Kiwi Saver, Mary Holm financial writer and columnist

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Weekend Herald

Mary’s Q&A column appears in the Business section of the Weekend Herald. Mary was a finalist for the "Best Columnist – General" award for this column in the 2014 Canon Media Awards.

NZ Herald 23 December 2017

Q&As: House size jump not so big when you take garages into account
- Help for single Mum struggling with debt
- Thanks from a reader - and to all the readers who help with this column

Question: I'm just reading a recent column in which you mention that in the 1940s the average house size was 113 square metres, while now it is 205 square metres.

Although that is what the stats say, I believe there is a significant difference in the calculations.
In the 1940s very few houses included a garage. If there was one it was almost invariably a separate building, so was not included in the quoted size of the house. I gather that real estate listings today where the garage is separate from the house also are quoted as the size of the house alone.

On the other hand, almost all new houses include an internal garage in the quoted size of the house. And typically they are double garages of at least 36 square metres. So in a 205-square-metre house there is typically just 169 square metres of house.

That's still a lot more than 113 square metres, but it is a bit misleading to say houses today are nearly twice the size of the 1940s. Fifty per cent bigger is more accurate.

Of course, an included garage is a very different beast from a separate garage, especially one built in the 1940s. Separate garages are typically unlined, while garages built into modern houses are just like an extended part of the house.
We are spending a lot to house our cars and toys these days.

Answer: The humble garage gets its moment in the spotlight at last!
The 113 and 205 figures came from CoreLogic, so I went back there to get a response to your point.

"I believe what your reader has said is correct, in terms of the make-up of houses today compared to the past," says CoreLogic's head of research, Nick Goodall. "And typically most stats (including ours) will include a garage's size if it's under the main roof only (which is more likely today than in the past, and garages are also likely to be bigger today).

"So yes, this should be taken into account when comparing today's houses to those built in earlier decades."

Even so, a 50 per cent increase in house size is still notable - given that households nowadays include fewer people than in the 40s.

It's not hard to see what makes houses bigger. These days people want multiple bathrooms, a family room as well as a posher living room, walk-in wardrobes, and a bedroom for each child - although the decreasing size of families may mean that last one doesn't makes much difference.

Then again, there's also a trend towards downsizing and tiny houses. It will be interesting to see if that leads to the average house size decreasing.

By the way, the averages apply to houses built in the 1940s and now, not to all houses in existence at those times - which of course include many built a long time earlier.

Interesting point about coddling our cars. But it's probably more about coddling ourselves. On a rainy day, it's lovely to be able to unload the groceries without getting wet.

Question: I'm contacting you for some advice on trying to eliminate financial debt of approximately $20,000. I'm a struggling single Mum with a nine-year-old son.

Due to a bankruptcy in November 2013, discharged in November 2016, I have a bad credit rating. Bankruptcy was the result of owning a leaky home and not being able to afford the 'body corporate' repairs, legal costs and the cost of renting elsewhere - while repairs were undertaken. My dwelling was one of 21 units affected. I more or less was forced to walk away from lifetime savings.

Since November 2013 I have rented on a single income with one dependent child (full custody from the age of one month). The debt I have incurred since is owed to friends who have helped me in tough times, and very high interest payday loans.

I need assistance with budgeting advice and management. Also, I wonder if there would be an institution or peer-to-peer adviser who would consider re-financing a lower interest rate loan.

I love my work, on $75,000, with a full company car. Any advice greatly appreciated.

Answer: I was so pleased to read your last paragraph. Up until then, your letter made sad reading. But with a good job on good pay I'm sure you can get out of this horrible hole.

Your first step should be to go to the National Building Financial Capability Charitable Trust's website, www.nbfcct.com.

It says there, "Budgeting services offer free, confidential budgeting advice. With a financial mentor, you can create a plan to get out of debt, save money and start building a future for you and your family."
You can find a service near you, and there are also resources, such as a budget worksheet, cashflow, debt schedule, and financial plan of action.

On borrowing through peer-to-peer lending, obviously it's less risky for a borrower than a lender. But still I suggest you ask your NBFCCT adviser about it.

There's a good article about risks to peer-to-peer borrowers at www.tinyurl.com/P2PborrowerRisks. There's also some info on the Financial Markets Authority's website, at www.tinyurl.com/P2Pborrowing

It includes: "Licensed providers are not obligated to accept you as a borrower. They will run some checks on you and if you've got a bad credit history they may decide they won't help you find money."

Given your bankruptcy, that might count you out. But not necessarily, if you explain your situation.

Good luck. You've already made the biggest step - acknowledging your problem and seeking help. I would be keen to hear back from you, in due course, about how helpful the NBFCCT service was.

Question: Mary, I would like to thank you for your column.

Thirteen years ago I separated from my husband and was left with my two young children to care for most of the time. I had enough money for a deposit for my house and it is almost mortgage-free. Admittedly I am paid a very good salary so have not had the money worries of many, but without your guidance I may not have made the best choices.

Your column has educated me about sound financial decisions and all sorts of unexpected things I wouldn't have thought about. It's one of the reasons I buy the Saturday Herald! I am now in a great financial position and am purchasing my first rental property. I have some shares, my Kiwisaver and my emergency fund (which started out ten years ago at $15,000 and has grown to $65,000 now).

I have enjoyed myself, travelled overseas and bought myself some treats. I have a few years of work left still and plan to put extra money into reducing the rental property mortgage. I have set myself goals (nothing fancy!) and so far am on track to achieve them. Thanks again.

Answer: Well done, and thanks so much for writing. I don't usually publish letters like yours - although it's always really encouraging to receive them. But I thought I would just this once at Christmastime.

One of the great things about this column is that I'm far from the only one who helps people. Often, after a Q&A is published, readers write in with other perspectives or suggestions. Note to people whose letters have run in the column: make a point of reading the next few columns to benefit from this.

Sometimes, though, the help goes on behind the scenes. One example this year was a man who offered to give people personalized information about living on board a boat. After I had forwarded the first two inquiries to the man, he wrote to me: "Thanks. I have written to make contact with both of those referrals and will start with a discussion of what their plans/needs are. As and when you drop me a line with each new referral I will talk with them. From past experience everyone will be different."

There was also an outpouring of support - and many suggestions - for a couple who found themselves broke in their 60s. Wrote one reader: "I had to sympathise with them, having made some terrible financial decisions of my own, but I at least survived and have managed to hold my head above water.

"I would be happy to donate a few dollars to them to assist in their journey forward, as I know that restarting is difficult the older you are (I am 61). So if you could forward them my email address and ask them to email me then that would be great."

Then there was the man who wrote about a letter from a victim of a binary options scam, saying he had been similarly scammed. "Suffice to say I am now talking to an Israeli law firm to help recover my funds. So I would be interested in discussing this with this investor, and if you could pass on my email address and ask him to contact me that would be great."

I'm not sure how all these worked out - and I don't need to know. But it's heart-warming to see people reaching out to others.

One not so great thing about this column is that, at the end of each year, I find myself apologizing to more and more people whose letters didn't make it into the paper. I do appreciate your writing. Without your letters, the column wouldn't exist. And it helps me to know what's going on out there.

If you do write, keep watching the column, as sometimes I run a letter several months later. That might be because it goes with another letter, or it's relevant to recent research or a change in the law.

Among letters that don't tend to make it are those that describe your broad financial situation and then ask what you should do better. Often it would take a book to reply. Specific questions work better.

Occasionally, I receive complaints like this: "I am always amused by the people in your column who clearly only outline their situation to show off: 'Dear Mary, we have worked very hard and done our best to succeed financially, but we are now nearly 40 and aside from an unencumbered home worth $5 million, plus a bunch of rental properties, and a large share portfolio we are struggling to know how to get ahead.' Ha ha."

Another reader's more positive take on the same issue: "Sometimes it feels like everyone that writes in has a quandary of what to do with their spare thousands, but surely that can't be the case!? Having said that I read the column religiously so that maybe in the future myself or my family may enjoy the same quandary. Anyway I digress, and I'm not moaning, we are not starving and have a great home in beautiful Northland."

Sorry if it seems there are too many letters from "the rich". I particularly like to hear from people who are not doing so well. Do keep writing in all you Kiwi Strugglers. Oh, and if you really want to grab my attention, perhaps start your letter the way one person did this year: "High Mary". Well, not at work ...

Here's to a relaxing and safe but fun break for everyone. See you back here on January 27.

* Mary Holm is a freelance journalist, a director of the Financial Markets Authority and Financial Services Complaints Ltd (FSCL), a seminar presenter and a bestselling author on personal finance. Her website is www.maryholm.com. Her opinions are personal, and do not reflect the position of any organisation in which she holds office. Mary's advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. Send questions to mary@maryholm.com or Money Column, Private Bag 92198 Victoria St West, Auckland 1142. Letters should not exceed 200 words. We won't publish your name. Please provide a (preferably daytime) phone number. Sorry, but Mary cannot answer all questions, correspond directly with readers, or give financial advice.

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