A recent Westpac survey shows 97% of people are concerned about the rising cost of living - with petrol and food prices being the main culprits – but more than two-thirds are confident they can deal with the rises.
A survey of more than 1,600 Westpac customers found 83% of respondents were concerned about the impact of inflation on their own lives, well ahead of the economic impacts of COVID-19 (57%) and the Russian invasion of Ukraine (52%).
Younger customers and families with young children were especially worried.
Kiwis were clearly feeling the squeeze, with roughly nine in ten customers saying rising fuel and grocery prices are affecting their households.
Many have already started spending less on petrol (44%), as well as spending less on eating out and takeaways (43%) and spending less on groceries (41%).
However, more than two-thirds of New Zealanders are confident they can cope with rises in the cost of living and more than half are already taking positive steps to manage their finances, according to the survey.
Westpac NZ General Manager of Consumer Banking and Wealth Ian Hankins said the survey also found the majority of Kiwi households were already taking proactive steps to make their money go further.
“We’re encouraged to see 58% of people taking action by reducing spending where they can, and 47% recently drawing up a budget. Having a clear handle on your incomings and outgoings is key to helping you manage your money more effectively,” Hankins said.
“We’re committed to working with customers through good times and bad. We hope this research will get customers thinking about their own situation and positive changes they can make.
“If you’re one of the 31% of people worried about your short-term finances, please reach out for help - whether it’s to trusted friends or family, community budget advisers or your bank,” he said.
The survey also identified non-negotiables that customers won’t consider cutting back on, with just less than half saying they wouldn’t cut healthcare and health products and household bills. Of those already spending on public transport, just over half said they wouldn’t consider cutting back.
Respondents were also open to lifestyle changes that could save them money.
Almost one in three surveyed have already found alternative forms of transport to driving, while another quarter are considering it. Also, more than half have either bought a more fuel-efficient car or are considering it.
“Through COVID-19 many of us have changed our lifestyles to some extent, whether it’s walking and cycling more, or shopping local to support Kiwi business. Those are habits worth keeping up as we deal with cost of living impacts this year,” Hankins says.
“It’s also good to see a third of people say they plan to save more money this year, compared to just a quarter saying they plan to save less. We know from our own data that most home loan customers are better-positioned to deal with cost increases than they were a year ago, but it always pays to think ahead about how your situation could change,” he said.
When prompted to mention anything else they’ve already done to make their money go further, a number of respondents mentioned growing vegetable gardens, buying cheaper in-season fruit and vegetables, working from home, doing more home cooking and entertaining, and installing solar panels to reduce their power bills.
The survey also found many Kiwis are looking to boost their income to manage rising costs. Of those in full-time work, one in five have already asked their employer for a pay rise, and a further 32% are considering it.
Just over half are either looking for a higher-paying job or might contemplate doing so. When asked what size pay rise they’d need to keep pace with rising prices, the average response was 10%.
Hankins acknowledged the rising cost of living is a challenge for many households but can be managed, and encouraged people in financial stress or needing assistance to seek help:
- For a range of money saving tips and tricks, or to sign up for a free Westpac Managing Your Money workshop on issues like budgeting, saving and managing mortgage repayments, visit: https://www.westpac.co.nz/personal/life-money/managing-your-money/
- For independent advice and assistance from financial mentors on all money and debt related matters, people can call FinCap’s Money Talks helpline on 0800 345 123.
- People in need of urgent financial assistance should contact their bank and/or Work and Income NZ.