March 14, 2018 Mahurangimatters 21
FE ATU R E
Housing issues hitting families hard A lack of affordable housing and rapidly increasing rents are causing more and more local families and individuals to struggle financially, according to support service organisations. Warkworth/Wellsford Budget Service co-ordinator Jo Walker says the higher cost of housing and also the lack of accommodation is having a huge impact on individuals and families. “Around 70 per cent of our clients live in rental accommodation and some are paying 65 per cent or more of their income in rent,” she says. “It is particularly difficult for single people to find affordable or suitable accommodation.” Quentin Jukes of Homebuilders in Warkworth agrees, and says they are seeing increased numbers of people whose financial situation is precarious. “The underlying issue in this area, like most of the country, is housing costs and the impact of that, particularly on people on middle and, especially, low incomes. To find anything even vaguely affordable to rent, never mind to buy is an ever-increasing problem,” he says. “What we constantly see are people struggling to get by week on week. Even one small cost, like a child losing a school jersey, or a flat tyre, or some whiteware breaking down, puts people
How to get help and what you’re entitled to Warkworth/Wellsford Budget Service Free and confidential budget advice from Puhoi to Kaiwaka. Trained advisers visit clients in their home to draw up budget plans, manage debt and help people to balance and prioritise income and spending. Info: Phone 423 7123, Email email@example.com
Homebuilders is seeing the impact of increased housing costs.
in a really precarious position, and then they get behind with their rent and find themselves in dire situations quite quickly. “When you’re sailing that close to the wind, just a small thing can put you over the edge.” The change in government and an increase some benefit payments might offer a degree of short-term hope, but a more fundamental change in policy and society as a whole is required, they say. “The increase in the accommodation supplement coming into effect on April 1 will be very welcome, however this doesn’t apply to all areas,” Jo Walker says. “The provision of social housing and an increase in benefits and accommodation supplements across the board is essential
to improve the situation for individuals and families.” Quentin Jukes says he is “cynically hopeful” that the new government might bring about meaningful change, but says the proof of the pudding will be in the eating. “What people are eating for breakfast this week is not based on policy, it’s based on dollars and cents, and when we see that change, we’ll be a lot happier,” he says. “While our system focuses on people working for the economy, rather than the economy working for people, there is always going to be a problem. “It’s partly about the minimum wage and basic income levels, but it’s also about what work we value as a society.”
Homebuilders Family Support Services Free and confidential practical help and information on a wide range of issues. “We check people are getting what they should be getting and know about the legal entitlements they have for support.” Info: homebuildersfs.org, Phone 425 7048, Email homebuildersfs@ clear.net.nz
Otamatea Community Services Free, one-on-one confidential financial mentoring and family support. Info: otamateacs.org.nz, Phone 09 431 9080, Email reception@ otamateacs.org.nz
Christians Against Poverty (CAP) Free debt counselling charity based in Auckland, operating via local churches. Open to anyone. Info: capnz.org, Phone 0508 22711, Email: firstname.lastname@example.org
We at Withers & Co are Chartered Accountants at 23 Neville Street Warkworth, two Partners and eight in our Staff Team. Our clients are very varied, we are used to complex Companies, Trusts, Farming and Developers, Overseas Income and Investment Portfolios, Rental Properties. We have been in Warkworth since 1969, and are seeking additional client work. Recent Tax Changes - Five year Bright Line Test Income tax is payable on any gain made from sale of residential property, section or house – now two years, to be five years when passed in Parliament in late March. There are exemptions for primary place of residence – but second home and rental properties are liable. There could be large savings by obtaining a property sale before end of March, while the two year rule still exists. Be very sure your 2017 tax returns are filed with Inland Revenue before 31 March 2018 – penalties start then for late filing. End of Year Tax Tips With 31 March now close, there is some very worthwhile forward planning you can do now, to save income tax. DEBTORS
Review these carefully if any are unlikely to pay, write them off the ledger as bad
debts. Still try to recover these, but if you do, you pay tax only when they are received. CREDITORS
March accounts payable after 1 April – if income earned is higher than usual, order now so these can be claimed this year. Any assets needed – likewise one month depreciation can be claimed. STOCK TAKE
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22 Mahurangimatters March 14, 2018 Christine Liggins says pay your bills at the same frequency you get paid.
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Top 10 budget balancing tips Warkworth businesswoman Christine Liggins, of Simply Budget, has been giving budgeting advice for 14 years because of a passion for “messing with money, making it work and helping people”. She divulged her top 10 budget tips to Mahurangi Matters … 1. Pay frequently Pay your bills at the same frequency that you get paid. For example, beneficiaries are paid weekly. If they pay the power bill only when it arrives then that it could mean all their benefit has gone for the week and they have no money for anything else. If the power bill comes in monthly and you get paid weekly, still make weekly payments. By paying weekly, you can manage your budget better and always have money for everything each week. Most power companies will let you pay at the frequency you want. They will look at your last 12 months of usage and divide the total cost by how frequently you want to pay. Telephone companies are not so helpful, but you can still set up an automatic payment and pay them as you get paid. If you end up paying a little more than necessary each month, after a little while you can have a “free” month. 2. Check your plans When it comes to things like insurance, power and phones, you need to regularly check that you are on the right plan. I used to pay $90 a month to Vodafone for 300 minutes of free talk, a gig of data and a limited number of free texts. I went in to see them one day. I came out with unlimited texts, unlimited calls and 4 gig of data for $30 a month. Phone companies are helpful in finding the right plan for you if you ask them, but you have to be sure to ask. With power, you can go to powerswitch. org.nz, which will help you work out which power company and pricing plan is best for you. They make about 10,000 changes a month to keep up with all the changes that are made by the power companies. They tried to set one up for telephone lines and the
internet but they could not keep up with all the changes. 3. Get on the same page I’ve seen a few clients like this in the last three months: There are two in a relationship and both are paying household bills but neither knows what the other is doing. One might be paying the bulk of the bills and is left without money at the end of the week. They need to sit down together, itemise the household bills and fairly divide the expenses. 4. Monitor all outgoings When people prepare a budget, they will remember to put down things like rent, power, car, insurance and even “fun”. But they tend to forget things like the WOF, the car registration and presents. Sometimes when working with clients it will take up to the second or third interview before they say, “Oh, I forgot to tell you but we do have this coming out each month.” It’s important to write down all outgoings and remember ones that might be overlooked. 5. Take free advice There is a budget line number 0508 BUDGET. Calling that number will put you in touch with your local budget advisor. I belong to the Warkworth Wellsford Budget Service and about 20 of us volunteer for that service. People calling the budget line in our area will be referred to one of us. A lot of people think that the budget service is tied to Work and Income and you have to be a beneficiary, but that is not the case. Also consider taking the NZ Certificate in Money Management Course run by Te Wananga. There are 20 weeks of evening classes and it’s free. continued next page
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6. Pay what you can People get a telephone bill of, say, $200 and they think, ‘O my goodness, I can’t pay that’, so they don’t. But pay what you can. At least it will make the bill smaller. If you don’t pay anything, the bill will just get bigger and even more impossible to pay. 7. Check your bank statements Look out for fraudulent use and spurious charges. I was helping one lady and noticed there was $11 a month coming out of her bank account. But we did not have that on her budget sheet. She did not know what it was, so I asked her to check. It turned out she had taken a loan out with the bank and there was an insurance cost attached to the loan. She was done paying off the loan, but they had not stopped taking the insurance payment. When she brought this to the bank’s attention, they cancelled the automatic payment and refunded the money she had overpaid. It was so much she could pay off one of her credit cards. If we see something unusual on our bank statements, we should always question it. 8. Keep it simple I had one client with six bank accounts and her bills came out of different accounts. Every week she had to transfer money from one account to another to make sure that a bill got paid. Sometimes she would transfer the money into the wrong bank account and end up with a dishonour fee in the correct bank account. There’s nothing wrong with having multiple accounts
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March 14, 2018 Mahurangimatters 23 if you can manage them. But if it’s too complicated for you, you are going to get in a mess. Keep it simple. 9. Take care with credit cards Don’t use your credit card to withdraw cash. Once you withdraw the cash you can immediately be paying interest of around 23 per cent. Whereas if you use the card to purchase something, you will have weeks to pay it off before incurring interest. Also, be careful with balance transfers. This is where you transfer the balance of one credit card on to another credit card with a lower interest rate. The trick here is to ensure you don’t add any further debt to the card with the lower interest rate. Any debt repayments that you do make on the card will be deducted from the balance transfer first, meaning any further debt will be attracting a high interest rate, possibly for a long period, until the balance transfer debt is eliminated. 10. Plan for the future We always forget unexpected medical, dental and optician bills. Put them in your budget. If you allocate $1000 this year for dental treatment, it’s possible you may not use it. But next year you might have a $2,000 dental bill and that money will then be available. If you lost your job today what is going to happen? Is it worth considering income protection insurance? Or would it be better to put the money you might have spent on insurance aside and build up an emergency fund for unexpected expenses? Think it through. Account for everything and plan ahead.
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24 Mahurangimatters March 14, 2018
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Bitcoin: ingenious investment or financial flop? Last year Bitcoin took the world by storm when its market value soared to almost US$20,000. But what exactly is Bitcoin? Mahurangi Matters spoke with Andrew Butler, administrator for the largest cryptocurrency Facebook page in the country, to find out. Where did it start? Bitcoin was introduced in 2009 by an unknown person or group under the name of Satoshi Nakamoto. The idea behind Bitcoin is to have a currency that can be transacted with no central authority involved. What is Bitcoin? Bitcoin is a digital currency. No physical coins exist. It is known as a cryptocurrency because it uses
cryptography for verification. Because of the mathematical process required to transact Bitcoin it is considered almost impossible to hack or corrupt. One Bitcoin has a current market value of around $15,000. Where can I obtain Bitcoin? Bitcoin can be obtained in a number of ways, but initially it must be mined. Mining essentially requires continued next page
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March 14, 2018 Mahurangimatters 25
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computer processing power to solve mathematical problems that reward the correct answer with currency. The currency is immune to inflation because there are a maximum of 21,000,000 coins that can be mined, with 16,000,000 having been mined already. The more coins that are mined, the more difficult mining becomes. In the currency’s early days, home computer systems were able to mine. Now people require warehouses full of processors to do so. Bitcoin can also be bought with
New Zealand dollars, either through a transactional agreement between two parties or through an exchange such as Cryptopia. Cryptopia holds Bitcoin and will trade it for other currencies.
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What can I use Bitcoin for? A growing number of New Zealand businesses are accepting Bitcoin as a method of payment. There are a number of platforms that facilitate Bitcoin payments such as Bitpay, essentially the Bitcoin version of Paypal. Bitcoin is also the standard currency for purchasing other cryptocurrencies.
The future of cryptocurrencies Aside from being an administrator of New Zealand CryptoCurrency News on Facebook, Andrew Butler is an investor in Bitcoin himself. He says although the currency has come under critical scrutiny recently, he believes the market has found stability and confidence in it will grow. “For many years, it’s been a transactional currency, but I think just recently its value is seen more as a holding currency for the long term, like investing in gold,” he says. Part of his belief in cryptocurrencies long term is their applications beyond financial transactions. “Because the blockchain system and cryptography make them so secure, people are looking at how these coins or tokens can be used to do things like run elections, because the system
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is corruption proof.” Andrew says most people investing in Bitcoin long term are hoping that it will become an international standard for currency. “I think the core group of people investing in these currencies are young buyers who are disenfranchised with central authority due to corruption and costs.”
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Published on Mar 11, 2018