In a nutshell:
- Most of us like to think we're pretty rational when it comes to matters of money, but human nature can be a funny thing.
- During times of uncertainty, we often end up making decisions that feel perfectly logical at the time, but actually cost us in the long-run—meaning what feels 'safe' and 'sensible' today isn't always best for your financial future.
- Some of our most expensive money decisions involve putting things off until "later"—waiting for market certainty before investing, waiting for house prices to come down a bit further before buying, putting off personal insurance until we're older.
- Here, we break down some of the biggest traps holding Kiwi back financially, and what we should be doing instead.
- If you've been waiting for a reason to act—how's this? Open a new Squirrel saving & investing account and deposit funds before 31 May 2026, and you'll get $20 on us. T&Cs apply.
Most of us like to think we’re pretty rational when it comes to matters of money.
But sometimes, especially during periods of uncertainty, logic goes out the window—and we end up making decisions that feel completely reasonable in the moment, but actually cost us on the long-run.
And they usually all come back to some variation of “I’ll get to it later”.
To unpack some of the biggest “rational thinking” traps that are holding Kiwi back financially, our Chief Squirrel, David Cunningham, sat down with enable.me’s Katie Wesney and Squirrel adviser Emma Wallace for our latest episode of Live at the Nut Bar.
Read on for their take on the money habits, myths, and “perfectly rational” decisions that can quietly destroy long-term wealth.
TRAP #1: Thinking it’s best to wait for certainty before investing
Since the outbreak of the US-Iran war (the latest in a long line of geopolitical tensions to hit the global markets in recent months) stock prices have been on a rollercoaster ride.
Down massively one minute, up again the next—wreaking havoc on people’s investment balances in the process.
In times like these, putting your hard earned money on the line probably feels like the last thing you want to do. But according to enable.me’s Katie Wesney, it could mean you're missing out on big opportunities.
“So many people at the moment are sitting on cash, waiting for more certainty in the market. [It’s a] hugely costly [approach] when we’ve got inflation pressures playing out [meaning cash in the bank is essentially going backwards in value].”
And the real irony, Wesney says, is that people love a sale in most other areas of life.
“It’s so interesting, the buyer behaviour we see with investing. I bought my mum a cardigan recently—I specifically waited until it was on sale at 30% off. I was happy to buy that cardigan on sale. [I wasn’t sitting there thinking] I’ll wait until prices go up again. But that’s exactly what we do in investing.”
Chief Squirrel, David Cunningham, says people often only feel comfortable jumping back in once the markets have recovered—but that’s actually the worst time.
“When uncertainty disappears, we rush in. The problem is, by that point the markets have already risen, so you’ve missed out on big gains straight off the bat.”
TRAP #2: Trying to time the bottom of the housing market
There’s a well-known saying in the investment world: no one wants to catch a falling knife.
That’s why—when house prices are falling—we often see buyers sitting on the sidelines, waiting for prices to come down that little bit further. Why buy for X today, when you could get a better deal tomorrow?
The problem is, though, we usually only know the bottom of the market once prices have already started to climb again.
Rather than holding out in the hopes of saving a few thousand dollars—and potentially missing the boat entirely—Wesney says a better approach is come at property from a long-term view.
“Property is a long-term investment, whether it’s your own home or an investment property. You’ve just got to get in there, do your thing, and then you’re not paying somebody else’s mortgage.”
TRAP #3: Thinking personal insurance can wait
While we’re young and healthy, forking out for personal insurances (life, health, income protection) can feel like a waste of money.
We know we should get onto it—eventually—but until we’re a bit older, she’ll be right… Right?
The danger with that kind of thinking, Cunningham says, is that life often gets in the way. “All of a sudden you’re married, with a house and kids, and somehow you still haven’t quite got round to it.”
Wesney says, “[The whole point with insurance is that], you get it before you think you need it. Otherwise, you miss the boat—you get a diagnosis and you’re not insured.”
Emma Wallace stresses that life and income insurance in particular are really important for anyone with a family and debts.
“Back in the day, when I bought my first home, [having life insurance in place] was a bank requirement. Now it’s just house cover, that’s the only insurance must. But if something goes wrong, there aren’t many couples out there where one partner could comfortably service the mortgage alone, if the other were to get sick or injured [and be out of work indefinitely].”
Wesney adds, “It feels really obvious—but just like you insure your house, you need to insure *you*. Particularly if you’ve got people relying on you.
“[Being properly insured] can be the thing that makes a really terrible situation actually somewhat okay financially. And if people wait, there can be such a cost in terms of opportunity, which quite often closes.”
TRAP #4: Targeting minimum repayments on your mortgage
When you’ve spent years budgeting and scrimping and saving to get into your first home, settlement day often feels like the finish line.
But unless your idea of financial freedom looks like spending the next 30 years tied to a mortgage, what happens after that is just as important.
Wallace says, “We always chat to clients about setting accelerated payments from day dot… Increasing your repayments even a little bit can be really powerful—knocking years off your mortgage term, and saving thousands in interest.
“What we see a lot of with first home buyers, though, is they’re like ‘yep, great, we’ll do that down the track’. But it’s that tomorrow that often never comes.”
With interest rates down around 2% from peak, there’s a golden opportunity for anyone rolling off a higher fixed rate in the coming months.
“Say, for example, you’re rolling off a 6.99% fixed term rate down to 4.99%. Most of us will gladly just take the extra cash in the back pocket—which is understandable with cost of living pressures. But if you’ve got to a point where your budget is used to that higher repayment, and you can keep it going moving forward, you’re going to have that much more going towards your principal. Maybe you could even do somewhere in the middle, which is great.
“It also means, when rates go back up again, because you’ve already been servicing a higher rate, you’re going to be less impacted.”
TRAP #5: Relying on willpower alone if you want to get ahead
One of the hardest things about sticking to a financial plan comes in those moments where you’re faced with a trade-off between what ‘present you’ wants now vs. what you know is best for your future.
The problem, Wesney says, is that because our future self “feels like this mysterious person who may never eventuate” it’s usually the present self who wins out.
“So, we’re more likely to spend on takeaways, or go on holiday…[even when that means robbing ourselves] of what [we] could achieve longer-term.”
The answer? Automating things as much as possible to remove temptation—and take your present self out of the equation.
“I love that saying—you don’t rise to the level of your goals, you fall to the level of your systems… [The aim should be to] create an environment where the default position is success, not failure.”
So, what does that look like in practice?
- Out of sight, out of mind:
- Having a clear strategy to pay your mortgage off faster—whether it’s through higher repayments, or something like a revolving credit—and then automating those payments.
- Setting up different money “buckets” for different things—bills, fun money, emergency savings, and longer-term savings—and using automatic payments to transfer funds on (or the day after) payday.
- Keeping up with KiwiSaver, even once you’ve used it for your house deposit. At least make sure you match your employer contribution rate, otherwise you’re leaving money on the table.
- Putting your credit card away in a drawer, and using it only when you really need it. Even if you’re in the habit of paying your credit card balance off in full every month, Wesney says it’s probably still costing you more than you think. “We know that people spend about 15% more when using a credit card than they would otherwise—just because it’s a less transparent form of payment.”
- Use life events as triggers to review important stuff:
- Scheduling time in the diary to review your will and insurances every year—i.e. around your birthday—to make sure everything’s still fit for purpose.
- Ditto with your budget—as incomes rise, it’s natural for expenses to do the same. Checking in regularly helps to make sure that any extra funds which could be helping you to reduce debt, or build wealth, aren’t getting sucked up by unnecessary everyday expenses.
- Using every mortgage rollover as a chance to reassess what’s working and what’s not—can you increase repayments, add an offset or revolving credit facility, or otherwise restructure your loan to pay it down faster?
TRAP #6: Underestimating the power of starting small, and early
When you’re just starting out in the working world—maybe not earning a whole lot—saving and investing might seem a bit pointless.
What difference could a couple of hundred bucks a month possibly make in the grand scheme of things? Surely it’s better just to have that little bit of extra cash in your back pocket, where you can actually use it, rather than channelling it to some far-off goal?
But over time, those small amounts can add up to a lot more than you might think.
Wesney uses KiwiSaver as an example: “I ran the math… If you're earning $70,000 a year—and you put in [the minimum KiwiSaver rate] of 3.5%, and your employer matches it. If you start at 25 instead of 35, you’ll have $295,000 more at [retirement] just by starting 10 years earlier.”
The best time to start saving & investing was 20 years ago. But the next best time? Right now.
Open a new Squirrel saving & investing account and deposit funds before 31 May 2026, and you’ll get $20 on us*. Register now.
*T&CS apply.