1 in 3 New Zealanders are living paycheque to paycheque
- 1.4 million Kiwis don’t have an emergency fund
- 15% could rely on their savings for less than a week
- Easy ways to boost your rainy day fund
Almost a third of Kiwi workers are unprepared to cope with a sudden job loss according to Finder, a global comparison site recently launched in New Zealand.
A recent Finder survey of 2,169 respondents revealed that 39% of New Zealanders, equivalent to 1.4 million people, don’t have emergency savings to fall back on.
The research found that 1 in 5 (20%) Kiwis would be able to cover their living expenses for just one week or less if they lost their job.
Around 7% could rely on their current savings for three months, while a meagre 5% could survive for six to 12 months if they fell out of work.
Kevin McHugh, Finder’s head of publishing in New Zealand said that millions of Kiwis are just one ill-timed event away from financial ruin.
“It’s scary to think how many of us could lose everything or go into long-term debt if they lost their job.
“That’s a very stressful way to live, knowing any unexpected event could pull the rug out from under you,” McHugh said.
The research also found that men could rely on their savings for 16 weeks on average, whereas women could last just 12 weeks in comparison.
McHugh urged Kiwis to consider how they’d pay for essentials like their rent or mortgage, utility bills and groceries if their income stream dried up.
“Households need a bigger financial buffer in place. A fortnight’s worth of savings isn’t going to cut it if things turn pear-shaped.
“This is easier said than done for many of us, but everyone can start small. Even putting away just $20 a week will add up to $1,000 over the course of year.
“Income protection insurance can be valuable for workers who are heavily reliant on their income, like those with young families or mortgages.
“If you get sick or injured and are forced to stop working, income protection cover will provide a regular payment of up to 75% of your wage,” McHugh said.
“If you are facing financial hardship there are people you can turn to. The Citizens Advice Bureau offers free counselling for those that need it.”
|If you lost your job tomorrow, how long could you live off your savings?|
|Less than a week||15%|
|Around 1 week||5%|
|Around 2 weeks||6%|
|Around 3 weeks||3%|
|Around 1 month||10%|
|Around 2 months||6%|
|Around 3 months||7%|
|Over 1 year||10%|
Source: Finder New Zealand survey
Easy ways to boost your rainy day fund
- Save your raise. If you get a salary increase, try and keep your spending at a similar level. Arrange for your increase to go directly into your savings account and watch your balance grow.
- Don’t spend your tax return. If you get a decent return from IRD at tax time, resist the urge to fritter it away on non-essentials. Instead, put it straight in a high-interest savings account to use in an emergency.
- Move your funds. If you’re constantly dipping into your savings, transfer them into an account that you can’t touch. Avoid getting a linked debit card if possible. This will make it harder to give in to impulse spending.