Budget update etc.

Hi everyone

In response to tiktok’s comment we’ve put up some screenshots of the revised budget we worked through on Sorted’s Budget Calculator. More income and less spending!

Budget page1
Budget page2
Budget page3
Budget page4
Budget page5
Budget page6
Budget page7
Budget page8
Budget page9

But is there room for some saving? Here’s Martin Hawes’ view:

Steph

Having money in the bank while you have a mortgage is a really bad arrangement. In effect, you are lending the bank your money (the term deposit), the bank puts a profit margin on and then lends the money back to you.

The result is that while you’re paying 9% interest on your mortgage, the bank only pays you 7% on your term Deposit. Then, of course, the IRD takes its share of the interest you are being paid and so you end up getting around 5.5%. That is not a good deal.

You are much better using any spare money that you have paying off the mortgage. To be better off you would have to get over 9% after tax from an investment – that’s not easy and would certainly mean taking some risk.

There are some exceptions, but most people are better to clear the mortgage before they start to invest.

Martin

Oh well, doesn’t look like such a smart plan at this stage after all. But let’s see where your votes take us.

Steph