Do I pay off debt or save?

When you get to a stage where you are earning more money than you spend, you might wonder whether you should work to pay off your debt, such as student loans, or start saving, maybe for a house or retirement.

Wonder no longer, because financial planner Lisa Dudson of Acumen has a helpful checklist for you to think about as part of your long-term approach to financial planning.

1. Create an emergency fund.

Ideally this should be equivalent to three months of your expenses. This is so when you have unexpected expenses such as a car repair, you have got money put aside and it doesn't derail your spending plan.

2. Pay off consumer debt.

This is debt that you accumulate on car financing, hire-purchase and credit cards. It's often referred to as "bad debt" because the interest you pay on debt is almost always much higher than the interest you earn on savings. Whenever possible, save for what you want before you buy it.

3. Create useful goals.

"If you have goals that are important to you, your chances of achieving them are much higher," says Lisa. "There are three main types of goals: short term goals, things like a new car or holiday; medium term goals like a deposit for buying a home; and long term goals like saving for retirement."

4. Name your savings account

A great tip is to have a separate savings account, that is named. For example 'home deposit' or 'kids education' or 'Aussie trip'. "This can be really motivational and helps enormously with making your spending plan work," says Lisa.

5. Ensure you are contributing to KiwiSaver.

If you plan on using KiwiSaver to help you into your first home, you might like to put in as much as possible. Otherwise, as a minimum, match what your employer contributes, which for most people will be 3 per cent. If you can afford it, make the maximum contribution, which is 10 per cent