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A Few Financial F’s for February

With a new year comes new financial commitments and the need to focus on how our money is going to work for us in the year ahead. At NZ Advice Group we have three talented financial planners who’ve contributed their Financial Fs for February to give you some ideas of what to think about in February to start your year off on the right track.

Fees

Fees are a fact of life when it comes to finances. But regularly reviewing your bank account options to make sure you’re not paying unnecessary fees is a simple and effective way of staying in control of your money and ensuring you’re not paying more than you have to.

Often a simple change to a different type of account can dramatically reduce fees. Can’t see any way to reduce them yourself? Don’t be afraid to broach it with your bank and see what you can negotiate.

Because if you don’t ask, you don’t get.

Financial Adviser

For people trying to save money, paying a Financial Adviser may seem counterproductive. But we know it’s worth its weight in gold.

Paying for a good accountant usually pays off in the savings you make in tax payments and the way you structure your personal and business finances. It’s the same story with a financial advisor.

We help you make good investment decisions so that you get better returns.

FIRE movement

FIRE stands for Financial Independence, Retire Early. Hundreds of thousands of people around the world follow the movement with the goal of being debt free, amassing savings and investments and then retiring early to live the good life.

It usually means living a frugal, bare-bones lifestyle in order to reach the end goal and many followers of the movement swear by it. If you want to aim for FIRE you need to talk to us for some rock solid investment advice. But, do your research, there can be serious pitfalls to this ambition.

Fixed rate

Interest rates have been dropping and you might be sitting there feeling frustrated that you’re locked in to a fixed rate. That means you can’t change it until the term ends right? But have you done the maths on whether it’s worth breaking your mortgage and re-fixing at a lower rate?

While break fees may need to be paid, they can often be less than the money you’ll save by paying less interest.

Four percent Rule

One of our key services at NZAG is to provide support with retirement planning and the 4 % rule goes hand-in-hand with this.

It’s a general rule of thumb used to determine how much a retiree should withdraw from a retirement account each year.

Typically, withdrawing 4% provides a retiree with a steady income but also maintains an account balance that keeps income flowing through retirement.

If you’re approaching retirement, it’s a good idea to review your portfolio and see if you could make the 4% rule work.

Friends and Family

Often friends and family will ask for help with a loan until they get back on their feet. But loaning to friends and family can cause major problems and many relationships have been lost as a result.

We recommend that if someone you care about asks for financial help then only agree if you are happy to gift that money and never see it again.

If you are unable to hand over the money permanently, then take a step back and kindly explain that you can’t help. It will save a lot of grief in the long run.

Got any ideas for more Financials F’s we may have missed? Send us an email or comment below with your ideas!