Holiday spend hangover: Westpac warns of financial distress

The summer spend is expected to cause stress for some New Zealanders as it comes to a close. Photo / Michael Cunningham

A major bank is warning consumers to budget this year as a quarter of its customers reveal they’re stressed about paying back spending during the holiday spending period that was.

In Westpac’s survey of more than 1000 customers before Christmas, 27 per cent said their summer spending would definitely, or probably, cause financial stress in the new year.

A quarter of the respondents also said January and February would be more stressful than the same months last year.

Westpac New Zealand acting general manager of consumer banking and wealth Helen Ryder said families may now be facing a new wave of costs with children returning to school for the year.

“We know Kiwi households are feeling the rising cost of living in different ways and the key to managing your money effectively is keeping your spending within your means.

“The start of a new year is a great time to do a financial reset to work out what your spending and saving priorities are for the year.”

She urged New Zealanders to track their finances and allocate some income to savings, which almost half of the customers surveyed said they planned to do.

“By getting an up-to-date idea of your regular costs as well as any big expenses coming up and setting aside money each week, you can create greater peace of mind that you can cover those costs when they roll around,” Ryder said.

“When deciding how much you’ll put aside for savings, think about your goals and it also helps to create an emergency fund in case something unexpected occurs.”

Ryder suggested thinking of saving money as paying yourself.

“That way it’s a reward and a motivator, not a punishment.”

But it paid to only save an amount you could commit too.

New Zealanders seemed to be educating themselves to improve their financial situation, with 60 per cent saying they either read money management books, researched information online, attended a budgeting workshop or spoke to a professional adviser last year.

Just 7 per cent spoke with their financial provider, while 36 per cent did nothing.

In contrast, 18 per cent of people surveyed said they would not act this year, with the majority saying they would adopt options to upskill, including using a budgeting tool or speaking to someone they trusted about money.