Tamsyn Parker: Are you really living within your means?

Credit cards provide easy access to money but can make it harder to live within your means. Photo/ Getty Images.

I was feeling all smug about my ability to control spending on my credit card until I read Diana Clement's piece this week.

I pay the card off every month so it's not the interest I'm concerned about.

But I was shocked to read that budget advisers who deal with real people's spending say using a credit card results in us spending about 30 per cent more than we would if it was cash.

Our card gets paid off automatically from our home loan account so if we have a bad month on the credit card it just gets added to the mortgage and paid down when our salaries come in.

But it does make it easy to keep spending without thinking about whether we can afford to or not.

If I was paying for everything using cash once it was gone, that would be it.

Credit cards offer great flexibility and accessibility but with that also comes the challenge of ensuring you are still living within your means.

Real hardship
KiwiSaver is a great backstop to have if you ever get into serious financial hardship like the couple in Mary Holm's column this week.

With the woman facing health issues and her husband having lost his job due to redundancy they face a tough situation which none of us hope to ever get into.

As a couple it's easy to get used to spending two incomes and having the ability to pay loans, a mortgage and buy want we want using that money.

But if one person loses their job it can be a big blow.

In the past most families survived on one person's income but it seems hard to fathom doing that these days.

Could your family survive on half of what it earns or possibly more if the higher earner loses his or her job?

Your KiwiSaver money is there if you really need is but once you use the money it's gone and that means you may face a harder time in retirement later.

It shows how important it is to build up a "rainy day fund" which would hopefully allow you to keep going without having to tap into retirement savings.

Transfer challenge
It seems it's not just from Australia that people are facing difficulties with when it comes to moving money from left behind pension savings.

Helen Twose's Q&A explores the challenges involved in transferring money from a UK pension back to New Zealand.

I didn't bother contributing to a retirement savings scheme when I was on my OE in London but if the company I was working for had contributed to a scheme on my behalf that might have been a different story.

It is possible to bring the money back to New Zealand and put it in your KiwiSaver account, provided your provider meets the requirements.

But people with small amounts to transfer may also have to consider whether it is better to leave it there until they become eligible to take it out.

The best advice seems to be to get some advice on your situation.

What do you think?