Retirement Top Reason for Kiwi Saving

Retirement Top Reason for Kiwi Saving

New Zealand, 14 October, 2014 – More than 90% of Kiwis intend to save more in the next six months, with nearly half listing retirement as their top reason for saving, the latest MasterCard Worldwide Consumer Pulse 2014 has revealed.

Surveying consumer’s outlook across the economy and local stock market, employment and income prospects, and quality of life, the bi-annual study found that whilst New Zealanders generally continue to be optimistic about the near future – with overall Consumer Confidence being up 15.9 points from the same period in 2013, savings remain front of mind for many.

On average, Kiwis are looking to save 16% of their income over the next 6 months, with primary reasons given as retirement (43%), international personal air travel (35%) and investments (25%).

“It’s great to see New Zealanders keeping a close eye on their expenditure, and planning ahead to meet their financial goals,” says MasterCard New Zealand Country Manager Peter Chisnall.

“With Money Week 2014 underway, now’s a great time to take stock of your financial situation, and ensure you have the information you need to make good financial decisions and avoid having your savings goals derailed in the event of a major unexpected expense.”

According to the study, 75% of Kiwis keep track of their spending on a weekly or monthly basis, and nearly 90% felt confident they could budget their day-to-day finances. Despite having a good grasp on their finances however, more than a third claimed to have problems with saving money for big purchases, and 1 in 5 reported having difficulty keeping up with their regular bills and financial commitments.

During Money Week 2014, MasterCard encourages New Zealanders to take the Money Week ‘Financial Fitness Check-up’ at http://www.fightingfit.org.nz/ to see how healthy their money habits are, and get advice on how they can improve.

Following the tips below can also help you get started on tackling your debts, and creating smart spending patterns that will help get your finances in fighting-fit form.

Top Tips for Reducing your Debt from MasterCard

• Actively manage your money: It’s important to manage your money and funds available responsibly to build a better financial future:
o Set a monthly budget with incoming and outgoing spend and monitor your progress in order to keep within your limits
o Charges on credit cards should be paid back in a timely fashion to avoid interest charges on the remaining balance
o Always check your credit card statements carefully and on a regular basis in order to spot any irregular transactions as quickly as possible
o Using your payment card, whether it be prepaid, debit or credit card to pay for purchases and make payments will help you to keep track of all your spending in one location
o Make sure you update your personal details if you move address. This will help to prevent your financial information from falling into the wrong hands

• Choose the right card payment product: There are many different types of payment card products available. Getting your finances in order and debt under control involves evaluating whether you are using the right payment card to suit your personal situation.

If you need to utilise the convenience of a line of credit over the short term, you should look around for a Low Rate credit card instead. Interest rates for Low Rate credit cards typically start at around 13% and could save you unnecessarily paying a higher interest amount.

Websites such as www.sorted.co.nz or www.interest.co.nz, as well as MasterCard’s own website, provide useful tools to help you determine what product may be right for you.

• Curb your spending: Freeze all unnecessary spending while you assess your debt and formulate a plan for getting on top of it. This will no doubt involve forgoing big-ticket items, reducing every day spending, or a combination of both.

• Assess debt levels: Understanding how much debt you’ve accumulated is the first step towards reducing it. Determining your total amount of debt can be difficult, but it’s important to have the complete picture if you are going to overcome it.

• Set a goal: Set a big goal, to pay off your entire debt over two years for example, then break it into a series of smaller goals which are achievable in the immediate term. If you are tackling debt as a family or couple, get everyone involved and look towards reaching the goal together.

• Formulate a plan: Put the plan for reaching your goal down on paper. Set targets for monthly expenses, such as transport, utilities etc. Then try to spend less than your set targets. Make the difficult decisions about how to squeeze more of what you earn to reduce your overall debt, but always remember to leave some budget for unforeseen expenditure (e.g. replacing a car battery, calling in a plumber) so your plan doesn’t fall down on something unexpected.

• Track spending: Keeping a spending diary online or in a journal will help you identify ways to reduce expenditures and allocate more money to paying off your debt where possible.

• Monitor your debit and credit cards: Always check your card statements carefully and on a regular basis in order to spot any irregular transactions as quickly as possible. Using a MasterCard card can protect you from any nasty surprises as liability for an unauthorised charge is limited.

As a customer, you do have the responsibility to inform your financial institution if you become aware of or see an unauthorised transaction on your credit card, or if your card is lost and stolen. Policies do vary depending on the credit card issuer, so make sure you read the small print. However, most providers do offer some extra level of protection on purchases. For example, MasterCard Zero Liability policy protects against unauthorised transactions in store, over the phone and via the Internet*.

• Pay more than the minimum: Charges on credit cards should be paid back in a timely fashion to avoid interest charges on the remaining balance. Paying more than the minimum repayment amount can be a critical first step in reaching your goal.

* More information on conditions and exclusions to MasterCard’s Zero Liability policy can be found at: http://www.mastercard.com/nz/personal/en/zeroliability/index.html

For further tips and information on managing debt, please visit: http://www.mastercard.com/nz/personal/en/education/budgetbasicsindex.html

About MasterCard MasterCard (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MasterCardNews, @MasterCardNZ, join the discussion on the Cashless Pioneers Blog and subscribe for the latest news on the Engagement Bureau.

ENDS

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