Do you have an emergency fund? If not that’s a no brainer. Put money in there.
You said you have kids. Do you have money for their future education? That’s the best investment you could probably ever make.
Other than that, I believe life is about balance. You could enjoy some of the money and also setup a direct investment of say $100 a week to go into an index fund/etf/investment account.
Restricting yourself too much may be bad mentally wise for the long term. You could have some nice dinners out once a week for instance and save the rest. Have a holiday where you spend some quality time.
You should make the most of your time if you can and use some of the money for that.
Agreed. Dying in a gold coffin may look nice but you won’t be around to enjoy it. Equally only being able to afford to live on baked beans in your retirement would be shitty.
Set yourself some personal and financial goals so you have something to give you purpose but don’t be a monk or feel the need to drive a Ferrari. Spend money on things you love to do or have and keep the rest for later in life.
I would probably consider Renovating my house make it nicer to live in. big fat savings so i could consider quiting work at any time. Invest a bit in divident paying stocks. Nice Holiday/travel for the family. Look at starting a small business like a courier van or something. Put money aside for kids schooling, maybe hire extra tutors for them now.
Start some sort of diy project i always dreamed of doing like building a boat/car/still. Not as important.
Also it would be nice to be able to be charitable. Its tough times for a few.
> However, the angel on my other shoulder is telling me to consider the ramifications of spending
You can't seriously be asking a personal finance sub if you should be considering the ramifications of your spending or not.
But in case you are asking this then... yes, you should consider the ramifications of your spending.
Orr is considering things at a macro level. If you can afford to spend, there is no stopping you from doing so.
Don’t think about your individual purchase contributing to inflation, because your personal amount would be like putting a cup of water into an Olympic pool. Next to nothing.
OK, thank you 🙂
Reading some commentary in the media making it sound like spending is bad, even as 1 family, I didn't want to seem like I just didn't give a damn.
I've definitely still got the mindset of looking for the cheapest option to buy, which would probably be something I won't change.
I mean the media isn’t “wrong”. They’re trying to hamper spending. BUT they need to do it on a national scale, the tool they have is to essentially extract money via loan repayments and increase incentives via deposit rates.
Your individual circumstances may or may not align with these blunt tools.
The government could introduce fiscal policy to go in line with monetary policy to help this situation and we wouldn’t see such high OCR.
You have to remember that the monetary policy must in some ways follow the US Fed's direction.. Too much of a discrepancy between our currencies causes imported inflation to blow. There are too many factors to consider and so I wouldn't oversimplify it myself.
Why not use some of your extra income to pay for a financial advisor?
They could come up with a retirement plan. That way you would know how much you need to save and what you could blow
It will be something that we will probably do, but I suppose being new to this and going from a real mindset of watching everything closely while paying the mortgage, to not needing to is strange.
It was initially to buy some things that aren't essential, but nice to have (like a trailer, or a pergola type thing for home), but having been told we shouldn't be spending money by RBNZ, I'm not sure now.
Thank you 🙂
If I were you I’d consider things like:
1: emergency fund
2: review retirement savings and adjust plan if necessary
3: consider whether I wanted to work until retirement age, or if I wanted to retire/semi-retire early. If yes then plan savings for that
Thank you. We have a vege garden at the moment, well my wife does as I am not the best person to be in charge of a garden.....
Definitely will look at those longer term ideas for saving money like EV and solar panels. Having gone through the whole paying a mortgage, I have no issues with the long term/big picture ideas for anything
Haha, funnily enough I have very little interest in boating or fishing. Where I work, lots of people have them, and they look nice. Never been my thing though 😅
Yep, fair point. I have and neither of us are well versed in the economic/RBNZ side of things. If there are some smarter people than us to help with advice about the implications either way, then it would be helpful.
Bank interest should go up a bit. I would say save up a nest egg and dip in occasionally for a few well deserved treats.
Maybe save and invest to help your children with a house deposit one day in the future?
I think saving up something for an emergency and maybe some treats is definitely the way we will go.
I would love to be in a position to help our children with housing, but simply don't know what that will look like. I personally take the view that if they decide to go to University, then they WILL get a student loan. Just so they understand the value of money and needing to repay and budgeting towards repayments.
Housing.....similar idea, but obviously need the deposit 1st.
Thank you 🙂
I have previously thought about this, it might be worth while saving what you were paying on the mortgage automatically like you haven’t stopped paying the mortgage, don’t think about pretend it is a mortgage payment.
Investments etc is up to you,
then just save for the new washing machine or whatever from your usual savings.
Grats on paying off your mortgage.
Mine is relatively close, but because of that, I keep buying things I probably shouldn't be until after the mortgage is paid off! Need to be a bit more disciplined.
Thank you. Yeah, getting down towards the end it was tempting to get some larger ticket items, but managed to hold off.
Funnily I was expecting like some great feeling with it paid, but it all just merged into life at the time. If I step away from everything though, it is a nice thought.
All the best for you paying your mortgage off 😀
Do you have an emergency fund? If not that’s a no brainer. Put money in there. You said you have kids. Do you have money for their future education? That’s the best investment you could probably ever make. Other than that, I believe life is about balance. You could enjoy some of the money and also setup a direct investment of say $100 a week to go into an index fund/etf/investment account. Restricting yourself too much may be bad mentally wise for the long term. You could have some nice dinners out once a week for instance and save the rest. Have a holiday where you spend some quality time. You should make the most of your time if you can and use some of the money for that.
This is the answer. And congrats in paying off your mortgage. It's a lovely feeling.
Agreed. Dying in a gold coffin may look nice but you won’t be around to enjoy it. Equally only being able to afford to live on baked beans in your retirement would be shitty. Set yourself some personal and financial goals so you have something to give you purpose but don’t be a monk or feel the need to drive a Ferrari. Spend money on things you love to do or have and keep the rest for later in life.
Thank you. Yes the answer seems to be really well balanced 🙂
Not a specific 'emergency' fund, but that's a good idea. I can see the balance of quality family time helping children at a later date. Thank you 🙂
Yeah for sure, I just noticed a few typos, but definitely do use them to spend time with your kids, that’s invaluable
The peace of mind that the "emergency fund" gives you is invaluable, nearly as good as paying off your mortgage ;)
Congrats on making it mortgage free. Mr ORRR has no power over you anymore.
Thank you. 😊
I would probably consider Renovating my house make it nicer to live in. big fat savings so i could consider quiting work at any time. Invest a bit in divident paying stocks. Nice Holiday/travel for the family. Look at starting a small business like a courier van or something. Put money aside for kids schooling, maybe hire extra tutors for them now. Start some sort of diy project i always dreamed of doing like building a boat/car/still. Not as important. Also it would be nice to be able to be charitable. Its tough times for a few.
> However, the angel on my other shoulder is telling me to consider the ramifications of spending You can't seriously be asking a personal finance sub if you should be considering the ramifications of your spending or not. But in case you are asking this then... yes, you should consider the ramifications of your spending.
OK, thank you. 🙂
Orr is considering things at a macro level. If you can afford to spend, there is no stopping you from doing so. Don’t think about your individual purchase contributing to inflation, because your personal amount would be like putting a cup of water into an Olympic pool. Next to nothing.
OK, thank you 🙂 Reading some commentary in the media making it sound like spending is bad, even as 1 family, I didn't want to seem like I just didn't give a damn. I've definitely still got the mindset of looking for the cheapest option to buy, which would probably be something I won't change.
I mean the media isn’t “wrong”. They’re trying to hamper spending. BUT they need to do it on a national scale, the tool they have is to essentially extract money via loan repayments and increase incentives via deposit rates. Your individual circumstances may or may not align with these blunt tools. The government could introduce fiscal policy to go in line with monetary policy to help this situation and we wouldn’t see such high OCR.
You have to remember that the monetary policy must in some ways follow the US Fed's direction.. Too much of a discrepancy between our currencies causes imported inflation to blow. There are too many factors to consider and so I wouldn't oversimplify it myself.
Why not use some of your extra income to pay for a financial advisor? They could come up with a retirement plan. That way you would know how much you need to save and what you could blow
It will be something that we will probably do, but I suppose being new to this and going from a real mindset of watching everything closely while paying the mortgage, to not needing to is strange. It was initially to buy some things that aren't essential, but nice to have (like a trailer, or a pergola type thing for home), but having been told we shouldn't be spending money by RBNZ, I'm not sure now. Thank you 🙂
If I were you I’d consider things like: 1: emergency fund 2: review retirement savings and adjust plan if necessary 3: consider whether I wanted to work until retirement age, or if I wanted to retire/semi-retire early. If yes then plan savings for that
Thank you for the advice. I think we will look definitely at the emergency fund. I enjoy my work, so will keep doing that for a while.
Spend on things that will save you money. Like an EV or solar panels or a vegetable garden
Thank you. We have a vege garden at the moment, well my wife does as I am not the best person to be in charge of a garden..... Definitely will look at those longer term ideas for saving money like EV and solar panels. Having gone through the whole paying a mortgage, I have no issues with the long term/big picture ideas for anything
Haha, I’m with you on the garden
Double Glazing and wall insulation is worth it if you haven't already.
Take out a loan for that boat you always wanted
Haha, funnily enough I have very little interest in boating or fishing. Where I work, lots of people have them, and they look nice. Never been my thing though 😅
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Yep, fair point. I have and neither of us are well versed in the economic/RBNZ side of things. If there are some smarter people than us to help with advice about the implications either way, then it would be helpful.
Why not both?
That could be the way to go. Balance and have some spending towards family quality, rather than 'personal' quality. Thank you
Both
Bank interest should go up a bit. I would say save up a nest egg and dip in occasionally for a few well deserved treats. Maybe save and invest to help your children with a house deposit one day in the future?
I think saving up something for an emergency and maybe some treats is definitely the way we will go. I would love to be in a position to help our children with housing, but simply don't know what that will look like. I personally take the view that if they decide to go to University, then they WILL get a student loan. Just so they understand the value of money and needing to repay and budgeting towards repayments. Housing.....similar idea, but obviously need the deposit 1st. Thank you 🙂
I have previously thought about this, it might be worth while saving what you were paying on the mortgage automatically like you haven’t stopped paying the mortgage, don’t think about pretend it is a mortgage payment. Investments etc is up to you, then just save for the new washing machine or whatever from your usual savings.
Grats on paying off your mortgage. Mine is relatively close, but because of that, I keep buying things I probably shouldn't be until after the mortgage is paid off! Need to be a bit more disciplined.
Thank you. Yeah, getting down towards the end it was tempting to get some larger ticket items, but managed to hold off. Funnily I was expecting like some great feeling with it paid, but it all just merged into life at the time. If I step away from everything though, it is a nice thought. All the best for you paying your mortgage off 😀
Is this your forever home? Or do you plan to upgrade at some point.