Westpac NZ 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.
A survey of 1,110 Westpac customers showed 27% of respondents believed holiday spending definitely or probably would cause financial stress in the new year, and 24% believed the start to 2024 would be more stressful than the same period in 2023. 20% of customers said they expect paying back holiday debt to be a big additional cost in January and February.
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.
Westpac NZ Acting General Manager of Consumer Banking and Wealth Helen Ryder says 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 says there’s 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 says.
“Even if you’ve used a budget in the past, it’s 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.
“Setting up a good spending plan can take some time, but there’s lots of great tools to help make budgeting easier. Reviewing your bank transactions is a good start and many suggest expenses to add so you don’t miss anything. Westpac’s CashNav can also categorise and track your spending if you’re a customer.”
The survey showed almost half of respondents planned to save what they could from each pay day.
“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’ll need to dip into your savings for everyday spending,” Ms Ryder says.
“When deciding how much you’ll put aside for savings, think about your goals and it also helps to create an emergency fund in case something unexpected occurs.
Kiwis looking to boost their financial capability this summer can find budgeting tips and information on our Managing Your Money workshops Key tips include:
- Keep it real – ensure you cover all your expenses accurately in your budget.
- Use tools like a budget calculator or to do the hard work for you.
- Set up automatic payments for payday, or utilise to automatically allocate your incomings.
- Think of putting money into savings as “paying yourself” – that way it’s 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’re consistently putting money into your savings account but you’re having to dip into it often because you’ve over-extended yourself.
- If you don’t connect with the word ‘budget,’ consider calling it something else like a spending plan, your family money goals, or your financial future.
Ms Ryder says anyone who’s 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?”
