The ‘new normal’ everyone talked about us entering following the COVID-19 lockdown is not restricted to moving to a new way of working or meeting or travelling. It also involves re-setting our goals and priorities.

Many of us emerged back into the fresh air having had time to re-evaluate aspects of our life. For some, it was about rebalancing our work-life. For others, it was discovering working from home was far better for our sanity than sitting in traffic for hours each day. For others, it was facing the reality of a new career direction.

But one thing most of us had in common was a greater awareness of our financial situation – what we were earning, what we were saving, and what we were spending.

If we weren’t directly affected, we had seen friends or family or colleagues having work hours cut, overtime banned, contracts suspended, jobs disappear. If not, we had read about it or watched it play out on TV. We had certainly seen our KiwiSaver and other investments ping-pong, as the economy shrunk and a new volatility took hold. Others, in or near retirement, watched as interest rates on savings hit all-time lows (hadn’t we thought it couldn’t go much lower?)

For households with reduced income and little way of changing that in the short term, now is the time to look at reducing your costs. And to develop a plan to do that.

If any of this applies to you, now is exactly the time to sit down and review your weekly or monthly costs.

The best advice I’ve seen is to first develop a list of “must have’s” versus “nice to have’s”.  There are a few “must haves” which you can be smarter with which can cut some costs for you and your household.

Have you noticed how “nice to haves” appear more easily on your credit card? With interest rates around 20%, these can be a budget killer. When you realise you can incur $1000 of interest over a year on a $5000 month-to-month balance, you know you can be smarter. You could pay it off by taking out a revolving credit facility with your bank (around 5%). If you’re not in a position to do that, look for a balance transfer offer from another bank. These range from 0% to 6% for a set time. Either way, you could remove temptation altogether and cut up your cards (this won’t remove the debt).

When it comes to mortgages and rent, there are also options. You could negotiate a mortgage or rent holiday till things become a little easier, though remember it just delays the payments. When your term mortgage falls due, shop around for the great rates out there. Remember, if you want to break your mortgage, break fees normally apply so make sure it works in your benefit. You could also take in a flatmate or a boarder.

Insurance is one area where households can make savings, though this should be done with caution. Your risks will be the same, so you don’t want to under-insure, but shopping around for house, contents and car insurance – even consolidating with one company, where possible – will make you wonder why you didn’t do it before.

Telephone plans, internet, and power all create a significant drag on household costs. If you have a cell phone, do you still need the landline? Do you need a pay-monthly plan or would a SIM-card be cheaper? Have you checked to see if you can get cheaper power?

Food is a biggie, and savings can be made by buying fruit and veges from the farmers’ market, cutting out takeaways, cooking at home and using leftovers, and waiting for supermarket specials and $5 shopping days. You could take the train and sandwiches to work, and sell the second car and not buy lunch.

These are some of the main ways to reduce a household’s running costs. There are more if you look around. The Commission for Financial Capability at is a great source of budgeting advice, and has a booklet template to help you start planning. If you are in hardship, many companies have hardship policies that may help – reach out and inquire.

Remember, this doesn’t need to be daunting. The trick is to analyse your situation, set a plan, do it, and stick to it. Of course, it’s much easier said than done, and you shouldn’t be afraid to ask for help – from a friend or family member, or an independent expert such as a financial adviser.

Financial Advice New Zealand is a professional membership organisation representing 1600 financial advisers across all areas of advice, including lending, risk/insurance, KiwiSaver, investing, and financial planning.