Over the past few years, we’ve got used to weathering plenty of storms and inflation is the latest storm to hit.
It was reported in April by Stats NZ that there has been a 6.9% annual jump in the consumer price index, putting inflation at its highest rate in 31 years.
The constant increase in cost of imports as well as New Zealand’s supermarket duopoly proved to be the driving factor to the increase in food prices and the government is grappling with creating a more competitive environment to help reduce our household grocery bills. Meanwhile, in a record high not seen since 1985, there has been a whopping 32% hike in the cost of petrol for the March 2022 quarter. It’s a statistic that won’t have gone unnoticed by many!
According to the recent IMF review of New Zealand’s economy, it is estimated that the inflation rate will worsen throughout this year as a result of the commodity price pressures related to the war in Ukraine, continued supply chain disruptions, and a tight labour market.
In a bid to help individuals navigate the ‘inflation storm, the government announced relief for lower income families which will benefit over 2 million adults. Inflation payments of $350 over three months are set to begin in August to provide monetary aid to more than 2 million lower-income adults.
But middle income New Zealand are also feeling the pinch and tightening their belts. Chances are you’re feeling it in one way or another so here are some tips to get you through the inflation storm.
Did you know that many New Zealander retailers offer a price promise? That means that if you find the same item listed at another retailer for less, your retailer will match their price and offer an additional incentive such as Fly Buys points or an additional 10% off. Retailers that do this include The Warehouse, Kmart, Mitre 10, Noel Leeming and Bunnings among others. You can price match by researching products at different retailers yourself or try the Price me website at https://www.priceme.co.nz/.
Review all your utility expenses
Now is a good time to review how much you’re paying for services such as Broadband, electricity and gas. Use websites such as Broadband Compare or Powerswitch to compare deals and packages.
Diversify your investments
There has been plenty of talk about investments taking a dip over the past few months. A diverse investment portfolio is always a wise idea to ensure that when it comes to your nest egg, you’re not putting all your eggs in one basket. A portfolio made up of a mix of conservative and higher risk funds can help weather the storm when investments fluctuate. If this is something you’d like to explore, don’t hesitate to get in touch with our investment expert Paul.
Revisit your budget
Whether we like it or not, increased costs mean that budgets will likely need to change. To help understand what the increasing costs mean for your spending, take a good look at your outgoings over the past 3 months. Work back from here to update your budget with the latest figures so you can ensure you’re covering your current expenses.
One of the biggest problems that inflation brings is that we suddenly find ourselves spending more that we earn creating a cashflow problem that will only compound over weeks and months.
Never had a budget before? Check out one of our past blogs for some useful tools.
Consider your subscriptions
Netflix, Neon, Disney Plus, Amazon Prime and that’s just the streaming services. Add to that Spotify, Patreon subscriptions, computer software and meal boxes and you may be paying for more subscriptions than you realise or even need. Now is a good time to do a review and determine if you really need them all.