ROB STOCK/FAIRFAX NZ
BNZ’s head of wealth Donna Nicolof teaches school children financial literacy in her spare time. Many adults could do with a few lessons too.
EnableMe’s Hannah McQueen says people should be able to thrive on $70,000.
Even a large proportion of people on higher incomes are say they are lving from pay cheque to pay cheque.
Katrina Genefaas, from Rotorua, could teach people who say they’re struggling to get by on $100,000 a thing or two.
After she split with her long-time partner, the mental health nurse found herself alone with a mortgage, and a pressing need to get on top of her finances.
She knuckled down to a more frugal existence, and found ways to cut back and take $200 to $300 out of her weekly spend.
She’s the living example of what’s possible for the 23 per cent of people in households with incomes of $100,000 to $150,000 who told BNZ surveyors they were living “pay cheque to pay cheque”.
* One in 10 New Zealand families fell into ‘Struggle Street’ since 2006
* Absurd financial pressure on parents
* Many Kiwis would add years to the mortgage to cope with interest rate rises
* How you see your money self matters
Even worse, 14 per cent of people in households with incomes of more than $150,000 say they are living pay day to pay day as well.
The figures come from the BNZ Financial Futures survey, which the bank conducted in a bid to understand how financially resilient households were to cope with rising interest rates.
On the advice of her brother, Genefaas went to NZ Home Loans, a Kiwibank-owned company that specialises in helping people budget and manage their finances in a bid to cut years off their mortgage repayment time, saving themselves heaps of interest.
Genefaas says she feared going frugal would spoil her life and make her less happy.
The opposite happened. Budgeting, paying off short-term debt, restructuring her loan, and setting some financial goals resulted in day-to-day cutbacks that actually lifted her sense of well-being.
“It’s made me more goal-focused, and yes, happier because I’m working towards something,” she says.
And she’s making progress towards her aim of being mortgage earlier than most people dream of.
“If I can be mortgage-free by the time I’m 40, my life is going to be so much better,” she says.
“Most people over $70,000 income should be able to live within their means,” says Hannah McQueen from EnableMe, a financial fitness training company that helps higher income-earners make the most of their money.