Praneeta Mahajan
Hamilton, January 26, 2024
Westpac Bank is encouraging New Zealanders to put together a 2024 budget, as new research shows more than one in four Kiwis expect to be impacted by a holiday spending hangover.
The cost of living has been a constant matter of discussion in the country and the holiday season saw card spending fall sharply in December 2023, taking the fizzle out of the Christmas season, a time of the year when retail activity is expected to be busier than usual. Falls were recorded across most categories over the month, in addition to a widespread decline on a quarterly basis, according to reports.
Refresher
A sharp fall in card spending during December
What the report says
The summer spending and savings survey of 1,110 Westpac customers showed that 27% of respondents believed holiday spending definitely or probably would cause financial stress in the new year, and 24% believed the start of 2024 would be more stressful than the same period in 2023. 20% of customers said that “they expect paying back holiday debt to be a big additional cost in January and February 2024.”
But encouragingly, more people (45%) are planning on budgeting this year in comparison to last year (33%). 68% of respondents aged between 25-34 were likely to plan their finances in the new year, with that number decreasing in older age groups.
A good time to start budgeting
Westpac New Zealand’s Acting General Manager of Consumer Banking and Wealth Helen Ryder said summer holiday spending may have left some families in a tight spot, as they face the next wave of costs such as those associated with the return to school.
However, she said there is no better time than now to draw up a spending plan to get 2024 off to a good start.
“We know Kiwi households are feeling the rising cost of living in different ways and the key to managing your money effectively is keeping your spending within your means. The start of a new year is a great time to do a financial reset to work out what your spending and saving priorities are for the year,” Ms Ryder said.
“Even if you have used a budget in the past, it is a great time to have another look, as your incomings and outgoings may well have changed. By getting an up-to-date idea of your regular costs as well as any big expenses coming up and setting aside money each week, you can create greater peace of mind that you can cover those costs when they roll around.”
A good spending plan
Ms Ryder recommends setting up a good spending plan, which can take some time, but there are lots of great tools to help make budgeting easier. Reviewing your bank transactions is a good start and many budget calculators suggest expenses to add so you do not miss anything.
“Westpac’s CashNav can also categorise and track your spending if you are a customer,” said Ms Ryder.
The survey showed almost half of the respondents planned to save what they could from each payday.
“Setting realistic savings goals, and then meeting them, is the best way to stay motivated to follow your budget. Accurately estimating your spending will make it less likely you will need to dip into your savings for everyday spending,” Ms Ryder said.
“When deciding how much you will put aside for savings, think about your goals and it also helps to create an emergency fund in case something unexpected occurs,” she said.
Tools to Help
Kiwis looking to boost their financial capability this summer can find budgeting tips and information on Westpac Bank’s website and through ‘Manage Your Money’ workshops.
Some of the quick tips shared by the Bank include-
- Keeping it real – ensure you cover all your expenses accurately in your budget.
- Use tools like a budget calculator to do the hard work for you.
- Set up automatic payments for payday to automatically allocate your incomings.
- Think of putting money into savings as “paying yourself” – that way it is a reward and a motivator, not a punishment that takes away from your spending money.
- Know what you can comfortably commit to. It can be a real de-motivator if you are consistently putting money into your savings account but you are having to dip into it often because you have over-extended yourself.
- If you do not connect with the word ‘budget,’ consider calling it something else like a spending plan, your family money goals, or your financial future.
Ms Ryder said anyone worried about making ends meet this year should talk to their bank for advice or support.
“We encourage everyone to take a deep dive into their finances over the next few weeks. Why not plan to set aside a summer evening to sit down with the whanau to create an accurate budget and set some savings goals for 2024?”
Praneeta Mahajan is an Indian Newslink reporter based in Hamilton.
