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If you’ve spent any time reading financial blogs or news you’ve probably heard the following terms thrown about: disposable income! emergency funds!

And of course short term, medium term and long term savings, as if they are different jam jars for money to be deposited. In fact, there is a personal budgeting technique that recommends the use of jam jars in almost exactly this way!

What this technique forgets is that we are human; the world changes, and money is fungible (this is hyperlinked because what even is fungible, you can thank us later for learning a new word).

Fungible as in – a dollar is a dollar, regardless of which jar it sits in.

So if the short/medium/long concepts are somewhat futile, how should you think about money + time + goals?

We would like to introduce the concept of…

So why is the now soon and later approach a cool way to think about money?

Because it’s easy and it takes the pressure off. Thinking about your financial situation and working towards your goals does not need to be complicated. You can go about it by thinking through these 3 questions.

What do I need money for NOW?

Before you get too carried away (hello a trip to Hawaii for Christmas) what we mean with this question is; what money do you require to live your life right now. How much do you need for food, bills, any debt repayments, your car – things that afford you the basic quality of living you want.

We’re not saying that how much you spend here is right or wrong, we’re simply encouraging you to know how much you need for your life right now. Once you’ve got that ticked off, we can think about…

What do you need money for SOON?

I can hear you thinking – how soon is soon – well it really depends. Right now for me, soon is a 12 month time frame. Any time after that is just too far to make a detailed plan because of my current life stage. Things that fall into the soon bucket are generally those expenses you need to have a savings plan for. Goals or expenses such as; holidays, a new couch, repairs on a house or car, going on parental leave.

The SOON expenses typically need to be saved for in cash (because soon aint that far away!) and you will have a reasonably good idea of exactly how much you need.

What do you need money for LATER…

When we think about later we mean no fixed plan or fixed need; something that is in a little more state of flux. Something can that grow or alter as you grow and alter in life. Things that might fall into your later pile; the dream to buy a bach or caravan, the opportunity to take extended leave and travel, saving for your kids, saving for a property.

Whatever it might be, it’s something that is a future need (not a current or soon need) and something that may vary. For example, many people have an idea of when they plan to retire, but very few actually cease work exactly on their 60th or 65th birthday. Because when you’re planning for retirement, in say your 40s, you don’t know exactly what you’ll be doing or how you’ll be feeling about retirement in 20-25 years. The reality is, flexibility is your friend.

This is where Kernel operates; in the later category; helping you build wealth for something yet to be fully determined.

One of the meanings of ‘Kernel’ is an edible seed, something to be grown or consumed. Ultimately, we want to harvest and consume our wealth, or pass it on to the next generation or charity.

Many New Zealanders are stuck thinking of only the now and soon category; in fact 40% of Kiwis admit living pay check to pay check.

We think that part of the reason for this is that for many, ‘later’ is simply too far away and unmotivating. And to be frank – it is. The idea of investing some money to use 20 years from now is not exactly as exciting as planning your 2020 euro vay-cay.

It’s a slow burn, it’s kind of boring, but it is important. Because future you is important. So if you find yourself in the group ignoring the ‘later’ category here’s one life hack:

Fill the later bucket first and live off the rest.

Or as we will develop further in our next blog: Pay Yourself First #PYF

Catherine Emerson

Catherine Emerson

Head of Marketing & Customer Strategy



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Indices provided by: S&P Dow Jones Indices