"When running errands, I try to take my bike instead of the car.
"This has been good for my health, the environment - and also our petrol bill (given the rising cost of petrol)."
Katrina Shanks, CEO, Financial Advice New Zealand.
Money. It's the driving factor behind many life choices, but is it the be-all and end-all?
'Me and My Money' is a regular feature that investigates Kiwi attitudes towards money and what drives the choices they make.
Katrina Shanks, CEO, Financial Advice New Zealand, believes all Kiwis should have a financial adviser in their corner. They delve into the details and set up a plan to help people protect themselves from financial risks, and to save and invest.
With petrol prices currently soaring, the former chartered accountant says her electric bike is a good investment, increasing her health and wellbeing as well as saving money.
For Kiwis who are grappling with the high cost of living, Shanks suggests going back to basics and looking at where money can be saved on extra grocery items, subscriptions and gifts.
1. Are you a saver or a spender?
I was a spender, now I'm a saver.
I Iike nice things and enjoy sharing with others, which ultimately meant I was a spender.
As I've become older, I've discovered I can still have nice things and share with friends and family, and be smart about how I do this.
Saving is also addictive: the more I save, the more focused I become on savings.
These two changes in my financial behaviour complement each other.
2. What's been your biggest financial lesson, success or failure?
The biggest impact on my financial health, wealth and wellbeing was when I engaged a financial adviser for the first time.
As a chartered accountant by trade, I consider myself to be pretty financially literate. The one area in my life I'm short on is time. This meant I never spent the time analysing the protections (insurance), savings and investments I had in place.
After doing this for me, my financial adviser ensured I had the protections in place for my peace of mind. They understood and made changes to how much I should be saving, and ensured my investments were in the right place for the financial outcomes I wanted to achieve.
This focus inspired me to manage my day-to-day financial position more closely. It resulted in a significant increase in my savings, with very little change in my lifestyle.
My biggest lesson, which I now pass on to others, is to find a professional financial adviser you trust. If I'd done this in my 20s, I think the impact on my financial behaviour and wellbeing would've been huge.
3. A recent purchase you consider was value for money?
An electric bike.
When running errands, I try to take my bike instead of hopping in the car. This has been good for my health, the environment - and also our petrol bill (given the rising cost of petrol).
Once I've dodged the buses on Wellington streets, I'm feeling relaxed. I now look for a longer route to get home - go figure!
4. What was your last impulse or 'fritter' purchase and how did you feel about it afterwards?
I bought a really nice top in the Boxing Day sales (which I swore I wouldn't go to)!
I've only worn it once since, which is really disappointing because I love it. It was obviously a purchase I didn't need.
5. Do you have any words of wisdom for Kiwis struggling to get ahead due to the rising cost of living?
For many Kiwis, it's tough when the price of basic goods and services increases, but pay stays the same.
If this is the case for you, I'd suggest having a close look at your expenditure and see where you can save money.
Reduce the luxuries in the groceries you buy, and use the car less to reduce petrol costs. Also reduce the amount of money spent on presents, such as agreeing not to swap gifts, or by making them at home.
Review some of your regular commitments, such as Netflix. Check if you're with the cheapest power provider and make payments on time to avoid any extra charges.
Money tends to vanish more when we just 'tap the card and go'.
Try taking a set amount of cash out for the week for spending. Once it's run out, that’s it for the week. When handing over actual money, it certainly brings focus to spending.
6. What’s your best saving tip?
Start today.
It's way too easy to say 'I'll start next week', then 'next week' never happens.
The best tool I've used is having separate bank accounts for different 'spending buckets'.
Automating this process is helpful (e.g. setting up automatic payments in internet banking), so it just happens and I don’t have to think about it.
One of those buckets should be 'savings'. Once these have been mastered, there's the option to consider investment.
7. Does having more money increase happiness?
Money provides life choices. Those choices then provide happiness.
Each person has different goals. That means they require different levels of money to provide happiness.
Happiness is greater than money - it also includes health, family, friends and work.
Getting the right balance between those factors (you may have others), that are personally important, is what brings true happiness.
The views expressed in this article are personal and are not professional financial advice.
