A growing number of New Zealanders are struggling to make ends meet. For Millennials, especially, saving and growing wealth has been a challenge since entering the job market during the global recession of 2009/10. Now, as the cost of living soars across the globe due to various socio-political factors, it’s becoming increasingly difficult for households to keep their heads above water, never mind save for future rainy days.
The irony is, however, that the only way to overcome the current cost of living crisis and ensure a secure financial footing for the future is to focus on long-term investments. For those already struggling to pay all their accounts at the end of the month, this might seem like an unachievable and impractical goal. However, it is still possible to save, even when money is tight.
It may take some time and effort, but it is necessary to become fully aware of monthly expenditure versus household income. By keeping track of expenses, it becomes possible to find areas of waste and, where necessary, move over to cheaper service providers or cut out certain expenses entirely in order to pay back debt or build up savings. Whatever is left over from such savings after covering vital expenses like food and accounts should be placed in a long-term investment account where the money can grow through compound interest.
In order to be deliberate with savings, especially when immediate expenses take priority, many New Zealanders are turning to the Barefoot Investor principle. In this approach, income is divided into three main ‘buckets’ aimed at meeting daily expenses, saving for emergencies, and saving long-term. Although it may mean sacrificing certain daily luxuries or living on a very tight budget for a while, the long-term gains can help buffer the impact of the current cost-of-living crisis down the road.
Release ID: 89080337
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