But many Kiwis are also already taking proactive steps to make their money go further
A survey of more than 1,600 Westpac customers has revealed that 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%).
Especially worried were younger customers and families with younger children.
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Findings showed that roughly nine in 10 customers felt rising fuel and grocery prices were affecting their households. Some 44% said they have already started spending less on petrol, 43% were cutting their expenses on eating out and takeaways, and 41% were spending less on groceries (41%).
However, more than two-thirds of Kiwis were confident they can cope with the rising cost of living and more than half were already taking positive steps to manage their finances and make their money go further, the survey found.
“We’re encouraged to see 58% of people taking action by reducing spending where they can, and 47% recently drawing up a budget,” said Ian Hankins, Westpac NZ general manager of consumer banking and wealth. “Having a clear handle on your incomings and outgoings is key to helping you manage your money more effectively.”
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Hankins said the Westpac research aims to get customers thinking about their own situation and the 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 the non-negotiables Kiwis won’t consider cutting back on, with just less than half saying they wouldn’t trim their spending on healthcare and health products and household bills. Of those already spending on public transport, just over half said they wouldn’t consider cutting back.
Some respondents were open to making lifestyle changes to save money. Nearly one in three 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,” Hankins said. “Those are habits worth keeping up as we deal with cost of living impacts this year. 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.”
When asked what else they’ve already done to make their money go further, many 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.
Many Kiwis are also looking to boost their income to manage rising costs, with one in five of those in full-time work have already asked their employer for a pay rise, and a further 32% are considering it.
Meanwhile, more than half of those surveyed 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%, the Westpac study found.
