Back to Basics: Steps to Achieving Financial Independence

Back to Basics: Steps to Achieving Financial Independence

If you have had an ‘ah ha’ moment, or maybe an ‘oh crap’ moment, then this blog post is definitely for you!

This is for all of the people who have contacted me over the last month who have just had their own “moment” with money but are struggling with where to go from here. I’m going to help you find YOUR starting point so read on...

You may have soldiered on for all these years thinking you had it under control and that you were just like “the Joneses” because the Joneses are freaking awesome right?

  • Student loan (✔︎)

  • A second mortgage for rental property (✔︎)

  • Consumer debt due to impulsive spending or necessity (✔︎)

  • A partner that you love but you don’t discuss money (✔︎)

Yet, despite being just like the Joneses, each day you are waking up unfulfilled. In fact you possibly feel like a bit of a cog in a wheel on a journey you can’t seem to stop, a ride you can’t get off of.

What gives?

So here is a simple, back to basics plan for putting some structure around your money, getting you talking to your spouse and getting you on a journey to feeling in control of your money, maybe for the very first time in your life.

Here's the thing:

Good money management is a long term commitment where the fundamentals won’t change. In fact, if you asked your Grandmother how to handle money, then the advice she would give is probably the advice you are going to hear from me on this blog. If you just do a few key things RIGHT and commit to getting out of debt and then to a slow and steady accumulation of wealth you will be fine. If you are looking for a quick hit or a get rich scheme (bitcoin or borrowing your way to wealth) it probably ain’t going to work for you, because being good with money takes patience, a steady hand and time. When you understand this it puts you back in control.

Talk to your partner:

Chances are they have been feeling a little bamboozled by the whole money thing as well. Don’t shout, don’t accuse, don’t nag, don’t placate. If you are opposites, spend a bit of time seeing things from their perspective so you can understand what is driving them and just have an honest conversation about where you want to be in one, five, ten and twenty-five years time. Hopefully, you want to be in the same place? And if so, how can you calmly talk through what the impact of the decisions you are making with your money today have on the future you see for yourselves. You have to have a common goal and you each need to play your part because the actions of one will impact the other and working against each other will ruin your plans. Time to team up and work a plan together and also to commit to discussing money regularly.

Track your spending:

If you are going to bake a cake you measure out all of the ingredients to make sure you get the correct quantities right? Same with your money, if you know what is coming in (earnings) and what is going out (expenses) then you can make sure you have the right amounts going to the right places. Even those who are absolutely loaded track their spending, even long after they actually need to watch their pennies. How you track it is up to you but it needs to be:

  • Easy to do

  • Measurable

  • Something you know you will consistently do

Whether you write it in a notebook or create your own computer doc, just find a system that works for you. I use *PocketSmith these days and it literally takes me ten minutes a month to maintain it. Much more importantly, I use the information it now produces to guide me and show me how my month is tracking. Am I spending more than I earn? What expenses are coming up that I need to prepare for? It gives ME complete control over my money instead of me reacting to unexpected expenses. Jonny reckons it helps me run our finances just like a business does, which is so true. And it means that I won’t be one of those businesses that has to put up a ‘going out of business’ sign!


Cutting out your $5 coffee every workday (which adds up to $1,300 a year BTW) won’t make you a millionaire and sometimes people focus on the little things, such as their $5 coffee, whilst ignoring the BIG purchases like:

  • Spending $400 a week on groceries for a family of three

  • Failing to ever renegotiate your insurance

  • Updating your phone every 18 months

  • Facing up to the fact that your mountain biking hobby drains your bank account by $10,000 each year

  • Realising that every time you make one ‘improvement’ to your house (painting the interior), it will just trigger something else (new carpet to match)

  • Buying more house than you can afford...

It’s these big purchases that will blow up your budget. But you can budget for them.

Putting a dollar amount around each area of expense helps you:

  1. Stick to it

  2. Actually take note of that expense in the first place

Having a ‘feeling’ for how much you spend is just not good enough. I ‘feel’ like we don’t overspend at the supermarket is not measurable. Seeing the supermarket category in your budget totalling $1,600 at the end of the month is measurable. From there you can make a decision about whether this is too high, or lower than you realise and you can start to put a dollar amount on each category. I for example budget on $800 a month for our groceries, plus $120 for dining out. And I try to stick to these budgets.

Invest for retirement:

Yeah yeah, I get YOLO, but the reality is the average life expectancy in New Zealand is 82 years. So, if at the age of 30 I’m shouting “YOLO” all over the place, well, that’s going to turn into a bit of regret at the age of 65 when I’m still up to my ears in debt. If you are not in KiwiSaver then sign up to a scheme today. If you are not enjoying running out of money today, you will enjoy it even less when you are of retirement age, unable to work and reliant on the government pension.

That pensioner you see on their mobility scooter headed to the shops while you are on your way to the gym, well, that's you in 40 - 50 years.

You WILL GET OLD so it might pay to plan for that.

Find a low fee scheme (less than .51%) on and contribute 3% from your wages (your employer will contribute the same) or if you are self-employed set up an automatic payment to voluntarily contribute a minimum of $20 a week, or $1042 a year into your scheme. Each year Jacinda Ardern will give you a bonus of $521. More is always better, but chances are you have other things pulling at your money so for now just focus on the minimum. Just set it up and forget about it.


A handy calculation to work out roughly what you might need in retirement is this: ANNUAL EXPENSES x 25

Does this number alarm you? I’d rather you thought about it now that in 40 years time.

Do you have debt?

Write it all out in a list:

  • Store card for that new sofa you bought “interest-free”?

  • Credit card with a balance on it each month?

  • Student loan?

  • The bank of Mum and Dad?

  • Mortgage?

  • Car on finance?

  • Personal loan?

How does looking at all of that debt make you feel now that the gloss has worn off the item you bought? Not as shiny, new and exciting as all the advertisements had you believing? A dawning awareness that some company will take the majority of your paycheque off of you each week and month should have you feeling rightly p***ed off. With yourself.

Make a pact with yourself and your partner to say “no more debt” and cut up your credit cards and vow that no “interest-free 60-month” finance deal (or points scheme) will EVER be good enough to entice you back! Get real and don’t confuse yourself with the argument of “this is GOOD debt” or what have you; it’s ALL just freaking money you owe to someone else!

Choose the item with the smallest balance and start ‘aggressively’ paying this off while you keep making normal payments on the others. Once it’s gone, move on to the next one...

Automate your account payments:

My rates bill is $2,500 per year. That is a huge bill to come up with once a year. So, instead I have an automatic WEEKLY payment of $47 making it much easier to budget for and it ‘irons out’ this big expense into smaller bite sized chunks making it much more manageable.

When you were a kid do you have memories of your Mum or Dad sitting down with a cheque book once a month to pay their bills and juggle their finances? They would have given their right arm for the automation we have today. So, use it! In *PocketSmith I use their calendar to show me ALL of my upcoming automatic payments, for example, I will pay my house insurance on the 24th of May and this reminds me to make sure I have enough money in our account to pay it.

Automate your “bills to pay” and one day, when cash flow allows, you will be able to automate all of your investments too.

Emergency Fund:

May 2019 has been a ‘spendy’ month for us (plumbing bill, water bill, car bill, doctor visits, tax bill…), combined with the fact that both of us are on variable incomes and work was quiet. A perfect storm for running out of money for day to day expenses. Which we did! This is where people commonly reach for the credit card to get by, only to have THAT bill come back to bite them next month and the whole situation can start to spiral downwards from there. We came up about $1,500 short, which had me reaching for the first time in many many MANY years to our emergency fund which is a stash of cash that sits in a separate bank account just poised and waiting to save our bacon. With no stress, no anxiety, no robbing Sarah to pay Sue, I just reached over and pulled out the amount of money we needed and paid the necessary bills. Now my immediate priority will be to build this amount back up again as QUICKLY as possible, then it can just sit there again, just like an insurance policy, waiting to bail me out IF and perhaps WHEN it happens again. At the beginning you may just start with $1,000 - $2,000 (and even this may take some time for you to pull together) then over time you can build it up to a higher amount, in my case it’s about $16,000. Early on you may find yourself using it to fight fires more often, but over time as you get the rest of your financial house in order emergencies happen less often!

It earns a teeny amount of interest but I don’t get all worked up about the fact it “could be earning more money”, it’s not there as an investment, it is there as insurance.

I cannot stress to you the peace of mind that having a sum of money set aside, but readily accessible, brings you. But for those impulsive types who would feel this money calling to them, desperately asking to be SPENT, you need to put a few roadblocks in your way to fight those voices in your head. I suggest a bank account with a completely different bank, that you have NO online access to and NO cash card attached to it meaning that you PHYSICALLY have to go into a branch to transfer money into your current account to pay emergency bills.

Spending Money:

Firstly - stop buying so much crap/stuff.

And secondly - stop buying so much crap/stuff.

You may have woken up to your finances with an ‘ah ha’ moment but changing the habits of a lifetime takes time. For some people once you have discovered a better way of doing things you are in boots and all and change is rapid (sometimes accompanied by a screaming spouse - you might want to slow down to avoid that!) but for me it took me YEARS to change course, learning new information as I went about bank accounts or investing and making one change, then another, then another.

If you are used to having lunch out or buying a $350 pair of new boots every year for winter, you still can.


But you can’t have it all.

You’ve been HAVING IT ALL up until this point and look where that got you - in debt and reading this blog post about how to work your way out of it. But you can still have SOME crap/stuff, you just have to budget for it and pay for it with cash, and only after all other necessities have been taken care of. So, set yourself an allowance and look your partner squarely in the eye and solemnly declare to stick to it; no ‘stealing’ money from elsewhere, that’s called financial infidelity. Maybe have a different account that money goes into each week and this is yours to spend any way you like. If you want those boots, then you need to save up all of your weekly allowance (yep, just like we teach our kids to do) and then when you have enough, go and buy it with cash.

I use this strategy to save up for things like a holiday, putting a set amount aside each week and when the balance is high enough, we book a holiday. Once you get this up and rolling you set and forget it and you don’t miss the cash from your account and then when you do book that break, it’s a big relief knowing it has been budgeted for and already paid for.

But I think the key is to break the cycle and to simply stop buying so much!

Earn More:

If you are following all this along and thinking “I just simply don’t have enough money coming in to cover all this” then it’s time to think about earning more. Whether you get a job, get a better job, get a second job, ask for a pay rise in the one you have or sell stuff you probably should not have purchased anyway, you need to find a way to have more money coming in. Unemployment is at an all time LOW in New Zealand, so if you want to work, someone will employ you. Everyone in the household needs to pull their weight and contribute to putting a financial mess behind you. A lot of problems can be fixed with money, so make it your goal to consistently have more of it coming in.

If you are up to your ears in debt I would argue that now is probably actually NOT the best time to launch that cottage industry you have always dreamed off. By all means do it if you can achieve it with no start-up costs, but if you are being realistic for a moment, now is the time to actually MAKE SOME MONEY. Spend the time while you are working FOR money working on your side hustle idea, (for some inspiration check out generating ideas and plans so that when you are more financially stable you can kick it into gear then.


Investing is important to me and when I’m looking to cut costs from my life, I never cut my investments, because if I cut back on that, I am denying my future self. I pay my family first.


Once your debt is gone and your daily needs are taken care of, then I feel it’s the right time to invest beyond your KiwiSaver and once again, doing it without jumping on the latest investment bandwagon. Readers of this blog and various companies are in regular contact telling me about ‘new’ investments that I really should look into. Out of interest I always do but I rarely, if ever, do I sign up. Because you see, the investment sector is absolutely no different than any other sector out there, they are just vying for our business.

Take chocolate for example.

There are 50 different types of Whittaker's chocolate out there and they are always bringing out new products. And I don’t need to buy any of those right? I can happily stick to the one flavour I like.

Same with investing. We worked for the money we have to invest and I’m not going to waste it on the ‘latest thing’ or a gimmick investment. Today I automatically invest into three index funds on a monthly basis, an extremely simple investment strategy. In fact it’s not even worth adding another sentence around this. Just. Keep. It. Simple.

If I can do this!

You can do this! It will take you many YEARS but you can do this!

To summarise:

  1. Talk to your partner

  2. Track your spending

  3. Budget

  4. Invest for retirement

  5. Pay off debt

  6. Automate

  7. Have an Emergency Fund

  8. Spend a little

  9. Earn More

  10. Invest

You don’t have to have a $300,000 a year income, you just need to live on less than you actually do earn, remove all debt as quickly as you can (even if you have to sacrifice lifestyle to achieve this) and vow to take on no more. I’m not a hardcore frugalist who saves 70% of my income so that we can quit work forever. Instead, I am in control of my life and the money that flows in and out of it and there is a powerful feeling knowing that. When I speak with people who have optimized their life and are completely debt free and are now investing for their future they have put the above tips in place in some way, shape or form in their own lives and they always tell me that they feel HAPPY and FREE because of it and that is a state that I want everyone who reads my blog to get to.

If you have reached the bottom of this post then well done!

If you still feel like you need a little more, then here are few other resources for you to check out:

Why save, plot and plan for my financial future?
Why am I a passive investor?
20. Super Consumer to Super Saver
01. The Tipping Point: A Buddha and a Movie

As always, if I can help you with any questions at all, just drop me a line.

Happy Saving!


* PocketSmith are offering Happy Savers 50% OFF their Premium Plan for the first two months. To redeem this offer, use our link to set up a FREE account and apply the coupon code - 50OFFPREMIUM-F4RG - in the app via Settings > Subscriptions and Upgrades > Enter coupon. Then enter your payment details, and you are set to go.

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