Westpac NZ Shares Tips For Mindful Summer Spending As Cost Pressures Persist

Westpac NZ is encouraging New Zealanders to set up a spending plan to keep them on track through the festive season, as new research shows most households are still feeling cost of living pressures.

The survey of nearly 1,100 Westpac customers showed 72% of respondents are extremely or moderately concerned about the cost of living.

Nearly half – 45% - are planning to spend less over the holidays than last year, compared to just 14% planning to spend more, with decorations, travel, accommodation, gifts and fun activities outside the home being the most common areas identified for reductions.

More than 20% of respondents expect the new year period to be more financially stressful than the same time last year, with just 5% expecting it to be less stressful.

Westpac NZ Managing Director for Consumer Banking and Wealth, Helen Ryder says planning ahead can help people avoid the financial stress often associated with the holiday season.

“It’s been another tough year for many Kiwis and we want them to relax and make the most of their summer, while heading into the new year feeling good about their finances,” Ms Ryder says.

“We totally understand why people are feeling the pinch. Inflation is starting to come down, but costs remain high, and many households with fixed home loans haven’t yet seen the benefit of falling interest rates.

“We’re pleased that more survey respondents this year say they’ve created a budget for their holiday spending, though the totals are still low – 27% this year compared to 23% last year.

“About half of respondents said they’ve put money aside for extra holiday spending. For those who haven’t, it’s not too late to start.

“Digging into your finances and going through a spending plan with the whole family is the best way to avoid starting the new year with a debt hangover.”

Ms Ryder says a quarter of Westpac’s fixed home loan customers will have rolled onto a lower rate by the end of the year, and more than 60,000 floating home loan customers have already seen their interest rate fall by a total of 1.25% since July.

“According to the Westpac mortgage repayment calculator*, a Westpac customer with a $300,000 loan on a 15-year term would have an extra $122 a fortnight in their back pocket if they rolled onto a new 1-year term today at our special rate of 5.79% p.a.

“People should think carefully about what they do with that extra money – whether it’s treating themselves over the summer, using it to pay down other debts, or increasing their fortnightly repayments to pay off their mortgage faster.”

The bank is also sharing key tips on ways to cut spending over the holidays, including:

• Don’t buy more groceries than you need. How much Christmas ham gets thrown away in the new year?
• Budget for the essentials first, like food and travel, before allocating leftover spending money on items like gifts and decorations.
• Consider alternative gifting options like a “Secret Santa” arrangement.
• Before paying with credit, see if you can reduce costs or use your savings, to reduce the amount of debt that needs to be paid back in the new year.
• Talk to friends and family before going gift shopping to discuss whether you are doing presents, and if so, whether you should set a price limit.
• If you are buying presents, try and get a steer to make sure they are things they need, rather than just things they want.
• Consider sustainable gifts that are meaningful, long-lasting and environmentally friendly.

Note: The summer spending survey was conducted on The Westpac Customer Forum from 18 to 24 November 2024. It was completed by 1,093 Westpac NZ Customers, aged between 25 and 84, with the margin of error 3% at a 95% level of confidence.

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