Budgeting

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Have you noticed how some people seem to manage their money better than others? While income, home circumstances and debt can affect your ability to save money, budgeting in New Zealand is something that can save money on either a high or a low income. Here are our top New Zealand budgeting tips to make you more financially savvy with your home finances:

Set up a household budget
Being on a household budget in New Zealand may sound like a daunting task (maybe one you've been putting off for years) but you don't need to be a numbers whiz to do it. A budget is essential in seeing where your hard-earned dollars are spent and finding ways to cut back:

• List your monthly income: include your paycheck, plus any additional income such as interest from a savings account, child support or casual work.
• List your monthly expenses: include rent, mortgage payments, regular bills, electricity, clothing, school fees and any other expenses. Estimate for expenses that aren’t easily defined.

You should be living within your means, hopefully with some to spare. Creating a budget is only the first step; from here, you need to keep track of spending. Monthly bill payments and other similar expenses are easy to track, but it's the freeflow of cash that can be difficult to rein in. To help with your household budget, carry a small notebook to record all purchases or withdraw a set amount of cash for the week.

Save, save, save!
Don't let potential savings get away – catch them before they can be spent. The easiest way to do this is to establish a savings account and set up automatic monthly payments, so that a savings deposit becomes a regular payment just like any other bill.

When choosing a savings account, check out your options. Most New Zealand banks offer a range of saving accounts with different charges and features. Are you likely to make any withdrawals? How much interest will your balance accumulate? Are there service fees attached to the account?

Avoid credit card debt
The number one rule for saving is 'If you haven’t got it, don’t spend it.' While a credit card is a necessity in today's world of online and phone purchases, it shouldn't be used for buying unnecessary extras. New Zealanders sure know how to swipe their plastic: credit card debt in New Zealand is currently a whopping $4.5 billion. Make it a rule not to spend money unless it's within your budget (your budget should include some money set aside for movies, special dinners and birthday celebrations).

Any purchases you do make on your credit card need to be paid off without any added interest, so make sure you pay the whole amount before it's due.

Become a bargain hunter
You don't have to be a Nelly no-fun, but try to shop around for a good deal. You'll be surprised what a difference it can make to monthly expenses:

• Shop at the cheapest supermarket
• Don't buy things which are cheap and low quality
• Buy in bulk instead of individually packaged convenience products
• Shop for near-new style bargains at secondhand clothing stores

Keep your head on at the supermarket
The weekly trip to the supermarket forms a significant portion of most New Zealand budgets, so it makes sense to shop smart. Shop at a supermarket that offers generally discounted prices. You should also:

• Make a list and stick to it
• Plan meals for the week and shop from your menu plan
• Don't buy convenience foods or extra sweets and cakes
• Compare brands to find the best price per 100g or per kilogram

Reduce your electricity consumption
Another (increasingly large) expense for your household budget is your electricity bill. Follow these simple tips to reduce your electricity consumption:

• Turn off lights when you leave a room
• Turn all appliances off ‘standby’ (this will save 5% on your annual bill)
• Attach thermostats to your heaters
• Insulate your hot water cylinder
• Take short showers
• Dry clothes outside on a line, rather than using a clothes drier
• Wash clothes in cold water, rather than hot

Have some low-cost fun!
Being on a household budget doesn't mean you can't have any fun – there are heaps of low-cost options available. Try these replacements for a supersaver night with friends, family or your loved one:

• Instead of getting takeaways or dining out, try having a special meal at home once a week or every month. This could be creative cuisine, a meal from another culture, a favourite dinner that the kids can help prepare, or a romantic dinner for two.
• Instead of heading down to your local movie theatre, rent a DVD and make popcorn at home.
• Instead of inviting people over for a dinner party, have a potluck dinner. Preparing a couple of plates and getting your guests to bring a dish each will make it affordable to entertain as many as 8 or 10 guests.
• Instead of taking the kids to an entertainment park, get into some outdoor activities with the family: fun at the beach, bike rides at the park or swimming at the local community pool.

Budgeting in New Zealand is achievable for families on both low and high incomes. Make your money go further by forming a household budget and saving some of yoru hard-earned dollars.

Looking for more information? Find New Zealand budgeting advice in the NZS.com directory.

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Family images from Flickr: Baby Boots, Kids Classroom and Hands.