What to be strict and loose about in your household budget
Sunday, 1 February 2026
Senior business reporter Rob Stock answers your money questions. Got a question for Sunday magazine? Email it to sundaymagazine@stuff.co.nz
QUESTION: If you're thinking of doing a budget that can see you through for the next year or two, what should you be strict about, and what can you be a bit looser about?
ANSWER: I have never worked as a budget mentor, but I was trained as one over 20 years ago.
I was big into experiential reporting back then, and wanted to live the work of the people I reported on. It was the same reasoning that saw me do my basic financial advice exams in London in the early 2000s.
But recognising dust gathers on qualifications, before writing this column I had a talk with David Verry, a budget mentor.
For him, a budget starts with the essential spending.
Get that down, and then you know what you have to use for the other stuff. May I steer you to the Retirement Commission’s Sorted budget planner as a starting point? There are bank tools and apps like Pocketsmith.
Be realistic, and if you are struggling, there’s no shame in asking help from a mother, a father, or a friend, or a budget mentor.
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Think about what you want your budget to achieve.
The first aim has to be to balance your budget, get adequate “emergency” savings, and shed any residual consumer debt habit you have.
Often people go to David struggling with high-interest consumer debt and car loans. They need crisis budgeting. I hope you are after aspirational budgeting.
Sometimes, a short-term hard-out budget is a good idea to get yourself free of crushing high-interest debt, but in the long-term, a budget must be liveable, and help deliver happiness in your life.
In most lives money is limited, and needed not only to pay for daily living now, but for daily living in the future, when you are no longer working.
That means you need to create a weekly surplus (spending less than your income) to do things like save a house deposit/build a retirement nest egg/pay off the mortgage/help the children through their studies, etc.
Automate savings to take money out of your account so you can’t spend it, to send it to places like KiwiSaver, and long-term savings accounts.
Reject the delusion there’s a standard formula for life. l have enjoyed doing things differently to create larger surpluses.
My household has generally only run one car in defiance of the one car/one adult standard. That’s kept a lot of headroom in the budget, and kept me fit as I zip around on my bike. I take lunches to work. I refuse to buy coffee. I need a lot of persuading to take on liabilities like pets and subscriptions.
David and I spoke about the link between spending and happiness.
I like to avoid spending on things that don’t move my core happiness. Happily, I have never felt the need to self-medicate with shopping/alcohol/drugs/new cars/fashion/recreational shopping, or the pursuit of a magazine-ready home, though my place is nice.
But I recognise I am not Lord High Dictator of spending at home.
A budget has to work for more than just you.
In short, be strict about spending that brings little real improvement to your life. Be looser on the stuff that does.
But, and here’s the nub of it; It can be hard to tell the one from the other.
Disclaimer: The information in this column is provided for general information only and is not intended as financial advice. If you require expert advice we encourage you to seek assistance from a professional adviser.
- Sunday Magazine