"My mum told my siblings and I to 'spend half and save half' of whatever we earned.
"That way, we enjoyed a bit of financial independence to buy something we liked, while saving for 'assets'."
Vittoria Short, CEO, ASB Bank.
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.
Having started working part-time from age 10, Vittoria Shortt, chief executive at ASB, says the best money advice she's received was from her mother, who taught her to 'spend half and save half'.
As a plan sets the direction for the future, Short stresses the need for all Kiwis to have a plan. To make the plan happen and get through challenging times, saving is key, she says.
1. Are you a saver or a spender?
A bit of both.
My mum told my siblings and I to 'spend half and save half' of whatever we earned.
That way, we enjoyed a bit of financial independence to buy something we liked, (mostly lollies from the dairy when I first got the concept at age 10), while saving for 'assets' (as I used to say as a teen).
I've always been determined to be financially independent so that I have choices. I started my first job when I was 10, doing a newspaper round. I then worked in the local supermarket packing bags ($3 per hour), babysitting, working at the local takeaway shop and a department store.
Every university holiday, I worked six days' a week. I've never been shy of hard work.
2. What's been your biggest financial lesson, success or failure?
My biggest financial lesson is to plan, find experts and ask questions, and be clear on your tolerance of risk.
My husband and I routinely sit down and review where we're at, where we're heading and what we need to do together to be prepared. We don't always agree on every part of the plan (there's a bit of give and take). We have the same underlying philosophy towards money, which really helps.
Your plan needs to be able to flex for the good times and the difficult times. It's important to work out what you're comfortable with, so it helps to remove financial stress.
3. What do you know about money now that you wish you'd known sooner?
That saving is key to getting through challenging times, and to achieve 'one day' dreams.
When I look at today's budgeting tips and tools, I wish I'd known more about the small, practical steps to take to invest and grow savings. Like how to use KiwiSaver, diversifying investments, or the impact of payment frequency for mortgages.
When I look at my teenagers and Generation Z, I can see they're more careful. The co-creation sessions we run at ASB with Gen Z show they have both FOMO (fear of missing out) and FOMU (fear of messing up). They know the choices they make today can, and do, impact later years.
4. A recent purchase you consider was value for money?
The Headspace app.
The latest lockdown in Auckland has been felt differently by everyone. When I spoke to friends in Melbourne - the most locked-down city in the world - they stressed the importance of doing more for wellbeing.
After using the free version of Headspace on and off, I decided to pay for a subscription. I'm really enjoying using it. Little things, like starting the day well with breathing and meditation and ending the day with a stretching session have a huge benefit and leave me feeling more able to tackle daily challenges.
5. A money tip you would give to young people wanting to get ahead?
There's no magic bullet to getting ahead.
It comes back to the basics of planning and budgeting, being careful with spending, developing good savings habits and investment decisions.
That may sound boring, but it’s the reality.
It's important for people to understand how much they spend, and on what. Conscious decision making is important. Is the item a need - or just a want?
Buying less helps financially and it helps sustainability (a double benefit).
6. What's your preferred form of investment and why (e.g. property, shares, term deposits)?
All of the above.
It's about diversification. It's important for people not to have all their eggs in one basket.
Cash is a great vehicle for an emergency fund (rainy day bank account).
KiwiSaver is a great way to save for a first home or retirement. Check your KiwiSaver and make sure you're in the right fund.
With investing, I think it is important to get help from the experts. New Zealand research shows that people who get the right guidance and advice usually grow their money more than those who don't.
7. Your best saving tip?
To set savings goals, then take small steps towards them.
Always focus on the end result, which is financial wellbeing and resilience.
For those who find it hard to save, I recommend using free online tools and banking apps.
For example, the 'Save The Change' tool on the ASB app rounds the amount spent to the closest $1, $2, $5 or $10 and transfers the extra into a nominated savings account. It's a great way to save without having to actively think about it.
Rounding up and transferring the money manually using internet banking will achieve the same result.
8. What's the best money advice someone's ever given you?
My mum's advice, 'spend half and save half', gave me a great start.