Starting your first job? Let’s get your finances sorted
Congratulations on landing your first job. It’s a huge achievement and you’ll gain valuable experience. Now that you’re earning an income, it’s a great time to create some good money habits – so you can start working towards your financial goals. Here are seven smart money management tips to help get you on the right track.
01
Make money top of mind
The money’s coming in and you’re probably dying to spend it. From that new jacket to the latest smartphone, it’s all fighting for your attention. But overspending can really set you back financially, and it’s an easy mistake to make when money’s not top of mind.
So start thinking about money more – and get knowledgeable on saving, investing and managing your money with helpful websites like sorted.org.nz. And whenever you’ve got the urge to splurge, ask yourself:
- Do I really need this (honestly)?
- How many hours’ work does the cost of this item equate to?
- Is there something more important I can put my money into – like debt or savings?
By getting money-savvy early on, you’re setting yourself up for a bright financial future.
02
Start a budget and stick to it
We know, budgeting isn’t the most exciting thing to do, but it can really help you understand what’s going on with your money – so you can reign in your spending and manage your money better.
How to work out a budget
Take your income after tax has been deducted (weekly, fortnightly or monthly depending on your pay cycle), and then subtract all your expenses for the same pay cycle.
Expenses could include:
- Rent
- Groceries, food and drink
- Student loan repayments
- Power and phone bills
- Car costs, e.g. petrol, rego and WOF
- Credit card bills
- Entertainment
- Shopping.
The Sorted website has a budget calculator you could use to help create a budget.
And the results?
Surplus
If you have money left over (a surplus), that’s great news – it means you’re staying on top of your finances and can start saving.
Deficit
If you don’t have enough money to cover your costs (a deficit), you may need to reduce your costs to make your budget stretch further.
Need help with budgeting?
The Sorted website is a great place to start – it has loads of information on budgeting and how to manage your money. Or you could get free one-on-one advice from the New Zealand budgeting federation.
03
Pay back any debts first
Now that you know where your finances are at, any surplus you have should ideally go towards paying back your debts first, like your credit card or car loan.
Follow these steps to pay off your debts faster:
- Decide how much you can afford to pay off regularly.
- Set up an automatic payment just after pay day to make regular payments towards your debt.
- If you suddenly receive a bonus or a lump sum of money, think about putting that towards your debt too.
The faster you pay off your debts, the faster you can start saving for your future.
04
Start saving for both short and long term
The future may seem like light years away, but when it comes to saving, starting early is the key.
Save for both short and long term so you've got everything covered:
- Short term goals could include saving for a car or holiday.
- Long term goals could be saving for a house deposit or retirement.
Here's an easy way to save
1. Open a different savings account for each savings goal.
2. Name your savings account whatever your goal is, for example 'Holiday' or 'New Home', as this will help you focus.
3. Set up an automatic payment for money to go into your savings account every pay-day. We have a range of savings accounts to suit different goals. For example, if you're saving for the longer term our Savings Plus account rewards you with higher interest for not dipping into your savings.
Every little bit counts - try Save the Change
Now here's a clever way to save a little bit every time you make an electronic payment…
Save the Change automatically rounds up electronic transactions to an amount you choose, then transfers the difference into your savings account. You probably won't even notice you're saving as you're spending.
05
Consider joining KiwiSaver
KiwiSaver is a voluntary, work-based savings initiative designed to help you save for your retirement.
If you join KiwiSaver, you can choose to contribute 3%, 4%, 6%, 8% or 10% of your before-tax pay into your KiwiSaver account every pay-day. You can choose the KiwiSaver scheme your savings are invested with.
Benefits of joining KiwiSaver
- Generally your employer will contribute at least 3% of your before-tax pay towards your KiwiSaver savings, on top of your own contributions.
- The government will also contribute up to $521.43 to your KiwiSaver account each year, provided that you are eligible. This is called an annual Government contribution (also known as a member tax credit).
- After three years of KiwiSaver membership, you may be able to withdraw most of your KiwiSaver savings to put towards your first home purchase.
- You may also be able to get financial help from the Government towards your first home purchase if you meet criteria including income and house price caps.
06
Sort your banking
While you're getting used to your new found freedom we can help make life even easier.
If you have graduated, or just left school and are starting out in a new job, our Streamline account offers an account with no monthly base fee or fees for transactions. Pair this with an ASB Visa Debit card with no annual card fee for access to the account.
07
Get your finances running like clockwork
Once you’ve got your banking sorted, here’s how you can make budgeting easier by setting up your banking electronically:
1. Open separate bank accounts for different purposes
This keeps your money tidy, hides some away for necessities, and reduces the temptation to spend.
For example, you could split your banking like this:
- Bank account 1: For your everyday spending, like food and drink.
- Bank account 2: For your rent, flat expenses and other regular costs like your phone and the gym.
- Bank account 3: A savings account to save for a goal or store your tax (if you have to pay tax yourself).
2. Set up automatic payments to these accounts
Automatic payments are a great way to pay a fixed amount regularly from one bank account to another (yours or someone else’s). Set up automatic payments so whenever you get paid, a fixed amount is automatically transferred from your main account to your other accounts. Easy!
3. Set up text or email alerts
Overspending happens fast, so keep track of your money with real-time notifications sent direct to your mobile or inbox.
Your notifications will let you know when your funds low, or when your bank account is overdrawn. Set them up how you want.
4. Set up quick balances in your mobile app
You could also check your bank balance fast, without having to log in, using the Quick Balance feature in your ASB Mobile app. Here’s how to set it up:
- Log in to your ASB Mobile app.
- Tap on the menu icon at the top left of your screen.
- Tap on ‘Settings’, then ‘General’.
- Tap on ‘Quick balance’, choose the accounts you’d like view fast, then toggle on.
Then whenever you need to check your balance, simply open your ASB Mobile app and swipe down.
7 tips to make your budget stretch
Choose the right account for you
Savings On Call account
A savings account where your money's on call, giving you access to your savings, while still earning interest.
Savings Plus
A savings account that rewards you for limiting your withdrawals - great for those who are saving for the long term.
Other helpful guides
The above information is a guide only and should not be relied on as it does not take into account your personal financial situation. ASB's terms and lending criteria apply. See the Savings Plus Terms and Conditions for more information.
