Statistics suggesting that grocery prices have increased 7- 20% over the last year do not reflect the reality, with many Kiwis reporting that their food bills have gone up by 50%-a scenario that could lead to deteriorating health conditions for New Zealanders.
Financial coach Shula Newland, who works with families across New Zealand wanting to get ahead, said she noted her grocery bill had gone up by 50%, but that many of her clients were spending a lot less on groceries.
This suggested they were either getting savvier with their grocery spend or cutting the amount and type of groceries they bought. A poll of more than 200 Kiwis confirmed that things are tougher than official statistics suggest.
“It is not a good time for failures like Supie because it reduces competition, and that does not help prices. It also illustrates that Kiwis need to think long-term about things like losing their jobs and what they have in place if that were to happen,” Newland said.
Forty-three per cent of those polled said their food bills were up from more or less $280 a week to over $400, a more than 40% increase, while 45% of those polled confirmed price increases of around 20%. Just 9% said that their food bills had not increased by much because they were really careful with their money. Three per cent said they have changed their habits and reduced spending.
“The lesson here is that people who prioritise healthy foods, fresh vegetables and prime meats because their health is important to them are likely the people experiencing a much higher rise in prices. What it also means is more people who can’t afford increasing costs will be buying cheap carbohydrate-rich foods, which contribute to obesity, diabetes and other health issues.
“The problem is bigger than money and the cost of living; it’s about people being able to afford to eat healthy. Unfortunately, sugar is cheap. Protein fills you up, but meat and fish are expensive.”
Newland said the flow-on effect of the cost-of-living impact on grocery bills is that more people-and she knows from experience that some families are eating noodles daily-have higher levels of sickness, low energy levels and more mental health problems.
“It’s no good telling people to shop around, to hunt down specials and look for bargains because it costs money in petrol and time, but locating a grocery store that appears to be consistently cheaper than most others is one way to go.
“Another suggestion is to buy in bulk when items are on special, but you need good cashflow and freezer space for that, so it’s not always practical.”
Newland said true financial control comes from a sustainable plan that can then enable good savings habits.
1. Don’t rush to pay off debt too quickly
“The traditional advice was to pay down debt like credit cards to reduce interest payments, but most people that are relying on credit cards are not able to pay down debt. This means they try to increase payments but go around in circles. They don’t have any savings and need to keep redrawing on the cards,” Newland said.
2. Start a savings habit
It is better to get into a savings habit so that you have money to draw on instead of resorting to debt.
“This then stops the debt cycle and will give you a feeling of security about what’s needed when something happens like losing your job.
“The folding of Supie shows us that this is a genuine risk, and we all must be prepared. A healthy savings account will help you get through.”
3. Consider a second job
Newland said that in some cultures, a second job to get ahead financially is considered normal.
“If your relationships and mental health can wear it, get a second job and save the money you make.”
Newland said some people she has met are so worried about retirement that they’re not spending any money.
“As in everything, there needs to be a balance. Avoid extreme behaviour, particularly when it comes to spending, and learn to enjoy the simple things while building your security and wealth for the future.”