What is the National Cost of Living?
It is important to understand the national cost of living as this is a key factors that could impact your options of buying a home. Let’s look at what this is and what you can do to improve your financial position.
The National Cost of Living in New Zealand
This refers to the amount of money needed to sustain a certain lifestyle, including expenses such as housing, food, transportation, healthcare, and entertainment. Understanding the national cost of living is crucial for individuals and families who are planning to purchase their first home, upsize or downsize their current home or make any type of financial changes with their current or proposed home loans.
Housing Costs
One of the biggest contributors to the cost of living in New Zealand is housing. The price of housing can vary greatly depending on the location, size, and condition of the property. In major cities like Auckland and Wellington, housing prices tend to be higher compared to smaller towns and rural areas. Renting is also common, especially among younger professionals / families and those who are still saving up to buy their own homes.
How Does the Cost of Living Impact Buying a Home?
The high cost of housing in New Zealand can pose challenges for those considering buying a home. Affordability is a key factor to consider, as the prices of properties may be out of reach for some individuals and families. In addition to the purchase price, other costs such as mortgage interest rates, insurance, and rates need to be taken into account.
To afford a home in 2024, you may need to make certain tradeoffs or consider different approaches. This could involve saving diligently for a deposit, exploring different regions with lower housing prices, or considering alternative housing options such as apartments or shared living arrangements. It is important to carefully assess your financial position and weigh the tradeoffs and challenges associated with each approach.
We recommend getting in touch with an experience financial adviser, like us, to help explore your options and start making a game plan towards achieving your dream!
Tips to Improve Your Financial Position:
Improving your financial position can help alleviate the impact of the national cost of living. Here are some tips to consider:
1. Budgeting
Creating and sticking to a budget is an essential step in managing your finances effectively. Take the time to analyze your income and expenses, and identify areas where you can cut back or save. This could involve reducing discretionary spending, finding more affordable alternatives, or renegotiating bills and contract providers – don’t be afraid to shop around and find a better price.
2. Increasing Your Income
If your current income is not sufficient to cover the cost of living, exploring opportunities to increase your income may be necessary. This could involve seeking higher-paying job opportunities, pursuing supplementary income streams such as freelancing, part-time work or side hustles or investing in your skills and education to enhance your career prospects.
3. Financial Planning and Investing
Consider seeking professional financial advice to help you create a long-term financial plan that works towards your goals. It is never to early to start having a conversation with a financial adviser / mortgage adviser (like us) to get you on track and working towards the right goals.
4. Saving for the Future
Saving for retirement, emergencies, and other future expenses should be a priority. Set aside a portion of your income regularly and explore options such as term deposit accounts or investments if you are not utilising Kiwisaver.
The Importance of Considering the Impact
When it comes to the national cost of living, it is crucial to consider the impact it may have on your financial well-being and overall quality of life. Failing to do so could result in financial stress, limited opportunities, or even debt. By carefully assessing your own personal circumstances, weighing the tradeoffs, and making informed decisions, you can navigate the challenges associated with the cost of living and create a more sustainable financial future which will see you on track to achieving your gaols faster!
Still not sure?
As mortgage advisers with over 20 year industry experience we can help you find the right options to suit your financial needs. The process can be quite overwhelming but if you have the right team on your side – it doesn’t have to be.
Let us take all the hard work out of exploring your options. Contact us to discuss and let us help you!
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.