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Here's Elizabeth Kerr's version of The Twelve Days of Christmas to keep you on the right financial path over the holiday season

Personal Finance
Here's Elizabeth Kerr's version of The Twelve Days of Christmas to keep you on the right financial path over the holiday season

By Elizabeth Kerr

This being my last column for 2014 I couldn’t resist bringing in a bit of Christmas cheer to my message.

The following is my version of the 12 days of Christmas song to keep you on track over the holidays until I start again late January.

Remember if you’d like to drop me a line with your thoughts or feedback until then you can email me at

On the first day of Christmas my true love said to me "lets buy this Bach ... "

Hell no!  Uh uh….no way!!!   Holiday homes are one of the biggest money suckers around.

They are for those who have more money than sense and you my friend are much smarter than that.

The amount that you would need to pour into a holiday home each year in mortgage payments, rates, utilities and fees would be far more than what you would pay if you just rented it from someone else whenever you felt like using it.

Do not be fooled into thinking a holiday home is a great investment – they are not the highest and best use of your savings!

You need to keep using your head and not give in to your sense of entitlement just yet. By all means enjoy your holiday but don’t buy the bloody bach.

On the second day of Christmas my true love said to me: "I worry about what people will think ... "

Sometimes we buy stuff just to save face. No other time in the year is this more obvious at Christmas time.

Do you really care so much about your colleagues you want to be spending more of your own time and money eating out and playing stupid Santa gift swap games? Just say no.

Besides, by the time everyone returns in the new year no one will remember whether you participated or not, they’ll be too busy gossiping about the woman from accounting last seen sleeping off the bubbly under her desk.

If you find yourself buying for some people because that’s what you’ve always done, then make this year the year you stop.   How about politely emailing them now and say you are cutting back your Christmas spending this year and you’d be more than happy to spend some quality time together during the holidays instead.   If they snub you for this then I’d question whether they were worth the effort in the first place.

On the third day of Christmas my true love said to me:  "I wish we were on holiday all the time" 

A smart lifestyle design allows you to leave paid employment well before you reach 65. For those people who achieve this it is largely because they take some pleasure from saving as well as spending.

They already know that happiness does not come from owning big cars, fancy houses, large screen tvs or a hummingbird rug and so they don’t waste their money buying these things. They don’t feel deprived.

There is an entire lifestyle that goes hand in hand with being this successful and they are tapped into it. How did they get there? They just changed their mind and worked their money machine muscles until they got there. If you have a will, you have the way my friend!

On the fourth day of Christmas my true love said to me:  "Let’s buy a house as an investment, everyone else is doing it these days"

While our politicians are away from the hive our newspapers are going to be chocka with stories about NZ real estate riches and how you too can be a real estate millionaire. Just because you are handy with a paint brush and you have two weeks off work does not mean you will succeed in making the same money as they did on TV3’s The Block.

Do NOT buy an investment house over the Christmas holidays.

I have some bolshie questions you need to ask yourself before you jump into such a big financial commitment so it’s worth waiting just a few weeks to read what I have to say first. I’m not against property investment; I’m just against people buying cheap stupid property thinking it’s going to make them NZ’s answer to Trump.

On the fifth day of Christmas my true love said to me: "Shall we upgrade our car?"

After the big house it’s the car that the middle squeeze think shows the world how successful they are or not. It is also a big area for reducing expenses and maximising money for your money machine instead.

I am all for having a reliable car which gets you from A to B. But that’s where the car fetish should end. It doesn’t matter if it’s a 10 year old Toyota or the family van that you’ve owned since the kids were in car seats.

The only thing that matters is that you can reliably get where you need to go; because turning up is the outcome you are looking for, not the shape of the box that carries you there. Better still ... walk or get a bicycle.

On the sixth day of Christmas my true love said to me: "Lets work out our savings percentage"

Finally your true love says something smart !

Your savings percentage rate is calculated as:

Annual income less annual expenses   =   Savings

Savings  ÷  annual income  x  100   =   Savings percentage %

Savings % Years until money machine achieved
10 51.4
20 36.7
30 28
40 21.6
50 16.6
60 12.4
70 8.8
80 5.6
90 2.7
100 0 = financially independent

If you want to increase your savings percentage you can either save more of you income by lowering your expenses or increase your earnings. Either option is absolutely fine.

Remember the more you can save and the less you need to live on, the sooner you are free to give up paid employment. You need to click on this link to understand the finer details of how a money machine works.

On the seventh day of Christmas my true love said to me: "Shite – I’ve been made redundant"

Bugger – that sucks! The truth is if you are employed these days you should treat this as a privilege, not a birthright.

Market forces, technology improvements and company margins could dictate that you become unemployed at any moment.

If you have not prepared for this, then you are playing a dangerous game. Even if you’re sleeping with the boss you’re not immune from having your luck run out. Give your job some basic respect by saving for an imminent retirement, stop facebooking during working hours and be as useful as you can in the meantime.

On the eighth day of Christmas my true love said to me: "Do you think I need to buy more presents?"

Less is not nothing! You do not need to go overboard with your gift giving this year. To save is to be brave and it takes a brave person to decide to stop being suckered in by the guilt of Christmas giving.

Gifts that you give or receive do not measure wealth or worth. The quantity of gifts you give your family or friends cannot prove love or soothe guilt.  

If giving less means you are out of debt faster, give less. If giving less means you don’t have to work overtime, give less. If giving less means you have more money to put towards your money machine, blimmin heck give less !

On the ninth day of Christmas my true love said to me: "We need more space!"

OOoohhhhhh no you don’t.

The standard roof height is 2.4 metres. If you exceed this then not only should you be in the Guinness Book Of Records, but you can justify needing a bigger home. If not, then you need to think about this decision very carefully because it could make or break your financial future.

The extra space is just not worth the hundreds of thousands of dollars you would have to take on to pay for it.

How about just staying put and be more conscious of how you use the space you have, or you could choose to sell down and pocket the change?  ( ... and stop hoarding the kid’s baby clothes – they are never going to use them on their own children I can promise you that!)

On the tenth day of Christmas my true love said to me:  "Why not, its interest free for 36 months?"

Xmas is one of my favourite times of year because it’s a great time to watch how hard retailers work to get us to buy their products.

I thought it was so cute the way Harvey Norman wanted to "reward" our community volunteers and public service for their hard work this year with their own shopping night. What they really did was trick them into buying their supposedly discounted products by making them feel special and activating their Palaeolithic subconscious 'spavings' gene and thus commit them to working those while they pay off the debts at a so called 36 months interest free.

If they really wanted to reward them they might have given them all a free fridge/freezer, or something else that didn’t require they spend their own money. Yes ...  very smart Harvey Norman.

If you’re thinking of slapping something on the credit card or paying using a never-never payment plan (because it’s unlikely you will ever own it outright before its usefulness is over and you’re upgrading again) then think again. This is not appropriate for someone who wants to do well financially.

Remember Old School is the New Cool. See if you can save for it in cash or just plain ole’ do without. If its not on your non-negotiable’s list then you can design a life that doesn’t need it anyway.

On the eleventh day of Christmas my true love said to me: "You cannot buy simplicity."

I think companies are catching onto the fact that more of us desire a more authentic and meaningful life without having to work ourselves into an early grave – and now they design their products to purportedly give us this life.

The truth is you can’t buy it.

It’s inside of you and you can access this life only through designing a lifestyle which is aligned to your individual values. Working until 65 is not the answer.

Gratitude is an attitude. Being thankful for what you have will bring more long lasting happiness than you could get from buying something.

Even the fanciest car on the block will loose its appeal once you’ve loaded it with groceries and done the school drop off a few times.

On the twelfth day of Christmas you showed your true love my columns and they shut up their whingey whiny "I wanna buy [insert] ..." voice and saw the world through new eyes. For the first time all Christmas holidays you are now able to have a good honest conversation together about your lifestyle and how you want to live.  

You have opened their mind to the possibility that a life of spending and excessive stuff is not going to make you happy for very long but an early retirement could be achievable.  

You have also signed up to receive my columns in your inbox via this link and forwarded this column to all of your friends so they too can read up on what changes you are going to be making next year and why.

We are going to have a great year together next year!

Until then flex your money machine muscles and enjoy your Christmas holidays.

Merry Christmas.

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I love how this column was so popular at first, as readers thought you were going to show them how to get more (easy) money, and how the comments have dwindled when it dawned on them that it's all about budgetting, not living beyond your means, saving rather than spending, personal responsibility, and getting rid of the culture of entitlement.




Good on you, though, it needs to be said, repeated ad nauseam. But I hope you're not expecting any gratitude.


Everybody wants to change anything but themselves :)





Come on Elizabeth where's the magic fomulaes to make lots of $ with as little work as possible?  Who cares if its really gambling as long as its someone elses money but you keep the profit?

Maybe we should get Big daddy in here instead with his sound advice on how to make millions in, uh property.


C'mon, trading G3 sovereign debt from the long side has offered remarkable returns at the taxpayers expense and undeniable central bank collaboration verging on artifice.


Indeed, producing nothing of value but consumed, surely that is the quintessential defination of a parasite.




Yes, a significant and necessary taxed parasitic class according to Treasury.

Treasury forecast the nominal size of the economy would be NZ$13.2 billion lower over the next four years because of that lower inflation, which would drag on expected GST, income tax and resident withholding tax revenues from term deposits.


Don't judge by how many comments I'm getting.  Just because you can't see them here doesn't mean that I'm not getting them.   People now privately email me instead :)


Good to know :)


"Give your job some basic respect by saving for an imminent retirement, stop facebooking during working hours and be as useful as you can in the meantime."

also and the most important thing of all, make sure your skill set is in high demand and keep it that way.


Elizabeth's column is popular with me.  So here's another comment to count.

Mind you I am in big trouble with Elizabeth.  I do have the holiday house, with a 2.7 Stud, more in the living areas and two new cars.  Horrors.

But on the good side.  No debt.   I can stop working now although I am well short of age 65.  Probably.  Ummmh.  Purely  --  as a result of running a high savings percentage some years back. 


Me too...we just upgraded our car..."she who must be obeyed" decided it was time.


Yeah, but there are an awful lot of cars out there which are purchased on "finance". Just like interest only mortgages, you can't tell by looking at a place whether someone actually owns it or whether it is a "cross your fingers and get rich quick" scheme.

Its amazing how much cheaper it is when you actually own stuff. For one, you don't have to insure it if you don't want to pay the exorbitant insurance cost....

3rd party for a car is excellent value.


Yes.  It's hugely cheaper when you own stuff.  And everything is simpler as well.  

As for the insurance issue I disagree.  Third party is fine if your car has little value.  But most would find the cost of replacement of a new one too big a hit.   More so for replacing your house, mortgage free one or not.