10 Top Holiday Season Finance Tips
It is almost that time of year again.
Sleigh bells will be ringing, the weather is warming (hopefully), and you’ll be shopping up a storm for pressies and ingredients for the family Christmas meal.
But, this Christmas might feel a little different from previous ones. Especially if you’ve just refixed your mortgage at a much higher interest rate.
So, we’ve been busy making a list of all the nice things you can do to save some money these holidays so that you can avoid Santa’s naughty finance list!
1: Set A Budget
It is super easy to overspend at Christmastime once you start grabbing presents for the family, decorations, and groceries. But you can avoid breaking the bank by setting a budget for what you will spend this December. It doesn’t mean you need to scrimp and save but be realistic about what you can afford when choosing the number.
2: Go Digital
Christmas cards are lovely, but once you buy the card and the postage for multiple recipients, the costs can start to add up. So, why not go digital and send electronic cards this year? Or record a video message with the family to share around. Cost effective, but still super personal. Plus, you never have to worry about it getting lost in the post!
3: Shop The Sales
In the leadup to Christmas, there will be plenty of sales at all your favorite shops. So, keep an eye out for holiday sales, discount codes, and promotions when shopping for your gifts. It pays to start shopping early so that you can catch any sales that are run, not panic buying whatever is left on Christmas Eve!
You can also look for ways to take advantage of discounts in your regular spending. Some utility providers or other services offer discounts if you pay on time or via direct debit.
4: Secret Santa
If you have a big family, the cost of gifts can soon add up. Instead of buying a gift for everyone, Secret Santa is a cool way to still have fun and keep the costs down. To do Secret Santa, put each family member’s name on a piece of paper and put it in a hat, then each draw out a name. That is the person you buy for.
If Secret Santa isn’t your jam, then you can kick the fun up a level and play Santa Grab instead. Everyone brings a small, wrapped gift and they are placed in a pile. Everyone takes a turn to either unwrap a gift from the pile or steal a gift from someone else who has already unwrapped it. Proceed onwards until all guests end up with a gift to take home.
Not only are these games fun, but they significantly cut down the gift spend as you are only buying one present.
5: Homemade Gifts and Experiences
Who says you need to gift a store-bought present? Why not get creative with fun homemade gifts or offers of help? Bake cookies, crochet snuggles, pot plant cuttings, or offer to mow someone’s lawn once a month. There are plenty of ways you can give a lovely, thoughtful gift that costs very little.
You can also use recycled materials to wrap your gifts or go rustic with some brown paper and twine.
6: Meal Planning or No Planning
When it comes to holiday food, you can plan as much or as little as you like. Setting a meal plan will stop you from buying unnecessary groceries, minimizing overspending.
Or, throw the plan out the window completely and ask your guests to simply bring a dish with them. The surprise of what kind of food you will receive is part of the fun!
Remember that you don’t have to invest in fancy treats either, you can make or bake your budget-friendly options that will probably taste better anyway!
7: Minimise Travel
Christmas Day can be hectic when you are trying to visit multiple households. Take a step back and look at what you could do to minimize the travel. Could you all meet somewhere central for a blended Christmas celebration? Or maybe visit one relative this year and save the others for next year, taking turnabout.
Flights are notoriously expensive over the holiday period, as is accommodation. Perhaps you could plan to have a small family Christmas at home and then visit your relatives for a mid-winter Christmas to save on travel costs.
8: Cut Discretionary Spending
Look at your monthly expenses to see if there is anything you can trim over the holidays. For example, if you are a rugby fan, you might be able to pause any Sports subscriptions until the season starts again or pause other services you won’t be using over the summer.
If you have family coming to stay, look at ways you can share expenses so that no one person must cover the cost of everything.
9: Put Money In
Look for ways that you can inject money into your budget, rather than taking things out. You could potentially sell unwanted items or things from your garden, rent a room if you have extra space, or even Air BnB your house if you are going to be on a summer holiday.
10: Examine Your Mortgage
One of the biggest holiday expenses you are likely to have will be your mortgage repayments. So, it’s worth exploring whether you can save some money there. The best way to do this is to have a chat with a mortgage broker.
Until next time,
Frequently Asked Questions
The advantage of using a mortgage adviser is that they can negotiate with a number of lenders to find the deal that best suits you. They do all the leg work for you, saving you time.
We help assess all your options, whereas the Bank is restricted by being only able to present one view.
While banks expect the client will negotiate with them, or accept the given rate, mortgage brokers are more likely to go to bat for you, to get a lower interest rate.
Our processes make financing your house purchase easy; providing quick personal service that takes the stress out of financing your home loan. With our wealth of experience in the finance industry, we know how to get the best deal for you.
Absolutely! We can still work with you using email, phone calls, and video calls. Whatever your financial situation is, we have a range of options to communicate with you whatever circumstances.
Yes, we have an online application system or a pdf form that can be completed. Supporting documents can either be uploaded directly into our system or emailed. We can use telephone, zoom, or email for further clarification or look at scenarios and receive and send information.
A home loan pre-approval is a conditional approval confirming that we can lend you a certain amount of money, provided the property you purchase meets the lender’s home loan criteria. It’s a good idea to ask us for a home loan pre-approval before you start house hunting. It will help you determine how much you can borrow and to give you some bargaining power when negotiating a purchase price.
Saving a deposit is probably the biggest hurdle for most first home buyers. First home buyers need to have saved at least 5% deposit with 20% or more being the optimum. Remember that this can be made up from a KiwiSaver first home withdrawal and some first home buyers may also be eligible for a HomeStart Grant. Gifts and deed of debts from friends and family are also common.
While there has been a lot of publicity about the need for home buyers to have a 20% deposit; there are still options available for you. We can talk you through what may be available to you including:
- The ability to access low equity loans
- Using your Kiwisaver contributions towards your deposit
- Building your own home
- Accessing parental assistance to increase your deposit.
The size of your deposit makes a big difference to the interest rate and the other costs you could potentially pay on your home loan. Generally, for lending where the deposit is less than 20%, the lender will also charge a Low Equity Fee (LEF) or Lenders Mortgage Insurance (LMI). Interest rates may also be higher for loans with a low deposit.
Whilst assessing a loan application, banks will scrutinise your bank account (usually the most recent 3 months bank statements).
In particular, they are looking at how well (or not) you manage your account.
Do you have dishonors, and or unauthorised overdrafts?
The better your account conduct the better your chances!
The banks also want to make sure all expenses including fixed and discretionary costs are included in the mortgage application expenses.
This will be determined by your income, your capacity to repay the loan, and the property type along with the current lending restrictions imposed by the reserve bank. Contact us today to find out.
The income you will need to earn will depend on the size of the loan, the bigger your loan the more you will need to earn.
As a rule of thumb if you are a first home buyer who is currently renting and have also been able to save some money there is a good chance you will meet the banks’ income criteria.
A LIM report is a summary of information that the local Counsel hold on a property. The report covers off information regarding consents, permits, code of compliance, potential erosion, subsidence, flooding of any type and the possible presence of hazardous substances. private and public stormwater and sewerage drain, rates, including any overdue rates.
Your solicitor should review this document.
Absolutely, we do this every day for many existing clients. We can use our scenario calculator to ensure you meet lender criteria and affordability for yourself.
Yes, you can borrow money in New Zealand and may be able to borrow up to 80-90% of the purchase price of a home.
To be eligible to for the KiwiSaver First Home Withdrawal Scheme you must:
Be purchasing your first home;
- Have been a member of KiwiSaver for a minimum of three years;
- Have your KiwiSaver account with a KiwiSaver provider that allows saving withdrawals; and
- Intend to live in the property for at least six months
- We recommend that you contact your KiwiSaver provider and check their individual policy on withdrawals for first homes.
- If you are eligible to withdraw money from your KiwiSaver, you may also be eligible for a first home deposit subsidy of up to $20,000.00 from Housing New Zealand – known as a HomeStart Grant.
Using a mortgage broker generally means no direct costs to you for their services but there are other unavoidable costs. These may include:
- A Registered Valuation ($800 – $1,200)
- Solicitor Costs ($800 – $1,500)
- LIM report ($150 – $400)
- Builder’s Report ($100 – $500)
- Weather Tightness Report for Monoclad houses ($300 – $1,000)
- Finance fee for non-bank lending (~1%)
Prices can vary. Always request a quote before ordering any of these services.
The banks all have different policies and risk tolerances. Buyers can get frustrated and waste a lot of time going to banks that won’t suit their needs.
Using a mortgage broker gives you a view of all the banks and their policies. It means you find the right bank faster and with less stress. With a mortgage broker, getting a mortgage isn’t complicated.
It’s about proving you have enough deposit and enough income and then heading to the right bank with that information.
Some tips to making your mortgage application easier: get your documentation sorted early and keep your spending as low as possible in the 3 months leading up to your application.
We will always act in the best interest of the client and will ensure that any deal we broker is the best we can do for the client.
While there can be variances in the amount different lenders pay us we do not favour any particular lender for this reason.
We are also members of NZFSG & Financial Advice New Zealand both of which have ethics that we must adhere to.
We can also be audited at any time by the FMA (Financial Markets Authority)
No… The lenders that use our services see us as an efficient channel to obtain business from. They only pay us on success i.e. when the loan settles.
We sit alongside their other channels such as a bank branch or mobile manager.
The cost of obtaining business from a mortgage broker is comparable to these other channels the banks choose to use.
For this reason, it will cost you no more to use our services.
Mortgage advisers (often called mortgage brokers) are paid by the bank when a mortgage is drawn down. If that mortgage is discharged (repaid and closed) within a short amount of time – typically 27 months – the broker must repay some or all of the commission (often referred to as a clawback). In this instance, the mortgage broker has essentially done the work for no pay.
We reserve the right to charge for our time if a clawback is incurred. The fee will be the estimated amount of hours the mortgage took at an hourly rate of $250 per hour. Unlike other fees, such as Break Fees from the bank, we have capped the amount we can charge clients at $2,500.
If you are refinancing or selling your house, the best thing to do is immediately talk to your adviser and discuss if any clawback fees will be charged.
If the property is for you to live in, this is something you should discuss with your Lawyer at your initial meeting. If it will be an Investment Property, you should discuss with your Accountant. We would also suggest you find a property accountant, someone who deals in property all the time rather than just as a side part of their business.
Refinancing creates an entirely new mortgage and an opportunity to restructure in a way that better suits your personal situation.
People refinance for lots of personal reasons, from changing circumstances to life goals and interest rates.
People often refinance with us because they want to get ahead faster and take advantage of the smart Go Home Loan structure and personalised support we offer.
The key to an effective loan structure is putting your savings and income into an account that helps reduce the daily interest costs of your mortgage, not a separate unlinked account.
Why? By combining all your income and savings against your Go Home loan, you’re making your money work harder for you.
A Go Home Loan is a much simpler mortgage structure that still uses your income and savings to reduce your daily interest costs.
Generally, banks offset your money from multiple accounts. Some clients find it difficult to track multiple accounts and figure out how much interest is being charged or offset.
We find that using a Go Home Loan is an effective loan structure by putting your savings and income into an account that helps reduce your daily interest costs.