All in Debt
Recently the banking/lending industry changed the way they view lending applications in response to new government legislation and changes made to the Credit Contracts and Consumer Finance Act. The government’s changes are to protect borrowers, which sounds fair to me. However, my personal view is that banks also saw this as an opportunity to reset the expectations of some borrowers.
It’s not something I’ve ever really thought deeply about before, but in the back of my mind, I’ve always just assumed that we would never let our daughter borrow money from us. It seems pretty obvious to me - and I’m speaking entirely about myself here - that’s because I feel particularly strongly about teaching good money principles to my daughter and I would feel like a failure as a parent if there comes a point that she has failed to plan ahead and I have to lend her money.
Rental real estate investment brings out some pretty passionate opinions and although I always enjoy a conversation, I don’t like arguing, therefore I rarely write about property. That and the fact it just does not interest me as a way to grow wealth. I regularly speak with such a wide range of people about money and I’m lucky that I get to see the allure or otherwise of property from many different angles and I conclude from talking to a lot of people who are ‘real estate investors’ that most of them appear not to be making any money.
I have the privilege to speak to so many people about “money stuff” and a very common scenario is that of a couple who have been together for a long time yet they still keep their money completely separate from each other. If you are committed to him or her being “the one”, you trust each other and have combined everything else in your life (your wardrobe, the bathroom cabinet, your home, your children, your pets), then why not your money?
There has been quite an increase in questions over the last couple of weeks, which is not at all surprising given how much uncertainty is out there. And this week, having answered so many emails, plus I was finishing writing and recording my final podcast episode of this series, I’ve not quite gotten around to a new blog post. So this week I’ve decided to republish a post I wrote back in 2017 because I feel that it’s still very relevant today.
I got a message this week from Joe. He said that he is after some “relevant situational budgeting help” and would like to see me help out and offer thoughts on “the most basic of budgeting for the families in severe need now”. So I thought I would reach out to someone else to help me write the blog post this week, someone who I consider to be a bit of a Budgeting Queen herself. It’s none other than Bradie from @kiwigirlonabudget
So, together we have worked on this blog post for you this week.
I asked you last week what I could help you with and I received a lot of emails with questions on various topics. I have pulled a couple of themes out of them and have shared them in this post, because my guess is that they are pretty common questions right now.
If there was ever any doubt about what an emergency might look like, well this is it, folks! I hope that each and every one of you is coping well and today I wanted to let you know what Jonny and I are doing, in the hope that you might gain a few pointers about what to do with whatever situation you may find yourselves in.
Have you noticed that I never really talk much about real estate? Except to say that I own the house I live in and I have never really gone too far down the path of writing about property as an investment. With the equity that we have in our house, the ‘obvious’ thing to many Kiwis would be to borrow against it and buy more property that I then rent out to other people. For many this has been a way to successfully grow their wealth. To many, it has not.
