Review spending habits, budget adviser urges

Shoppers should look around for bargains. Photo / Kenny Rodger

New Zealanders are being urged to re-examine their spending habits in the wake of rising prices following October's GST increase.

Fonterra last week promised not to raise its price for milk for the rest of the year and yesterday, the two main supermarket groups pledged not to raise theirs either.

However, the price of milk has still soared nearly 9 per cent in a year.

And with 91 unleaded petrol prices breaking $2, the AA has warned drivers not to expect them to fall any time soon.

Federation of Family Budgeting Services chief Raewyn Fox said New Zealanders should examine their spending on everything from power bills to bank fees to ensure they were getting the right deal.

She said this was particularly important for people who had lost work or seen their salary reduced, and might not know how to adapt budgets.

"When you have a change in situation, sometimes it puts you into a lower-income category where you may be entitled to stuff from IRD or Work and Income," she said.

"Make sure you are getting everything you are entitled to."

Examining the weekly shopping budget, which makes up around 18 per cent of average household expenditure, is also an important check after figures from Statistics New Zealand show food prices are up across the board.

Mrs Fox said shoppers should not get into the rut of buying the same brands and same quantities every week when there were savings to be had by shopping around.

She recommended families keep milk powder on hand in case they ran out of a weekly supply of fresh milk.

The retail price of two litres of standard milk has increased 8.7 per cent in the past year, from $3.34 to $3.63, according to Statistics New Zealand. The price of fruit and vegetables also increased by 7.4 per in the last year.

Mrs Fox said families should look past the supermarket and see if there was a community garden where they could harvest a plot or if there was a local market.

"For years when I had teenagers at home, going down to the Saturday morning markets once a fortnight and buying up bulk of potatoes, apples and pumpkins made your money go so much further.

"You're buying fresh from the growers so it tends to last a bit longer."

Meanwhile, fuel prices hit their highest level for more than two years last week when a litre of 91-octane petrol rose 3c to 202.9c and 95-octane rose to 211c.

The AA says that means it costs $20 more than last year to fill an average car. Spokesman Mark Stockdale said motorists could save up to 40 per cent on fuel costs by managing their driving style and performing regular vehicle maintenance.

He said the most effective way of reducing petrol costs was accelerating gently and not braking suddenly. Mr Stockdale added that drivers should check tyre pressure every time they filled up, or at least once a month, to cut 4 to 8 per cent from their fuel bill.

TOP TIPS

PETROL

* Accelerate and brake gently to save up to 30 per cent of fuel.

* Keep the windows up and the economy setting of the air conditioning on, especially at high speeds.

* Check tyre pressure at least once a month to save 7 per cent on fuel.

* To calculate the annual petrol cost of a new car go to fuelsaver.govt.nz

GROCERIES

* To save money on the weekly shop, look around to see what is on special instead of buying the same brands and quantities every week.

* Stock up on long lasting vegetables, such as potatoes, at a local market.

* Keep a supply of milk powder on hand.