Dream It, Plan It, Live It

Dream It!

Having clarity on what you want for your finances and life in your future, for you and your family (regardless of where you are now), will help you make choices (in the now) that align with you and your family’s values and desires.

Do it now:

Write down what you dream/desire (you may find this better to do this on your own initially, and then with your partner/family as a group):

  • What would you do if you knew you could not fail….
  • What would you do if money was not an object (eg your won lotto)
  • Regardless of money (eg if you lost everything), what is most important to you in this world
  • What are you most grateful and value most in your life at this moment
  • What makes you most happy and content

It will always be a balance between living and enjoying the now, and having more financial security earlier in life. If you spend all your money living and enjoying the now for your whole life, you will have little financial security when you are older. At the other end of the scale, if you spend your life saving for the future, and having no life, then you may have missed out on enjoying and living your life to the full!

Borrowing can enable you to get and have the thing you want now, instead of having to save up for it.  It can also enable you to get and have that thing if you don’t have the ability or never get around to savings – in a way, it can be forced savings. Borrowing can also enable you to invest in your future, and get a return on your money that you otherwise wouldn’t have been able to access e.g. borrowing for a house, education, business, transport.

Depending on the loan affordability for the debt payment though, the debt could restrict other plans/dreams and your ability to live the lifestyle you were used to. This is why making informed decisions and Knowing Your Affordability, will put you back in the driving seat in your decision to take on debt.  If you have been Declined a Loan, find out more about your options here.

Plan It!

Ok, so you have your dream, your goal, your desires (what ever you want to call it!). Now how do we make that happen?

Step one – take stock of where you are now: 

How much savings you have and how much debt you have.  Then based on your current situation and habits, how much of a surplus you have from your income that you are currently saving. You may have no savings, lots of debt and no surplus, but don’t despair, the most important thing is that you believe you can turn this around if you put your mind to it and give yourself some time.

Step two – look at your current situation: 

Are you moving towards your dreams and goals at a rate you are happy with? If not, start brainstorming ways to increase your income, reduce your expenses, and start taking steps towards this. These may be easy things to implement (such as cancelling subscriptions you don’t need), or harder things like asking for a pay rise, looking for a better paid positions, or deciding to study, or they may be medium like cutting out that bought lunch and coffee every day to just a treat instead. Or alternatively, an affordable loan may be a quicker option, rather than saving to get the goal you want.

Step 3 – implement a system that means you are automating your savings. 

You may need to start slowly and just get some short term savings (money for yearly costs like car repairs), and then build up to have a separate long term savings (which could also be used to pay down debt faster). If you set unrealistic goals for large amounts of savings or paying down debt quickly which isn’t affordable, you may find yourself going around in circles and reborrowing on credit cards or continuously dipping into savings.

If you are struggling with coming up with a sustainable plan, reaching out to the many paid or free independent Financial Coaches/Mentors may help to smooth the process and get you ahead quicker. 

Live It!

Yay, you have reached your goal or got the thing you desired. The next part of the puzzle is to maintain your lifestyle and continue growing your wealth and Financial Capability to give you longer term security. 

This means ensuring you can put money aside for those yearly or unexpected costs like repairs and maintenance, holidays, schooling, Christmas, health care costs, then build up some emergency savings in case of loss of income or a family emergency (remember you will also have Kiwi Saver to draw on in cases of hardship too). This will put you in a more secure position and more Financially Capable to weather any storms that might come along. Of course, insurance will also play a part here, including insurance for car, house, contents, life, medical, income, trauma and liability (if in business).  Refer to an Insurance Broker for more info.

Investing then by either paying down your debt or mortgage quicker or investing elsewhere, will help you to build your net worth so that at some stage if you can’t work or you chose to retire early, you can afford to stop working and live off your investments/savings – and hopefully be able to maintain your lifestyle you have become accustomed to. Refer to an Independent Financial Planner/Coach to determine how much you might need for retirement or Investment Advisor for more info on how/where to invest your money.

Have Any Questions?