrepreneur, or a gig worker, life insurance is a wise option to protect your loved ones and your business. It provides your beneficiaries with financial support in the unexpected event of your death. This is an especially great option if you’re not receiving life insurance benefits through your workplace.

Not only that, but it can actually support your wellness through “living healthy benefits”. Insurance companies like nowly are rethinking the purpose of life insurance and getting creative to provide their policyholders with complimentary world-class living healthy benefits that you can use now, not just later. All nowly members have access to a $50 annual healthy living rebate which can go towards any health and wellness app, fitness class, gym, yoga program, etc (some restrictions apply). All members also get complimentary access to the nowly virtual wellness program (powered by Virgin Pulse). A confidential, secure, and complimentary best-in-class online health and wellness platform.

Feeling like you just can’t find the time to sit down and apply or get a quote? Don’t worry! The process of applying and finding the coverage you need is way simpler and more straightforward than it used to be. More modern insurance brands are digital-first, which means that you can do everything from the comfort of your couch, office, on the move, or wherever you happen to be.

nowly’s easy-to-use quoting tool only takes about 60 seconds of inputting your personal details to generate a customized quote. The same goes for the application process. No more long paper forms, medical tests, or additional documentation that would usually take weeks. nowly’s application can be completed online in a number of minutes.

Life insurance that gives back

Companies are beginning to rethink their social responsibility and their role in making meaningful, positive change now. The decisions that we make when we support a company through buying their products matter more now than ever before. Believe it or not, this can apply to buying a life insurance policy as well. Not all companies are made equal or with the same values or intentions.

Insurance companies such as nowly are committed to investing in people and communities to create innovative and collaborative solutions today. Their program, Press Start, is designed to support new and established social entrepreneurs across Canada to arrive at viable solutions to some of today’s most pressing problems. By becoming a member of a company such as nowly, you can feel good knowing that your values are aligned with a company that invests in a new, bold way to give back for a better world now.

Learn more about nowly Life Insurance and their give-back program, Press Start.

Matt is an accomplished Insurance Advisor experienced in connecting with people and getting the right products in front of them. Matt has worked for Manulife and Teachers Life over the past 13 years. Matt earned his Life License Qualification Program (LLQP) in 2014 and is licensed to advise on insurance products across Canada.

Matt is a father of two girls and passionate about health and wellness.

How to Avoid the Investing FOMO Trap

Tue, 04 Oct 2022 11:00:00 +0000

What was once a secret club for the ultra-wealthy, investing has become the hot topic of conversation among just about everyone. More of us are investing than ever before, and participation in the wealth creation conversation now extends well beyond your average white bloke in a suit. We simply love to see it. But as investing has had an almighty glow up, its growing accessibility can carry dangerous consequences, as unqualified and often shady traders tout bad investments.

What is FOMO investing?

FOMO stands for fear of missing out, and that’s exactly what’s happening with investing. Everyone is talking about it, and many have taken to social media to gush about big returns in a way that’s reminiscent of the get-rich-quick schemes of the 80s and 90s. FOMO investing happens when people make ill-informed investment decisions based on a fear of missing out on a good thing, or fear of missing the boat on a ‘sure thing’ investment.

What are the risks of FOMO investing?

The issue with FOMO investing is that people can wind up making extremely risky investments without even realizing it, costing them financial security and resources that are vital to their livelihoods.

Risks are heightened in the day trading and cryptocurrency spaces, where extremely short-term investments are bought and sold. These types of investments move very fast and are extremely high risk. Make a mistake and you could lose your money very quickly.

Dangers of DIY investing

Often short-term investors with no financial credentials flood social media feeds with big promises of high returns in days or even hours, convincing vulnerable people to buy in. Even outside of cryptocurrency, the recent Gamestop scandal involved the artificial inflation of the value of a stock called Gamestop. Many bought in as the stock’s price soared, despite being uninformed about the validity of the investment.

How to invest safely

What’s important to remember is that all investing carries some level of risk — but not all risk is equal. Someone on social media shouting about making a quick buck on a stock you’ve never heard of isn’t the same level of risk as investing in diversified funds with a view to hold those investments over the long term.

Build up your emergency fund

It’s critical that before you invest, you first make sure you’re only investing money you can reasonably live without for a long period of time. Expecting to make quick money with your investments opens you up to much bigger risks. Instead, look long term. Ensure you’ve got your emergency savings fully funded, and only invest what you don’t need right now.

Research and due diligence

Do your due diligence on anyone you’ve taken information or advice from. Just because they have a following on social media doesn’t mean their information is accurate.

Then, research what it is you’re investing in, and think about what your strategy is. How has this investment’s value changed over time? Why are you buying it? What makes it a good investment?

If you can’t answer these questions, keep researching and learning before you hand over your money. Alternatively, seek qualified advice from a financial advisor.

Use brokerages you can trust

If and when you do make your first investment, ensure you’re buying safely with a brokerage platform you can trust or an investing app for beginners, rather than through social media DMs or links. If something feels off, trust your gut. Scammers often replicate public figure profiles in order to attract vulnerable fans and followers. Remember, your favorite influencers won’t ask you for money over social media. Report accounts that appear fraudulent and avoid clicking links they may have sent you.

Important: Never transfer money to someone claiming to be an investing expert on social media. If you believe you’ve been scammed, you can report scams to the ScamWatch by the ACCC in Australia, NetSafe in New Zealand, or Citizens Advice in the UK.

Kina Prioritizes the Safety of Her Financial Data With PocketSmith

Mon, 03 Oct 2022 11:00:00 +0000

Read how Kina gains insights into her spending habits in an environment where her data is secure and easy to utilize.

Tell us a little about yourself?

I’m Kina, a product designer and personal finance blogger sharing tips and resources on my journey to financial independence.

I call New Zealand and Indonesia home and live with my partner Kees, a creative technologist with a background in marketing and design. We focus on spending based on our values, and enjoying life together while also taking steps towards a future that excites us.

How would you describe your role in your household?

I’m one of those people that enjoy planning, so I’m usually the one setting up a structure. Kees, on the other hand, is amazing at creating experiments for us to try.

For example, I’ll map out the fixed and variable expenses in our shared budget. Kees then shares ideas on how we can reduce our spending for a category like Eating Out by preparing easy dinners for nights when we don’t want to cook. Later on, we check in together to see how our spending is going.

What drew you to PocketSmith?

Having multiple accounts across many banks, credit cards, and other accounts got incredibly tedious to track manually, and I wanted to make sure my data was safe. With budgeting apps, I find that you have to pick between two: Cheap, easy to use, and secure. PocketSmith is easy to use and safe, so I’m happy to pay for the convenience.

Diagram provided by Kina

How long have you been with us?

From early 2021, so coming up to two years soon. Before that, I’d use a swath of spreadsheets and restart anew every year. Nowadays, we use Notion and spreadsheets for high-level plans and goals.

What do you primarily use PocketSmith for?

Mostly categorizing our expenses, and seeing what we actually spent our money on. I’m currently trying to figure out how to use the Rollover Budgeting feature consistently — it’s a work in progress.

How has PocketSmith changed the way you do money?

I love how it proves how we’re going with our plan — it’s easy to think it’s going fine, but having the data to back it up makes it really clear what’s working well and what needs to be adjusted.

We noticed that we consistently spent more than expected on Groceries recently, so we reduced spending on other categories because we love cooking new dishes together!

What are your favorite features?

Besides the category rules that have saved me SO much time, I love the Earning and Spending chart! It makes it super clear where our money is going.

Got any tips?

Start by taking a small action in the direction of your goals — you can always improve it later. There’s no such thing as a perfect plan to follow; we often learn and adjust our focus along the way. When I started investing outside of Kiwisaver a few years ago, I started with a small monthly amount. As I learned more about investing and personal finance, I increased it bit by bit, which made a huge difference!

If you asked me when I started, there’s no way I would jump straight to this point — building a consistent habit is a lot more impactful than focusing on one big goal to achieve. For more tips and resources about money and careers in tech, you can read my blog or follow me on Instagram.

What’s the best money decision you made in the past 12 months?

Planning what we’ll do with income changes as soon as it’s confirmed to prevent lifestyle creep.

We’ve built a habit of putting extra money towards savings or investments, and it’s been quite motivating to see how the numbers behind it have changed over time.

Do You Support the Bank of Mum and Dad?

Wed, 28 Sep 2022 11:00:00 +0000

A few months back, I was speaking with a 19-year-old. They were working full-time and having the time of their life renting with friends and partying on the weekend — their plans went no further than one week ahead. I asked if they ever wanted to buy a home one day, and they shrugged it off. Unsurprisingly, it was not even on their radar. I asked them to look around. Houses are everywhere. And inside each house is someone who decided to buy it to live in or rent it out to someone like you.

As diplomatically as I could, I explained to this 19-year-old that I could see what their future might hold better than they could at this moment. I guided them through how to run a basic budget so they could start setting aside money to save for the home that, at this point, they didn’t even know they wanted. I told them what I told my daughter: You don’t see what you might need money for in the future, but I guarantee you that having some will come in handy. But you need to start saving a part of your income now.

Yet the reality is, that still might not be enough to get into your first home. If you feel comfortable enough to ask, and they are in a position to support you, you could think about approaching The Bank of Mum and Dad. It’s okay to ask for help! And I’ll bet that if a child has a track record of being as financially prepared as their situation allows, The Bank of Mum and Dad will be more likely to chip in.

As a mother, would I consider helping my child into a home one day?

Yes.

But.

I’m already preparing for it, but I hope not to have to help. She and I need to be equally financially responsible in the years ahead. That starts with openly, honestly, and age-appropriately discussing money at home. Teaching her well will help her buy a home of her own.

For those with a long runway like my daughter, I think raising the entire deposit for your own home one day is entirely possible if you are taught some basic money skills.

But for those without the benefit of financial education and guidance who find themselves trying to pull together a deposit for their first home, I think it’s entirely reasonable to approach The Bank of Mum and Dad.

Get the basics right first

Buying a home is yet another predictable financial decision, like buying a first car, traveling, education, starting a business, or getting married. However, out of all our economic decisions, buying a home is likely to be the biggest and the one that takes the most planning as the prices climb ever higher. This is why it’s essential to get the financial basics under your belt.

Know your net worth and track its growth monthly.
Budget. Know where your income is coming from and going to.
Earn more. Continue to strive for a better-paying job.
Aggressively save. Automate this process so that you save first.
Have an emergency fund both before and after you buy a home.
Continue to save the minimum into your KiwiSaver and then save aggressively outside your KiwiSaver fund for your home.
Do your best to become debt-free. Take on no more debt and pay off the debts you already have because this frees up your income for saving for your house deposit.

Research your home options and get good advice

Find out what houses are selling for in the town you are looking to buy, do the math on those prices, and work out how big a deposit is required to purchase that home. Then consider your situation — at the rate you are saving, how close are you to this goal? Constantly adjust your course and your expectations to stay on track. Talk to a bank lender and get all the information early to help make sure you are looking good financially and are aware of any extra costs to buying a home that you might have overlooked.

Learn from others and find relatable first home buyer stories like these to glean ideas for building your home deposit: The Happy Saver Podcast and The Kiwi House Deposit.

Talk to your family

Once you have complete oversight over your finances, have done some research, know how much you need for a deposit, you have a plan, yet find you can’t reach your goal alone, then are you ready to approach The Bank of Mum and Dad.

When you do, try to understand their financial position, and don’t make them feel obligated to help you if it does not align with their goals. I speak with many people who have never discussed money within their families. When the conversation is finally broached, many children are shocked at their parent’s finances. This is why you need to talk to your parents early enough to see if you can factor them into your home ownership plans.

Financial support can come in many different ways

Just like you are deciding how you spend your money, and they have no say over that, the same is true of theirs. If The Bank of Mum and Dad is not lending at this time, bring them into your team as mentors and DIY experts instead. Family help doesn’t need to just be transactional; it could look like any of the following:

The option to live rent-free with your parents while you save.
A top-up of your monthly savings towards your deposit.
A gift that you do not need to pay back.
Parents or a trusted family member acting as guarantor.
Co-ownership of the property.
Helping with loan repayments once the home is purchased.
Either gifting a house already owned by the family.
Lending the entire cost of the deposit.

What if they say yes to financial support?

Suppose they are in awe of your fiscal responsibility and are in a position to help you. I’ll tell you what they are worried about:

Your partner, if you have one. What happens if you split?
Your track record with money. Hence, you need to show them you are a good money manager.
Not getting their money back when they need it.
What might your siblings think?

Just like the bank has a lot of say in how you handle bank borrowed money, it should not come as any surprise that The Bank of Mum and Dad might be doing the same, tut-tutting at your choice of car, weekend getaway, or improvement made to the property — so be prepared to be examined and answer some tough questions.

Create a legally binding contract

If you have a parent willing to help you financially and you have bent over backward to show yourself and your parent that you have enough money smarts to be a worthy recipient, then take the opportunity, but go into it with your eyes wide open. If you do borrow or lend, get it legally documented all the way through. Just like a bank would. The bank is protecting itself, and you and your family should be too.

This episode of Consumer NZ’s podcast Consume This provides some excellent examples of the right and wrong ways to make an agreement between parents and children.

Giving or loaning money must be clean and traceable. If I had to have my parent’s ongoing involvement in my home (and potentially their point of view on the decisions I’m making), I’d rather have a black-and-white arrangement than a form of grey.

It would be a recipe for disaster if an unorganized home buyer collaborated with an equally disorganized parent to get into a home. Protect yourselves to prevent misunderstandings.

I’d prefer not to help, but I will if I have to

As a parent, I’ll do everything I can to educate my child so that she can save up the required deposit to buy her own house. If she has done everything right yet still doesn’t make it, I’ll help out.

Because I have the idea that I might help my daughter with a home purchase, I’m already preparing for that distant reality. Just like I told her that it is worth saving just for the sake of, because you never quite know where money will come in handy one day, I’m doing the same. If she needs help, the money will be there; if not, I can redirect that money elsewhere.

But, life evolves, and if helping her puts undue pressure on my financial situation, it’s not worth it. I’ll be putting my oxygen mask on first because she is no longer a child despite her being my child.

I know, coming from a family of five children, opinions about money can change from person to person, with one person fully embracing family financial support (if it is available) and the other recoiling at the prospect because they are fiercely independent and want to go it alone.

For a person wanting to get into their first home, go out and earn your “I’m a financially responsible adult” stripes and wear them proudly. Learn how to make more, spend less and save the difference. Immense dignity and pride come from going it alone as an independent adult. Frugality, going without, and focused saving towards a substantial financial goal will feel much sweeter if achieved on your own. In all honesty, that is the path I want my daughter to take, and I’ll do everything I can to give her the financial knowledge to make that happen. I want to provide her with the tools to achieve such a massive goal and be there to guide her if and when she asks.

Ultimately, I want her to be independent enough to do it on her own without the support of The Bank of Mum and Dad.

The First Home Loan Scheme With Just A 5% Deposit

Sun, 18 Sep 2022 12:00:00 +0000

Getting into your first home may be easier than you think. Not many people seem to know, but there are products on the market whereby you ‘only’ need a 5% deposit. I say ‘only’ as if you are buying a house for $800,000, you still need a $40,000 deposit, and that’s a big chunk of money for one person to save. But with the First Home Loan, you may be able to realize your dream of owning your own place sooner than you thought possible!

The 5% First Home Loan — what it is, and how do you get one?!

You’ve got a good job, earn a decent income, and have been paying hundreds a week in rent with no issues. But saving that 20% deposit, which could be hundreds of thousands of dollars with today’s property prices, just seems like an impossible task no matter how hard you try. Enter the First Home Loan!

With just a 5% deposit required, this allows lenders to provide mortgages that would otherwise not fit their criteria (‘normal’ bank policy requires a 20% deposit for an in-situ property or a 10% deposit for new builds).

There have been some recent changes to the First Home Loan, which open this product up to more people than ever before. Effective 1 June 2022, property price caps were removed, providing would-be homeowners a greater choice of properties. These changes give first-home buyers a better chance of being able to buy a property at a price that actually reflects the current housing market. There was also the introduction of income caps for single applicants with dependants (Note: These changes only apply to the First Home Loan — different criteria apply to theFirst Home Grant andFirst Home Partnership schemes).

How do you qualify?

Only selected banks offer this loan product, and it is underwritten by Kainga Ora, so there are some specific criteria that apply:

You have to be a first home buyer, and you have to live in the property.
The income cap for a single applicant is $95,000 or less. For a joint application, you have to earn a combined income of $150,000 or less, and for a single applicant with dependents, your income is also capped at $150,000.
- It is important to note that income is based on the previous 12 months’ earnings, not the previous tax year or your current income — so if you are lucky enough to have recently received a pay rise that takes you over those income caps, you may still qualify.
You have to have been in the same job for at least 12 months. If you haven’t, you need to have evidence of two years of employment history in the same industry. This can be verified by previous employers simply confirming you worked for them, your job role and duties, and how long you were employed for.

There are a few other criteria that apply, but it’s really nothing that is out of the ordinary — you have to be a New Zealand citizen or resident, you can’t have a large sum of valuable assets or have a 10%-15% deposit. You also need to meet the bank’s specific lending policy. For example, banks have restrictions on the size of property they will lend against if you’re buying apartments, and you have to meet the bank’s affordability criteria (i.e. they have to ensure you can afford to repay the mortgage you are taking out).

What amount could you be borrowing?

This will vary on a case-by-case basis as everyone’s financial position is different, but if we assume:

A single applicant, with no dependents
An average cost of living
No other debts (loans/credit cards/Buy Now Pay Later)
$95,000 salary
3% contributions to KiwiSaver

You could borrow in the region of $550,000-$600,000. Add in a border, so you have a friend living with you, and this could go up to around $630,000 (though keep in mind the property needs to match the household composition, so you would need to be buying a two-bedroom property in order to include a border as part of your application).

For joint applications, assuming the same scenario but with a combined income of $150,000, you could borrow in the region of $900,000 — add in a border and this could go up to around $930,000.

These figures are based on interest rates and bank policy as at 23/08/2022. This does not constitute an offer of lending, but serves as an indication of what you may be able to borrow. Full verification of income and outgoings is required.

Keep in mind these are the income caps — if you don’t earn as much as $95,000 or $150,000, you may still be able to borrow enough to get you into your first home. A good adviser will determine which lender gives you the ability to borrow the most.

What if the bank says that you can’t afford to borrow the loan amount you need?

There are other options available such as the First Home Partnership, which is a shared equity scheme with Kainga Ora. In this instance, you contribute your deposit and are assessed on what loan amount you can afford, and then apply to Kainga Ora to make up the shortfall. For example, if you are buying a house for $750,000 and you have a 5% deposit ($37,500), you then need a loan of $712,500 to complete the purchase. Upon assessment of your financial position, you are only able to service (i.e. afford to repay based on your income and outgoings) a loan of $650,000. There is a shortfall here of $62,500 — this is the amount that you would apply for with Kainga Ora. If approved, Kainga Ora will then own an 8% share of your property.

Again, certain criteria apply to the First Home Partnership scheme, and we strongly encourage you to seek independent legal advice or speak to a mortgage adviser with regard to this type of ownership.

How can you obtain that 5% deposit?

One huge benefit to this product is that your deposit can be fully gifted. Usually, banks will want to see that you have saved a portion of your deposit yourself if the rest of the funds are being gifted from a family member. However, with the 5% deposit loan, your whole deposit can be gifted.

You can also use your KiwiSaver, and the First Home Grant if you qualify under their criteria (you must have been contributing to KiwiSaver for at least three years, be buying your first home to live in, and earn under the income caps for the First Home Grant).

Are there any other benefits?

Some banks will still offer discounted interest rates and cashback — this is usually unheard of when you are borrowing 85%-90%, let alone 95%! For high loan-to-value ratio lending, banks usually apply a Low Equity Premium to your interest rate, which can often be an additional 0.5%-1%, so to be offered discounted interest rates for the First Home Loan is a huge advantage to you as a borrower. Cashback is typically a few thousand dollars, so this can help towards covering your legal fees or moving-in costs. Cashback is paid to your account the day after your mortgage starts (i.e. the day after settlement of the property) and is effectively your money to do with as you please!

If you qualify, what action should you be taking?

Get a pre-approval application underway. They are valid for 60 days, and doing this now will protect you against any future tightening of bank policy that might come into play in that time.

If you have signed a contract on a property, act now! Due to increased demand for this product, banks are experiencing a longer turnaround for assessing the applications — most people have a 10-working-day finance condition in their Sale & Purchase Agreement, and it is taking most banks this amount of time to assess the applications. If you can get a 15-day finance condition, even better.

The application has to be presented ‘’fully packaged’’, so this means you have to be able to evidence all of your deposit, your income, and proof of previous employment up front — you can’t say ‘’I will have saved another $10,000 by the time the property settles”.

Only selected banks offer this product, and bank policy and the incentives offered varies slightly between lenders, so it would pay to talk to an adviser to gauge which bank would work best for you. Advisers do this day in and day out, so we know how to present a really strong application to the bank, and which lender would be the best fit for you personally.

We have referenced the First Home Loan, the First Home Grant, and the First Home Partnership here… there’s no mistaking that for someone new to applying for a mortgage, understanding the differences between each can get very confusing. While each scheme is designed to help you into your first home, each has slightly different criteria, whether that be the type or purchase price of the property, or your income. It’s worthwhile talking to an adviser who has a thorough understanding of how each scheme works, and whether you meet the eligibility criteria for each.

Laura Sheehan has over 6 years mortgage experience in both London and New Zealand. She is passionate about helping hers and future generations into their first home — the motto at Lighthouse Mortgages is ‘we won’t take no for an answer!’ Laura has loved exploring her new home here in Aotearoa, and challenges herself to visit a new place every month.

Six Easy Ways To Start Preparing For Christmas

Mon, 12 Sep 2022 12:00:00 +0000

Yep, we said the C word. Breathe.

Sure, it feels like last Christmas was a heartbeat ago, but believe it or not, we’re just weeks away from doing it all again. Yikes! But panic not. You’ve got plenty of time to start getting things organized, and we’ve got six handy tips to help you get your Christmas finances in order ahead of time. Fa la la la la, la la la la.

1. Open the dialogue with friends and family

Off the back of the Covid-19 pandemic, we’re experiencing a cost of living crisis like no other. Inflation is rising, supply chain disruptions are impacting stock levels, and wages aren’t keeping up with the costs of groceries, fuel and housing. If you’re concerned about how you’ll afford the holidays this year, start the conversation with friends and family about how you can collectively make it more affordable. You could ditch individual gifts and do a Secret Santa or Kris Kringle exchange instead, or each bring a plate of food to share the financial load on the day. Chances are, they’re feeling the same way.

2. Start planning your gifting

List out all your gift recipients and start making notes about things they might like. Tuning in your awareness to your recipients’ interests earlier on can make Christmas shopping an absolute breeze. Plus, there’s nothing better than giving them something they mentioned they wanted months ago! Make your list, assign a budget for each person, and then start adding in notes and ideas over time. Then, by the time you’re ready to shop, you’ve already got a bunch of ideas together to take the stress away!

PocketSmith tip: when you start buying your Christmas gifts, store all your receipts within PocketSmith using the Attachments feature. If you need to return something, you’ve got your proof of purchase to hand!

3. Think about your own wishlist

If you have friends or family that you exchange gifts with, don’t forget to start thinking about your own wishlist, too. There’s nothing wrong with keeping a running list of things you want and need — it makes for much more purposeful gifting and makes other people’s Xmas shopping substantially easier!

When you collate an intentional wishlist, you can save yourself money and wastage by leveraging gifting as an opportunity to get things you would’ve bought anyway. Think of your favorite skincare, kitchen appliances, or books you’ve had your eye on.

4. Set up a Christmas sinking fund

Once you’ve started to get your gifting ideas organized, you can start thinking about how to save for Christmas. A sinking fund allows you to save up some cash towards an upcoming expense so that when it rolls around, you’re prepared and ready to go.

To set up your Christmas sinking fund, start by listing out all the expenses you’ll expect to incur throughout the holiday season. Include as many things as you can, from gifts to food to the cost of an Uber home from your work Christmas party. Looking back on last year’s expenses can help you out here. Then, divide it by the number of weeks from now until Christmas, and start stashing a weekly contribution towards the cost of Christmas. You can use your PocketSmith dashboard to manage your progress towards your Christmas sinking fund goal!

5. Consider tapering your spending ahead of the holiday season

The holiday season offers ample opportunities for celebration and indulgence, and so it can be valuable to taper back your lifestyle for a few weeks prior. Whether you cut out takeaway for a few weeks or switch up your regular brunch for a home-cooked feed, small tweaks can help you stash a little extra cash over time. By the time the holidays roll around, you’ll have a little extra freedom in your budget to enjoy an extra mulled wine with pals, blow out for NYE, or treat yourself to something you’ve had your eye on.

6. Diarize sale events

When you start planning for Christmas early on, you can take advantage of sales events to get your gifts at a discount. Look ahead to any sales events that might be coming up between now and Christmas — like Black Friday and Cyber Monday — and set alerts or reminders for opportunities to save big. Google Shopping can even alert you to a price drop on something you’ve got your eye on!

Know someone who loves personal finance or has been wanting to take control of their money? A PocketSmith subscription makes a great Christmas gift idea!

Why There’s A “Regret” Category In My PocketSmith Budget

Tue, 06 Sep 2022 12:00:00 +0000

I smiled as I hit “submit payment”, but as soon as the green tick appeared, my stomach sank. It wasn’t an impulse purchase as such — not when I’d been thinking about it for two weeks — but it was a dumb move all the same.

Did I need it? No.

Would it improve my quality of life? Considering the odds were approximately 1 in 3.8 million, that’s a resounding no.

Was this the second time in six months that I’d been sucked in by a shiny what-if and dropped money on a Lotto ticket? Ouch. Yes.

Hello, buyer’s remorse. And this time, I had an irritating reminder sitting on my PocketSmith dashboard.

Unassigned transactions: 1

How to categorize it in my traffic light priority system? It wasn’t income, critical living expenses, or investments/savings. It wasn’t even a nice-to-have discretionary. That only left Luxury Items — which, yeah, that’s fair. Spending hard-earned money and getting nada in return is a luxury. I couldn’t dispute that.

What I needed was a way to make sure I didn’t do this again. I’d recognized the problem: That’s Step 1, right? Now I needed to measure it. Contain it. Give it boundaries.

Filing it under “Gifts — Birthday” was tempting. My mother and I sometimes bought each other Lotto tickets as a joke gift. But in this case… no. That would be cheating. If I was honest, there was only one name for this.

New category: Regret

I won’t lie. Staring at that Regret category stung my pride a little. As a year-long PocketSmith user and years-longer budgeter, I’d love to think I’m above financial slip-ups. Truth is, I’m not. Nobody is.

The Regret category nested neatly under the Luxury Parent category. A keyword search in Transactions for “lotto” brought up my two tickets — one each side of the New Year. While I was there, I added a category rule to automatically file any more Lotto transactions under “Regret.”

By then I was really starting to hate the words “lotto” and “regret.”

But I wasn’t finished yet. I couldn’t leave the Regret budget open-ended. That would be the exact opposite of what I was trying to accomplish. As the old saying goes: If you can’t measure it, you can’t improve it.

I could measure this. Budget: $7 a ticket @ 1 ticket a year = $7/year.

The budget line filled up immediately. A red ! appeared, warning me that I was at 100% of my yearly quota.

And you know what? The tension in my gut eased immediately.

I’d named the problem for what it was. I’d set boundaries in place to contain it. And anytime I’m tempted to make a similar purchase now, I think ahead to where I would file the transaction. If it’s in the Regret category, I think: ‘Do I really want to buy this when I already know I’ll regret it?’

Most of the time, I don’t. It’s not worth the regret and it’s not worth blowing my budget.

Using an entire category works for me. But say I’d bought something I already had an existing category for — a cheap pair of shoes or a houseplant that hated me (hello, calathea). It’s easy enough to use labels to mark these “regret”. I’d save that as a transaction search, so I could find it in a split second in the future.

But to be honest? I don’t think there will be many of these in the future. Not now that I have a virtual filing box to put those useless Lotto tickets in. After all, why would I keep spending money on Regret?

Sarah Anticipates Upcoming Expenses Using PocketSmith’s Calendar

Sun, 04 Sep 2022 12:00:00 +0000

Read how Sarah achieves peace of mind by using PocketSmith’s forecasting features to ensure she has enough funds for upcoming expenses.

Tell us a little about yourself?

I’m an IT Professional living in Chicago, Illinois, USA. I moved into Chicago from one of its suburbs to go to university and have stayed here for the last 25 years. I spend my time outside of work studying Aikido.

How would you describe your role in your household?

My cat, Ivy, is certainly the head of our household, but I would say I’m the primary breadwinner. I take care of all the finances, while she is in charge of waking me up in the morning and being super cute.

What drew you to PocketSmith?

Initially, I was using Mint, way back when it first came out. Being able to view all your transactions and balances across accounts in one place was a game changer. Sure the ads were a bit annoying, but it did most of what I needed. I tried over and over again to set up budgets in Mint, but they didn’t quite fit how I naturally manage my finances. I don’t really set aside a total amount for groceries, for example, and then use up that amount. I’m fortunate in that I don’t need to keep that tight of a grip on my spending. What I naturally do is work my way backwards. How much money will I have at the end of the month after I’ve accounted for my recurring bills and income? This gives me a general idea of how much leeway I have for spending for the next few weeks. What I really needed was a calendar view of my balances and transactions. Mint had nothing like it. Frankly, PocketSmith was the only application I could find that had both bank feeds and a calendar view that supported the way I manage my money.

How long have you been with us?

If I search my transactions, the oldest one for PocketSmith shows November of 2016.

What do you primarily use PocketSmith for?

Mainly for managing income and expenses month to month. Of course, I use saved transaction searches periodically for gathering information for tax purposes or giving myself a gut-check on… HOW MANY SUBSCRIPTIONS DO I HAVE?!

How has PocketSmith changed the way you do money?

It allows me to take all the information I have in my head about upcoming big expenditures and pop it into my PocketSmith calendar. I can see the impact ahead of time and adjust accordingly. It relieves all my anxiety about missing payments or not knowing whether I will have enough cash on hand if an emergency comes up. It’s also a big factor in helping me find fraud ASAP. Logging into PocketSmith and confirming all of my new transactions from my feed is the first thing I do at the computer each morning. I have eyes on anything that posts to any of my accounts. If something is questionable, I simply leave it unconfirmed until I’ve sorted it out.

What are your favorite features?

Definitely, the calendar view for forecasting is my favorite. Additionally, if things are getting hectic, I will temporarily synchronize my PocketSmith calendar with my Google calendar. In this way, if I’m going out of town or some other major event is coming up, I can make sure my finances will be all handled ahead of time for that period. This lets me focus on what’s happening in my life, knowing that I’ve already sorted out the money.

Got any tips?

PocketSmith has a ton of features. Don’t feel like you need to use all of them all of the time to get value out of it. I’ve been using one scenario for the entire time I’ve been using PocketSmith. I think I’ve changed my budgets and categories a handful of times. Yet I’ve got all the information I need to make good decisions. When I have time and feel like “nerding out” I will spend several hours playing with the other features, but on a daily basis I’m in PocketSmith for less than five minutes.

What’s the best money decision you made in the past 12 months?

Since my spending went down during the lockdowns, I doubled the amount of money I auto-transfer to Savings each paycheck. Now that things are getting more expensive, those savings will come in handy.

Teenage Investor: Three Lessons I’ve Learned in My Sharesies Journey So Far

Wed, 31 Aug 2022 12:00:00 +0000

I started my investing journey with Sharesies in May 2022. Some three months later, I thought I would summarize what I have learned so far.

I have been investing $5 every week into Sharesies, sometimes adding a little extra here and there. I have put in $1,130, split between three ETFs, with my starting amount being $1,000.

The first month after I started my investing journey, the share market plateaued, and I didn’t make or lose much. I was never up or down more than $20. In June, the share market dropped, and I lost $80 out of the $1,000 I had invested. One month later, in July, the market went back up, and as of now (21 August 2022), I have made about $80 (7.16%) in returns.

As you can see, I have invested in three different funds: the Smartshares Global Automation & Robotics Fund, the Smartshares Japan Responsible Fund, and the Smartshares US 500 fund.

Since I have diversified my portfolio by putting my money into three different funds, it lowers the risk of me losing money. This is because if one fund crashes, I still have another two to fall back on. The numbers at the bottom of each fund are the amount of shares I have and returns I have made from each fund. Even though the Automation & Robotics fund has a higher percentage in return than the US 500, I have made more from the US 500 fund because I have invested more money into it, therefore gaining a more significant return.

What has all this taught me? I suppose I could boil it down to three main lessons:

Lesson 1: Stay calm and remember why I’m investing

The first thing I learned from that experience is to stay calm, not panic, and remember that I am in this for the long term. When I first saw that I had lost around 8% of my investments, I thought, “Oh no,” but I quickly moved on. I guess it did help that I am still in the early stages of my investing journey, and I had not invested a huge amount. If it was 8% of $100,000, I don’t know if I would have remained as calm, but I still don’t think I would have taken any drastic action.

Lesson 2: Make regular investing a habit

Another thing that I have learned is to make a habit of investing the same amount of money regularly. This is called dollar-cost averaging. It’s when you frequently invest the same amount into a specific investment, ignoring the share price. This means that if prices are high, you will purchase fewer shares, and when prices are low, you will purchase more shares. Over time your cost per share will average out, meaning you don’t need to time your investing during a particular high or low point.

Lesson 3: Don’t dwell on how my investments are faring

One of the most important things I have learned is not to dwell on how my investments are faring. This is because I would definitely rather spend my time without worry rather than constantly thinking about my investments. In my case, since the money is transferred straight from my pocket money into my investments, I’ve automated things so that weekly investing has become a habit, and I don’t have to think about it proactively.

Overall, I’m still enjoying the journey of investing, and I look forward to reviewing my experience again in a few months. With inflation going the way it is, I’m glad I’ve started investing now rather than later.

Ruth’s Two Cents: Getting My Spouse More Involved In Our Finances

Mon, 29 Aug 2022 12:00:00 +0000

Hi Ruth,

My wife and I are in our early 50s; we’re now mortgage-free and on our highest salaries to date. I take care of all the bills, investing and important financial documents in our household. I’m okay with this because I enjoy it, but I think we could be even better off if we were both active in managing our money. I also want her to feel financially capable and prepared should the worst happen to me. How can I get my wife more involved in our finances?

I think it’s normal for one person to be more interested in household finances than the other, but it can be a bit lonely, right? Constantly having to make decisions, some of which are pretty critical, with your financial future on the line if you make a wrong move. It puts a lot of pressure on you to be the decision-maker all the time, especially if a wrong financial move will put you in the dog house!

That’s a lot to have sitting on the shoulders of one spouse, and it can potentially make you overly fearful or overly cautious, which will limit what you are capable of financially. Not to mention that you are making joint decisions with only one person’s point of view, your own, and that can’t help but create a bias in one direction. A problem shared is a problem halved, so that is the path I would recommend you go down, talking with each other and navigating a route where you each get a say and work to make an already good position even better.

Don’t feel bound to a division of labor

I feel from your brief outline that you and your wife have fallen into a natural division of labor, with you steadily taking on more of the financial housework over the years. If you look around your home, there will be many roles that each of you naturally performs — making the bed, putting out the rubbish bins, cooking, and booking the family holiday. Any of these roles would be up for discussion if the person carrying them out was sick of doing it or needed some help. Talking about your money is the same. So, raise your hand and ask for help.

I’m sure that if you point out that her input into the family finances would be welcome and appreciated, she would be willing to hear you out and then take part. You allude to the fact that two heads are better than one. That is the way I would encourage you to approach the conversation with your wife, particularly as you enjoy the highest-earning years of your lives. Now is the time to make hay while the sun is shining brightly.

I probably wouldn’t lead in with “Babes, if I died tomorrow…” but I would lead in with “Babes, collectively, we have come so far, but I would love your input into our finances so we can go even further”.

Ease into the details of it

It sounds like you already have her trust, so start to dream together about what the future holds and then gently bring in the numbers to aid the conversation if and when appropriate. If your wife has kept out of the finances for all these years, bombarding her with financial jargon is unlikely to draw her in. So, you know those spreadsheets you have been cultivating over the years? Don’t show her those! Instead, give a conversational summary of how far you have come as a family over time, working in round numbers, mentioning the providers you use, and showing the direction and progression. And explain your ideas about where you could take things as a team. Ask for her input. What dreams and ideas does she envision for her future and your shared future? I guarantee that she will come up with things you have never thought of.

Explain that while you are happy to continue to manage the money, you would like her to have more input into the decisions you make for both of you. Chances are she has backed right off taking much notice of the financial side of life because she thinks you are so competent at doing so, but I know that if my spouse came to me saying, “I need some support here”, I would listen with both ears and step in to help share the load.

Work on a problem together

Find some common ground where you can work together. It may be that you have stayed with the same insurer for 20 years but wonder if she can help you find a better deal? Ask for her input because no doubt she has heard talk around the office, listened to a good friend mention someone, or seen an advertisement somewhere that she could add to the conversation. Keep the conversation flowing as you reach a combined conclusion about which provider to go with and work together through the process.

Customize your PocketSmith dashboard

There are a couple of resources to help present information in the way you both like to hear it.

PocketSmith has a custom dashboard feature that caters to the “deeply into the numbers” spouse and the “give me the basics” spouse. You can have your dashboard with every widget imaginable because you love the detail. You can create a simplified dashboard for your spouse that can convey the point they are interested in, whether pictorial or list form, in a way they like to see it.

For your peace of mind, write it all down

The other resource is for you to ease your concerns about your sudden passing. Create a document that lays out all the vital information your family can refer to when they have lost you as their central financial database. It can be a weight off everyone’s mind. My Peace of Mind is one such resource, and the actual physical act of creating this folder will start conversations with your wife that you can also build upon. To keep all of your important financial information together, you can also store your essential documents in PocketSmith using the Attachments feature.

A little and often will take you a long way

In my own home, we have found a nice balance. I’m the numbers person because I genuinely enjoy handling our money, but I don’t go it alone. There are frequent but brief conversations — I’ll run a decision past Jonny and get his input (he always adds something I would not have thought of), and then once a month, I’ll give him an update on how our family fortunes (or misfortunes) are progressing. Through hundreds of small conversations, he has come to learn where our money is invested, how our bank accounts are structured and how our spending and earnings are going. We are both more mindful of our money because of this process.

Be realistic about how involved your wife will ultimately become in your family finances; it’s unlikely that she will ever be as keen as you. Still, small conversations build up to great knowledge over time. So the answer to getting her more involved is by starting a chat about your worries and your dreams and hearing what hers are as well. Then you build upon this, one day at a time, checking in with each other at crucial points when a decision needs to be made and then with regular check-ins along the way.

Getting your wife involved now while you are making the best money of your lives can only set you up for a fabulous time in the years to come. Enjoy planning that exciting future and celebrating your successes as a couple along the way!

Got a burning money question for Ruth? Send them through to hello@pocketsmith.com!

Crypto Investment Rules and Trends To Follow in 2022

Sun, 21 Aug 2022 12:00:00 +0000

As we move further into the 21st century, new technologies are constantly emerging and disrupting industries as we know them. One such industry that has seen massive upheaval in recent years is the world of finance, with the rise of cryptocurrencies and blockchain technology.

While this may seem like a daunting and confusing topic to invest in, there are specific rules and trends that crypto investors should follow to ensure the best results in 2022.

Invest in a diversified portfolio

One of the most important things to remember when investing in any asset is diversifying your portfolio. This means not putting all of your eggs in one basket. When it comes to cryptocurrencies, this is especially important as the prices of these assets can be highly volatile.

By investing in various coins and tokens, you can mitigate your risks and ensure that you are still making a profit even if one of your investments doesn’t do as well as expected.

Don’t invest more than you’re willing to lose

Another essential rule to follow is only to invest an amount of money that you are comfortable losing. Cryptocurrencies are a risky investment, and there is always the potential for you to lose all of your money.

While it is possible to make a lot of money by investing in crypto, you should only do so with an amount you are okay with losing. Doing so will help limit your losses if the market takes a turn for the worst.

Remember to do your research

Before investing in any cryptocurrency, it is essential to do your research. There are a lot of scams out there, and you don’t want to end up losing your money to one of these. Look into the team behind the project, the technology, and the roadmap.

Also, read up on reviews and what other people say about the project. This will help you avoid any potential scams and give you a better idea of what you’re investing in.

Shaun Heng, VP of Growth & Operations at CoinMarketCap, suggests, “Building a personal checklist of factors to look out for in a project will help you sift through the hundreds of options in the market and invest with confidence.”

Never invest based on rumors or hearsay

Another essential rule is to never invest based on rumors or gossip. Just because someone you know says that a particular cryptocurrency will explode in value doesn’t mean that it will.

Nate Tsang, Founder & CEO of WallStreetZen, warns crypto investors “to be wary of anyone giving unsolicited investment advice, no matter how well-intentioned since everyone’s risk tolerance is different.” Do your research, and don’t make any rash decisions regarding investing in crypto.

AI and machine learning within the crypto industry will increase

In terms of crypto trends, one of the most prominent ones for 2022 is the increased use of artificial intelligence (AI) and machine learning within the industry. These technologies can be used for various purposes, such as analyzing data and predicting price movements. As the industry becomes more reliant on these technologies, we will likely see more adoption in the coming years.

More states and countries will begin to regulate crypto

Another trend that we are likely to see in 2022 is more regulation of cryptocurrencies by states and countries worldwide. As the industry continues to grow, more governments are beginning to notice and start to put forth regulations.

It remains to be seen whether these regulations will be good or bad for the industry, but it is something that we are likely to see more of in the next year, especially as the industry continues to gain mainstream adoption.

So there you have it, four rules and two trends that crypto investors should follow for the best results in 2022. While investing in crypto is a risky endeavor, following these tips can help you minimize your risks and give you the best chance for success.

Nate Tsang is a serial entrepreneur, part-time investor, and founder of WallStreetZen.

The Risks of Using Buy Now Pay Later

Mon, 15 Aug 2022 12:00:00 +0000

In recent years, Buy Now Pay Later (BNPL) products have risen in popularity across the world — but what’s the deal with this flashy new way to pay? In this article, we break down how BNPL is different from credit cards, the risks to your credit score, and whether it belongs in your money-savvy strategy.

What is Buy Now Pay Later

Buy Now Pay Later is a new way to pay for everything from clothing to dental appointments. With a raft of different providers, you can checkout online or in-store as normal, but rather than pay the full amount up front, you’re charged in periodic installments. There’s no interest, but if you miss payments you may incur late fees.

How is Buy Now Pay Later different from credit cards?

Credit cards are issued after an affordability assessment, that takes into account your financial situation and other debts you already have. If approved, you’re given a card that allows you to spend up to a certain limit. You then carry a balance each month where interest is charged on anything that isn’t cleared from your account.

Buy Now Pay Later products do not generally involve a credit check or an affordability assessment. They allow you to purchase things upfront, and pay them back in interest-free installments. Instead of interest, BNPL providers tend to charge fees for late payments.

Are Buy Now Pay Later apps safe to use?

Broadly speaking, major Buy Now Pay Later providers are safe and secure to use, in that they’re legitimate methods of payment. But it’s important to consider how they could be impacting your financial situation. The use of them is directly correlated to an increase in spending, and a lot of the marketing messaging is directed toward overspending. Plus, with so many new apps coming onto the market, it’s easy to get caught up with multiple repayments due across several providers.

That said, it can be possible for Buy Now Pay Later to exist within a healthy budgeting strategy if you’re spending with intention and using the installments to manage your cash flow. Just like any form of credit, it pays to check in regularly to ensure you’re not overspending.

Can Buy Now Pay Later affect your credit score?

The way Buy Now Pay Later is treated from a credit file perspective varies by country. That said, one thing’s for sure — Buy Now Pay Later is progressively becoming integrated into the credit industry.

In the US and the UK, Buy Now Pay Later use is now reported to credit agencies. In Australia, Buy Now Pay Later can impact your ability to borrow by being factored into your debt-to-income ratio assessment by lenders.

Ultimately, BNPL services are having a growing impact on people’s ability to take out home loans and other forms of credit, so approach them with caution.

Audit your use of Buy Now Pay Later

Log into your Buy Now Pay Later accounts and review the types of things you’ve been using them for. If you’re using them for essentials, that’s one thing. But often these services are heavily marketed towards impulse purchases and non-essentials like fast fashion, tech and gaming.

Aside from what you’re actually buying with Buy Now Pay Later services, consider the wider context of your financial goals. If you’re looking to buy a home anytime soon, or apply for any type of credit, it could be worth reining in your use to clean up your spending and credit history.

Advance Australia Fair: Open Banking Access Incoming With Basiq

Thu, 04 Aug 2022 00:00:00 +0000

We’ll discuss a bit of background around open banking access in Australia in this post, and provide context around our decision to go with Basiq as our chosen CDR data provider. But let’s frontload the most important information: When?

Cutting to the chase: When can you get access?

Right now! All Basiq feeds are now available to search and add within PocketSmith. Just look for the “Open Banking” tag next to your Australian bank feed in your feed search results to identify which feeds are provided via Basiq, as a CDR open banking data sharing feed.

Look for the Open Banking tag to identify Basiq feeds

Everything is working well, however as CDR open banking data sharing is a fairly new concept, some banks are still struggling to supply data reliably and completely. If you experience any issues, please send us an email and we’ll be happy to look into the problem.

(No further updates will be provided here; last updated October 28, 2022).

Our background on Australian open banking

Australian banks have been rolling out their open banking implementations since the official launch in July 2020, allowing customers to share their banking data with accredited data recipients. As of the end of 2021, a total of 16 banks had come online with their access models.

Since the official launch, the picture has been murky for non-Australian companies with Australian customers, like PocketSmith. At first, there was no way to even start the application process without an Australian Business Number.

Additionally, the original legislation also left little room for the lesser access requirements of PocketSmith. The same accreditation requirements were applied for organizations enacting payments, and for those who just allowed users to access their account and transaction data automatically, like PocketSmith.

At the end of September 2021, this changed with new rules for tiered accreditation being published by the Australian Treasury. This finally meant there was hope for PocketSmith’s users to access Australian open banking feeds. The hunt started!

Choosing Basiq

While open banking promises a level of ease to connect to banks individually, it’s not pragmatic for PocketSmith to take this path. Aside from the fact that we’re already supporting bank feeds in many countries outside of Australia via a myriad of data providers, the individual quirks and differences between how banks interpret the open banking requirements are best dealt with by experts in the field.

Once we were settled on using an aggregator, we decided that we want to use someone local to Australia. We’ve had an excellent experience with our local New Zealand bank feed aggregator, Akahu. We also knew, based on our experience of how things shook out with the introduction of the PSD2 in Europe in 2019, that we needed someone with local knowledge of the legislation coming into effect.

Basiq came to the fore. They have support for over 130 Australian institutions, and offer both open banking feeds alongside their own methods of maintaining a bank feed. This dual approach means we can better choose the best feed type for the individual bank, based on the data that they provide via open banking APIs, versus other access methods.

What enamored us even more is that they have a public status page for their connections to Australian banks at https://status.basiq.io. This sort of visibility is something we know that both ourselves and our customers appreciate. And look at all those 100% uptime statistics!

Next steps

As mentioned at the start, we’re moving ahead as fast as we can, in order to get Australian customers connected via Basiq. We’re beyond excited about being able to offer truly reliable, open banking feeds for all Australian financial institutions. Can’t wait for you to all hopefully experience that 100% uptime!

James is the CTO and co-founder at PocketSmith. He loves tech from software to hardware to music, and is passionate about technology being a net-positive in people’s lives. He lives off-grid with two humans, two axolotls, two rabbits, one dog, and too many possums.

Yes, We’re Open For Business!

Mon, 01 Aug 2022 12:00:00 +0000

On the 7th of July, the Australian company Pocketbook announced that they will close on the 5th of August.

We’ve since been hearing from concerned customers who, in their haste, misread that WE were closing. Please don’t worry — we’re alive and well, and healthier than ever!

Yes, our names are similar, and we both produce personal finance software that is available to the Australian market.

Here’s a quick run-down on how we differ from each other.

	PocketSmith	Pocketbook
Years in operation	14 (2008 -)	10 (2012 - 2022)
Years in operation	We’ve spent years building a business that will be here for years to come, because we understand that financial journeys are measured in decades, not years.
Market	Australia and 190 other countries	Australia
Market	Made with love in New Zealand, we love connecting with people worldwide and being a part of their stories. The inspiration we gain from one part of the world translates into value for another.
Subscription type	Free and Premium	Free
Subscription type	By charging a fair price for our services, we maintain a transparent business model and the ability to continue improving our product for you. We do not support the idea of selling customer data in exchange for offering a free service.
Ownership	Independent and founder-owned	Owned by Zip
Ownership	My co-founder James and I still lead the company as CTO and CEO. Our vision and priorities haven’t been diluted by a parent organization. We’re all about our customers, our team, and our values.

Curious about features? Learn a bit more about why we’re the ideal Pocketbook alternative.

What’s in our name?

We’re proud of our moniker, though we rarely find occasions to explain it.

Naming a company is a hard thing to do, and when we were founded in June 2008, we sought to establish a brand name that was fun, unique, timeless, meaningful, pronounceable, and spellable.

If the latter two criteria seem odd, you may have been fortunate enough to miss the decade that brought us startup names like Thoof, Diigo, Heekya, Sclipo and Oooooc.com.

PocketSmith is the combination of:

And we’d like you to take it as you wish. For some, our product is a PocketSmith, helping them craft their finances — for others, it helps them be a PocketSmith, forging their custom financial insights and outcomes.

However you see it, our intention across both interpretations is the same. We’re out to make the best tools to give you greater capabilities and control over your personal finances.

Why?

Here’s a fundamental one that isn’t just about making more dollars and cents.

We humans are complex creatures, and though the invention of money has moved us ahead as a civilization, we still lack a collective instinct that ensures we’re nourished, and not poisoned by it.

When we set about making solutions to the challenges we see in the rapidly-changing space of personal finance, we’re playing our part in the evolutionary chain by creating technology to influence our progress in a positive way.

One of our rewards is having the privilege of being a part of our customers’ remarkable journeys. We’ve helped newlyweds Ellen and Max combine their incomes, kept Dan’s “go go go!” household of four under control, tracked digital nomad Connor’s growing global empire, conquered Nicole’s taxes with her out in a gold mining town in WA, and helped Chief Grocery Officer Tara buy her first home.

We also believe in growing our business sustainably. While this may mean that we invest carefully and take our time, we maintain control over our decisions and we don’t risk imperiling our customer experience and culture.

The flames of our forge burn as brightly as they did on our very first day. Yes, that’s unabashedly cheesy. And yes, the doors to our workshop are wide open, and we’re still very much here for you.

Amy Tracks Her Account Balances With PocketSmith’s Calendar Feature

Mon, 01 Aug 2022 12:00:00 +0000

Read how Amy makes the most of PocketSmith’s bank feeds to keep up-to-date with her expenses and savings.

Tell us a little about yourself?

I live in Southern California with my husband, my 90-year-old mother, five cats, four tortoises, and two parakeets. I am a second career Registered Nurse. My first career was as a bookkeeper and tax preparer. I finally decided to pursue my lifelong dream of having a career in healthcare when I was about 40 years old and have never looked back.

How would you describe your role in your household?

I am a proud wife to my beloved husband who is good enough to have taken the responsibility for caring for my elderly mother who has dementia. As I am a Registered Nurse manager now, I work outside the home five days per week. If it weren’t for his willingness to care for my mother, I would not be able to pursue nursing.

What drew you to PocketSmith?

When I found PocketSmith, I was looking for a way to track our spending. I was still new in my Registered Nurse career and having transitioned from the unpredictable nature of self-employment income to the predictability of a regular paycheck, I was eager to find a system that would help us manage our income responsibly.

I had tried many other services, but none worked as flawlessly as PocketSmith. The other services either didn’t connect directly with bank and investment accounts or if they did, were very glitchy. PocketSmith has continually made upgrades to their service and when I did have an issue with one of our accounts not connecting properly, I received prompt technical support that resolved the issue.

How long have you been with us?

Since November 2017.

What do you primarily use PocketSmith for?

I primarily use the Calendar to keep a check on our balances and expenditures. The calendar function is super helpful for planning purchases. I can see that we have the cash to afford a purchase and how the expense will impact our future balances.

How has PocketSmith changed the way you do money?

PocketSmith shows us exactly what our balances are in all of our accounts at any given time. Prior to having this tool, we had no way to plan spending and saving. Now, we can see our projected balances in all accounts to make decisions that will strengthen our financial outlook.

What are your favorite features?

I love that PocketSmith connects directly with our bank and investment accounts so we can see our projected balances. The Dashboard is also a helpful high-level overview of account balances and expenses. I love the snapshot of expenses coming due in the next seven days.

Got any tips?

Connect all of your accounts — bank, credit card, investment accounts, etc. Knowledge is power when it comes to your finances. If you are having financial difficulties, face them head-on, arm yourself with the facts, and use this tool to help you make wise choices.

What’s the best money decision you made in the past 12 months?

This decision wasn’t in the past 12 months, but it is the best money decision we have ever made. At one time, due to a combination of poor financial stewardship, medical bills, and school expenses, we had severe financial difficulties and credit card debt approaching $60,000. One day we made the decision to cut all of our credit cards up and never use them again. With the help of a credit counseling program, we were able to completely pay off our debt. So the best money decision we have made in the past 12 months has been continuing to never carry a balance on a credit card. We use one credit card to purchase household items to receive cash back and every purchase is paid before the bill comes due. We pay no interest and get the benefit of cashback. Having zero credit card debt is a liberating feeling and solidifies our financial wellbeing.

The Best Retirement, Savings, and Nest Egg Calculators

Tue, 26 Jul 2022 12:00:00 +0000

Retirement and nest egg calculators
Country-specific retirement and nest egg calculators
Savings calculators
Investment calculators

We’ve compiled a list of financial calculators you might find helpful — from retirement planning to savings to investments. Just plug in the relevant numbers that apply to your situation and get the answer within minutes.

Retirement and nest egg calculators

Financial Mentor Ultimate Retirement Calculator
Key Point Credit Union Nest Egg Calculator
NestEgg U
The Retirement Solution Retirement Nest Egg Calculator
Vanguard Retirement Nest Egg Calculator

Financial Mentor Ultimate Retirement Calculator

As the name suggests, the Financial Mentor Ultimate Retirement Calculator is one of the most comprehensive. It includes all the regular inputs such as current age, age at retirement, life expectancy, total current savings, monthly savings, desired retirement income, and annual investment return. One feature available here that isn’t found on many other calculators is the ability to increase your monthly savings by an annual percentage — so if you anticipate increasing your savings amount over the course of your career, this can more accurately calculate your final retirement figure.

It also includes a section labeled “Advanced Retirement Planning” that has options to reduce spending throughout retirement, one-time lump sum payments (e.g. an inheritance), or other retirement income sources (i.e. rental properties, pension, business income).

The calculator itself functions very similarly to the others we’ve mentioned here, but the difference comes in the advanced retirement planning section. If you know you may have a more complicated retirement plan than simply your retirement savings, this will likely be much more useful to you than many of the other calculators out there. Having the ability to input inheritance payments or retirement income such as rental properties means that you can more accurately plan for your retirement. Although if you have some more complex finances, you should probably seek professional advice, as this acts merely as a starting point.

Best for: Those looking to do some more complex retirement calculations. The ability to set specific dates for contributions and include any possible lump sum payments (i.e. sale of real estate or business) may give a more accurate picture for individuals with more assets than just their retirement investment account.

Key Point Credit Union Nest Egg Calculator

The Key Point Credit Union Nest Egg Calculator has five main variables: Years until retirement, initial savings, annual investment until retirement, annual withdrawal amount at retirement, and the annual rate of return. Once you input these variables, you’re presented with a total nest egg figure as well as a graph showing how it will change over time depending on the variables you entered.

For our tests, we used 35 years until retirement, initial savings of $20k, an annual investment amount of $10k, annual withdrawal in the retirement of $70k, and an interest rate of 7% annually. This gives us a nest egg of $1,595,900 and estimates us to have a nest egg balance throughout retirement.

Similar to some of the other calculators we’ve discussed, this one gives a good indication of where your financial position and what you may need to do to improve your retirement position. However, if you’d like to include types of investments such as real estate, you’ll need to look at other calculators such as the Sorted one.

Best for: Those who want to see what their nest egg will be at retirement and how long it will last. Like some of the other calculators, it’s limited by the types of assets you can include, thus only giving you a rough idea of the position you’ll be in at retirement.

NestEgg U

NestEgg U is another pretty simple retirement calculator, this only requires your current and retirement ages, your current income, the percentage you contribute towards retirement, your current retirement account balance, the type of investor you are (aggressive/moderate/conservative), expected annual pay increase, retirement income goal, and age expectancy. It then calculates your retirement savings balance at retirement, the retirement income needed, and the annual retirement income generated.

For this calculator, we input the following numbers: Current age of 30, a retirement age of 65, an income of $70,000, a savings rate of 15%, with current retirement savings of $20,000. We also used a moderate investment profile, 2% annual raise, 75% income retirement goal, and a life expectancy of 90 years. This comes out to a balance of $1,710,000 at retirement with an annual retirement income of $96,272.00. The calculator also tells us that this is just 91.69% of the $104,994.00 needed to hit our 75% income retirement goal.

We really like how this calculator presents its results in how full your income bucket is. In our example, it says, “Your bucket is 91.69% full”, thus indicating that more needs to be saved to reach our goal income. The idea of filling the bucket makes it feel more achievable than just “you need to save an extra $X per week to hit your goal.” But it’s not perfect and lacks some of the features that calculators such as Sorted have, such as including your other assets like real estate.

Best for: People who want to see their progress towards being able to retire. Good for a rough idea but limited in the types of assets you can include.

The Retirement Solution Retirement Nest Egg Calculator

The Retirement Solution Retirement Nest Egg Calculator is one of the most simple you’ll come across. You need to enter your current age, retirement age, current retirement savings, the monthly amount invested, and the annual interest rate. Hit enter, and you’ll be greeted with the total amount available at retirement, the number of contributions, the total amount invested, interest earned, and your last deposit date.

Unlike the Vanguard calculator, this just shows you how much you’ll have available to you at your desired retirement age. For our experiments, we entered an age of 30, a retirement age of 65, savings of $50,000, and monthly savings of $1000 at an annual interest rate of 7%. This comes out to $2,560,541.80 by retirement age.

This calculator works great for a quick estimate of where you’ll be financially when you retire. It does fall short when it comes to any nuance within retirement planning. It gives no option to include pensions or real estate, not to mention the fact that you can’t change up the interest rates to reflect what asset classes your retirement portfolio holds.

Best for: Getting a rough idea of what your total retirement investments will be when you retire. Similar to an investment calculator, it’s great if you want to know how much interest you’ll have gained relative to the amount you’ve invested once you retire.

Vanguard Retirement Nest Egg Calculator

Vanguard’s Retirement Nest Egg Calculator is an effective, if somewhat simple, solution to figuring out how long your savings will last and your projected savings balance throughout retirement. All that’s needed to make these projections are four variables: How long your savings should last, your current savings balance, your yearly spending, and how your savings are split between financial instruments (cash, bonds, stock).

For example, if you want your savings to last 30 years, have $1.5 million in savings, an annual spend of $60k, and a 50/30/20 split for your asset types, you have a 91% probability of your savings lasting 30 years. It also gives you a projected savings balance over the course of 30 years.

On the downside, it doesn’t include provisions for pensions or other assets such as real estate that you may own. Converting to a cash equivalent to use the calculator will not take the differing rates of return for different asset classes into account and thus produce inaccurate results.

Best for: Those with relatively simple finances or if you want to get a rough idea of where you’re at.

Country-specific retirement and nest egg calculators

Moneysmart Retirement Planner (AUS)
Interest.co.nz Retirement Calculator (NZ)
Live Sorted Retirement Calculator (NZ)
AARP Retirement Nest Egg Calculator (USA)
Merrill Personal Retirement Calculator (USA)

Moneysmart Retirement Planner (AUS)

The Moneysmart Retirement Planner is slightly different from the rest on this list as it focuses on Australian Superannuation for your retirement. The main things you need to input are your current and retirement ages, your current super balance, and the contributions from you and your employer. It then calculates your annual retirement income. You’re able to add in other variables like fees and investment options and homeownership, and other personal assets that you may have.

As a retirement planner, it does the job quite well. Integrating Superannuation is especially useful if you’re from Australia and don’t want to make your super calculation separate from your other assets when you’re retirement planning.

Best for: Australians wanting a good general idea of retirement income, including Superannuation.

Interest.co.nz Retirement Calculator (NZ)

The Interest.co.nz Retirement Calculator calculator offers a different perspective on retirement savings. Rather than calculating the amount of money you’ll have at retirement or the amount you’ll be able to spend whilst in retirement, it calculates how long you’ll be able to live on your current savings trajectory. You’re able to enter in figures such as current and retirement age, your income before and after-tax, expenses while working and retired, current savings and rate of return, as well as superannuation. You can also add your Kiwisaver balance, employee contribution, and rate of return.

Our calculations used a pre-tax salary of $75,000 with approximately $45,000 expenses while working and $40,000 while retired. When we added in $30,00 in savings and $20,000 in Kiwisaver with a 7% rate of return and 2% inflation, the calculator said we’d be able to live to an age of 120 years.

This presents the major hurdle for this calculator — it only calculates how long you’ll be able to live on your funds, and only to a maximum of 120 years. If the only thing you want to know is whether you’ll have enough money saved for retirement, this tool may work for you. On the other hand, if you want some more concrete numbers about your assets or income throughout your retirement, you may want to search for another tool.

Best for: New Zealanders looking to see how long their expected retirement savings will last. The ability to add KiwiSaver makes it easier to get a rounder picture of your retirement.

Live Sorted Retirement Calculator (NZ)

The Live Sorted Retirement Calculator is one of the more in-depth retirement calculators we tested, as it gets into the nuts and bolts of retirement. You’re asked to enter your current and projected retirement age and what your desired weekly ‘allowance’ would be once you retire. Then you enter your retirement funds — these may include your Kiwisaver balance (401k equivalent), savings, investments, home equity, inheritance, sale of a business, or others. From there, you add any other income you may receive and NZ Super.

This calculator is an excellent tool if you already know what you’re likely to have in savings, investments, etc, by the time you retire. It allows you to see what weekly spending amount you can afford and if that’s a relatively high or low amount. The great thing about this calculator is how you can plug in and change all of the different inputs to see how they affect your weekly spending in retirement.

Best for: New Zealanders who want an in-depth look at their spending situation in retirement. The ability to add different assets and KiwiSaver means it’s more helpful than your standard “here’s how much you’ll have when you retire” calculators.

AARP Retirement Nest Egg Calculator (USA)

The AARP Retirement Nest Egg Calculator gives inputs for two major sections: “Retirement plan inputs” and “investment returns, inflation, and social security.” The retirement plan inputs section consists of sliders for your current age, age at retirement, annual household income, current retirement savings, expected annual income increase, the percentage of your pre-retirement income you expect to have in retirement, and the number of years in retirement. The investment returns, inflation, and social security section offer sliders for the rate of return before and during retirement and the expected rate of inflation, marital status, and whether or not to include social security.

When you input all of the numbers, the calculator gives you a total projected nest egg you’ll need for retirement, the amount you have left to save before hitting that target, and the monthly amount you’ll need to save. Using similar numbers to the previous calculators (salary of $75,000 at 30 years old, retiring at 65, etc), we’d need $2,395,557 at retirement and save around $1100 per month.

All in all, this calculator is an effective tool to give you a rough idea of how much you should be trying to save to hit your goals for retirement. Like most calculators, this is just a starting point, but it certainly helps that it gives you a concrete number for both your estimated nest egg and the monthly amount you’ll need to save to get there.

Similar retirement calculators from different websites that use the same format include:

Best for: People trying to see if they’re on the right track to their goal retirement income. The easy-to-use graph shows whether you need to save more to meet your goal or if you’re ahead of where you need to be.

Merrill Personal Retirement Calculator (USA)

The Merrill Personal Retirement Calculator is one of the best-looking calculators we have come across. Its main inputs include your annual income, current savings, monthly savings, investment style (safe/moderate/aggressive), retirement spending, retirement age, and life expectancy.

Using these inputs tells you how much you’ll need total, annually, and monthly to retire. It also allows you to include social security in the calculations. What we found unique to this calculator was its ability to show what your monthly contribution numbers would be in a good vs a poor market. It also has excellent information text bubbles to help you understand what all the different numbers actually mean.

Best for: Individuals looking to get an idea of how much they’ll need in retirement to maintain their current lifestyle (total, annually, monthly). Specifically for individuals from the USA, as it can include social security in the calculations.

Savings calculators

Calculator Soup Savings Calculator
CalcXML “How long will my money last” calculator
Investor.Gov Savings Goal Calculator

Calculator Soup Savings Calculator

As far as financial calculators go, this one has it in the name of the website. Calculator Soup Savings Calculator offers many useful tools to help with your finances.

The savings account calculator is probably the easiest to use on this entire list. All you have to enter is the starting amount, the amount you’re going to deposit (weekly/monthly/annually), the interest rate, the length of time, and the compounding interval. This can help you figure out how much you’ll have saved in the future (including interest) if you make consistent deposits over a period of time. For example, with an initial amount of $1000 and monthly deposits of $500 for 10 years, compounding 7% annually, the final total comes out to be $87,976.59.

Best for: Figuring out how much your savings will grow over time. It’s a very simple calculator but does its job well.

CalcXML “How long will my money last” calculator

The CalcXML How long will my money last calculator estimates how long your money will last when you systematically withdraw money each month. It can act similar to a retirement calculator as it’ll show you what happens to the principle after you take out your retirement income.

We used $1 million in savings with $5000 in monthly withdrawals as an example. This calculator allows you to adjust assumptions, so we chose to increase the annual withdrawals by 2% to match inflation, an annual before-tax return of 8%, and a marginal tax rate of 22%. The resulting graph shows that our savings will last approximately 29 years before running out.

Although this calculator will not tell you how much you need for retirement, it is useful for approximating how long the money you currently have will last. Using this in conjunction with other calculators may be helpful to plan your retirement or any other long-term expenses.

Best for: Those wanting to figure out how long their savings would last given consistent withdrawals, e.g. someone facing unemployment and needing to survive on their savings.

Investor.Gov Savings Goal Calculator

The Investor.Gov Savings Goal Calculator from the US Securities and Exchange Commission is for calculating your savings goals rather than retirement. Entering your goal, initial savings, years to grow, and estimated interest rate calculates how much you should aim to save on a monthly basis.

We aimed for $100,000 in 10 years at a 7% annual interest rate for our test. According to the calculator, we’d need to save $484.50 each month to reach our goal. This can be a great tool if you have a set goal in mind for something you need to save for.

Alternatively, Investor.Gov also has a compound interest calculator that shows how much your savings/investments will increase over time, depending on how much you put away each month. For example, with an initial sum of $10,000, if we save $500 per month for 10 years at 7% the total would come out to $102,570.20.

Both tools are great at what they do. Still, they are inherently limited and probably shouldn’t be used for retirement planning as they lack some of the features that other calculators have — things such as your retirement draw rate and inclusion of other assets like real estate.

Best for: Great for understanding how your savings will grow with regular deposits/investments. Would be useful for someone looking to save for a specific goal (purchasing a house) or simply wanting to see what their savings/investments may look like in the future.

Investment calculators

Calculator Soup Investment Account Calculator
Calculator.net Investment Calculator

Calculator Soup Investment Account Calculator

The Calculator Soup Investment Account Calculator helps you somewhat accurately forecast how much money you’ll have in your investment account in the future.

By entering your initial balance, start date, interest rate, monthly deposits, monthly withdrawals, and account fees, you’ll quickly figure out how much you’ll have in your investment account. This can even be used for your retirement accounts as you can schedule when you want the withdrawals to start - they can coincide with your retirement.

Best for: People who want to figure out their total investments after deposits/withdrawals/fees. The inclusion of fees makes it unique from the other calculators on this list.

Calculator.net Investment Calculator

When it comes to calculating your investments, there are many different things you may want to find out. Calculator.net Investment Calculator uses multiple different calculators to help you with your investing journey.

To find your total investment after a period of time, all you need to do is enter your starting amount, time frame, return rate, compounding period, and contribution amount. For example, if you start with $20,000 and invest $1000 a month for 10 years at a 6% return annually, you’ll end up with $198,290.40. This figure is broken down into the amount invested, and interest gained.

The other investment calculators use similar formats to find out:

How much you’d need to invest each month/year to get a certain return. You can enter your target investment, the initial amount invested, rate of return, time frame, and when the interest will compound.
What return rate you’ll need to hit your target investment. Enter your initial investment, target, additional contribution amounts, and time frame to find out your required rate of return.
The starting amount you need to reach your investment goal. Enter your target, rate of return, additional contribution amounts, and time frame.
Your investment time frame. You’ll need to enter your initial investment, investment goal, rate of return, compounding period, and additional contribution amount.

Best for: People looking to play around with different investing variables. If you’ve got a target investment total in mind but are unsure about the other metrics, this is the calculator for you.

How To Make Your Charitable Donations Go Further With Supergenerous

Sun, 24 Jul 2022 12:00:00 +0000

At Supergenerous, our mission is to supercharge the impact of human generosity. We’ve created a digital platform and service to allow everyday Kiwis to effortlessly regift up to 33% of their charitable donations — meaning charities, schools and religious organizations get a top-up on the original donation rather than those unclaimed donation tax rebates sitting there at the IRD.

We’re big fans of making the most of your money, so we reckon PocketSmith users are already on the same wavelength as us. We’ll tell you a bit about us and what we do first, and then we’re keen to let you know why a PocketSmith x Supergenerous combo is a good thing for everyone.

How Supergenerous came to life

Our research uncovered that over 60% of Kiwis who donate to New Zealand charitable organizations don’t claim their donation tax rebates — some of them don’t even know they can. If these aren’t claimed, they just sit there with the IRD, and after four years they disappear. With approximately 250 million dollars of tax rebates going unclaimed every year (and over 1 billion over the past four years!) this is a huge wasted opportunity. So Franco Sabadini and I got to work on creating a digital platform and service to make it easy for anyone to access rebates — critically, without having to fossick around and dig out old receipts. That platform, Supergenerous, has been helping Kiwis do just this for two years now and we now have thousands of registered users.

We are a social enterprise rather than a charity, meaning we charge a small 10% + GST fee on rebates claimed. We use those funds to deliver our service and continue to improve our platform.

The Supergenerous mission

Our aim is to help New Zealanders claim their donation tax rebates without hassle. Once people sign up to Supergenerous, we collect their donation information, claim on their behalf and they will never have to make a donation tax claim again. We also provide them with the choice to collect the rebates or re-gift it on their behalf to the charities they support. Their regift then becomes a new donation which we claim the following year, so the giving… well, it keeps on giving! We’ve already helped generous Kiwis claim over $4.5 million dollars and regift $277,000 — and we’re just getting started.

We’d love to help unlock your generosity

We know that people who are on top of their finances and have a clear picture of what’s coming and going are better positioned to put aside a portion of their income towards charitable giving. With PocketSmith, all of those donation transactions are right there at your fingertips — we ask you which charities, schools and religious donations you’ve given to in the last four years, so it’s perfect for making the Supergenerous sign-up even easier. Beyond donations, the rebates you claim back can also be put towards your PocketSmith subscription to supercharge your financial productivity for the year ahead.

Here’s what to do to sign up with Supergenerous:

Find your IRD number and have it handy
Have your PocketSmith account ready so you can see your historical donations
Head to our sign-up page and input your details
Sit back and relax while we take care of claiming your rebates

Once we’ve got your rebates in hand, we’ll let you know.

If you’re interested in learning more

We work with New Zealanders only at the moment, so you’ll need to have a current taxable income in Aotearoa.
An eligible donation is a donation over $5 made to an approved donee organization (a charity, school or religious organization) within the last four tax years.
Supergenerous is approved by the IRD as a Tax Agent, for the purpose of making donation tax claims on behalf of individuals in New Zealand. We’ve already helped thousands of users claim and re-gift or collect rebates.
If you’ve got any other questions, you can check out our FAQs page.

We’d love to have you on board to help us supercharge the impact of your generosity!

Guillaume is on a mission to make NZ the most generous country in the world! He has worked in over five countries for start-ups and multi-billion-dollar asset management firms and is using this experience for good.

How Does Rising Inflation Affect the Self-employed?

Thu, 21 Jul 2022 12:00:00 +0000

Inflation is rising around the world, and the cost of living is soaring as a result. It’s a challenging time for everyone, but inflationary pressure presents a unique challenge for those in self-employment. Here we share the PocketSmith guide to navigating inflation when you’re self-employed.

Firstly, what is inflation and why is it rising?

Before we share our hot takes on inflation for self-employed workers, let’s break down what’s happening with inflation. Inflation is the rate at which the cost of goods and services increase. A healthy economy has a stable level of inflation around 2% — anything above or below that is cause for concern.

In 2022, inflation is rising for a few reasons, including:

Soaring demand for goods and services following the easing of lockdowns and health restrictions
The Russian invasion of Ukraine causing disruptions to supply chains and distribution networks
Supply issues as a result of severe weather events.

All of these factors affect self-employed workers differently. Here are some things you can do to manage the effects of rising inflation.

Check in with your cash flow

The most immediate effect of rising inflation is rising prices across just about every industry, so you may find the costs of materials and systems you use have increased. This can impact your profit margins and the overall profitability of your business activities. Spend some time checking in with your costs of doing business, and establish whether the gap between your expenses and your revenue has changed.

Cut costs or increase prices

If you’ve noticed your profit margins are decreasing as a result of rising inflation, it could be time to cut costs or increase prices. Maintaining a sustainable amount of profit is key to ensuring your business survives this inflationary period. Recalibrating your pricing strategy can unlock new financial efficiencies for the long term, too.

Assess demand for your products and services

Think about how your consumers will be experiencing the effects of inflation, and the extent to which it could impact demand for your product or service. If your business sells a luxury product or service, you may notice demand decreasing as your consumers feel the pinch. On the other hand, if you produce essential goods and services or provide a cheaper alternative to things that are commonly used, you could find demand increases as the cost of living rises.

Factor demand fluctuations into your pricing strategy and overall view of the coming months in order to best bolster the cost of inflation on your self-employment income.

Check in with how much you’re paying yourself

As a self-employed worker, your income is responsible for paying both your business expenses and covering your personal costs of living. Don’t forget to review your personal expenses, too. You might need to pay yourself more to cover your own costs of living, which could in turn impact your business profitability.

Using a personal finance software like PocketSmith can give you a clearer understanding of how much you need to be paying yourself, while identifying areas to save money.

Book Review: “Your Money, Your Future: The Realest Guide to Finding Financial Freedom”

Wed, 20 Jul 2022 12:00:00 +0000

As the host of Cooking the Books, one of New Zealand’s top podcasts, journalist Frances Cook is one of the country’s leading personal finance commentators. Cook released her debut, “Tales From a Hot Financial Mess”, in 2019 to a widely positive reception. Her new book “Your Money, Your Future: The Realest Guide to Finding Financial Freedom” was published in early 2022 and became one of the best-selling NZ books in the weeks following its release.

“Your Money, Your Future” covers the nuts and bolts of personal finance and achieving financial freedom. Cook presents step-by-step information to teach the reader everything from Finance 101 to FIRE (Financial Independence, Retire Early), how to earn more via upskilling, negotiating pay rises, side hustles and more.

A couple of my favorite takeaways

Screw you, pay me

Personal finance culture can often come across as restrictive. Everyone has heard the spiel of “you wouldn’t be so broke if you didn’t eat that avocado toast” or “stop buying coffee from Starbucks and invest it instead”. This mindset can become negative as it places all the blame of your financial situation on you. You spend too much money. You don’t place enough priority on investing. In reality, the amount of money you can save by restricting your spending is limited, while the amount of money you can earn is (technically) limitless. This is why I love how Cook uses chapters 3 and 4 to discuss how to actually get raises, and why you shouldn’t have an illogical attachment to where you work. Not negotiating for higher salaries, especially at the beginning of your career, becomes a difference of $1 million in lifetime earnings.

You can’t beat the market (so buy the whole thing)

This chapter is excellent for newbie investors, and even more experienced investors can gain useful reminders here. Cook details the reasons why we need to grow our wealth before retirement (most millennials won’t be able to retire before 75 due to rising living costs, high student loan debt, and holding too much of their assets in cash) and discusses how you can invest to have the highest chance of growing your wealth in the long term. Namely, Cook details what index funds and ETFs are and explains why passive investing generally beats active investing in long-term returns. It’s an incredibly valuable reminder for anyone considering active investing — the majority of professional investors don’t beat the market over time, so what are the odds that you will?

Personal finance made for Australasia

I really liked how Cook made her book relatable to those living in New Zealand and Australia. Most of the personal finance and investing content available is incredibly US-centric. That’s great if you live in the US and need to use its financial system but can become slightly confusing when you live elsewhere and have to transpose the information you know to a different system with different rules. New Zealand, for example, has a very similar financial system to the USA but certain aspects such as 401Ks and insurance have some larger differences. Of course, most of the information that Cook presents is universally applicable. Still, some extended explanations, such as why NZ should stick with the 4% retirement rule when compared to Australia, lent to the sense that it was written for me.

“Money is the grease that keeps our lives moving, but our lives are deeply personal. Everything, everything, will need to be adapted to your own personal situation.”

- Frances Cook, Your Money, Your Future: The Realest Guide to Finding Financial Freedom

However, a running theme throughout the book is that, while Cook touches on many points, it can sometimes feel like you aren’t getting as in-depth information as you could. You can see this in the chapter on debt. Cook makes an excellent case of why paying off your current debts is essential and outlines two basic strategies to accomplish it: The debt avalanche and the debt snowball. While both methods are effective, I wish Cook went into more detail surrounding the positives and negatives. It’s generally understood that the debt avalanche is the best on paper if we consider human emotion and motivation, but the debt snowball method comes out on top. But that’s expected from a book that only runs about 250 pages. It’s not meant to teach you the ins and outs of high-level financial concepts — it’s supposed to give you an introduction to examining your finances and sorting out ways to achieve financial freedom. At that, it’s more than successful.

The afterword “The money manual” and the glossary are excellent additions to the book. By adding these towards the end of the book, Cook gives some quick lessons you can understand at just a glance and useful personal finance definitions. Having these all in one spot lets you refresh your memory quickly without flicking through the entire book for a specific page.

Overall, I would recommend “Your Money, Your Future: The realest guide to finding financial freedom” to all New Zealanders and even Australians. It has to be said that personal finance books focused on personal finance in general or the USA specifically are a dime a dozen. Ones that present personal finance through a Kiwi lens are much harder to come by and thus far more valuable for New Zealanders.

In her afterword, Cook says, “Money is the grease that keeps our lives moving, but our lives are deeply personal. Everything, everything, will need to be adapted to your own personal situation.” I think that’s one of the good things about this book. As the title suggests, it’s your money and your future, so Cook gives you the information so that you can adapt it to your situation.

Book cover used in banner image from Penguin Random House

The KiwiSaver Savings Gap Between Men and Women

Thu, 14 Jul 2022 12:00:00 +0000

Women have 20% less in their KiwiSaver than men

A report outlining that “women have 20% less in retirement savings than men” makes quite the headline. As a woman, I feel deflated just reading it! My feminist sense of justice is poised for an argument. However, I don’t like arguing, so it makes better sense to dig into this statistic to help answer the question, “is this my reality?”

Te Ara Ahuna Ora Retirement Commission conducted a major study of almost three million KiwiSaver members, and their research revealed many findings.

Two of which were:

There is a 20% gender gap in KiwiSaver balances
Regardless of gender, none of us is saving enough for retirement

Both points are pretty sobering!

Statistics are great, but they never tell the personal stories behind the numbers

I know, just by looking at the numbers, that I could have easily been that statistic, having far less in my KiwiSaver than the man I often compare myself to: my husband Jonny. But to provide hope to others and give away the punch line of this article, I’m no worse off than him when it comes to retirement savings. In fact, I have 24% more in my KiwiSaver than he does! And both of our balances are far higher than the average.

This was by design, not an accident.

KiwiSaver began in July 2007, and Jonny and I signed up straight away. This newfound workplace perk coincided with me permanently stopping all paid employment when our daughter was born in November of that year. Those KiwiSaver employer contributions were good for the brief time I received them! With Jonny continuing to work full-time in his own company, he began voluntary contributions to his KiwiSaver fund, and his employer took over this input.

I clearly recall seeing the direction both of our KiwiSaver balances were headed in if this arrangement continued:

No new money being invested into my fund
His balance continuing to grow due to regular contributions

I immediately started making voluntary contributions to my fund upon stopping working. I transferred my entire Australian superannuation balance into my KiwiSaver, giving my fund a small boost. I made contributing to my fund an item in our household budget and created a voluntary monthly contribution into my KiwiSaver fund.

Given we have had fully combined finances from the day we became a permanent couple, this money came from our household income, i.e. Jonny’s take-home pay.

Whether working or not, always contribute to your retirement fund

As the years have rolled on, Jonny and I have oscillated between not working, part-time PAYE employment and self-employment. To say our income is ‘variable’ would be an understatement.

But the one constant has been never-ceasing contributions to both of our KiwiSaver funds, either from voluntary contributions or PAYE employment. Or both.

For the last fifteen years, we have never missed a single month, consistently contributing to our KiwiSaver as a priority investment, even when things get tight financially. The result, when I look at our KiwiSaver balances, is that mine is 24% higher than his!

That small cash injection from my Australian superannuation fund (being rolled into my KiwiSaver very early on), my progression into part-time PAYE employment, and ongoing voluntary contributions have meant that my investment has grown nicely over time.

Therefore, I think it’s essential to look at the findings of this study in relation to your own situation.

Try not to drain the fund

Although I understand why we might need to use our KiwiSaver for a first home deposit, it does have massive consequences for our future retirement. The most significant blow our KiwiSaver funds can take has nothing to do with the performance of the share markets or the fees charged by any providers; it’s because we can drain our KiwiSaver fund effectively to zero if we are buying our first home. You have to start all over again in building up that nest egg.

We could all do better in saving for retirement

Whether men are ahead of women in the size of their KiwiSaver balance shouldn’t have men feeling smug or women feeling left behind. Because the fact is that according to this study, we are ALL behind when it comes to saving for retirement in New Zealand.

I’d encourage you not to focus on the ‘minimum’ contribution you can make to your fund but instead think about the end balance of your retirement fund. Just take a peek at our friends across the ditch in Australia; their superannuation contributions are required by law to be far higher than ours, meaning that their balances are substantially greater from the get-go and that just compounds over time. How much ‘should’ you be contributing today to reach your goal?

Be the change; educate your children

This is why I focus so hard on teaching my daughter how money works, reducing any disparity I can, and putting her on the right side of any statistics. I believe in giving children a head start by building their financial knowledge early in life and contributing financially to their KiwiSaver fund if you can. Having signed my daughter up to KiwiSaver at birth and contributed the equivalent of two flat whites a week to her fund ever since, I think she will sway a few statistics in the years to come when she is compared to her peers. Even though there is no government match or employer contributions until she reaches 18, her fund performance has given me the best insight into what regular contributions can grow to over time.

When we reach 65, no matter our gender, we will receive government superannuation, meaning that the amount you have invested in KiwiSaver will be the cherry on top of this fortnightly government payment. It’s up to you to decide how large that cherry will be. If you have time before you retire, implement some changes and move what levers you can to increase your chances of a substantial retirement nest egg.

Moving From Pocketbook to PocketSmith

Fri, 08 Jul 2022 00:00:00 +0000

[Update: 8 August]: Pocketbook shut down its app on 5 August, so you will no longer be able to access your historical data. This article is a guide for folks who already have a CSV download of their Pocketbook data. If you don’t, not to fret! You can still have a great PocketSmith experience by connecting your bank accounts and importing transactions from over 163 institutions in Australia.

To get started, you can either follow the instructions below to start with your Pocketbook CSV data, or you can start afresh with 50% off your first two months of PocketSmith Premium or Super.

Welcome, friends!

We’re so pleased that you’re here, reading this guide! PocketSmith has a range of tools that makes moving from Pocketbook a breeze. In this blog post, we’ll walk you through getting your transaction data imported via the Pocketbook Express, then using our auto-budget tool to set up your budgets based on past spending, and getting your accounts hooked up to a feed again.

A bit of background: we’ve been fully independent and bootstrapped since we were founded in 2008. Many other personal finance companies have come and gone since then, but by building the best tools that we’d be proud to use ourselves, we’re focused on building a company to last.

Let’s get one thing out of the way: PocketSmith is primarily a premium application. We only make money through people like you paying a fair price for great software — no tricks, kick-backs, or selling of user data here.

We have a free plan which is excellent for people with simple needs, however, bank feeds are only available on paid plans. If you’re looking for a completely free application with bank feeds, you’ll be best served to look elsewhere (keeping in mind the adage that if you’re not paying for it, you are the product).

With that said — we’re running a limited-time special promotion, exclusive to ex-Pocketbook users. Follow the steps below, and the offer will pop up as you work through things. We can’t wait to get you started, so let’s move on!

Step one: Export your data from Pocketbook

Pocketbook provides you with a CSV file that you can export. The export contains all your transactions, categories, labels, and financial institutions stored in Pocketbook. You can import this CSV file into PocketSmith to get all this data imported at once. Just follow the steps below:

Sign in to your Pocketbook account.
Head to the Transactions page.
Click on the Export (CSV) button at the bottom of the left-hand sidebar of Pocketbook’s transaction page.
This will start the download of a CSV file containing all your Pocketbook data. Save this to your computer and move on to the next step!

Step two: Import your Pocketbook data into PocketSmith

Once you’ve created your account at PocketSmith, you’re all set to get your Pocketbook data imported. We’ve got an express import tool that accepts Pocketbook CSV data files and creates all your existing categories, transactions, accounts, and financial institutions you had with Pocketbook.

If you’ve just started, you’ll be on the “Let’s get started” screen. Click See more > at the bottom of the screen, then click the Import from other app button. A “Move from another app” popup will be shown — click the Pocketbook logo.

The import from Pocketbook button when starting

If you’ve already started getting set up, you can head straight to the Pocketbook express import tool. You’ll get the option to clear existing data when you import.
Upload the CSV file you downloaded from Pocketbook, and follow the prompts. Your transactions, accounts and financial institutions will be imported, along with your categories as they were in Pocketbook.

Import from Pocketbook confirmation

In progress import from Pocketbook

Set your balances. Once your data has been imported, you’ll need to set the current balances of the imported accounts as the CSV file from Pocketbook does not contain this data. This ensures that the balances within PocketSmith are correct immediately after import.

Setting balances after an import from Pocketbook

Rejoice! Your Pocketbook data is now in PocketSmith! You can head straight to your new Dashboard or peruse some of the other features under Reports. Once ready, move on to the next step — getting your initial budgets set up.

Step three: Start your budgets based on your data with a single click

In PocketSmith, each category has a budget — which is just a target of spending or earning you want to achieve for a particular category. Budgets are highly flexible and customizable in PocketSmith, and you can tweak each budget for each category to suit your needs. If you’d like, check out our budget tips and tricks article on the Learn Center.

Head to the Budget page from the main menu of PocketSmith.
Click the auto-budget tool link, from either the toolbar or the section at the top of the Budget page.

The budget page immediately after import

This will display the auto-budget tool popup — click the large green Start auto-budget tool button to start the budget calculation process. This might take a few moments, depending on how many transactions you have.

The auto-budget popup showing the confirmation button

PocketSmith will show your automatically created budgets in the popup window. If any budgets are in a category that you don’t want to budget for — such as a large budget for Transfers — click the cancel dash icon that appears next to the budget when you hover over it. This will remove the auto-budget for that category, such as the “Household” budget in the screenshot below.

Automatically created budgets, showing the removal icon for "Household" budget

When you close the popup, you’ll a budget analysis based your newly created budgets. You can edit a budget by clicking on the three-dot menu next to each budget and choosing “Edit / Delete budget”. If you want to see the detailed historical analysis of any given category’s budget, click on the category title.

Created budgets shown in the main Budget page

Drilling down into the historical analysis for the Groceries budget

Once you’ve checked out your budget analysis, head to the Calendar page to see your budgets in a different format. You can edit individual budgets here, if you need to make changes after the auto-budget process — either all instances of a budget, or a single one. Just click a budget in the calendar to edit it, and you’ll be guided from there. It’s also where one of PocketSmith’s key features is clearest — your budgets come together with your current balance to forecast your financial future!

The PocketSmith calendar, showing budgets and the forecast graph

We’ve only scratched the surface of what PocketSmith can do with budgets here. From here, follow your nose and consult our Learn Center when you need to.

But now, let’s get the accounts you’ve imported linked to a bank feed to start receiving new data.

Step four: Connect your accounts to a feed

Bank feeds are a premium feature in PocketSmith, only available on paid plans. Once you’ve upgraded or taken advantage of our special offer (please get in touch if you didn’t see the prompt), head over to the Manage Feeds page to begin.

We have a complete step-by-step guide on our Learn Center illustrating how to get your bank feeds set up — if you’re not the sort of person who likes to follow their nose. However, getting the feed added and authorized should be straightforward if you’ve set up bank feeds before in Pocketbook.

Once the feed is authorized, you’ll be able to link up the accounts you imported from Pocketbook with the feed accounts found. This will ensure you won’t have duplicate accounts or transactions — follow the guide on the Learn Center here.

Step five: Celebrate everything that PocketSmith can offer you

Well done, you made it! We hope that the transition to PocketSmith was straightforward for you. If not, please get in touch — we have a fantastic support team who’d love to hear from you.

We’re keen to provide a smooth landing for all the people who’ve been with Pocketbook for years, so if there is anything more we can do to help, please let us know.

James is the CTO and co-founder at PocketSmith. He loves tech from software to hardware to music, and is passionate about technology being a net-positive in people’s lives. He lives off-grid with two humans, two axolotls, two rabbits, one dog, and too many possums.

With PocketSmith, Alex Gets Macro Visibility Over His Finances

Mon, 04 Jul 2022 12:00:00 +0000

Read how Alex uses PocketSmith to remain elastic in tracking his budgets and adjust to any unforeseen circumstances.

Tell us a little about yourself?

I’m a husband, dad, part-time bad poet, and information systems manager. I’m both left brain, and right brain; psychologically, spiritually, and politically. This means I tend to sit on the fence in edgy debates, but play a very good devil’s advocate to explore viable solutions to problems, and gain complete satisfaction from penning terrible rhyming tales as bedtime stories. I also fly kites (both at the beach, and metaphorically) and enjoy night-hiking (it’s cooler in the tropics, and you can’t see how far you’ve got to go).

How would you describe your role in your household?

I take on responsibility for macro-financial matters; who to invest superannuation with, management of mortgages and tracking bills, etc. And as it’s related to my role at work, I also try to keep my family safe online by sharing with them best-practice security and banking techniques.

What drew you to PocketSmith?

I’ve previously written feedback where I said that I’d tried “Xero, MoneyBrilliant, YNAB, Pocketbook, QuickBooks, Wave… nothing managed to marry the GUI with function, and be appropriate for an individual managing a family budget, at the price point PocketSmith offers.” That was probably two years ago, and it still stands today.

There’s also a bias as I saw it was a Kiwi platform (true to my right/left brain summary, I herald from both South and North Islands), although to be fair, I only discovered this after thinking “this is cool”, and looking into the team that built PocketSmith in more detail.

How long have you been with us?

Since Q2 2020, I believe.

What do you primarily use PocketSmith for?

Managing my family’s budget and providing macro visibility over my finances. It’s super important to be able to understand what is remaining in any specific budget, and to allow ongoing adjustments in order that unforeseen events can be accommodated.

I also use it to track income and expenditure related to side gigs, which helps enormously at tax time.

How has PocketSmith changed the way you do money?

Doing money is like juggling jelly in a pair of oiled jandals — it doesn’t matter how detailed your preparation is, there’s likely to be unforeseen variables that need to be accounted for when you’re already committed to your plan.

PocketSmith is the antidote to oiled-jandal jelly juggling. It’s super easy to adjust budgets on the fly, and see that everything’s going to be okay. This was one of the things that sold me.

It’s the only tool that I’ve found that allows both zero-dollar-type forecast budgeting, and post-spending tracking budgeting, without compromising either. And possibly because of this, it’s moved me to a more dynamic and big-picture way of managing my finances, rather than being lost in the details.

What are your favorite features?

My favorite feature is the Budgets page (go figure!) where I routinely spend a lot of time changing the time period I’m viewing to see how I’m tracking. I like the fact that while this week, for example, may have blown a particular budget, I can see that within the context of the entire month (or even a year) I’m okay, and can accommodate this over-spend.

Got any tips?

I use custom categories, and highly recommend daily checking-in to confirm or categorize transactions. Building this into my daily routine has helped provide financial confidence, as I remain on top of budget health.

Secondly, I love creating money out of nothing. Okay, so it’s not really out of nothing, but when something unexpected presents itself that needs money put aside on a regular savings plan, I’ll look at my overall budget for individual budgets that have some wiggle room. It’s as if I’ve created money out of thin air, when really, PocketSmith has done its thing — informed me where I’ve underspent on specific budgets, and therefore allowing these funds to be allocated to this new budget.

What’s the best money decision you made in the past 12 months?

Upgrading to the PocketSmith Super plan! I’ve ended up connecting all financial accounts that I can, including superannuation, and multiple bank accounts. The comprehensive overview of my assets, liabilities and budgets (including offline accounts or assets) is absolutely worth paying for the top tier in my view.

Should You Combine Finances With Your Partner?

Sat, 02 Jul 2022 12:00:00 +0000

Combining finances with a partner or spouse is a hotly contested topic. Some insist you must, others are more fluid. Ultimately, there’s no right or wrong as long as both of you feel comfortable. Here are a few things to consider when making your decision.

How long have you been together?

Shared finances in a relationship aren’t generally something you dive into from day one. Consider how long you’ve been with your partner and the seriousness of the relationship. Combining your finances is a big deal, and you don’t want to rush into it with someone you’re not sure about.

Are you on the same page about the future?

There’s a lot to consider about the future, and not just whether or not you’ll stay together. Even if your personalities are ultra compatible, if you want different things for the future, your finances can get complicated fast.

Have conversations about both your future together and your futures individually. Are you on the same page about kids? Which one of you would work and who would stay home with the baby? All of these factors can influence whether or not you’re ready to combine finances. If you’re not aligned, it’s probably not time.

What are your individual financial situations?

Another factor in your decision-making is your individual financial situations. If one of you has debt to pay off and the other is a savvy saver with lots of cash stashed, it could make it harder to combine finances if you’re not on an even keel.

That said, some couples are happy to take on one another’s financial past, so have the conversation with your partner and see where you both stand.

Is now the right time to combine finances?

If you’re thinking “Help! I don’t want to combine finances!”, that’s okay! If you’re not ready now, maybe it’s just not the right time. Deciding when to combine finances isn’t a one-time conversation. Be open to it being a journey, and consider combining when your lives become more and more entwined, and when you can benefit from co-financing.

What are the actual benefits to you?

Ask yourselves what you hope to gain from combining finances. Some couples combine money in order to balance out a higher and lower-income earner in the household, or to work towards shared goals with one pool of money. If you earn a similar amount as each other, hustle towards your goals individually and make your own spending decisions, combining finances might just complicate things. Being clear on how it will add to the relationship is important in making your decision.

What happens if you separate?

No couple wants to plan for separation, but when it comes to money it’s important to think about. If you’re combining finances in marriage or a relationship, open the conversation about how you’ll handle things if you separate. Women in particular can suffer great financial impacts after divorce or separation, so think beyond the immediate future and be prepared for what you’ll do if things go wrong.

Tips for couples’ financial harmony

Set a date or milestone to combine finances

If you think your relationship would benefit from combining finances but you’re not quite there yet, set a date or a milestone to make the switch. This helps keep you engaged with the process of shared finances, and ensures you don’t put it in the ‘too hard’ basket.

Opt to semi-combine

There’s more to couples’ finances than the ‘what’s mine is yours’ approach. If you don’t think going all-in is for you, consider other ways to benefit from shared finances. Many couples keep most of their money separate with the exception of a shared expenses account and shared savings account. This ensures you’re splitting joint expenses equally, but you still have the freedom to manage your own money however you like.

Have a monthly money date

Trust is really important when it comes to money, whether you’re combining finances or not. Setting a monthly money date or where you review your spending, monitor goal progress and raise any issues or watch-outs can be transformative for your financial wellbeing as a couple. A full visibility dashboard like PocketSmith can help you unpack trends and unlock opportunities to stash more cash together. Plus, you can do it while drinking wine. Win!

Set goals together

Combining finances with a fiance, spouse or partner can be daunting, especially if you’ve managed your own money for a long time. A fun way to get on board with shared finances is to set goals together. Working towards shared goals brings you together as a couple, while also sparking exciting conversations about what’s next for your relationship.

Rollover Budgeting: A Clearer Picture

Mon, 27 Jun 2022 12:00:00 +0000

Since the initial release of rollover budgeting, we’ve been constantly tweaking and refining its inner workings — improving robustness, and ensuring that it works for all of the use-cases you can throw at it. With the fundamentals all operating smoothly, it’s high time we turned our attention to the visual side of rollover budgeting, and we’re excited to share the result!

Visualizing rollover budgeting

At its core, rollover budgeting changes how much you can spend (or earn) in a given period before you exceed your budget. If you under-spend on your weekly craft beer budget this week, then you’ll have more to spend next week before going over budget — or, you can keep that extra surplus to be used any time in the future (or even distribute it to another budget altogether).

Visually, however, this information has been represented in PocketSmith in a highly simplified manner ever since rollover budgeting was first introduced: on the Trends chart, an additional dark purple Budget with rollover line was added to compliment the usual Budget line. This new line represented your adjusted budget amount after taking rollover into account, but aside from this, each budget period was treated no differently than a regular (non-rollover) budget period. It also had the unwanted side effect of giving the impression that you need to adhere to the new, adjusted, budget amount — which goes against one of the key aspects of rollover budgeting: being able to carry over a surplus from one budget period to the next as far into the future as you’d like.

The original Trends chart with opaque rollover information

Rollover budgeting is much more nuanced than this visual representation. Notably absent is any insight into the actual surplus and deficit, and what portion (if any) of those is being carried over to subsequent budget periods. While the popup for each column includes some rollover information, this is still limited to just the rollover adjustment amount — a positive or negative amount added to your usual budget amount.

The original Trends chart popup

A clearer picture

To help better visualize the key aspects of rollover budgeting we’ve enhanced the Trends chart to show more detail when a budget period has a rollover surplus or deficit:

Column segments

The usual column segments have been split to show the portions that relate to a rollover surplus or deficit, providing much-needed insight into things like how much surplus has been used vs how much has been carried over to the next budget period, and helping to build a clearer picture of how and why a budget period has been adjusted up or down.

As before, information about rollover budgeting can only be shown when the Trends analysis is set to View by budget period in the toolbar.

Chart legend

The chart legend has been spruced up and organized into logical groups to make it easier to understand what each item represents.

Budgeted amount

The budgeted amount lines (light grey and dark purple) have swapped colors; now it is the usual budget amount shown in dark purple, and the rollover-adjusted budget amount is light grey, making it clear that the more prominent line is the budget’s baseline — any rollover adjustment will be added to, or subtracted from, this line. This means that the rollover-adjusted line is much less prominent before, better illustrating that this is not a target that you have to adhere to.

Refunds and deductions

We’ve moved the yellow Refunded/Deductions segment to sit alongside each column, rather than being stacked on top, visually separating these amounts from the main columns and reducing cognitive load.

The new Trends chart with a clear rollover breakdown

The breakdown is also reflected in the popup for each column, with unimportant information (such as the $0 Refunded and Overspent amounts shown in the screenshot of the original popup) removed:

The new Trends chart popup

We’re not done yet

There’s still more in the pipeline for rollover budgeting in order to bring similar detail to other parts of PocketSmith, so stay tuned. As always we appreciate your feedback so don’t hesitate to get in touch!

Mike is a software engineer at PocketSmith and chief architect behind rollover budgeting. He’s a burgeoning woodworker and not-half-bad ukulele player, and has been getting a little too carried away with home automation.

How I Use The Traffic Light System To Prioritize With PocketSmith

Mon, 20 Jun 2022 00:00:00 +0000

Traffic lights are pretty simple, right? Green for go, orange means slow, and if it’s red you’d better Stop Right Now. It’s not a hard system to understand — which is why I use an adapted version for my finances.

A year ago, I was using a boring but adequate spreadsheet for my budgeting. Problem was, it wasn’t doing the one thing I really wanted: traffic light color-coding. I had the system in my head, but I couldn’t see it on my screen.

Then I found PocketSmith.

Traffic light finances: The overview

See, I’ve always had variable income year-to-year which means I’ve grown used to trimming or growing my budget accordingly. The system is simple: red for bare-bones essentials, Stop, Do Not Pass Go; orange for investing and giving, Slow And Steady; and the all-important income, Green For Go.

When I was unemployed, I stopped spending and investing, and dropped back to the red category of essential living expenses. When I’m in stable work, I can budget from red through orange to the whole dang rainbow. Nested color-coded categories make it easy to see where my priorities are. If I have a drop in income, it’s easy to pause budgets for all categories in that color.

Traffic light priority categories

Green

I start with income because it’s easy. This is what I base all my other colors around. If the light isn’t green, I stop on red. If the light is green, I budget based on how much money is coming in and what my needs are at the time.

Red

Even with a decent income, I try to keep my spending contained, which means the red category sits around the 50% mark of my monthly finances. This is my ‘survival number’ — the minimum I need to keep my head above water. It includes rent, groceries, transport, and utilities, with sub-categories for phone, power, and internet.

I find the Dashboard Donut a fantastic way to see this at a glance.

Orange

Ah, orange. This is my slow-growth-for-the-future category.

It’s evolved over the years. Once it was the beginnings of a house deposit stashed in the bank. (Remember when term deposits would give you more than 3% p.a.?)

But who can afford a house, right? Now it’s a bit of that, a bit of Kernel’s index funds, and a steady 10% tithe to give something back to the community.

Traffic light not-so-priority categories

Light blue

This is where I branch out from ‘basic traffic light’ to ‘full rainbow’, but only when I have a level of income that lets me.

Light blue is any voluntary debt repayments — not minimum payments, they’d be in red, but over-and-above. For me, it’s my student loan.

Dark blue

The next bite on my donut is discretionary spending. This is anything that isn’t essential but isn’t quite at the level of ‘complete lavish luxury’ either. It looks different for everyone. Think regular haircuts, new shoes, going for coffee with friends… that sort of thing.

To be honest, a dentist appointment might fall under this. But I digress.

Purple

This isn’t just any purple. This is PocketSmith Purple, for all your most luxurious, splash-out-y expenses… like your finance app subscription. Or shouting your best friends dinner out at a restaurant. Or splurging on a new houseplant or three (No? Is that just me?) I even have a Regret category here, but that’s another story!

It’s a lesser-priority category, so I make my spending proportionately less. If you look at the Earning and Spending Donut, you’ll notice I put about half into red, then progressively smaller amounts into each of the other categories.

Incidentally, this makes it super easy to tell if my spending is a little out of control one month. The focus should be on the traffic lights. Green, red, orange: income, essentials, slow growth for the future. If purple takes up a full quarter of the donut, then Houston, we have a problem!

The traffic light system might be simple, but simple is good. It cuts down on decision fatigue. It makes slashing expenses during tough times a breeze. And once you’re on your feet again, it opens out into a whole world of brightly-colored possibilities.

Just do me a favor and never run the red light.

Q&A: My Experience Buying a House With Friends

Mon, 13 Jun 2022 00:00:00 +0000

First up, congratulations on becoming a homeowner! We’d love to hear a little about your property.

The house is situated in Hawea, a small town about 15 minutes drive away from Wanaka. [For our international readers, that’s in the South Island of New Zealand.] It has four bedrooms, two garages, and a huge backyard. It’s surrounded by mountains and has a view of the lake. It’s a beautiful place.

There’s lots of capacity to have guests over. In fact, over Christmas and the summer, we had more than a dozen people staying every night for several months, and it was great.

You’ve done something that some of our readers might be considering themselves. Can you tell us more about what led to your decision to buy a house with friends?

I co-own the house with three friends. Greg and Rimma are a couple, and then there’s me and another friend, Margot. We all know each other from the climbing and festival communities, share a love of the outdoors, and have similar life values. It’s pretty hard to articulate, but we all try to be open, adventurous, and non-judgmental. Also, our social circles are pretty similar, which means we have lots of people coming through to stay, which I really like.

We bought the house during the Delta lockdown of late 2021. Greg and Rimma were in Wanaka on holiday. They decided to stay put when the lockdown happened, and looked into real estate there. When they saw the Hawea property, they rang me and asked if I was serious about buying a house with them. On a previous climbing trip, we’d discussed the possibility of purchasing a property together.

So when they rang to ask about the house, I just said, “sure.” I didn’t put a whole lot of thought into it. It was essentially this: Greg and Rimma are great people, and I have a whole bunch of money in my account. So why not? It was either that or buying a van in North America and Europe! [For context, Derek is currently in the longest work stint of his adult life.] I then told them that I had also discussed — very vaguely — buying a house in Wanaka with a friend of mine, Margot, so if they wanted a fourth person, one might be willing and able.

We took ownership of the house in mid-October, and I moved down from Wellington at the start of November. Since then, all four of us have been living together.

What are some of the benefits of buying a house with friends?

One significant benefit is the increased leverage when you combine incomes with others. There’s no way I could have afforded the deposit on this house.

Another benefit is that we’re all invested in the house. If you’re a tenant, you don’t care as much about whether you scratched the wall. When you own the home, it’s in everyone’s interest to maintain and improve it.

Greg is skilled in DIY and constantly adds improvements to the property, like a pizza oven and shelving in the garage. The rest of us have insisted that he charges us for his labor because he’s adding value to the house. But because he’s so generous, I think he charges us a really conservative amount!

Everyone tries to bring something to the house. Margot loves gardening, so she looks after that and grows tomatoes, kale, and lots of different herbs. I take photos and have put up some massive panoramas on canvas around the house. Rimma and Margot are both very enthusiastic sourdough bakers.

And lastly, another benefit is just sharing the company of people you like. Three of us work remotely from home, and it’s nice to know that there are people around, so you’re never quite on your own all the time.

Beautiful Lake Hawea, where Derek lives after buying a house with three of his friends.

And what are some of the risks?

The worst-case scenario would be if I decided I didn’t want to live there anymore. Like if, for whatever reason, I hated the people I lived with or became suddenly extremely allergic to lake views from my bedroom and all-day sun in my room.

Before this, I lived in Wellington in a tiny little room with a view of a retaining wall, so I was comfortable taking the risk!

What sort of conversations did you have with your friends before you made the decision?

We’ve had lots of different conversations covering a range of scenarios: from what happens if the couple breaks up or decides they want to have a kid, to the possibility of one of us losing our jobs or deciding to go overseas for an extended period.

Were there any legal considerations you had to factor in?

Friends of ours passed us a co-ownership contract. These friends — four couples — had also bought a house together. So we used that template and adjusted it for us. We’ve since shared our contract with other friends who are also buying as a group.

All the key issues that cropped up in our conversations are captured in the contract, including:

Setting up an emergency fund that we have to put money into to cover scenarios where one of us is suddenly out of work and can’t pay the mortgage.
What happens if one of us decides to sell our share of the house. Essentially, we would have to offer it to the existing co-owners first. If we can’t come to an arrangement, that can trigger a sale of their share of the house to someone the rest of the owners agree on.
Household administration, like paying for insurance, utilities and home maintenance.

Before we signed the contract, we had our own lawyers look at it, and they didn’t spot any red flags.

Before I bought the house in Hawea, I was paying $200 a week for a single room in an inner-city apartment in Wellington, which was considered quite cheap. I am now paying less in my weekly mortgage payment than I did for my rent and get all-day sun plus a view of the lake and mountains. There’s no comparison, really. It’s a no-brainer of a decision.

What about mortgage considerations? Did you have any issues with lenders when they learned it was a group of friends buying a house together?

We each had a conversation with the same Lending Manager at the bank before they approved us. It was pretty straightforward. He looked at what we earned, what our expenses were, and ran a credit check on us, and said, “You’re good to go.”

So now we each have individual mortgages with the same bank. Our mortgages are the same amount, but we all have different repayment arrangements.

Is there one person that tends to be the household financial administrator? Or do you contribute equally on that front?

We’ve set everything up so it happens automatically. Three of us cook together, so we have weekly food payments going into an account. All of us have put in weekly payments into a utility account. We pay for the insurance every year. So it’s relatively automatic, and we don’t have to think too much about it.

What tips or advice do you have for someone considering purchasing a property with their friends?

I think buying a house as a group of friends gives you many options because you have a greater pool of money. You’ll be able to access and afford properties that you otherwise wouldn’t be able to.

But I would probably say the most important consideration is that you like the people you’re buying the property with. You’re going to live with these people potentially for a very long time, and you would want to be as confident as possible that things will work out.

For me, my thinking was: these guys are my friends. They like festivals and music. We have big bookshelves. We have a piano and a guitar in the house. There’s several rows of mountaineering boots in the garage. It would be a house that I would walk into and go, “Oh, my tribe lives here.”

We’ve been living together in a situation for five months now, and things are going well. We have various issues that every flat has, like people having different levels of cleanliness that they’re willing to tolerate. But in general, things are going really well, better than I could have hoped for.

Before I bought the house in Hawea, I was paying $200 a week for a single room in an inner-city apartment in Wellington, which was considered quite cheap. I am now paying less in my weekly mortgage payment than I did for my rent and get all-day sun plus a view of the lake and mountains. There’s no comparison, really. It’s a no-brainer of a decision.

Lake Hawea photo by Philip Bird LRPS CPAGB via Canva

Blog | PocketSmith

Why There's A Splurge Category In My PocketSmith Budget

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Good news #4: changing the incentives for banks

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1. There’s no better time to start than now

2. Investments go down, but that doesn’t mean you should sell them

3. Do what feels right for you

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Critic’s corner

Would I recommend Friends That Invest?

Travis Plans Life's Big Decisions With PocketSmith

Tell us a little about yourself?

How would you describe your role in your household?

What drew you to PocketSmith?

How long have you been with us?

What do you primarily use PocketSmith for?

How has PocketSmith changed the way you do money?

What are your favourite features?

Got any tips?

What’s the best money decision you made in the past 12 months?

Fireside Finance: Prashant Mohan, Sharesight

Welcome, Prashant! Tell us a bit about yourself.

Can you share your personal journey with money and finance? What were some pivotal moments or lessons you learned along the way?

Clearly, you know about taking calculated risks. Can you share your approach to assessing and managing risk as you pursue multiple income streams and build your net worth?

Speaking of investing, it can be intimidating for many. What advice do you have for someone looking to start investing for the first time?

I love that! Money is rarely purely financial. Can you share any experiences where non-financial factors influenced a significant financial decision?

It sounds like your achievements are hard-fought. How do you define success, and does it extend beyond monetary wealth for you?

What financial goals do you believe everyone should consider setting for themselves, regardless of their current financial situation?

How can individuals strike a balance between saving for the future and enjoying the present?

A fun one to end things! What’s the most unusual or extravagant thing you’ve ever bought?