Many Northlanders are feeling the pinch of the cost of living crisis, but savings are still possible.
The cost of living just got a lot more costly for Northlanders, with food prices increasing yet again, followed by a spike in petrol prices as the Iran war hits home.
Electricity prices are about to rise in April, along with the default KiwiSaver contribution rate - all at a time when a “frightening” number of Northlanders are taking up buy now pay later [BNPL] loans to get by.
Whangārei Budgeting Service senior financial mentor Anna McIntosh said there had been an “increased demand” for budgeting services this year.
“Substantial increases to basic living costs across the board have driven Northlanders to the highest number of buy now pay later loans we have ever seen.
“The amount of people using BNPL to purchase food, petrol and essentials is frightening.”
Oil prices have spiked dramatically of late, with unleaded 91 sailing past $3 a litre at several Auckland petrol stations on Tuesday.
That prompted the National Road Carriers Association to announce that transport operators must pass on “substantial” fuel price increases resulting from the Iran conflict.
“Transport businesses operate on small margins and cost increases of this magnitude will need to be passed on immediately,” policy and advocacy general manager James Smith said.
“We expect this will impact the cost of living as increased transport costs will likely flow through to increased prices of goods on supermarket shelves and price increases for the 93% of all products that are delivered by truck.”
According to a recent Ipsos survey, inflation and the cost of living continue to be the top issue for New Zealanders.
Food prices increased by 4.6% in the year to January, Stats NZ figures show.
Prices for meat, poultry and fish were up 8.9%, fruit and vegetables increased by 6.3%, and a 250g chocolate block is up a whopping 20.5%.
Electricity prices continued their upward trend, with prices up 11.5% on an annual basis, and gas prices are up 16%.
McIntosh said power savings usually focused on customers reducing their power consumption.
“But with the prices set to rise again in April ... we see many families that may have a healthy home compliant house but aren’t using the heating provided as they cannot afford the bills.”
Infometrics chief executive Brad Olsen said if the Iran conflict continued, it could “undermine the potential recovery we will see this year”.
“We’re already starting to see it pick up in terms of economic activity and growth across Northland.
“Momentum is starting to build and we’re expecting it to build throughout the year.
“This should lead to more jobs growth coming through in the second half of the year.”
However, Olsen warned there would be “patchy” economic results, as some industries were doing better than others.
“Construction in Northland is still subdued, and not likely to pick up quickly or strongly, whereas the primary sector is doing a lot better.
“The difficulty we’re seeing on the inflation front, is the price of essentials keep going up.”
From April, many Northlanders will notice a small reduction in their take-home pay, as KiwiSaver default contribution rates rise to 3.5% following Government changes.
Employer contributions will also increase to match the new rate.
From April 2028, the default rate will increase to 4%.
Massey University head of accountancy, economics and finance, Dr Claire Matthews, said the extra contributions were important.
“They will help people have the sort of retirement they’ll be looking forward to and not likely achieve on Kiwi super alone.
“Having a KiwiSaver fund top that up will give you a better retirement.”
The extra money would make a big difference over time, Matthews said.
“Your future self will thank you,” she said.
“There’s a cost now, but there will be a substantial future benefit.”
McIntosh said people in hardship could apply for a savings suspension on their KiwiSaver contributions, though this would affect their employer and government contributions.
“This means you are leaving the funds, as is, to keep accumulating, but temporarily reducing or stopping the ongoing contributions, while in hardship.”
Matthews said people had the option of reducing their KiwiSaver contributions back to 3%.
“It’s not the best idea, but if you’re really struggling, it might be the best outcome for you.
“It’s a matter of getting the balance right.”
Consumer recommends switching your car insurance provider and increasing your excess to bring down premiums.
Opting to pay your insurance premium in an annual lump sum, if possible, is also cheaper.
Unsubscribing to streaming services will save cash, and using the Powerswitch website to compare power companies will help people get the best deal.
Whangārei Budgeting Service also suggests Whangārei and Kaipara residents take advantage of Northpower’s free Home Energy Education programme to help reduce household power consumption.
Keep hot water usage under control and check for leaks or damage to cylinders and taps, McIntosh said.
“Remember that Northpower rebates are due in May ... and the winter energy payment for eligible beneficiaries starts in May and runs until October.”
McIntosh suggests using the free Gaspy app to find the cheapest fuel prices in your area.
The Grocer app, also free, helps compare grocery prices and find stores with the cheapest items.
Parents struggling with school costs can get help from Variety New Zealand, and Taitokerau Education Trust can help with interest free loans for refurbished Chromebooks and broadband connections.
“See if your child’s school has support though KidsCan NZ, as they can help with food, clothing, shoes, and health needs.”
Jenny Ling is a senior journalist at the Northern Advocate. She has a special interest in covering human interest stories, along with finance, roading, and social issues.