Households juggle budgets to stretch the dollars as inflation bites

Thursday, 21 April 2022

Finance Minister Grant Robertson says some Government moves have kept inflation lower, even though it has hit a 31-year high.

Larissa Emmerson has a passion for household budgeting – and it’s just as well.

The Christchurch at-home mum-of-three and her builder husband Matt used a budget adviser several years ago, and still stick carefully to their plan.

Emmerson said the years of practice at spending carefully are paying off in the face of fast-rising interest rates and consumer prices.

On Thursday Stats NZ announced New Zealand’s inflation rate has hit a 30-year high of 6.9%.

Larissa Emmerson and Matt Emmerson, pictured with their three daughters, Cora, 1, left, April, 5, and Pippa, 3, budget carefully to make their dollars go further.

Petrol prices have jumped New Zealand-wide.

* Minister indicates fuel tax break could be extended, as inflation gets political

* The big living squeeze hits Southland

* Cost of living: 'Hideous' rising food costs hit shoppers in the pocket

* People are feeling the pinch, says the woman helping beneficiaries

The Consumer Price Index released by Stats NZ the same day revealed increased housing costs are the largest contributor to inflation. Transport and food prices have also gone up.

ANZ chief economist Sharon Zollner says efforts to curb inflation will be painful for some Kiwis but are necessary (interviewed on April 19)

Finance Minister Grant Robertson said the Government’s recent temporary fuel tax cut had helped keep the inflation rate below 7%. National Party leader Christopher Luxon said Robertson had “no plan to help tackle skyrocketing inflation”, while ACT Party leader David Seymour called for tax relief and said the Government’s “enormous borrowing” had helped drive inflation.

While foodbanks and social services organisations have increasingly been rescuing needy New Zealanders as inflation bites, households across most income brackets have been trimming spending and juggling budgets. Budget advisers are reporting increased demand for services.

Emmerson said she feels “very passionate about trying to be creative with the budget” and the family hasn’t had to go without.

With an eye on the couple’s mortgage interest payments, she said she will find work outside the home if needed.

For the past year she has bought only second-hand clothes “except for underwear” and has been happy with the results.

She keeps to her grocery budget, shopping at Pak ’n Save on Mondays for the specials, and swapping out cheaper options.

Weekly fresh fruit and vegetables and bulk produce for freezing come from growers’ stalls, meat comes from bulk farm kill, home baking fills the cake tins, and firewood is bought in advance, she said.

The family recently changed their car for one with better fuel economy.

“It’s nothing flash but it does the job.”

Emmerson thinks some people are unaware of what is available in the form of the Working for Families tax credit, and subsidies for costs including childcare, dental work, and home insulation.

“People think help is just for low-income people, but it’s not. There’s help out there for a lot of families.”

Meanwhile, shoppers who spoke to Stuff on Thursday outside the Countdown supermarket in Anderson’s Bay, Dunedin, described the effect of rising prices on their weekly shop.

Many said they had changed their shopping habits, including putting frozen instead of fresh vegetables in the trolley, buying cheese only once a month, padding out the grocery list with “cheap staples”, and buying a fortnightly produce box.

One said they were shopping as normal, but no longer looked at their receipt.

Outside the Warehouse store in South Dunedin, one shopper said they only buy toilet paper there as it would be “stupid” to get it from the supermarket, while another said buying breakfast foods there in bulk saves money.