Steps to getting Sorted financially

Step one: Budgeting. Making a budget is a powerful tool for getting ahead financially. It is the first step to regaining control of your money. For help putting together a budget use Sorted’s Budget Calculator. But remember, budgets only work if you stick to them, so make sure yours is realistic.

Step two: Saving. Becoming a regular saver is a giant leap towards getting your finances sorted. To stay motivated set specific targets - like $1,000 for a trip or $2,000 towards an investment. Sorted’s Regular Savings Calculator will show you how regular savings, and the power of compound interest, can turn a little into a lot. The Goal Machine will show you what you need to save to reach a specific goal.

Step three: Debt Management. Paying interest on debt sucks away your money and makes the things you buy more expensive. So it’s important to keep debt under control. Only borrow to pay for assets – like a house or an education. Use your regular income to pay for living expenses and save for luxuries like meals in restaurants. Get rid of high-interest debt first, like credit cards and hire purchase. Then increase repayments so you can repay other debt faster. For more help visit Sorted’s Getting Out of Debt Calculator.

Step four: Retirement planning. If you want more than the basic income provided by New Zealand Superannuation you’ll need to save for retirement. The easiest way to do this is to start early but don’t start until you’ve got rid of your debt – see above. But it’s never too late to begin saving because even small amounts saved regularly can make a difference to your retirement lifestyle. Visit Sorted’s Retirement section for information on New Zealand Superannuation, and to see how private savings can boost your retirement income. If you’re closer to retirement visit Sorted Over-60s for help managing your nest egg.

Step five: Investing. The choices for investing are huge - everything from bank accounts to complicated futures funds. The important thing is to find investments that suit your personality and situation. For impartial advice visit Sorted’s Investment section and work through Your Investment Profile, Risk Recommender and Investment Recommender. Also check out the tips on finding a good investment adviser.

Find out more:
For more help sorting your finances, visit Sorted (www.sorted.org.nz). Sorted is packed with helpful information, tools and calculators that will help keep you in control of your money.