Author Katrina Shanks, CEO Financial Advice NZ Article originally published on

As inflation begins to soar around the world in the wake of the pandemic and other environmental factors, it’s not surprising the cost of living is at the top of most people’s minds.

A recent global survey shows it’s a particularly big concern for Gen Zs (born after 1997) and Mllennials (born between 1981 and 1996).

Some 29% of Gen Zs and 36% of Millennials in the Deloitte survey said the cost of living was their greatest concern.

But dig a little deeper and the survey reveals some eye-raising numbers:

 – 46% of Gen Zs and 47% of Millennials said they live payday to payday and worry they won’t be able to cover their expenses.

– 26% of Gen Zs and 31% of Millennials said they are not confident they will be able to retire comfortably.

– 30% of Gen Z’s and 29% of Millennials don’t feel financially secure.

– 43% of Gen Zs and 33% of Millennials have a second part- or full-time paying job in addition to their primary job.

That’s a lot of our younger people for whom finances are a worry.

Furthermore, a New Zealand survey of 18- to 34-year-olds revealed only 54% expect to own their own home by retirement.

So, if you’re a Gen Z or a Millennial what can you do about it?

There’s no doubt education plays a big part in this, to learn how to budget and to prioritise spending.

But another way to look at it is to identify and stop bad money habits that can get you into trouble. By identifying and separating these habits, targets can be easier to obtain.

So, let’s look at some of these habits.

Spending sprees

Most of us at some time have succumbed to that great sale. These days the temptations are many, including online, but spending sprees are a habit we need to break if we are to succeed with a budget to set us on the right path.

Buying one thing at a sale is fine, but it’s when that turns into more than one, or into something unplanned, that is the problem. And let’s be honest – most of us have done it.

One idea I have used on numerous occasions is the cooling-off period.

The idea is to put 24 hours between you and your purchases (if the sale lasts that long), to give you time to have a think about what you’re considering buying. Perhaps you could take a photo of it and take it home and think about it.

You’re not saying no, you’re simply telling yourself you’re thinking about it, which is easier to handle. And if you’re still keen in the morning then it’s easier to justify – because you’ve thought about it. At least you’ll be comfortable with your decision.

Another way is to go shopping with a list and stick to it. That’s a regularly quoted way to keep your grocery shopping in hand, and it can work for anything, particularly in sales.

And remember not to get psyched into sales. Sale regret is a real thing when you get home and think it’s still a nice purchase, but why did I buy it? Your mantra should be need versus want.

Mindless daily spending

It’s very easy to buy something on a whim when that great sale price catches your eye, and even if you have doubts you can always justify it by saying, “well, it’s only $40 – and I did save $30”.

But even the little bits of spending add up.

One great idea is to think about things on a cumulative basis – not the single spend, but what all those single spends add up to.

Instead of thinking weekly, try thinking what they add up to over a year.

For example, a casual spend of $8 a day for lunch adds up to $40 a week or $2080 a year. Or four $8 beers at a bar two nights a week adds up to $3328.

That’s money to put a deposit on a car or purchase an electric bike. Assets that help you purchase an asset. Or to save or invest. Or just cut those numbers in half and make your lunch twice a week and cut back those beers. You’re still enjoying it, but you’re being careful as well. Just shifting the balance can make a big difference.

It’s like the old saying “take care of the cents and the dollars will take care of themselves”.

Avoiding credit

Credit cards and buy-now-pay-later (BNPL) schemes can be a trap.

Many people use them sensibly and for good reasons, such as a cashflow tool, and they don’t cause a problem.

But for many others, using them to buy things you don’t need with money you don’t have can get you into big trouble that can take years to get yourself out of.

Sure, they can help you buy things you wouldn’t otherwise have access to, and it removes the bite of having to find a lump sum, but unless you can make regular payments on your credit card, or meet the four-weekly payments on your BNPL account, then trouble is looming. You have to pay it all back somehow.

You could try the old-fashioned method of regular lay-by (if the store offers it). This is where you pay off the goods before you get them. It just means you have to wait for them. But it’s safe.

Not taking financial future seriously

The key here is to plan early and spend sensibly.

Most of us are now thinking about our financial futures more seriously, thanks mainly to KiwiSaver. Anything you put into your KiwiSaver above the minimum is a great investment in your financial future.

It’s vital to save for the future in one form or another, and the more sensible you are with your money now, the easier it will be later and the better off you will be.

KiwiSaver and its free $512 government contribution and the compulsory employer contribution is a perfect vehicle for investing, but so are other managed funds that allow for investing in your future which are more flexible (but don’t have the government and employer contribution).

The keys

The keys are to be aware of what you’re earning, what you’re spending, and how to control it. And when you’ve done that, understand how to make your money work for you.

It’s hard to break bad habits because that involves discipline and change. But the sooner you tackle it, the sooner you’ll be on the right road, and you’ll feel the pressure ease.

There’s something liberating about knowing your future is financially secure.

A couple of years ago my husband and I split our everyday finances, created new accounts and took control of our own discretionary spending. This allowed us to both have better control of our spending, and it unbelievably changed our financial behaviours and disciplines. Now, the sales, coffees and bought lunches don’t look nearly as attractive!

As my financial adviser would say, identify that bad habit and tackle it head on. You may be surprised how easy it is to get into good habits. Be relentless but remember to breathe.