KiwiSaver - There's free money in it

READ THIS !
To find out how:
• The government gives money to people enrolled in KiwiSaver.
• KiwiSaver can help you to buy a house, for which you get more money.
• It teaches you about money, which can set you up for the future.

KiwiSaver might sound like something for old people but it's not. It's good for kids too, and here are some of the reasons why.

Lots of teenagers have part-time jobs, so the chances are you're probably
already enrolled in KiwiSaver. But did you know that this comes with a $1,000 kickstart
from the government? Plus, you get a $40 a year subsidy. Over-18s can get up to
$1,043 as a tax credit from the government. Also, from April 2008, your employer has
had to contribute 1% to your KiwiSaver account (based on your earnings).
The other good thing about all this is that it's your KiwiSaver account - so it's your
money. This means it goes with you when you change jobs or even if you stop work
for a while. (It's worth thinking about how much some of those cash jobs are really
worth, given the value of KiwiSaver.) If you stop working for a while, you - or your parents -                                                                                                       could still contribute $20 a week to KiwiSaver once you're over 18, so you'd still benefit from that $1,043 credit. Twenty
bucks might sound a lot, but consider how much you spend on clothes, entertainment
and food and you might be surprised.

Future thinking
Buying a house might seem a long way
off to you, but there are young people out
there not much older than you who have
this goal firmly in their sights, along with
owning their own business. Sam Morgan,
who started TradeMe, was just a teenager
when he started up his multimillion dollar
website. He is still only in his early teenties
now and could now buy dozens of houses if
he wanted to. Of course, that kind of young
business success is rare, but actv8 knows
of a 19-year-old who plans to set up in the
film business one day, and another who
was the same age when he went out on his
own as an electrician and later started a
limousine business.
But what about that house? Well, the
government will contribute up to $5,000
towards a KiwiSaver's first house - that's two
times $5000 if you buy as a couple. You can also withdraw some of your KiwiSaver money
to buy a home and to help pay the mortgage.
So, why is the government doing all of
this? Partly because New Zealanders don't
have a very good savings record and, as
you can see, you need savings for lots of
things. The sooner you get started the better.
Compound interest works in your favour when
you're saving - unlike when you take out
a loan. The bank earns huge interest at the
beginning of a big mortgage loan, which tails
off rapidly once you begin to reduce it.
This is just a little taste of what you can learn
about handling money. For more on KiwiSaver
check out the www.kiwisaver.govt.nz website,
and www.sorted.org.nz which has calculators
that can help you manipulate figures to learn
more about how mortgage money works.

What do you think?
Is KiwiSaver a good thing? Did you
already know about it? Do you think
it's important to start saving money
while you're young? Check out the
links in this article and drop us an
email if you have any questions:
heyyouguys@actv8.co.nz