The Covid-19 crisis has caused uncertain times. It remains unknown what its full impact will be on New Zealand’s economy, but we do know it’ll cost Kiwis jobs and have a significant impact on business, despite the Government’s $12.1 billion economic rescue package.
While it’s easy to feel overwhelmed and worry about the impact on our own lives and families, just take a deep breath and remember there are a number ways to save, budget and lighten the stress loads.
1. Create a budget for your household
A bit of advance planning can pay off big time. The first step to a budget is looking at how your money is coming in and where it’s going. Sit down with your family (or whoever you’re managing funds with in a household) and take a look at your current spending to create a budget. The more detail you have in your budget, the more accurate it will be. So, print out approximately three months’ worth of bank statements, or download them electronically. Canstar has a detailed step-by-step guide to writing a budget, and a calculator you can use to get a blueprint for your yearly cash flow.
You want to work where your expenditures per month are coming from and how their cost compares to your income. Expenditures can be divided into fixed/regular expenses, which include things like mortgage repayments, rent, utilities (gas, electricity etc), petrol, groceries; and discretionary expenses – expenses that you incur by choice, such as gifts, clothing, entertainment, eating out and hobbies. Having a good look at your bank statements is a great way to see how spending adds up quickly and what you could potentially do without to save extra cash.
Once you’ve organised a realistic budget that takes into account your income and essential needs, stick with it as much as possible. Record your expenditure on a computer (you could use a budgeting program like Microsoft Money) or in a ledger book. Don’t let yourself spend what’s not in your budget or isn’t essential.
In normal economic times, the standard recommendation from financial advisers tends to be “live within your means”. But, in times of economic hardship, it’s better to live below your means. A planned budget ensures you can do this.
2. Avoid impulse buying and unnecessary online spending
It’s an emotionally charged time right now, so be aware of impulse buying. A lot of us are at home scrolling on laptops and phones while we practise social-distancing, and it can be tempting to order clothes or other unnecessary items out of boredom. Combat this by recognising when you’re in an impulse-purchase mood. Try engaging in something else to enhance your mood: Facetime a friend, or get a dose of fresh air and go for a walk. Your wallet will thank you later.
3. Save on electricity and gas costs
Cut your electricity costs by acting energy-smart at home, which might mean swapping hot water machine washes for cold, turning off appliances that use hefty amounts of standby power when you’re not using them and ensuring your heating isn’t costing you more than it should. If you live in a shared house, read our tips on cutting power bill costs and always compare your energy plan to make sure it’s competitive.
While you’re thinking about saving power, check you’re not spending more than you should on your mobile phone bill, too. Often we’re on plans that renew automatically each month and don’t notice the sum disappearing from our bank accounts. Could you swap from a $40 plan to a $20 one perhaps? The savings add up fast.
4. Reduce car use
It can be tempting to head out on some solo drives right now, especially if you’ve been holed up at home, but just watch your gas use. Minimise your driving as much as possible if you want to save money. Combine multiple shopping trips into one if you need things, or ditch the car and walk or bike.
5. Cancel memberships you don’t use
If you’ve got a gym membership, a Pilates membership or something similar that you’re paying for but not using, look into cancelling it ASAP. This is particularly relevant right now as we’re all trying to minimise social contact. Every fitness outlet will have their own rules/plans around how COVID-19 will impact your use of their facilities, so get in touch with them. If they need to close their doors temporarily, ask if refunds are available.
6. Plan ahead and meal-prep
Preparing multiple meals at once and storing them for later consumption could help you ward off impulse take-away food purchases and allow you to cash in on bulk-buy benefits. There’s an enthusiastic community of meal prepper bloggers who swap recipes and ideas to help people prepare a week’s worth – or sometimes longer – of meals. You can make grocery lists based on what you need and cut costs there, too.
Consider adding in some vegetarian meals to your weekly dinners if you haven’t already. A tin of beans or chickpeas really bulks up a meal and makes a great chilli or dhal, and is often cheaper than buying meat.
7. Audit your bank accounts to see if you are paying fees
It could be a good idea to go back through past statements and add up any account-keeping fees you’ve been charged. You could ring your bank to ask for a better deal when it comes to these types of charges, or potentially swap to a fee-free transaction account. It’s a good idea to keep in mind that the interest paid on fee-free accounts could be different to those paid on accounts that charge fees – check with your bank.
While the savings environment might be tough heading into the future, there’s no sense in going with the first savings account or savings account provider that you see advertised. To help you narrow down your options, Canstar compares savings providers and accounts. To have a look at what is currently on offer, hit the button below.
8. Get creative with activities
Budgeting and saving doesn’t mean you have to sacrifice enjoying life. Luxury foods, clothes and holidays might have to be put on hold, but it’s a good time to explore what you can enjoy that’s free. Have a family walk and picnic on a beach you’ve never been to, have a special hour of quiet time to take a bath and read the book you’ve been meaning to for months, or have a streaming movie marathon or bake-off with your flatties or family if you’re indoors.
9. Avoid unnecessary credit card spending
Think again before purchasing expensive, non-essential items (such as new cars, clothing, furniture, appliances, boats or other luxury items) on credit, or borrowing large sums of money. In an already stressful financial environment, don’t add to the worry by taking on extra debt.
10. Swap brands for savings
Next time you go to the supermarket, consider buying a cheaper generic item instead of a big-name brand. There could be little to no difference in quality, but the price saving could add up over time.
11. Join savings communities
We all need a bit of motivation to keep on track. There are various savings communities on social media to join. There are trade pages where members give away items to others who need them; plenty of savings hacks communities who spot deals and share meal-planning ideas; and co-op groups where people buy food and other items in bulk and share the cost (just do your research before committing to one of these groups to make sure they’re legitimate).
12. Ask for help
Reach out to organisations who can help you budget for free in New Zealand. Moneytalks is a free financial helpline for advice and support from trained financial mentors, supported by the government. MoneyTalks can also connect you with services in your community. They also have a MoneyMates peer support group.
There’s also the Sorted website, a government-funded independent online money management guide. It’s full of various calculators and information to help you manage your personal finances throughout life.
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