Money matters: a deep dive | Blog | Rabobank NZ
skip to content
If you are experiencing issues with the Rabobank Online Savings Mobile app on your Apple device (PIN not accepted) please reinstall the Rabobank Online Savings NZ app from the App Store.
Rabobank
 

Money matters: a deep dive into Kiwi’s savings habits and happiness

Share
Category managing-your-money

Money matters: a deep dive into Kiwi’s savings habits and happiness - Rabobank NZ


In 2017 we surveyed 1000 Kiwis, hoping to reveal our nation's financial ambitions, and open the door to a conversation on how New Zealand spends and saves. We were particularly interested in understanding the influence financial stability can have on people's emotional wellbeing. While it's widely accepted that money can't buy happiness, our survey showed just how easily our financial situation can affect our emotions, our relationships, and even our sleep. So, in other words, saving well can make you smile. We should all be doing more of it!

Financial control and happiness

Hamish McKegg, Head of Rabobank Online Savings NZ, says the annual survey highlighted the intrinsic link between financial control and happiness. "Sensible management of personal finances contributes to increased levels of happiness," says McKegg. "The survey shows that those who regularly contribute to their personal savings are more likely to report feeling happy with their lives than those who don’t save."

The happiest Kiwis are those who have a handle on their finances. Close to half of this group says they feel completely happy with their lives. The verdict is: the more you save, the happier you’ll be.

Money worries keep Kiwis up at night

When there’s a lack of a structure around how you spend money, feelings of guilt and stress can build up over time. Of the people we surveyed, one in five said their money worries had kept them up at night, while the other half said their financial situation had caused tensions within their household. The survey also shows that a fifth of New Zealanders don't have any existing savings to live off should they suddenly lose their job, which McKegg points out takes an emotional toll. "Living with that knowledge at the back of your mind can create a tremendous amount of financial stress, which in turn could have a detrimental impact on emotional wellbeing," he says. "Many people already realise that a greater understanding of their financial incomings and outgoings, be it through creating a budget, a regular savings plan, or by other means, reduces financial strain."

Money matters: a deep dive into Kiwi’s savings habits and happiness - Rabobank NZ


Our biggest worry: the rising cost of living

Many Kiwis are concerned about the rising cost of living. Sadly, just under half of New Zealanders polled in our survey have experienced challenges paying for day to day essentials in the past three months – particularly those in the Gen Z and Gen Y groups. Millennials are struggling to make ends meet because the cost of rent is so high. There might not be much you can do about inflation, but there are some easy ways to keep your cost of living down.

Here are our top 5 tips to reduce your cost of living:

  1. Use public transportation. You can save quite a bit of money when you take the bus, or even a Lime Scooter to work. Better yet, why not walk? That way you’ll be getting some exercise while you curb your spending at the same time.
  2. Look for cheaper entertainment options. We’ve all got a fear of missing out, but instead of going out for dinner and drinks, why not ask your friends to meet at the park for a game of touch rugby? Take advantage of free community events like music and food festivals.
  3. Cook your own meals at home. When you cook at home, make extra so you can take the leftovers to work for lunch the next day. You shouldn’t be going out for lunch with your colleagues every day! Treat yourself to a lunch out once a month to save money.
  4. Lower your cell phone bill. What mobile phone data plan are you on? Downgrading to a cheaper plan without all the bells and whistles can save you close to $120 a year.
  5. Stop buying so much. We live in a consumer society, but you don’t have to keep up with the Joneses. If you do need something, buy secondhand online or in the many op shops we have across New Zealand.

According to the people we surveyed, taking shorter showers is the most frequent activity that could potentially save money. For Gen Y, they save money by reducing dryer use, avoiding single use plastics, and purchasing used clothing.


Money matters: a deep dive into Kiwi’s savings habits and happiness - Rabobank NZ


Should I grow my assets or pay down debt?

More than half of all New Zealanders have a credit card. Younger groups have student loans and short-term loans to pay for things like cars and travel. Debt has become a normal part of life for many of us, but how we think about debt depends on our age. For example, a quarter of New Zealanders believe that debt is bad – Baby Boomers in particular – while younger groups like Gen Y and Z believe that only some debt is bad.

If you pay your debt first and put no money in savings, you'll have nothing to fall back on if you get into financial trouble. It’s hard to know whether or not you should make saving a priority or if you should pay off your debt first. Why not both at the same time? A blended approach can help you save some extra cash while you pay off your debt at the same time. For example, if you have an extra $1,000 each month, put $500 toward your debt and $500 toward saving.

Here’s some tips for saving and paying down debt:

  1. Figure out how much money you owe. Make a list of all of your debts and add them up to get a total of how much money you need to reduce your debt each month.
  2. If you have credit cards with high interest rates, pay your debt down before saving. By reducing your balance, you'll also reduce the amount of interest you pay monthly.
  3. Reduce your daily expenses. Stop eating lunch out every day! Create a budget and stick to it. You’ll be amazed at how many money leaks you might have.
  4. Figure out how much money you owe. Make a list of all of your debts and add them up to get a total of how much money you need to reduce your debt each month.
  5. Set up an online savings account. Make saving automatic through regular payments. This is the easiest way for you to save money.

Money matters: rel=


How do I improve my financial literacy?

Financial literacy refers to a person’s understanding of financial  issues like saving money, paying bills, debt management, and investing. When it comes to financial literacy, we could be doing better. Family, friends or colleagues are the preferred source of financial advice for one third of New Zealanders. It seems we’re getting more open about talking about money with the people we know and trust. Gen Z and Y are more likely to ask around, but Baby Boomers still rely on bank staff and financial planners.

According to our research, savings behaviours have slipped slightly in 2019. Fewer Kiwis are consistently saving each month and alarmingly one in ten New Zealanders has no savings or investments at all. It’s no wonder many New Zealanders believe they’ll be worse off in 12 months time than believe  they will be better off. A lot of this is due to a lack of financial literacy. Luckily, this is a money issue that’s easy enough to fix!

Top 5 ways to improve your financial literacy

  1. Read. Try to put aside at least 1-2 hours each week to reading books about money management.
  2. Use tools. Thanks to the internet and apps, there’s heaps of tools to help you be better with money. From the best savings accounts to budgeting templates, there’s a lot of help out there for you.
  3. Break your consumer mentality. You don’t need a lavish lifestyle to be happy. Practice gratitude for what you have already. Find joy in the small things.
  4. Get over your fear of finances. Managing money can be pretty annoying and tedious, but it’s part of being a responsible adult. Know what you’re saving for. Most Kiwis are saving for a house or a big, overseas holidays.
  5. Seek out professional advice. We’re here to help you make better decisions with your finances. Just get in touch.

Money matters: a deep dive into Kiwi’s savings habits and happiness - Rabobank NZ

Optimism for the future

Fewer than one in five New Zealanders expect to retire without a mortgage, but there are still people who are worried that they might not be able to retire at all. One in ten New Zealanders believe their KiwiSaver will be enough for a comfortable retirement.

Despite some of the negative findings in our survey, we’ve realised that Kiwis are pretty optimistic. Must be our can-do attitude! 56% of the people we surveyed said they felt excited about the future. McKegg thinks that percentage would be even higher if people were to look closely at ways in which they could gain control over their finances. "The good news is that many Kiwis only need to make small changes to their behavior to put them on a better savings path." For example, those who have savings accounts with RaboBank save $500 a month.

Financial well-being is all about having control over our day-to-day, month-to-month finances. It’s about the ability to absorb a financial shock. When you’re financially healthy you’re able to meet your financial goals, and most importantly you’re got the freedom to make financial choices that let you live the life you want to. So, would you regain financial control, and improve your financial wellbeing? Start with a savings account, start now..

Show me articles from