New Zealand Wellbeing Budget 2021 and your household budget
Every May the New Zealand budget is released and there is a media hoo-ha about the announcement that outlines how the Government plans to spend our taxes. To be fair, most New Zealanders don’t pay much attention to the occasion but back in the day the budget announcement caused rushes to buy petrol and cigarettes before sales taxes increased.
However, the nation’s budget is just as relevant today as it has ever been and the Wellbeing Budget 2021 started off in the same way Debtfix does when helping people get out of debt.
What are your priorities?
The Government budget identified three long-term priorities, that is keeping New Zealanders safe from Covid-19, supporting the nation’s recovery and rebuild, and establishing foundations for a better future. When making a budget you need to determine your priorities and identify where you want to be in the next few years. Clearly knowing what you are aiming for will help you stay on track when a spending blowout threatens your plans.
It’s worth thinking a little bit broader at this stage and here are some ideas.
To provide a secure home for you and your whānau.
To live without stress about money and debt.
To have a back-up plan when things don’t go as expected.
To improve your health and wellbeing.
To travel, to study, to go fishing, to play a new sport, to write a book, etc.
You need to consider your real priorities for the long-term and then you can work out the short-term actions required, both to survive right now and to progress towards a better future.
What were the New Zealand Government’s short-term priorities?
Debtfix was pleased to see the Wellbeing Budget 2021 included a short-term action that will immediately impact on many people in Aotearoa, that is, increasing the weekly main benefit rates. People receiving Job Seeker, Sole Parent, Supported Living or Young Parent payments will receive an increase of $32 to $55 per week, per adult. The increase is staggered over two dates, with the first increase starting on 1 July 2021 and the second increase on 1 April 2022.
Please note, Work and Income states that when benefit rates change supplementary assistance will be reviewed. In most cases, temporary additional support will go down and the overall amount will depend on your situation and your costs.
A second short-term expense included in the budget is the cost of the Covid-19 vaccine, which is an action needed for the immediate health of New Zealanders.
When planning your budget what would be your short-term goals? Here are some examples.
Pay the rent on time, every time.
Sort out the outstanding power bill so the electricity doesn’t get cut off.
Get your car fixed so you can get to work.
Pay off a credit card to avoid paying high interest rates.
Provide 5+ a day fruit and veg for the whānau.
Just like the Government, you need to work out how much your short-term goals will cost and how much money you have available to pay for them. Then you can consider how these will help you achieve your long-term goals.
For example, getting your car fixed is essential if you need it to get to work and this would be a short-term priority. A long-term outcome could be that by being a reliable employee, you are promoted and get a pay rise. Woohoo – you are on your way to improved financial stability and less stress about money, especially if you review your budget and allocate the pay increase towards achieving your goals.
Your health and healthy homes are vital
In the Wellbeing Budget 2021 the Government acknowledged the need to invest in the health and wellbeing of New Zealand’s most disadvantaged people. The financial gap between the haves and the have nots has increased and people who struggled before Covid-19 are the most significantly affected by the economic impact of the pandemic.
The Debtfix Crew is pleased to see the budget includes money to support Māori and Pacific peoples, particularly in housing and health. The budget aims to provide the essentials needed for children’s wellbeing through supporting more families and whānau into warm, dry housing.
In your own budget and planning – health and housing should be priorities.
For example, paying the rent on time each week will keep the landlord happy and reduce the risk of eviction. That is the short-term outcome. Long-term outcomes could be living security, and your credit score improves, which will help if you want to rent a better home or apply for a mortgage to buy your own home. In New Zealand, owning your own home is one of the biggest factors that influences your financial stability, especially when times change such as the disruption caused by Covid-19.
When the budget is tight it can be difficult to make healthy life choices and paying for a visit to the GP may feel impossible. The Debtfix Crew makes sure their clients’ budgets allow for housing, food and medical care – essentials we all need.
Budgeting for a different future
Investment in education and skills training was included in the Wellbeing Budget 2021. To create a brighter future for yourself, your whānau and your tamariki – what would you include in your budget to improve your career prospects?
Maybe you want to train to be a nurse, builder, computer technician, dairy farm manager or to be the next Elon Musk.
Have a look at the careers website to find out more about skills shortages in New Zealand and what training different jobs require. The Government’s budget included “four years of funding to support around 16,000 sole parents, disabled people and carers receiving eligible benefits with study costs.”
A budget is essential
You may not have the same amount of money to juggle as the Government but that doesn’t change the requirement for you to have a budget. It will give you direction, motivation and give you control of your life. When the Debtfix Crew looks for a debt solution for clients, setting a budget and regularly reviewing it are essential steps.
Make a positive move now and contact Debtfix or go to MoneyTalks to find a financial mentor near you.