Cost of living these days

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When I talk about money with people, we talk about lack. It’s the feeling of desperation when you’re paying for groceries and spending hundreds of dollars just for the basics. Or putting $60 of petrol in your car, then being back at the pump two days later. What does the cost-of-living crisis mean? And what are some ways of spending less or still attempting to save some money?

Cost of living crisis

It feels difficult to be tangible about how much prices have risen, but Stats NZ has some pretty clear information, as per this headline: “Annual inflation reaches 30-year high of 6.9%” (from March 2021 to March 2022). And it’s not just annually. From the December 2021 quarter to March 2022, the Consumer Price Index rose 1.8%. This is down to fruit and vegetables, which increased 9%, and groceries, which increased 2.5%. Transport costs also rose 6.6%. Those damn groceries and petrol.

What does all this mean for everyday people? In social media groups, I see people talking about buying frozen veges because they can’t afford to buy fresh broccoli. People going to food banks because their rental costs are so high, they have to make a decision between food or heating. It means using the car less and trying to smash out three errands at the same time so we don’t have to drive on different occasions. RIP to our toddler’s weekend naps, because he loves to sleep in the car (when we all had Covid, my husband had to drive him around for his nap to keep him healthy and non-exhausted, and I almost had a heart attack at how much we spent on petrol that month). And we have a weekly grocery budget that’s hard to stay on top of.

Most of our problems are very middle-class. There are people struggling to afford period products (Dignity NZ) and children are going without shoes when it’s winter and freezing cold (Share a Pair NZ). It shouldn’t be this way. But what’s happened to the economy since Covid hit, and since the war in Ukraine, is complicated.

Money on the mind

 Some things I find helpful or have heard help when it comes to managing money:

 Spending

  • Set up different bank accounts for the basics and the luxuries, so if you run out of spending money on the basics, you can make an informed decision about how much to spend on your luxury items. (Anyone do this? Does it work?!)

  • If you’re sharing money with your partner, having your own fortnightly or monthly spending money that’s paid into your personal account as an automatic payment, can help you to see how much you’re spending on your own stuff.

  • Get a budget tracking app like PocketSmith – it syncs with NZ bank accounts.

  • Look into subscription services for fruit and vegetable boxes. They may not be that much cheaper than supermarkets, but I love the fact that we’re saving produce from going to waste and it provides a revenue stream for local growers (Wonky Box, Stuff.co.nz).

Saving

  • If you’re saving money, put it in a bank account that you don’t look at or have everyday access to, like Rabo Savings or an online account with a different bank. If you don’t see your balance, you’re less likely to dip into it.

  • Even if you save a small amount each paycheck (and set it up as an automatic payment into your savings account, so it always goes out), over time, the money compounds. A couple of years saving $25 a fortnight for example, can produce over $1000.

Investing

  • If you want to make money in the medium term, look into investing, rather than saving. A New Zealand-based podcast I’ve been listening to, “Girls that invest” says that women have an attitude of always saving our money, and this causes us to end up financially worse off than males (along with the gender pay gap and other socio-cultural factors!) Investing in shares is often talked up as risky, but it can work out well, if we do a little bit of research and are prepared to ride the wave for the medium term. Apps like Sharesies make investing even small amounts of money feasible.

Do any of these resonate? How are you managing your finances / keeping costs down or saving money at the moment?

A disclaimer

This is general information only. If you require expert advice about your finances, you should talk to a professional advisor :)