Kiwis are increasingly worrying about money as the effects of the cost of living bite.
The Financial Services Council’s latest Financial Resilience Index shows inflation and the continuing rise of house prices and interest rates are challenging Kiwis’ financial resilience.
The report found almost 50 percent of Kiwis are worrying about money daily or weekly, which equates to an increase of 300,000 people since last year.
Also, the negative effects of financial issues on Kiwis’ wellbeing have increased. Now, 59 percent said financial issues have affected their overall wellbeing, up from 53 percent in 2022.
But it’s younger New Zealanders who are disproportionately affected. A total 64 percent of respondents aged 37 or below worry about money daily, weekly or monthly, which is more than any other age group.
Richard Klipin, CEO of the Financial Services Council, said the impact of the current cost of living crisis mirrors the increasing wellbeing challenges they found in their report.
“Despite high financial confidence driven by job security, the reality is that fewer Kiwis have household investments, are unable to find $5000 in a week for an emergency and are facing increasing debt that they are unsure if they will be able to pay,” Klipin said.
Just 53 percent of Kiwis could access $5000 within a week in a time of emergency, down from 59 percent in 2022.
The research additionally found that 54 percent of the respondents that had fixed-rate mortgages said they would be expiring in 12 months or less, and 30 percent in six months or less.
“Reports in the media indicate the OCR may remain around the current rate for a number of quarters, so those coming off fixed-rate mortgages over the next 12 months are a group that are going to feel the squeeze and need to prepare for higher monthly payments to reduce money worry and improve overall wellbeing,” Klipin said.
There was also a difference between spending today and saving for tomorrow. The report said for those that can find some money to put away, low financial literacy is hampering their ability to invest and save well for the future.
“But again, as we have seen in previous years, it’s the younger generation that are disproportionally bearing the burden of this economic cycle,” Klipin said.
“Whilst older generations are also finding it tough, they have been here before and know that it will come good. For our children and grandchildren, it’s new and simply an unknown.”
Klipin encourages Kiwis to look out for each other, check in to see how they’re doing, and let them know “these tough times won’t last forever”.