Generation X reboot; How the election affects KiwiSaver; Credit card cash-back traps; How not to lose your job; Count your blessings

By Amanda Morrall (email)

1) Turn a negative into a positive 

I linked a few columns back to the Forbes 2012 investment guide  which has some constructive financial advice for the various generations. This posting profiling how one Generation X couple turned  a misfortune into a blessing is quite interesting.

In a nutshell, they wracked up US$10K of wedding expenses on a credit card and then everything that could go wrong did. One party lost their job, the other got a pay cut. They turned it all around for the better by using mint.com, (a money tracking software) and permanently adopting a "we are broke mentality.'' 

Read the piece all the way through. The clincher is the last line.

It's about the importance of finding a career or line of work that you love and can imagine doing until you're 70.

2) What the election outcomes means for your retirement savings

Call me paranoid, or perhaps I've been working with Bernard too long, but I think public pensions will be a thing of the past when it comes time for me to retire. As such, planning and provisioning for one's own retirement is hugely important.

According to a recent study, many now regard KiwiSaver as their primary retirement savings vehicle and yet for the average New Zealander that nestegg will only go one-third of the way to covering their financial needs in old age. That at least was the opinion of some financial advisers I spoke with recently.

With the election behind us now, this is prime time to review where you're at with KiwiSaver. Here's a check-list to get you started:

• What's your balance? 

(Check your annual statement, or sign up to the IRD's KiwiSaver website to find out how much you, your employer and government have paid into it).

• What's your performance been over the past four years, and how does that compare to others? Find your fund here.
• What's your contribution rate? (Minimum employee rates are now 2% but that's changing to 3% in 2013)

• What's your employer's rate? (Employers are currently obliged to pay 2% (some pay more - make it part of your next salary negotiation -- on top of pay) that will change to 3% in 2013.

• What's changing this year?(Member Tax Credits will be half what they were last year)

For a summation of the changes ahead for KiwiSaver under National click here.

3) Cash back traps

I have an aversion to debt. I avoid it at all costs. That said there is a smart way to use credit cards to capture air miles, "gifts" or cash back. 

Is that free stuff really worth it or is it just a trick to get you to spend more?

Here's 10 cash back credit card traps from consumerismcommentary.com. A few references to 401ks but general lessons for Kiwis as well.

4) How not to lose your job

I've had a lot of jobs over the years. I just counted 15 (since I was 15) but I expect I left a few out. Happily, I was only canned from one job.

I was "let go" after I failed to turn up for a hostessing shift at a restaurant. I thought I had a good excuse as I was working on a dance production at the time. It didn't fly with the manager. I didn't care so much as I'd also seen this manager get into a row with an elderly customer who complained about an overcooked steak.

The manager's response to the complaint was this: "Perhaps it's your dentures dear?" Apparently, this manager missed the crucial "the customer is always right" lecture.

Anyhow, there are far worse ways to lose one's job.  This has got to be the worst. 

5) Count your financial blessings and otherwise

There are two things I associate with my late grandfather: 1) his passionate belief about the power of vitamin B  which he religiously dispensed with a glass of OJ and a bowl of Weetabix on my summer visits to his country home on Vancouver Island and 2) his daily pep-talk which included a sermon about "always counting your blessings." 

I didn't know what he was on about as a kid but the message has come home to roost in my adult years.

The lessons in life are never ending, but one that will always serve you well, in personal finance, or otherwise is to appreciate what you have.

It won't magically make your problems go away however by taking stock of and appreciating all that you do have, it will help to curb some of those cravings that lead to unnecessary consumer binges.

I couldn't find a financial link to go with this message but here's how gratitude is cultivated on the yoga mat.

To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter @amandamorrall