Money & You - Building long-term financial security (Part 2)
Date: 16 Dec 2024
Money & You - How to create financial security
If you missed Part 1 - you can read it here:Money & You - Financial Planning (Part 1)
Now, let's continue with some proven strategies that can turn saving money into an automatic habit instead of a monthly struggle - great things to put on that holiday to-do list for planning in 2025!
Maximising your saving potential
After setting up our saving framework, we can boost our saving potential through smart income management and spending decisions, and making the most of every penny we earn.
Optimising income streams
Smart work beats hard work when creating multiple income streams. If we have the opportunity to vary our income sources, our financial foundation become more stable faster.
Developing passive income streams is an excellent strategy that generates extra cash flow alongside our main career. Rental properties, digital products, and investment dividends can serve as passive income sources, becoming income streams that keep working for us even during tough economic times.
Reducing unnecessary expenses
Smart spending matters just as much as earning. Money & You shared the spending habit changes many Kiwis are already making explaining,
“Buying cheaper groceries and cutting back on takeaways and treat purchases are in the top 10 of the main spending changes”.A healthier relationship with money requires us to take an honest look for practical ways to cut down expenses:
- Review and cancel unused apps, subscriptions and memberships
- Switch to energy-efficient appliances and LED lighting
- Talk to us about a free review of your insurance, mortgage, and KiwiSaver services
- Plan meals to reduce food waste
- Use loyalty programmes and cashback opportunities
Leveraging KiwiSaver employer benefits
Workplace benefits can boost our saving potential by a lot, yet many people overlook them. 79% of Kiwis are using KiwiSaver as their main form of investment savings, but the percentage we’re contributing may need lifting for a “dignified” retirement (Money & You). Key employer benefits to consider:
- Retirement contributions: Get the most from employer matching in schemes like KiwiSaver
- Workplace Group Schemes: Don't have one? Check out #QuantumCare and tag your employer!
- Health insurance: Take advantage of private health coverage for quicker medical services
- Professional development: Use training programmes and education benefits to increase earning potential
These benefits serve as valuable financial tools that help us reach our personal financial planning goals faster.
Building long-term financial security
A secure financial future needs more than daily saving—you need a reliable foundation that stands strong in tough times.
Let's look at two core elements of long-term financial security.
Emergency fund strategies
39% of New Zealanders (over 1.5 million of us) can’t access $5,000 within a week without going into debt if we had to pay for something unexpectedly, leaving us incredibly vulnerable.Make a start, even if it’s $1 a week! Just start building that fund. Being able to access money in an emergency is a key indicator for being financially resilient and prepared. Your emergency fund should cover:
- Housing and utilities (3-6 months)
- Essential food and medications
- Insurance premiums
- Simple transportation costs
- Minimum debt payments
Think of emergency savings as a regular bill—it's not optional.
Retirement planning essentials
Retirement planning goes beyond just saving money, or KiwiSaver. You shouldn't count on government benefits alone. The FSC’s Financial Index 2023 stating,
"only a fifth of all retired respondents could maintain their lifestyle for less than a year" with 33.6% admitting they’re not particularly prepared at all, with a serious concern around understanding the level of funds needed for retirement at the root of everything.A solid retirement strategy focuses on three areas:- Having a clear plan for building your retirement funds
- Understanding the longer you can work and save, the larger your retirement pool of funds will be
- Regular reviews: Your retirement plan should adapt as life changes, regularly reviewing your Mortgage Structure and your Personal Risk policies is a free service through your Financial Adviser (Broker) that cannot be understated!
Small, steady actions create lasting progress
Those taking financial advice are more positive about their financial security and Quantum is here to help you get where you’d like to go. We get it, financial planning can feel overwhelming at first! Breaking it down into smaller steps makes the trip easier. Our money habits shape our financial choices, so we need to build positive routines and set up automatic savings with a well-laid-out system.
Smart financial planning takes you beyond simple saving. You must tap into the full potential of your earnings through multiple income streams. Building reliable emergency funds creates a strong financial base that supports your current needs and future goals.
"Financial security takes time to build. But prioritising savings ensures that you’re constantly building wealth. Small, steady actions create lasting progress".Your positive money choices today move you closer to long-term goals - whether building emergency savings, planning for retirement, or growing wealth through investments.
Your success depends on commitment to your financial plan and the ability to adapt when needed. Even modest savings started today can build substantial financial security for tomorrow.
