For some professionals such as executives, electricians and construction bosses, this week's tax cuts make them wealthier than before. Others take home less money than they did six years ago.

Like the shoemaker's elves, supermarket workers toiled through the night this week changing thousands of price tags in preparation for the GST hike. When Progressive opened the doors of its Countdown and Woolworths stores on Friday morning, slightly later than normal, the switch was made. Prices for most products were up, factoring in the tax increase from 12.5 to 15 per cent. A litre of Anchor milk was up six cents to $2.55; 1kg of Mainland Colby cheese was up 24 cents to $10.99.

The adjustment will take longer for average New Zealanders to absorb as they grapple with a change in their personal finances. On the same day the rise in GST hit, a drop in personal income tax came into effect - but instead of wallowing in a little extra dosh, most people are wary that any increase in income will be offset by the creeping rise of other everyday costs.

In theory, the tax cuts mean that no matter what your income, you should be better off. That is what John Key would like us to believe. Yet his optimistic message does not seem to be resonating with New Zealanders.

According to a Herald on Sunday-Phoenix research poll, most people expect to be worse off (35 per cent) or experience no difference (38 per cent) after the tax changes.

Consider the relentless upwards march of what we dish out for essential goods and services, and it is easy to see why. Along with the GST rise, there have been increases to ACC levies, the Emissions Trading Scheme has pushed up electricity costs (costing an average household $165 extra a year), petrol stations are charging 7c/litre more this week, because of the rise in GST combined with a 3 cent fuel tax, and mortgage rates have been increasing through the year.

A New Zealand Institute of Economic Research report finds personal tax cuts will allow households to absorb one-off price increases from the GST rise but general inflationary pressures are expected to erode 80 to 90 per cent of wage gains over the next two years.

An attack of pessimism has also hit the business sector. Business confidence has taken a dive, according to a survey by the Auckland Chamber of Commerce. Only 18 per cent of 1000 businesses questioned were more positive than negative in respect of the next six months compared to 35 per cent in June and 32 per cent in March.

The Herald on Sunday talks this week to three families earning low, middle and high incomes. All welcome extra money - but say it is not likely to change their spending habits. They still need to watch every penny.

It's no surprise people are feeling the pinch across the board, says Paul Millet of Auckland accounting firm WHK. "The more you earn, the more you spend. People extend their lifestyle to what they're earning."

So if you're wondering how to get your hands on the big bucks, check out our pay guide for an indication of how wages weigh up by profession.

Unsurprisingly, it is good to be the boss. An Auckland Chamber of Commerce study shows chief executives take home an average $1679 a week and, despite taking a slight hit during the recession years, their pay continues to rise. Human resources managers are also on the up, collecting an average $1297 a week. Construction managers build big wages, from $541 a week in 2003 to nearly double that this month.

Jobs that are better to do for love than money include plumbers, whose weekly income fell from $1037 in 2005 to $638 this year, and cleaners, who receive $421 in the hand - down from $541 seven years ago.

HOW IT AFFECTS YOU
* Much worse off: 12%
* Slightly worse off: 23%
* No difference: 38%
* Slightly better off: 19%
* Much better off: 3%
* Don't know: 6%

LOW INCOME FAMILY
One surefire way to dodge the pressure of a GST hike is to avoid paying cash for goods.

Living on a low income, Christchurch mother Frauke John makes her food budget stretch further by taking her excess garden produce to her local swap meet in New Brighton and trading it for other produce. No money changes hands.

At the moment Frauke has a bumper crop of silverbeet, which she detests.

"The great thing about that is you can take something like this blimmin' silverbeet, I can't wait to get rid of it, but some people really like it and are happy to swap it for lemons," says Frauke. "To me lemons are worth so much more than the silverbeet."

Her husband, Donald Pettitt, is a social worker who earns $34,944 managing the Canterbury Men's Centre. They have a 3-year-old son, Lenny, and Donald's daughter Phoebe, 10, stays four days a fortnight.

The family stand to receive about $10 a week extra from this week's tax cuts. On a tight budget, every little bit helps. "It's nice for us because we spend so little it does make a difference," says Frauke.

She won't be putting the extra cash into savings - instead, she plans to spend it on treats. "We'll buy chocolates," she says. Or they might use it to pay for family activities. Frauke would like to take the children to the theatre, aquarium and swimming pool.

Getting by on a low income is a matter of managing expectations. Frauke has neighbours who earn far more money but struggle financially because they are tied up in debt for big-ticket items.

"We never buy anything on credit," she says. "To us it's insidious to pay high interest for something we want but don't need.

"We're teaching our children that there is no instant satisfaction. They need to think about it for a big longer. Not 'I want it, I'm going to buy it'."

Frauke and Donald have several frugal tricks to keep expenditure down. Their furniture is secondhand. They minimise petrol costs by cycling places. They are vegetarians, which saves money on meat, drink only water or tea rather than buying juice and fizzy drinks, grow their own vegetables and never buy pre-packaged meals. As well as swapping produce, Frauke goes to clothes swap meetings where people exchange secondhand clothes.

Apart from paying off their mortgage, Frauke's long-term financial goal is to save to send her son to a private primary school that costs $6000 a year, a sizeable chunk of the family's income.

"We need to pull ourselves together financially to make that happen," she says. She's optimistic. "I'm capable - if I set myself a financial goal I can work towards it."

MIDDLE INCOME FAMILY
Aphrodite Hannah's dream is to visit her husband's parents in Canada, but it's not likely to happen any time soon.

When she married Bill in 2003 the couple didn't have a honeymoon. They say they haven't spent a single night away from their Glen Eden home since.

"We can't afford a holiday," says Aphrodite.

The tax cut will give the Hannahs an extra $18 in the hand each week, but Aphrodite doubts the extra money will bring the family any closer to their holiday. She expects it will be swallowed up by rising prices on basics, such as food.

"I don't know why the Government thinks everybody's going to put an extra 20 bucks in the bank each week," she says. "Dream on."

Aphrodite is a fulltime mother to Jared, 15, and Angus, 12, who are home-schooled.

Her husband Bill is a web developer in Parnell, earning $65,000. The rent for their Housing NZ home increased this week from $320 to $330, because it is tied to Bill's income.

While Aphrodite might be expected to feel optimistic about a salary rise and tax cut, she is nervous that upward pressures on the family's fixed costs are going to leave them struggling, rather than better off.

"I just don't want to be worse off," says Aphrodite. "I'm extremely worried about the price of food. I've been noticing the price hike weeks ago."

To contain her grocery bill she is buying less meat and has switched coffee brands from her favourite to a budget label. Bill takes a packed lunch to work.

Aphrodite tries to keep the energy bill down by turning lights off and switching the TV off at the wall. "I'm the power police," she says.

She rarely goes into the central city because she resents high transport costs and is "annoyed" that the cost of petrol is rising by 7c/litre.

Doctors' fees at her local clinic have just increased by $2 and the cost of prescriptions is also up.

Bill catches a bus to work, spending $50 a week, which is increasing to $51.11. The Auckland Regional Transport Authority (Arta) has promised to keep the rise to the 2.5 per cent GST increase only.

Aphrodite says they don't do much as a family apart from "hang out in front of the TV, because of the cost [of other activities], it's ridiculous".

Occasionally they will go to the movies together, but mostly entertainment is at home on the couch or playing games on the computer.

HIGH INCOME FAMILY
When Conal Martin returned home three years ago after working in Britain and the US for nearly a decade, he says he was "like a broken record" complaining to his friends about the the high cost of living in New Zealand.

Despite being in a high income bracket, with a household income of more than $200,000, he doubts his tax cut will have much impact on his family finances.

Conal and his wife Joena get $148 more a week from their tax cuts which, even after the cost of extra GST is factored in, will amount to an extra $137 a week in the hand for the family.

"I think you certainly appreciate it but at the same time, with the cost of living, it can easily get absorbed," says Conal, who is an SAP project manager for a business management software company. Joena works fulltime as an SAP consultant. Their 2-year-old daughter, Sofie, goes to private day care while her parents are at work.

Conal came home for the lifestyle, and so his daughter could be born here but has had difficulty grappling with the huge difference in the cost of living between Auckland and London and Atlanta, where he worked previously.

"In New Zealand we have to plan and budget and look after every penny we have, otherwise it gets lost, whereas you don't need to do that to the same extent overseas," says Conal.

He is keeping a close eye on how people in his profession are faring across the ditch.

"I've got friends doing my job in Australia who appear to be a lot wealthier than I am in New Zealand, and as that gap continues to widen it's something that I'm continually monitoring."

Conal and Joena have not yet decided what they will be doing with their tax cut. They have talked about putting it aside for travel. Conal says they haven't had a decent holiday since they have been back in New Zealand and miss it after getting used to travelling every year when they lived abroad.

They are also thinking about expanding their family. "That comes down to a financial consideration, unfortunately," says Conal.

But his earning power is set to increase: in December he will complete a two-year MBA programme at Auckland University, a qualification Conal hopes will give him "more opportunities for the future".

After working overseas, Conal was struck by how mainstream New Zealanders were being squeezed between rising cost pressures and no increase in salaries. "One thing I've seen, coming back to New Zealand, is the middle class is getting poorer. That's really quite tragic."