From left: Ekant Veer, Katy Gosset and Marama T-Pole. Photo / RNZ
By RNZ
Can you live on $20-a-week budget for disposable income?
This week in RNZ podcast Thrift, the second episode of a two-parter about why we spend, three contenders take up the challenge.
Thrift host Katy Gosset, RNZ news presenter Marama T-Pole and Ekant Veer, marketing professor at the University of Canterbury and consumer behaviourist, are the thrifty volunteers.
The $20 is set as a weekly budget for disposable income - so those taking part can pay for food, power and utilities, but once those bills are covered $20 is all they have for the week for lunches and sundry treats.
Coffee is T-Pole’s main vice: “I need a coffee every day. I’m starting to get withdrawal thinking about this already”.
But she knows it’s a pricey habit.
“I worked out it was over $2000 a year, which is embarrassing for me to say.”
Veer has similar coffee cravings.
“It’s 9am on Monday morning, I got my first meeting and my first ‘No thanks. I don’t need a coffee’. Here I am drinking free water like a barbarian instead. This week’s gonna be a long week,” he says.
One of the big triggers that can undermine our best spending intentions is prospect theory, or loss aversion theory.
T-Pole understands this all too well.
“Not feeling like you’re contributing or missing out. I understand that there’s certainly a massive pressure that you can feel no one else is probably looking, but you feel it yourself in terms of what you should be doing.”
So, what did each of the three feel they were missing out on?
For foodie Gosset it was the lure of Lyttelton market, she still visited but kept her money in her pocket.
For committed op shopper T-Pole, when she spotted a bargain, the temptation was too great.
“I succumbed to my weakness. And what I actually bought, which cost $20, was a pair of gumboots that I saw at the op shop. And I thought, I must buy these.”
Veer fell down when friends came from overseas, a visit he knew was coming.
“I still bought myself a pint of beer.”
Gosset succumbed to a glass of red during an RNZ pub quiz, significantly depleting her $20 budget.
So what did they learn from the challenge?
“I was a lot more conscientious on my purchasing,” says T-Pole.
She started eating more lunches at home, and became more aware of where her money was going.
“Gosh, over two or so years, I could be taking my family to Tuvalu on these coffee prices.”
Veer recommends small, incremental changes are more likely to stick long term.
He admits he found the week’s challenge difficult because a close friend was celebrating a success, and Veer couldn’t join him for a drink.
There is a risk that after being restricted, you end up having a big blowout.
“I blew a whole bunch of money celebrating with friends on a completely separate thing. I just said, ‘Hey, let me pick up the tab on this one’.”
So while the full deprivation model didn’t work for Veer, it did show him the power that lies in each decision.
“If I’m buying these chips because my mood is low and I’ve had a stressful day, and chips will make me feel better, but it’s going to cost me $3 for these chips.
“Actually, maybe a walk will have the exact same effect.”
Start reframing cheaper activities as positives, he says.
“I get to rage against the system and feel like an anarchist because I’m not going to buy a damn thing.
“It almost turns it into a game, but a game that has positive consequences for your health and your future.”
Exercising within four hours of bedtime can reduce sleep by up to 43 minutes.