Spontaneous purchases and splurging on avoidable items such as booze and cigarettes are hindering household budgets, a new survey reveals.

According to a survey of 24 New Zealand Home Loans branches, 88 per cent of respondents found unplanned purchases of consumer items as the reason behind household budget blowouts.

Ninety two per cent of respondents indicated bad lifestyle habits such as smoking and alcohol were having the same level of impact.

Upgrading gadgets to the latest model was also an influencing factor.

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New Zealand Home Loans chief executive Julian Travaglia says the survey data confirms sticking to a budget, particularly at this type of the year, is never easy.

"Most people will be all too aware what the key culprits are, unforeseen or random purchases and spending on things like alcohol. Increasingly our franchisees, are also seeing money unnecessarily spent on new tech such as TVs, mobile phones, simply to get the latest model," Travaglia said.

"By curbing spending on these discretionary items, it allows people to channel their money into their largest expense their mortgage. While a bit of belt tightening may seem difficult in the short term, when combined with a right home loan structure, the average household in the long run can save thousands of dollars in mortgage interest."

"This rather than fretting about mortgage interest rates, has been shown to be a much clearer way to a future free of financial stress," he said.

Graphic / NZ Home Loans
Graphic / NZ Home Loans