Save your money! Kia ora, Welcome, Talofa. What are savings? The Wilsons. A resource to help you save your money. Income. Ruby & Johnny.






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A resource to help you save your money.

Save your money!

Kia ora, Welcome, Talofa.

With savings skills, you’ll be able to afford more of your goals. This course will help you:

• start saving

• get around some of the ‘road blocks’ to effective savings • recognise what saving options are right for you

• write your own savings plan.

What are savings?

After we pay our expenses whatever is left in the bank is savings.

What are savings?

After we pay our expenses whatever is left in the bank is savings.





The Wilsons…

We’ll use the Wilsons as an example of some of the situations we’re going to learn about in this resource. The Wilson family all have different savings goals.

Ruby & Johnny 25 & 29 years

Ruby and Johnny save some of their money each week to cope with emergencies and big payments.

They’re also putting money aside to buy a house with in a few years. Mike

19 years


Mike is saving to go on an OE once he finishes getting a qualification.

Annie is saving for her retirement. She has some money put away, but she’d

Information given is of a general nature only and does not constitute personalised financial advice. While BNZ has made every effort to ensure that the information provided is accurate, individuals should not rely on this information to make any financial decision without first having sought advice from their financial adviser, or make an investment without first having read the relevant investment statement.


Sometimes it’s hard to sacrifice daily costs to put money aside for later. Do any of these apply to you?

What stops you from saving?

It’s not a priority for me

I have better things to concentrate on right now. I have all the time in the world.

I want to enjoy life while I’m still young.

My other commitments take up all my time and my income.

I have other plans

I know I’ll make millions one of these days, so why bother with saving a few thousand? My partner is loaded.

I know how to play the currency and stock markets – just waiting for a good run. I have a set of collectibles that’s going to be worth serious money.

Life has other plans

I always have lunch with my workmates; bringing lunch from home will upset them. The World Cup doesn’t happen every year; I’ll start saving after the games.

Painting the house is more important right now; I’ll start saving next month.

I just don’t have the money

I don’t get paid a lot; I barely make the rent.

I might as well live it up now; I might not have a job next year. I just have too much debt to start saving.

There is a recession on, so saving is a luxury right now.

While it’s never too late to start saving, if we delay saving too much or don’t save at all, that decision can reduce our quality of life in the future. How can you deal with your reasons for not saving?


Why do you save money? Which reasons here help you save? Do you have any other reasons to save?

Reasons to save

You are better able to handle emergencies with a full bank account.

You are able to meet lifestyle goals with confidence (like buying a house or planning a big wedding). You can have a comfortable retirement.

When a need arises, you’re in a comfortable position to deal with it.

Savings makes things cheaper to get. You won’t have to pay interest and having money can get you a cash discount.

Reason 1:

Reason 2:

“Saving something beats spending everything.”

“Save now; spend later.”


Look for ways to earn interest!

When you put money into a bank account, the bank holds the money for you and may pay you interest.

How can you help your savings grow?

No or low interest Low interest Higher interest High interest

Current account • For your income

and paying your expenses • Easy to get your

money out

Savings account • Save money in

these as you go • Easy to open • Easy to get your

money out

Fixed term deposit • Locks your money

away for a fixed length of time • Limits your access

to the money

Investment account • Invest in bonds and


• Needs a minimum balance

• Limits your access to the money All the Wilsons have

current accounts. Ruby and Johnny share one, to make their joint budget easier to manage.

Annie, Ruby and Johnny use these to put money aside for emergencies and big payments.

Mike is saving to go overseas. He won’t need the money for two or three years, though, so he uses fixed term deposits. Ruby and Johnny are planning to put their house deposit savings in one of these soon.

Annie uses one of these for her retirement savings. Do you have one of these accounts? What do you use it for?


Let’s look at Annie and her friends Jonathan and Meretiana. They met on a course five years ago, and they’ve been putting aside money for a group trip to Europe since then.

How much will they each have after five years?

Savings add up!

Jonathon Annie Meretiana




$50 $75 $100 How much can you afford each week?

Saved for 5 years 5 years 5 years 5 years

Value of savings

$50 x 5 years x 52 weeks each year = $13,000

$75 x 5 x 52 = $19,500

$100 x 5 x 52 = $26,000

How much will you have in five years?

Remember, you’ll have even more if you’re earning interest!

Planning is the easiest path to living a hassle-free life. This applies to our finances too. The more we plan, the better our future financial security will be.

The first step is to think of goals we can save for. Goals can be a big ticket item or a lifestyle event.

They are saving for a house in five years. The deposit for a house would be $30,000.

Ruby also wants to save some money for her daughter’s future. She’s hoping to put away $20,000 by the time baby Marama is 21.

They decided to open separate bank high-interest saving accounts to achieve this goal.

Goal Target amount Deadline Weekly saving target

House deposit $30,000 5 years $115.50

Marama’s education fund $20,000 20 years $19.25

Total $50,000 $134.75


Your goals

What are your goals? Fill in your own deadlines and targets, and work out your weekly targets.

Goal Target amount Deadline Weekly saving target












Saving for retirement

You have worked hard and you deserve to enjoy retirement without worrying about money. Often the government superannuation is not enough to live the lifestyle you expect.

A lot of things affect how much you should save

Use the spaces here for your own notes about what you’re expecting.


KiwiSaver is available to New Zealand citizens and permanent residents. You can choose to contribute 3%, 4% or 8% of your income and your employer has to match the minimum 3% contribution. If you are self-employed, the government will contribute up to $521.43 per year. A lump sum payment will be available when you turn 65.


Now you know what you want for your retirement, you can talk with your bank about setting up retirement savings or you could use an online tool, like

Mere Jonathon Annie

Age started 30 40 52

Weekly savings $150 $150 $150

Retirement income in today’s dollars (each year for 25 years)*

$39,624 $32,084 $24,856

* This figure includes superannuation, interest, and inflation, and is given in today’s dollars, to allow us to understand the real buying power of the total retirement income.

After their round-the-world trip, all three decided to take another look at their retirements. (Annie already has some money put aside, but we’ll just look at her new savings, to see how the retirement incomes compare, depending on how young you are when you start saving.)

Let’s look at Jonathon, Annie and Mere

How long do you expect to be retired for?

What weekly income could you live on comfortably?


Match a savings plan

Let’s see how Ruby and Johnny do this for their house savings. They need $30,000 in five years.

Identify savings goals

Make a budget

Reduce your expenses and debt

Open a dedicated savings account

Watch your money grow! They are on track to save for a deposit on a place of their own in 5 years. • $30,000 ÷ 5 years = $6,000 a year • $6,000 ÷ 52 = $115.50 a week

Ruby and Johnny need $30,000 for a deposit in 5 years

They reduced their expenses

They opened a high-interest savings account • Savings from their new budget plan allowed them to

save the $52 a week.

• They created an automatic payment for $52 every week.

• They decided to give up drinking coffee at the café

• and Johnny thought he’d try walking to work instead of driving.

They made a budget to save $52 a week

• What do I want to save for? • When do I need it?

• How much will I need per week?

• Put the money towards your savings plan. • Put off buying things on credit.

• Choose a high-interest account.

• Set up an automatic payment on payday. • What can you give up for your goal? • What expenses can you reduce?


Make your own savings plan

I won’t touch it for the next years.

(But if I get good interest, it might be even less time!)

There are more resources in this series to help you be good with money...


I’m on track to save for



I need $



I need to save $

a week

I’m going to reduce expenses because my goal is important

I’m going to put $

in a high-interest savings account

$ ÷ years = $ a year

$ ÷ 52 = $ a week

I can save $ a week and a $ lump sum

What can I reduce weekly?

Item 1:

$ a week,

Item 2:

$ a week

What big expense can I give up this year? $