If you’ve never had a budget, or if you’ve tried and given up on one before, it can be easy to get overwhelmed. Visions of complicated spreadsheets and living on nothing but 2 minute noodles make the idea seem at best, snore-inducing and at worst, overly restrictive. But the truth is it takes very little effort to get a basic system – ‘money buckets’ – in place. This is great news, as it can mean the difference between major savings and none at all.

If you’re hesitant to set up a budget, or even if you have one now that’s only kind of working for you, here’s a solution that may just work: separating you money into ‘buckets’.

What is a money ‘bucket’?
The concept of ‘money buckets’ has been doing the rounds of the personal finance blogs and media for a while now, and it’s a simple one: instead of a complicated line-by-line budget that accounts for every cent, you simply split your income into large ‘buckets’, setting up a separate account – and automatic transfers – for each. That way, you automate your saving and spending so it becomes easy to save: it’s that simple.

Step 1: Track how you’re spending now
For a week, or better yet, a month, track your spending. You could log this manually in an app or sync one with your bank account, but actually, many banks in Australia and New Zealand have this function built in to their online banking already, categorising all your transactions for you. However you choose to do it, you’ll soon see trends emerging, and you’re ready to move onto the next step.

Step 2: Choose your categories and decide how much goes in each
Once you have all your info, it’s time to come up with a few broad categories that reflect a realistic picture of how you want to spend and save. For example, you could have categories like rent or mortgage and bills, emergency savings, groceries, eating out, fun money, travel savings and debt. Less is definitely more – fewer categories makes for a simple budget that’s easy to stick to, making it easier to save. Once you’ve set your buckets, decide what percentage of your income needs to go into each. Assuming you’re not spending more than you’re earning, this needn’t be vastly different from how you’re spending now.

Step 3: Open an account for each bucket
With a different account for each type of spending and saving, you’ll know exactly how much you have in each bucket. Many financial institutions offer an option for multiple accounts linked together, and you can even give them customised names so you can see, at a glance, how much you have in each of your ‘buckets’.

Step 4: Set up your automatic transfers
As with many things in life, set and forget is the surest path to success. Make sure you set up direct debits for each of your buckets so your money is moving where you need it without you needing to think about it. Many companies will let you split your salary this way, or you could have all your income go into one account to begin with, with regular transfers set up to move money between accounts automatically.

Step 5: Regular check-ins
Whether monthly or quarterly, it’s a good idea to check your buckets regularly to make sure they’re where they need to be. That way, if you find one overflowing while another is almost empty, you’ll know it’s time to tweak your transfers to better match your spending and saving goals.

So what are you waiting for? It’s time to let your savings take care of themselves. Get started on your money buckets to see how automating your finances can help you save towards your dreams.

The post This could be the secret to better budgeting appeared first on Credit Simple NZ.

If the school holidays have you fearing those dreaded words, ‘I’m bored!’ but you know you don’t have cash to spare, never fear – a quick Credit Simple brainstorm is all you need.

Check out our top 5 tips to help you survive – and thrive – during these school holidays, with your budget and savings well and truly intact.

1. Get out and about – for free
Whether you’re planning a vacation or a staycation, the school holidays are the perfect time to get out and enjoy heaps of free and low-cost activities on offer. From kid-friendly museums and galleries, to parks, adventure playgrounds, libraries, national parks and even that ol’ favourite, the beach, you could easily fill a whole day (and ensure the kids are well and truly tuckered out) for the cost of a car trip or a bus ride and your byo sandwiches.

2. Try backyard camping
An old-school family holiday might not be in the budget this month, but there’s no reason you can’t drag the camping gear out of the garage, or borrow some from a mate, and have your own backyard camping adventure. This idea is perfect if you small kids who might not be used to being away from home – their beds are just metres away. There’s no stressful car ride required, and it’s a risk-free option that won’t be spoiled by bad weather.

3. Enjoy a crafternoon at home
This trendy pastime (a combo of the words ‘craft’ and ‘afternoon’) is not just for pinterest-obsessed twenty-somethings – in fact, it’s beyond kid-friendly. Especially if the arvo looks gloomy, a bit of craft can go down a treat with the young and young at heart. The best bit? There’s not much skills and very little money involved. Crafternoons can include painting, drawing, origami, The only limit is your imagination – google ‘crafternoon’ and you’ll see what I mean.

4. Have a movie marathon
Find me one kid that doesn’t love to veg out in front of their favourite movie or binge their fave tv show with a bowl of freshly-popped popcorn on the coffee table. Whether you fire up those streaming services or crack out the DVDs, each kid can pick their favourite movie or show for some much needed family chill time. If it all goes well, why not make it a regular event?

5. Go bush
Tramping is a brilliant way to explore the natural world on a budget. Just grab the sunscreen, insect repellent and plenty of water, load up the car with the bits ‘n bobs you need for a BBQ or picnic, and hit the road for an awesome family day out. Pro tip: make sure you let someone know where you’re going and when you plan to be back.

Hopefully these 5 cheap school holiday activity ideas get you thinking of even more fun, free ideas to keep the kids occupied.

The post 5 super fun (and frugal) school holiday hacks appeared first on Credit Simple NZ.

Recently I heard a story about a turkey who fills up his car with $40 worth of petrol, hangs up the pump, pays for it inside, then immediately fills up with another $40 and goes back in and pays for that too. He reckons he’s getting a better deal by hacking the AA Smartfuel system. There was much eye rolling and sighing at this seemingly silly caper.

But it turns out this turkey is one of 600,000 Kiwis (not turkeys) who know how to maximise the AA Smartfuel system and discounts – and they all do more or less what he does. You know how they always ask you at BP or Caltex, “Redeem or save?” There’s a very good reason. So we sat down with AA spokesman Liam Baldwin to find out why.

The main idea, says Liam, is to accumulate your discount on the minimum, but redeem it on the maximum. “Paying for $40 worth of fuel entitles you to a discount per litre, say 6c per litre,” Liam explains. “You can either take that discount on the spot and pay 6c less per litre you’ve just put into your car, or you can save the discount and redeem it later on more fuel. Essentially, you can either take your 6c per litre discount now on the $40, or you can save it take the discount later on a full tank, which might cost you, say, $120.”

In very simplistic terms, let’s say petrol costs you $2 per litre and you just filled up 20 litres to kick you over the $40 threshold. If you take your 6c per litre discount now on $40, you’ve saved $1.20. But if you get that same 6c discount on a tank of 50 litres at $100, you’ve saved $3 – an extra $1.80. Couple that with the additional 6c per litre discount you’d get with the second fill – I’ll do the maths for you, it’s 12c – you’ll actually save $6.

If this all sounds like too much bother, cool your engine for a second. I downloaded the app and checked out my Smartfuel discounts over time – the loyalty system has been going for about five years, says Liam – and I’ve saved a total of $431! That’s huge. And I’ve made that saving without ever accumulating my discount.

You can also take the loyalty scheme one step further and combine it with your Countdown shopping. So long as you spend more than $100 at Countdown within the calendar week, you’ll qualify for a further 3c per litre discount (be aware that if you opt for this, you’ll forgo getting the Countdown rewards vouchers you used to get), and $200 qualifies for a 6c per litre discount. And if you download the app, it’s easy to switch between the rewards programmes depending on how much you’re spending (i.e. you can opt to get the Countdown vouchers rather than the fuel discount, if you’re regularly falling short of the $100 minimum spend). (There’s even more advice on the AA website about saving money through Smartfuel.)

All in all, Smartfuel has been a massive success for the AA. “We’ve seen a 25% increase in monthly unique users and we’ve got one million people using the card each calendar month, which makes us the most active loyalty programme in New Zealand,” says Liam. “We’re saving Kiwis $65 million each year through fuel discounts, and that’s huge.

“It’s real money and it satisfies our need for instant gratification – you don’t have to wait to reap the rewards, but if you’re patient you can save even more.”

And finally, a wee tip for those who’ve been zipping in and out to pay twice for each of their $40 fill ups. “There’s actually no need to walk inside in between fills,” says Liam. “Just hang up the nozzle and pump again – then pay for both inside.”

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