How to get better at saving money
Retirement tends to creep up on people - one day you’re working hard to pay off the mortgage and raise a family, the next, retirement is just a few short years away. If you’ve reached this point in your life and are worried that you may not have enough money saved to see you comfortably through, now is a good time to act by finding ways to supplement your existing income. A little extra money saved now can go a long way over the coming years.
Making extra money doesn’t mean you need to re-dedicate your life to work by taking a second job, but it will require some commitment. However, by thinking outside the square you could earn money without having to give up all your spare time.
How can I earn extra income?
The answer to this question depends entirely on you. First, how much time can you commit? Second, what are you good at doing? Some opportunities will come down to the skills you have to offer, others may come down to your current financial situation and the kinds of assets you have at your disposal. Either way, start thinking about what you like, what you’re good at and what you’re able to do. We’ll kick things off with a short list of ideas - it’s far from exhaustive, but there’s plenty in there to get you thinking along the right lines.
Rent out your assets
If you own a bach or a house you only live in part-time, it’s easier than ever to make money from them thanks to several internet-based letting services. AirBNB and Bookabach are popular and allow you to connect with a massive online network of people looking for properties to rent or holiday at. These services provide all the tools to do this and, in return for a small commission (Bookabach charges 3%), you can put your property to work.
Likewise, if you own a campervan that sits idle most of the year, try a similar service called Shareacamper. You can even earn money by renting out your own car with a company called Your Drive - as a rough guide if you rented out a $10,000 car for 10 days each month, you could earn up to $2695 per year. That's nothing to be sniffed at.
Invest in real estate
Rental income is a great way to earn passive income and once you’re setup, there’s little impact on your time. There is, however, plenty to consider, so read our guide to property investment to see if it might be right for you.
Become a freelancer
Freelancing is just a fancy way to describe hiring out your skills. It could be writing, web design, photography, tutoring or just about anything, but if you have a particular skill that’s not being used, there’s a good chance someone out there is willing to pay you for it.
Buy and sell
If you’re a shrewd operator, it’s entirely possible to buy stuff (TradeMe or your community newspaper are great places to start) and then sell it again for a profit.
Drive your car
This is another product of the internet sharing economy. Uber is expanding all the time in New Zealand, so if you have a car and a driver’s licence, you can soon become an Uber driver making money when it suits you. Check out the process involved in becoming an Uber driver.
How do I put my money to good use?
Once you’ve got that extra income coming in, putting it to good use is vitally important.
Even if you’ve been a dedicated saver your whole life, if you’ve not paid much attention to those savings over the years, there’s a good chance there are some simple tweaks that’ll see you better off. Your best approach here is to talk to your bank to go over what you’re trying to achieve. They’ll know the tools inside out and will be able to suggest the best choice for you. Start by checking out savings account options, then investigate the benefits a term deposit might hold for you.
Other ways to put those savings to work include KiwiSaver (it’s never too late to enroll and take advantage of the perks) and specialised services from the likes of BNZ Private Bank. Be sure to check our guide to saving for retirement in your 50s for more detail on how to maximise your savings.