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What to do with $1200 more a month?
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Here are some perspectives on the state of personal finances in New Zealand.
Regarding the NZ student loan mentioned in the first link, it is worth noting that student loans are interest-free if the borrower is living in New Zealand for 183 or more consecutive days (about 6 months).
More on NZ student loans: http://www.ird.govt.nz/studentloans/
And yes, we have ridiculously high interest savings account rates between 7% to 7.35% p.a. Mortgage rates range between 7.70% (5-year fixed) to 7.99% pa (3-year fixed).
Household savings are in the negative however. What we owe, according to the NZ Herald:
• Total mortgage debt: $123 billion
• Up from $108 billion a year ago
• At fixed rates: $101 billion
• Average household debt: 1.5 times disposable income
• Ten years ago: 0.9 times average income.
• Households spend $1.15 for every $1 of income
NZ’s equivalent to your IRA and 401(K), however, is still not as good but it’s better than nothing. The new voluntary KiwiSaver scheme kicks off in July next year and some of its highlights include:
• The government will contribute $1,000 to kick-start your savings
• Your savings will be 4% or 8% of your before-tax salary or wages
• Employer contributions (if they choose to contribute) to your KiwiSaver savings are tax-free, up to a cap of whichever is less: your contribution or 4% of your before-tax pay
• KiwiSaver offers a first home deposit subsidy of $1,000 each year of membership in a scheme, up to a maximum of $5,000
Read more about it here:
http://www.kiwisaver.govt.nz/
http://subs.nzherald.co.nz/section/12/story.cfm?c_id=12&ObjectID=10411311
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