Spend carefully

How to manage rising living costs

Food, power bills, petrol prices – you name it – remain high. Here are some ideas that could help you manage higher costs as well as options for assistance.

Reading time: 5-6 minutes

Why are living costs high?

One word. Inflation. Inflation refers to a general increase in the price of goods and services. Inflation means the cash you have today won't be able to buy as much in the future. The Reserve Bank of New Zealand sets interest rates to achieve low and stable inflation, aiming for consumer price rises of 2% on average each year. But annual inflation in the past couple of years has been much higher.

How to take action

Review your spending

Planning your spend and creating or revisiting your budget is a good starting point. This will give you some clarity around money coming in and going out and might help you spot areas where you could cut back.

Need help reviewing your finances? MoneyTalks provides free, confidential and non-judgmental budgeting services throughout New Zealand. 

Trim your grocery bill

It’s likely that groceries will be one of your biggest expenses. This can be tricky, because they’re a must-have. But there are some ideas that could help you keep costs down. From meal planning to buying in bulk, see how you could cut your grocery bill with these six hacks

Reduce fuel costs

We’re all feeling the pinch at the pump. Consider jumping on the bus, train or ferry instead. If you need to fuel up, Google one of the handy apps that track the cheapest petrol prices near you.

Shop around for the best deals 

When it comes to products and services, there are always deals to be had. Shop around and take advantage of the best offers or see if your existing provider can cut you a better deal. We’ve also pulled together some other ways to save without sacrificing the things you love.

Know your outgoings

Ignorance isn’t bliss when it comes to saving money. Review your recent transaction history, including your direct debits. Are there some automatically billed apps or services you could cut? Making some quick decisions about what stays and what goes could help you tidy up and save on subscription services. Small savings add up.

Managing your home loan

A home loan is usually a long-term arrangement, and we understand that financial situations change over time. Cost of living increases, rising interest rates and other unexpected events can make it harder to meet your mortgage repayments. For options and resources that can help, see Manage your home loan.

If you find it difficult to afford repayments, talk to us about your options.

Assess your debts 

Staying on top of debts can feel daunting, but some forms of debt can be useful. For information on when borrowing money can be useful or a burden, plus ideas to repay what you owe, see Managing debt.

We also have articles on:

  • Identifying if debt like overdrafts or credit cards are right for you
  • Choosing a limit or loan amount 
  • Tips to reduce your interest payments.

We’re here to help

Don’t wait until you’re in financial trouble. If you can see it coming, the earlier you talk to us the better. If rising costs are making things unaffordable, there are a number of ways we may be able to assist. 

If you’re experiencing a hardship event, e.g. job loss, illness, a relationship breakdown, you may be eligible for financial hardship assistance.

Financial help from the government

If you struggle to meet your living costs, Work and Income may be able to help with:

  • Housing costs, including help to pay rent or other accommodation costs
  • Food costs
  • Power, gas, water bills or heating
  • School costs, including uniforms, stationery and school fees
  • Urgent or unexpected costs. 

Looking forward

Prices might feel uncomfortably high, but inflation is expected to decline over the next few years due to raising interest rates (pumping the economic brakes to slow down demand). 

It’s a good idea to plan now for when inflation does ease, so you can put your money in better long-term shape. Financial wellbeing isn’t about how much you’ve got. It’s about making the most of what you have in good and not so good times.

Steps to financial wellbeing

Our financial wellbeing programme can help. Try one step or two, or work through the programme's six steps in any order.

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Important information

This material is for information purposes only. Please talk to us if you need financial advice about your situation and goals or about our products and services. See our financial advice provider disclosure (PDF 39.9KB).

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