"Unless there's a pressing need to own a home, stay on the sidelines.
"Concentrate on building your savings so if you reach retirement with no home, there's enough money to cover the rent.
"Despite New Zealanders' huge emphasis on homeownership, that's a perfectly legitimate thing to do."
Mary Holm, personal finance author, columnist and presenter.
Money. It's the driving factor behind many life choices, but is it the be-all and end-all?
'Me and My Money' is a regular feature that investigates Kiwi attitudes towards money and what drives the choices they make.
A financial commentator and author of a new bestselling book, 'A Richer You: How to make the most of your money', Mary Holm dislikes shopping. She refers to the supermarket as the 'un-super' market and admits to wearing clothes from 20 years ago.
Unless first-home buyers need to buy now, Holm says they're wise to keep saving. House prices can't continue to be eight or ten times household incomes and will flatten or fall at some point, she says.
After cutting her losses on the foreign exchange market, costing her $7000, Holm says statistically, second-guessing might work but it doesn't make people rich.
1. Are you a saver or a spender?
I'm a saver.
I don't like shopping, whether in the supermarket (which I call the 'un-super' market), or a mall.
It just doesn't excite me. I always get what's on my list and get out of there.
The other day, I saw a photo of a friend's birthday party 20 years before and was a bit shocked to notice the top I was wearing because I still wear it.
But I don't think I've lost any friends because I keep wearing the same clothes.
2. What's been your biggest financial lesson?
Years ago an academic friend said he'd worked out the secret of how to make money on the foreign exchange market.
His trick did work for several months. So my husband and I put $10,000 in. By the time it turned into $3000, we decided it was time to cut our losses.
Since then, I've watched other people trying to get rich by second-guessing what way the dollar will move.
Half get it right half the time - because that's the way the numbers work. But by the time costs are paid, it's a losing game.
3. What do people need to know about buying a first home in the current market?
Unless there's a pressing need to own a home, stay on the sidelines.
Concentrate on building savings so if you reach retirement with no home, there's enough money to cover the rent. Despite New Zealanders' huge emphasis on homeownership, that's a perfectly legitimate thing to do.
In any case, the chances are high that between now and retirement age, house prices will fall, or at least not rise for a period.
There's no way they can stay this out of whack with incomes. You'll be in a good position to jump into the market then.
4. Give an example of a recent purchase that you consider great value for money?
My herb scissors (about $25).
I use them all the time. They're easy to use and easy to clean. So many kitchen appliances might save labour in food preparation, but take as much time to clean!
5. What was your last impulse or 'fritter' purchase and how did you feel about it afterwards?
As I'm not a shopper, there aren't many 'good' or 'bad' purchases.
But my wardrobe contains more than its fair share of 'mistakes' because I just wanted to get out of the shop and onto the beach or into the bush.
I did buy a real fruit ice cream at the beach the other day. There was a wee bit of 'post-purchase regret' because it wasn't great for my waistline. But it did taste good.
6. If you had spare money to invest, what would you invest in and why?
If I didn't need the money for at least ten years, I'd put it in a low-fee index fund that invests in international shares.
They offer good diversification and average returns over the years have been great.
7. Does having more money increase happiness?
Up to a point.
When the car breaks down or some dental treatment costs thousands, of course, I don't like it. But I'm lucky news like that isn't a disaster for me - I've got rainy day money that will cover it.
I don't think having more money would make me happier. As I used to say to my university friends, 'If you won Lotto, you'd always wonder about any friends you made… are they there for you or your cash?'
International research backs up the idea that beyond a certain income or wealth level, people with more money actually tend to be less happy.
8. The best money advice someone's ever given you?
Take advantage of time. Start - from now on - transferring a painless amount into a savings account every payday.
Whenever that amount has built up, move it into KiwiSaver or other long-term savings. Over the decades, it will grow enormously.
The views expressed in this article are personal and are not professional financial advice.