OPINION:  Each week, the NZ Herald and Newstalk ZB's Cooking The Books podcast tackles a different money problem. Today, it's how to change your money habits for the better, starting today. Hosted by Frances Cook.

It's so easy to ignore things that scare you. For instance, money. Most people don't like to talk about it, and now it turns out, a shocking number of us have no plan for our money. A third of us, in fact.

I get the temptation to put it off. Six months ago I was part of the one in three New Zealanders who had no plan and was living only for today.

While I've since had the realisation that I need to get it together, many people went the other way. The number of people with a plan actually dropped last year, according to BNZ research.

I suspect many people have the same reasons I did. Retirement seems far away (it's not really), money seems hard (it doesn’t have to be), and the whole thing gets put off for another day.

Another day which can turn into years.

Those under 30, like me, are among the worst offenders. Only 17 per cent have a money plan.

Which is a terrible idea, as we can make far more money by starting early.

But the oldies shouldn’t be smug too soon. 59 percent of those between 50 and 64 say they don’t know how much they’ll need for retirement. Guys, you don’t have long to figure it out.

But again, I get it, it’s daunting. What got me to change habits was making the small, daily changes.

It woke me up to the realisation that most of this isn't so hard, and doesn't have mean sacrificing the fun things in your life. In fact, as a reformed spender, taking back the control can be a fun power trip of its own.

I got in touch with BNZ's head of wealth and private bank Donna Nicolof, to find out what things most of us could do to be better with money from today.

She said it was very worrying that so many people didn’t have a plan, or idea of their financial goals.

"I actually think that taking control of your finances should be empowering rather than intimidating.

"The earlier you start, the more you will have.

"People miss what the benefits of compounding [interest] are, and how much more the dollars saved today will be worth in the future.

"For example, if you start a good savings habit early and put money away in your twenties … you’ll have a larger starting pot to invest for the future."

Nicolof recommended a strategy of cutting back on spending, saving the difference, and then putting the saved money to work.

"Setting up a savings account is a good first step. If you have children, set up a savings account for them so they can start good habits early.

"If you struggle with self-control, KiwiSaver is a good one to keep your savings locked away.

"Two things with KiwiSaver. Make sure you choose your fund, the fund that’s right for you, and also what your contribution amounts are.”

If you really struggle to save, take a brutal look at your spending.

There are probably areas where you can cut back, without losing the fun things in your life.

"If you're working and you buy your lunch every day, that's $10 that you're spending every day, which is $50 a week, and $200 a month.

"You don’t often realise how those small amounts all add up."

All of that saved cash then needs to get to work.

For someone who's new to investing, managed funds can be a way of dipping their toes in.

"Because your investments are diversified, you can seek advice on what’s the best fund for you, and it minimises risk and gives you good return prospectives," Nicolof said.

"Whatever investment you choose, take the time to understand where you’re putting your money, what the risk profile is of the investment you’re making, and does it meet your return objectives.

"The one thing I'd say on that is, make sure you don’t have all your eggs in one basket."

For the full interview, listen to the podcast.

If you have questions about this episode, or ideas for the next one, get in touch.

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