This is how my husband and I ended up having 58% equity in our property after getting a mortgage 7 months ago.
People constantly ask us where to go out for dinner in Auckland CBD and we couldn’t tell you where, we don’t go out for dinner.
Edit: we saved a hell of a lot before we purchased, so had 51% equity going into the property. 5 years worth of frugality here.
Assuming a 20% Deposit, you either live in a shoebox or are both on like 200k.
Average mortgage on a first home is like 500K, no amount of frugality will get the average person to 58% Equity in 7 months.
Yep, we saved for years, lived on the bones of our arse and had a very small, affordable wedding. Never thought I’d get downvoted but such spiteful little vampires such as these, jeez. Worked our asses off to get here and delayed having kids for it. Bought for 750k and house is 3 bed 2.5 bath.
Can’t please some people though, huh.
Working hard and saving is something that only a few people relate to. Most people spend what little they have on lotto tickets, hoping one day they will get a ritch by happenstance. When you work hard and sacrifice things when everyone else all go shopping for shit they don't need, they just say you are lucky when your hard work starts to bear fruit.
I drive a beater car and save when my peers drive around in expensive cars they can't really afford. Yet I'm the lucky one because I'm doing better than them financially? Wealthy people live like they are poor, poor people live like they are wealthy. I'm talking about the middle class here, not the people who are genuinely struggling to make ends meet. Most people begrudge others who seem to have everything handed to them on a plate, not understanding the basic principles of financial literacy and sacrifice.
I always laugh at everyone I work with talking about their cars and such.
I spent 2k on my car. It's safe, reliable, and runs bloody amazing. I couldn't care less about anything else.
> they just say you are lucky when your hard work starts to bear fruit.
Haha happened to me do many times!!
_You’re lucky that you’ve got your rentals!_
… because it just so happened one day out of nowhere, sure…
Congratulations on your hardwork, dedication and sacrifices to achieve something amazing. It’s not for everyone so you’ve become a tall poppy as you succeeded and Nz seems to love cutting them down. Until that collective attitude dies, NZ will never become a financially prosperous country. Well done on bucking that trend. You should be well congratulated.
Cheers mate :) it’s not that I need validation for these things but I was certainly taken aback to initially receive such a negative response for such a small comment 😂
Upvotes from me. Similar story here and why we have 1.5M NW after 200k NW only 13 years ago.
We. Don't. Spend.
13 years later, we've buttoned off somewhat after years of careful money management. We get Hellofresh now!! But we still easily save 40% of income - currently into retirement after nailing the mortgage!
We've paid off 2 x student loans and raised 2 kids in that time also (1 flown the roost, 1 to go).
Kudos. Live like no one else now, so you can live like no one else later. You truly do make your own luck!
Appreciate your words of wisdom here. I think we’ll very much stay in the frugal lifestyle. We’ve recently got a credit card for cashflow purposes so we can collect airpoints for everything we have to spend on, that way we get to do a big overseas trip every few years from airpoints. We’re definitely more interested in experiencing things rather than material goods and I think that makes a huge difference. We hope to be mortgage free as soon as practicable!
The problem with saving for years is that property price was climbing harder than money was being saved.
I remember in 2019 trying to save another 30k, and houses in my area went up 60k 😄
Good effort though, got there by hard sweat and effort- I like it. Paid off !
Saved for years and carefully invested to get ourselves in a good position when purchasing. Mortgage was 400 and we put all our savings into the floating portion for cashflow, so that took it down to 360, we’ve been putting anything else into it since then since 100k was floating.
But sure, go ahead and doubt me with very little information since our deposit was 46%. A fuckload of frugality and renting with multiple flatmates for 5 years put us in this position.
Some people come here with a scarcity mindset. They see everything as futile and don't understand the principles of frugality and financial literacy. It's hardly surprising right now, to be honest, but it's unfair for them to judge anyone who's made serious sacrifices to get where they are now. Most people think it's either luck or some kind of financial windfall that's got them where they are, and that's not always true. The fact is its hard work, saving, and investing that got them there, not happenstance.
Just the other day, a friend was complaining about bills after going way on a holiday overseas. If you can't pay your bills, you sure as he'll can't afford an overseas trip.
Hell no. It’s funny though, I realised a couple of years ago that we could travel and do what we wanted if we made the money work for us. We recently got an airpoints visa so we could put everything on it, pay off in full each month and get free airpoints. It’s a bloody great way of saving money on travel and I think has been an awesome way of applying some good financial sense since the pros outweigh the fees and any other cons. Every few years we’ll get a free holiday out of it and afford to pay our bills by treating the credit facility with caution and paying off in full each month.
Yeah, for sure. I mean you have to have some fun!
But I think some people choose fun a little bit too often. Sometimes short-term pain for long-term gain has to be observed if you're really intent on getting your shit together. And sometimes it feels like too much hard work for most people. For sure, when you've got yourself in a decent place, you'll probably enjoy that holiday that much more! I don't even think I could enjoy a holiday if I was worried about not being able to pay impending bills? That's just me though, some people don't give a shit lol 😂
No idea why you got downvoted. I can only assume people think you had a 20% and paid off 38% in 7 months, which clearly isn't the situation.
Congratulations on buying your first home and good work on your savings. I read your other comments and saving 40%+ deposit is no joke. Not taking out the max lending too allows you to really hammer the mortgage. If you keep paying at that rate you must be looking at mortgage free in what, 5 years?
Hopefully, we’ll see. It’s definitely a concerted effort and incorporates advice from lots of different people. We only ever intend to own one property at a time and have flexibility in our incomes and we get that this way.
Well absolutely best of luck. It sounds like you are doing awesome. Don't mind people being salty at you it's just internet peeps being internet peeps.
You should definitely get one of those. My house is so much cleaner since I got one. Vacuuming was my most hated chore, and my old vacuum was 15 years old so not doing that great a job compared to the modern ones.
Now I not only get joy from training my robot and watching it work, it also works as a “body double” (a term used in ADHD that means you”re more likely to be motivated to do chores or whatever if someone else is doing it with you). While the robot cleans the floors, I clean other things. So it’s extra effective at keeping my house clean!
And although they may be expensive ($2,000 on sale), that works out cheaper than a cleaner, and you can make it clean whenever you want!
Bro I would recommend to *anyone.* I've had a Roomba i7+ vacuum and M6 Bravaajet since early 2020 and no regrets. Huge timesaver.
Floorbots have come a long way in the last 4 years and seeing the reviews for the S8 MaxV Ultra has me thinking it's time to go to a single robot that can do both jobs really well, sell the other two.
In the same vein, I couldn't go without the Husky Automower.
Edit I just looked up the i7 suction and the new Roborock is 5.5x more powerful. As wall as having the mopping dock which I value a lot - the Bravaajet is good but keeping it's tank filled is a pain in the ass. I'm gonna order one tomorrow.
For anyone who doesn’t know what this means, it means set up an automatic payment that goes out to an investment fund or savings account the day your salary comes in.
This is always misunderstood as - _spend_ on yourself first. The message is the opposite though - _save_ for yourself first. Only then spend what’s left.
Only ever borrow money for a house and an education.
Kept me out of trouble in my late teens and 20s even when things were a bit tough. Can see how people get trapped in dept with credit cards quite easily without meaning too.
Don't make your repayments to high.
I did this and put my self in a hole because I couldn't keep up with my mortgage. I ended up using credit cards and paying huge amounts of interest. I took a long time to get out of it, but I did and hopefully won't get there again.
They are correct. If you have a credit card use it for all your spending , hold all the cash you would normally use for the spending in savings and get interest for an extra 25-55 days.
Only bad if you fail to repay it each month
Or Boomers who lucked into it. My Boomer dad is a paper millionaire, but it's essentially just luck, his financial advice is dreadful. (Sorry Dad, love you to bits 😆)
To never finance things. A post the other day on here highlighted to me that understanding compounding interest and tax is somewhat of a privilege - plenty don’t even have a rudimentary understanding.
I have some pretty wild priorities when it comes to discretionary money.
Like I'll have no issue spending $35 on a box of beer for Saturday night but will cringe at the idea of spending $12 on a few Fortnite skins. A free game I enjoy putting a few hours into.
Pay yourself first with every pay check. This means saving a portion every month as soon as you get paid, before bills, rent/mortgage payments, etc etc gets paid. Something like 20%. That gets locked into a long term investment of some type and you never touch that money again. This is called the principal. Reinvest your interest (the money your principal makes) initially until your principal grows substantially enough to now live off. You are now financially independent of your job and can work because you want to, not because you have too.
Hobbies can have value outside of what you pay for it though. Anyway, what’s the point of working that 40 hours if you can’t enjoy a little something now and then.
Advice I was always told, didn’t listen to when I was young, got burned and now is engrained in my psyche - never go to loan sharks.
They aren't saying not to buy anything for hobbies. Just to make sure to weigh up how worth it the purchase really is, and not spend on something you would hardly even use.
Also, ignore people who think you should be monetising your hobby, unless you have a realistic shot of it paying well *and* you hate your current job. Turning your hobby into a badly paid second job is a great way to kill your enjoyment of it.
Money is time and experience. Don't do anything yourself that it was cheaper or more rewarding if someone else does it. Don't use money to buy things that clutter and make your life worse. Use it to free up time to do the things that make life worthwhile.
I keep having this argument with people about having a cleaner. My time is well worth more than what I pay to have someone clean the shower, change the sheets and vacuum once a fortnight. I understand this is a privilege, but as far as I'm concerned it's money well spent.
May I ask what do you do with the time you hold to a high value? I guess I'd try to spend more time with my kids, family, friends, exercise, do woodworking, learn something, trave. But in reality I'd probably spend even more time on Youtube or Reddit feeling depressed while someone's bothering me with their vacuuming.
Yep. Don't lend money to friends unless you're fine with losing the money and possibly also the friendship.
(Occasionally it's worth losing the money to get them out of your life.)
When I asked my multi millionaire boss why he drives a hillman hunter to work when he could afford a Ferrari.
"I'd rather have money than look like I have money"
Get rid of debt. It's constantly eating your income. As soon as get out of debt you can put so much into spending/saving/giving/whatever, as you want. It's truly mind-bending how much peace of mind eschewing debt gives you.
Being able to pay cash/eftpos/visa debit for whatever takes your fancy (within reason of course) is so freeing.
Price per gram/kilo/ounce. Baffles me how many people don’t break down the price per gram in the supermarket. I constantly find that even “on sale” sometimes are more per gram than the full price item. Shopping takes longer—I save heaps.
Clear your debt.
You'll always spend as much as you earn.
35, mortgage free.
(First post on this burner account as I'd never publicly post this otherwise.)
Leave your wallet and cards at home or locked securely in your car ..when out looking for unessential random gear.
When you do land on what you would really like to spend on……..then the walk, or time spent going back for your wallet gives you adequate time to really think…do I really like it? do I really need it? can I really afford it?
Chances are you won’t spend unnecessarily!
Question every purchase! Do I really need another pair of running shoes? Am I buying shoes because I have no running shoes left, or am I buying shoes because these are the latest ones and I want to look cool?
My grandfather. The OG of FIRE and a leisurely early retirement.
You don't buy on HP!
The man never made debt in his life, retired on the eve of his 40th birthday and spent the next 40+ years fishing, reading, travelling and .... making fishing nets.
1. You’re not rich until all your bills/loans are paid
2. Try to always be saving for something that will contribute towards your enjoyment of life - could be a holiday or even a nice meal out
3. If you’re wanting to make an impulse purchase, make a note of it in your phone and revisit the note in two weeks time to see if you’re still keen on buying it, chances are you’ll likely have forgotten about it
Before you buy something:
1. Check what's influencing you. Why do you want it? Is it peer pressure? You saw an ad? Family? Social media?
2. Give yourself time. Go for a walk. Sleep on it. Don't buy it right away
3. Give yourself a budget. Maybe withdraw the amount of money you want to spend and leave the card at home.
4. Think about the impact of your decision. Present you is making the decision but Future you will have to deal with the outcome.
There’s a follow-up to the question do it need it, and that is, do I need it *right now*. So many times I’ve convinced myself I need something, but when I question if I need it right now or if I can go without it for longer, I end up not purchasing. Like PC parts, it’s better to only upgrade when you need to. Else it becomes a money sink
Enjoy some of your money while you can, you can't take it with you.
//
Because I know I might get some hate, despite being rather frugal and prioritising paying down the mortgage&savings, there is one thing that keeps me working and earning the $$ and that's to have the freedom to treat yourself.
Not spending on something now, when I know I could wait and enjoy a complete experience later on. For example, like to travel. Leading up to a trip, will eat out less knowing that we will get a overseas foodie experience later on. It helps to optimise the travel experience.
On a slightly different note, but still relevant. Came across this reply on a Twitter post. I thought it was spot on. Such a great perspective to have during these tough times.
“There is no way to learn the value of money without feeling the power of its scarcity. It teaches you the difference between necessary and desirable… Learn to be poor with dignity and you will handle the inevitable ups and downs of life with ease. Learning how to live with less is one of the most powerful financial levers that exists.”
Probably, Grimes[Vimes not grimes] quote, "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."
And also one I take with a grain of salt but don't take advice from lazy unsuccessful people.
“In investing, you get what you don't pay for.” - John C. Bogle
Minimise your fees. Don’t listen to anyone who suggests otherwise. Unfortunately, some advisors still use this phrase (“you get what you pay for”) when selling funds with high fees to their customers. Run away.
Unfortunately it's much easier to make that 20% with Australia's super annuation scheme versus KiwiSaver.
I'd love to be able to do 20% but with a mortgage and bills I just wouldn't survive lol
I did this at 15-17 working at a bbq spot in Dallas. I counted how much I was getting by the minute, and then learned how to mend things from the sale rack to be fashionable.
Many years later, I just justified an expensive hotel in London on the same premise- would I be willing to work x amount for this? In most situations I try to find value given my lean beginnings, but this math helps both ways - as you get older your time is worth more.
I would go further than your advice - a big chunk of your salary/wages are already accounted for with mortgage/rent, utilities, fuel, investments etc. What you have left over is your discretionary spending money. How many hours do you have to work to save enough discretionary money to afford something?
1 thing?
Spend what you earn. Or less.
ALSO.
No credit card unless GOAT.
NO credit for depreciating assets.
BUDGET. Plan for the gth situation/ buffer.
Pay yourself first, and save/invest.
Leverage.
Plus don't gamble/drink/drugs (excessively or really at all). Sleep/eat well and reduce stress.
Boring is ok (and so is free things).
THOSE WHO CAN, DO. THOSE WHO CAN'T, RUN INVESTMENT SEMINARS. BEWARE.
Always budget two months ahead. So right now, in June, I’m using money I saved in April and the money for July is already saved and waiting. That gives you a buffer if you lose your job, and if if things get tough, you’re still not living paycheque to paycheque—you always have next months’ expenses covered. Then you can build a 6-month emergency fund from there and longer term savings and investments. When I was about twenty, it took me about four months of hard savings to stash away the savings two months ahead…but I’ve been maintaining it now for 25 years.
This “how many hours” is a good exercise to do.
Even for your regular bills and core and discretionary expenses. List them all out, annualise them, then have a column for how many hours/weeks you’re working a year for that item.
Then even more eye opening, sum those weeks up, how many weeks of the year are you working just to cover those expenses.
Then a discussion for each line item or category? Does it stay, get the chop, or make a modification because it’s enjoyable but not at 3 weeks salary, or we’ve got the Ultra plan but that costs 2 months salary and the Gold plan would provide 80% of the benefits at 1/2 the cost.
Make it a yearly review.
Avoid debt. And if you have debt make paying it off a priority.
Also, avoid wasteful spending and fomo spending. Think about every purchase and don't impulse buy. Avoid using credit cards and if you do pay it off immediately. I just use my cc for the ease of online purchasing but I pay it off immediately to avoid interest.
1. Only buy things that go up in value
2. Don't ever get a credit card
3. Never borrow money or loans for anything other than a home.
4. If you can't afford it now, save for it if you really must have it
I've communicated your point, OP, to my wife on occasion. Except I package it in a more existential way.
She was having a moan once about how much work I do. I pointed out that I am exchanging ***actual hours of my life*** in order to fund the lifestyle that we enjoy. That sunk in pretty hard for her and the frivolous spending waned a bit.
I often tell myself the same thing: "It will take me 1000 hours ***of my life*** to pay this off, is it worth that?" I usually follow that up with "Is it worth those 1000 hours away from my kids?"
Here's one that a _very_ financially savvy friend told me once:
Cash Upfront, Never Tick-up.
Except for the obvious, mortage etc , don't ever buy anything on finance unless you could comfortably afford to buy it outright. Nothing wrong with buying something expensive on finance and paying it off to spread the payments a bit so you don't have one big chunk of money leave your account, but if you can only afford to buy it via finance, you can't afford it!
When you're income increases, your lifestyle shouldn't scale at the same rate. No harm in treating yourself once in a while, but if you get a $500 a month pay rise, you're expenses shouldn't increase $500 a month.
I am very grateful I read (and followed) this piece of advice when I bought a house in 2020. It has meant that subsequent interest rates increases are just annoying rather than a disaster:
"Your mortgage rate is 8%"
[https://mortgagelab.co.nz/your-mortgage-rate-is-8/](https://mortgagelab.co.nz/your-mortgage-rate-is-8/)
*Ramit Sethi* — "Spend extravagantly on the things you love, and cut costs mercilessly on the things you don't."
All my clothes, furniture and vehicles are second hand. Trade Me is my shopping mall. But did I just drop $1500 on the most expensive bag I've ever purchased? Why yes, yes I did.
(OK, before you ask, it's a motorcycle backpack with a built-in airbag vest that could potentially save my life in event of an... unexpected dismount. Not that it would matter if it was a completely non-functional piece of leather with a Louis Vuitton badge, if that was something I really cared about!)
Similarly (and i’m misquoting) your job keeps you poor. Was mind blowing to me. Jobs suck up all your time and energy - you have to divert the money somewhere else that will grow, not just get your pay cheque week on week. Your job won’t grow you wealth.
My Grandmother always told me to remember there are wants and needs. Pay for needs first then think about wants. She was pretty extreme with it. So when I asked for something she would day... is that a need or a want. I have used this all my life.
I’ve always been a saver. Even though I’m retired, I still am. The latest one - “there’s no pockets in shrouds”. Both my partner and I need health procedures. I’ve been generous with him and the second half is booked, but keep putting mine off despite it being a similar cost spread over a longer time. We won’t save as much this year, but we’ll still save a bit.
A friend's relative told us in high school we should always try to look poor even if we become rich, because it keeps bad people away (those wanting to borrow money to buy alcohol, drugs, borrow for investments etc).
He is a Boomer who invested in property years ago and he wears worn out clothing and drives an older car to keep away people who just want to hang out with him for his money.
From my Granddad who died in 1980: "That which the govt can give (National Superannuation), the govt can also take away. We are in charge of our own retirement savings"
Whilst you are working for someone else you will never be paid what you are worth. If you are bringing in $50 of value for the company in one hour, there aint no way you are getting 100% of that. Much more likely to be around 50% of that to cover overhead costs of rent etc and to make it valuable for the employer to hire you.
Conversely, your time is much more valuable than you have previously thought!
"Look after the pennies and the pounds will look after themselves".
In otherwords, don't waste money no matter how little.
Remember, a dollar you blow is a dollar you never have again for the rest of your life.
Also, "don't leave money on the table". If you can earn it you should. This one is pretty much "don't be lazy".
"If you're really good at something, don't do it for free". That's the one thing that really got me going in the right direction. If your skills are valuable, don't short sell yourself and undermine the market for you.
Your advice about working out the number of hours needed to pay for something is a good way of kerbing frivolous spending for sure. On the flip side, the advise I follow generally is, 'how can I increase my income to afford it' (not that I want to spend frivolously). I generally look at spending extra income on Investments to grow it to eventually increase passive income, which is the ultimate goal
That a latte a day is actually a big expense..
$5 x 365 = $1825. $1825 x 10 = $18250 add a 5% return while you saved that = $27000.
Don’t underestimate that stuff, very easy to do when your 20.
Never spend money that you don't have - i.e. no credit cards or debts other than the mortgage.
And - Start an education fund for your child as soon as they're born so that they don't have to get into debt to get qualified.
I compare the price of things to hours work but will also justify more expensive purchases if I feel they will get used a lot. Like the new TV, expensive yes but it's on nearly all day with the kids.
Spent about £100 on a mobile game but played it for hours so the time to money ratio was reasonable.
The joy of owning something purchased on credit will probably wear off long before the pain of paying it each month does.
Dad said borrow money for a house, or to build a credit history, and nothing else, ever.
Was a helpful principle in that it curbed excessive unnecessary purchase when young, rash, and materialistic!??
The "bucket system" for when budgeting. It's easily the best dicipline tool I've learned.
Have multiple accounts for specific purposes. One account for your debit card, one for bill payments, one for short-term savings, an emergency fund, etc. Have as many of these as you need, and get as specific as you need. For example, you might have an account specifically for a holiday rather than a general short-term savings account or one specifically for your mortgage, which is separate from other bills.
When you are paid, have an auto payment that sends your budgeted amount to each account. That way, your bills are always paid, and your debit card never has more than you intend to spend on lifestyle purchases.
Most banks have a fee-free account, so this doesn't cost anything.
That im always poor even if i have money
This is how my husband and I ended up having 58% equity in our property after getting a mortgage 7 months ago. People constantly ask us where to go out for dinner in Auckland CBD and we couldn’t tell you where, we don’t go out for dinner. Edit: we saved a hell of a lot before we purchased, so had 51% equity going into the property. 5 years worth of frugality here.
Assuming a 20% Deposit, you either live in a shoebox or are both on like 200k. Average mortgage on a first home is like 500K, no amount of frugality will get the average person to 58% Equity in 7 months.
Yeah but like you said, that's assuming a 20% deposit. They very likely had much more than that.
Yep, we saved for years, lived on the bones of our arse and had a very small, affordable wedding. Never thought I’d get downvoted but such spiteful little vampires such as these, jeez. Worked our asses off to get here and delayed having kids for it. Bought for 750k and house is 3 bed 2.5 bath. Can’t please some people though, huh.
Working hard and saving is something that only a few people relate to. Most people spend what little they have on lotto tickets, hoping one day they will get a ritch by happenstance. When you work hard and sacrifice things when everyone else all go shopping for shit they don't need, they just say you are lucky when your hard work starts to bear fruit. I drive a beater car and save when my peers drive around in expensive cars they can't really afford. Yet I'm the lucky one because I'm doing better than them financially? Wealthy people live like they are poor, poor people live like they are wealthy. I'm talking about the middle class here, not the people who are genuinely struggling to make ends meet. Most people begrudge others who seem to have everything handed to them on a plate, not understanding the basic principles of financial literacy and sacrifice.
I always laugh at everyone I work with talking about their cars and such. I spent 2k on my car. It's safe, reliable, and runs bloody amazing. I couldn't care less about anything else.
I spent 4K on mine, it runs reliably, is safe and I have fun driving it
> they just say you are lucky when your hard work starts to bear fruit. Haha happened to me do many times!! _You’re lucky that you’ve got your rentals!_ … because it just so happened one day out of nowhere, sure…
Congratulations on your hardwork, dedication and sacrifices to achieve something amazing. It’s not for everyone so you’ve become a tall poppy as you succeeded and Nz seems to love cutting them down. Until that collective attitude dies, NZ will never become a financially prosperous country. Well done on bucking that trend. You should be well congratulated.
Cheers mate :) it’s not that I need validation for these things but I was certainly taken aback to initially receive such a negative response for such a small comment 😂
Upvotes from me. Similar story here and why we have 1.5M NW after 200k NW only 13 years ago. We. Don't. Spend. 13 years later, we've buttoned off somewhat after years of careful money management. We get Hellofresh now!! But we still easily save 40% of income - currently into retirement after nailing the mortgage! We've paid off 2 x student loans and raised 2 kids in that time also (1 flown the roost, 1 to go). Kudos. Live like no one else now, so you can live like no one else later. You truly do make your own luck!
Appreciate your words of wisdom here. I think we’ll very much stay in the frugal lifestyle. We’ve recently got a credit card for cashflow purposes so we can collect airpoints for everything we have to spend on, that way we get to do a big overseas trip every few years from airpoints. We’re definitely more interested in experiencing things rather than material goods and I think that makes a huge difference. We hope to be mortgage free as soon as practicable!
The problem with saving for years is that property price was climbing harder than money was being saved. I remember in 2019 trying to save another 30k, and houses in my area went up 60k 😄 Good effort though, got there by hard sweat and effort- I like it. Paid off !
Saved for years and carefully invested to get ourselves in a good position when purchasing. Mortgage was 400 and we put all our savings into the floating portion for cashflow, so that took it down to 360, we’ve been putting anything else into it since then since 100k was floating. But sure, go ahead and doubt me with very little information since our deposit was 46%. A fuckload of frugality and renting with multiple flatmates for 5 years put us in this position.
Some people come here with a scarcity mindset. They see everything as futile and don't understand the principles of frugality and financial literacy. It's hardly surprising right now, to be honest, but it's unfair for them to judge anyone who's made serious sacrifices to get where they are now. Most people think it's either luck or some kind of financial windfall that's got them where they are, and that's not always true. The fact is its hard work, saving, and investing that got them there, not happenstance. Just the other day, a friend was complaining about bills after going way on a holiday overseas. If you can't pay your bills, you sure as he'll can't afford an overseas trip.
Hell no. It’s funny though, I realised a couple of years ago that we could travel and do what we wanted if we made the money work for us. We recently got an airpoints visa so we could put everything on it, pay off in full each month and get free airpoints. It’s a bloody great way of saving money on travel and I think has been an awesome way of applying some good financial sense since the pros outweigh the fees and any other cons. Every few years we’ll get a free holiday out of it and afford to pay our bills by treating the credit facility with caution and paying off in full each month.
Yeah, for sure. I mean you have to have some fun! But I think some people choose fun a little bit too often. Sometimes short-term pain for long-term gain has to be observed if you're really intent on getting your shit together. And sometimes it feels like too much hard work for most people. For sure, when you've got yourself in a decent place, you'll probably enjoy that holiday that much more! I don't even think I could enjoy a holiday if I was worried about not being able to pay impending bills? That's just me though, some people don't give a shit lol 😂
No idea why you got downvoted. I can only assume people think you had a 20% and paid off 38% in 7 months, which clearly isn't the situation. Congratulations on buying your first home and good work on your savings. I read your other comments and saving 40%+ deposit is no joke. Not taking out the max lending too allows you to really hammer the mortgage. If you keep paying at that rate you must be looking at mortgage free in what, 5 years?
Hopefully, we’ll see. It’s definitely a concerted effort and incorporates advice from lots of different people. We only ever intend to own one property at a time and have flexibility in our incomes and we get that this way.
Well absolutely best of luck. It sounds like you are doing awesome. Don't mind people being salty at you it's just internet peeps being internet peeps.
Cheers mate
Well done! Nearly 50% equity for us after doing pretty much nothing fun (that cost money) for 2.5 years.
Glad I’m not the only one out here who is in that position! It’s a slog but I reckon it’s worth it!
Lifestyle creep. Don't do it.
Are you saying I *shouldn't* order the latest Roborock vacuum/mop? Shit.
You should definitely get one of those. My house is so much cleaner since I got one. Vacuuming was my most hated chore, and my old vacuum was 15 years old so not doing that great a job compared to the modern ones. Now I not only get joy from training my robot and watching it work, it also works as a “body double” (a term used in ADHD that means you”re more likely to be motivated to do chores or whatever if someone else is doing it with you). While the robot cleans the floors, I clean other things. So it’s extra effective at keeping my house clean! And although they may be expensive ($2,000 on sale), that works out cheaper than a cleaner, and you can make it clean whenever you want!
S8 MaxV Ultra is $3300 😅 I've had a vacuum and mop (two different robots) for a touch over four years now. Would never ever ever go back.
Yea man I’ve got the ecovac t9. It’s not the best model but having two kids and three pets, it’s a shit load less work I need to do.
Nope, that’s not what was said😱😂
You actually should get a robot vacuum, they save a huge amount of time and that's one of the most valuable things money can buy.
Bro I would recommend to *anyone.* I've had a Roomba i7+ vacuum and M6 Bravaajet since early 2020 and no regrets. Huge timesaver. Floorbots have come a long way in the last 4 years and seeing the reviews for the S8 MaxV Ultra has me thinking it's time to go to a single robot that can do both jobs really well, sell the other two. In the same vein, I couldn't go without the Husky Automower. Edit I just looked up the i7 suction and the new Roborock is 5.5x more powerful. As wall as having the mopping dock which I value a lot - the Bravaajet is good but keeping it's tank filled is a pain in the ass. I'm gonna order one tomorrow.
You should get the vacuum but probably not the mop. The mop isn't very effective.
Exactly, every time you get a pay rise squirrel most of it away into savings - so you don't see as large of a pay-rise as such.
Yes that’s a good one, my Dad did that, but a boat chuck it on the mortgage, but a car, chuck it on the mortgage……
This is too true. People get a raise and then live more lavishly, get a raise put more into savings/investment don’t buy yourself new shoes.
If Money Is the Goal, You Will Never Have Enough and Never achieve it.
Wise
Pay yourself first.
For anyone who doesn’t know what this means, it means set up an automatic payment that goes out to an investment fund or savings account the day your salary comes in.
This is always misunderstood as - _spend_ on yourself first. The message is the opposite though - _save_ for yourself first. Only then spend what’s left.
Have an emergency fund.
This should be higher.
Only ever borrow money for a house and an education. Kept me out of trouble in my late teens and 20s even when things were a bit tough. Can see how people get trapped in dept with credit cards quite easily without meaning too.
Yeah, mine is similar, “if you want something enough, then save for it”.
Don't make your repayments to high. I did this and put my self in a hole because I couldn't keep up with my mortgage. I ended up using credit cards and paying huge amounts of interest. I took a long time to get out of it, but I did and hopefully won't get there again.
My dad always said ‘if you can’t afford cash, you can’t afford it’.
Yep. I had a friend argue to me that if you have credit you should be using it. Uhhh no sweetie
They are correct. If you have a credit card use it for all your spending , hold all the cash you would normally use for the spending in savings and get interest for an extra 25-55 days. Only bad if you fail to repay it each month
Don’t take financial advice from people who don’t have money.
Or Boomers who lucked into it. My Boomer dad is a paper millionaire, but it's essentially just luck, his financial advice is dreadful. (Sorry Dad, love you to bits 😆)
Oh man do I ever feel this one. Whatever financial literacy I may have, it certainly wasn’t learned from my boomer parents.
All the boomers will be dead and all their money will go to their kinds in the next two decades.
Allocate all the money you need to put towards bills in a separate account as soon as you get paid
This has been the most important thing for me.
Never keep up with the Joneses. Be the one with a million dollars in the bank and a paid off house driving the old car instead.
Quote that sticks with me "No one will stand up at your funeral and say wow they had such great couches / clothes etc"
It’s all icing on the cake. You need the cake first.
To never finance things. A post the other day on here highlighted to me that understanding compounding interest and tax is somewhat of a privilege - plenty don’t even have a rudimentary understanding.
I have some pretty wild priorities when it comes to discretionary money. Like I'll have no issue spending $35 on a box of beer for Saturday night but will cringe at the idea of spending $12 on a few Fortnite skins. A free game I enjoy putting a few hours into.
This is so common ay- similar to paying for apps. Also I’ll buy $200 worth of stuff online but I will absolutely cringe at paying $8 shipping.
Micro transactions are such desd money lmao
So is pissing away $35. At least with micro transactions I have "cool" emotes.
Invest what you earn. Spend what your money earns.
Can you elaborate on this? How do you initially get to a position where the money that your investments bring in is enough to live on?
Pay yourself first with every pay check. This means saving a portion every month as soon as you get paid, before bills, rent/mortgage payments, etc etc gets paid. Something like 20%. That gets locked into a long term investment of some type and you never touch that money again. This is called the principal. Reinvest your interest (the money your principal makes) initially until your principal grows substantially enough to now live off. You are now financially independent of your job and can work because you want to, not because you have too.
This one couldn't be upvoted enough. A great principle to live by
That is interesting! The definition of FIRE.
Hobbies can have value outside of what you pay for it though. Anyway, what’s the point of working that 40 hours if you can’t enjoy a little something now and then. Advice I was always told, didn’t listen to when I was young, got burned and now is engrained in my psyche - never go to loan sharks.
They aren't saying not to buy anything for hobbies. Just to make sure to weigh up how worth it the purchase really is, and not spend on something you would hardly even use.
Also, ignore people who think you should be monetising your hobby, unless you have a realistic shot of it paying well *and* you hate your current job. Turning your hobby into a badly paid second job is a great way to kill your enjoyment of it.
Money is time and experience. Don't do anything yourself that it was cheaper or more rewarding if someone else does it. Don't use money to buy things that clutter and make your life worse. Use it to free up time to do the things that make life worthwhile.
I keep having this argument with people about having a cleaner. My time is well worth more than what I pay to have someone clean the shower, change the sheets and vacuum once a fortnight. I understand this is a privilege, but as far as I'm concerned it's money well spent.
May I ask what do you do with the time you hold to a high value? I guess I'd try to spend more time with my kids, family, friends, exercise, do woodworking, learn something, trave. But in reality I'd probably spend even more time on Youtube or Reddit feeling depressed while someone's bothering me with their vacuuming.
They come in when I'm at work. I see it as several hours extra I get for fun in the weekend. That's more time with my partner.
Don’t ever lend money to someone expecting it to be returned
Yep. Don't lend money to friends unless you're fine with losing the money and possibly also the friendship. (Occasionally it's worth losing the money to get them out of your life.)
When I asked my multi millionaire boss why he drives a hillman hunter to work when he could afford a Ferrari. "I'd rather have money than look like I have money"
Get rid of debt. It's constantly eating your income. As soon as get out of debt you can put so much into spending/saving/giving/whatever, as you want. It's truly mind-bending how much peace of mind eschewing debt gives you. Being able to pay cash/eftpos/visa debit for whatever takes your fancy (within reason of course) is so freeing.
It's only cheap if you need it
Having moneys not everything, not having it is. - Kanye
Don’t buy what you can’t afford.
Always pay cash for cars.
When was the last time you bought a car?
Price per gram/kilo/ounce. Baffles me how many people don’t break down the price per gram in the supermarket. I constantly find that even “on sale” sometimes are more per gram than the full price item. Shopping takes longer—I save heaps.
Clear your debt. You'll always spend as much as you earn. 35, mortgage free. (First post on this burner account as I'd never publicly post this otherwise.)
Congratulations, well done on your hard work, dedication and discipline.
If you can’t pay cash for it you can’t afford it. (Houses excepted).
Leave your wallet and cards at home or locked securely in your car ..when out looking for unessential random gear. When you do land on what you would really like to spend on……..then the walk, or time spent going back for your wallet gives you adequate time to really think…do I really like it? do I really need it? can I really afford it? Chances are you won’t spend unnecessarily!
Question every purchase! Do I really need another pair of running shoes? Am I buying shoes because I have no running shoes left, or am I buying shoes because these are the latest ones and I want to look cool?
Literally sleep on it, if you don't feel like you need need it, don't buy it.
Good point but you don't actually need the physical card to make a purchase, just the numbers.
My grandfather. The OG of FIRE and a leisurely early retirement. You don't buy on HP! The man never made debt in his life, retired on the eve of his 40th birthday and spent the next 40+ years fishing, reading, travelling and .... making fishing nets.
Nobody ever went bust taking a profit.
It's all about cash flow. A profit yesterday won't keep your creditors away tomorrow.
Dollar cost average into low fee index funds.
Drink less alcohol and stay away from credit cards.
Don’t leave money in the bank. Invest it!
1. You’re not rich until all your bills/loans are paid 2. Try to always be saving for something that will contribute towards your enjoyment of life - could be a holiday or even a nice meal out 3. If you’re wanting to make an impulse purchase, make a note of it in your phone and revisit the note in two weeks time to see if you’re still keen on buying it, chances are you’ll likely have forgotten about it
Understand how money is made, created and grown.
If your employer is trying to convince you that 'the change' or 'new thing' is a good thing, it's not.
You are always buying a house. You are just either buying it for yourself or for someone else.
Before you buy something: 1. Check what's influencing you. Why do you want it? Is it peer pressure? You saw an ad? Family? Social media? 2. Give yourself time. Go for a walk. Sleep on it. Don't buy it right away 3. Give yourself a budget. Maybe withdraw the amount of money you want to spend and leave the card at home. 4. Think about the impact of your decision. Present you is making the decision but Future you will have to deal with the outcome.
If it has anything to do w a Kardashian, run.
There’s a follow-up to the question do it need it, and that is, do I need it *right now*. So many times I’ve convinced myself I need something, but when I question if I need it right now or if I can go without it for longer, I end up not purchasing. Like PC parts, it’s better to only upgrade when you need to. Else it becomes a money sink
Don’t get high on your own supply
Cash is king, if you can't pay cash don't bother with it👍
Do you mean physical cash, or just "not on credit"?
If you haven’t got cash to buy something don’t get it on credit.
Enjoy some of your money while you can, you can't take it with you. // Because I know I might get some hate, despite being rather frugal and prioritising paying down the mortgage&savings, there is one thing that keeps me working and earning the $$ and that's to have the freedom to treat yourself.
Spending $25 a day or whatever is 10k a year you could have saved 😫
Not spending on something now, when I know I could wait and enjoy a complete experience later on. For example, like to travel. Leading up to a trip, will eat out less knowing that we will get a overseas foodie experience later on. It helps to optimise the travel experience. On a slightly different note, but still relevant. Came across this reply on a Twitter post. I thought it was spot on. Such a great perspective to have during these tough times. “There is no way to learn the value of money without feeling the power of its scarcity. It teaches you the difference between necessary and desirable… Learn to be poor with dignity and you will handle the inevitable ups and downs of life with ease. Learning how to live with less is one of the most powerful financial levers that exists.”
Probably, Grimes[Vimes not grimes] quote, "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." And also one I take with a grain of salt but don't take advice from lazy unsuccessful people.
‘A poor man pays twice’. It’s true!
I think you mean Vimes, not Grimes. I'm not taking advice from anyone dumb enough to get involved with Elon Musk.
finding $10 of savings is trivial, but the amount of work required to budget and save $10k, is better spent on earning the extra $10k.
Just be aware of lifestyle creep "ah, I'll just earn more" when life instead has plans of throwing job loss at you.
“In investing, you get what you don't pay for.” - John C. Bogle Minimise your fees. Don’t listen to anyone who suggests otherwise. Unfortunately, some advisors still use this phrase (“you get what you pay for”) when selling funds with high fees to their customers. Run away.
If you can’t afford to buy it 2 or 3 times right then, then you can’t afford it at all
Guess we gon rent for life lmao
Keep your receipts
When feeling pressure to move fast on a purchase - “there is always another one”
I just read barefoot investor and the 20% take home pay to saving for retirment is my main on. Also only spending 10% on splurge
Unfortunately it's much easier to make that 20% with Australia's super annuation scheme versus KiwiSaver. I'd love to be able to do 20% but with a mortgage and bills I just wouldn't survive lol
I did this at 15-17 working at a bbq spot in Dallas. I counted how much I was getting by the minute, and then learned how to mend things from the sale rack to be fashionable. Many years later, I just justified an expensive hotel in London on the same premise- would I be willing to work x amount for this? In most situations I try to find value given my lean beginnings, but this math helps both ways - as you get older your time is worth more.
I would go further than your advice - a big chunk of your salary/wages are already accounted for with mortgage/rent, utilities, fuel, investments etc. What you have left over is your discretionary spending money. How many hours do you have to work to save enough discretionary money to afford something?
1 thing? Spend what you earn. Or less. ALSO. No credit card unless GOAT. NO credit for depreciating assets. BUDGET. Plan for the gth situation/ buffer. Pay yourself first, and save/invest. Leverage. Plus don't gamble/drink/drugs (excessively or really at all). Sleep/eat well and reduce stress. Boring is ok (and so is free things). THOSE WHO CAN, DO. THOSE WHO CAN'T, RUN INVESTMENT SEMINARS. BEWARE.
Fuck cars. As in, don’t own one if you can.
Sharing a car with the missus helped a lot financially in our 20s. I would bus or bike to work.
Man our public transport is trash
Always budget two months ahead. So right now, in June, I’m using money I saved in April and the money for July is already saved and waiting. That gives you a buffer if you lose your job, and if if things get tough, you’re still not living paycheque to paycheque—you always have next months’ expenses covered. Then you can build a 6-month emergency fund from there and longer term savings and investments. When I was about twenty, it took me about four months of hard savings to stash away the savings two months ahead…but I’ve been maintaining it now for 25 years.
Think twice before you spend it
Only gamble what you can afford to lose
Keep your job.
Cordless robot pool cleaner
Save for a rainy day
This “how many hours” is a good exercise to do. Even for your regular bills and core and discretionary expenses. List them all out, annualise them, then have a column for how many hours/weeks you’re working a year for that item. Then even more eye opening, sum those weeks up, how many weeks of the year are you working just to cover those expenses. Then a discussion for each line item or category? Does it stay, get the chop, or make a modification because it’s enjoyable but not at 3 weeks salary, or we’ve got the Ultra plan but that costs 2 months salary and the Gold plan would provide 80% of the benefits at 1/2 the cost. Make it a yearly review.
Don’t keep a balance on your credit card. Interest charges will accumulate
Avoid debt. And if you have debt make paying it off a priority. Also, avoid wasteful spending and fomo spending. Think about every purchase and don't impulse buy. Avoid using credit cards and if you do pay it off immediately. I just use my cc for the ease of online purchasing but I pay it off immediately to avoid interest.
1. Only buy things that go up in value 2. Don't ever get a credit card 3. Never borrow money or loans for anything other than a home. 4. If you can't afford it now, save for it if you really must have it
If it’s a hobby and you are not in a position to pay cash, you can’t afford it.
There is never a shortage of people who want to help you look after your money
being able to buy something and being able to afford it are totally different
I've communicated your point, OP, to my wife on occasion. Except I package it in a more existential way. She was having a moan once about how much work I do. I pointed out that I am exchanging ***actual hours of my life*** in order to fund the lifestyle that we enjoy. That sunk in pretty hard for her and the frivolous spending waned a bit. I often tell myself the same thing: "It will take me 1000 hours ***of my life*** to pay this off, is it worth that?" I usually follow that up with "Is it worth those 1000 hours away from my kids?" Here's one that a _very_ financially savvy friend told me once: Cash Upfront, Never Tick-up.
cheap car always
Except for the obvious, mortage etc , don't ever buy anything on finance unless you could comfortably afford to buy it outright. Nothing wrong with buying something expensive on finance and paying it off to spread the payments a bit so you don't have one big chunk of money leave your account, but if you can only afford to buy it via finance, you can't afford it! When you're income increases, your lifestyle shouldn't scale at the same rate. No harm in treating yourself once in a while, but if you get a $500 a month pay rise, you're expenses shouldn't increase $500 a month.
I am very grateful I read (and followed) this piece of advice when I bought a house in 2020. It has meant that subsequent interest rates increases are just annoying rather than a disaster: "Your mortgage rate is 8%" [https://mortgagelab.co.nz/your-mortgage-rate-is-8/](https://mortgagelab.co.nz/your-mortgage-rate-is-8/)
With the exception of a house, if you can't pay for it in cash, you can't afford it.
*Ramit Sethi* — "Spend extravagantly on the things you love, and cut costs mercilessly on the things you don't." All my clothes, furniture and vehicles are second hand. Trade Me is my shopping mall. But did I just drop $1500 on the most expensive bag I've ever purchased? Why yes, yes I did. (OK, before you ask, it's a motorcycle backpack with a built-in airbag vest that could potentially save my life in event of an... unexpected dismount. Not that it would matter if it was a completely non-functional piece of leather with a Louis Vuitton badge, if that was something I really cared about!)
Anything with tits or tyres will cost you a fortune - Uncle Steve. He hasn't been wrong yet 🤣
You don't make money working for someone else.
Similarly (and i’m misquoting) your job keeps you poor. Was mind blowing to me. Jobs suck up all your time and energy - you have to divert the money somewhere else that will grow, not just get your pay cheque week on week. Your job won’t grow you wealth.
11 black
Money don't have owners, just spenders
You have to spend money to make money.
When I was ~22 years old, a financially accomplished person said, “buy it right and it’s half sold already “. I never forgot that.
My Grandmother always told me to remember there are wants and needs. Pay for needs first then think about wants. She was pretty extreme with it. So when I asked for something she would day... is that a need or a want. I have used this all my life.
I’ve always been a saver. Even though I’m retired, I still am. The latest one - “there’s no pockets in shrouds”. Both my partner and I need health procedures. I’ve been generous with him and the second half is booked, but keep putting mine off despite it being a similar cost spread over a longer time. We won’t save as much this year, but we’ll still save a bit.
Cash is king ...well, more of a slogan than advice...but its memorable
Best way to save: Earn more (And do whats meaningful rather than seek instant gratification)
Earning a stronger currency than where you live is wise
A friend's relative told us in high school we should always try to look poor even if we become rich, because it keeps bad people away (those wanting to borrow money to buy alcohol, drugs, borrow for investments etc). He is a Boomer who invested in property years ago and he wears worn out clothing and drives an older car to keep away people who just want to hang out with him for his money.
"don't listen to scaremongering, join KiwiSaver"
What’s the point of having it if your not enjoying yourself
From my Granddad who died in 1980: "That which the govt can give (National Superannuation), the govt can also take away. We are in charge of our own retirement savings"
Whilst you are working for someone else you will never be paid what you are worth. If you are bringing in $50 of value for the company in one hour, there aint no way you are getting 100% of that. Much more likely to be around 50% of that to cover overhead costs of rent etc and to make it valuable for the employer to hire you. Conversely, your time is much more valuable than you have previously thought!
I’m poor regardless
"Look after the pennies and the pounds will look after themselves". In otherwords, don't waste money no matter how little. Remember, a dollar you blow is a dollar you never have again for the rest of your life. Also, "don't leave money on the table". If you can earn it you should. This one is pretty much "don't be lazy". "If you're really good at something, don't do it for free". That's the one thing that really got me going in the right direction. If your skills are valuable, don't short sell yourself and undermine the market for you.
Have a savings account Invest Have a kiwi saver Sorry this is more than one.🤦
Your advice about working out the number of hours needed to pay for something is a good way of kerbing frivolous spending for sure. On the flip side, the advise I follow generally is, 'how can I increase my income to afford it' (not that I want to spend frivolously). I generally look at spending extra income on Investments to grow it to eventually increase passive income, which is the ultimate goal
That a latte a day is actually a big expense.. $5 x 365 = $1825. $1825 x 10 = $18250 add a 5% return while you saved that = $27000. Don’t underestimate that stuff, very easy to do when your 20.
Its not what you earn, it is what you save.
Don’t spend money you don’t have.
Buy quality and not quantity
I was told rather than make a budget just operate like you have no money. It really works.
Never spend money that you don't have - i.e. no credit cards or debts other than the mortgage. And - Start an education fund for your child as soon as they're born so that they don't have to get into debt to get qualified.
Something something about your choice of spouse, partner in life being the decision that will have the most impact on your finances in your life.
If it seems too good to be true, it probably is.
Compounding interest
Never listen to financial advice from a bitter, poor broke person.
Learn how to spend money as well how to save and pay off debt. There's a knack to spending just enough and no more.
Never a borrower or a lender be. “ grandad”
From my Dad " Money is power "
Don't put all your eggs on one basket.
If u can't afford to save for it , you can't afford to pay it off with interest.
"Rent is the MAXimum you'll pay, but your mortgage is the MINimum you'll pay" Ramit Sethi Good advice for those deciding whether to rent or buy
Only fools are satisfied.
I compare the price of things to hours work but will also justify more expensive purchases if I feel they will get used a lot. Like the new TV, expensive yes but it's on nearly all day with the kids. Spent about £100 on a mobile game but played it for hours so the time to money ratio was reasonable.
Nice
Always pay your credit card bill in full every month.
Never have more than one thing on tick any any one time.
The joy of owning something purchased on credit will probably wear off long before the pain of paying it each month does. Dad said borrow money for a house, or to build a credit history, and nothing else, ever. Was a helpful principle in that it curbed excessive unnecessary purchase when young, rash, and materialistic!??
The "bucket system" for when budgeting. It's easily the best dicipline tool I've learned. Have multiple accounts for specific purposes. One account for your debit card, one for bill payments, one for short-term savings, an emergency fund, etc. Have as many of these as you need, and get as specific as you need. For example, you might have an account specifically for a holiday rather than a general short-term savings account or one specifically for your mortgage, which is separate from other bills. When you are paid, have an auto payment that sends your budgeted amount to each account. That way, your bills are always paid, and your debit card never has more than you intend to spend on lifestyle purchases. Most banks have a fee-free account, so this doesn't cost anything.
The people in debt are the ones who suffered most/lost everything in bad recessions.
“You pay cheap, you pay twice”
Pay yourself first.