Northern Advocate
  • Northern Advocate home
  • Latest news
  • Business
  • Opinion
  • Lifestyle
  • Sport
  • Property
  • Video
  • Death notices
  • Classifieds

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • On The Up
  • Business
  • Opinion
  • Lifestyle
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
  • Sport
  • Property
    • All Property
    • Residential property listings

Locations

  • Far North
  • Kaitaia
  • Kaikohe
  • Bay of Islands
  • Whangārei
  • Kaipara
  • Mangawhai
  • Dargaville

Media

  • Video
  • Photo galleries
  • Today's Paper - E-Editions
  • Photo sales
  • Classifieds

Weather

  • Kaitaia
  • Whangārei
  • Dargaville

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In

Advertisement
Advertise with NZME.
Home / Northern Advocate / Business

Jeremy Tauri: Keeping a lid on your spending

By Jeremy Tauri
Northern Advocate·
21 Aug, 2019 01:08 AM2 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save
    Share this article
Reserve Bank of NZ Governor Adrian Orr. Photo / Mark Mitchell

Reserve Bank of NZ Governor Adrian Orr. Photo / Mark Mitchell

The Reserve Bank wants you to splash out.

It recently cut the official cash rate to 1 per cent, a bigger drop than many had predicted.
The idea behind the reduction is that it will flow through to lower interest rates, which will give people more money in their pockets to
spend, which will then help to boost the economy and stave off a possible recession or downturn.

It works to an extent — floating home loan rates dropped immediately and fixed rates have started to move down, too. Many people will now be facing smaller payments on at least some of their debt.

But while the idea of spending more to boost the economy is a good one, and good advice at a population level, it's not such a great plan for individual households.

When there's the potential for a slower economy, it makes sense to pay down as much debt as you can.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

There's nothing worse than going into a time of economic uncertainty, when maybe your business might earn less or your job prospects could be slimmer, with a huge debt to worry about.

When interest rates are low, it's a great time to get rid of as much of what you owe as possible.

Any extra you can knock off the principal you have owing to the bank (or anywhere else) will reduce the amount you have to pay in future when interest rates invariably go up.

Advertisement
Advertise with NZME.

The investment in loan reduction now will pay off many times over.

Dropping interest rates create an opportunity for pain-free debt elimination.

When you have a loan come off a fixed term, and have the opportunity to move to a lower rate, keeping your payments the same means you pay it off faster without having to spend anything more.

Keeping a lid on your spending may not be the best thing for the New Zealand economy as a whole but for your individual household or business, it's probably the most sensible thing to do.

Save
    Share this article

Latest from Business

Northern Advocate

Green light for two new solar-to-hydrogen farms in Northland

Northern Advocate

'Got everything that I treasure': Couple’s floating house turns heads

Northern Advocate

Kūmara growers ready for new freshwater farm rules, industry leader says


Sponsored

Kiwi campaign keeps on giving

Advertisement
Advertise with NZME.

Latest from Business

Green light for two new solar-to-hydrogen farms in Northland
Northern Advocate

Green light for two new solar-to-hydrogen farms in Northland

Two new 5MW solar-to-hydrogen farms set for Northland.

02 Sep 01:00 AM
'Got everything that I treasure': Couple’s floating house turns heads
Northern Advocate

'Got everything that I treasure': Couple’s floating house turns heads

29 Aug 11:00 PM
Kūmara growers ready for new freshwater farm rules, industry leader says
Northern Advocate

Kūmara growers ready for new freshwater farm rules, industry leader says

21 Jul 11:00 PM


Kiwi campaign keeps on giving
Sponsored

Kiwi campaign keeps on giving

07 Sep 12:00 PM
NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • The Northern Advocate e-edition
  • Manage your print subscription
  • Manage your digital subscription
  • Subscribe to Herald Premium
  • Subscribe to the Northern Advocate
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The Northern Advocate
  • The New Zealand Herald
  • The Northland Age
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • © Copyright 2025 NZME Publishing Limited
TOP