10 Simple Financial Steps with Massive Future Payoffs
Our definitive guide explains how small, manageable financial steps can significantly enhance your future. Start making smarter choices today.
Updated 19 June 2025
Summary:
To help you change your financial habits for the better, our guide outlines:
Important: Our trusted guide, How Much Do You Need to Retire Comfortably in New Zealand, explains what you need to know should this be of interest.
- The journey towards financial independence and security is both a personal and practical pursuit, but it also takes a really (stubbornly) long time. If looking at it from the start, it can seem like such a long road that stunts most people from acting.
- When it comes to many life goals (getting out of debt, getting married, buying a house, saving for retirement), it can be daunting to think about how far those objectives are and how hard you'll need to work. However, often, the smallest actions taken over long periods significantly impact your future financial position.
- It's easy and less time-consuming to make small changes, but it's very easy to go "too hard" at one thing, burn out, and regress back to your original ways.
- A different way to make big changes is to take small, low-effort, automated baby steps now that compound over time. Small steps are easy to continue doing and barely noticeable, meaning you're much more likely to stick with them over long periods (given they aren't taking up much of your mindshare and aren't causing you a lot of short-term stress). However, these small steps can compound into big differences over time.
- The ten steps below are intended to be broad so that they can apply to all Kiwis, but there will be individual nuances that aren't factored in. Personal finance isn't "one size fits all", and we suggest you shortlist which steps resonate the most with you and your situation rather than adopt them all broadly.
- These steps are purely meant as a starting point to kickstart your financial journey and increase the ease of getting started (hence the "small steps" nature).
To help you change your financial habits for the better, our guide outlines:
- Ten Small and Effective Financial Steps You Can Take Right Now
- Must-Know Facts to Get Ahead Without Holding Yourself Back
- Frequently Asked Questions
Important: Our trusted guide, How Much Do You Need to Retire Comfortably in New Zealand, explains what you need to know should this be of interest.
MoneyHub Founder Christopher Walsh shares his comments about why it's essential to challenge everyday spending habits:
|
"In a world where social media often dictates unnecessary spending for likes and appearances, our guide is not about 'quick fixes for riches' but about understanding that each financial decision you make today shapes your future.
Every step you take towards saving and investing will lead to significant financial freedom later. Ignore the urge to impress online followers with flashy purchases; it's your financial health that truly matters. Instagram and Facebook 'likes won't pay your bills or secure your retirement. Debt is all too common throughout New Zealand, and many people are held back from their true financial potential. True wealth comes from understanding what deserves your hard-earned money and making each dollar work towards substantial, long-term gains. You can never get there when you buy things you don't need with money you don't have. The latest tech and trends often become next year's clutter. Spending to keep up with the Joneses, aka Instagram followers, WILL derail your financial goals and hold you back. Influencers pushing non-essentials are not valuable to your life. Credit cards and BNPL schemes like Afterpay might seem convenient, but they often encourage spending beyond one's means. Before you know it, you're paying interest on things you don't value anymore. Adopting some of our steps below offers a path to genuine financial independence. Remember, many social media personas are curated highlights, not real life. Living within your means and investing wisely will not generate likes; together, they will give you real substance and stability. Finally, financial freedom is not about how much you earn but how much you keep. Every dollar saved and invested today is a step away from stress and a step towards a prosperous future. Start with what you can manage now, and build from there. Every small effort counts more than you might think". |
Christopher Walsh
MoneyHub Founder |
Ten Small and Effective Financial Steps You Can Take Right Now
|
​​Adopt a gradual savings mindsetThe notion of amassing an emergency fund or saving for a house deposit may seem daunting. Still, small contributions to these funds over long periods can make saving far more achievable. By saving in small amounts (say $50 or $100 every month), you make steady, visible progress towards these objectives in manageable increments every month.
Try to forget the overwhelming "big picture" and concentrate on what's achievable: setting aside small amounts regularly. One of the most overlooked benefits of this approach is that you get your money working for you as soon as possible. For example, depositing $50 weekly into a savings account with a 4%+ interest rate will amass thousands over three to five years (thanks to the interest earned on the principal amount). |
|
Exercise financial restraint (especially on non-essentials)It can be so easy to spend without thinking. Whether you're exhausted after work and just want to order Uber Eats to avoid cooking and cleaning, or you're scrolling on your phone on the weekends looking for new clothes to buy, there's a lot of choice and it's all too easy to spend a little here and there and end up with hundreds of dollars missing at the end of the month on cheap thrills.
To take real steps towards your financial goals, you've got to identify and cut non-essential expenses (including our impulse purchases). The best way to do this is to look back at some of your recent bank and credit card transactions and scrutinise where you spent your money (particularly the non-critical spending on which you didn't expect to spend money). It could be the impromptu $20 work lunch during the week, an extra coffee on a day you're feeling particularly tired, or a lunch out with close friends. If you didn't budget for it, consider eliminating or reducing these costs. This practice redirects finances towards your primary objectives and ensures that you only spend on what truly brings you value. Important: Without constantly looking at your transaction history, it's very hard to move forwards as you don't know exactly where your money goes. |
|
Automate as much as you canThe more easily you can make positive financial steps without thinking about it, the better. KiwiSaver is a great example of this - whereby 3% of your salary is taken out and invested in your financial future before you even see any money hit your bank account. Not only is this useful from an actions perspective (you don't have to do a thing; it is automatically done each time you get paid by your payroll provider), but it also prevents you from needing to think about it.
By automating this KiwiSaver process, you can take small baby steps towards saving for retirement without having to do anything. In other words, automation allows you to continue doing something without taking up any thinking time - it's done for you, and benefits you later on. There are many ways you can automate your life to improve your financial position, including:
|
|
Let your money work for you by picking the right asset allocation strategySaving is one of the core pillars of reaching your financial goals, but the other is getting your money working for you. One of the biggest mistakes New Zealanders make is not setting their asset allocation strategy correctly (both in their personal investment accounts and KiwiSaver).
For example, many default KiwiSaver fund types are too conservative (particularly for younger investors). If you're in your 20s or 30s, there's no strong rationale to have a high percentage of your assets in low-risk/reward investments (like cash funds). However, many default KiwiSaver funds have upwards of 50%+ in low-risk assets. If you have a long-term investment window (e.g., 30+ years until retirement), you'll most likely want to be as aggressive as possible with your investments (within reason and while being diversified). Balancing your investments between stocks and bonds is crucial for long-term financial health. This small act of ensuring your asset allocation strategy is correct for your age, risk profile, and financial goals has a drastic impact on your long-term financial position (e.g., if you got a 10% return over 20 years from investing in mostly stocks versus a 3% return investing in mostly cash accounts and bonds, you would end up with a wildly different retirement). |
|
It's essential to overcome fearOvercoming fear is an incredibly important step towards financial freedom. The barriers to financial prosperity are often self-imposed. Many Kiwis might not engage in learning about investing because it's "too complex", but in today's day and age, it's never been more accessible or easy to learn about personal finance. Online websites like Sorted (backed by the New Zealand Government) provide free online modules and paper resources to help Kiwis educate themselves about finance. Our guide to free financial literacy courses has numerous options.
As tough as many Kiwis' financial situations are right now (with rising inflation, high mortgage rates, and a distressed job market), overcoming the mental obstacle that you can't get into a better financial position is critical for success. |
|
Build the emergency fund (your future emergency self will thank you)Adding $50 here and $20 there may seem insignificant, but it is valuable. It builds up to pay for new tyres, dental work and other unexpected one-offs. Your future self always benefits from saving up those little amounts into an emergency fund. The longer time goes on, the more likely something unfortunate will happen that will require tapping into your emergency fund to solve. Having money in a savings account is something few New Zealanders have (per this 2023 Stuff.co.nz story).
|
|
Leverage matching KiwiSaver government contributionsThe government effectively gives you free money (as long as you contribute a minimum amount to your KiwiSaver each year). The one downside is you can't cash out until retirement age (at the moment, age 65). The current offering is a government contribution of $521.43 (assuming you contribute at least $1,042.86 before 30 June each year). Our guide explains how valuable this can be.
Note that employer contributions, past government contributions and funds from Australian retirement schemes, don't count towards the $1,042.86 contribution. |
|
Chip away at paying down debtDon’t let debt snowball out of control. Just like small positive steps compound into massive gains, small negative steps (if not caught and stopped early) can snowball into severe problems.
Take debt as an example - a $1,000 credit card balance may not seem that daunting, but at a 25% interest rate (which is standard for most credit cards), that $1,000 turns into over $7,000 over 10 years (assuming the debt compounds and you only make a 3% minimum repayment). This shows that small, insignificant negative steps can compound into serious problems or bad habits. It's all too easy to use credit cards or short-term debt as a way to bridge a gap to the next payday, pay off unexpected expenses (like dentist appointments or car repairs) or just have a bit of fun in the short term (when you may not otherwise have the cash). Small debts at high-interest rates (common with credit cards and consistently above 20% interest) can grow to enormous sizes (multiples of the initial debt amount) if not tackled upfront. The biggest way to tackle this upfront is to pay off more than the minimum amounts necessary. The more you pay off, the less interest/debt that accumulates and the more likely you are to be able to stop the debt from getting out of control. Our guide to repaying credit card debt with an average salary is a useful starting point. |
|
Goal setting and visualisationSetting clear, actionable financial goals is another crucial element of achieving financial independence. Beyond the immediate aim of saving or cutting expenses, it's about envisioning the life you want to lead and the financial freedom you wish to attain. Goals should be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.
An example of a a goal using SMART looks like this: Goal: Save for a deposit on a home.
|
|
Build a strong support network to reinforce good behaviour and keep you accountableFinancial independence doesn't have to be a solo journey. Building a support network, including family members, friends, online communities such as Reddit Personal Finance NZ, can provide encouragement, advice, and accountability. Sharing goals and progress with other Kiwis can reinforce commitment and offer new perspectives or strategies you might not have considered.
|
​Must-Know Facts to Get Ahead Without Holding Yourself Back
1. Be adaptable - almost nothing will ever go to plan (financially): While it's great to create a structured approach to financial well-being, you've got to be adaptable. Almost nothing goes to plan. Financial situations can change due to personal circumstances, economic shifts, or unexpected events. Flexibility and willingness to adjust your financial plan in response to these changes are essential for long-term success. This might mean revisiting and revising your budget, changing your investment strategy, or altering your retirement contributions as needed.
2. Leverage technology and apps to make small actions: Using apps and technology to help you take the small, incremental steps above is a great way to make small progress without having to do anything. Apps like Booster Savvy have built-in rounding up and sweep functionality that makes it easy to save small amounts (normally a few cents or dollars at a time that get invested) that you won't miss but will compound into significant sums over time.
3. Extend your time horizon: Taking small financial steps won't "move the dial" right away, but the longer you extend your time horizon (e.g. thinking in years or decades) is the easiest way to ensure you don't get demotivated mentally. After all, continuing to do something without significant progress can be difficult to grapple with. But if you can lower your expectations and take a longer-term view, you're much more likely to stick with it (and end up in a far better position financially than if you kept high expectations in the short term).
4. Don’t put too much pressure on yourself to get absolutely everything right: If you're able to save early, save often, and stay the course, you'll be fine in the end. You don't have to get absolutely everything right 100% of the time. Making small financial steps is about staying on the path for as long as you can—that's when compounding has its chance to really shine.
2. Leverage technology and apps to make small actions: Using apps and technology to help you take the small, incremental steps above is a great way to make small progress without having to do anything. Apps like Booster Savvy have built-in rounding up and sweep functionality that makes it easy to save small amounts (normally a few cents or dollars at a time that get invested) that you won't miss but will compound into significant sums over time.
3. Extend your time horizon: Taking small financial steps won't "move the dial" right away, but the longer you extend your time horizon (e.g. thinking in years or decades) is the easiest way to ensure you don't get demotivated mentally. After all, continuing to do something without significant progress can be difficult to grapple with. But if you can lower your expectations and take a longer-term view, you're much more likely to stick with it (and end up in a far better position financially than if you kept high expectations in the short term).
4. Don’t put too much pressure on yourself to get absolutely everything right: If you're able to save early, save often, and stay the course, you'll be fine in the end. You don't have to get absolutely everything right 100% of the time. Making small financial steps is about staying on the path for as long as you can—that's when compounding has its chance to really shine.
​Frequently Asked Questions
How can reducing small daily expenses contribute to financial well-being?
Cutting back on daily non-essential expenses, like dining out or luxury items, can free up money that can be saved or invested. In the short term, $20 here and there won’t make a huge difference to most Kiwis’ financial position. However, that same $20 every week over 10 years has can dramatically contribute to financial goals and wealth building (especially if those dollars are invested).
Why is it beneficial to start investing early?
Starting to invest early takes advantage of compound interest, allowing your investments more time to grow. Even small investment amounts can grow significantly over a long period, helping to build wealth and financial security.
How can setting financial goals help in achieving long-term financial success?
When you’ve got a long road ahead of you, it can help (mentally) to set signposted milestones that remind you how far you’ve come. If you just set one large overarching goal, you only celebrate it once (when you hit it at the end of the road). With smaller financial goals, you’re able to celebrate small wins along the way. Not only that, but it creates a positive feedback loop that reinforces your brain to continue doing these positive actions.
Setting clear, achievable financial goals provides a roadmap and motivation for saving and investing. It helps prioritise financial actions and track progress towards long-term financial stability.
Setting clear, achievable financial goals provides a roadmap and motivation for saving and investing. It helps prioritise financial actions and track progress towards long-term financial stability.
Why is it important to regularly review and adjust your budget?
Lifestyle creep happens to all Kiwis - especially as they get older (and ideally wealthier). While a little bit of lifestyle inflation is okay, regularly reviewing your budget helps to identify and eliminate unnecessary expenses, adjust for financial changes, and ensure that you are on track to meet your financial goals whilst keeping lifestyle inflation at bay.
How does improving your credit profile save money in the long run?
A better credit profile can qualify you for lower interest rates on mortgages, personal loans, car finance and credit cards, saving you money on interest payments over time.
