The financial fallout: Understanding the effects of withdrawals on budget generation

Those who were born before the era of easy credit remember their parent’s sage advice about saving money. Yet, jumping forward four decades we find that one-quarter of all Kiwis are in a situation with no savings at all. Half the working population save less than 5% of their income. With inflation running at 7.5%, driving up the cost of living, there aren’t many options to put aside capitals. As for borrowing, a bank loan has become too expensive with rates running as high as 8%. Unfortunately, many savers are falling into financial difficulty and are forced to consider withdrawing their savings to budget for day-to-day living expenses.

Withdraw from Different Savings Accounts


For those who enjoy gambling, withdrawals from long-term savings can prove stressful and many will question the ethics of using their moolah for this purpose. However, whatever the needs, breaking into the piggy bank does come with consequences.

Taking Cash from Your Bank

Any New Zealander will incur expensive penalties for withdrawing from long-duration bank savings early. This involves higher fees and an earnings rate reduction depending on how much of the savings term has elapsed. You’ll also wave goodbye to a yield rate of around 5%. If you need funding from the bank, stick with your checking funds.

Don’t Leave Dollars at the Casino

As a prerequisite of playing online games of chance, you need to open and fund an account. When it comes to deposits and withdrawals, here at we suggest you a fixed budget and instant payouts. Only deposit money based on what you need to play with. If there’s anything left over when the session ends, take it out and leave nothing behind. After all, online casinos don’t offer dividends on your deposits.

Retirement Accounts Should be Sacrosanct

Kiwis don’t have an official retirement age. However, many stop working and start taking their government pension as they reach 65. For those with retirement savings on top of the KiwiSaver plan, think hard before breaking into these. Though you can take out up to 25% of the total value tax-free, it’ll cost you a peace of mind. After all, these savings are designed to provide a source of income for later life. In fact, consider that most long-term investments are there to provide living during the 25 – 30 years of retirement.

Exiting Long-Term Investments

Breaking into any investment accounts will result in penalties, including break fees and loss of interest between 0.5% – 1%. Breaking into a 5-year Saving Fixed Term plan is not allowed, though shorter savings terms will result in penalties and other charges. For those with a portfolio of stocks and shares, there are no costs to selling. Because New Zealand has no capital gains tax, all profits are yours. However, there may be bank or brokerage fees of around 1%.

Tomorrow’s Moolah to Spend Today

Whatever your material hopes and dreams are, you still have to afford them. Assuming you don’t have unlimited wealth, you’ll need to prioritise between living costs and funding a pastime or hobby. Taking a loan or removing savings earmarked for future plans creates opportunities to invest in something that brings wealth. It might be a new business or a promising investment. Equally, it’s crucial for sudden and unforeseen events like a medical emergency or repairment on ever-increasing debt. In times of economic instability, it’s understandable to liquidate a long-term investment. But to use this for wagering is irresponsible.

Monetizing your withdrawing funds is usually a long process that requires focus and patience. Even if you have great ideas, make thorough analysis. Make sure that your money will be invested wisely. Utilising long-term investments for the present or irresponsibly is likely to impact your finances in the future.

Keeping an eye on Your Gambling Needs

If online gambling rocks your boat, it’s essential to have a strong-headed approach to finance at the game’s table. It makes sense to look at this as a hobby. Someone who loves fishing might want to invest in new rods and reels. Likewise, gamblers find enjoyment in investing with dice and cards in the hope of landing that elusive catch.

For those involved in pathological gambling, the source of funding is of little importance when compared to the ability to continue betting. They will be more interested in what online casino has the fastest payouts, so they can gamble at a faster rate. Withdrawing from long-term investments to pay for a hobby is probably not the best approach to future financial stability. Never look to games as the only chance to make money from your savings.

Being unable to get a firm grip on your gambling money points to a serious problem. Unless you’re able to implement a sensible and responsible means of controlling your wagers, then trying to maintain a bankroll will be a costly affair. Especially, if you decide to make a withdrawal from long-term savings. The stress of watching your dough being depleted and growing a debt will suck all the enjoyment out of the games. As for all problems, there are many methods to find support and solutions to pathological gambling.

Summary: Can’t Save, Then Don’t Gamble

Unfortunately, present-day credit culture, coupled with wage stagnation, has led to financial irresponsibility. Because easy bank lending has fermented the idea you can have it all now, no one saves. As a result, many are stuck paying a never-ending repayment.

Saving, especially in the social media age of rampant materialism, is no easy feat. For someone under the cloud of pathological gambling, it’s even harder. They see their outlay at the gaming tables as a genuine form of investing. One they hope will produce huge dividends at some point. We suggest that such wrong-headed thinking calls for a financial mentor. It has to be someone who takes charge of household spending and saving for the future.

A generation or so ago, when times were hard, no one would consider borrowing money, looking for loans, or breaking into their investments. They would simply “tighten their belt.”  This means cutting back on nonessentials.

Disclaimer: Gambling involves an element of financial risk and may be addictive. Please play responsibly and at your own risk. This post contains material that may or may not be legal in your country. Please play subject to applicable law.