Chances are we’re giving up little luxuries or putting goals on hold to make ends meet, but for most of us, it’s the rising cost of necessities that hurts the most.
Research commissioned by meal kit delivery service HelloFresh shows that those surveyed estimate their spending on groceries has gone up by 33 per cent in the past six months.
The grocery aisle might just be where we're feeling the effects of the cost of living crisis the most. Photo / 123rf
According to the research, 63 per cent of Kiwis surveyed have cut down on takeaways or dining out, with 52 per cent giving up holidays or entertainment to save cash. But while we can cut back on things like clothes, eating out and travel, we can’t just stop buying groceries or paying for electricity.
“You feel it on those things that are necessities, because that’s what you have to keep spending money on. You almost don’t have a choice,” she tells the Herald.
She notes that you tend to cut back on the things you love first, and it can leave you feeling “frustrated and sad” - so what can we do to avoid some of that frustration? Harris has a few savings hacks up her sleeve.
Keep a money diary
Harris advises writing down what you spend in a day, week or month and how each purchase makes you feel.
“Every time I go out for dinner now with my friends, I actually don’t enjoy it, because I have to pay so much, but I do really enjoy going for a coffee and a walk with my friends and catching up with them that way,” she says.
“It’s figuring out what brings you value so that you can keep doing some of those things and cut back on the things that don’t bring you any joy or add any value to your life.”
A regular audit on your bills and expenses goes hand in hand with this. Can you get cheaper electricity or internet elsewhere? Will signing up for a meal kit or produce delivery service save you time and money at the supermarket?
“Utilities and phone companies always have deals going and always want new customers,” Harris notes. “There’s no harm in giving them a call for five minutes and seeing what better deal you can get.”
Investing in the future is probably the last thing on our minds in a cost of living crisis - but Harris says it’s important to keep doing it, even if you have to cut back temporarily.
“With investing, the more unemotional, regular and consistent, the better. If you’re regularly investing, and then you go, ‘Oh gosh, I actually really need that money’, and you stop, it’s really hard to get started again,” she says.
So don’t be tempted to empty your Sharesies account next time you’re short on cash.
“This might be a bit tough - but just reduce the amount that you’re investing until you’re in a better financial position.”
Think outside the box
When money’s tight, our first reaction is often to cut down our spending, but Harris explains that “there’s another side to that equation, and that’s growing your income.”
That can mean thinking outside the box - or the office. Picking up extra hours at work or asking for a pay rise might not be possible for everyone.
“Selling old clothes on TradeMe, that little side hustle you always wanted to start, or you’ve got a car that you don’t use most of the week ... all those little things add up,” she suggests.
“It’s just trying to look at your personal situation, your assets, and go, okay, can I make money out of this?”
Using cash can help you visualise how much you're spending. Photo / 123rf
Cold hard cash
We avoided it like the plague - literally - during the pandemic, but cash might be making a comeback.
Harris has noticed more “people getting out actual amounts for the week, or saying, ‘okay, I’ve got $100 for this week’.”
Those of us belonging to the younger generation can struggle to understand the value of a dollar, because we’re not physically letting go of the money - we’re just spending it with a wave of our phones. But getting $20 out for your coffees for the week could help you visualise where your hard-earned dollars are going.
“Once it’s done, it’s done - rather than waking up and seeing that you’ve got no money and you’ve still got two weeks ‘til pay day,” Harris says.
The old saying is true - comparison is the thief of joy.
Harris acknowledges that it can be tempting during tough financial times to compare yourself to others - is anyone else sick of scrolling through endless Euro summer posts on Instagram?
But it’s important to remember that “everyone’s financial situation is different - it’s called personal finance for a reason, because it’s very much personal”, she points out.
And if you are struggling, it’s important not to shy away from asking for help.
“Don’t be afraid to call your bank and ask for a repayments holiday, or if you’ve got some overdue bills, ask, ‘can I get another 30 days?’
“Everyone’s in the same boat and don’t feel ashamed of your financial situation, because I can guarantee you there’s people that have asked those questions or asked for help or been in a worse situation than you.”
