KiwiSaver for Beginner’s:




Kia Ora and welcome back to yet another blog post. Today’s post is all about KiwiSaver. I love KiwiSaver because there are some special perks you receive by having a KiwiSaver account. This post is all about those special perks you receive, and the potential benefits you may get by having and using your very own KiwiSaver account. But first, what even is a KiwiSaver account?


KiwiSaver is Aotearoa's very own version of a retirement scheme that started in July of 2007. The idea was that it would support and encourage people to invest and contribute regular, small amounts into their accounts to help build up their wealth which they could later withdraw for retirement. Today, you are able to withdraw funds from KiwiSaver for two things:


  1. Retirement

  2. Buying a first Home


(Under some circumstances you can withdraw funds for serious Financial Hardship and Serious Illness)


I like to think of my KiwiSaver account as like a savings account that grows really fast. Here’s why:

● When you have a job, and you decide to opt in to ‘employee contributions (a % of your wage gets sent to KiwiSaver instead of yourself)’, your employer actually has to contribute too. Their contributions are called ‘Employer Contributions’. They have to match your contributions up to 3%, but some employers will match it with your own contribution. So, what this means is that if you add 3% of your wages to KiwiSaver, and your employer does so too, you are getting 6% added to your KiwiSaver but only paying for half of that. So, each week/fortnight/time you get paid you are effectively making a 100% return on your initial investment (meaning the savings you have contributed).


● Once you are 18 years old, there is another wee surprise with KiwiSaver. This one is called the ‘Government Contribution’. This is where the Government will contribute up to $521.43 each year - all you need to do is make sure you have contributed at least $1042.86 in the period 1 July to 30 June (If you do not contribute $1042.86 in the year, the government will still contribute 50 cents for every dollar you save).


· Your KiwiSaver money is pooled together with other KiwiSaver accounts and invested into different funds (this will vary slightly depending on your KiwiSaver provider), which will make up your overall KiwiSaver portfolio. This also means that your KiwiSaver savings money is put to work, and through the magic of compounding (interest) growth, it will grow over time.


So, why would you put money into KiwiSaver as opposed to an ordinary savings account?

1. Because an ordinary savings account will not pay you 3% of your wages, and it won't give you $521 each year, and it also will not have as much potential return (earn as much interest) as it would in KiwiSaver.


  1. Each year your money sits in a bank account, it may earn 1% in interest (Depending on your bank). But, if inflation is at, say, 6%, you have actually lost 5% of your savings, to inflation. This means that your buying power reduces. Alternatively, if it is invested, it should have a better chance to grow more than the rate of inflation, which means more for you in the long term.


The three F’s with KiwiSaver


There’s a few important factors to deciding what provider you should use when it comes to KiwiSaver, and they are a big part of the reason I chose kōura as my KiwiSaver provider:


  1. Fees

  2. Friendliness

  3. Freedom


I will explain these 3 F’s for you:


Fees - Let’s not waste our hard earned money on fees! That’s nonsense. Some providers steal a lot of your money by charging you big fees. At kōura though, their fees at 0.63%, are on the lower side, with their core fund fees being half the industry average growth fund. the best in the market.

Friendliness - your KiwiSaver provider is going to be someone you’ll need to talk to over the years. When your situation changes, when you want to withdraw it for a first home, it's important that the team is friendly enough that you can do these things efficiently and without stress.


The last F is Freedom. Freedom to decide where your money is invested is so important! Some providers make it really hard to understand where your money is being invested. Not with kōura though! You have the freedom to choose where your money gets invested.


These three F’s don’t just apply to KiwiSaver. You can use them with any investment.

Kids and KiwiSaver:


You might be wondering, if KiwiSaver is so good - should I sign my kids up for it? Yes! My mum first helped me to open up a KiwiSaver account when I was 8 years old. I haven’t added any of my own money to the fund except for the government contributions, and employee / employer contributions and it’s already compounded to $7,000.00! I intend to withdraw the money here when I buy my first home. This will be a huge help and it's something I wish for every young person to have access to. Here are just some of the benefits for children and KiwiSaver:


● By signing them up young, you have the option of adding small amounts of money and them being able to leave home with a nice lump sum in their KiwiSaver account.

● KiwiSaver is an awesome way to educate your children about dollar cost averaging which is when you add regular amounts of money into an investment. You can help them to start doing this at a young age, even with their pocket money. The skills that they will learn from this are invaluable.


KiwiSaver may seem big and confusing, but it’s really not. If you’d like to learn more about KiwiSaver and the different types of funds, make sure to read the articles available in the education center of koura’s website. Here’s my favorite one: Servicing your KiwiSaver


Disclaimer: This Blog Post is sponsored by kōura KiwiSaver. #ad All thoughts are my own.

1. The 24-hour rule and 72-hour rule

The 24-hour rule is based on the principle ‘to sleep on it’ before making an important decision. Instead of being lured into an impulsive buying decision, wait 24 hours before locking in expensive purchases.

This will give you time to decide whether it’s a ‘want or need’ and make sure it’s not an emotional and unnecessary indulgence.

The 72-hour rule takes this a step further, which suggests waiting even longer.

Austrian neurologist Viktor Frankl writes in his book Man’s Search For Meaning, “Between stimulus and response there is a space. In that space is our power to choose our response”.

This space between our desire to buy and actual buying can hold the power to change our decisions, The NY Times says.



2. An all-cash mindset

One habit the wealthy live by is avoiding debt and interest costs by paying for everything up-front.

American talk show host Jay Leno has been quoted saying he barely uses credit cards, doesn’t write cheques and doesn’t carry debt.

“I don’t write cheques at the end of the month for anything. When you own something and you don’t have to write cheques every month, you’re just better off,” he told CNBC.

Save the cash you need for each purchase, and you won’t need to take on debt. This will also make you more frugal with your buying decisions because you’ll be budgeting with the cash in your bank account, rather than what credit loan is available to you.

If you’re buying a large purchase as an investment such as property, taking on debt as a mortgage can be a good debt, but having a cash mindset for smaller purchases will save you money.

3. Set the goal of saving 10 to 20% of your income

Thomas C. Corely, a certified public accountant and certified financial planner, studied millionaires for five years for his book, Change Your Habits, Change Your Life.

Out of the 233 people he interviewed with at least $160,000 USD gross income annually and $3.2 million USD in net assets, 177 of them were self-made.

“The self-made millionaires in my study all set a goal of saving 10 to 20% of their income during their pre-millionaire years,” Corey wrote.

What is encouraging about his study is that 80% of the self-made millionaires he studied didn’t fully accumulate that wealth until after the age of 50.

4. Use the 50/30/20 rule for budgeting

Harvard bankruptcy expert and US Senator Elizabeth Warren coined the 50/30/20 budget rule for Americans, but the same philosophy might prove note-worthy for New Zealanders too.

The rule outlines that one’s income after tax should be divided between spending 50% on needs, 30% on wants and 20% on savings.

Needs consist of your non-negotiable monthly payments such as rent or mortgage repayments, grocery bills, utility bills, health insurance and car payments.

Your wants would be made up of disposable income that can be spent on entertainment, shopping for non-necessities and any planned vacations.

This would leave your final 20% for a savings account or debt repayment.

This rule comes back to the theory that most self-made millionaires save 20% of their income.

5. Spend on items that have earning potential

Buy the things that will be an investment into your future, such as a decent laptop and working from home workstation.

Stanford University economist Nicholas Bloom says working from home is likely to continue long after the pandemic ends - so investing in home office equipment will likely increase your earning potential.

“Work from home employees now accounts for more than two-thirds of the U.S. economic activity,” Bloom told Stanford News.

This is a global trend that has also changed the way we work in New Zealand. More than 40% of Kiwi employees worked from home during lockdown in 2020 according to Stats NZ and it’s a trend that has continued into flexible working at many corporate companies.

6. Time is money – so pay for services that save it

"Time is the only asset you can’t get any more of, so be extremely selective when handing it out,” Warren Buffet said.

Following the advice of one of the best investors of all time, spending money on services that save you time and stress are worth it. Whether that’s a delivery service or renting or buying accommodation closer to where you work, it could be worth the extra cost.

Creating a lifestyle that gives you more time to do the things you enjoy, will add to your personal fulfillment.

7. Experiential spending is an investment into your happiness

Experiences that enrich your life and add to your happiness are worth the cost and millionaires are always embracing these.

Business Insider asked 100 millionaires what they spent their money on and 60% spent their money on travel.

Experiences are found to provide a higher level of satisfaction compared to using material possessions, according to a study at the University of Texas.

8. Streamline your wardrobe to save on outfits

Many successful people wear similar outfits every day, from Mark Zuckerberg to Steve Jobs.

This minimises the decisions you have to make on what you’ll wear – saving brain power for better financial decisions, plus saving you money on shopping.

If something can be repaired instead of replacing it, this will also save you more money in the long term.

Having a capsule wardrobe is another way of saving – this means having a small number of items that can all be mixed and matched together to create more outfits overall.

Budgeting can allow you to have more money in the areas which are important to you. If you are wanting to save some money for a holiday, or to purchase something, then saving money is the best way to do this. Here are some ideas for saving money:


  1. 50//30/20 rule - this is where you spend 50% of your income on your needs, 30% on your savings, and 20% on your wants

  2. In a partnership, to spend one persons income on living costs and then the other persons income for investing and saving

  3. If you're alone, to live off of your side hustle and save your 9-5 income

  4. If your side hustle isn't generating enough to do number 3, then to live off of your 9-5 income and to invest and save your side hustle money

  5. Pay yourself first - This one is my literal favourite. This method uses the idea that your savings and or investments are a 'fee'. This works so that your mind is like 'ok I have to pay $50 in to my 'bill' (savings) account. Its all in the mentality....

  6. Decrease your expenses or increase your income

  7. Stop going on date night until you can afford it - or, go on cheaper dates!!

  8. Save spare coins - If you really do not have spare cash each week to put away, start small. This can be as small as saving coins in a container until they add up. Remember, every cent counts.

  9. Stop buying lunch at work! This is one of the biggest money thieves!!!! Every day you spend $10-$20 which adds up to $50-$100 a week and then you say that you can't afford to save?


Then on to budgeting. I like to budget every single cent. This means that every dollar has somewhere it needs to go, and every dollar has a job to do. Whenever I'm making a budget, these are the things I like to do:

  • Create a list of my income streams

  • Create a list of my expenses

  • Put these lists side by side

  • Add each list up and take a look at the difference

If I have more expenses than income, then I need to work on either increasing my income or decreasing my expenses.


That's it! It's that simple.

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