November 23, 2025 • 41 mins
Queues at budgeting services are getting longer, and financial advisors are finding households with increasing incomes are seeking help.
Kiwis with a household income of over $200,000 a year and likely with a mortgage are struggling to make ends meet.
It feels like it was only a few years ago that being on a six figure salary meant you were fairly well off, but it seems it's barely enough to get out of living paycheck to paycheck these days.
So what actually is a liveable wage these days? Do we truly need to be making half a million a year just to pay our bills and still have a bit left over for savings and fun?
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Episode Transcript
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talks.
Speaker 2 (00:42):
You couldn't understand.
Speaker 1 (00:44):
It, and a very warm welcome or welcome back if
you have just joined us. This is the this is
smart money. By the way, if you have missed any
of the previous hours, don't forget later on after this
after six o'clock, of course, you can go and check
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Weekend Collective and everything will be all there ready for
(01:06):
your enjoyment.
Speaker 3 (01:07):
Anyway, So we would.
Speaker 1 (01:09):
Love your calls on eight hundred and eighty ten eighty
and we're gonna have a chat initially based on a
story around budgeting services. So accuse a budgeting services and look,
and I think there are a lot of people and
I would be included in that. We suddenly think, my goodness,
the money that we've been sort of relying on at
the end of the month, that hopefully you've covered all
(01:31):
your bills and you've got a little left over or not.
All of a sudden, it does feel like life is
a lot more expensive. We found that, and financial advisors
are finding that households with slightly larger incomes are seeking
help and there was. There are even kiwis with a
household income of over two hundred thousand dollars a year.
(01:51):
So a household income of over two hundred thousand a
year with likely with a large mortgage, they are struggling
to make ends meet. So it feels like, you know,
it's only a few years ago, really, wasn't it? Where
the number one hundred thousand bucks? If you're on a
sell of one hundred thousand dollars, it's like, God, you're
creaming it. You're fairly well off. And I've had a
(02:12):
conversation with a few friends about this that it's not
as much as you think if you want to depending
on what.
Speaker 3 (02:18):
Your mortgage is.
Speaker 1 (02:19):
I mean, there'll be some people whose mortgage costs are
massive and a couple hundred thousand dollars between two people
once you've paid tax on it all, and everything actually
doesn't go very fast. So I want to know from you,
how much money do you think is actually a comfortable
amount of money for a household to live on. But
of course, a household can be many things. A household
(02:41):
can be you and your flatmates. I mean, if you're
all any good money, you don't have kids and you're
single and just enjoying yourselves, half that amount of money
might be something where you go, I'm actually quite happy,
to be honest. But if you've got a couple of
kids and they've got a few different interests in sporting
interests and clubs or dance or whatever, you might find
that at the end of the month, it's like, oh,
(03:02):
that'll go paying. You know you've got once you've deducted
your expenses for living in, your mortgage.
Speaker 3 (03:08):
And food and all that sort of thing.
Speaker 1 (03:10):
So what do you think you need to be making
to live comfortable? Come to live comfortable? Talk about terrible
grammar to live comfortably? These days, we're going to explore
that and other questions with our guest, who is again
another one who needs no introduction really is Martin Hwes Martin.
Speaker 2 (03:28):
Hello, Yeah, Hi, there some interesting topic for today. Much.
Speaker 1 (03:32):
I mean, there would be a question that you would
have examined, possibly more from the end of retirement living. Sorry, Mante,
I just had to change an audio setting there because
I think I'll could hear myself bouncing back there. But
I think we solved that it would be something that
people are considering how much they need to retire on,
of course, but I've got to say that two hundred
(03:54):
thousand bucks a year.
Speaker 3 (03:55):
It might to some people.
Speaker 1 (03:57):
Sound obscene that people are not making ends meet, but
it would be quite common for people to think they're
not exactly rocking and eroly, wouldn't it.
Speaker 2 (04:04):
Yes, I can certainly think of people in that kind
of prodictament. And two hundred thousand dollars does sound a lot,
but you know, if you've got a couple of children,
maybe more if you've got a big mortgage, as you
said before, And I think a lot of this is
(04:25):
also about expectations, and that's two respects. First of all,
we expect to have just about everything now now, you know,
I try to avoid be saying when I was their age,
we didn't have those things. You know, we didn't have
to buy a phone, we didn't have to buy a laptop,
we didn't have to have a screen in every room
and what have you. There was no expectation of that,
(04:47):
let alone overseas holidays and those sorts of things. The
other expectation that was set up after COVID was very
low interestrates, and I suspect that there were a number
of people who took very big mortgages. And if you
remember back to that time coming out COVID, mortgage interest
rates for two two and a half percent something like that.
(05:10):
They're willowy people who quite wisely fixed for maybe five years,
and now they're starting to come off. And although interest
rates are basically generally declining, it may it may be
a decline, but it may be a lot more than
what they were used to film the post COVID days.
Speaker 3 (05:34):
Yeah.
Speaker 1 (05:35):
Actually, the mortgage, that's the thing everyone. It's so easy
to look at a figure and it's the gut reaction.
Is like households on a couple hundred thousand dollars a year,
goodness me, how can you not make ends meet? But
if you're if you've got to be quite common for
people to have a four or five hundred thousand dollars mortgage, mortgage,
if not even significantly more than that, yep. But if
(05:55):
you've got a you know, five hundred thousand dollars mortgage,
what's what's that costing you a year in payments? More
than fifty grand?
Speaker 3 (06:03):
Isn't it?
Speaker 2 (06:04):
Know?
Speaker 3 (06:04):
How on I got that wrong? I've got that wrong.
Speaker 2 (06:07):
Yes, I have, you should have if the number of
numbers I scratched out were paying interest only, which of
course is not usually the case. But if you think
of somebody with a seven hundred thousand dollars mortgage, and
that will be quite common. You know, nine hundred thousand
dollars average house price in a lot of areas. You know,
you if it's the first time you've managed to scrape
(06:29):
together god knows how two hundred thousand for a deposit
and you're paying therefore at two percent interest back in
the glory days. Didn't feel like the glory days, but
it was for somebody at a mortgage, you're paying fourteen
thousand dollars of interest. If you're now faced with a
five percent one of interest only littlone paying thing off,
(06:50):
you have thirty five thousand dollars of interest. So that's
a twenty thousand dollar like in your overall family costs.
It's a big chunk. And if you weren't you should
have been expecting it. But if you hadn't done the numbers,
or you hadn't sort of tried to calculate just how
(07:11):
bad it was going to be, then that would come
as an awful bookshop Yeah, and then and then it's
hard to say to the kids, Well, no, no, we're
not going to visit this year, or we're not going
to we're not going to go skiing, or we're not
going to do any of those things that we have
done for a couple of years. We just can't afford to.
Speaker 1 (07:34):
Yeah, I mean, it's life. The other side of the
or the question is is life just naturally more expensive
because we do have different expectations.
Speaker 3 (07:47):
It feels like, I don't.
Speaker 1 (07:48):
Know, it used to feel like the being able to
go for a holiday at the beach in summer was
you know, it wasn't exactly something that was out of reach.
But now with Airbnb, you look at if you were
going to have four or five days during the school holidays,
that's say from my out the beach, I'd be thinking
probably something like mart Mnganui or Papamoa. I mean, that'd
easily set you aback five or six hundred bucks a night.
(08:09):
So what I don't know is that, as a proportion
of our income, more expensive than things would have been
when we don't have to As I say, we never
used to buy laptops, we didn't have to buy a
Phone's a sort of like a technology tax to life.
Speaker 2 (08:22):
Isn't there, Yes, there is. And there's also what's going
on at school. So all the other kids are going
to you know, I'm in the South Island, so we'll
say Nelson or Marble Sounds or something like that, possibly
even overseas. And so William is coming home and saying, well,
(08:43):
Belinda is going to so and so why are we going?
And the answer to that is unpalatable and probably not
something you should be discussing with a seven year old say,
But the answer is, well, we can't afford to. And
you know, this is a high cost, low rage country.
(09:07):
Now we're not. We're not the rich country that we
were going back to when I was young and at
various other other periods. And you know, the bad news
and I haven't seen anything in the media about this yet,
but I think it'll come. Is that we've seen the
New Zealand dollar fall quite about that drives up. It
(09:28):
makes exports more saleable, more affordable for our partners to
buy them overseas. But it makes the things that we buy,
which imports, more expensive. So import items, you know, whether
whether that's fuel or the car that you put the
fuel in, or clothing or just about everything. Now is important.
(09:52):
That becomes more expensive, and god, I'm a burger of jo.
Speaker 3 (09:58):
It's just a realistic conversation.
Speaker 2 (10:01):
And the next thing that happens when the currency falls
is that generally infrastrates rise because you're getting a bit
of more of important inflation. And therefore reserve bank, who
have a remit only to take management inflation, Reserve bank
puts up interest rates because we've got higher inflation. So
(10:23):
we could be we're a few we were away from
that yet. I mean, the currency's fallen gradually over the
last couple of months and took quite a steep fall.
I was in Greece and I actually I missed it,
but there was another quite big fall maybe Thursday Friday
(10:44):
of last week as well.
Speaker 1 (10:46):
Was that a fall against any particular currency or just
a fall in the New Zealand dollar.
Speaker 2 (10:51):
I follow the US dollar mostly, but I think it
was a fall against currencies generally. I think it was
a fall in the New Zealand dollar rather than arise.
And there's an American dollar or the Australian dollar, you know,
I think on one New Zealand dollars buying is eighty
seven eighty.
Speaker 1 (11:10):
Eight, it's eighty seven cents news in Australia. I saw
that headline pop up recently. In fact, my brain miss
misunderstood it for in a minute. I thought it was
absolutely catastrophic. But I can remember a time I think
when well, it goes back ages of course, but where
we were sort of used to routinely be around eighty cents.
Probably even in the even the mid was at twenty ten,
(11:34):
we were around seventy nine cents. I think, in fact,
I've got the graph here. Now we generally fluctuate. In fact,
there would be a generation New Zealanders who can remember
the time and it was almost one for one at
one stage. I think that was about ten years ago.
It was almost one for one with the Australian dollar.
But I always thought that was very going to be
very fleeting. But we're at eighty seven now. I mean
(11:57):
it could be worse. We've been worse. We've been down
to seventy four in twenty eleven.
Speaker 2 (12:02):
Yeah, you can always say it could be worse, but
you see it plat it's what it's what's happened. It's
what's happened in the last months, because that's going to
drive prices going but going up if we're importing much
from Australia. I don't know if we do. I suspect
that we do. But if we are important from saying
the US or Europe or UK, and those things are
(12:24):
all going to be more expect.
Speaker 3 (12:25):
That's actually why I was.
Speaker 1 (12:28):
I was thinking about the price of petrol because there
was a time with you know, fuel taxes and all
that sort of thing, when we were was you know,
you could regularly be looking around the three dollar mark,
if my memory sees me correctly, for ninety one. But
now we're seeing regularly prices around two forty nine, two
fifty eight or something. And I was thinking that's only
because fuel is cheaper because of our dollar was you know,
(12:51):
fuel got to the stage it was back when those
prices were three bucks a leter. We'd really be feeling,
wouldn't we.
Speaker 2 (12:57):
Yeah, And for a lot of people, you know, fuel
is like attacks. It's almost impossible to avoid. There isn't
public cransports available or good public transport available everywhere in
the country. You've got to put petrol in the car
because you've got to get to work, and you know,
I think that might be coming down the road.
Speaker 1 (13:18):
Gosh, well, let's not dwell on it too much because
it'd be a bit to derm and bloom. But we'd
love your calls on this too, by the way, that's
what we're here for. Eight hundred and eighty ten eighty.
But how much money do you think you need to
live comfortably these days? But it's such a at Martin,
actually it is. It's a very difficult question to pin
(13:38):
down because if you're supporting three or four children, then
you know, a couple hundred thousand dollars for a household
doesn't go nearly as far as if you're a single
person on a couple of hundred thousand dollars a year,
you're you know, you're a pig and muck.
Speaker 2 (13:52):
Yeah. Well, and you know there are a lot of
people who are the meat in the middle of the
sandwich that is supporting two or three children, but they
may also be supporting to some extent or other parents.
Speaker 1 (14:03):
Yeah, yeah, I mean how Actually, I tell you what.
We'll go to the break and see if people like
to join us for the conversation how much money. Let's
just standardize it to say you are a couple and
you have a couple of kids and a mortgage somewhere
how much per household do you think you'd need to
(14:25):
earn to be considering that, you know what, we're actually
getting ahead and we're in good shape. Because I'm going
to say it, I reckon to be feeling with a
couple of kids.
Speaker 3 (14:35):
I think you'd have to be well.
Speaker 1 (14:37):
In excess of a couple of hundred thousand dollars a
year because with them with a chunky mortgage and the
rest of life's expenses of just managing children. And it's
a terrible thing to say, because I know that people
there are a lot of people are in a hell
of a lot less than that as well.
Speaker 3 (14:50):
What do you reckon?
Speaker 1 (14:50):
Oh, eight hundred and eighty ten eighty text nine nine
two twenty one minutes past five News Talk si'd b.
Speaker 3 (14:56):
Yes, News Talk zid B.
Speaker 1 (14:58):
Actually, because I've got a text from someone with Martin
Hawes and discussing, you know, how much money does a
household need to well off with a couple of kids, say.
Speaker 3 (15:06):
And a mortgage.
Speaker 1 (15:07):
And this person's saying, look, I've got a mortgage for
a Oh my goodness, this is a big loan, a
one point two million dollar loan, seventy six thousand dollars
a year. I mean, that's Martin, that's one income gone,
isn't it.
Speaker 2 (15:21):
Yeah. Basically, by the time you've paid tax, it is
one income norm.
Speaker 1 (15:26):
Yeah, so did I did actually ask chet GPT to
do a quick calculation for me on what the tax
is on one hundred thousand bucks and it's just under
twenty four thousand dollars. So so basically there's a quarter
of that gone already.
Speaker 3 (15:38):
Yeah.
Speaker 1 (15:38):
I had another text suggesting that actually, in a way
that middle class New Zealanders actually have it tough because
they don't get they don't earn little enough to get
you know, the working for families. And yet if you've
got kids and everything, you pay the I've got kids
tax of everything being more expensive in the holidays.
Speaker 3 (15:56):
So yep, yeah yeah.
Speaker 2 (16:00):
And unless the unless that couple on two hundred thousand
dollars a year had twelve children or something, you know,
they wouldn't get working for families, they wouldn't be getting
any assistance whatever.
Speaker 1 (16:10):
Probably, And then somebody else said, afternoon, gents, what about
the cost of rates and insurance, because okay, there's rates
you could easily on an average house, say Hamilton, Wellington,
what are you paying five thousand dollars a year in
rates plus Yeah.
Speaker 2 (16:22):
Yeah, well I don't have a particularly salubrious sort of
a house, but I'm paying I think it's nine. So
every time accounts will talk about putting rates up ten percent,
you know, it's basically another another thousand dollars. It's funny
because I during the break I grubbled grates down and insurance.
They both seem to be going to the road, and
(16:43):
it looks like we might seem more of it rather
than less of it.
Speaker 3 (16:47):
See.
Speaker 1 (16:47):
That's the rates of the tax that I think are
particularly problematic for people, cost of living wise, especially once
you're retired, because that's it. You're not you know, unless
you continue working beyond sixty five. You're relying on whatever
you've set aside for you know, your retirement, if you've
been able to do that. Plus the super I mean
(17:09):
the idea of having a few thousand dollars for rates
bill that's kissed that bye, isn't it unless you do that?
What is the scheme that counsels let you leave it
in sort of thing and then they ping you when
you die.
Speaker 2 (17:19):
Yes, yes, you can do that. Rates it's a form
of wealth tax. It's not a capital gains tax. There's
a difference between and the national conversation between you know,
wealth tax and capital gains taxes and terribly good. They
tend to get inflated or confused together. But it's a
tax on wealth and the only wealth in the property.
(17:41):
And it's a poor tax because it is levied at
a time when people can't pay for it. And that's
the case with wealth taxes generally. It's why in Europe
they used to be thirteen wealth taxes. Now there are three.
That is thirteen compries that wealth taxes. Now only only
three do and that's one of the reasons. People just
can't afford to pay for it at that time. And
(18:05):
you know, I mean I've done a fair bit in
over the years and local authorities and so from who
I've never spoken to a mayor or even a counselor
who thought that rates was a good way of funding
local government. It's a lousy way of doing it.
Speaker 1 (18:18):
What, oh, that's a hot take. What is the best
way of funding local.
Speaker 2 (18:22):
Well, I probably do it either with some kind of
sales tax, perhaps a bit more on GST or something
something like that. But I certainly wouldn't do it. I
certainly wouldn't levy taxes on people, first of all on
the basis of an evaluation, which is dodgy, and see
(18:43):
secondly at a time when they can't afford to pay
for it.
Speaker 1 (18:47):
I'll tell you what I'm certainly missing. I'm regretting that
I missed the deadline to query my the valuation of
our property, which I'm sure has cost a few hundred bucks.
But anyway, that's a that's a It's a different cup
of tea, isn't it.
Speaker 2 (19:01):
There'll be another opportunity come but there wasn't guarantee.
Speaker 3 (19:04):
But there it was.
Speaker 1 (19:06):
Just while we're on that topic of rates, and I'm
not sure if I mean, I'd love to know from
anyone who's listening, But in my mind, there was a
time when rates was sort of an inconvenient bill, because
you know, it's a bill that you'd rather not pay,
but you're like, okay, well, look if I've set aside
a certain amount of week, that's okay, I can deal
with it. But it feels that the rates bills around
(19:28):
the country have gone beyond that sort of being an
inconvenient bill to something that really is something that people
struggle to keep up with.
Speaker 2 (19:40):
Yes, I think what is happening or what local authority
officers tell me is that. And I don't have any
examples of this, but they tell me that central government
has loaded more and more onto local authorities, more things
for them to do without givening them any money. Like Australia,
(20:00):
the states get a part of GST. Yeah, now, don't
think the city's doing and such like. So they probably
still fund the cities and the areas, the local areas
on rates, but the states get a part of GST.
And I think that wouldn't be a bad proposal for
New Zealand, although you know, I wouldn't like to propose that,
(20:23):
as willis at the moment. The problem is together a
bud jeb.
Speaker 1 (20:27):
You know the problem with our tax conversation is that
no party is interested in reducing the tax take because
they will. We know the government has money, you know,
it doesn't have enough money to spend on what it
needs to spend. So realistically, there's never going to be
anything that really gives any meaningful tax relief to New Zealanders.
(20:48):
It's just going to be another redistribution of where the
burden sits.
Speaker 3 (20:52):
Really, isn't it, Yes, it is.
Speaker 2 (20:54):
There are so many demands on health and education obviously
the two big ones. But then we've got a lot
of talk about having to spend more money on defense,
and that's a big hold of shovel money into it
as well. And I think total tax takers about thirty
five percent of the economy. I've looked it up now
that day. I think it's somewhere like like that, and
(21:15):
that's getting towards the top of where a total amount
of tax can sit. I think, you know, thirty seven
or thirty eight is of our high as it can
get to. There's not a lot of scope there. We
PEPs could be talking about capital gain tax, but that might.
Speaker 1 (21:33):
The Greens and their wealth tax and all that. I mean,
we could dig into that a little bit later, but
just just on that, you know, getting back to that,
the stories that households on a couple of hundred thousand
dollars a year have been seeking budgeting advice. Maybe if
we take it away from you know, from you or
me or ourselves personally, I guess if.
Speaker 3 (21:55):
You were aware of.
Speaker 1 (21:57):
You know, knew what your family members, younger family members,
whether they be you know, nephews, nieces, kids, or whatever,
house old income would you think would be okay, you
should be all right on that's I was thinking of
a better way to a better way to frame the
question in terms of what's you know, what's more than
(22:18):
a household might need, because for me it's almost coming out.
I'm thinking you need to be more than two fifty
plus per year, if with a mortgage and two kids,
to be feeling that you were actually going to get ahead.
Speaker 2 (22:30):
Yeah, it depends on your circumstances, what you used to,
the lifestyle, you expect. Expectations, there's a big one. I
keep coming and finance generally. Actually, I keep coming back
to expectations because I think they drive It's not so
much the reality, it's what we are expecting on the life,
that style that we're expecting. And if people expect a
(22:52):
certain amount of lifestyle or a certain quality of lifestyle,
then they just try to make that fit and they
probably load up credit cards, or they put the car
on high purchase or that under thing. These are not
good decisions, of course. It's sorry, Tom. It spirals down
(23:13):
for a lot of people that the harder it gets,
the harder it gets an exact way the same way
as compounded. It just works when we are investors, and
the more we invest, the more returns we get, and
the more returns we get, the more returns we get,
and the more returns we get and so on. That's
you know, it's a virtuous cycle. It can be a
(23:35):
vicious cycle as well on the downside. So we've got
the more difficulty we're having the more we borrow, the
more we borrow, the more interest rate is high. There's
a credit card data on high purchase data if it
or something like something like that, And it's a vicious circle.
Speaker 1 (23:55):
Where where do you reckon from your experience in financial advice,
where do you think the most common areas are where
people do overspend?
Speaker 2 (24:07):
Well, you see one person over a spend expenditure as
another person's absolutely.
Speaker 1 (24:13):
Well, well yeah, but let's get judgment let's get judgmental.
Speaker 3 (24:15):
Man, okay. For instance.
Speaker 1 (24:18):
For instance, I've got into cycling, okay, and I'd love
to buy a flash road bike, but I can't afford it.
So I know someone who's throw a bike mechanic. I
can probably get a hold of one for less than
five hundred bucks, and that's probably going to be the
avenue I go because I'm cutting my cloth. Accordingly, whereas
(24:40):
there be people, well I've just got to have the best.
I don't know where would you think?
Speaker 3 (24:46):
No, that was a poor example.
Speaker 2 (24:47):
Really No, No, I think it's actually a good one.
Because when I was buying a road bike once, the
person telling me me, like I said, don't look at
that one. It's a surgeon's bike. It's twenty thousand dollars
surgeon's bike. I didn't. I didn't look at it. I
would all my prejudices are coming out, and this is
(25:08):
somebody who's just got back from the overseas truck.
Speaker 1 (25:11):
But well, we're not going to judge you. I mean
you have written about You've written seventeen books, isn't it
on finance? We would expect that somebody's written those books
to be recently comfortable, and weren't going to judge you
for that. Roll with the punch.
Speaker 2 (25:26):
I've paid the credit cards off, I would say, I
would say holidays where a lot of almost said wasted
money goes. Because with some people it's not wasted. It's
some you know. But the you get a memory, and
that memory may be worth an awful lot to you.
(25:47):
So as a family, say, remember the time we went
to preg your Gold Coast or whatever, or you know,
the time we went to Mount montonery. But from my perspective,
I think it's an awful price unless you're coming back
and paying the credit call a credit card off immediately.
Speaker 3 (26:11):
Oh if you can, then that's.
Speaker 1 (26:13):
A good point if you if you are paying it
off straight away and you're not hitting that interest. But
if that holiday you paid for has eighteen percent attached
it because of your credit card for several months.
Speaker 2 (26:23):
Yep, or twenty one or twenty one because I locked
that up for today as well. It's i'd say, the
thing that you could do without most easily without it
damaging family relationships and so forth, would be overseas travel.
Speaker 1 (26:45):
Not doing it you mean, oh yeah, overseas travels and
absolutely lecture. I mean, I think for many people it's
the sort of yeah, I mean, it's something you either
save up for the trip of a lifetime type of thing.
But yeah, I think if you, if overseas holidays are
your regular thing when you're struggling to make ends meet.
Speaker 3 (27:01):
That's probably a bit of an own goal, isn't it.
Speaker 2 (27:04):
You try and book an airbnb in Gold Coast during
school holiday time, say in June or July or whenever
the holidays are now, let alone in Queenstown for skiing.
I mean, these places are these places are booked out.
So there's a lot of people using the school holidays
(27:25):
because they have children who are taking those kinds of holidays.
Now some of them will be able to afford it.
There be a lot of you know, don't forget there
are wealthy people out there who have got really good
businesses or they're in the professions they've done well. So
let's not you know, let's not not them have the
holiday if you can afford it. It's just whether it's
(27:45):
appropriate for what for the rest of your budget.
Speaker 1 (27:50):
Basically funny enough, as you were saying that, I think
there was almost a time in fact I went and
priced something for a trip to Sydney just because it's
a business related thing, and the return tickets if I'd
booked for the family, were cheaper than me taking the
(28:10):
kids to christ Church at Christmas time. Right, Yes, and
I wonder in fact we could do it. Probably not
that we're going to do it now, because we probably
could do a whole hour and about affordable holidays, but
I think at certain times Australia still can be a
reasonably affordable destination, which is why people were all panicking.
(28:31):
Eighty seven cents for the dollar.
Speaker 2 (28:34):
Yes, yeah, it's a certain group of people. Let's expect
it almost. Yeah, now that they wouldn't have been me.
I talk my kids. I think once or twice maybe
on overseas drops once, I think, yeah and two Yeah,
am at least want a cream? Sound go skiing?
Speaker 3 (28:58):
You said that you most apologize for that.
Speaker 1 (29:00):
I don't think you should apologize for those lifetime memories.
Speaker 2 (29:03):
But no, no, I'm not apologizing for it. The other
other thing was that I could afford it almost. What
was going through my little mind was that maybe I
should have taken them more often. But it's not not
if the budget is tied. I mean budgeting is. It's
(29:24):
about what as a priority for you. You know, do
you want the holiday or do you want to have
your finances in good shape so that you're not worrying
about the bills?
Speaker 3 (29:34):
Yeah?
Speaker 1 (29:36):
Yeah, actually, because I was thinking in terms of Okay,
the holidays are a big thing. But the other thing
I think where I mean it sounds you don't want
to be puritanical, but I think if you are constantly
buying your lunch all the time, or buying that coffee.
I think those expenses can get incredibly expensive. If you say,
for instance, your daily habit is to buy a coffee
(29:56):
at your favorite coffee place for six or seven bucks
a shot. What there's thirty there's thirty odd dollars a week.
That's fifteen hundred bucks a year. And that's not even
with the sandwich as opposed to I don't know, going
with something at home before you leave and making your
own sandwiches. Those I mean that can be really expensive
in the long run, can it.
Speaker 2 (30:16):
Yeah, it's very easy to walk into a cafe and
just buy myself with a copy and that something reasonably
modest to eat. It's fifteen dollars, yeah, fifteen Yeah.
Speaker 1 (30:29):
Look, we love your cause, by the way, eight hundred
and eighty, ten and eighty just talking about budgeting and
making ends meat, but how much money do you think
should be enough for a household with a couple of
kids to live on?
Speaker 3 (30:42):
Give us your call. And if you think.
Speaker 1 (30:43):
That a couple hundred thousand and not enough for it's
too much? What do you reckon? Is the reason why
I'm out for a household to live on? Where you
shouldn't really be having to set budgeting advice as we
are hearing is happening. It's twenty minutes to sex news talks.
He'd be news talks. He'd be welcome and or welcome back.
We're with Martin Hawes. We're talking about how much money
should a household really be able to cope with life's
(31:05):
expenses without having to get budgeting advice. Somebody is texted
saying if someone can't bring up a couple of kids
and pay a mortgage on a couple of hundred thousand,
surely this means they're living above their means they need
budgeting advice.
Speaker 3 (31:17):
Well, actually, at least they're doing the right thing.
Speaker 1 (31:19):
If you're struggling, getting budgeting advice doesn't matter how much
you're aning a Martin, Yeah.
Speaker 2 (31:24):
Well that's right. But almost by definition they are living
above their means. Yeah, because you know they need budgeting advice,
so that the text is absolutely right. I think if
you're not making the ends meet, you are living above
your means, and that's the definition of I.
Speaker 1 (31:44):
Always think that in terms of budgeting advice, I would
like to think if I needed it, I could give
it to myself like I'd just sit down and go
through what I was spending and work it out for myself.
But I guess where would the budgeting advice kick and
that would do something beyond what I might be think
I can do for south.
Speaker 2 (32:06):
They might come act as a mentor, so you have
to report back to them. So I think, yeah, accountability,
So you know, I think there are firms probably charge
that that do this. Budgeting is really difficult. It's not
it's not hard in the sense that all you have
(32:26):
to do is a bit of basic arithmetic, but it's
it's not simple either. It's very hard for a sort
of a soft skill because it's got connotations of going without.
I think the best way to tackle a budget is
actually what I think of is the jars approach. And
(32:48):
this was my grandmother and I'm going back sort of
sixty years with Nana. But she would sit there, and
in those days we didn't have credit cards or any
other if you couldn't pay a bill, and you couldn't
pay a bill and you were in trouble, and you
couldn't just us all some money out of a credit
(33:09):
card or the likes, and she used to every time
she got some money, she'd put a florin in one
jar for the bread, and she'd bot two and six
and and and and so on, and that way kept
her on the street. Now and now I if I
was you know, if I was constrained, and I was
(33:29):
having to live within a budget, and we all we
all have to to some extent, I would set up
a bunch of different bank accounts, and there might be
one labeled overseas holidays, and that would have the final
in my in my view, that would have the final
little bit going too into that one. But you know,
(33:50):
one for the grocery shop, one for electricity or utilities,
and one for treats and so and so forth. And
I'd run it by that, and I'd try to figure
it out over time so that every time somebody got
paid in the household, if anytime some money came in,
(34:12):
fifteen percent would go on gross would go into the
grocery's account, you know, twelve and a half percent would
go to the utilities account, fifty five percent would go
to rates, the rates account. And try to live like that,
to try and make it easy on yourself rather than think,
(34:34):
well we have to do this purely with will power
and going without.
Speaker 1 (34:38):
I've got someone who's texted in here saying that they've
got eighteen different accounts for that purpose. Yeah, I think
I need to text me back and tell me how
they've actually apportioned those spensers. But there is something I
mean I would that is actually something that's worth reminding
people about, because traditionally people used to think of I
opened another bank account, it's going to have a whole
(34:58):
lot of different costs associated with it. But I opened
a couple of suburbs. It's just a I mean, it's
not it's actually not really a doesn't feel like a
full bank account. It's literally like a sub account of
something that you've got already. And the one thing that
I'm really glad I did was for I've got one
(35:19):
which is combined for school fees, health insurance, and rates,
and I've worked out I need to put in so
many bucks a month for or week for rates, so
much in for health insurance, and so much in for
the school fees, and I never see that money in
our general expenses account, so we can't spend it. And
(35:41):
so when I get the bill, even though I still
get a shock, we still go. It's sort of I
can pay it because I know I've set it aside,
and I think that's probably one of the things that
I'm relieved I did a long time ago.
Speaker 2 (35:53):
Yes, the one, the one I do tim is an
account I have labeled tax. So I receive a payment
from somebody, it's got GST on it and it will
be taxable. And I'm always pretty determined to pay both
my GST and my income tax. So I take I've
kind of worked it out over twenty odd years, but
(36:15):
I take about thirty five percent of every of every
payment I get from anybody, Yeah, and put that into
the tax account.
Speaker 1 (36:25):
Well, that's probably just about depending what your income is.
That's if you're not that's almost like a savings account
because you're you're almost over catering for it.
Speaker 3 (36:34):
At thirty five cents, I.
Speaker 2 (36:37):
Am a little bit, but don't forget this GST and
income tax, so I usually end up with a little
bit left over after you know, I make a tax payment.
Speaker 1 (36:49):
Yeah, actually, no, that actually, to be honest, I actually
do do that on the tax thing as well, because
I'm self employed, but it's usually based on what the
account has told me. I have to set aside for
a provisional tax, and I go what the hell and
then bite the bullet. No, all that my text has
come back with what this might be a useful thing
for anyone who's straightening with savings. So this was what
this person who's got eighteen sub accounts. One is savings
(37:14):
for fun money. There's the account our wages come into, spending,
holiday fund, dogs, which is food and vet visits, mortgage,
children's account for fun things for him to do. Investment
account for children, cars, oil changes, warrant, a fitness of
course under the cast thing chickens, what the hell this
(37:38):
person must keep have chickens at home, groceries, shorter term
holiday fund, petrol rates, septic tank service, sheep workshop fund,
and it goes on bloody health. That is that's quite organized,
isn't it.
Speaker 2 (37:53):
Yeah, But I take my head off to more them
because it struck me as a bit over the top.
But I suspect they've got some sort of small fun
or something and maybe they're running a you know, a
micrope as this there as well, so they've got a few.
Speaker 1 (38:10):
Mine's a lifestyle plot. But yeah, I'm just amused that
there's a fund for chickens, because I would have thought
that chickens would I guess, what have you got chickens
for meat and for eggs? And what do you have
to get a cleaver or something.
Speaker 2 (38:28):
Let's just stay with the eggs.
Speaker 3 (38:31):
Okay, hell, sorry, what are you gonna say?
Speaker 2 (38:33):
No, I was just going to say, well, there's there's
chicken food obviously, and maybe the vet every now and again.
Speaker 1 (38:38):
Then yeah, and they've sat. At the end of the text,
they so they've set up automatic payments on payday so
they don't have to do any transfers or anything. They're
just yeah, well there's something about that. At least sit
and forget.
Speaker 3 (38:50):
Yeah.
Speaker 1 (38:50):
Hey, we'll be back in just a moment. It's nine
minutes to Sex News Talks. He'd be Yes News Talks.
He'd be with Tim Beverage and Martin Hawes is my
guest today. We're just talking about budgeting, and we started
with the question around people needing to access budgeting services
when they've got a household income of two hundred thousand
a year. But that recent text Martin around one text
who said they've got eighteen different accounts and they just
(39:12):
feed the accounts the appropriate amount. That's amongst our listeners
quite not eighteen accounts.
Speaker 3 (39:18):
I think they're winning that one.
Speaker 1 (39:19):
That's quite a popular strategy for many households from the
texts that have come, and there are a lot who
are saying that they've got text set aside up. Sorry,
accounts set aside for a bunch of things, ten different
bank accounts. I pay my rates weekly, my phone bill weekly, and.
Speaker 3 (39:35):
My powerball weekly.
Speaker 1 (39:37):
Fair enough, Martin, there's another sorry.
Speaker 2 (39:40):
They probably they probably get paid weekly. And so that's
I think a good idea, just very very quickly. I
think a lot of a lot of the so called
budgeting stuff is about making it a habit rather than
using willpower, because we only have so much willpower to
go around, and we can't try to do everything on
the basis of willpower. If we make it a habit,
(40:03):
as I put my text money side, and it's just
something I do automatically every time I O a receiver
of payment, then it doesn't know. It's just what I do.
It's the way I love.
Speaker 1 (40:17):
Yeah, yeah, absolutely, Now just a couple more text I look,
we've got a truckload of text with people sharing their stories. Here,
one person saying, Hi, guys, you need approximately twenty three
hundred to twenty eight hundred net per week for a
family of four and an average mortgage local body rates
are completely unfair barometer to apply to properties, point in fact,
and talks about an industrial building I built and the
(40:38):
rates and insurance were not part of the affordability. And
that's just another thing complicating whole things. And there's a
big long text on CGT. Another one says we're on
two hundred and eighty k in our household with two
kids and a mortgage of almost a million, still living
paycheck to paycheck, and we borrow off our friends to
pay off credit card to avoid interest almost every two months.
(41:00):
There's some budgeting advice needed. I think, Mama, wouldn't you say?
Speaker 2 (41:03):
Yeah, could be anyway. It seems a lot, but you
know it happens to merriage and.
Speaker 1 (41:09):
Yeah, And another person has a six dollar fifty coffee
comes with substantial benefits, a free read of the paper
and mental health benefits for a few minutes of personal space.
Hey Martin, gosh, time flies. Thanks so much for your time, mate.
Speaker 3 (41:20):
We'll look forward to next time.
Speaker 2 (41:22):
Okay, thank you very much, Tom, cheers mate.
Speaker 1 (41:24):
Sunday It's six is next. Thanks for all your feedback.
We'll catch you soon.
Speaker 3 (41:28):
For more from the Weekend Collective.
Speaker 1 (41:29):
Listen live to news talks it'd be weekends from three pm,
or follow the podcast on iHeartRadio
You're listening to the Weekend Collective podcast from News Talks.
Speaker 2 (00:42):
You couldn't understand.
Speaker 1 (00:44):
It, and a very warm welcome or welcome back if
you have just joined us. This is the this is
smart money. By the way, if you have missed any
of the previous hours, don't forget later on after this
after six o'clock, of course, you can go and check
out the look for iHeartRadio and just look for the
Weekend Collective and everything will be all there ready for
(01:06):
your enjoyment.
Speaker 3 (01:07):
Anyway, So we would.
Speaker 1 (01:09):
Love your calls on eight hundred and eighty ten eighty
and we're gonna have a chat initially based on a
story around budgeting services. So accuse a budgeting services and look,
and I think there are a lot of people and
I would be included in that. We suddenly think, my goodness,
the money that we've been sort of relying on at
the end of the month, that hopefully you've covered all
(01:31):
your bills and you've got a little left over or not.
All of a sudden, it does feel like life is
a lot more expensive. We found that, and financial advisors
are finding that households with slightly larger incomes are seeking
help and there was. There are even kiwis with a
household income of over two hundred thousand dollars a year.
(01:51):
So a household income of over two hundred thousand a
year with likely with a large mortgage, they are struggling
to make ends meet. So it feels like, you know,
it's only a few years ago, really, wasn't it? Where
the number one hundred thousand bucks? If you're on a
sell of one hundred thousand dollars, it's like, God, you're
creaming it. You're fairly well off. And I've had a
(02:12):
conversation with a few friends about this that it's not
as much as you think if you want to depending
on what.
Speaker 3 (02:18):
Your mortgage is.
Speaker 1 (02:19):
I mean, there'll be some people whose mortgage costs are
massive and a couple hundred thousand dollars between two people
once you've paid tax on it all, and everything actually
doesn't go very fast. So I want to know from you,
how much money do you think is actually a comfortable
amount of money for a household to live on. But
of course, a household can be many things. A household
(02:41):
can be you and your flatmates. I mean, if you're
all any good money, you don't have kids and you're
single and just enjoying yourselves, half that amount of money
might be something where you go, I'm actually quite happy,
to be honest. But if you've got a couple of
kids and they've got a few different interests in sporting
interests and clubs or dance or whatever, you might find
that at the end of the month, it's like, oh,
(03:02):
that'll go paying. You know you've got once you've deducted
your expenses for living in, your mortgage.
Speaker 3 (03:08):
And food and all that sort of thing.
Speaker 1 (03:10):
So what do you think you need to be making
to live comfortable? Come to live comfortable? Talk about terrible
grammar to live comfortably? These days, we're going to explore
that and other questions with our guest, who is again
another one who needs no introduction really is Martin Hwes Martin.
Speaker 2 (03:28):
Hello, Yeah, Hi, there some interesting topic for today. Much.
Speaker 1 (03:32):
I mean, there would be a question that you would
have examined, possibly more from the end of retirement living. Sorry, Mante,
I just had to change an audio setting there because
I think I'll could hear myself bouncing back there. But
I think we solved that it would be something that
people are considering how much they need to retire on,
of course, but I've got to say that two hundred
(03:54):
thousand bucks a year.
Speaker 3 (03:55):
It might to some people.
Speaker 1 (03:57):
Sound obscene that people are not making ends meet, but
it would be quite common for people to think they're
not exactly rocking and eroly, wouldn't it.
Speaker 2 (04:04):
Yes, I can certainly think of people in that kind
of prodictament. And two hundred thousand dollars does sound a lot,
but you know, if you've got a couple of children,
maybe more if you've got a big mortgage, as you
said before, And I think a lot of this is
(04:25):
also about expectations, and that's two respects. First of all,
we expect to have just about everything now now, you know,
I try to avoid be saying when I was their age,
we didn't have those things. You know, we didn't have
to buy a phone, we didn't have to buy a laptop,
we didn't have to have a screen in every room
and what have you. There was no expectation of that,
(04:47):
let alone overseas holidays and those sorts of things. The
other expectation that was set up after COVID was very
low interestrates, and I suspect that there were a number
of people who took very big mortgages. And if you
remember back to that time coming out COVID, mortgage interest
rates for two two and a half percent something like that.
(05:10):
They're willowy people who quite wisely fixed for maybe five years,
and now they're starting to come off. And although interest
rates are basically generally declining, it may it may be
a decline, but it may be a lot more than
what they were used to film the post COVID days.
Speaker 3 (05:34):
Yeah.
Speaker 1 (05:35):
Actually, the mortgage, that's the thing everyone. It's so easy
to look at a figure and it's the gut reaction.
Is like households on a couple hundred thousand dollars a year,
goodness me, how can you not make ends meet? But
if you're if you've got to be quite common for
people to have a four or five hundred thousand dollars mortgage, mortgage,
if not even significantly more than that, yep. But if
(05:55):
you've got a you know, five hundred thousand dollars mortgage,
what's what's that costing you a year in payments? More
than fifty grand?
Speaker 3 (06:03):
Isn't it?
Speaker 2 (06:04):
Know?
Speaker 3 (06:04):
How on I got that wrong? I've got that wrong.
Speaker 2 (06:07):
Yes, I have, you should have if the number of
numbers I scratched out were paying interest only, which of
course is not usually the case. But if you think
of somebody with a seven hundred thousand dollars mortgage, and
that will be quite common. You know, nine hundred thousand
dollars average house price in a lot of areas. You know,
you if it's the first time you've managed to scrape
(06:29):
together god knows how two hundred thousand for a deposit
and you're paying therefore at two percent interest back in
the glory days. Didn't feel like the glory days, but
it was for somebody at a mortgage, you're paying fourteen
thousand dollars of interest. If you're now faced with a
five percent one of interest only littlone paying thing off,
(06:50):
you have thirty five thousand dollars of interest. So that's
a twenty thousand dollar like in your overall family costs.
It's a big chunk. And if you weren't you should
have been expecting it. But if you hadn't done the numbers,
or you hadn't sort of tried to calculate just how
(07:11):
bad it was going to be, then that would come
as an awful bookshop Yeah, and then and then it's
hard to say to the kids, Well, no, no, we're
not going to visit this year, or we're not going
to we're not going to go skiing, or we're not
going to do any of those things that we have
done for a couple of years. We just can't afford to.
Speaker 1 (07:34):
Yeah, I mean, it's life. The other side of the
or the question is is life just naturally more expensive
because we do have different expectations.
Speaker 3 (07:47):
It feels like, I don't.
Speaker 1 (07:48):
Know, it used to feel like the being able to
go for a holiday at the beach in summer was
you know, it wasn't exactly something that was out of reach.
But now with Airbnb, you look at if you were
going to have four or five days during the school holidays,
that's say from my out the beach, I'd be thinking
probably something like mart Mnganui or Papamoa. I mean, that'd
easily set you aback five or six hundred bucks a night.
(08:09):
So what I don't know is that, as a proportion
of our income, more expensive than things would have been
when we don't have to As I say, we never
used to buy laptops, we didn't have to buy a
Phone's a sort of like a technology tax to life.
Speaker 2 (08:22):
Isn't there, Yes, there is. And there's also what's going
on at school. So all the other kids are going
to you know, I'm in the South Island, so we'll
say Nelson or Marble Sounds or something like that, possibly
even overseas. And so William is coming home and saying, well,
(08:43):
Belinda is going to so and so why are we going?
And the answer to that is unpalatable and probably not
something you should be discussing with a seven year old say,
But the answer is, well, we can't afford to. And
you know, this is a high cost, low rage country.
(09:07):
Now we're not. We're not the rich country that we
were going back to when I was young and at
various other other periods. And you know, the bad news
and I haven't seen anything in the media about this yet,
but I think it'll come. Is that we've seen the
New Zealand dollar fall quite about that drives up. It
(09:28):
makes exports more saleable, more affordable for our partners to
buy them overseas. But it makes the things that we buy,
which imports, more expensive. So import items, you know, whether
whether that's fuel or the car that you put the
fuel in, or clothing or just about everything. Now is important.
(09:52):
That becomes more expensive, and god, I'm a burger of jo.
Speaker 3 (09:58):
It's just a realistic conversation.
Speaker 2 (10:01):
And the next thing that happens when the currency falls
is that generally infrastrates rise because you're getting a bit
of more of important inflation. And therefore reserve bank, who
have a remit only to take management inflation, Reserve bank
puts up interest rates because we've got higher inflation. So
(10:23):
we could be we're a few we were away from
that yet. I mean, the currency's fallen gradually over the
last couple of months and took quite a steep fall.
I was in Greece and I actually I missed it,
but there was another quite big fall maybe Thursday Friday
(10:44):
of last week as well.
Speaker 1 (10:46):
Was that a fall against any particular currency or just
a fall in the New Zealand dollar.
Speaker 2 (10:51):
I follow the US dollar mostly, but I think it
was a fall against currencies generally. I think it was
a fall in the New Zealand dollar rather than arise.
And there's an American dollar or the Australian dollar, you know,
I think on one New Zealand dollars buying is eighty
seven eighty.
Speaker 1 (11:10):
Eight, it's eighty seven cents news in Australia. I saw
that headline pop up recently. In fact, my brain miss
misunderstood it for in a minute. I thought it was
absolutely catastrophic. But I can remember a time I think
when well, it goes back ages of course, but where
we were sort of used to routinely be around eighty cents.
Probably even in the even the mid was at twenty ten,
(11:34):
we were around seventy nine cents. I think, in fact,
I've got the graph here. Now we generally fluctuate. In fact,
there would be a generation New Zealanders who can remember
the time and it was almost one for one at
one stage. I think that was about ten years ago.
It was almost one for one with the Australian dollar.
But I always thought that was very going to be
very fleeting. But we're at eighty seven now. I mean
(11:57):
it could be worse. We've been worse. We've been down
to seventy four in twenty eleven.
Speaker 2 (12:02):
Yeah, you can always say it could be worse, but
you see it plat it's what it's what's happened. It's
what's happened in the last months, because that's going to
drive prices going but going up if we're importing much
from Australia. I don't know if we do. I suspect
that we do. But if we are important from saying
the US or Europe or UK, and those things are
(12:24):
all going to be more expect.
Speaker 3 (12:25):
That's actually why I was.
Speaker 1 (12:28):
I was thinking about the price of petrol because there
was a time with you know, fuel taxes and all
that sort of thing, when we were was you know,
you could regularly be looking around the three dollar mark,
if my memory sees me correctly, for ninety one. But
now we're seeing regularly prices around two forty nine, two
fifty eight or something. And I was thinking that's only
because fuel is cheaper because of our dollar was you know,
(12:51):
fuel got to the stage it was back when those
prices were three bucks a leter. We'd really be feeling,
wouldn't we.
Speaker 2 (12:57):
Yeah, And for a lot of people, you know, fuel
is like attacks. It's almost impossible to avoid. There isn't
public cransports available or good public transport available everywhere in
the country. You've got to put petrol in the car
because you've got to get to work, and you know,
I think that might be coming down the road.
Speaker 1 (13:18):
Gosh, well, let's not dwell on it too much because
it'd be a bit to derm and bloom. But we'd
love your calls on this too, by the way, that's
what we're here for. Eight hundred and eighty ten eighty.
But how much money do you think you need to
live comfortably these days? But it's such a at Martin,
actually it is. It's a very difficult question to pin
(13:38):
down because if you're supporting three or four children, then
you know, a couple hundred thousand dollars for a household
doesn't go nearly as far as if you're a single
person on a couple of hundred thousand dollars a year,
you're you know, you're a pig and muck.
Speaker 2 (13:52):
Yeah. Well, and you know there are a lot of
people who are the meat in the middle of the
sandwich that is supporting two or three children, but they
may also be supporting to some extent or other parents.
Speaker 1 (14:03):
Yeah, yeah, I mean how Actually, I tell you what.
We'll go to the break and see if people like
to join us for the conversation how much money. Let's
just standardize it to say you are a couple and
you have a couple of kids and a mortgage somewhere
how much per household do you think you'd need to
(14:25):
earn to be considering that, you know what, we're actually
getting ahead and we're in good shape. Because I'm going
to say it, I reckon to be feeling with a
couple of kids.
Speaker 3 (14:35):
I think you'd have to be well.
Speaker 1 (14:37):
In excess of a couple of hundred thousand dollars a
year because with them with a chunky mortgage and the
rest of life's expenses of just managing children. And it's
a terrible thing to say, because I know that people
there are a lot of people are in a hell
of a lot less than that as well.
Speaker 3 (14:50):
What do you reckon?
Speaker 1 (14:50):
Oh, eight hundred and eighty ten eighty text nine nine
two twenty one minutes past five News Talk si'd b.
Speaker 3 (14:56):
Yes, News Talk zid B.
Speaker 1 (14:58):
Actually, because I've got a text from someone with Martin
Hawes and discussing, you know, how much money does a
household need to well off with a couple of kids, say.
Speaker 3 (15:06):
And a mortgage.
Speaker 1 (15:07):
And this person's saying, look, I've got a mortgage for
a Oh my goodness, this is a big loan, a
one point two million dollar loan, seventy six thousand dollars
a year. I mean, that's Martin, that's one income gone,
isn't it.
Speaker 2 (15:21):
Yeah. Basically, by the time you've paid tax, it is
one income norm.
Speaker 1 (15:26):
Yeah, so did I did actually ask chet GPT to
do a quick calculation for me on what the tax
is on one hundred thousand bucks and it's just under
twenty four thousand dollars. So so basically there's a quarter
of that gone already.
Speaker 3 (15:38):
Yeah.
Speaker 1 (15:38):
I had another text suggesting that actually, in a way
that middle class New Zealanders actually have it tough because
they don't get they don't earn little enough to get
you know, the working for families. And yet if you've
got kids and everything, you pay the I've got kids
tax of everything being more expensive in the holidays.
Speaker 3 (15:56):
So yep, yeah yeah.
Speaker 2 (16:00):
And unless the unless that couple on two hundred thousand
dollars a year had twelve children or something, you know,
they wouldn't get working for families, they wouldn't be getting
any assistance whatever.
Speaker 1 (16:10):
Probably, And then somebody else said, afternoon, gents, what about
the cost of rates and insurance, because okay, there's rates
you could easily on an average house, say Hamilton, Wellington,
what are you paying five thousand dollars a year in
rates plus Yeah.
Speaker 2 (16:22):
Yeah, well I don't have a particularly salubrious sort of
a house, but I'm paying I think it's nine. So
every time accounts will talk about putting rates up ten percent,
you know, it's basically another another thousand dollars. It's funny
because I during the break I grubbled grates down and insurance.
They both seem to be going to the road, and
(16:43):
it looks like we might seem more of it rather
than less of it.
Speaker 3 (16:47):
See.
Speaker 1 (16:47):
That's the rates of the tax that I think are
particularly problematic for people, cost of living wise, especially once
you're retired, because that's it. You're not you know, unless
you continue working beyond sixty five. You're relying on whatever
you've set aside for you know, your retirement, if you've
been able to do that. Plus the super I mean
(17:09):
the idea of having a few thousand dollars for rates
bill that's kissed that bye, isn't it unless you do that?
What is the scheme that counsels let you leave it
in sort of thing and then they ping you when
you die.
Speaker 2 (17:19):
Yes, yes, you can do that. Rates it's a form
of wealth tax. It's not a capital gains tax. There's
a difference between and the national conversation between you know,
wealth tax and capital gains taxes and terribly good. They
tend to get inflated or confused together. But it's a
tax on wealth and the only wealth in the property.
(17:41):
And it's a poor tax because it is levied at
a time when people can't pay for it. And that's
the case with wealth taxes generally. It's why in Europe
they used to be thirteen wealth taxes. Now there are three.
That is thirteen compries that wealth taxes. Now only only
three do and that's one of the reasons. People just
can't afford to pay for it at that time. And
(18:05):
you know, I mean I've done a fair bit in
over the years and local authorities and so from who
I've never spoken to a mayor or even a counselor
who thought that rates was a good way of funding
local government. It's a lousy way of doing it.
Speaker 1 (18:18):
What, oh, that's a hot take. What is the best
way of funding local.
Speaker 2 (18:22):
Well, I probably do it either with some kind of
sales tax, perhaps a bit more on GST or something
something like that. But I certainly wouldn't do it. I
certainly wouldn't levy taxes on people, first of all on
the basis of an evaluation, which is dodgy, and see
(18:43):
secondly at a time when they can't afford to pay
for it.
Speaker 1 (18:47):
I'll tell you what I'm certainly missing. I'm regretting that
I missed the deadline to query my the valuation of
our property, which I'm sure has cost a few hundred bucks.
But anyway, that's a that's a It's a different cup
of tea, isn't it.
Speaker 2 (19:01):
There'll be another opportunity come but there wasn't guarantee.
Speaker 3 (19:04):
But there it was.
Speaker 1 (19:06):
Just while we're on that topic of rates, and I'm
not sure if I mean, I'd love to know from
anyone who's listening, But in my mind, there was a
time when rates was sort of an inconvenient bill, because
you know, it's a bill that you'd rather not pay,
but you're like, okay, well, look if I've set aside
a certain amount of week, that's okay, I can deal
with it. But it feels that the rates bills around
(19:28):
the country have gone beyond that sort of being an
inconvenient bill to something that really is something that people
struggle to keep up with.
Speaker 2 (19:40):
Yes, I think what is happening or what local authority
officers tell me is that. And I don't have any
examples of this, but they tell me that central government
has loaded more and more onto local authorities, more things
for them to do without givening them any money. Like Australia,
(20:00):
the states get a part of GST. Yeah, now, don't
think the city's doing and such like. So they probably
still fund the cities and the areas, the local areas
on rates, but the states get a part of GST.
And I think that wouldn't be a bad proposal for
New Zealand, although you know, I wouldn't like to propose that,
(20:23):
as willis at the moment. The problem is together a
bud jeb.
Speaker 1 (20:27):
You know the problem with our tax conversation is that
no party is interested in reducing the tax take because
they will. We know the government has money, you know,
it doesn't have enough money to spend on what it
needs to spend. So realistically, there's never going to be
anything that really gives any meaningful tax relief to New Zealanders.
(20:48):
It's just going to be another redistribution of where the
burden sits.
Speaker 3 (20:52):
Really, isn't it, Yes, it is.
Speaker 2 (20:54):
There are so many demands on health and education obviously
the two big ones. But then we've got a lot
of talk about having to spend more money on defense,
and that's a big hold of shovel money into it
as well. And I think total tax takers about thirty
five percent of the economy. I've looked it up now
that day. I think it's somewhere like like that, and
(21:15):
that's getting towards the top of where a total amount
of tax can sit. I think, you know, thirty seven
or thirty eight is of our high as it can
get to. There's not a lot of scope there. We
PEPs could be talking about capital gain tax, but that might.
Speaker 1 (21:33):
The Greens and their wealth tax and all that. I mean,
we could dig into that a little bit later, but
just just on that, you know, getting back to that,
the stories that households on a couple of hundred thousand
dollars a year have been seeking budgeting advice. Maybe if
we take it away from you know, from you or
me or ourselves personally, I guess if.
Speaker 3 (21:55):
You were aware of.
Speaker 1 (21:57):
You know, knew what your family members, younger family members,
whether they be you know, nephews, nieces, kids, or whatever,
house old income would you think would be okay, you
should be all right on that's I was thinking of
a better way to a better way to frame the
question in terms of what's you know, what's more than
(22:18):
a household might need, because for me it's almost coming out.
I'm thinking you need to be more than two fifty
plus per year, if with a mortgage and two kids,
to be feeling that you were actually going to get ahead.
Speaker 2 (22:30):
Yeah, it depends on your circumstances, what you used to,
the lifestyle, you expect. Expectations, there's a big one. I
keep coming and finance generally. Actually, I keep coming back
to expectations because I think they drive It's not so
much the reality, it's what we are expecting on the life,
that style that we're expecting. And if people expect a
(22:52):
certain amount of lifestyle or a certain quality of lifestyle,
then they just try to make that fit and they
probably load up credit cards, or they put the car
on high purchase or that under thing. These are not
good decisions, of course. It's sorry, Tom. It spirals down
(23:13):
for a lot of people that the harder it gets,
the harder it gets an exact way the same way
as compounded. It just works when we are investors, and
the more we invest, the more returns we get, and
the more returns we get, the more returns we get,
and the more returns we get and so on. That's
you know, it's a virtuous cycle. It can be a
(23:35):
vicious cycle as well on the downside. So we've got
the more difficulty we're having the more we borrow, the
more we borrow, the more interest rate is high. There's
a credit card data on high purchase data if it
or something like something like that, And it's a vicious circle.
Speaker 1 (23:55):
Where where do you reckon from your experience in financial advice,
where do you think the most common areas are where
people do overspend?
Speaker 2 (24:07):
Well, you see one person over a spend expenditure as
another person's absolutely.
Speaker 1 (24:13):
Well, well yeah, but let's get judgment let's get judgmental.
Speaker 3 (24:15):
Man, okay. For instance.
Speaker 1 (24:18):
For instance, I've got into cycling, okay, and I'd love
to buy a flash road bike, but I can't afford it.
So I know someone who's throw a bike mechanic. I
can probably get a hold of one for less than
five hundred bucks, and that's probably going to be the
avenue I go because I'm cutting my cloth. Accordingly, whereas
(24:40):
there be people, well I've just got to have the best.
I don't know where would you think?
Speaker 3 (24:46):
No, that was a poor example.
Speaker 2 (24:47):
Really No, No, I think it's actually a good one.
Because when I was buying a road bike once, the
person telling me me, like I said, don't look at
that one. It's a surgeon's bike. It's twenty thousand dollars
surgeon's bike. I didn't. I didn't look at it. I
would all my prejudices are coming out, and this is
(25:08):
somebody who's just got back from the overseas truck.
Speaker 1 (25:11):
But well, we're not going to judge you. I mean
you have written about You've written seventeen books, isn't it
on finance? We would expect that somebody's written those books
to be recently comfortable, and weren't going to judge you
for that. Roll with the punch.
Speaker 2 (25:26):
I've paid the credit cards off, I would say, I
would say holidays where a lot of almost said wasted
money goes. Because with some people it's not wasted. It's
some you know. But the you get a memory, and
that memory may be worth an awful lot to you.
(25:47):
So as a family, say, remember the time we went
to preg your Gold Coast or whatever, or you know,
the time we went to Mount montonery. But from my perspective,
I think it's an awful price unless you're coming back
and paying the credit call a credit card off immediately.
Speaker 3 (26:11):
Oh if you can, then that's.
Speaker 1 (26:13):
A good point if you if you are paying it
off straight away and you're not hitting that interest. But
if that holiday you paid for has eighteen percent attached
it because of your credit card for several months.
Speaker 2 (26:23):
Yep, or twenty one or twenty one because I locked
that up for today as well. It's i'd say, the
thing that you could do without most easily without it
damaging family relationships and so forth, would be overseas travel.
Speaker 1 (26:45):
Not doing it you mean, oh yeah, overseas travels and
absolutely lecture. I mean, I think for many people it's
the sort of yeah, I mean, it's something you either
save up for the trip of a lifetime type of thing.
But yeah, I think if you, if overseas holidays are
your regular thing when you're struggling to make ends meet.
Speaker 3 (27:01):
That's probably a bit of an own goal, isn't it.
Speaker 2 (27:04):
You try and book an airbnb in Gold Coast during
school holiday time, say in June or July or whenever
the holidays are now, let alone in Queenstown for skiing.
I mean, these places are these places are booked out.
So there's a lot of people using the school holidays
(27:25):
because they have children who are taking those kinds of holidays.
Now some of them will be able to afford it.
There be a lot of you know, don't forget there
are wealthy people out there who have got really good
businesses or they're in the professions they've done well. So
let's not you know, let's not not them have the
holiday if you can afford it. It's just whether it's
(27:45):
appropriate for what for the rest of your budget.
Speaker 1 (27:50):
Basically funny enough, as you were saying that, I think
there was almost a time in fact I went and
priced something for a trip to Sydney just because it's
a business related thing, and the return tickets if I'd
booked for the family, were cheaper than me taking the
(28:10):
kids to christ Church at Christmas time. Right, Yes, and
I wonder in fact we could do it. Probably not
that we're going to do it now, because we probably
could do a whole hour and about affordable holidays, but
I think at certain times Australia still can be a
reasonably affordable destination, which is why people were all panicking.
(28:31):
Eighty seven cents for the dollar.
Speaker 2 (28:34):
Yes, yeah, it's a certain group of people. Let's expect
it almost. Yeah, now that they wouldn't have been me.
I talk my kids. I think once or twice maybe
on overseas drops once, I think, yeah and two Yeah,
am at least want a cream? Sound go skiing?
Speaker 3 (28:58):
You said that you most apologize for that.
Speaker 1 (29:00):
I don't think you should apologize for those lifetime memories.
Speaker 2 (29:03):
But no, no, I'm not apologizing for it. The other
other thing was that I could afford it almost. What
was going through my little mind was that maybe I
should have taken them more often. But it's not not
if the budget is tied. I mean budgeting is. It's
(29:24):
about what as a priority for you. You know, do
you want the holiday or do you want to have
your finances in good shape so that you're not worrying
about the bills?
Speaker 3 (29:34):
Yeah?
Speaker 1 (29:36):
Yeah, actually, because I was thinking in terms of Okay,
the holidays are a big thing. But the other thing
I think where I mean it sounds you don't want
to be puritanical, but I think if you are constantly
buying your lunch all the time, or buying that coffee.
I think those expenses can get incredibly expensive. If you say,
for instance, your daily habit is to buy a coffee
(29:56):
at your favorite coffee place for six or seven bucks
a shot. What there's thirty there's thirty odd dollars a week.
That's fifteen hundred bucks a year. And that's not even
with the sandwich as opposed to I don't know, going
with something at home before you leave and making your
own sandwiches. Those I mean that can be really expensive
in the long run, can it.
Speaker 2 (30:16):
Yeah, it's very easy to walk into a cafe and
just buy myself with a copy and that something reasonably
modest to eat. It's fifteen dollars, yeah, fifteen Yeah.
Speaker 1 (30:29):
Look, we love your cause, by the way, eight hundred
and eighty, ten and eighty just talking about budgeting and
making ends meat, but how much money do you think
should be enough for a household with a couple of
kids to live on?
Speaker 3 (30:42):
Give us your call. And if you think.
Speaker 1 (30:43):
That a couple hundred thousand and not enough for it's
too much? What do you reckon? Is the reason why
I'm out for a household to live on? Where you
shouldn't really be having to set budgeting advice as we
are hearing is happening. It's twenty minutes to sex news talks.
He'd be news talks. He'd be welcome and or welcome back.
We're with Martin Hawes. We're talking about how much money
should a household really be able to cope with life's
(31:05):
expenses without having to get budgeting advice. Somebody is texted
saying if someone can't bring up a couple of kids
and pay a mortgage on a couple of hundred thousand,
surely this means they're living above their means they need
budgeting advice.
Speaker 3 (31:17):
Well, actually, at least they're doing the right thing.
Speaker 1 (31:19):
If you're struggling, getting budgeting advice doesn't matter how much
you're aning a Martin, Yeah.
Speaker 2 (31:24):
Well that's right. But almost by definition they are living
above their means. Yeah, because you know they need budgeting advice,
so that the text is absolutely right. I think if
you're not making the ends meet, you are living above
your means, and that's the definition of I.
Speaker 1 (31:44):
Always think that in terms of budgeting advice, I would
like to think if I needed it, I could give
it to myself like I'd just sit down and go
through what I was spending and work it out for myself.
But I guess where would the budgeting advice kick and
that would do something beyond what I might be think
I can do for south.
Speaker 2 (32:06):
They might come act as a mentor, so you have
to report back to them. So I think, yeah, accountability,
So you know, I think there are firms probably charge
that that do this. Budgeting is really difficult. It's not
it's not hard in the sense that all you have
(32:26):
to do is a bit of basic arithmetic, but it's
it's not simple either. It's very hard for a sort
of a soft skill because it's got connotations of going without.
I think the best way to tackle a budget is
actually what I think of is the jars approach. And
(32:48):
this was my grandmother and I'm going back sort of
sixty years with Nana. But she would sit there, and
in those days we didn't have credit cards or any
other if you couldn't pay a bill, and you couldn't
pay a bill and you were in trouble, and you
couldn't just us all some money out of a credit
(33:09):
card or the likes, and she used to every time
she got some money, she'd put a florin in one
jar for the bread, and she'd bot two and six
and and and and so on, and that way kept
her on the street. Now and now I if I
was you know, if I was constrained, and I was
(33:29):
having to live within a budget, and we all we
all have to to some extent, I would set up
a bunch of different bank accounts, and there might be
one labeled overseas holidays, and that would have the final
in my in my view, that would have the final
little bit going too into that one. But you know,
(33:50):
one for the grocery shop, one for electricity or utilities,
and one for treats and so and so forth. And
I'd run it by that, and I'd try to figure
it out over time so that every time somebody got
paid in the household, if anytime some money came in,
(34:12):
fifteen percent would go on gross would go into the
grocery's account, you know, twelve and a half percent would
go to the utilities account, fifty five percent would go
to rates, the rates account. And try to live like that,
to try and make it easy on yourself rather than think,
(34:34):
well we have to do this purely with will power
and going without.
Speaker 1 (34:38):
I've got someone who's texted in here saying that they've
got eighteen different accounts for that purpose. Yeah, I think
I need to text me back and tell me how
they've actually apportioned those spensers. But there is something I
mean I would that is actually something that's worth reminding
people about, because traditionally people used to think of I
opened another bank account, it's going to have a whole
(34:58):
lot of different costs associated with it. But I opened
a couple of suburbs. It's just a I mean, it's
not it's actually not really a doesn't feel like a
full bank account. It's literally like a sub account of
something that you've got already. And the one thing that
I'm really glad I did was for I've got one
(35:19):
which is combined for school fees, health insurance, and rates,
and I've worked out I need to put in so
many bucks a month for or week for rates, so
much in for health insurance, and so much in for
the school fees, and I never see that money in
our general expenses account, so we can't spend it. And
(35:41):
so when I get the bill, even though I still
get a shock, we still go. It's sort of I
can pay it because I know I've set it aside,
and I think that's probably one of the things that
I'm relieved I did a long time ago.
Speaker 2 (35:53):
Yes, the one, the one I do tim is an
account I have labeled tax. So I receive a payment
from somebody, it's got GST on it and it will
be taxable. And I'm always pretty determined to pay both
my GST and my income tax. So I take I've
kind of worked it out over twenty odd years, but
(36:15):
I take about thirty five percent of every of every
payment I get from anybody, Yeah, and put that into
the tax account.
Speaker 1 (36:25):
Well, that's probably just about depending what your income is.
That's if you're not that's almost like a savings account
because you're you're almost over catering for it.
Speaker 3 (36:34):
At thirty five cents, I.
Speaker 2 (36:37):
Am a little bit, but don't forget this GST and
income tax, so I usually end up with a little
bit left over after you know, I make a tax payment.
Speaker 1 (36:49):
Yeah, actually, no, that actually, to be honest, I actually
do do that on the tax thing as well, because
I'm self employed, but it's usually based on what the
account has told me. I have to set aside for
a provisional tax, and I go what the hell and
then bite the bullet. No, all that my text has
come back with what this might be a useful thing
for anyone who's straightening with savings. So this was what
this person who's got eighteen sub accounts. One is savings
(37:14):
for fun money. There's the account our wages come into, spending,
holiday fund, dogs, which is food and vet visits, mortgage,
children's account for fun things for him to do. Investment
account for children, cars, oil changes, warrant, a fitness of
course under the cast thing chickens, what the hell this
(37:38):
person must keep have chickens at home, groceries, shorter term
holiday fund, petrol rates, septic tank service, sheep workshop fund,
and it goes on bloody health. That is that's quite organized,
isn't it.
Speaker 2 (37:53):
Yeah, But I take my head off to more them
because it struck me as a bit over the top.
But I suspect they've got some sort of small fun
or something and maybe they're running a you know, a
micrope as this there as well, so they've got a few.
Speaker 1 (38:10):
Mine's a lifestyle plot. But yeah, I'm just amused that
there's a fund for chickens, because I would have thought
that chickens would I guess, what have you got chickens
for meat and for eggs? And what do you have
to get a cleaver or something.
Speaker 2 (38:28):
Let's just stay with the eggs.
Speaker 3 (38:31):
Okay, hell, sorry, what are you gonna say?
Speaker 2 (38:33):
No, I was just going to say, well, there's there's
chicken food obviously, and maybe the vet every now and again.
Speaker 1 (38:38):
Then yeah, and they've sat. At the end of the text,
they so they've set up automatic payments on payday so
they don't have to do any transfers or anything. They're
just yeah, well there's something about that. At least sit
and forget.
Speaker 3 (38:50):
Yeah.
Speaker 1 (38:50):
Hey, we'll be back in just a moment. It's nine
minutes to Sex News Talks. He'd be Yes News Talks.
He'd be with Tim Beverage and Martin Hawes is my
guest today. We're just talking about budgeting, and we started
with the question around people needing to access budgeting services
when they've got a household income of two hundred thousand
a year. But that recent text Martin around one text
who said they've got eighteen different accounts and they just
(39:12):
feed the accounts the appropriate amount. That's amongst our listeners
quite not eighteen accounts.
Speaker 3 (39:18):
I think they're winning that one.
Speaker 1 (39:19):
That's quite a popular strategy for many households from the
texts that have come, and there are a lot who
are saying that they've got text set aside up. Sorry,
accounts set aside for a bunch of things, ten different
bank accounts. I pay my rates weekly, my phone bill weekly, and.
Speaker 3 (39:35):
My powerball weekly.
Speaker 1 (39:37):
Fair enough, Martin, there's another sorry.
Speaker 2 (39:40):
They probably they probably get paid weekly. And so that's
I think a good idea, just very very quickly. I
think a lot of a lot of the so called
budgeting stuff is about making it a habit rather than
using willpower, because we only have so much willpower to
go around, and we can't try to do everything on
the basis of willpower. If we make it a habit,
(40:03):
as I put my text money side, and it's just
something I do automatically every time I O a receiver
of payment, then it doesn't know. It's just what I do.
It's the way I love.
Speaker 1 (40:17):
Yeah, yeah, absolutely, Now just a couple more text I look,
we've got a truckload of text with people sharing their stories. Here,
one person saying, Hi, guys, you need approximately twenty three
hundred to twenty eight hundred net per week for a
family of four and an average mortgage local body rates
are completely unfair barometer to apply to properties, point in fact,
and talks about an industrial building I built and the
(40:38):
rates and insurance were not part of the affordability. And
that's just another thing complicating whole things. And there's a
big long text on CGT. Another one says we're on
two hundred and eighty k in our household with two
kids and a mortgage of almost a million, still living
paycheck to paycheck, and we borrow off our friends to
pay off credit card to avoid interest almost every two months.
(41:00):
There's some budgeting advice needed. I think, Mama, wouldn't you say?
Speaker 2 (41:03):
Yeah, could be anyway. It seems a lot, but you
know it happens to merriage and.
Speaker 1 (41:09):
Yeah, And another person has a six dollar fifty coffee
comes with substantial benefits, a free read of the paper
and mental health benefits for a few minutes of personal space.
Hey Martin, gosh, time flies. Thanks so much for your time, mate.
Speaker 3 (41:20):
We'll look forward to next time.
Speaker 2 (41:22):
Okay, thank you very much, Tom, cheers mate.
Speaker 1 (41:24):
Sunday It's six is next. Thanks for all your feedback.
We'll catch you soon.
Speaker 3 (41:28):
For more from the Weekend Collective.
Speaker 1 (41:29):
Listen live to news talks it'd be weekends from three pm,
or follow the podcast on iHeartRadio
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Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.