Written by Tom Stanley, Investment Adviser, 2nd February 2023
For my first note this year I want to wish all our clients a Happy New Year and all the best for the year ahead.
That said, we are already one month in, and despite a strong start to the year for markets (potentially the January effect in action?), I have noted many conversations kicking off with people preparing to be more conscious in their spending as we roll into the new year – I am tempted to get academic, digging into how people tightening their purse strings in preparation for tough times can be create a ‘self-fulfilling prophecy’, but these notes are supposed to be practical!
This month’s note is for those who set $ focused New Year’s resolutions, or even those who are simply looking to tackle some money conversations head on in 2023.
Before I start sharing tools, resources, or introducing people who may be able to help, I want to pose a question:
Is it hard for you to talk about money with your spouse or partner?
I’ll come out on this one first, my wife and I find it very challenging to talk about money. Not just with each other, but with our parents, and even our siblings and friends.
And you know what? That’s okay. I think that is one of the keys to talking about money: Knowing it is going to be hard. Sometimes it’s going to be painful. And that’s okay.
Talking about money may not be necessary for all couples. If you’re one of those rare people, great. But I doubt that is the case for the vast majority of our clients.
For those looking to have better money conversations this year, I hope the below resources are useful.
2023 Budget Template:
Over the summer holidays I stumbled across a website that sells budget templates for $20 a pop… (somewhat ironic). I have built a few things in excel over my time, so I thought to re-create that budgeting template freely available for Amicus clients. With this template you can easily break out and chart your income, expenses, debts etc in a simple ‘dashboard’ view. Each tab is set out for a new month and ready to go when you are.
When testing out this template, I calculated my personal monthly debt servicing. I was a little shocked as to how quickly our interest cost had moved on our floating rate lending (revolving credit) – Around the same time the below chart from Harbour Asset Management hit my inbox, indicating I am not the only Kiwi seeing the very real impact of higher interest rates:
Harbour’s note also flagged the number of mortgages that are expected to come off term and be re-fixed in the coming year at much higher rates:
“Prevailing mortgage rates continue to increase and sit well above the average outstanding mortgage rate. Almost half of all outstanding mortgages will roll on to these higher rates over the next year.”
If rates are on your mind, or you just want to discuss your mortgage options, the next resource is for you.
The Amicus team recently expanded to take on Tracey Hunter, a mortgage adviser with 24 years of experience. During her career, Tracey has helped thousands of Kiwis ranging from first home buyers to large scale property investors, and has experience across interest rate cycles – Tracey is excited to join the team, and is happy for Amicus Investment and KiwiSaver clients to book in for a no obligation phone call to discuss their situation.
When I was working my way through a test run of the above 2023 Budget Template, the spread of variable expenses crushed my budgeting momentum.
When transactions were predominantly in cash, it was a lot easier to keep track of what was spent where – now, my wife and I have 9 credit/debit cards across different businesses, accounts, and providers! How do you keep track of that?
This is where Booster have stepped up. Booster’s MyBudgetPal is available to all, not just Booster clients (for free) and it solves this consolidation problem. MyBudgetPal connects directly into your bank transactions and automatically codes your spending, so you can see what is being spent where.
There you go, I hope these are 3 resources that help encourage those who wanted to talk about money to start, and if you have started, try and try again.
Always remember, if you want to have an adviser as part of that conversation – We are here to help.
If you would like to speak with any of our advisers, please click one of the links below and book a time.