How to manage rising living costs

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.

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. 

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. 

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.

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.

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.

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.

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.

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.

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. 

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.